AUDIT REPORT

ON
THE ACCOUNTS OF
PUBLIC SECTOR ENTERPRISES
AUDIT YEAR 2018-19

AUDITOR GENERAL OF PAKISTAN

 TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS i

PREFACE xi
EXECUTIVE SUMMARY xiii
SUMMARY TABLES AND CHARTS
I. Audit Work Statistics xxi
II. Audit Observations regarding Financial Management xxi
III. Outcome Statistics xxi
IV. Table of Irregularities xxii
V. Cost- Benefit xxii

AVIATION DIVISION
CHAPTER-1
(CABINET SECRETARIAT)
1.1 Pakistan International Airlines Corporation
1.1.1 Introduction 1
1.1.2 Comments on Audited Accounts 1
1.1.3 Compliance of PAC Directives 1
1.1.4 AUDIT PARAS 2
1.2 Skyrooms (Pvt.) Limited
1.2.1 Introduction 41
1.2.2 Comments on Audited Accounts 41
1.2.3 Compliance of PAC Directives 42
1.2.4 AUDIT PARAS 42
CHAPTER-2 CABINET DIVISION

2.1 Pakistan Bait-ul-Mal

2.1.1 Introduction 46
2.1.2 Comments on Audited Accounts 46
2.1.3 Compliance with PAC Directives 46
2.1.4 AUDIT PARAS 47
CHAPTER-3 MINISTRY OF CLIMATE CHANGE

3.1 Pakistan Environmental Planning and

Architectural Consultants (Pvt.) Limited
3.1.1 Introduction 59
3.1.2 Comments on Audited Accounts 59
3.1.3 Compliance with PAC Directives 60
CHAPTER-4 MINISTRY OF COMMERCE AND
TEXTILE

4.1 National Insurance Company Limited

4.1.1 Introduction 61
4.1.2 Comments on Audited Accounts 61
4.1.3 Compliance of PAC Directives 63
4.1.4 AUDIT PARAS 63
4.2 Pakistan Reinsurance Company Limited
4.2.1 Introduction 71
4.2.2 Comments on Audited Accounts 71
4.2.3 Compliance of PAC Directives 73
4.2.4 AUDIT PARAS 73
4.3 State Life Insurance Corporation of Pakistan
4.3.1 Introduction 79
4.3.2 Comments on Audited Accounts 79
4.3.3 Compliance of PAC Directives 80
4.3.4 AUDIT PARAS 81
4.4 Trading Corporation of Pakistan (Pvt.) Limited
4.4.1 Introduction 89
4.4.2 Comments on Audited Accounts 89
4.4.3 Compliance of PAC Directives 90
4.4.4 AUDIT PARAS 91
4.5 Pakistan Expo Centers (Pvt.) Limited
4.5.1 Introduction 95
 4.5.2 Comments on Audited Accounts 95
4.5.3 Compliance with PAC Directives 95
4.5.4 AUDIT PARAS 96
4.6 Pakistan Tobacco Board
4.6.1 Introduction 118
4.6.2 Comments on Audited Accounts 118
4.6.3 Compliance with PAC Directives 118
4.6.4 AUDIT PARAS 119
CHAPTER-5 MINISTRY OF COMMUNICATIONS

5.1 Karachi Infrastructure Development Company

Limited
5.1.1 Introduction 125
5.1.2 Comments on Audited Accounts 125
5.1.3 Compliance of PAC Directives 126
5.1.4 AUDIT PARAS 126
CHAPTER-6 MINISTRY OF DEFENCE PRODUCTION

6.1 Karachi Shipyard and Engineering Works

6.1.1 Introduction 138
6.1.2 Comments on Audited Accounts 138
6.1.3 Compliance of PAC Directives 138
6.1.4 AUDIT PARAS 139
6.2 Pakistan Ordnance Factories
6.2.1 Introduction 147
6.2.2 Comments on Audited Accounts 147
6.2.3 Compliance with PAC Directives 147
6.2.4 AUDIT PARAS 148
6.3 Pakistan Ordnance Clothing Factory
6.3.1 Introduction 184
6.3.2 Comments on Audited Accounts 184
6.3.3 Compliance with PAC Directives 184
6.3.4 AUDIT PARAS 184
 6.4 Wah Industries Limited
6.4.1 Introduction 191
6.4.2 Comments on Audited Accounts 191
6.4.3 Compliance with PAC Directives 192
6.4.4 AUDIT PARAS
CHAPTER-7 MINISTRY OF ENERGY (Power Division)

