ISLAMABAD: Auditors have expressed concerns over the existence of Pakistan Hunting and Sporting Arms Development Company (PHSADC) for its poor financial standing.

The company established to divert the skilled gunsmiths away from grey market to a formal export-oriented sector is in stress financially, according to the Auditor General of Pakistan’s report 2015-16.

The report highlighted that the company incurred expenditure of Rs13.64 million against the total income of Rs5.43m in 2014-15.

“The company’s management needs to explain the reasons for its failure. Instead of its primary objective, the main source of income for PHSADC was the profit on investments and the profit on bank accounts,” the report highlighted.

The company increased its investment in banks by 18.75 per cent to Rs70.58m in 2014-15 compared to Rs59.44m in 2013-14. However, returns were Rs4.83m in 2014-15 against Rs5m in 2013-14.

The company faced an overall deficit of Rs100.3m as of June 30, 2015. “These conditions indicate that the existence of a material uncertainty cause doubts about the company’s ability to continue as a going concern.”

Meanwhile, PHSADC Chief Executive Officer Tahir Khattak refuted the charge sheet.

“We are not a commercial entity but a sector development institution,” Mr Khattak said, adding that we are neither in manufacturing nor in selling of arms or accessories, PHSADC helps develop the sector and not a competitor to the private sector.

The PHSADC established in 2006 by the Ministry of Industries and Production as a subsidiary of Pakistan Industrial Development Corporation (PIDC), with the target to promote quality hunting and sporting products for local and international markets.

The Auditor General Report has also highlighted issues related to the establishment of Common Facility and Training Centre (CFTC), which was initiated in 2011-12 at the cost of Rs48m.

“The project could not be started and the matter required detail investigation for mis-utilisation of funds along with cost escalation of the project,” the report added.

But Mr Khattak has said that the establishment of the CFTC was delayed because there was no board of the company for a long time and added that the CFTC would be operational in the first week of November.

The units manufacturing fire arms such as shotguns, pistols and rifles, knives and daggers, including multi tools and archery equipment, leather and fabric accessories such as belts and slings, holsters, shot shell bags, gun slips, rucksacks sleeping bags, tents and other outdoor accessories fall under PHSADC domain. Units producing sports wears also fall under the ambit of PHSADC.

The main centres of such units are Dara Adam Khel, Peshawar, Wazirabad, Sialkot, Gujranwala, Lahore and Karachi.

However, the main firearms manufacturing units are situated in Peshawar, that have been established by the government to streamline the gun manufacturing workshops into the formal sector.

Published in Dawn October 11th, 2016