State-owned Enterprises (Governance and Operations) Act, 2023

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THE STATE-OWNED ENTERPRISES (GOVERNANCE AND 
OPERATIONS) ACT, 2023 
 
 
 
  
 
 
CONTENTS 
 
CHAPTER-1 
GENERAL 
1.  Short title and commencement 
2.  Definitions 
3.  Scope and application 
 
CHAPTER-2 
STATE-OWNED ENTERPRISE MANAGEMENT POLICY AND PRINCIPLES 
 
4.  State-owned enterprise ownership and management policy 
5.  General principles 
 
CHAPTER-3 
PRUDENT AND EFFICIENT MANAGEMENT 
 
6.  Sound and prudent management  
7.  Objectives of state-owned enterprises 
 
CHAPTER-4 
MEASURABLE PERFORMANCE 
8.  Business plan 
 
CHAPTER-5 
RESPONSIBLE MANAGEMENT 
 
9.  Application of this Chapter 
10.  Board Nominations Committee 
11.  Disqualification of independent directors 
12.  Composition of the Board of a company 
13.  Term of office of directors 
 

 
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14.  Defect or irregularity in appointment 
15.  Chairman of the board and the chief executive officer 
16.  Fit and proper criteria 
 
CHAPTER-6 
RESPONSIBILITIES, POWERS AND FUNCTIONS OF THE BOARD 
 
17.  Independence of the Board 
18.  Appointment of the chief executive officer 
19.  Responsibility to the shareholders and the state-owned enterprise 
20.  Enforcement of systems of internal control 
21.  Audit Committee 
22.        Board meetings  
23.  Indemnity 
 
CHAPTER-7 
TRANSPARENT PERFORMANCE 
24.  Financial transparency 
25.  Financial statements 
26.  Annual report 
27.  Publication of summary of annual report 
28.  Half-yearly report 
 
CHAPTER-8 
SHAREHOLDING RIGHTS OF THE FEDERAL GOVERNMENT 
 
29.  Role of Federal Government 
30.  Disclosure by state-owned enterprise 
 
CHAPTER-9 
MONITORING PERFORMANCE 
31. Central monitoring unit 
32.  Disclosures to the central monitoring unit 
 
CHAPTER-10 
ENFORCEMENT 
33.  Enforcement of this Act 
34.  Power to make rules 
35.  Power to issue directives, circulars, guidelines, etc. 
 
 
 
 
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CHAPTER-11 
MISCELLANEOUS 
36. Miscellaneous 
37.  Removal of difficulty 
 
SCHEDULE-I 
SCHEDULE-II 
SCHEDULE-III 
SCHEDULE-IV 
SCHEDULE-V 
SCHEDULE-VI 
 
 
  
 
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THE STATE-OWNED ENTERPRISES (GOVERNANCE AND OPERATIONS) 
ACT, 2023 
 
ACT NO. VII OF 2023 
 
[30th January, 2023] 
AN 
ACT 
 
to provide for governance and operation of the management and financial efficiency of state-owned 
enterprises owned and controlled by the Federal Government 
 
WHEREAS, the Federal Government owns and controls a number of state -owned enterprises 
established under the various laws of Pakistan; 
 
AND WHEREAS, the governance and operation of these enterprises if not made effectively or 
appropriately affects the quality of service delivery by the State as well as the fiscal discipline of the 
State; 
 
AND WHEREAS, it is expedient to specify principles governing the operation of state-owned 
enterprises to a uthorise the formation of state -owned enterprises for carrying on certain Federal 
Government activities and to control the ownership thereof and to establish requirem ents about the 
governance and accountability of state -owned enterprises and for matters co nnected therewith and 
ancialiry thereto; 
 
It is hereby enacted as follows: 
CHAPTER-I 
 
GENERAL 
 
1. Short title and commencement.—(l) This Act shall be called the State-Owned Enterprises 
(Governance and Operations) Act, 2023. 
 
(2) It shall come into force at once. 
 
2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,— 
 
(a) “articles” means the articles of association of a company;  
 
(b) “board” means⸻ 
 
 (i)  in the case of a company, the board of directors of the company; and 
 
(ii)  in the case of a statutory state -owned enterprise, the governing body 
empowered to oversee or manage the affairs of such statutory body or 
enterprise. 
 
(c)  “chief executive officer” means⸻ 
 
(i)  in the case of a company, the chief executive officer of the company, by 
whatever name called; and 
 
 
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(ii)  in the case of a statutory state-owned enterprise, the person empowered 
to undertake the functions of the chief executive officer, by whatever 
name called under the relevant law. 
 
(d)  “controlled by the Government” means⸻ 
 
(i)  in the case of a company, i f the Federal Government directly or 
indirectly has the right to appoint a majority of directors or control over 
management or policy decisions, exercisable by a person individually or 
through any person acting in concert, directly or indirectly, whether b y 
virtue of Federal Government shareho lding, management right, 
sharehlders agreement, voting agreement or otherwise; 
 
(ii)  in the case of an entity created by an Act of the Majlis -e-Shoora, if the 
Federal Government has the power to appoint a majority of the persons 
who are directors of that entity or otherwise has the power to determine 
the outcome of decisions about the entity’s management or financial and 
operating policies. 
 
(e)  “commercial state-owned enterprise” means⸻ 
 
(i)  a state -owned enterprise  established under the Companies Act, 2017 
(XIX of 2017) other than companies licensed under section 42 thereof; 
or 
 
(ii)  a state-owned enterprise that generates the majority of its revenue from 
the sale of goods or services or a combination of goods and services on 
a commercial basis. 
 
(f)  “company” means a company incorporated under the Companies Act, 2017 
(XIX of 2017) which is a state-owned enterprise; 
 
(g)  “director” means⸻ 
 
(i)  in the case of a company, a director appointed under the Companies Act, 
2017 (XIX of 2017); and 
 
(ii)  in the case of a statutory state -owned enterprise, a member of the 
governing body designated under the applicable law. 
 
(h)  “nominee director” means⸻ 
 
(i)  a director who represents the Federal or Provincial Government; and 
 
(ii)  a director who representats another state-owned enterprise. 
 
(i)  “independent director” means a director who is not an ex-office director and is 
not disqualified under section 11;  
 
(j)  “owned by the Federal Government” means⸻ 
 
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(i)  in the case of a company, an entity in which the Federal Government 
directly or indirectly holds fifty percent or more shareholding; and 
 
(ii)  in the case of a statutory state owned enterprise, an entity which has been 
established through an Act of the Majlis-e-Shoora. 
 