7.1 National Engineering Services Pakistan (Pvt.)

Limited
7.1.1 Introduction 196
7.1.2 Comments on Audited Accounts 196
7.1.3 Compliance with PAC Directives 196
7.1.4 AUDIT PARAS 197
CHAPTER-8 MINISTRY OF FINANCE (Finance Division)

8.1 House Building Finance Company Limited

8.1.1 Introduction 231
8.1.2 Comments on Audited Accounts 231
8.1.3 Compliance of PAC Directives 232
8.1.4 AUDIT PARAS 233
8.2 Pakistan Security Printing Corporation (Pvt.)
Limited
8.2.1 Introduction 250
8.2.2 Comments on Audited Accounts 250
8.2.3 Compliance of PAC Directives 251
8.2.4 AUDIT PARAS 252
8.3 State Bank of Pakistan
8.3.1 Introduction 270
8.3.2 Comments on Audited Accounts 270
8.3.3 Compliance of PAC Directives 272
8.3.4 AUDIT PARAS 273
8.4 SME Bank Limited
8.4.1 Introduction 294
 8.4.2 Comments on Audited Accounts 295
8.4.3 Compliance with PAC Directives 296
8.5 Zarai Taraqiati Bank Limited
8.5.1 Introduction 298
8.5.2 Comments on Audited Accounts 298
8.5.3 Compliance with PAC Directives 299
8.5.4 AUDIT PARAS 300
8.6 Kissan Support Services (Pvt.) Ltd
8.6.1 Introduction 327
8.6.2 Comments on Audited Accounts 327
8.6.3 Compliance with PAC Directives 328

