By CL Jose
Auditors express Qualified Conclusion this time too
THIRUVANANTHAPURAM/March 28-2022: KSEBL, the sole distributor of power in the state, has given the market a ‘pleasant’ shock by announcing quarterly and nine-month profits, deviating from the practice of reporting loss year after year.
Can this be viewed as a harbinger of a positive change in the performance of other Government-controlled companies too?
The company that has been infamous for its ‘unfailing’ track record of loss-making, is now back in ‘Black’ by reporting a third quarter (Q3) profit of Rs411.83 crore in the current year, and a cumulative 9-month profit of Rs480.99 crore for such period ending December 31, 2021.
The same nine-month period and the third quarter in the previous financial year (FY21) had witnessed substantial losses to the tune of Rs1304.45 crore (9M) and Rs267.51 crore (Q3) respectively.
Moreover, the power company that purchases about 80 per cent of its requirement from outside, had reported a huge loss of Rs1822.35 crore for the full financial year 2020-21 (FY21).
Quite encouraging is the development (especially for media) that KSEBL has commenced filing quarterly financial reports in the public domain even as annual reports of most public sector entities in Kerala languish in their respective finance departments for multiple months and a few others for multiple years, leave alone talking about publishing quarterly financial reports.
KSEBL has filed the quarterly report this time “pursuant to the requirements of the Department of Public Enterprises (DPE) Guidelines, issued by the Ministry of Power for state DISCOMS, dated March 11, 2021.”
Revenues witness jump
What surprises the financial analysts is why there has been a sudden jump in KSEBL’s top line performance or revenue during the current year statements.
For example, the financials for the third quarter ending December 2021 show that the company has turned in Rs4450.81 crore as revenue from operations, representing a growth of around 20 per cent compared with that in the same period last year.
At the same time, there hasn’t been a noticeable growth in the power purchase bill suggesting any mark-up in consumption, and on the contrary, the cost of domestic generation has dropped during the said period.
Qualified conclusion from auditors
Auditors have historically been faulting the way the accounts have been prepared and presented by KSEBL.
This time too, the auditors have expressed a Qualified Conclusion on certain areas in their financial reporting.
They have stated that “the company has presented the financial information (in Ref to Notes 5-12) in deviation from Indian Accounting Standards (IAS) specified under Section 133 of the Companies Act 2013 (as amended) which has resulted in the understatement/overstatement of loss and corresponding impact on the assets/liabilities of the company, the impact of which the company is unable to quantify.”
