Small and Medium Exterprises Development Authority Ordinance, 2002

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SMALL AND MEDIUM ENTERPRISES DEVELOPMENT 
AUTHORITY ORDINANCE, 2002 
 
 
 
CONTENTS 
 
CHAPTER I 
PRELIMINARY 
 
1.  Short title, extent and commencement. 
2.  Definitions. 
CHAPTER II 
THE AUTHORITY 
 
3.  Establishment of the Authority. 
4.  Powers and functions of the Authority. 
CHAPTER III 
BOARD AND COMMITTEES 
 
5.  Exercise of the powers and functions of the Authority to be vested in a Board.  
 
6.  Composition of the Board. 
7.  Powers and functions of the Board. 
8.  Meetings of the Board. 
9.  Committees. 
10.  The Chairman of the Board. 
11.  Powers and functions of the Chairman. 
CHAPTER V 
THE CHIEF EXECUTIVE OFFICER 
 
12.  The Chief Executive Officer. 

               
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13.  Qualifications of the Chief Executive Officer. 
14.  Disqualification of the Chief Executive Officer. 
15.  Powers and functions of the Chief Executive Officer. 
CHAPTER VI 
DELEGATION OF POWERS 
 
16.  Delegation of powers, duties and functions. 
CHAPTER VII 
THE EXECUTIVE SECRETARY 
 
17.  The Executive Secretary. 
CHAPTER VIII 
ESTABLISHMENT 
 
18.  Appointment of employees, etc. 
19.  Conditions of service and disciplinary powers. 
CHAPTER IX 
RESIGNATION AND REMOVAL 
 
20.  Resignation. 
21.  Removal of Member. 
CHAPTER X 
FINANCE, AUDIT AND ACCOUNTS 
 
22.  Fund.  
23.  Expenditure to be charged to the Fund. 
24.  Accounts, annual financial report and audit. 
25.  Investment. 
26.  Bank accounts. 
CHAPTER XI 
ANNUAL REPORT 
 
27.  Annual report. 
CHAPTER XII 
GENERAL AND MISCELLANEOUS PROVISIONS 
 
 
28.  Limitation of liability. 
               
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29.  Right of recovery as arrears of land revenue. 
POWER OF THE FEDERAL GOVERNMENT 
TO ISSUE POLICY GUIDELINES 
 
30.  Power of the Federal Government to issue policy guidelines. 
31.  Chief Executive Officer, Members, employees, etc. of the Authority to be public 
 servants. 
32.  Indemnity. 
33.  Winding up. 
34.  Common seal. 
35.  Ordinance to override other laws. 
36.  Power to make rules. 
37.  Power to make regulations. 
38.  Removal of difficulties. 
39.  Savings. 
40.  Repeal. 
 
  
               
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SMALL AND MEDIUM ENTERPRISES DEVELOPMENT AUTHORITY 
ORDINANCE 2002 
 
ORDINANCE XXXIX OF 2002 
 
An 
Ordinance 
 
to provide for the, establishment of the Small and Medium Enterprises Development 
 Authority as an autonomous body under the Federal Government for encouraging and 
 facilitating the development and growth of small and medium enterprises in Pakistan 
 
WHEREAS it is expedient for the establishment of a Small and Medium Enterprises 
Development Authority to provide requisite support services for encouraging and facilitating the 
development and growth of small and medium enterprises in Pakistan by way of policy making and 
through the pr ovisions of resources and support services and to pro vide for matters connected 
therewith and ancillary thereto; 
 
AND WHEREAS the President is satisfied t hat circumstances exist which render it 
necessary to take immediate action; 
 
NOW, THEREFORE, in pursuance of the Proclamation of Emergency of the fourteenth day 
of October, 1999,  and the Provisional Constitution Ord er No. 1 of 1999, read with the 
Provisional Constitution (Amendment) Order No. 9 of 1999, and in exercise of  all powers 
enabling him in that behalf, the President of the Islamic Republic of Pakistanis pleased to make 
and promulgate the following Ordinance: — 
 
CHAPTER I 
PRELIMINARY 
 
 1. Short title, extent and commencement.—(1) This Ordinance may be called the 
Small and Medium Enterprises Development Authority Ordinance 2002. 
 (2) It extends to the whole of Pakistan. 
 (3) It shall come into force at once. 
 