MINISTRY OF INDUSTRIES AND

CHAPTER-9
PRODUCTION

9.1 Export Processing Zones Authority

9.1.1 Introduction 329
9.1.2 Comments on Audited Accounts 329
9.1.3 Compliance of PAC Directives 329
9.1.4 AUDIT PARAS 330
9.2 Pakistan Industrial Development Corporation
9.2.1 Introduction 339
9.2.2 Comments on Audited Accounts 339
9.2.3 Compliance of PAC Directives 339
9.2.4 AUDIT PARAS 340
9.3 Pakistan Industrial Development Corporation -
Medical Centre
9.3.1 Introduction 356
9.3.2 Comments on Audited Accounts 356
9.3.3 Compliance of PAC Directives 356
9.3.4 AUDIT PARA 356
9.4 Karachi Tools, Dies and Moulds Centre
9.4.1 Introduction 358
9.4.2 Comments on Audited Accounts 358
9.4.3 Compliance of PAC Directives 358
9.4.4 AUDIT PARAS 359
9.5 National Industrial Parks Development and
Management Company
9.5.1 Introduction 363
9.5.2 Comments on Audited Accounts 363
9.5.3 Compliance of PAC Directives 364
9.5.4 AUDIT PARAS 365
9.6 Pakistan Chemical & Energy Sector Skill
Development Company
9.6.1 Introduction 387
9.6.2 Comments on Audited Accounts 387
9.6.3 Compliance of PAC Directives 388
9.6.4 AUDIT PARAS 388
9.7 Pakistan Gems and Jewellery Development
Company
9.7.1 Introduction 396
9.7.2 Comments on Audited Accounts 396
9.7.3 Compliance of PAC Directives 397
9.7.4 AUDIT PARAS 397
9.8 Pakistan Institute of Management
9.8.1 Introduction 409
9.8.2 Comments on Audited Accounts 409
9.8.3 Compliance of PAC Directives 407
9.8.4 AUDIT PARAS 408
9.9 Pakistan Steel Mills Corporation (Pvt.) Limited
9.9.1 Introduction 413
9.9.2 Comments on Audited Accounts 413
9.9.3 Compliance of PAC Directives 415
9.9.4 AUDIT PARAS 416
9.10 Pakistan Steel Fabricating Company (Pvt.)
Limited
9.10.1 Introduction 427
9.10.2 Comments on Audited Accounts 427
9.10.3 Compliance of PAC Directives 428
9.10.4 AUDIT PARAS 428
9.11 Pakistan Machine Tool Factory (Pvt.) Limited
9.11.1 Introduction 434
9.11.2 Comments on Audited Accounts 434
9.11.3 Compliance of PAC Directives 434
9.11.4 AUDIT PARAS 435
9.12 ENAR Petrotech Services (Pvt.) Limited
9.12.1 Introduction 438
9.12.2 Comments on Audited Accounts 438
9.12.3 Compliance of PAC Directives 438
9.12.4 AUDIT PARAS 439
9.13 Technology Upgradation and Skill
Development Company
9.13.1 Introduction 443
9.13.2 Comments on Audited Accounts 443
9.13.3 Compliance with PAC Directives 445
9.13.4 AUDIT PARAS 445
9.14 Pakistan Hunting and Sporting Arms
Development Company
9.14.1 Introduction 455
9.14.2 Comments on Audited Accounts 455
9.14.3 Compliance with PAC Directives
457
9.15 Furniture Pakistan (Pvt.) Limited
9.15.1 Introduction 458
9.15.2 Comments on Audited Accounts 458
9.15.3 Compliance with PAC Directives 460
9.16 State Engineering Corporation
9.16.1 Introduction 461
9.16.2 Comments on Audited Accounts 462
9.16.3 Compliance with PAC Directives 463
9.17 Heavy Electrical Complex (Pvt.) Limited
9.17.1 Introduction 465
9.17.2 Comments on Audited Accounts 465
9.17.3 Compliance with PAC Directives 469
9.17.4 AUDIT PARAS 469
9.18 Industry Facilitation Centre (Pvt.) Limited
9.18.1 Introduction 480
9.18.2 Comments on Audited Accounts 480
9.18.3 Compliance with PAC Directives 482
9.19 National Fertilizer Corporation (Pvt.) Limited
9.19.1 Introduction 483
9.19.2 Comments on Audited Accounts 483
9.19.3 Compliance with PAC Directives 486
9.20 NFC Institute of Engineering and
Technological Training (Pvt.) Limited, Multan
9.20.1 Introduction 487
9.20.2 Comments on Audited Accounts 487
9.20.3 Compliance with PAC Directives 489
9.21 NFC Institute of Engineering and Fertilizer
Research Faisalabad
9.21.1 Introduction 490
9.21.2 Comments on Audited Accounts 490
9.21.3 Compliance with PAC Directives 491
 9.22 Small & Medium Enterprises Development
Authority
9.22.1 Introduction 493
9.22.2 Comments on Audited Accounts 493
9.22.3 Compliance with PAC Directives 495
9.22.4 AUDIT PARAS 495
9.23 Spun Yarn Research & Development Company
9.23.1 Introduction 498
9.23.2 Comments on Audited Accounts 498
9.23.3 Compliance with PAC Directives 498
9.23.4 AUDIT PARAS 499
9.24 Leather Crafts Development Company
9.24.1 Introduction 505
9.24.2 Comments on Audited Accounts 505
9.24.3 Compliance with PAC Directives 505
9.24.4 AUDIT PARAS 506
9.25 Utility Stores Corporation of Pakistan (Pvt.)
Limited
9.25.1 Introduction 510
9.25.2 Comments on Audited Accounts 510
9.25.3 Compliance with PAC Directives 513
9.25.4 AUDIT PARAS 514
9.26 Aik Hunar Aik Nagar
9.26.1 Introduction 553
9.26.2 Comments on Audited Accounts 553
9.26.3 Compliance with PAC Directives 555
MINISTRY OF INFORMATION,
CHAPTER-10 BROADCASTING AND NATIONAL
HISTORY & LITERARY, HERITAGE

