S.R.O. 349 (1)/77, dated 19^th March, 1977:  In exercise of the powers conferred by Section 44 of the Employees’ Old-Age Benefits Act, 1976 (XIV of 1976), the Federal Government is pleased to make the following rules, namely:-

• Short title and commencement:

(1)  These rules may be called the Employees’ Old-Age Benefits (Audit and Accounts) Rules, 1977.

(2) They shall come into force at once.

• Definitions:

In these rules, unless there is anything repugnant in the subject or context,-

(a)         “Act” means the Employees’ Old-Age Benefits Act, 1976 (XIV of 1976);

(b)        “accounting year” means a financial year;

(c)         “Form” means form appended to these rules;

(d)        “Institution” means  the Employees’ Old-Age Benefits Institution nominated under Section 4 of the Act;

(e)     “market value” means, in respect of any asset, the market value thereof as ascertained from

           published market quotations or, if there be no such quotations its fair value as between

           willing buyer and willing seller; and

(f)         “subsidiary company” or “corporation” means any company or corporation in which either-

(i)         The Institution holds more than 50% of the ordinary share capital of the company or

            corporation; or

(ii)        in respect of which the institution can legally control its management.

• Balance Sheet and statement of loans and investments:

(1)     The balance-sheet and the statement of loans and investments may be in any form, but shall show either on its face or in notes and statements annexed thereto the information contained in Form PI-04 and Form PI-05, respectively.

(2)     A statement showing the sources and application of funds during the accounting

      year shall be appended to the balance-sheet.

(3)      In arriving at amounts receivable in the balance-sheet or in any note, statement or report annexed thereto, amounts currently receivable from one person may be included net of amounts currently payable to that person and in arriving at  amounts payable in the balance-sheet or in any statement, note or report annexed thereto, amounts currently payable to any one person may be included net of amounts currently receivable from that person but, if this be done, there shall be stated the fact amounts payable and receivable have been shown on this basis.  Subject to the foregoing, all other amounts receivable and amounts payable shall be shown in the balance-sheet, or in any note, statement or  report annexed thereto, as gross amounts.

(4)      Where the amount of any assets shown in the balance sheet or in any note, statement or report annexed thereto includes an amount of shares, loans, debentures or other indebtedness in respect of the Head of the Institution, any member, actuary or auditor of the Institution or any firm or company in which the Head of the Institution , any member, actuary or auditors of the Institution has any personal interest as proprietor , partner, share-holder, manager or managing agent, the aggregate of such assets under each head of the balance-sheet shall be shown separately either on the face of the balance sheet or by way of a note.

(5)    The balance-sheet shall contain the following certificates, namely:-

(i)      A certificate, signed by the persons required to sign the accounts under sub-rule (3) of rule 5, explaining as to how the values of the investment in stock and shares as shown in the balance-sheet have been arrived at, and as to how the market value thereof has been ascertained for the purpose of comparison with the values so shown;

(ii)    A certificate, signed by the persons required to sign the accounts under sub-rule (3) of rule 5, certifying that the values of all assets have been reviewed as at the date of the balance-sheet and that in their belief the assets set forth therein are shown in the aggregate at amounts not exceeding their realizable or market value in Form PI-04:

Provided that if they are unable to certify that the assets set forth in the balance-sheet are shown as aforesaid, a full explanation of the basis upon which the values shown in the balance sheet have been assessed shall be given in the certificate;

iii)    A certificate, signed by the persons required to sign the accounts under sub-rule (3) of rule 5 and by the auditors, certifying that no part of the assets of the Fund has been directly or indirectly applied in contravention of the provisions of the Act relating to the said Fund;

(vi)     A certificate, signed by the auditors (which shall be in addition to any other Certificate or report which they are required to give with respect to the balance sheet), certifying that they have verified the cash balances and the securities relating to the Institution’s loans and investments either by physical checking or on the basis of a certificate issued by the banker  or an agency competent to hold securities.

(6)    If the values shown in Form PI-05 in respect of “holdings in subsidiary companies or corporations” and: land and landed properties” have increased since the last previous balance-sheet, the certificate required under clause (ii) of sub-rule (4) shall state the amount of every increase not solely due to the cost of subsequent additions or, as respects holdings  in subsidiary companies or corporations, to increased profits, and shall contain an explanation therefore.

• Revenue account:

(1)    The revenue account shall show the Fund at the beginning of the accounting period , the income and outgo during the accounting period and the Fund at the end of the period and such account may be in any form but shall show either on its face or in notes and statements annexed thereto the information contained in Form PI-06.

(2)    The items on the income side of the revenue account must relate to income, whether actually received or not, and the items on the expenditure side must relate to expenditure, whether actually paid or not.

(3)    Any office premises which form part of the assets of the Institution must be treated as an income earning investment, and accordingly in the income side of the revenue account a fair rent for the premises must be included under the heading “interest, dividends and rents, and in the expenditure side a proper charge for any use thereof by the Institution itself must be included under the heading “expenses of management’.

(4)    Any expenses incurred or disbursed for the purposes of the Act by any body corporate nominated under sub-section (1) of Section 5 of the Act shall be included under the appropriate headings under “expenses of management” in the expenditure side of the revenue account; any such expenses incurred or disbursed in respect of any period prior the Ist day of July, 1976 , shall be included in the first revenue account of the Institution as “preliminary, formation and development expenses” under the heading “other items” on the expenditure side.

