Coal units overstated profits, says CAG

Four of Coal India subsidiaries along with Neyveli Lignite Corporation (NLC) has overstated their profits to the extent of Rs 161.65 crore in 2002-03.

While Northern Coal Fields had overstated its profit figures by Rs 114.50 crore "" the largest among all, Mahanadi Coalfields overstated it by another Rs 32.54 crore. Central Coalfields on the other hand inflated its profits by some Rs 9.72 crore.

South Eastern Coalfields and NLC overstated the figures by around Rs 2.5 crore each. Coal India however, understated its net profit by Rs 4 lakh.

Two of CIL's loss making subsidiaries has also understated the losses to the extent of Rs 75 crore. Ailing, Eastern Coalfields and Bharat Coking Coal understated their profits, by around Rs 56 crore and Rs 19 crore respectively.

In its report on the financial accounting of Coal India and its subsidiaries, the Comptroller and Aditor General of India has stated Western Coalfields Limited's profit after tax for 2002-03 at Rs 279.78 crore was overstated by Rs.84.74 lakh (net) due to incorrect adjustment of lease rent of Rs 52.86 lakh pertaining to the year 2002-03, as charge during the year 2001-02.

It was also overstated because lease rent of Rs 8.07 lakh pertaining to the year 2003-04, was taken as charge during the year instead of accounting the same under pre-paid expenses under the head current assets and short provisioning of depreciation amounting to Rs 39.95 lakh on development expenditure incurred on projects in operation.

CAG has also pointed out that profitability ratio of Coal India Ltd, has declined due to marked decrease in profit after tax to Rs 245.59 crore for 2002-03 as compared to Rs 516.8 crore in 2001-02.

For Bharat Coking Coal, CG has pointed out the networth of the company has declined sharply a negative Rs 1962.88 crore in 2001-02 to minus Rs 3223.17 crore in 2002-03.

For Eastern Coalfields, CAG has pointed out that its networth has declined from a negative Rs 1937.55 crore in 2001-02 to minus Rs 2267.82 crore as on March 2003. The EPS of the company also decreased to Rs 152.71 crore from Rs 125.15 crore in 2001-02.

Northern Coalfields' EPS has also decreased to Rs 3989.02 crore against Rs 4840 crore in the previous fiscal, according to CAG.