April 26, 2002	Friday	Safar 12, 1423

KARACHI, April 25: The annual accounts of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) for the year ended June 30, 2001, adopted by its general body on April 19, shows a sharp fall, in the excess of income over expenditure, at Rs3.5 million, from the previous year’s Rs9.8 million.

The total income of the Federation for financial year 2001 stood at Rs38.8 million and total expenditure at Rs35.3 million. These compared with income for 2000 amounting to Rs33.7 million and expenditure at Rs23.9 million.

A major reason for the steep drop in excess of income over expenditure during 2001 appears to be the payment of huge sum of Rs6.9 million that the apex chamber shows in ‘gratuity’. For the Federation with total assets of just Rs61 million and total annual expenditure of under Rs30 million (excluding gratuity), this seems a significant sum. But the accounts do not identify to whom and how many persons, gratuity has been paid.

But more important than the accounting figures is the fact that the auditors of the Federation — Rahim Iqbal Rafiq & Company — have qualified their report on the accounts on at least four counts.

The most significant of which being the fourth one, which said that the company (FPCCI) had not disclosed complete details of transactions relating to trade fairs and shows held from time to time.

The auditors note that the financial statements also do not reflect amount of Rs15.267 million relating to Expo-2000, which so far remained unrecorded in the company’s book.

Corroborative evidences for verification was not provided to the auditors in support of Rs4.195 million reflected as expense incurred by the FPCCI’s representatives on Expo-2000. Further, the amount purportedly realized in Germany subsequent to Expo-2000 against sale of a bus built for display at Expo-2000 has not reflected on the income side. Necessary adjustments required in respect of the above transactions have not reflected in these financial statements.

Auditors also said in their report that the FPCCI in the year 1996 had entered into an agreement with the Royal Netherlands Embassy for environmental project programme (ETPI) under which it received assistance of 3.095 million gilder from time to time.

Other objections raised by the auditors include that no transaction relating to programme (ETPI) has to date reflected in the books of the FPCCI ever since its inception in 1996 as against management assertions on financial statements.

Consequently, the auditors say that financial statements do not reflect the amount of unadjusted advance equivalent to Rs3,793,845 given to a consortium of five companies from ETPI funds neither the bank balance of ETPI funds of Rs929,174 nor the contra amount of Rs4,723,019 received from the RNE on this account.

Including under the “receivables” is a sum of Rs0.71 million, against which it has been noted: “This represents the amount received by the FPCCI in 199