The Auditor General of Pakistan has detected millions of rupees financial irregularities in Pakistan Steel Mills (PSM) - future of which is hanging in the balance. The audit report 2015-16 has revealed that the sale of the corporation declined by 24.7 per cent from Rs 10.191 billion to Rs 7.673 billion during 2013-14 whereas cost of goods sold increased by 14.77 per cent as against 4.25 per cent over the year 2011-12. According to the audit team, this was an alarming position and serious efforts should be made to boost up the sales and to earn revenue.
The accumulated loss increased from Rs 94.921 billion to Rs 118.453 billion during 2013-14 registering an increase to 24.79 per cent. Due to which negative equity increased by 30.28 per cent from Rs 77.705 billion to Rs 101.238 billion which indicates existence of material uncertainty and significant doubt about Corporation's ability to continue as a going concern.
The cooperation operated at around 06 per cent of its capacity during 2012-13 and 2013-14 around 14 per cent) due to which the fixed cost could not be absorbed. Maximum possible efforts need to be made to utilise the plant at the maximum level to achieve the targeted production and to earn the revenue in order to make the mill a self-sustaining entity.
During 2013-14, interest/ mark-up due stood at Rs 11.121 billion as against Rs 5.383 billion as on June 30, 2013, showing an increase of 106 per cent. This was due to a persistent default in repayment of mark up accrued. PSM management has received term financing amounting to Rs 36.507 billion from National Bank of Pakistan during 2008-09 to 2012-13. Due to non- payment of outstanding dues, management defaulted on an amount of Rs 12.785 billion as on May 31, 2015. No efforts were taken by the management to pay the outstanding dues of NBP which needs a justification.
The Corporation's financial charges increased by 25.23 per cent from Rs 4.889 billion to Rs 6.122 billion during 2013-14. The audit was of the view that all efforts are required to be made to increase income and control on expenditure. The SSGCL levied Late Payment Surcharge (LPS) amounting to Rs 9.550 billion on the outstanding bills of Rs 24.449 billion as on June 30, 2014 due to non-payment of natural gas bill. Resultantly, SSGCL discontinued the supply of natural gas to PSM which ultimately a effected the production of the plant.
The audit has reported the following paras;(i) loss due to non-utilisation of different items- Rs 328.7 million; (ii) non- recovery of various charges- Rs 216.9 million;(iii) loss due to non-receipt of refund/ replacement of rejected items- Rs 9.632 million;(iv) loss due to undue favour extended to the supplier M/s Bhanbore Ceramics Industries- Rs 1.869 million;(v) irregular allotment of two accommodation/ plots to the same employees in Steel Town and ;(vi) loss due to delayed payment- Rs 4.613 million.