Documente Academic
Documente Profesional
Documente Cultură
Estd. 1951
Jul-Aug, 2008
Volume : 17.4
President
The only Professional Journal in Pakistan with a circulation of over 15,000 copies per issue
Vice President
Mutee-ur-Rehman Mirza
Honorary Secretary
Mohammad Arif Nara
Honorary Treasurer
Mohammad Azam Khan Shad
Members
Muhammad Abdullah Yusuf
M.H. Asif
M. Ayub Khan Tarin
Muhammad Rafi
Kashif Mateen Ansari
Hasan A. Bilgrami
Mirza Munawar Hussain
Karachi - Head Office
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Karachi-75300.
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E-mail: mul@icmap.com.pk
Contents
Divine Wisdom : Translation from the Holy Qur-an and Commentary
From the Desk of President
From the Chief Editor
Focus: Federal Budget 2008-09
2
3
4
Budget Highlights by Tariq Mustafa Ramzan & Co., Cost & Management Accountants
Federal Budget, 2008-09 - A Critical Review by Wasful Hassan Siddiqi, FCMA
A New Direction or Compulsive Action Federal Budget 2008-2009
by Syed Shabbar Zaidi, FCA, President, South Asian Federation of Accountants (SAFA)
20
23
26
30
32
36
40
41
45
47
53
54
55
Article of Merit: Pushing the Art of Management Accounting by Alexander Mersereau, FCMA
Article: Credit Crunch for SMEs Compiled by Mohammad Arif Nara, FCMA
Sukuk A New Dawn of Islamic Finance EraII by Intisar Muhammad Usmani FCMA
From More Specific to More Generic Framework by Muhammad Asif Jaffer, ACMA
Faisalabad Centre
ICMAP Centre, P-87, Hasan Street, Tariq Road,
Canal Park, Near FCCI, Faisalabad.
Tel: 041-9220103
Email: fsd@icmap.com.pk
Peshawar Centre
Frontier College of Business Education,
Saddar Road, Peshawar.
Tel : (091) 5277662 & 5272662
Fax : (091) 5276663
E-mail: peshawar@cecos.com
Quetta Centre
Railway Accounts Academy,
Zarghoon Road, Quetta.
Tel : (081) 2824317
Fax : (081) 2838207
Other Centres
Hyderabad
Kohat
Abottabad
Sargodha
5
9
15
Our Vision
Our
Mission
Survey Questionnaire
To get the feedback of members and students to bring improvement in Management Accountant
Journal, a Survey Questionnaire is attached at the end.
O u r
N e x t
I s s u e
ManagementAccountant
Sep-Oct 2008
Divine Wisdom
Commentary :
Let me paraphrase this verse, for there is profound meaning in it.
(1)
All your property you hold is trust, whether it is in your name, or belongs to the community, or to people
over whom you have control. To waste is wrong.
(2)
In II-188 the same phrase occurred, to caution us against greed. Here, it occurs to encourage us to
increase property by economic use (traffic and trade), recalling Christs parable of the Talents (Matt xxv.
14-30), where the servants, who had increased their masters wealth, were promoted and the servant who
had hoarded, was cast into darkness.
(3)
We are warned that our waste may mean our own destruction (nor kill nor destroy yourselves), But there
is a more general meaning also: we must be careful of our own and other peoples lives. We must commit
no violence. This is the opposite of trade and traffic by mutual good-will.
(4)
Our violence to our own brethren is particularly preposterous, seeing that Allah has loved and showered
His mercies on us and on all His creatures
Translation and Commentary by: Abdullah Yusuf Ali
he fiscal year 2007-08 has come to an end. Institute did its best to facilitate
members and students while keeping vigilance about the changes taking place in
the profession globally. Throughout the year, various programs were organized for the
professional development of members and students. To benefit the members, the
Institute actively participated in different professional forums around the globe which
has strengthened its image at International level. Participation in professional activities
of different accounting bodies enhanced acceptance of ICMAP qualification.
During the last two months, Budget has remained a hot issue in the country. A lot of
debates and discussions at different forums have generated a need for taking solid steps
to alleviate poverty and to ensure trickle down effect, of the macroeconomic reforms,
on the common man. Institute did organize several pre-budget and post-budget
seminars and discussions at its centers.
The budget, as is well known, is the principal instrument for the implementation of economic and social policies of the
government. It is more than a mere balancing of public revenues and expenditures. It is indicative of the resource
mobilization effort of the government, while on the expenditure side it reflects the priorities, aims and objectives of the
state. It is also a vehicle whereby medium and long-term plans are implemented in the public sector. It is an intricate
process of matching national vision with practical possibilities.
