C&AG ultimatum, KSEBL restates 2 years’ accounts

THIRUVANANTHAPURAM: KSEB Ltd, the state’s lone provider of power has restated its profit & loss (P&L) accounts for the financial years 2021-22 (FY22) and 2022-23 (FY23) cutting its previously published FY22 profit of Rs736.47 crore drastically down to just Rs97.66 crore.

The KSEBL Board also noted that the company has reported a loss of Rs1023.61 crore for the financial year 2022-23 (FY23)  instead of the earlier loss of Rs807.86 crore.

The need for the restatement of accounts for the last two financial years arose from the decision of the Board in its 69th meeting held on February 27, 2023, to provide ‘depreciation’ as required by the provisions of the Indian Accounting Standards (Ind AS) on the assets of KSEBL.

Indian Accounting Standards (IND AS) came into existence to meet the requirements of the International Financial Reporting standards (IFRS).

In fact, the revaluation of KSEBL’s assets was incumbent upon the company for the purpose of restructuring of KSEB into KSEBL (company) during 2013 as directed by the Statutory Auditors of the company as well as the Comptroller and Auditor General (C & AG).

Despite the repeated ‘qualification’ of accounts by KSEBL’s statutory auditors, raising the issue of failure to provide depreciation, KSEBL continued its stand on depreciation.

The Principal Accountant General (Audit 2) vide letter dated October 6, 2022 mounted pressure on KSEBL Board.

It said that “in view of the repeated ‘qualifications’ by the statutory auditors, the mandatory Subsequent Audit by C&AG under Section 143 (6) (b) of the Companies Act 2013 will not be conducted unless otherwise action to be taken to avoid qualifications.”

It may be noted that KSEB was just a utility entity owned by the government of Kerala until it was converted into a limited company, KSEB Ltd (KSEBL) under the provisions of the Company Law.

Following the revaluation carried out on the KSEBL assets as directed by its auditors, additional depreciation to the tune of Rs565 crore on the asset revalued have been provided for the year 2022-23, and this also had an impact to the tune of Rs5326 crore on the net worth of the company as on March 31, 2023.