 2. Definitions. In this Ordinance, unless there is anything repugnant in the subject or 
context,— 
 
(a) “Authority” means the Small and Medium Enterprises Development 
Authority established under section 3; 
 
(b) “Board” means the Board of the Authority constituted under section 5; 
 
(c) “Chairman” means the Chairman of the board; 
 
               
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(d) “Chief Executive Officer” means the Chief Executive Officer of the 
Authority 
(e) “Committee” means a committee constituted by the Board; 
 
(f) “employee” means any officer or servant of the Authority; 
 
(g)  “Executive Secretary” means the Executive Secretary of the Board: 
 
(h) “Federal Government” for purposes of this Ordin ance means the Ministry of 
Industries and Production; 
 
(i)  “Fund” means the fund established under section 22; 
 
(j)  “Member” means a member of the Board including the Chairman; 
 
(k)  “Person” means any n atural p erson or  Legal entity, including an individual, 
association of  persons, partnership, company, corporation, statutory body, 
trust, society, or any other legal entity; 
 
(l)  “prescribed” means prescribed by the rules made under this Ordinance; 
 
(m)  “private sector” means any field of activity not in the public sector or of any 
statutory body or anybody which is owned or controlled, wholly or 
partially, by the Federal Government or a Provincial Government except a 
university or an educational or research institute; 
 
(n)  “regulations” means the regulations made under this Ordinance; 
 
(o)  “rules” means the rules made under this Ordinance; and 
 
(p) “S.M.E.s” means all entities declared or defined by the Federal 
Government to be  small or medium enterprises for the purposes this 
Ordinance. 
 
CHAPTER II 
THE AUTHORITY 
 
 3. Establishment of the Authority.—(1) There shall be established an Authority to be 
called the Small and Medium Enterprises Development Authority for carrying out the purposes and 
objectives of this Ordinance. 
 
 (2) The Authority shall be a body corporate having perpetual succession and a common seal, 
with power, subject to the provisions of this Ordinance, to acquire, take-over, hold and dispose 
of property, both moveable and immovable, to inter into contracts and shall by the said name sue 
and be sued. 
 
 (3) The Authority shall have the sole and exclusive right to have and se all emblems, motto, 
logo, decorations, descriptive or d esignating marks and title now or heretofore used by the 
               
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Authority, the name “Small and Medium Enterprise Development Authority or any similar 
grammatical variation thereof and shall also have the sole and exclusive right to have and to use 
any emblems, motto, logo decorations, descriptive or designating marks or titles hereafter adopted 
by the Authority for carrying out its objectives. 
 
(4) The Head Office of the Authority shall be at Lahore or at any other place as the 
Federal Government may, by notification in the official Gazette, specify. 
 
(5) The Authority may establish regional offices at such other places and in such 
numbers as the Board may, from time to time, deem fit. 
 
 4. Powers and functions of the Authority.—(1) The Authority shall have all such powers 
as may be necessary to perform its duties and functions under this Ordinance. 
 
  (2) Without prejudice to the generality of the foregoing provision, the Authority shall 
exercise and perform the following powers and functions, namely:— 
 
(a)  to facilitate on policy-making and to provide overall planning, programming, 
research and evaluation of matters relating to S.M.E.s in Pakistan; 
 
(b)  to identify research parameters and priorities and broad thrusts; 
 
(c)  to conduct professional overall monitoring and external evaluation of 
S.M.E.s; 
 
(d)  to advise the Federal Government for allocation of funds to identify 
research and planning priorities; 
 
(e)  to initiate, take, continue, implement and perform any and all activities for 
encouraging and facilitating the growth and development of S.M.E.s'; 
 
(f)  to protect the interests of S.M.E.s in accordance with the provisions of this 
Ordinance and any rules and regulations made thereunder; 
 
(g)  to act as a resource base for providing expertise, information, data, statistics 
including but not limited to, economic, commercial, business and 
industrial areas and such other resources as deemed appropriate or necessary 
for S.M.E.s; 
 
(h)  to provide, arrange and facilitate support services, including but not limited 
to technical, financial, managerial, legal, marketing, commercial industrial 
and such other services as deemed appropriate or necessary for S.M.E.s. 
 