(k)  “prescribed” means prescribed by rules made under this Act; 
 
(1)  “public service obligation” means the specified service or activity referred to in 
a public service obligation agreement; 
 
(m)  “public service obligation agreement” means an agreement referred to in 
Schedule-II between the Federal Government and a commercial state -owned 
enterprise for the undertaking of a public service obligation by the commerc ial 
state-owned enterprise; 
 
(n)  “Schedule” means Schedule made under this Act; 
 
(o)  “state-owned enterprise” means a corporate body falling within the scope of 
section 2; and 
 
(p)  “statutory state-owned enterprise” means a state -owned enterprise established 
under an Act of Parliament. 
 
3. Scope and application.—(1) Notwithstanding anything contained in any other law for the 
time being in force, this Act shall have application to all public se ctor companies as defined in sub -
section (54) of section 2 of the Companies Act, 2017 (XIX of 2017) and other corporate bodies which 
are owned and controlled by the Federal Government including those established under special 
enactments but shall not apply to— 
 
(a)  regulatory bodies which are empowered to issue licences, grant tariffs or 
undertake investigations and inquiries with regard to non -compliance of their 
statutory functions and powers; 
 
(b)  subject to sub-section (2), enterprises providing health and educational services 
and facilities; and 
 
(c)  subject to the criteria laid down in the state -owned enterprise ownership and 
management policy, any state-owned enterprise specifically excluded from the 
complete or partial application of this Act by t he Federal Government for 
reasons to be recorded and by notification in the official Gazette, provided that 
such exclusion does not undermine the objectives and principles of this Act. 
 
(2) The application of this Act may be extended by the Federal Government either completely 
or partly to any entity specified in Schedule-I, including without limitation to entities which the Federal 
Government does not have ownership in but exercises control thereon: 
 
Provided that the Federal Government shall have the power to amend Schedule-I; 
 
 
 
 
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CHAPTER-2 
 
STATE-OWNED ENTERPRISE MANAGEMENT POLICY  
AND PRINCIPLES 
 
 
4. State-owned enterprise ownership and management policy .—(1) The Federal 
Government shall, at least once in every five years, prepare and prescribe a state -owned enterprise 
ownership and management policy for giving effect to the objectives of this Act, namely:— 
 
(a)  that the shareholding responsibilities of the Federal Government with respect to 
its state owned enterprises are clarified; 
 
(b)  that the Federal Government acts as an informed and active shareholder; and 
 
(c)  that fiscal risks associated with state owned enterprises are effectively managed: 
 
Provided that the first policy to be developed under this Act shall be notified no later than one 
year from the coming into effect of this Act: 
 
Provided further that in the development of policies under this section, the Federal Government 
may seek input and assistance from the relevant stakeholders, including any regulatory  body, as may 
be required. 
 
(2) The policy referred to in sub-section (1), shall provide for, inter-alia— 
 
(a)  the criteria and rationale for ownership, retention and establishment of a state -
owned enterprise by the Federal Government; 
 
(b)  the role of the Federal Government in the governance of state -owned 
enterprises; 
 
(c)  the manner and procedure for exercising the rights of the Federal Government 
as shareholder in state-owned enterprises, including, without limitation, matters 
enumerated in sub-section 2 of section 29, subject to the principles laid down in 
this Act;  
 
(d)  clarification of the respective roles and responsibilities of any Division of the 
Federal Government, under the Rules of Business, 1973, Boards and other  
stakeholders involved in the implementation of the Ownership Policy; 
 
(e)  the role of and manner of operation of the central monitoring unit; 
 
(f)  the form and procedure for management and use of the electronic state -owned 
enterprise database, including right of access by the public; 
 
(g)  a framework for ensuring competitive neutrality of the State with respect to state 
owned enterprises; 
 
 
 
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(h)  a public sector obligation management framework; 
 
(i)  process of monitoring and managing contingent liabilities of state -owned 
enterprises; 
 
(j)  guidelines for board nominations committee while exercising its functions 
under section 10, including with respect to diversity and adequacy of board 
composition; 
 
(k)  1[* * * * * * *] 
 
(1)  the cooling off period for the appointment of independent directors;  
 
(m)  the manner of regulation of conflict of interest of directors, including procedures 
for identification and reporting of direct and indirect interests of directors and 
resolving any conflict of interest thereon; 
 
(n)  the criteria for excluding a state owned enterprise from the ambit of clause (c) 
of sub-section (1) of section 3; and 
 
(o)  any other matter required to give effect to the provisions and objectives of this 
Act. 
 
(3) The policy prescribed under this section shall clarify the manner of giving effect to the 
institutional arrangements whereby roles and responsibilities have been assig ned under this Act, in 
particular and without limitation— 
 
(a)  the manner in which the Board shall undertake its responsibilities with regard 
to— 
 
(i)  development of a business plan and statement of corporate intent under 
section 8, including without limitation the development of performance 
indicators and specific targets and the disclosure of public service 
obligations and target areas; 
 
(ii)  appointment of chief executive officer under section 18; 
 
(iii)  ensuring the development of internal systems o f control under section 
20; 
 
(iv)  establishment of an audit committee under section 21; 
 
(v)  timely preparation and publication of the financial statement, annual 
report and half-yearly report under sections 24 to 28; 
(vi)  timely submission of informati on to the central monitoring unit under 
section 32; and 
 
(vii)  ensuring the integrity of the information submitted to the central 
monitoring unit. 
 
___________________________________________________________________________ 
1Omitted by Act No. XII of 2024, s. 2 
 
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(b)  the manner in which the central monitoring unit shall undertake its functions 
with regard to— 
 
(i)  maintaining an electronic database under section 31; 
 
(ii)  providing analysis under sub -section (2) of section 31 to the Federal 
Government or its standing committee as the case may be; 
. 
(iii)  issuing periodic reports to the Federal Government or its standing 
committee as the case may be, and making such reports public, under 
sub-section (3) of section 31. 
 
 (c)  the manner in which the Federal Government shall undertake its functions with 
regard to— 
 
(i)  prescription of the state -owned enterprise ownership and management 
policy under this section as well as other rules to be prescribed under 
section 34; 
 
(ii)  roles and procedure of the standing committee to be established under 
sub-section (1) of section 33; 
 
(iii)  the role of the Division to which the business of a state-owned enterprise 
has been allocated under the Rules of Business, 1973 with respect to—  
 
(A) co-ordinating compliance with this Act by the Board; 
 
(B) providing sectoral policy support and guidance to the state-owned enterprise to enable it to 
comply with its objectives under section 7; and 
 
(C) providing sectoral policy support to the Federal Cabinet or its s tanding committee as the 
case may be with respect to the objectives of this Act. 
 
(iv)  the role of the Federal Government or its standing committee as the case 
may be, regarding the exercise of shareholding rights, use of analysis 
and reports submitted by  the central monitoring unit and the general 
oversight of the Boards under this Act. 
 
5. General principles.—The provisions of this Act, the state -owned enterprise management 
policy, and any rules made hereunder shall aim to further the following general principles, namely: 
 
(a)  the principle of prudent and efficient management according to which— 
 
(i)  a commercial state -owned enterprise must operate on a commercial 
basis that is efficient and profitable; and 
 
(ii)  a state-owned enterprise must operate efficiently and effectively. 
 
