CAG pulls up K'taka for not formulating dividend policy

Bangalore, Mar 2 (UNI) The Comptroller and Auditor General of India has pulled up the Karnataka Government for not formulating any dividend policy for its public undertakings.

In its report (commercial) for the year 2004-05 presented to the State Legislature today, the CAG said the dividend of Rs 14.95 crore received by the Government from five out of the 42 companies which had finalised their accounts by September 2005 was only 0.12 per cent of the total equity investment of Rs 11,879.99 crore by the State Government. As against this, the return during 2003-04 was 0.18 per cent.

Out of 42 State-owned undertakings which had finalised the accounts, 22 had reported an aggregate profit of Rs 588.35 crore.

Out of the 19 loss-incurring Government companies, nine had accumulated losses aggregating to Rs 722.21 crore, exceeding their paid up capital of Rs 558.80 crore.

The CAG commented that despite poor performance and complete erosion of paid up capital, the State Government continued to provide financial support to these companies in the form of equity, loans and subsidy. The total financial support provided by the State Government during 2004-05 to six companies amounted to Rs 43.61 crore.

About return on capital, it said that out of the total capital of Rs 36,871.60 crore in 59 working companies, the total return was only Rs 1,123.11 crore. The percentage of total return was only 3.05 per cent as against 4.2 per cent (Rs 1,143.71 crore) achieved the previous year. The return on capital employed was only 10.5 per cent in 2004-05 as against 12.71 per cent the previous year.

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