(i)  to establish any association of persons, firm, company, body or corporation 
concerning S.M.E.s in Pakistan; 
 
(j)  to engage and enter into agreements with financial and other institutions, and 
financial, legal, accounting, valuation and other specialists, for the 
               
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purposes of  fulfilling the aims and objectives of the Authority; 
 
(k)  to borrow money and secure or discharge any debt or obligation binding on 
the Authority in such manner as may be thought fit; 
 
 (l)  to sell, improve, manage, develop; exchange, mortgage, let or rent, grant 
licences, easements, options, servitudes and other rights over and in any 
other manner deal with or dispose  the real and personal property, assets, 
rights and effects of the Authority; 
 
(m)  to op en and maintain the Authority's accounts with banks and financial 
institutions 
 
(n)  to enter into any agreements with any authorities, Federal or Provincial, 
autonomous, semi-autonomous, municipal, local or otherwise that may be 
conducive to the Authority's aims or objectives, or any one of them, and to 
obtain from any such authority, rights, privileges and concessions which the 
Authority may deem desirable to obtain and to carry out, exercise and 
comply with any such arrangements, rights, privileges and concessions ; 
 
(o)  to have and possess all powers and functions enumerated in sections 7, 11 
and 15 as entrusted to the Board, the Chairman and the Chief Executive 
Officer respectively; 
 
(p)  to perform such other functions as may be assigned by the Federal 
Government to achieve the alms and objectives of this Ordinance; and 
 
(q)  to do  all other acts, deeds and things incidental to or ancillary for the 
purposes of achieving the objects of this Ordinance. 
 
CHAPTER III 
BOARD AND COMMITTEES 
 
5. Exercise of the powers and functions of the Authority to be vested in a Board. The 
powers and functions of the Authority and the general and overall direction, management, control 
and superintendence of the affairs of the Authority shall vest in a Board and all actions, 
decisions, guidelines, directions, orders and policies made or issued by the Board in the exercise of 
the said powers and functions shall be deemed to have been made and issued by the Authority. 
 
 6. Composition of the Board.—(1) The Board shall consist of the following members, 
namely:— 
 
(a)  the Chairman; 
 
(b)  the Secretary, Industries and Production Division, Government of Pakistan; 
 
(c)  the Secretary, Finance Division, Ministry of Finance, Revenue and Economic 
Affairs, Government of Pakistan; 
               
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(d)  the Secretary, Commerce Division, Government of Pakistan; 
 
(e)  the Chairman, Central Board of Revenue, Government of Pakistan; 
 
(f)  the Chief Executive Officer; 
 
(g)  six persons from the private sector and, as far as possible, amongst them 
at least one from each Province of Pakistan who are reputed for their integrity, 
competence, expertise, knowledge and experience in the spheres including 
but not limited to economics, commerce, business, trade, industry, law, 
actuarial sciences, accountancy, banking, finance, marketing, technology, 
academia, or other spheres of expertise and who are capable of and able 
to positi vely contribute towards the aims, objectives and functions of the 
Authority. 
 
(2) The Members mentioned in clauses (b) to (e) of sub-section (1) shall be ex officio 
Members. 
 
(3) If any Member referred to in clauses (b) to (e) of sub-section (1) sent from Pakistan, or 
is unable to attend a Meeting of the Board, he may authority officer, not below the rank of 
Additional Secretary or Joint Secretary of his Division, to act as a Member and such officer, if 
approved by the Board, may act, as Member and participate in the Board Meeting for such period 
of time and for such number of Meetings as may be permitted by the Board. 
 
(4) A Member, other than an ex officio member, shall be appointed by the Federal 
Government in consultation with the Chairman, and shall hold office for a term of three years 
and may be eligible for re-appointment for only one additional term not exceeding three years. 
 
 7. Powers and functions of the Board. Subject to the provisions of this Ordinance, the 
Board shall,— 
 
(i)  exercise executive control over the affairs of the Authority; 
 
(ii)  manage and administer affairs of the Authority; 
 
(iii)  approve the annual budget of the Authority; 
 
(iv)  ask for any information or call for the record of any matter relating to 
S.M.E.s, pending before or decided by the Authority or any committee 
constituted by the Authority; 
 
(v)  ask for any information or call for the record of any matter relating to 
S.M.E.s, from any ministry, division, department, section, statutory body, 
corporation, agency of the Federal of Provincial Government concerning any 
policy, relating to S.M.E.s subject to the constitutional and legal 
requirements, for r eview and appropriate action as and if n ecessary. The 
concerned ministry, division, department, section, statutory body, corporation, 
               
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agency of the Federal or Provincial Government, which after the receipt of 
such request, shall, within a reasonable period of time, provide the requisite 
information or record to the Authority; 
 