(b)  the principle of measurable performance according to which a state -owned 
enterprise must identify its business goals; 
 
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(c)  the principle of responsible management according to which the management 
of a state-owned enterprise must be competent, honest and accountable; 
 
(d)  the principle of transparent performance according to which a state -owned 
enterprise must report its performance fully, transparently and timeously; 
 
(e)  the principle of monitored performance according to which a state -owned 
enterprise must be subject to rigorous monitoring and review; 
 
(f)  the principle of competitive neutrality; and 
 
(g)  the principle of protection of minority shareholders, according to which the 
government and the stat e-owned enterprise must recognis e the rights of all 
shareholders and ensure all shareholders are treated equitably and have equal 
access to corporate information and the ability to nominate directors in a manner 
commensurate with their shareholding interest. 
 
CHAPTER-3 
 
PRUDENT AND EFFICIENT MANAGEMENT 
 
6. Sound and prudent management.—(1) Every state -owned enterprise shall undertake its 
operations in accordance with the criteria for sound and prudent management, namely:— 
 
(a)  the business of the state -owned enterprise is carried on with integrity, 
objectivity, due c are and the professional skills appropriate to the nature and 
scale of its activities; 
 
(b)  each independent director and chief executive officer, by whatever name called, 
of the state -owned enterprise complies with the prescribed fit and proper 
criteria; 
 
(c)  the state-owned enterprise is directed and managed by a sufficient number of 
persons who are fit and proper persons to hold the positions which they hold; 
and 
 
(d)  the state-owned enterprise maintains adequate accounting and other records of 
its business. 
 
(2) Accounting and other records shall not be regarded as adequate for the purposes of this 
provision unless they— 
 
(a)  enable the business of the state-owned enterprise to be prudently managed; 
 
(b)  enable the state -owned enterprise to comply with the obligations imposed by 
this Act; and 
 
(c)  comply with all professional standards and pronouncements of relevant 
professional bodies as applicable in Pakistan. 
 
7. Objectives of state -owned enterprises .—(1) The primary objective of a state -owned 
enterprise shall be to operate in an efficient manner, achieving the objectives contained in, and acting 
 
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in accordance with their respective Acts or articles and memorandum of association, as the case may 
be. 
(2) State -owned Enterprises, in undertaking their primary objectives, shall have regard, 
amongst other matters, to:–– 
 
(a)  the economic consequences of any decision in the long term; 
 
(b)  the need to foster the state -owned enterprise ’s business relationships with 
suppliers, customers and other stakeholders; 
 
(c)  the impact of the state-owned enterprise’s operations on the community and the 
environment; 
 
(d)  the importance of the stat e-owned enterprise maintaining a reputation for high 
standards of business conduct; and 
 
(e)  the need to act fairly as between members of the state-owned enterprise. 
 
(3) Notwithstanding anything contained in any other law for the time being in force, the primary 
objective of a commercial state-owned enterprise shall be to be generate sufficient revenues to cover 
their costs and be financially sustainable. 
 
(4) The Federal Government shall not require a commercial state -owned enterprise to 
undertake a public service obligation which deviates from the primary objective except as specified in 
Schedule-II of this Act; 
 
(5) Nothing in this section shall affect the validity or enforceability of any contract or other 
transaction entered into by a commercial state-owned enterprise. 
 
CHAPTER-4 
 
MEASURABLE PERFORMANCE 
 
8. Business plan .—(1) The Board of every state -owned enterprise shall, prior to the 
commencement of each financial year, adopt a business plan in respect of the following three financial 
years which shall contain information about the operations, strategic direction, and financial and non-
financial performance measures of the state-owned enterprise and demonstrates how the state -owned 
enterprise shall achieve its primary objective: 
 
Provided that the business plan must be effective on the first day of the first financial year to 
which it applies. 
(2) If a state-owned enterprise has one or more subsidiaries, the business plan must, for each 
subsidiary and for the group as a whole, include information about the operations, strategic direction 
and financial projections of the state-owned enterprise. 
 
(3) The business plan of a state owned enterprise shall be prepared in consultation with the 
Division to which the business of the state -owned enterprise has been allocated under the Rules of 
Business, 1973 and the draft under consultation shall be simultaneously submitted to the Central 
Monitoring Unit and the adopted business plan shall be submitted to the Federal Government for 
information. 
 
 
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(4) The board of every state-owned enterprise shall at the start of each financial year, adopt and 
cause to have published a statement of corporate intent for the state -owned enterprise or the group 
comprising the state -owned enterprise and its subsi diaries (if any), in respect of that year and the 
following two financial years in the manner and form set out in Schedule-III. 
 
CHAPTER-5 
 
RESPONSIBLE MANAGEMENT 
 
9. Application of this Chapter .⸻This chapter shall apply to all boards of state -owned 
enterprises, notwithstanding anything contained in any other law for the time being in force. 
 
10. Board Nominations Committee .––(1) There shall be a Board Nominations Committee 
comprising- 
 
(a)  the Minister in Charge to which the business of the state -owned enterprise has 
been allocated under the Rules of Business, 1973, who shall also be the Chair 
of the Committee: 
 
Provided that where the Minister in Charge is the Prime Minister, he 
may nominate a nother member of the Federal Government to be Chair of the 
Committee; 
 
(b)  the Secretary of the Division to which the business of the state-owned enterprise 
has been allocated under the Rules of Business, 1973; and 
 
(c)  the Secretary of the Finance Division or his nominee of at least BPS 21. 
 
(2) The Board Nominations Committee shall be responsible for— 
 
(a)  identifying and recommending candidates to the Federal Government for 
appointment as independent directors which the Federal Government is 
empowered to appoint to Boards; 1[*] 
 
(b)  recommending ex-officio positions to be held by the relevant Division or public 
sector organization of the Federal Government, or where necessary, a Provincial 
Government 1[;] 
 
1[(c)  evaluating the performance of ex-officio and  independent directors; and 
 
 
(d)  recommending the removal of a director or directors to the Federal Government  
on the basis of evaluating the performance of such director or directors.] 
 
 (3) The procedure adopted by the Board Nominations Committee for performing its functions 
1[under clauses (a) and (b) of sub-section (2)] shall be notified and shall comply with the principles of 
merit, confidentiality, transparency, diversity and fairness, including, but not limited to— 
 
(a)  advertisement in a newspaper(s) of wide circulation;  
 
(b)  requesting applications by invitation; 
 
(c)  appointing a head-hunting agency; or 
 
 
1Omitted, subs., added and ins. by Act No. XII of 2024, s. 3. 
 
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(d)  identifying candidates from the databank of independent directors notified by 
the Securities and Exchange Commission of Pakistan under section 166 of the 
Companies Act, 2017 (XIX of 2017). 
 
