1. We have prepared/ compiled the Statement of Affairs of Municipal Corporation, AJMER as at 31.03.2006 based on the Accounting Policies adopted and various information provided by the Corporation, valuation of various properties carried on by the Approved Valuer/ Independent Committee, other relevant information in respect of Bank balances, P. D. A/c. balances, advances & loans to staff and others, various receivables, Valuation of Physical Stocks of Stores etc. as provided by the respective Departments, which has been accepted and taken by us as correct.
2. The said Statement of Affairs is to be read with the Notes & Other information attached therewith subject to the Statement of Information not provided.
3. We have to inform that we have not audited the books of accounts of the Corporation for preparation of this Statement of Affairs hence not expressed our opinion on the same.
4. We have to further state that this Statement of Affairs will be a benchmark towards the implementation of Accrual based Double Entry Accounting System as well as to draw the Balance Sheet and Income & Expenditure Account of the Corporation in the subsequent years.

• The financial statements are drawn up under the Historical Cost Convention on Going Concern basis except certain Assets &  Liabilities up to 31.03.2006, which have been adjusted at current value.
• The Council follows Double Entry System of Accounting on Accrual basis, w.e.f. 01.04.2005.

• Movable assets are valued at estimated realizable value and Immovable Assets at DLC Price as approved by a Committee up to 31.03.06 and thereafter at actual cost of acquisition/construction.
• Infrastructure Assets like Roads, Bridges, Drainages etc. and Social Assets like Mandir, Ponds, Shamshan, Urinals, Water Hut, Pyau are valued at Nominal Value of Re.1 per unit only.
•  Live Stocks are valued at Rs.1/- per animal.
• In case of Commissioned Assets where final settlement of bills with the contractor is yet to be effected, the capitalization is on provisional basis subject to necessary adjustments in the year of final settlement.
• Any addition to or improvement to the fixed asset that results in increasing the utility or useful life of the asset shall be capitalized and included in the cost of fixed asset.

• Capital Work-in Progress are recorded at cost including expenses incurred till date as recorded in measurement book.
• On completion of the Project/Works the assets will be transferred to respective assets account.

•  Premium on leasehold land is depreciated over the period of lease.
• Depreciation is charged as per W.D.V. method following the rates as approved by the Committee up to 31.03.2006 and thereafter at rates prescribed under the Income Tax Act.
• Depreciation is provided for full year in the year in which the assets becomes available for use and no depreciation is provided in the year in which the assets are sold/disposed off.

• Stores & spares are valued at estimated cost.
• Scrap & unserviceable stores are valued at net realizable price.

• Contributions towards retirement benefits are only in respect of monthly payment to pension fund as approved by the State Govt.

• Borrowing costs that are directly attributable to the acquisition/construction of a qualifying Asset is capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they incurred.

• All Income/Expenses are accounted on accrual basis of accounting except those, which are specifically mentioned otherwise.
• The surcharge/penalty/interest on overdue payments are accounted for as and when received i.e. on cash basis.
• Interest earned on specific grant investment credited directly to particular Fund A/c.
• Loss/Profit on Sale of Investments are directly adjustable in the relevant Fund A/c.
• Revenue in respect of Notice Fee, Warrant Fee and Other Fees/charges shall be recognized when the bills for the same are raised.
• Collections to be made on behalf of state Government i.e., State Education Cess, Employment Guarantee Cess and Library Cess and included in the House tax demand shall be reckoned together with House tax demand and credited to a control account called “State Government Levies in Taxes- Control Account.”
• In respect of the demand outstanding beyond two (2) years, provision shall be made to the extent of income of the Municipal Council in the demand, based on the following provisioning norms:

                        Outstanding for more than 2 year but not exceeding 3 years: 25%

                        Outstanding for more than 3 years but not exceeding 4 years: 50% (additional 25%)

                        Outstanding for more than 4 years but not exceeding 5 years: 75% (additional 25%)

                        Outstanding for more than 5 years: 100% (additional 25%)

• Refunds, remissions of taxes for the current year shall be adjusted against the income and if pertain to previous years then it shall be treated as prior period item.

• Investment shall be recognized at cost of investment. The cost of investment shall include cost incurred in acquiring investment and other incidental expenses incurred for its acquisition.
• Short-term investments shall be carried at their cost or market value (if quoted) whichever is lower.
• Long Term Investments are valued at Cost.
• Dividend on investments shall be recognized on actual receipt.

• Liabilities for Goods in transit/Capital Works executed but not certified and pending for inspection by the corporation are not provided.
• Pre-paid expenses and prior period expenses/ income of items of Rs.5000/- and below are charged to natural head of accounts.