(vi)  assist and facilitate banks and other institutions in developing appropriate 
programmes for the promotion and development of S.M.E.s; 
 
(vii)  enter into all such negotiations, agreements and contracts and rescind or vary 
all such agreements or contracts, and to execute all such documents and 
do all acts, deeds and things, in the name and on behalf of the Authority as 
may, be considered necessary, expedient or proper or in relation to any of 
the matters aforesaid or otherwise, for the purposes of the Authority ; 
 
(viii)  deal with,  make arrangements, sign contracts with Go vernment, semi- 
Government, autonomous bodies, corporations, local Government and other 
institutions; 
 
(ix)  sell, deal in and dispose of all articles and goods of the Authority ; 
 
 (x)  engage, employ, fix and pay the remuneration and remove, dismiss or 
discharge all employees and other persons employed in, or in connection 
with, the Authority's business; 
 
(xi)  transfer employees from one department to another department; 
 
(xii)  employ advisers, experts and consultants for the Authority; 
 
(xiii)  review the performance of any person employed or engaged by the Board 
or the Chief Executive Officer, from time to time, and issue such directions 
as it may deem fit, appropriate or necessary; 
 
(xiv)  make and give receipt, release and discharge, all moneys payable to the 
Authority or for the claims and demands of the Authority; 
 
(xv)  receive money or goods on behalf of the Authority; 
 
(xvi)  give effectual discharge for moneys payable to the Authority and for its 
claims and demands; 
 
(xvii)  draw, accept, endorse and negotiate all such cheques, bills of exchange, 
promissory notes and Government and other securities as shall be necessary 
in or  for carrying on the affairs of the Authority whether the account 
may be overdrawn or not. 
 
(xviii)  provide for the welfare of employees or ex-employees of the Authority 
and the wives, widows or families or the dependents of such persons in such 
manner as it may think fit; 
 
               
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(xix)  open, maintain and operate accounts or letters of credit for any amount 
with any bank or banks and to give instructions for operation of such 
accounts; 
 
 (xx)  institute, commence, defend, compromise, withdraw or abandon any legal 
proceedings by or  against the Authority or its employees or otherwise 
concerning the affairs of the Authority; 
 
(xxi)  Appear before any Court of law, civil, criminal, revenue excise income-tax, 
special courts, tribunals, whether original or appellate, Provincial High 
Courts and the Supreme Court of Pakistan and other authorities for and on 
behalf of the Authority and to institute, apply for transfer of suits and other 
proceedings, conduct, prosecute and defend suits and legal jurisdiction, sign 
powers of attorney or other authorizations, statements, pleadings and 
petitions on behalf of the Authority and to represent, defend and safeguard 
the interest of Authority; 
 
(xxii)  purchase or take on lease or otherwise acquire for the Authority, land, 
buildings, rights and privileges for the purpose of offices or premises of the 
Authority at such prices and generally on such terms as it may think necessary 
and expedient, to build, alter and furnish offices, houses or premises and 
let or sub-let any such houses or premises in, portion or otherwise; 
 
(xxiii)  demand and enforce payment, delivery, transfer of any dues for recovery and 
receive from all and any persons, body corporate or corporations, firm or 
companies whatsoever, all moneys, securities for moneys, debts and claims 
of all kinds and demand; enforce, deliver and receive any property of all kinds 
whether belonging to the Authority as security or in  trust or h eld by any 
person or company in trust or by way of security for the Authority; 
 
(xxiv)  appoint and nominate attorneys, agents, managers for the Authority for such 
purposes and with such powers, authorities and discretion and for such 
period and subject to such conditions as he may, front time to time, think fit 
and authorise them to exercise any or all such powers and functions; 
 
(xxv)  assign or sub-contract work of the Authority to private sector persons or 
otherwise; (xxvi) see that the Ordinance and the rules and regulations made 
thereunder are duly observed and to ensure such observance; 
 
(xxvii)  make, formulate, lay down, review and approve policies and plans relating 
to the aims and objectives of the Authority; 
 
(xxviii) advise the Authority on all matters relating to its policies, plans, aim and 
objectives; 
(xxix) review the development and growth of S.M.E.s in Pakistan and make 
recommendations and policies therefore; 
 
(xxx)  make, formulate, lay down and approve regulations on behalf of the 
Authority; 
               
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(xxxi)  approve the annual financial budget of the Authority; 
 