 1[(3A). In carrying out its functions under clauses (c) and (d) of sub -section (2) of section 10, 
the Board Nomination Committee shall evaluate the performance of a director or directors of a state-
owned enterprise based on the objectives and principles laid down in Chapters 2, 3 and 4 of this Act, 
to the extent applicable to a Board of a state-owned enterprise.] 
 
(4) The Board Nominations Committee shall apply the prescribed fit and proper criteria while 
making nominations of persons for appointment as directors. 
 
11. Disqualification of independent directors .––The following persons shall not be 
appointed or continue to hold office as an independent director, namely: 
 
(a)  a person who is under eighteen years of age; 
 
(b)  a person who is not a natural person; 
 
(c)  a person who is an undischarged bankrupt in any jurisdiction; 
 
(d)  a person who has been convicted of an offence in any jurisdiction;  
 
(e)  a person who is prohibited under a statute or by order of court from being a 
director or promoter of, or being concerned or taking part in the management of 
a corporation; 
 
(f)  a person who is declared mentally unfit by a medical board constituted for this 
purpose; 
 
(g)  a person who is in the service of Pakistan; 
 
(h)  a member of the Majlis-e-Shoora or a Provincial Assembly;  
 
(i)  a holder of a political office whether or not in a legislative role; or 
 
(j)  an employee of a state-owned enterprise. 
 
12. Composition of the Board of a company .—(1) A Board of a company shall consist of 
independent directors, ex-officio directors and the chief executive officer of the company, with the 
requisite skills, competence, knowledge, experience and approach so that the Board as a group includes 
core competencies and diversity required to assist the company achieve its primary objective. 
 
 (2) The majority of the board shall consist of independent directors. 
 
(3) No person shall be appointed or nominated as a director of more than five state -owned 
enterprises simultaneously, including their subsidiaries. 
 
___________________________________________________________________________ 
 1Added by Act No. XII of 2024, s. 3. 
  
 
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(4) An independent member shall not serve for more than nine years on a Board, and shall not 
be appointed to the same Board after two consecutive terms unless a period of three years has lapsed. 
 
13. Term of office of directors.—(1) A director, once appointed shall hold office for the period 
specified under the applicable law, unless he resigns in writing or is removed earlier in accorda nce 
with the provisions of this Act. 
  
 1[Provided that for reasons to be recorded, the Federal Government may remove a director or 
directors on the recommendation of the Board Nominations Committee under clause (d) of sub-section 
(2) of section 10.] 
 
 (2) 1[Save for as provided in the proviso sub-section (1) of section 13, an] independent director 
once appointed by the Federal Government shall not be removed unless it is established through an 
inquiry conducted in the prescribed manner that— 
 
(a)  the director is found to be in non-compliance with the provisions of this Act, or 
the Companies Act 2017, (XIX of 2017), or any other applicable law; 
 
(b)  1[* * * * * * *] 
 
(c)  the director is found to act in a manner detrimental to the successful 
management and operation of the state-owned enterprise; or 
 
(d)  the director is found guilty of misconduct. 
 
Explanation.––For the purpose of this clause, misconduct includes— 
 
(i)  indulging in a competing professional or personal conflict of interests’ situation;  
 
(ii)  using the funds, assets and resources of the state-owned enterprise without due 
diligence and care; 
 
(iii)  failing to treat the colleagues and the staff of the state -owned enterprise with 
respect, or using harassment in any form of physical or verbal abuse; 
 
(iv)  making public statements relating to the business of the state-owned enterprise 
without authorization by the Board; 
 
(v)  failing to comply with the state-owned enterprise’s code of conduct or conflict 
of interest requirements; 
 (v)  receiving gifts or other benefits from any sources external to the state -owned 
enterprise offered to him in connection with his duties on the Board; or 
 
(vi)  abusing or misusing his official position to gain undue advantage or assuming 
financial or other obligations in p rivate institutions or for persons which may 
cause embarrassment in the performance of official duties or functions. 
 
14. Defect or irregularity in appointment.––No act, proceeding or decision of the board shall 
be invalid by reason only of the existence o f a vacancy in, or defect or irregularity in the constitution 
of the board. 
_________________________________________________________________________ 
                                                         1Ins., subs. and omitted by Act No. XII of 2024, s. 4. 
 
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15. Chairman of the board and the chief executive officer .––(1) No person can hold office 
as chairman and chief executive of a state -owned enter prise simultaneously, and the office of the 
chairman shall be separate and his responsibilities distinct, from those of the chief executive officer. 
 
(2) The chairman of the board shall be appointed by the Federal Government and shall be 
responsible for leading the board and ensuring its effective functioning and continuous development 
and shall not be involved in day to day operations of the state-owned enterprise. 
 
(3) The chief executive officer shall— 
 
(a)  be responsible for the management of the state -owned enterprise and for its 
procedures in financial and other matters under delegation from the board and 
subject to the oversight and directions of the Board; 
 
(b)  ensure the proper implementation of strategi es and policies approved by the 
Board; and  
 
(c)  putting in place appropriate arrangements to ensure that funds and resources are 
properly safeguarded and are used economically, efficiently and effectively and 
in accordance with the state -owned enterprise  business plan, the primary 
objective and all statutory obligations. 
 
16. Fit and proper criteria.—(1) The fit and proper criteria shall be prescribed in Schedule -
IV and shall apply to independent directors, the chief executive officer, the company secretary and all 
other senior management officers, by whatever name called, of a state-owned enterprise. 
 
(2) The requirement to comply with the fit and proper criteria under this Act shall be without 
prejudice to compliance with any other requirement for the fitness and propriety of directors or senior 
management officers issued under any special law, rules or regulations by a sector regulator or 
authority governing a specified sector. 
 
CHAPTER-6 
 
RESPONSIBILITIES, POWERS AND FUNCTIONS OF THE BOARD 
 
17. Independence of the Board.⸻(1) The Board shall be given autonomy and independence 
in the discharge of its functions under this Act or any other applicable law in accordance with the 
adopted business plan and no administrative or standing instructions by an y Division of the Federal 
Government shall be applicable to any state -owned enterprises unless prior approval of the Federal 
Government has been obtained and any such instructions already in field at the time of coming into 
effect of this Act shall require  Federal Government ratification within a period of six months, failing 
which they shall be deemed to be rescinded. 
 
(2) State-owned enterprises shall maintain independent procurement policies with the approval 
of the Federal Government, which comply wit h the Chartered Institute of Procurement and Supply ’s 
Global Standards of Procurement and Supply and shall only be responsible for compliance of the 
provisions of the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002) to such 
extent as may be directed by the Federal Government: 
 
Provided that until the procurement policy of state-owned enterprise is prepared and approved 
by the Federal Government, the Public Procurement Regulatory Authority Ordinance 2002, (XXII of 
2002) apply mutatis mutandis to it. 
 