Facing daunting political challenges and an economic slowdown, Syed Naveed Qamar Minister of Finance and
Economic Affairs, presented a Rs.2.01 trillion national budget that at once offers relief measures to the poor and the
salaried class, imposes new taxes and slashes food, fuel and power subsidies. The budget, seeks to meet a budgetary
deficit of Rs.82 billion by rationalizing taxes, mainly by increasing indirect General Sales Tax (GST) from 15 per cent to
16 per cent a move likely to push already surging inflation further up.
It is said by economic experts that a drastic cut announced in the budget on food, fuel, electricity, and fertilizer subsidies
from Rs.407.48 billion to Rs.295.20 billion would hurt the common man, already reeling from price-hikes, inflation and
food shortages. So in one way it is called a pro-poor budget but in also increases the cost of living. Analysts are of the
view that the revenue target is too optimistic and, like the outgoing fiscal, it may have to be revised downwards later
during the year.
Keeping in view long-term perspective, the government has assumed macroeconomic conditions such as GDP growth at
5.5%; containing inflation at 12%; gross investment to GDP ratio would be maintained at 25%; restricting fiscal deficit
to 4.7%; reducing current account deficit to 6% of GDP; increasing foreign exchange reserves to $ 12 billion. All these
measures would affect the budget 2008-09.
As a result of healthy economic growth achieved in the recent past, per capita income has also increased. As people
become more affluent, they have not only been consuming more food but better quality food items such as meat and
dairy products. Accordingly the demand for high quality food such as meat and dairy products is rising and putting
pressure on the prices of these commodities. In a changed environment, there is an ample scope to provide boost to the
livestock and dairy sector. Unfortunately, these sectors have received little or no attention by the successive
governments in the past. It is important to note that livestock accounts for 52.2 percent of agricultural value addition,
contributes 11 percent to GDP and affects the lives of 30 35 million people in rural areas. It is highly labour intensive and
if proper attention is given to this sector, it will not only absorb more rural workforce but also help alleviate rural poverty
in Pakistan. In order to achieve higher sustained growth in agriculture, it is absolutely necessary for the government to
give more attention to livestock and dairy sector. Realizing its importance Institute has decided to give exclusive
coverage to this sector to apprise members and students about its role in the society and impact on business, trade and
industry.
Sher Afgan Malik, FCMA
President
Editorial
he Country's budget for the year 2008-09 was announced at a time when destiny and hopes
of the people are immersed in complete darkness. The aspiration of the country to emerge,
as 'Asian Tiger', is shattering due to prevailing weak economic conditions and uncertain
security issues. Economic progress made in last 4 to 5 years has not yet proved to be
sustainable. The delicate foundation of growth was exposed to various internal and external
challenges, which unfortunately could not be converted into opportunity.
Despite adverse internal and external developments of an extraordinary nature, Pakistan's
economy has shown great resilience against shocks of very high intensity. Domestic factors
like heightened political tensions, an unstable law and order situation, supply shocks, coupled
with external factors like a worsening of international financial crisis, and an unprecedented
rise in global food and energy prices tested the strength of economic fundamentals but
Pakistan's economy grew robustly at 5.8 percent in 2007-08, as against 6.8 percent last year and
this year's target of 7.2 percent.
Looking into world GDP growth rate of 4.9% and country's macroeconomic stability as well as
reinvigorating the growth momentum at an average of more than 6% in last few years through a
combination of adjustments and reforms provide optimism for the future.
With hopes and promises, the Government has announced budget 2008-09 with total outlay of Rs 2.01 trillion. This size is 29.7 %
higher than the size of budget estimates 2007-08. The resource availability during 2008-09 has been estimated at Rs 1.836 trillion
against Rs 1.394 trillion in the budget estimates of 2007-08 and net revenue receipts for 2008-09 have been estimated at Rs 1.111
trillion indicating an increase of 23.1% over the budget estimates of 2007-08. There are other optimistic measures for which we
wish the government and their functionaries all the best. This issue of the journal carries highlights and comments on Budget
2008-09, which will serve as a reference document for our members and professionals to refer throughout the fiscal year.
Agriculture and livestock continue to be the largest sector of the economy. The share of agriculture in GDP has been falling
persistently. It accounted for 24.1 percent in 2001-02 but subsequently has declined to 20.9 percent in 2007-08. The agriculture
sector consists of crops, livestock, fishing and forestry sub-sectors. Apart from being a major source of foreign exchange earnings,
the agriculture sector also provides employment to the 44 percent of the country's labour force. The country's overwhelming
majority of the population depends directly or indirectly on income streams generated by the agriculture sector. In this issue we
have also covered this sector for which I am sure, would be of readers' interest. Enjoy reading
Chairman
Mohammad Arif Nara, FCMA
Correspondence Address
Institute of Cost and Management
Accountants of Pakistan
ST-18/C, Block-6, Gulshan-e-Iqbal, Karachi-75300.