(xxxii)  seek advice from any person relating to any matter under its jurisdiction; 
 
(xxxiii)constitute such committees as it may deem fit or consider necessary or 
expedient to assist the Board in the performance of its functions under 
this Ordinance and to review the performance of such committees 
 
(xxxiv) maintain and preserve the Fund of the Authority; 
 
(xxxv) lay down the terms and conditions of the employees, experts, advisers and 
consultants of the Authority; 
 
(xxxvi) to assist and facilitate banks and other institutions in developing appropriate 
programmes for promotion and development of S.M.E.s; 
 
(xxxvii)recommend suitable persons for the appointment as the Chief Executive 
Officer; and 
 
(xxxviii)do or to perform such other acts, deeds and things as may be necessary and 
incidental thereto. 
 
 8. Meetings of the Board.—(1) The Board shall meet not less than twice in a calendar 
year. 
 
(2) the Meetings of the Board shall be presided over by the Chairman or, in his absence, by 
any other Member as the Board may determine; 
 
 (3) Six Members including at least two ex-officio Members shall constitute a quorum for a 
meeting of the Board. 
 
(4) The decision of the Board shall be taken by the Majority of its Members, each of 
whom shall have a single vote, including the Chairman. In case of a t ie, the Chairman or, in his 
absence, the person chairing the meeting, shall have a casting vote. 
 
(5) No actor proceeding of the Board shall be invalid merely on the ground o f the 
existence of any vacancy in, or any other defect in the constitution of, the Board. 
 
 9. Committees. The Board may, for the purpose of obtaining advice and assistance in 
carrying out the purposes of this Ordinance, constitute committee consisting of the Members of the 
Board and any other suitable person or persons as it may deem fit. 
 
CHAPTER IV 
THE CHAIRMAN 
 
 10. The Chairman of the Board. The Federal Minister for Industries and Production, 
Government of Pakistan, shall be the ex-officio Chairman of the Board. 
               
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 11. Powers and functions of the Chairman.—(1) The Chairman may ask for any 
information or call for the record of any matter, pending before or decided by the Board, the Chief 
Executive Officer or any committee, relating to S.M.E.s and may ask for information, from any 
Ministry, statutory body, corporation, agency of the Federal or Provincial Government concerning 
any policy, relating to S.M.E.s for review and appropriate action, as and if necessary. The 
concerned Ministry, statutory body, corporation, agency of the Federal or Provincial Government, 
which after the receipt of  such request, shall, within a reasonable period of time, provide the 
requisite information or record to the Chairman. 
 
(2) The Chairman may take appropriate and necessary action on any report submitted to 
him by the Board, the Chief Executive Officer, a member or a committee. 
 
 (3) The Chairman may review the performance of the Board, the Chief Executive Officer, a 
Member or a committee, from time to time, and issue such directions as the Chairman may deem 
fit. 
 
CHAPTER V 
THE CHIEF EXECUTIVE OFFICER 
 
 12. The Chief Executive Officer.—(1) There shall be a  Chief Executive Officer of the 
Authority who shall be appointed by the Federal Government subject to such terms and 
conditions as may be determined by the Federal Government. 
 
(2) The Chief Executive Officer shall be appointed for a term of three years which may be 
extended to only one additional term of not exceeding three years. 
 
 13. Qualifications of the Chief Executive Officer. A person shad not be qualified to be 
appointed as the Chief Executive Officer or a Member of the Authority unless he— 
 
(a)  is a citizen of Pakistan; 
 
(b)  is not less than forty years of age; 
 
(c)  is a person who is well-qualified, experienced and of known integrity and 
competence. 
 
 14. Dis qualification of t he Chief Executive Officer. No p erson shall be appointed or 
continue as a Chief Executive Officer of the Authority if he— 
 
(a)  is of unsound mind and has been so declared by a competent authority; 
 
(b)  is adjudged an undischarged insolvent; 
 
(c)  ceases to be a citizen of Pakistan, or acquires the citizenship of a foreign 
state; 
 
(d)  has at any time been convicted of an offence which, in the opinion of the 
               
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Federal Government, is an offence involving moral turpitude; 
 
(e)  has been dismissed, removed or compulsorily retired from the service of 
Pakistan on the ground of misconduct; 
 
(f)  is found guilty of a corrupt or illegal practice under any low for the time 
being in force; 
 
(g)  has after the establishment of Pakistan, worked against the integrity of the 
country; 
 