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18. Appointment of the chief executive officer .⸻(1) The Board, in the case of a company, 
or the concerned authority in the case of a statutory state -owned enterprise shall appoint a chief 
executive officer to the state -owned enterprise under a performance based contract for a specified 
period, unless such period is already specified in the enactment governing a statutory state -owned 
enterprise: 
 
Provided that the Board or the concerned authority shall bring their existing arrangements with 
the the appointment of chief executive officers in line with this provision within one year of coming 
into effect of this law. 
 
(2) The Board or the governing body in the case of statutory state -owned enterprises, by 
whatever name called, s hall be responsible for ensuring the performance of the chief executive is 
monitored regularly against agreed performance measur es and for the chief executive ’s development 
and succession planning. 
 
19. Responsibility to the shareholders and the state -owned enterprise .––(1) The Board 
shall ensure its obligations to shareholders of the state-owned enterprise are fulfilled and they are duly 
informed in a timely manner of all material events through shareholder meetings and other 
communications as necessary. 
 
(2) The Board shall develop and implement a code of conduct for the members of the Board, 
as well as the employees of the state -owned enterprise for the matters set out in Schedule -V of this 
Act, with a view to ensure the highest professional standards and corporate values are in place: 
 
Provided that the code of conduct developed under this sub -section shall be effectively 
communicated within the state-owned enterprise together with supporting policies and procedures,  
 
including adequate systems and controls for the identification and redressal of grievances arising from 
unethical practices. 
 
20. Enforcement of systems of internal control.⸻The Board shall ensure the integrity of the 
systems of internal control and any person who is found liable for a devia tion or violation from the 
company’s code of conduct or other systems of internal control shall be subject to disciplinary 
proceedings in accordance with the state-owned enterprise’s internal policies. 
 
21. Audit Committee.⸻(1) The Board of a state-owned enterprise shall establish an audit 
committee, whose members shall be financially literate and majority of them, including its chairman, 
shall be independent directors: 
 
Provided that the Chairman of the Board and the Chief Executive Officer of the state-owned 
enterprise shall not be members of the audit committee. 
 
(2) The audit committee shall be responsible for— 
 
(a)  recommending to the Board the appointment of external auditors by the state -
owned enterprise and shall consider any questions of resignation or removal of 
external auditors, audit fees and provision by external auditors of any service to 
the state-owned enterprise in addition to audit of its financial statements; 
 
 
Page 17 of 29 
 
(b)  determination of appropriate measures to safeguard the state owned enterprise’s 
assets; 
 
(c)  all reports and communications with external auditors; 
 
(d)  review of half -yearly and annual fi nancial statements of the state owned 
enterprise, prior to their approval by the Board; 
 
(e)  ensuring coordination b etween the internal and  external auditors of the state 
owned enterprise; and 
 
(f)  investigating, where necessary on a confidential basis, any deviation from or 
violation of the company’s code of conduct or other systems of internal control. 
 
22. Board meetings.⸻(1)The Board of a company shall meet–– 
 
 (a)  at least once in every two months; and 
 
(b)  at other times that the board considers necessary for the efficient management 
of the business and affairs of the state-owned enterprise. 
 
(2) Notwithstanding anything contained in any other law for the time being in force, decisions 
of the Board shall be ta ken by majority, however the following decisions shall require a decision by 
three-fourth majority, which shall include the vote of the nominee director representing the Federal or 
Provincial Government, namely⸻ 
 
(a)  appointment and removal of chief e xecutive officer of the state -owned 
enterprise; 
 
(b)  approval of the statement of corporate intent and business plan; 
 
(c)  proposals for sale of sizeable assets; 
 
(d)  annual budget statement approval; and 
 
(e)  sale of assets of the company. 
 
(3) The Chairman of the Board shall in case of equal number of votes, have a casting vote. 
 
23. Indemnity.––No suit, prosecution or other legal proceedings shall lie against the directors, 
chief executive officer, or other employee of a state-owned enterprise if the liability arose out of an act 
or omission of the director, chief executive or employee and the act or omission was done in good faith 
and with due care. 
 
CHAPTER-7 
 
TRANSPARENT PERFORMANCE 
 
24. Financial transparency .––(1) The Board shall ensure that the state -owned enterprise 
along with its subsidiaries, must keep written financial records that— 
 
 
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(a)  correctly record and explain its transactions and financial position and 
performance; 
 
(b)  enable financial statements to be prepared and audited in accordance with this 
Act; 
 
(c)  clearly identify any transactions undertaken by the state-owned enterprise with 
any director or his close relatives, either directly or indirectly and comprising a 
pecuniary or non -pecuniary benefit through a company or other business 
established by such director; and 
 
(d)  enable other reports required by this Act to be prepared.  
 
(2) The records required by sub-section (1)⸻ 
 
(a)  shall be kept for at least ten years after the dates of the transactions to which 
they relate; 
 
(b)  must be kept at the principal place of business or the registered office address 
of the state-owned enterprise; and 
 
(c)  shall also be kept in electronic form if they are readily retrievable and 
convertible into hard copy form. 
 
25. Financial statements .⸻(1) The board of a state -owned enterprise must ensure there is 
prepared, for each financial year, audited financial statements for the state-owned enterprise as well as 
consolidated financial statements for the group consisting of the state -owned enterprise and its 
subsidiaries: 
 
Provided that for the purposes of this section, a subsidiary shall not include a joint venture. 
 
(2) The financial statements must be  prepared in accordance with International Financial 
Reporting Standards and the financial statements together with the notes to them must include all 
information that is necessary to ensure that the financial statements give a true and fair view of the  
 
 
financial position of the state-owned enterprise and the group consisting of the state-owned enterprise 
and its subsidiaries: 
 
Provided that where a state -owned enterprise is not following the International Financial 
Reporting Standards at the time of com ing into effect of this Act, the Board shall ensure compliance 
with this provision within a period of three years from coming into effect of this Act. 
 
(3) The financial statements must be accompanied by a declaration of the Board whether, in 
their opinion⸻ 
 
(a)  there are reasonable grounds for believing that the state -owned enterprise and 
its subsidiaries shall be able to pay their debts as they become due and payable; 
and 
 
 
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(b)  the financial statements and the notes to them comply with the requirements of 
this Act and international accounting standards. 
 
26. Annual report.––(1) A state-owned enterprise must submit to the Federal Government a 
report on its operations and its subsidiaries for the financial year to which it relates, not later than four 
months after the end of that financial year in the form prescribed in Schedule-VI. 
 
(2) The annual report may omit information that the board of t he state -owned enterprise 
reasonably considers is likely to materially prejudice the commercial interests of the state -owned 
enterprise or a subsidiary if disclosed. 
 
(3) The Board shall submit a report to the Federal Government on the information omitted from 
the annual report under sub -section (2) and the reasons for such omission and such report shall be 
confidential. 
 