10.1 Pakistan Television Corporation Limited

10.1.1 Introduction 556
10.1.2 Comments on Audited Accounts 556
10.1.3 Compliance with PAC Directives 559
 10.1.4 AUDIT PARAS 560
10.2 Pakistan Broadcasting Corporation Limited
10.2.1 Introduction 587
10.2.2 Comments on Audited Accounts 587
10.2.3 Compliance with PAC Directives 587
10.2.4 AUDIT PARAS 588
10.3 National Book Foundation
10.3.1 Introduction 600
10.3.2 Comments on Audited Accounts 600
10.3.3 Compliance with PAC Directives 601
10.3.4 AUDIT PARAS 602

MINISTRY OF INFORMATION
CHAPTER-11 TECHNOLOGY AND
TELECOMMUNICATION

Pakistan Software Export Board (Guarantee)

11.1
Limited
11.1.1 Introduction 606
11.1.2 Comments on Audited Accounts 606
11.1.3 Compliance with PAC Directives 608
11.1.4 AUDIT PARAS 609
MINISTRY OF NATIONAL HEALTH
CHAPTER-12 SERVICES REGULATION AND
COORDINATION

12.1 National Institute of Health Biological

Production Division
12.1.1 Introduction 624
12.1.2 Comments on Audited Accounts 624
12.1.3 Compliance with PAC Directives 626
 MINISTRY OF NATIONAL FOOD
CHAPTER-13
SECURITY AND RESEARCH

13.1 Pakistan Agricultural Storage and Services

Corporation Limited
13.1.1 Introduction 627
13.1.2 Comments on Audited Accounts 627
13.1.3 Compliance with PAC Directives 629
13.1.4 AUDIT PARAS 630
13.2 Livestock and Dairy Development Board
13.2.1 Introduction 640
13.2.2 Comments on Audited Accounts 640

CHAPTER-14 MINISTRY OF MARITIME AFFAIRS

14.1 Gwadar Port Authority 642
14.1.1 Introduction 642
14.1.2 Comments on Audited Accounts 642
14.1.3 Compliance of PAC Directives 643
14.1.4 AUDIT PARAS
14.2 Korangi Fisheries Harbour Authority
14.2.1 Introduction 647
14.2.2 Comments on Audited Accounts 647
14.2.3 Compliance of PAC Directives 647
14.2.4 AUDIT PARAS 648
14.3 Pakistan National Shipping Corporation
14.3.1 Introduction 654
14.3.2 Comments on Audited Accounts 654
14.3.3 Compliance of PAC Directives 656
14.3.4 AUDIT PARAS 657
 14.4 Port Qasim Authority
14.4.1 Introduction 674
14.4.2 Comments on Audited Accounts 674
14.4.3 Compliance of PAC Directives 674
14.4.4 AUDIT PARAS 675

CHAPTER-15 MINISTRY OF OVERSEAS PAKISTANIS

AND HUMAN RESOURCES
DEVELOPMENT

15.1 Employees’ Old-Age Benefits Institution

15.1.1 Introduction 710
15.1.2 Comments on Audited Accounts 710
15.1.3 Compliance of PAC Directives 711
15.1.4 AUDIT PARAS 712
15.2 Overseas Employment Corporation (Pvt.) Ltd.
15.2.1 Introduction 753
15.2.2 Comments on Audited Accounts 753
15.2.3 Compliance with PAC Directives 756
15.3 Overseas Pakistanis Foundation
15.3.1 Introduction 757
15.3.2 Comments on Audited Accounts 757
15.3.3 Compliance with PAC Directives 760
CHAPTER-16 MINISTRY OF PLANNING,
DEVELOPMENT AND REFORM

16.1 National Logistics Cell

16.1.1 Introduction 762
16.1.2 Comments on Audited Accounts 762
16.1.3 Compliance with PAC Directives 765
16.1.4 AUDIT PARAS 766
 16.2 Pakistan Institute of Development Economics
16.2.1 Introduction 801
16.2.2 Comments on Audited Accounts 801
16.2.3 Compliance with PAC Directives 804
CHAPTER-17 MINISTRY OF SCIENCE AND
TECHNOLOGY