(h)  is not capable of discharging his duties by reason of physical, 
psychological or mental unfitness or ill-health and has been so declared by a 
medical board appointed by the Board and comprising of three registered and 
licensed medical practitioners; 
 
(i)  absents himself from all the Meetings of the Board, without sufficient cause 
and leave of absence from the Board, for a continuous period of six months 
or, if l ess than three meetings are held within such a period, from three 
consecutive meetings of the Board; 
 
(j)  remains absent without leave from the Authority for more than seven days, 
or 
 
(k)  refuses or  fails to discharge or, in the opinion of the Board, becomes 
incapable of effectively discharging his responsibilities under this Ordinance. 
 
 15. Powers and functions of the Chief Executive Officer. The Chief Executive Officer 
shall exercise such powers and perform such functions as may be assigned to him by the Board. 
 
CHAPTER VI 
DELEGATION OF POWERS 
 
 16. Delegation of powers, duties and functions. The Board may, subject to such 
conditions and limitations as it may deem fit to impose, delegate all or any of its powers, 
duties or functions to the Chairman, the Chief Executive Officer, a member, a committee or any 
officer of the Authority, as it may deem fit. 
 
CHAPTER VII 
THE EXECUTIVE SECRETARY 
 
 17. The Executive Secretary.—(1) There shall be an Executive Secretary who shall be 
appointed by the Board on the basis of such qualification and on such terms and conditions as 
may be prescribed. 
 
(2) The Executive Secretary shall exercise all such powers and perform all such 
functions, as may be assigned to him by the Board. 
 
               
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(3) The Executive Secretary shall be responsible for calling the meetings of the Board 
on the direction of the Chairman, the Chief Executive Officer or on a requisition by the majority 
of the Members, as the case may be. 
 
CHAPTER VIII 
ESTABLISHMENT 
 
 18. Appointment of employees, etc.—(1) The authority may appoint such employees as 
it may consider necessary for the efficient performance of its functions on such terms and 
conditions as may be prescribed. 
 
 (2) All appointments and promotions in the Authority shall be in accordance with the 
service rules and regulations of the Authority. 
 
(3) The Authority may engage experts, advisers and consultants on contract on such terms 
and conditions as it may determine. 
 
 19. Conditions of service and disciplinary powers. The Authority shall prescribe the-
procedure for the appointment and removal and other terms and conditions of service of its 
employees and shall be competent to take disciplinary action against its employees. 
 
CHAPTER IX 
RESIGNATION AND REMOVAL 
 
 20. Resignation.—(1) The Chief Executive Officer or a Member, other than an ex officio 
Member, may, at any time, resign his office by writing under his hand addressed to the Chairman, 
subject to the terms and conditions of his office. 
 
(2) An employee may, at any time, resign his post by writing under his hand addressed to the 
Chief Executive Officer, subject to the terms and conditions of his employment. 
 
 21. Removal of Member. The Federal Government may, on the recommendation of the 
Chairman, it any time, remove any Member, other than an ex officio Member, on any one or-
more of the grounds specified in section 14. 
 
 
 
 
CHAPTER X 
FINANCE, AUDIT AND ACCOUNTS 
 
22. Fund.—(1) There shall be established a Fund vested in t he Authority which shall be 
utilized by the Authority to meet all such costs and charges incurred in connection with its 
functions under this Ordinance. 
 
 (2) The Fund shall consist of— 
 
(a)  such funds as the Federal Government may, from time to time, grant to the 
Authority; 
               
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(b)  allocations made by the Federal Government from the Federal Consolidated 
Fund or any other financial source available with the Federal Government; 
 
(c)  annual grant (budget) obtained from the Federal Government; 
 
(d)  non-repayable fees, and income, accruing to it under the law, donation. 
bequests, endowments, contributions, and other receipts provided to the 
Authority by any person, agency, body, corporate (statutory or otherwise), 
institution approved by the Board; and 
 
(e)  all other sums or property which may, in any manner, become payable to or 
be vested in the Authority. 
 
 23. Expenditure to be charged to the Fund. The Fund shall be expended for the purposes 
of— 
 
(a)  paying any expenditure lawfully incurred by the Authority or its constituents 
for the purposes of this Ordinance; and 
 
(b)  repaying any financial accommodation received or moneys borrowed under 
this Ordinance and the profit, return, mark-up or interest due thereon, 
howsoever called. 
 