27. Publication of summary of annual report .⸻(1) A state-owned enterprise must arrange 
for publication of a summary of the annual report on an internet site maintained by the state -owned 
enterprise or, where the state-owned enterprise does not have a website, on the website of the Division 
to which the business of the state -owned enterprise is allocated under the Rules of Business,1973, or 
in one or more newspapers generally circulating in Pakistan. 
 
(2) The summary of the annual rep ort must be published under sub -section (1) within one 
month after the report is submitted to the Federal Government and should compare the actual 
performance of the state-owned enterprise during the financial year to which the report relates with the 
targets or benchmarks set in its statement of corporate intent for that financial year. 
 
28. Half-yearly report.⸻(1) A state-owned enterprise must submit to the Federal Government 
a half-yearly report of the operations of the state -owned enterprise for the first half of the financial 
year to which it relates not later than two months after the end of the first half of that financial year. 
 
(2) The half-yearly report must contain: 
 
(a)  the half yearly financial reports of the state-owned enterprise; 
 
(b)  a statement on the extent the state -owned enterprise and its subsidiaries have 
achieved the business goals specified in its statement of corporate intent for the 
financial year; and 
 
(c)  include any other matter that the Federal Government may direct the state -
owned enterprise to include. 
 
CHAPTER-8 
 
SHAREHOLDING RIGHTS OF THE FEDERAL GOVERNMENT 
 
29. Role of Federal Government .––(1) Subject to this Act, the Federal Government shall 
exercise all the powers and rights that shareholders have in relation to the state-owned enterprise under 
the law or the constitution of the state-owned enterprise. 
 
(2) The manner of exercise of shareholders rights with respect to  the state-owned enterprise 
shall be prescribed in the state-owned enterprise ownership and management policy and shall include, 
without limitation⸻ 
 
 
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(a)  the designation of the officers authorized to act as shareholder on behalf of the 
Federal Government at statutory meetings; and 
 
(b)  any other matter necessary for the efficient exercise of shareholder rights by the 
Federal Government. 
 
(3) The provisions of this section shall have overriding effect over any procedure to the contrary 
in any other applicable law. 
 
30. Disclosure by state-owned enterprise.⸻(1) The directors and senior management officers 
of a state -owned enterprise shall annually submit their assets and beneficially held investments and 
properties to the Board, and any changes thereon shall  be reported to the Board within two weeks of 
such change, subject to such reasonable restrictions on making this information public as may be 
imposed by the Board in its conflict management policy. 
 
(2) The Federal Government may direct a state -owned en terprise to disclose specified 
information or documents relating to the affairs of the state-owned enterprise or its subsidiary. 
 
(3) The Federal Government must not direct the disclosure of information relating to an 
individual if the individual is identifiable from the information. 
 
(4) Subject to the terms of a direction under this section, a state-owned enterprise may propose 
reasonable conditions to the Federal Government on making the information public disclosed under 
this section, including restrictions of its further disclosure. 
 
CHAPTER-9 
 
MONITORING PERFORMANCE 
 
31. Central monitoring unit .⸻(1) The Federal Government shall establish a central 
monitoring unit in the Finance Division which shall also maintain an electronic database of the 
financial and operational performance of state -owned enterprises and the following information in 
relation to state-owned enterprises, namely.⸻ 
 
(a)  statements of corporate intent; 
 
(b)  business plans; 
 
(c)  half-yearly and annual reports; and 
 
(d)  any other information prescribed in the state -owned enterprise management 
policy. 
 
(2) The central monitoring unit shall undertake analysis on the financial, commercial and 
operational performance of state -owned enterprises, and on the basis of such analysis , submit 
recommendations to the Federal Government on matters related to the performance and governance of 
state-owned enterprises, including⸻ 
 
(a)  the overall performance of state-owned enterprises; 
 
 
Page 21 of 29 
 
(b)  performance of state -owned enterprises against th eir primary objectives, 
business goals, and performance targets and benchmarks; 
 
(c)  investment in, loans to, and guarantees of state-owned enterprises; 
 
(d)  the risks associated with the state-owned enterprise sector that could affect the 
State’s investment in state-owned enterprises; 
 
(e)  proposals relating to major transactions by state-owned enterprises as and when 
required by the Federal Government; 
 
(f)  best practice by state -owned enterprises for encouraging and enhancing 
efficiencies and service delivery, and for improving performance;   
(g)  agreements for public service obligations as and when required by the Federal 
Government; 
 
(h)  compliance under section 32 by state-owned enterprises; 
 
(i)  state-owned enterprise reform options as and when required by the Federal 
Government; 
 
(j)  analysis of the content of the statements of corporate intent, business plans, 
annual reports and semi-annual reports; and 
 
(k)  any other matter which the Federal Government may require. 
 
(3) The central monitoring unit shall issue periodic reports on the performance of the state -
owned enterprises and matters listed in sub -section (2), which shall not be less than once eve ry half 
year, in such form and manner as may be prescribed, and such reports shall be submitted to the Federal 
Government. 
 
(4) The central monitoring unit shall publish a consolidated report on the performance of state-
owned enterprises annually, with the approval of the Federal Government. 
 
32. Disclosures to the central monitoring unit .⸻(1) Every state -owned enterprise shall be 
required to submit information to the central monitoring unit as required under this Act: 
 
Provided that if there is any chang e or error in the particulars already submitted to the state -
owned enterprise monitoring unit, it shall be updated or corrected as the case may be, within fifteen 
days of such change or knowledge of error. 
 
(2) The central monitoring unit may, by notice in writing to a state-owned enterprise, require a 
disclosure by the state-owned enterprise to enable the central monitoring unit to discharge its functions 
under this Act. 
 
(3) A state -owned enterprise must comply with a notice under sub -section (2)  within ten 
working days after receiving it. 
  
 
Page 22 of 29 
 
CHAPTER-10 
 
ENFORCEMENT 
 
33. Enforcement of this Act.––(1) The Federal Government shall establish a committee of the 
Federal Cabinet to monitor the implementation of this Act. 
 
(2) The Division to which the business of a state -owned enterprise has been allocated under 
the Rules of Business, 1973 shall co-ordinate with the Board of such state-owned enterprise to monitor 
compliance with the provisions of this Act, including, withou t limitation, with respect to the 
development of the business plan, statements of corporate intent, the annual reports, timely 
establishment of systems of internal controls of the state -owned enterprise, appointment of the Chief 
Executive Officer, and reporting to the central monitoring unit. 
 
(3) The Federal Government may carry out its functions and powers under this Act, except the 
power to make rules or to appoint independent directors, either directly through or by delegation to 
one or more of its Divisions or a body corporate which may be established by the Federal Government 
for this purpose by notification in the official gazette: 
 
Provided that in case the Federal Government establishes a body corporate then the functions 
of the central monitoring unit shall also be undertaken by such body. 
 
