MESCO with turnover of Rs 100 cr not audited for 3 yrs

The Maharashtra Ex-Servicemen Corporation (MESCO), created in 2001 for the benefit of retired defence personnel, has been handling huge sums of money, with its current annual turnover touching around Rs 100 crore. However, in clear violation of rules, the corporation has not been audited for the last three years. This was revealed in an RTI application filed by The Indian Express.

Section 23 the Articles of Association of MESCO clearly mentions: "Once at least in every financial year, the accounts of the company shall be examined and the correctness of the Profit and Loss account and balance sheet ascertained by one or more auditors." While the Articles of Association make it mandatory to get the audit done by CAG-appointed auditors, the same has never been done.

A proposal to create MESCO was moved in 2001, in the aftermath of 1999 Kargil conflict, when a need was felt to create employment opportunities for retired armed services personnel. The sanction was accorded by the then chief minister Vilasrao Deshmukh and the initial amount of Rs 4.53 crore, which was lying unused with the Jawan Kalyan Vishwasta Mandal (Maharashtra), was made available towards capital money for the corporation. MESCO bagged its first contract in 2003 when 300 retired services personnel were employed with the BSNL. Today, the turnover of the corporation is close to Rs 100 crore and the employee strength has increased to 8,000.

In its application, The Indian Express had asked for the audited copies for the balance-sheets of MESCO from financial year 2006-07. While the audited copies of balance-sheets for financial years 2006- 07, 07-08 and 08-09 have been provided, the reply says: "The audits of year 2009-10, 2010-11, 2011-12 have yet not been done."

Consider this against the financial figures that reflect in the balance-sheets provided to The Indian Express. The profit and loss account for the year ending March 31, 2006, shows that MESCO generated Rs 20.61 crore as income against Rs 8.41 crore on March 31, 2005. The figure was Rs 16.57 crore in 2007 and Rs 27.20 crore in 2008. The profits too have been on the rise. The net profit after tax was Rs 31 lakh in 2006, Rs 1.54 crore in 2007 and Rs 4.61 crore by March 2008. While the turnover has since reached close to Rs 100 crore, there has been no audit in the last three years.

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