Audit Reports
Karnataka
Report of 2009 - Financial Audit on Commercial 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 CAG. These accounts are also subject to supplementary audit conducted by the CAG. Audit of Statutory corporations is governed by their respective legislations. As on 31 March 2009, the State of Karnataka had 72 working PSUs (66 companies and 6 Statutory corporations) and 16 non-working PSUs (all companies), which employed 1.74 lakh employees. The working PSUs registered a turnover of Rs. 32,627.68 crore for 2008-09 as per their latest finalised accounts. This turnover was equal to 12.17 per cent of State GDP indicating the important role played by State PSUs in the economy. The PSUs had accumulated loss of Rs. 39.93 crore as per their latest finalised accounts.
As on 31 March 2009, the investment (Capital and long term loans) in 88 PSUs was Rs. 48,565.22 crore. Infrastructure Sector accounted for nearly 59 per cent of total investment and Power sector about 27 per cent in 2008-09. The Government contributed Rs. 6,876.14 crore towards equity, loans and grants / subsidies during 2008-09.
The working State PSUs incurred a loss of Rs. 587.97 crore in the aggregate for 2008-09 as per their latest finalised accounts. The major contributors to profit were Karnataka Power Corporation Limited (Rs. 391.93 crore), Mysore Minerals Limited (Rs. 192.42 crore), and The Hutti Gold Mines Company Limited (Rs. 154.09 crore). The heavy losses were incurred by Bangalore Electricity Supply Company Limited (Rs. 587.36 crore), Hubli Electricity Supply Company Limited (Rs. 560.51 crore) and Chamundeshwari Electricity Supply Corporation Limited (Rs. 217.15 crore). Audit noticed various deficiencies in the functioning of PSUs. A review of three years' Audit Reports of CAG shows that the State PSUs' losses of Rs. 549.70 crore and infructuous investments of Rs. 392.60 crore were controllable with better management. Thus, there is tremendous scope to improve the functioning and enhance profits. The PSUs can discharge their role efficiently only if they are financially self-reliant. There is a need for greater professionalism and accountability in the functioning of PSUs.