Auditors flag material misstatements in KSEBL financial statements
The Kerala State Electricity Board Limited faces scrutiny over rising accumulated losses and a significant working-capital deficit.
The Kerala State Electricity Board Limited (KSEBL) has come under scrutiny following audit observations regarding its financial statements, asset valuation and liability recognition, according to The New Indian Express.
Auditors Mohan & Mohan Associates issued an adverse conclusion for the first quarter of FY2026-27, identifying pervasive material misstatements. The auditors also highlighted material uncertainty regarding the utility's ability to continue as a going concern.
As of 30 June 2026, KSEBL's accumulated losses rose to Rs 41,384.18 crore, while its negative net worth stood at Rs 37,885.13 crore. The utility reported a working-capital deficit of Rs 8,426.59 crore, with current liabilities of Rs 14,167.14 crore against current assets of approximately Rs 5,740.55 crore.
The auditors questioned the accounting treatment of a Rs 494.29 crore government grant, stating its recognition as income inflated reported profit. Additionally, the Comptroller and Auditor General (CAG) questioned the State Government's decision to withdraw that same amount from KSEBL in March 2025 after it was initially credited in December 2024.
The CAG described the withdrawal of the funds to the State's Consolidated Fund as a serious breach of financial propriety. The State Government stated the amount was adjusted against electricity duty collected by KSEBL in November 2025.
During the first quarter of FY2026-27, KSEBL's profit after tax declined to Rs 357.99 crore from Rs 687.72 crore in the same period the previous year. Finance costs rose to Rs 1,522.23 crore from Rs 1,163.89 crore, an increase of approximately 31 per cent.