313 State Firms Publish Financial Statements
EghtesadOnline: In line with new measures to improve the performance and transparency of government and affiliated organizations, 313 state-owned companies have released their financial statements.
They include state-controlled holdings, parent companies and subsidiaries, including seven banks, two insurance firms and four firms affiliated to the Economy Ministry, according to a press release seen on the ministry’s news agency, Shada.ir.
State companies published financial data for fiscal years ending in March 2021 and 2022 on Codal website, an information platform through which stock market companies publish key corporate information.
The financial reports come after the Economy Minister Ehsan Khandouzi this week spoke about “developments regarding economic transparency”.
The minister has said that improving financial transparency and accountability is a key priority in the ministry.
“Releasing financial statements audited by independent companies and legal inspectors discloses the strength and weakness of state-run companies to the public, “the ministry website said.
Obliging companies to regularly publish financial reports is paramount to assessing the performance (or lack of it) of the managers of the army of state-owned companies.
Last September, financial reports of the Bank Melli Iran, the main state-owned bank, revealed disappointing details about its performance. The bank showed 675.23 trillion rials ($2.5 billion) in accumulated losses in the fiscal year 2020-21.
The surprising losses were equivalent to 73% of the lender’s capital, which literally made the top bank eligible for bankruptcy. However, it still continues to function.
Listed companies usually absorb a significant part of the treasury’s revenue in fiscal budgets. The Economy Ministry’s website said “they account for more than half the total fiscal budget”.
According to a report by the Supreme Audit Court (SAC), the supervisory arm of the parliament, the Planning and Budget Organization has allocated 21,120 trillion rials ($78 billion) in the 2022-23 budget to government-controlled companies and banks.
This is 34.4% higher from the 15,710 trillion rials ($58 billion) set aside in the previous fiscal year.
The SAC said funding for 377 state-run companies, for-profit organizations and government-owned banks is mentioned in the current budget. Almost 60% of the budget revenue will go to ten state-run companies and banks, the ombudsman said.
Examining the financial records of state companies, the SAC said of the 377 companies, nine banks and one for-profit organization, 154 are expected to make profit, 199 will breakeven and 24 will be in the red this year.
On why state companies fail to make profit, the report pointed to selling goods based on mandatory prices by the government, expanding payrolls, old and ageing machinery and equipment, systemic failures to realize projected income, US sanctions and forcing banks to give loans beyond their ability and resources.