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    CAA Annual Report 2017

    Uploaded by

    Ifra Re

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 45
    Civil Aviation Authority Financial Statements For the year ended June 30, 2017 Deloitte. re Chartered Accountants Covish Court, 35, Block 7 & & KCHSU, Shabrahve Faisal Karaci-75350 Pakistan Tet 492 (0)21 3456 6498-7 rac 352,021. 3454 1514 03-52 / 1669 ee May 12, 2018 worwdeloite com ‘The Board of Directors Civil Aviation Authority Headquarters Civil Aviation Authority Terminal 1 Building Jinnah International Airport Karachi Dear Sirs, Audit of the draft financial statements of Civil Aviation Authority (the Authority) for the year ended June 30, 2017 This Is with reference to our letter no. 03-52 / 1145 dated January 15, 2018, addressed to the Board of Directors, covering our initialed draft audit report (audit deliverables) and initialed draft financial statements prepared by management, which we provided in respect of our audit of draft financial statements of Civil Aviation Authority (CAA) for the year ended June 30, 2017. Our initial draft audit report provided to you vide letter no. 03-52 / 1145 dated January 15, 2018, inter alia, included the following audit qualification which has been reproduced below: “The Authority is governed by the Pakistan Civil Aviation Authority Ordinance, 1982 (the Ordinance). Section 16(1) of the Ordinance states “There shall be @ Fund to be known as the “Civil Aviation Authority Fund” which shall vest in the Authority and shall be utilized by the Authority to meet charges in connection with its functions under the Ordinance, including the payment of salaries and other remuneration to the Director General, officers, servants, experts and consultants of the Authority.” Section 16(2) of the Ordinance states “The Civil Aviation Authority Fund shall consist of (i) grants made by the Federal Government; (il) loans obtained from the Federal Government; (iii) sale proceeds of bonds 'ssued under the authority of the Federal Government; (iv) loans obtained by the Authority with the special or general sanction of the Federal Government; (v) foreign aid and loans obtained with the sanction of, and on such terms and conditions as may be approved by the Federal Government; and (vi) all other sums received and fees collected by the Authority. Paragraph 24 of IAS 20 "Accounting for Government Grants and Disclosure of Government Assistance” States that “Government grants related to assets, including non-monetary grants at fair value, shall be presented in the statement of financial position either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.” Paragraphs 26 and 27 of IAS 20 further explain accounting treatment of government grants as follows: © Paragraph 26 states "One method recognizes the grant as deferred income that is recognized in Profit or loss on a systematic basis over the useful life of the asset.” and © Paragraph 27 states “The other method deducts the grant in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense.” bee Peet meer Deloitte. cee Chartered Accountant All grants and aids received by the Authority are made part of the Fund, instead of following the aforementioned requirements and no assessment has been made to determine impact of utilization of the grant over the period. In the absence of such assessment, we are unable to identify the adjustment required in the financial statements.” During the Audit Committee meeting held on April 16, 2018 for the consideration and recommendation to the Board of Directors, of the above mentioned financial statements, Audit Committee advised the management to complete the exercise of accounting for the government grant and foreign aid as per the requirements of IAS 20, and decided to present revised draft financial statements in their next meeting for consideration. Subsequently, we were provided with workings and accounting entries required for restating the financial statements, on which audit procedures were performed. Management after incorporating changes required under IAS 20, provided us the revised draft financial statements of the Authority for the year ended June 30, 2017, In the wake of the above developments, we have revised our draft audit report to exclude the aforementioned audit qualification, as government grant and foreign aid, and the financial impact relating to the same have been incorporated in the revised draft financial statements. As a result, we have Provided the revised draft audit report and the enclosed revised draft financial statements for the year ended June 30, 2017 which have been initialed by us for identification purpose only. We will issue our signed audit report after: + The enclosed revised draft financial statements for the year ended June 30, 2017, with or without ‘modifications, have been approved by the Board and signed on its behalf by the Director General and Chairman; + The Board has considered and/or approved the matters raised in our letter no. 03-52 / 1145 dated January 15, 2018, which are still relevant to our audit of financial statements of the Authority except matter highlighted in paragraph 3.1 of the said letter - ‘Inappropriate accounting treatment of government grant and foreign aid’ ~ as our revised draft audit report does not include audit qualification thereon; and * All other signing conditions stated in our letter no. 03-52 / 1145 dated January 15, 2018, that have not been fulfilled as on the date of the letter. + The Board's specific approval for the items listed in Annexure A of this letter. We once again wish to place on record our appreciation for the courtesy and co-operation extended to us by the Authority’s management and staff during the course of audit. Yours truly, Nelo Wa duty Ket Chartered Accountants Delete Touche Tohmateu Limited Items requiring Board approval for the year ended June 30, 2017 Additions to Property, Plant and Equipment Transfers from CWIP to