<p>Bengaluru: With the Bangalore Electricity Supply Company (Bescom) clocking in a loss for the fifth consecutive year, statutory auditors who have assessed the accounts have expressed concerns over the electricity company’s ability to discharge its liabilities in the normal course of business. For the financial year 2022-23, Bescom has reported a comprehensive loss of Rs 1,767.49 crore of which operational losses account to close to Rs 274 crore.</p>.<p>According to the audit report, Bescom is in dire need of revival since the company’s current liabilities exceed its current assets.</p>.<p>The report, a copy of which is accessed by DH, said that without the support of the government, Bescom may find it difficult to remain afloat. </p>.<p>“This condition indicates the existence of material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern in the absence of infusion of additional share capital or comfort letter issued by the Government of Karnataka,” the report stated.</p>.No load shedding: Bescom promises industry bodies.<p><strong>Can’t take loans</strong></p>.<p>Experts opined that since Bescom had hit a negative net worth, the company would also find it difficult to raise loans. </p>.<p>Noting that the company had failed to recover dues to the tune of Rs 1,022.51 crore that was spent on various free power schemes such as Ganga Kalyana and other drinking water supply schemes initiated by the Government of Karnataka, the auditors opined that Bescom had to make provisions in accordance with the same in the accounts. </p>.<p>“The recoverability of the said assets being carried in the books has not been justified to us by the management. The company in its financial statements has recognised Rs 1,024 crore as a tariff subsidy receivable from the Government of Karnataka for a long time. As the recovery of the same is doubtful, there is a need for an appropriate provision. Consequently, the profits are overstated to that extent,” the report said.</p>.<p>An auditor privy to the assessment said that Bescom had to make provisions in the accounts for these dues. “It is uncertain if Bescom will receive this amount. In such cases, they should make some provisions to declare them and reduce the value of assets proportionately,” the auditor said. </p>.<p>Apart from these, the audit has also identified a number of deviations from the Indian Accounting Standards. Valuation of inventories at the standard rates as against the norm that mandates it to value them at net realisable value and failure to recognise government grants in the statement of profit and loss were among a few deviations noticed. </p>.<p>“The deviations from the Indian Accounting Standards can be corrected by ensuring better maintenance of records. The financial state of the company is the major concern,” an expert said.</p>.<p>“The deviations from Indian Accounting Standards can be corrected by ensuring better maintenance of records. The financial state of the company is the major concern": Expert</p>
<p>Bengaluru: With the Bangalore Electricity Supply Company (Bescom) clocking in a loss for the fifth consecutive year, statutory auditors who have assessed the accounts have expressed concerns over the electricity company’s ability to discharge its liabilities in the normal course of business. For the financial year 2022-23, Bescom has reported a comprehensive loss of Rs 1,767.49 crore of which operational losses account to close to Rs 274 crore.</p>.<p>According to the audit report, Bescom is in dire need of revival since the company’s current liabilities exceed its current assets.</p>.<p>The report, a copy of which is accessed by DH, said that without the support of the government, Bescom may find it difficult to remain afloat. </p>.<p>“This condition indicates the existence of material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern in the absence of infusion of additional share capital or comfort letter issued by the Government of Karnataka,” the report stated.</p>.No load shedding: Bescom promises industry bodies.<p><strong>Can’t take loans</strong></p>.<p>Experts opined that since Bescom had hit a negative net worth, the company would also find it difficult to raise loans. </p>.<p>Noting that the company had failed to recover dues to the tune of Rs 1,022.51 crore that was spent on various free power schemes such as Ganga Kalyana and other drinking water supply schemes initiated by the Government of Karnataka, the auditors opined that Bescom had to make provisions in accordance with the same in the accounts. </p>.<p>“The recoverability of the said assets being carried in the books has not been justified to us by the management. The company in its financial statements has recognised Rs 1,024 crore as a tariff subsidy receivable from the Government of Karnataka for a long time. As the recovery of the same is doubtful, there is a need for an appropriate provision. Consequently, the profits are overstated to that extent,” the report said.</p>.<p>An auditor privy to the assessment said that Bescom had to make provisions in the accounts for these dues. “It is uncertain if Bescom will receive this amount. In such cases, they should make some provisions to declare them and reduce the value of assets proportionately,” the auditor said. </p>.<p>Apart from these, the audit has also identified a number of deviations from the Indian Accounting Standards. Valuation of inventories at the standard rates as against the norm that mandates it to value them at net realisable value and failure to recognise government grants in the statement of profit and loss were among a few deviations noticed. </p>.<p>“The deviations from the Indian Accounting Standards can be corrected by ensuring better maintenance of records. The financial state of the company is the major concern,” an expert said.</p>.<p>“The deviations from Indian Accounting Standards can be corrected by ensuring better maintenance of records. The financial state of the company is the major concern": Expert</p>