Audit Reports
Karnataka
Report No. 4 of 2014 - Compliance and Performance Audit on Public Sector Undertakings of Government of Karnataka
Overview
Audit of Government Companies is governed by Section 619 of the Companies Act, 1956. The accounts of Government Companies are audited by Statutory Auditors appointed by the Comptroller and Auditor General of India (CAG). These accounts are also subject to supplementary audit by the CAG. Audit of Statutory Corporations is governed by their respective legislations. As on 31 March 2013, the State of Karnataka had 79 working Public Sector Undertakings - PSUs (73 Companies and 6 Statutory Corporations) and 14 non-working PSUs (all Companies), which employed 1.87 lakh employees. The State PSUs registered a turnover of 37,867.13 crore for 2012-13 as per their latest finalised accounts.This turnover was equal to 7.21 per cent of the State Gross Domestic Product indicating the important role played by the PSUs in the economy. The PSUs had accumulated profit of 1,388.01 crore as per their latest finalised accounts.
As on 31 March 2013, the investment (capital and long term loans) in 93 PSUs was 69,810.45 crore. Infrastructure Sector accounted for about 54.27 per cent of the total investment and Power Sector about 33.18 per cent in 2012-13. The Government contributed 15,058.73 crore towards equity, loans and grants/subsidies in 2012-13.
The working State PSUs earned a profit of 1,144.33 crore in the aggregate and incurred loss of 549.04 crore for 2012-13 as per their latest finalised accounts. The major contributors to profit were The Hutti Gold Mines Company Limited ( 257.13 crore) and Karnataka Power Corporation Limited ( 171.20 crore). Heavy losses were incurred by Karnataka Neeravari Nigama Limited ( 235.37 crore), The Mysore Paper Mills Limited ( 76.86 crore) and Chamundeshwari Electricity Supply Corporation Limited ( 116.27 crore). Audit noticed various deficiencies in the functioning of PSUs. Cases discussed in the subsequent Chapters of this Report show that there were controllable losses to the extent of ` 1,075.66 crore and infructuous investment of 524.48 crore. The losses could have been minimized or profits enhanced substantially with better management. There is a need for greater professionalism and accountability in thefunctioning of PSUs.