Ph : (92-21) 9243900-01-02 & 04, Direct: 9243551
Fax : (92-21) 9243342
E-Mail : jps@icmap.com.pk
Website : http://www.icmap.com.pk
Budget Highlights
By Tariq Mustafa Ramzan & Co.,
Cost & Management Accountants
INCOME TAX
1.
2.
3.
The basic limit of exemption from income tax in respect of salaried person has been increased from
Rs.150,000 to Rs.180,000 in case of male employees
and from Rs.200,000 to Rs.240,000 in case of female
employees.
To cater for the negative impact of taxation under the
previous flat tax rate system for salaried persons, the
concept of marginal tax relief has been introduced,
whereby the marginal increase in salary income will
now be taxed at the rates not exceeding 20% to 60%.
The limit for payment of salary to be paid by an employer through cheque or transfer to employees account has been increased from Rs.10,000 to Rs.15,000.
4.
Minimum tax payable by resident companies on the declared turnover @ 0.5% has been withdrawn.
5.
6.
7.
8.
Previously, withholding tax rate of 5% and 1% was applicable in respect of commercial and manufacturer,
importers respectively. The Finance Act, 2008 has
made it uniform at the rate of 2% for both the categories
of importers.
9.
Withholding tax on cash withdrawal from banks presently collected @ 0.2% has been enhanced to @ 0.3%
on cash withdrawal without altering the maximum
daily limit.
36. The provisions of section 115 of the Income Tax Ordinance, 2001 have been amended to ensure filing of
wealth statement by a salaried taxpayer whose income
is more than Rs.500,000 even if he is not required to file
a return of income.
37. Sub-section (6A) of section 153 has been amended to
treat tax deducted in the case of non-corporate taxpayers on supply of manufactured goods as a final tax.
38. To ensure correct recording of sale, Electronic Tax
Register (ETR) will be installed at selected wholesale
and retail outlets with known high volume of business.
39. In order to ensure quick disposal of cases remanded
back by the ITAT to the CIT (A) for making a fresh order, a time limitation of six months has been provided
in the law.
40. A time limit of 90 days has been provided under the Income Tax Rules, 2002 for making an order by the FBR
on receipt of recommendations from the Alternate Dispute Resolution Committee (ADRC).
41. In case of withdrawals from superannuation fund liable
to WHT, the deduction of tax has been made at the rate
applicable to the year of withdrawal instead of average
rate of the preceding three years.
42. In order to create linkages between voluntary and occupational savings schemes, the subscriber of a Recognized Provident Fund will,now, be allowed to transfer
funds to a voluntary pension fund scheme.
43. The provisions of 7th Schedule allowing deduction on
account of non- performing loans as per prudential
regulation issued by the SBP have been deleted. From
the next financial year, such deductions would be allowed under sections 29 and 29A of the Income Tax
Ordinance, 2001.
44. Enabling powers have been granted to the FBR to allow
exemption from Withholding taxes required under different provisions of the Ordinance.
2.
3.
4.
6.
FED @ 5% has been levied on imported as well as locally manufactured cars having engine capacity exceeding 850cc effective from 1st July, 2008.
7.
20. Supplies, falling under respective headings of Customs, made to hospitals of 50 beds or more being run by
Federal or Provincial Government or Charitable Institutions have been exempted.
8.
9.
Section 10 of the Sales Tax Act, regulates the excess input tax over the output tax but there was no provision
relating to carry forward of excess input tax. Section 10
has been amended to incorporate the carry forward
amount for excess input tax effective from 1st July,
2008.
23. To enable AJK Government to pay refunds to their registered persons on purchase of taxable goods from
Pakistan, a provision has been introduced in Sales Tax
to pay sales tax refunds to persons registered in AJK.
10. Time to adjudicate the cases under Sales Tax Act, 1990
and Federal Excise Act, 2005 has been increased from
90 to 120 days effective from 1st July, 2008.
CUSTOMS
1.
Cosmetics
Electric ovens/cooking ranges
Betel leaves
Sulphonic acid
CKD/SKD of sewing machines
2.
Customs duty @ Rs. 500/ per set has been levied on import of mobile phone.
3.
4.
5.
6.
7.
18. FED has been levied on the services of real estate developers and promoters, whereby the builder would be
required to pay duty @ Rs.50 per sq. ft. of the covered
area of a unit. The developer of open plots would be
subject to duty @ Rs.100 per sq. yard of the plot.