• This being the second year for preparation of Statement of Affairs. Hence, previous year’s figures are given.
• This Statement of Affairs is compilation of various information provided by Municipal Council. This Statement of Affairs is still subject to some information required but not provided till date (details attached separately).
• Corpus Funds as on 31.03.2006 is representing difference between various assets and liabilities of Municipal Corporation on that day.
•  Earmarked Fund includes balance lying in PD Account for gratuity and GPF. However, GPF calculations for actual liabilities as on 31.03.2006 is under progress and will be incorporated in the Statement of Affairs as and when finalized.
• Depreciation Fund created first time and represents difference between the actual/estimated cost and realizable value/WDV as on 31.03.2006.
• Grant received from various Organizations is net of grant further receivable/ refundable.
• Secured loan from Asian Development Bank through State Govt. (RUIDP) is subject to confirmation. Provisions for interest in ADB loan have not been considered and taken into the account for want of information.
• Deposit Received from contractors are inclusive of security deposits as well as earnest money deposits.
• Sundry Creditors include payments made after 31.03.2006 for the works already done/ goods already supplied before 31.03.2006. These do not includes amount yet to be payable for works done / good supplied before 31.03.2006.
• The total amount outstanding towards House Tax has been taken as per the records available in Municipal Council. However a physical survey of all the properties within the limit of Municipal Council is going on and final number of taxable properties may increase significantly on completion of the same. The actual outstanding amount on this head up to 31.03.06, will be adjusted through “Corpus Fund Opening Balance adjustment A/c” when the final outstandings determined.
• Since the records in respect of Leased properties have not been maintained properly at Municipal Council and requires to be updated, hence outstanding amount due up to 31.03.05 has not been determined & taken into account. Since the Lease rental are collected by Municipal Council on behalf of Govt. of Rajasthan and only 15% of total collection belongs to Municipal Council as collection charges, the share of Rajasthan Govt. has also not been determined and accounted for. The same will be adjusted through “Opening Balance Corpuses Fund adjustment A/c” in the year in which the final amount determined.
•  Infrastructure Assets are valued at nominal cost of Re.1/- per unit except those assets, which are created out of any specific loan. These assets are valued at actual cost.
• Various immovable assets have been physically measured and verified by an independent Architect and taken into the account as per the approved valuation method by an independent Committee. Contra verification of the same is yet to be done by the Municipal Council.
• Rent receivables and interest thereon are based on information provided by the Council. However, necessary adjustment in outstanding amount will be made while implementing the computerized system.
• Advances to staff members and other parties for various works are subject to final reconciliation. These include long outstanding advances for which no proper records are available.
• Loan to staff represents outstanding amount as provided by Municipal Council. However full details regarding original loan amount and year of sanction, total recovery up-to-date, number of installments, rate of interest etc are not available. The amount of interest recoverable as on 31.03.2006 has not been calculated and incorporated in the Statement of Affairs loan to staff also includes loan due from employees passed away or left.
• Estimated amount of contracts remaining to be executed and not provided for - Rs._NIL.
• Contingent liabilities not provided for:

                      i.Legal suits pending at various forums and courts Rs NIL

                      ii. Bank guarantee issued by the bank in favor of the corporation Rs. NIL.

                      iii. Disputed liability in respect of electricity charges payable to RSEB Rs.NIL.

                      iv. Disputed liability of employees Rs.NIL

• Title deeds of immovable properties forming part of this statement of affairs are subject to verification.
• Balances of various Advances/Creditors/Contractors/deposits/Loans etc. are subject to confirmation and if any variation is noticed the same will be adjusted in that particulars year only.
• Cash & Bank balances of various bank a/cs have been taken as per balances shown by relevant cash book /bank books of the Corporation.
• Saleable properties represent assets available for sale only.
• Disputed income of lease/proportionate share of registration charges will be accounted in the year of actual receipt.
• This Statement of Affairs is subject to entries regarding grants. The same will be incorporated on the availability of required information.
• This Statement of Affairs is subject to valuation of the constructed area on various properties. Since the verification and measurement of the same are under progress, this will be adjusted in the books of accounts on completion of the work.
• Loans Taken from ADB through State Govt.:

1. Asian Development Bank (ADB) loan through RUIDP is to be confirmed that how much amount is actually disbursed and utilized for the purposes.
2. Assets created out of ADB loan is to be identified and accounted for with actual cost.
3. As per the information made available regarding ADB Loan, 31% of Own Contribution is required and balance 69% will be the Loan amount. Out of the loan amount 30% is Grant to the council and Balance 70% is only repayable along with Interest. The own contribution is also made available by State Govt. to the council by way of Loan repayable in 10 equal installments but no effect of the above are given in the books of account for want of proper information.

• Total Area of Immovable Assets is significantly varying from Nagar Parishad records, which requires to be verified.
• Outstanding Lease Rent - No details are available for these lease rents. The same is to be worked out from the Lease Rent Module to be implemented by TSP.
• Pending recoveries from various departments is yet to be collected.
• Any receivable from UIT, State Government, PWD, Registration Department, RSEB if any is required.
• Any Security deposit given to Telephone department and list of other security deposit required.
• Details of Infrastructure Assets are to be included in the Statement of Affairs. They are pending for want of information.
• Details of Saleable properties has not been provided.
• Provision on doubtful recoveries of Property Tax has not been provided for want of age wise details of outstanding recoveries.