17.1 Pakistan Science Foundation

17.1.1 Introduction 805
17.1.2 Comments on Audited Accounts 805
17.1.3 Compliance with PAC Directives 806
17.1.4 AUDIT PARAS 806
17.2 STEDEC Technology Commercialization
Corporation of Pakistan (Private) Limited
17.2.1 Introduction 812
17.2.2 Comments on Audited Accounts 812

Annexure: 1 MFDAC 817

2 Non-submission of Audited Accounts 827
3 Companies under liquidation/closed 830
4 Recoveries made at the instance / pursuance of
Audit 832
5 Statement showing the detail of loss due to low
seat factor 835
6 Statement showing the detail of non-collection of
cancellation charges 836
7 Statement showing the detail of Non-Production of
requisitioned auditable record 837
8 List of irregular appointment of officers/official 854
9 Statement showing negligence Engineering 856
Department of PIAC
10 Statement showing the detail of excess payment to
M/s Master Management 857
11 Statement showing the detail of short deposit of
amount 858
12 Statement showing the detail of misplaced/
unreturned inventory of Chairman House 859
13 Statement showing the detail of payment 860
14 Detail of bonus paid to Class-I to Class-IV Officer 861
15 PRCL PDP-Suspended Companies 2017 862
16 Statement showing the detail of irregular
appointment of officers 863
17 List of Debit balances in Assets & Receivables
accounts stands irrecoverable 865
18 Receivables from Govt. institutions and other
companies 866
19 Statement showing the detail of mis-appropriation
of funds 867
20 Statement showing the detail of irregular award of
contracts 869
21 Statement showing the detail of irregular revision
of the cost of contracts 870
22 Statement showing the detail of irregular award of
contracts 871
23 Detail of irregular appointments 873
24 Statement showing the detail of non-recovery of
decreed amount 875
25 Statement showing the detail of irregular
disbursement of loans beyond Area limit 877
26 Statement showing the detail of penalties 878
27 Statement showing the detail of non-collection of
sale deeds from the Registrar Office against
investment 879
28 Irregular appointment of Mechanical Engineer 880
29 Detail of payment made by PSPC on account of
income tax on behalf of MD and ED on payment
of Special Management Allowance 881
30 Statement showing non-production of record 882
31 Statement showing the detail of procurement of
 vehicles 883
32 Statement showing the detail of payment of fee 884
33 Statement showing Local currency investments 885
34 Statement showing detail of revised pay scales
2017 for EPZA employees 886
35 Statement showing in detail of investment made
on 28-08-2016 887
36 Statement showing the details of material reported
short / stolen 888
37 Statement the detail of Pay and Allowances drawn
by the CEO 891
38 Statement the detail of irregular payment of pay &
Allowances due to non-verification of degrees 892
39 Statement the detail of irregular appointment of
employees on contact basis 893
40 Detail of House Rent Allowance 2017-18 894
41 Detail of party wise receivable 895
42 Details of loss due to imprudent investment in
Companies’ Shares 896
43 Detail of non-recovery from debtors 897
44 Detail of loss due to irregular reservation of
vehicles as pool vehicles 989
45 Statement showing the detail of double payments 899
46 Detail of non-reconciliation of contribution
collection with banks 900
47 Detail of non collection of contribution from
employers 901
48 Detail of loss due to short fall in contribution
targets 903
49 Detail of investment in the category of held for
trading 905
50 Detail of loss due to donations by EOBI 906
51 Detail of extra ordinary delay in settlement of
pension claims 907
52 Detail of loss due to reduction in monthly rent 909
53 Statement showing the detail of IPS 910
54 Detail of non-recovery of outstanding rent and
electricity charges from tenants 911
55 Detail of non-recovery of contribution from
M/s. Kiran Sugar Mills 913
56 Detail of losses incurred on acquiring various
properties / land at exorbitant rates 914
57 Statement of unjustified revision rates 915