• Audit:

(1)    The accounts of Institution required to be prepared in pursuance of these rules and every note, statement, certificate and report permitted or required to be annexed  thereto shall be audited by the auditors competent to audit  accounts of a public limited company  incorporated under the Companies Act, 1913 (VII of 1913) , who shall prepare a report thereon and submit it to the Board stating therein whether or not in their opinion the accounts and the notice, statements and reports annexed thereto have been properly  prepared  under the provisions of these rules and whether or not in their opinion and according to the information and explanations they have received, the certificates required or permitted to be given under clause (ii) of sub-rule (4) of rule 3 and Note (b) in Form PI-05 have been properly prepared in accordance with the provisions of these rules and whether or not in their opinion and according to the information and explanations they have received it was reasonable for the persons giving these certificates to have arrived at the opinions therein stated.

(2)    For the purpose of these rules, a loan shall be deemed to fall due for re-payment, and an installment of a loan shall be deemed to fall due for payment, on the earliest date on which the lender could require repayment or, as the case may be, payment, if he exercised all options and rights available to him.

(3)    The accounts shall be signed by the Head of the Institution and by the Chairman and at least one other member.

(4)    The auditors shall forward to the Board their report together with an audited copy of the accounts within six months of the end of the accounting year, or within such extended period as the Board may, with the prior approval of the Federal Government, allow.

• General:

(1)    The first balance-sheet and statement of loans and investments of the Institution shall be prepared as on the 30^th June, 1977, and the first revenue account of the Institution shall be prepared for the accounting year commencing on the Ist July , 1976.

(2)    The accounts required to be prepared in pursuance of these rules and all notes, statements, certificates  and reports permitted or required to be annexed thereto shall give a true and fair view of the state of affairs of the Institution as at the end of the accounting year and of its revenue for the accounting year and the previous accounting year’s figures shall be shown for the purpose of comparison.

Provided that such accounts, notes, statements, certificates and reports shall not be deemed not to give such a true and fair view by reason only of the fact that the amount at which any asset of the Institution has been included in the balance-sheet is less than the full value of that asset.

(3)    All amounts which are required to be shown in the accounts or in any note, statement, certificate or report permitted or required to be annexed thereto shall be shown in rupees but may be shown to the nearest one thousand rupees and the basis on which foreign currencies have been converted into rupees, where the amount affected is material, shall be stated in a statement annexed to the accounts.

 (Form PI-04)

EMPLOYEES’ OLD-AGE BEBEFITS INSTITUTION

 BALANCE SHEET AS ON THE 30^TH JUNE, 20----- 

Notes:             

(a)      Any amount which falls due for payment within or at the end of the period of 12 calendar months following the Balance sheet date is to be treated as a Current Liability. Any amount which falls due for payment later than the said period, is to be treated as a Long Term Liability.

(b)     This item must tally with the total of the Net Value Columns of Form PI-05.

(c)      These items are or have been included in the corresponding items in the Revenue Account. Outstanding and Accrued interest, Dividends and Rents must be shown after deduction of expenses and taxes specific to them such as property tax, or such taxes must be provided for amongst the liabilities on the other side of the Balance sheet.

(d)     Under this heading must be included such items as the following, which must be shown under separate headings suitably described:

Preliminary, Formation and Development expenses, other expenditure to be carried forward to be written off in future years etc. The amounts included in the Balance Sheet must not be in excess of cost.

(e)      The aggregate of Contingent Liabilities not provided for in the accounts must be stated by way of a note on the face of the Balance Sheet.

                                                                                                (Form PI-05)

                                                                        EMPLOYEES’ OLD-AGE BENEFITS INSTITUTION

                                             STATEMENT OF LOANS (OTHER THAN LOANS TO EMPLOYEES) AND INVESTMENTS

                                                                                AS ON THE 30^TH JUNE, 20____. 

 Notes:- 

(a)  Loans made on security located outside Pakistan and Debentures, Debenture Stock, Granted and Ordinary Stocks and Shares and holdings in Companies and Corporations incorporated outside Pakistan, Land, Landed property and investments located or referable outside Pakistan shall be shown separately under each heading.

(b)  The net value shall in no case be shown as exceeding the published market value as at Balance Sheet date in the case of loans and investments quoted on a Stock Exchange registered in Pakistan. In the case of other loans and investments, the net value shall in no case exceed their realizable value as at the Balance sheet date, and for each such item the Remarks column shall show how the realizable value has been arrived at.

(c)  The rates of exchange shall be stated at which assets in other currencies have converted to Pakistani Rupees.

(d)    No amount on account of any of the following items may be shown in the Statement: Preliminary, Formation and Development Expenses, Commission or Discount on Debentures Issued,

Expenditure carried forward to be written off in future years.

                                                                                       (Form PI-06)

                                                          EMPLOYEES’ OLD-AGE BENEFITS INSTITUTION

                        REVENUE ACCOUNT FOR PERIOD COMMENCED IST JULY, 20____ & ENDED 30^TH JUNE, 20____. 

 Notes: 

 (a)    If any sum has been deducted from this item and entered on the Assets side of the Balance-Sheet, the amount so deducted must be shown separately. 

(b)    Taxes specific to this head of income, such as property taxes, must be shown under this heading. The separate heading on the other side of the Account is for taxes like income-tax which are levied on an overall basis.