Sebi income surplus up 75% in FY16

Markets regulator Sebi on Thursday made public its first annual accounts statement, along with the observations made by Comptroller & Auditor General (CAG), showing 75 per cent jump in income surplus to Rs 356.19 crore last fiscal.

The surplus rose from Rs 203.50 crore in the financial year ended March 31, 2015 to Rs 356.19 crore in 2015-16.

The total income jumped to Rs 601.67 crore last fiscal from Rs 513.17 crore in 2014-15.

CAG, which examined Sebi's records, said the income is overstated by Rs 1.66 crore being excess booking of income on accrual basis in 2015-16, representing fees realisable by Sebi from FPIs, which actually pertains to registration and renewal fees for the periods commencing in/after April 2016.

"This is in contravention of the declared accounting policy on revenue recognition which states that registration/ renewal fees received from all intermediaries are accounted in the first year of registration/ renewal. This has resulted in overstatement of 'income-fees/subscriptions' and sundry debtors by Rs 1.66 crore," it noted.

Sebi has advanced a sum of Rs 222.83 crore to the National Institute of Securities Markets (NISM) -- a public trust established by it -- in 2013-14 to 2015-16 towards cost of building a campus at Patalganga on lease basis.

The interest earned on these advances amounting to Rs 2.17 crore has not been accounted for by the regulator in its books, resulting in understatement of 'interest earned', 'capital advances to NISM' and 'surplus' by Rs 2.17 core, CAG said.

CAG also noted that internal audit as well as control system in Sebi is adequate.