34. Power to make rules .⸻(1) The Federal Government may, by notification in the official 
Gazette make rules to carry out the purposes under this Act. 
 
(2) Without prejudice to the generality of the foregoing powers, such rules may provide for–– 
 
(a)  procedure for submission of various reports to the Federal Government and the 
manner of preparation of such reports; 
 
(b)  legal validity, form, procedure and security of the electronic database 
maintained by the central monitoring unit; and 
 
(c)  any other matter incidental or consequential. 
 
 (3) The power to make rules under this Act shall be subject to the condition of prior publication 
in a manner appropriate for inviting representations thereon by the public, and the Federal Government 
shall cause a report to be published on its website, setting out in general terms- 
 
(a)  the representations made on the draft rules; 
 
(b)  the response of the Federal Government to the representations; and 
 
(c)  where the rules are made with modifications which in the opinion of the Federal 
Government result in the rules or regulations being significantly different from 
the draft, publish, in such manner as it considers appropriate, details of the 
difference. 
 
35. Power to issue directives, circulars, guidelines, etc .⸻The Federal Government shall 
have the power to issue such directives, codes, guidelines, circulars or notifications as are necessary 
to carry out the purposes under this Act and the rules made hereunder. 
 
 
Page 23 of 29 
 
CHAPTER-11 
 
MISCELLANEOUS 
 
36. Miscellaneous.⸻(1) Notwithstanding anything contained in any law for the time being in 
force, nothing in this Act, shall affect or be deemed to affect anything done or any action taken, or 
purported to have been taken by a state -owned enterprise, including under any rule, regula tion, 
notification, order or notice made or issued, any approval, appointment or declaration made, any 
operation undertaken or direction given before the commencement of this Act. 
 
(2) Subject to sub -section (1), any order, rule, notification, regulation , appointment, 
conveyance, deed, document or direction made, proceedings taken, instrument executed or issued or 
thing done by or in relation to a state-owned entity shall, if in force before the commencement of this 
Act, continue to be in force and shall have effect as if made, directed, passed, given, taken, executed, 
issued or done under or in pursuance of this Act, unless otherwise specifically withdrawn by an order 
of the concerned authority. 
 
(3) Any person appointed to any office prior to the coming into force of this Act shall be 
deemed to have been appointed to that office under and by virtue of this Act and any condition or term 
of service or employment modified through this Act shall not have retrospective application or effect. 
 
(4) Within one year of the coming into effect of this Act, the Federal Government shall, in the 
case of any inconsistency, initiate legislation to bring the laws of statutory state -owned enterprises in 
conformity with the provisions of this Act. 
 
37. Removal of difficulty.––If any difficulty arises in giving effect to the provisions of this 
Act, Federal Government may make such order, not inconsistent with the provisions of this Act, as it 
may consider necessary for removal of such difficulty. 
 
Schedule-I 
Entities to Whom this Law is Extended 
[see Section 3(2)] 
 
 
Entity Applicable Provisions 
Pakistan Railways  
Pakistan Post Office  
Companies estab lished under 
section 42 of the C ompanies Act, 
2017 
 
Pakistan Agricultural Storage and 
Services Corporation 
 
Pakistan State Oil  
 
Schedule-II 
Framework for Enforcing Public Service Obligations 
[see Section 7(4)] 
 
1.  The Federal Government may in writing require a commercial state -owned enterprise 
to: 
 
(a)  provide a specified service or perform specified activities; or 
 
 
Page 24 of 29 
 
(b)  cease providing a specified service or performing specified activities. 
 
2.  Within one month of receiving the written proposal from the Federal Government, the 
State-owned enterprise must resp ond to the notice in writing, stating, with reasons, 
whether the State-owned enterprise: 
 
(a)  agrees to give effect to the proposal; or 
 
(b)  finds the request to be inconsistent with the primary objective of the State -
owned enterprise. 
 
3.  If the commercial state-owned enterprise gives a notice under clause (2)(b), the Federal 
Government and the commercial state -owned enterprise must enter into good faith 
negotiations with a view to agreeing arrangements under which the commercial state -
owned enterprise can give effect to the Federal Government proposal without acting 
inconsistently with its primary objective. 
 
4.  If an agreement is reached under clause (3), the arrangements for giving effect to 
Federal Government proposal shall be incorporated in a Publ ic Service Obligation 
Agreement which: 
 
(a)  must be in writing;  
 
(b)  must be approved by the Federal Government and the Board of the commercial 
state-owned enterprise; 
 
(c)  may include provision for funding or other resources to the commercial state -
owned enterprise; 
 
(d)  if it provides for the commercial state -owned enterpri se to provide goods or 
services, must- 
 
(i)  specify the goods or services, including any particular quantities; 
 
(ii)  specify an estimate of the annual total cost to the commercial state -
owned enterprise for providing the goods or service, and an estimate of 
the annual total revenue to be received by the commercial state -owned 
enterprise for doing so; and 
 
(iii)  specify how the performance of the commercial state -owned enterprise 
in providing the goods or services will be monitored and assessed. 
 
(e)  may include any other matter, not inconsistent with this Act, that is agreed 
between the Minister in Charge and the commercial state-owned enterprise. 
 
5.  For the avoidance of doubt, if the Federal Government directs a commercial state -
owned enterprise to provide specified services or perform specified activities through 
cross-subsidizing the cost between different groups of users and the revenue collected 
by the commercial state-owned enterprise from the cross-subsidization does not cover 
the costs, the Federal Government and commercial state -owned enterprise will agree 
the short-fall to be funded by the Federal Government and enter into a public service 
obligation agreement as provided in clause (4). However, a cross subsidy between 
different groups of users which is in accordance with a tariff determined by a regulator 
or the commercial state-owned  enterprise’s  own  pricing  mechanism,  is not  a public  
 
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 service obligations and will not require a public service obligation agreement as 
provided in clause (4). 
 