 24. Accounts, annual financial report and audit.—(1) The Authority shall maintain 
proper books of accounts and records on generally acceptable accounting principles, to explain all 
its transactions and to give true and fair view of its state of affairs. The books of accounts relating 
to a period of not less than ten ears immediately preceding the current year shall be preserved in 
good order. 
 
 (2) The Chief Executive Officer shall, in consultation with the Board, soon as may be 
practicable after the end of each financial year, cause an annual financial report to be prepared 
on the accounts and financial activities of the Authority during that financial year which shall 
include a balance sheet of the annual profits and losses and an account of the annual income and 
expenditure incurred by the Authority. 
 
(3) The accounts of the Authority shall be audited annually by a reputable firm of chartered 
accountants selected by the  Board and, together with the report of the Auditors thereon, be 
submitted to the Board for approval by the 31st December each year. 
 
(4) A copy of the annual financial report shall be sent to the Chairman and shall also be 
made available to the general public. 
 
(5) The audit shall be carried out in accordance with the professional standards of auditing 
prescribed by the Pakistan Institute of Chartered Accountants, and shall issue a report on the 
audit. 
 
 25. Investment. The Authority may insofar as moneys are not required to be expended 
               
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under this Ordinance, make such investments as it may determine from time to time. 
 
 26. Bank accounts. The Authority shall open, maintain and operate one or more bank 
accounts in its name with any scheduled bank in Pakistan. 
 
CHAPTER XI 
ANNUAL REPORT 
 
 27. Annual report.—(1) The Authority shall prepare, in such manner and form and at such 
time each year, as may be prescribed, an Annual Report which shall include, among others, a 
comprehensive review of its performance, the steps taken by the Authority towards the fulfilment 
of its aims and objectives and a true and full account of its operations and activities during the 
previous year. 
 
 (2) The Annual Report of the Authority shall be prepared under the direction of the Chief 
Executive Officer. 
 
 (3) The Annual Report shall be presented to the Board for its approval by the 31st 
December each year. 
 
(4) After its approval by the Board, a copy of the Annual Report shall sub mitted to the 
Federal Government and it shall also be made available to the general public. 
 
CHAPTER XII 
GENERAL AND MISCELLANEOUS PROVISIONS 
 
 28. Limitation of liability. The Authority shall not have any liability to any financial 
institution save in accordance with law. 
 
 29. Right of recovery as arrears of land revenue. Subject to law, the Authority shall be 
entitled to recover all outstanding amounts due to it as if they are arrears of land revenue under the 
Land Revenue Act, 1967 (West Pakistan Act XVII of 1967). 
 
 
 
POWER OF THE FEDERAL GOVERNMENT 
TO ISSUE POLICY GUIDELINES 
 
 30. Power of the Federal Government to issue policy guidelines. The Federal Government 
may, as and when it considers it necessary, issue guideline to the Authority on matters of policy, 
not inconsistent with the provisions of this Ordinance or any rules made thereunder. 
 
 31. Chief Executive Officer, Members, employees, etc. of the Authority to be public 
servants. The Chief Executive Officer, Members and employees of the Authority, when acting or 
purporting to act in pursuance of any of the provisions of this  Ordinance shall be deemed to be 
public servants within the meaning of section 21 of the Pakistan Penal Code, 1860 (Act XLV of 
1860). 
 
               
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 32. Indemnity. No suit, prosecution or other legal proceedings shall lie against the 
Authority, the Chairman, the Chief Executive Officer, the Members or employees of the Authority, 
in respect of anything done intended or purported to be done orders passed or proceedings taken by 
the Authority, in good faith under this Ordinance or any of the rules or regulations made 
thereunder. 
 
 33. Winding up. No provision of law relating to the winding up of bodies corporate shall 
apply to the Authority and the Authority shall not be wound up except by the orders of the 
Federal Government in such manner as the Federal Government may direct. 
 
 34. Common seal. The Authority shall have a common seal and such seal shall be kept in 
the custody of the Chief Executive Officer or such other person as may be authorized by the Board. 
All documents that are required or permitted to be executed under seal shall be specified and 
authenticated in such manner as may be prescribed. 
 
 35. Ordinance to override other laws. This Ordinance shall have effect notwithstanding 
anything contained in any other law for the time being in force. 
 
 36. Power to make rules.—(1) The Federal Government may, by notification in the official 
Gazette, make rules for carrying out the purposes and provisions of this Ordinance. 
 
