Audit Reports
Karnataka
Report No. 9 of 2014 - Financial 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 2014, the State of Karnataka had 81 working Public Sector Undertakings - PSUs (75 Companies and 6 Statutory Corporations) and 14 non-working PSUs (all Companies), which employed 1.93 lakh employees. The State PSUs registered a turnover of Rs. 44,908.32 crore during the year 2013-14 as per their latest finalised accounts. This turnover was equal to 7.46 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 Rs. 1,894.94 crore as per their latest finalised accounts.
As on 31 March 2014, the investment (capital and long term loans) in 95 PSUs was Rs. 75,051.46 crore. Infrastructure Sector accounted for about 48.50 per cent of the total investment and Power Sector about 39.26 per cent in 2013-14. The Government contributed Rs. 13,511.65 crore towards equity, loans and grants/subsidies in 2013-14.
The working State PSUs earned a profit of Rs. 1,906.09 crore in the aggregate and incurred loss of Rs. 1,028.27 crore as per their latest finalised accounts as at the end of September 2014. The major PSUs which contributed to the profit were Bangalore Electricity Supply Company Limited (Rs. 432.77 crore) and Mysore Minerals Limited (Rs. 313.35 crore). Huge losses were incurred by Chamundeshwari Electricity Supply Corporation Limited (Rs. 268.35 crore), Gulbarga Electricity Supply Company Limited (Rs. 194.56 crore) and Karnataka Neeravari Nigam Limited (Rs. 172.54 crore).
Audit noticed various deficiencies in the functioning of the PSUs. Cases discussed in the subsequent Chapters of this Report show that there were controllable losses to the extent of Rs. 957.39 crore and infructuous investment of Rs. 86.65 crore. The losses could have been minimized or profits enhanced substantially with better management. There is a need for greater professionalism and accountability in the functioning of the PSUs.