6.  The obligations under a public service obligation agreement shall be binding. 
 
      Schedule-III 
 Statement of Corporate Intent 
 (see Section 8(4)) 
 
1.  Name of State -Owned Enterprise: [ full name as per certificate of incorporation or relevant 
statute] 
 
2.  Incorporated/established on: [date of incorporation/establishment] 
 
3.  Subsidiaries included in this statement of corporate intent: _____________________________ 
 ______________________________ 
 
4.  Description of the main business of the state -owned enterprise: [ as per the constitutive 
documents/relevant statute] 
 
5.  Summary of the business goals of the state -owned enterprise: [as per the approved business -
plan] 
 
6.  Summary of the performance measures an d benchmarks against the state -owned enterprises 
business goals and its primary objective: [targets of the state-owned enterprise] 
 
7.  Summary of the strategies of the state -owned enterprise for achieving its business goals and 
primary objective: [ commercially sensitive strategies are not required to  be included here , 
summary of key risks identified in the achievement of the  business goals to also be included 
here] 
   
8.  The current or anticipated borrowing of the state -owned enterprise. including borrowing by a 
subsidiary: [current borrowing has to be specific -anticipated borrowing to be included on the 
basis of projected revenue requirements of the state-owned enterprise and will not be binding 
on the state-owned enterprise] 
 
9.  The accounting policies that the state -owned enterprise will apply for financial records and 
reporting:____________________________ 
 
10.  Summary indicative balance sheet and profit and loss statement for the state-owned enterprise: 
____________________________________ 
 
11.  Consolidated summary indicative balance sheet and profit and loss statement for the state -
owned enterprise and its subsidiaries as a group: [need not be filled if the state-owned enterprise 
does not have any subsidiary] 
 
12.  The proposed dividend declarat ion and di stribution policy of the state -owned enterprise: 
____________________________________ 
 
 
Page 26 of 29 
 
13.  Description of any public service obligations and their impact on the forecasted financial 
outcomes of the state-owned enterprise: [as agreed with the Federal Government] 
 
14.  Any other matter directed to be included in this statement by the Federal Government: _______ 
 _____________________________________ 
 
                          Schedule-IV 
Fit and Proper Criteria 
(see Section 16) 
 
For the purpose of determining as to whether a person proposed to be appointed as director is a 
‘fit and proper person’, the appointing authorities shall take into account any consideration as it deems 
fit, including but not limited to the following criteria, namely that the candidate for appointment:⸻ 
 
(a)  has the skills, knowledge and experience to assist the state -owned enterprise 
achieve its primary and other objectives; 
 
(b)  has at least a graduate degree 
 
(c)  is a businessman of repute or a recognis ed professional with relevant sectoral 
experience; 
 
(d)  is financially literate; 
 
(e)  has no convictions or civil liabilities; 
 
(f)  has good reputation and character and exhibits high ethical standards; 
 
(g)  is not disqu alified to act as a director stipulated in this Act or any other law 
applicable to the functioning of a state-owned enterprise; 
 
(i)  has not been subject to an adverse order passed by the Securities and Exchange 
Commission of Pakistan or any other sector regulator;  
 
(j)  has not been subject to an order passed by the Securities and Exchange 
Commission of Pakistan or any other regulatory authority, withdrawing or 
refusing to grant any license or approval to him which has a bearing on the 
capital market; and 
 
(k)  does not suffer from a conflict of interest; this includes political office holders 
whether or not in a legislative role. 
 
Schedule-V 
Matters to be Covered under the Code of Conduct 
[see Section 19 (2)] 
 
1.  The standards of conduct for directors and employees, whereby: 
 
(i)  compliance with the fundamental principles of probity and propriety; 
objectivity, integrity and honesty are ensured; 
 
 
Page 27 of 29 
 
(ii)  the directors and executives uphold the reputation of the state owned enterprise 
by treating the general public, institutional investors and other stakeholders with 
courtesy, integrity and efficiency, and ensuring service quality; 
 
(iii)  the state owned enterprise’s assets and resources are applied for the benefit of 
the state -owned enterprise i n a manner which ensures efficiency and 
transparency; and 
 
(iv)  quality standards are followed with due diligence and that suppliers comply 
with the standards specified and are paid for supplies or services within the time 
agreed. 
 
2.  An effective “anti-corruption” strategy to minimize actual or perceived corruption in 
the state owned enterprise, including without limitation, with respect to: 
 
(i)  the active promotion of ethical behaviour and facilitating reporting of unlawful 
or unethical behaviour; 
 
(ii)  the circumstances in which directors and employees may accept gifts and other 
benefits, including reporting and recording those gifts and benefits; 
 
(iii)  the use by directors and employees of the resources of the state -owned 
enterprise, including phones, vehicles, and other property; 
 
(iv)  regulation of business travel, including its cross-over with personal travel; 
 
(v)  reducing or eliminating improper influence on directors and employees in their 
position as a director or employee of the state-owned enterprise; 
 
(vi)  equality of opportunity is ensured by establishing  open and fair procedures for 
making appointments and for determining terms and conditions of service. 
 
(vii)  compliance with the law and the state -owned enterprise ’s internal rules and 
procedures relating to public procurement, tender regulations, purcha sing and 
technical standards, when dealing with suppliers of goods and services; and 
 
(viii)  trading in and holding shares, securities, or other financial instruments by 
directors and employees. 
 
3.  Regulation of conflicts of interest, including procedures for identification, reporting, 
and resolving a conflict of interest; 
 
Explanation:––For the purpos es of this clause a person shall be deemed to have an 
interest in a matter if he has any stake, pecuniary or otherwise, in such matter which 
could reasonably be regarded as giving rise to a conflict between his duty to objectively 
perform his functions and  his ability to consider and decide any matter impartially or 
to give any advice without bias, may reasonably be regarded as impaired; 
 
4.  The use and disclosure of information by directors and employees; 
 
Page 28 of 29 
 
 
5.  Managing breaches of the code, including moni toring compliance and reporting 
breaches; and 
 
6.  Any other matter relevant to ensuring a high standard of governance within the state -
owned enterprise. 
 
 
Schedule-VI 
Details to be Submitted in the Annual Report 
(see Section 25) 
 
1.  Name of State-Owned Enterprise: [ full name as per certificate of incorporation or 
relevant statute] 
 
2.  Incorporated/established on: [date of incorporation/establishment] 
 
3.  Subsidiaries included in this statement of corporate intent: _______________________ 
 ___________________________ 
 
4.  The audited financial statements required by this Act for the financial year to which it 
relates: 
 
5.  The report of the auditor for those financial statements, including compliance with this 
Act: 
 
6.  A review of operations during the financial year of the state -owned enterprise and its 
subsidiaries and the result of those operations: 
 
7.  A report of the extent to which the state -owned e nterprise and is subsidiaries have 
achieved the outcomes specified in the statement of corporate intent for the financial 
year: 
 
8.  A statement of the dividend or distribution paid or to be paid by the state -owned 
enterprise to the State for the financial year: 
 
9.  Details of any public service obligation agreement applicable during the financial year, 
including: 
 
i.  the cost of the public service or services performed under the agreement; and 
 
ii.  the revenue received by or payable to the state-owned enterprise under the 
agreement. 
 
10.  Details of any significant changes in the affairs of the state-owned enterprise during the 
financial year: 
 
11.  Details of any matter or circumstance arising since the end of the financial year that has 
significantly a ffected, or may significantly affect, the operations of the state -owned 
enterprise in future financial years: 
 
 
Page 29 of 29 
 
12.  Details of any breach of the code of conduct of the state -owned enterprise during the 
financial year: 
 
13.  Details of any information which is omitted from the annual report along with reasons 
for such omission. 
 
14.  Any other matter that the Federal Go vernment directs  the state-owned enterprise to 
include in the report. 
 
_________ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RGN Date: 09-09-2024