Property, Plant and Equipment ‘Transfers from Capital Items in Transit to Property, Plant and Equipment Additions to Capital Work-in-progress Sale proceeds of disposals of property and equipment (written down value Rs. 23,121 thousand) Provision against slow moving / obsolete stores Provision for doubtful advances Provision against trade debts Provision for compensated absences Provision for medical facility Provision for pension and gratuity Investments made in Term Deposit Receipt during the year Remuneration of Director General and Executives as disclosed in note 35 ‘Transactions with related parties as disclosed in note 32 Annexure - A (Rupees in ‘000) 2,397,086 6,822,588 1,769,508 26,613,819 42,372 26,329 1,000,000 10,758,704 (220,613) 673,464 2,208,160 49,000,000 chit Aviation Authority Statement of nancial position [As at June 30,2017 Assets, NON-CURRENT ASSETS FIXED ASSETS, Property. pont and equipment tntangole asset Investment propery Developmen wakcinprogress Long tenn loans Long-term deposte Total non-currant aseete ‘CURRENT ASSETS Stores and spares Trade debts Loans and advances Prepayments Iiterest scene Other receivables Taxation = net (Cash and bank balances TOTAL ASSETS FUND AND LIABILITIES FUND ANO RESERVES Cv Aviation Authosty Fund ‘Surplus on revaluation of fixed acset NON-CURRENT LIABILITIES Deferred taxation net Fetrement and other service benefits Government grante Defevied wicame Total non-eurtent abilities wes Teade and oter payables Retention money and secunty deposits Total current ails Total abies TOTAL FUND AND LIABILITIES CONTINGENCIES AND COMMITMENTS The anne bn, notes 1.41 fxm an integral part ofthese tana statements TaN Note 10 2 3 1s 6 16 » an 2 2017 2016 2015 (estates) (Rested) ARES 1 000m 202,904,368 ][~ 2s04a00] [204.115 801 29,688 40320 63 2ozss4os7 280884380 204 167.268 67,453,637 5147547 65,128620 1546,686, 24423 64452 ‘ssaort 758.197 14080 as 10.038, 9.208 362606206 2a.2e2s91 —z7O.seaate 208,87 zas.620 saz 2.565 036, 22sisiz 9.230.603 394789 1.354266 1344629 61,999) 53875 100.555, ‘uol4s7 118 768 anise 600,072 704.086 747,375 17,500,000 17,500,000 11,600:000 10353.467 19440033, 11462.785| 5.834.045 s12377 era “41.456,302, “44620827 39,400,273 aoanea soe _avayzave 310088187 te2s76013——160.279.708 ——140.189.802 weorzzass —se2.e05.i37 © 122.670.700 11788 086 Tazo Var 144 30.086-485 22,050.02 re r1s023, 9.976.918 3.564.804 2.900208, 2.386.498 1.680.071 1504 865 | 12,506,340 738,759 Baar aT 4.792.730 2.92451 2.038.908 | 4'586,651 274309 sai ies 9.379.381 7,198,820, 6.880.550 54,807,730 997.579 4247 Seo woaoasoe __a7aiaaie __910.08a.187 Civil Aviation Authority Income and expenditure account For the year ended June 30, 2017 INCOME ‘Aeronautical revenue Non-aeronautical revenue Inspection and other services Revaluation gain on investment property EXPENSES. General and administrative expenses Exchange loss Finance costs Other income Surplus before taxation Income tax expense Surplus for he year ‘The annexed notes 1 to 41 form an integral part of these financial statements, Ben (AIRMAN Note 23 24 25 26 ar 28 2017 aeeee(Rupees in 1000) 2016 (Restated) 63,606,779 $7,830,227 6,174,197, 5,370,083 332,337 307,087 1,306,090 1,012,620 71,419,403 64,519,997 (34,862,488)| | 43,531,670) (33,899) (26,402) (3,181) (2,852)] (34,899,568) (43,561,130) 1,499,914 1,567,653 37,959,149 22,526,520 (9,944,903) (6,428,375) 28,014,246 17,098,145 DIRECTOR GENERAL Civil Aviation Authority Statement of comprehensive income For the year ended June 30, 2017 Note ‘Surplus forthe year (2016: restated) Other comprehensive Income: tems that may be reclassified to income and expenditure account ems that will not be reclassified to ‘income and expenditure account Remeasurement of post retirement benefit obligations 334 Impact of tax Total comprehensive income for the year ‘The annexed notes 1 to 41 form an integral part of these financial statements. aun (|e — CHAIRMAN. 2017 2016 {Rupees in 000) mane 28,014,246 17,098,145 (9,442,215) (6.623.357) 2,927,087, 1,799,474 21,499,118 13,274,262 DIRECTOR GENERAL Civil Aviation Authority Statement of changes in Civil Aviation Authority Fund For the year ended June 30, 2017 xcensof ants Funds nineadio _Govermmanirais,_—_ Accumulated Surplus Givi Aviton "omer ‘etsenatance sory Fone (roe) revousiy stated Tae Tae Ta aaa ‘tect of pir paved wero 3:38) e uses 1925700 Batre a Ja, 205 a aaa tee rane caste ‘ane enzton tn apo exreral opt rte ym tes moo soem sepa nrten at ses Sipser ye evi sated ema cory et cr pat rt rte 2) sszo2e 1207 Supt yar re) Weee4s ose 4s one amet ame (52s) omen since atone 38. 28h sansa rare zis e027 708 ae corte tad wes z ano smo Sule : : ora ‘te conprenarae inane e e Forte Te rere 14 fm net of ese rar yn DIRECTOR GENERAL, Civil Aviation Authority Statement of cash flows, For the year ended June 30, 2017 CASH FLOW FROM OPERATING ACTIVITIES. ‘Surplus before taxation Adjustments for: Non-cath and ater items. Working capital changes: Financial costs paid Contribution fo defined benefit plans Deposits paid - net Long-term loans Receipts for collection charges on FTT and GAT Income taxes paid Net cash generated from operations CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures Proceeds from disposal of propery, plant and equipment ‘Proceeds from disposal of scrap and salvage material Payments for capital workin-progress. Payments for development workin-progress Receipts for constuction of Thar airport Payments for capital tems in ansit, Payments for intangibles Payment for investment property RRetuin on term deposits received Investments made during the year - net [Net cash used in investing activities ‘CASH FLOWS FROM FINANCING ACTIVITIES Grant received tom Government of Pakistan Not cash genorated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year ‘Cash and cash equivalents at end of the year The annexed notes 1 to 41 form an integral part of these financial statements, yA

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