Indian
Express: Mumbai: Thursday, October 18, 2012.
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.
Suhas Jatkar,
Director, Sainik Kalyan Vibhag, Maharashtra, said: “The local audits have been
done. This is probably the only corporation of the state where business has
been growing. Today, it (turnover) is Rs 100 crore. We are in the process of
getting the current audits done.”
Interestingly,
the MESCO website currently non-existent because of the expiry of domain makes
a mention that a portion of the profits generated out of MESCO should be
directed towards Flag Day Fund, which goes towards the welfare of retired
services personnel. It may be noted that MESCO’s contribution towards the fund
has been nil or minimal. In fact, the term ‘Flag Day’ is not traceable in the
copies of audited balance-sheets that have been made available. “We are
focusing on business development as a result of which contribution towards the
Flag Day Fund by MESCO is nominal,” Jatkar said.
Maj (Retd) R
G Kulkarni, General Manager, MESCO, said: “There are three types of audits local,
statutory (by the state government) and CAG. Till 2009, all the audits are
complete. Statutory audit for 2010 is done, while the ones post 2010 are under
way.” A reply to a mail written to Bhaskar Jadhav, Minister of State for
Ex-Servicemen Welfare, in this regard is awaited.
.JPG)
.JPG)