(2) In particular, and without prejudice to the generality of the foregoing power, such rules 
may provide for all or any of the following matters, namely:— 
 
(a)  administration and conduct of business of the Authority; 
 
(b)  conduct of business at the meetings of the Board and the Committees; 
 
(c)  constitution of the Committees; 
 
(d)  inance, audit and accounts of the Authority; 
 
(e)  employment and service matters of the Authority; 
 
(f)  control, restrictions and conditions subject to which the Authority may 
appoint employees; 
 
(g)  terms and conditions of service of the Chairman, Members and the Chief 
Executive Officer; 
 
(h)  terms and conditions of service of the employees of the Authority; 
 
(i)  powers, duties and functions of the Chairman and Chief Executive Officer; 
 
(j)  conditions under which the Board may enter into arrangements with other 
institutions and organizations, whether public, private, government owned or 
autonomous bodies; 
 
               
Page 18 of 19 
 
(k)  manner in which the accounts of the Authority shall be maintained; 
 
(l)  manner in which the Authority may invest its money; 
 
(m)  manner, form and time in which the annual statement of accounts and annual 
report shall be prepared; 
 
(n)  any other matter which is to be, or may be prescribed or in respect of 
which provision is to be, or may be made, by the rules. 
 
 37. Power to make regulations.—(1) The Board may, by notification in the official 
Gazette, make regulations, not inconsistent with the rules, to provide for all matters for which 
provision is necessary or expedient for carrying out the purposes and provisions of this Ordinance. 
 
(2) In particular, and without prejudice to the generality of the foregoing power, such 
regulations may provide for all or any of the following matters, namely:— 
 
(a)  time and place of the meetings of the Board and the Committees and the 
procedure to be followed at such meetings; 
 
(b)  manner in which and the purpose for which persons may be co-opted by the 
Authority; 
(c)  recruitment, selection and the terms and conditions of service of the 
employees; 
(d)  recruitment, selection and the terms and conditions of service of the 
Executive Secretary; 
 
(e)  duties, conduct and functions of the employees; 
 
(f)  conduct and discipline of the employees; 
 
(g)  constitution and management of provident or other funds for the 
employees; 
 
(h)  preparation of annual estimates of income and expenditure, profit and loss 
and supplementary estimates; 
 
(i)  annual report; 
 
(j)  manner in which payments are to be made by or on behalf of the Authority 
and the officers by whom  orders for making deposits or investments for 
withdrawals or any other disposal of the income or fund of the Authority 
shall be authenticated, made or signed; 
(k)  custody and use of the common seal of the Authority; 
 
(l)  efficient conduct and expeditious disposal of the affairs of the Authority 
generally; and 
 
(m)  any other matter which is to be, or may be prescribed or in respect of which 
               
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provision is to be, or may be made, by the regulations. 
 
 38. Removal of difficulties. If any difficulty arises in giving effect to any provision of 
this Ordinance, the Federal Government may, by notification published in the Gazette, make such 
provisions, not inconsistent with the provisions of this Ordinance, as may appear to it to  be 
appropriate or necessary for the purpose of removing such a difficulty. 
 
 39. Savings.—Upon the commencement of this Ordinance,— 
 
(a)  all funds, moneys, properties, rights and interests of whatever kind, 
issued, used, enjoyed, possessed owned or vested in the Small and Medium 
Enterprises Development Authority in existence immediately before such 
commencement and all l iabilities legally subsisting against the said Small 
and Medium Enterprises Development Authority shall pass onto the 
Authority as established under this Ordinance; 
 
(b)  everything done, action taken, obligations and li abilities incurred, persons 
appointed or authorized and orders issued prior to such commencement 
shall be continued and be deemed to have been done, taken, incurred, 
appointed or authorized, instituted or issued by the Authority; and 
 
(c)  all acts, deeds and thing done, orders passed, decisions taken, directions 
issued in pursuance of the Federal Government's Notification No. 5(20) 
E&FI/98, dated the 13 th October,1998, shall be d eemed to h ave b een done, 
passed, taken or issued under this Ordinance. 
 
 40. Repeal. The Federal Government's Notification No. 5(20) E&FI/98, dated the 13th 
October, 1998, is hereby repealed. 
 
 
 
 
 
 
 
____________ 
 
 
 
 
 
 
 
 
 
 
 
 
RI - Date: 13-05-2024