19. To charge duty on the services originating from abroad
and terminating in Pakistan, an enabling provision has
9.
21. Section 194C has been amended for enhancing the limit
of single bench of the Appellate Tribunal from five to
ten million rupees
2.
The maximum fine for not holding AGM & related non
compliances by listed companies within the prescribed
time period has been proposed to increase from
Rs.50,000 to Rs.500,000.
3.
The maximum fine for not holding AGM & related non
compliances by other companies within the prescribed
time period has been proposed to increase from
Rs.10,000 to Rs.100,000.
SECP has been empowered to specify the time limits
for payments of dividends.
PTA
PSF
4.
Caustic soda
from Rs.5000/MT to
Rs.4000/MT,
Printing screens
1.
from 5% to 0%,
Textile buckram
3.
Employees Old-age Benefits Act, 1976 will be applicable on every industry or establishment, where five or
more persons are employed
4.
5.
6.
The wage limit for application of Social Security Ordinance, 1965, has been enhanced to Rs. 10,000 per
month from Rs.5000 per month.
17. Tariff based system (TBS) for auto sector has further
been improved.
7.
The rate of contribution under Social Security Ordinance has been decreased to 6 percent.
8.
The rate of social security contribution has been increased to Rs. 360 per month under self assessment
schemen
Mr. Ghulam Mustafa Qazi, Director TMR & Co. delivered presentation in Post-Budget Seminar at Lahore based on his companys
Budget Highlights.
The Budget
Finance Minister Syed Naveed Qamar, on Wednesday the
June 11, 2008 unveiled a Rs. 2.01 trillion taxes-laden federal
budget for 2008-09.
Subsidies are cut on wheat, oil and electricity. 20pc raise is
allowed in govt. employees salary. Poor are promised to get
Rs. 1,000 per month as if it is a big amount to bear the burden of high inflation.
i)
ii) Kapra: Continued power crises, long hours load shedding, inflationary pressure caused by budgetary taxes and
increase in the prices of electricity, CNG Gas, POL products
and other consumables will increase the cost of industrial
production to which textile is no exception. This will make
kapra (cloth) much costlier which will not be affordable by
the common men.
iii) Makan: Increase in GST and similar increase in federal excide duty on cement and other construction items in
addition to levy of FED Rs. 100 per sq. yrds. on the plot and
Rs. 50 per sq. yrds. on the covered area of the built up house
Growth
The GDP growth rate peaked in 2004-05 at 9 percent. Since
then there has been a gradual decline in the growth rate,
most pronounced in the manufacturing sector. Also, there
has been considerable volatility in agricultural growth and
10
Fiscal Deficit
Deficit started increasing after 2003-04 as public expenditure was built up once again with rising PSDP and higher
non-interest current expenditure. By 2006-07, public expenditure had exceeded the 1999-2000 level by 0.5 percent of
the GDP.
Balance of Payments
Pakistan experienced a strong balance of payments position
in earlier years of the new millennium. After 9/11, the jump
in private transfers led to current account surpluses from
2001-02 to 2003-04. Thereafter, there has been a steady deterioration.
Inflation in 2007-08
Inflation has been threatening the economy since 2004-05.
Cumulative inflation from 2004-05 to 2006-07 has been 27
percent in the overall CPI and 33 percent in food prices. As
per the recent press conference of the Governor of the State
Bank, food inflation at present is 25 percent on a year-toyear basis.
Inflation has acquired a galloping character and during
the last two months of March and April 2008 the
monthly rate of inflation has crossed 3 percent. Inflationary expectations have become embedded in the behaviour of economic agents and imparted a strong dynamic to inflation in the country.
There is a strong monetary 'overhang', due especially to
the high rate of government borrowing from the Central
Bank, which has substantially added to the stock of reserve money.
There has been incomplete adjustment yet to the rising
oil prices internationally and if the government opts to
raise domestic POL prices accordingly in 2008-09, to reduce the large oil subsidy bill (see Section IV), then this
could impact significantly on the overall price level.
The rupee has depreciated rapidly in recent months by
over 10 percent and, as highlighted by the Governor of
SBP, this will imply more imported inflation in coming
months.
Sales Tax
Sales tax is levied at two stages in Pakistan- at the stage of
import and domestic production respectively. During the
decade of the 90s, it acquired the characteristics of a value
added tax. Therefore, the tax base for the tax is the value of
dutiable imports plus revenue from import duty plus value
added in large-scale manufacturing.
In recent years, there has been a major broad basing of the
tax, which has increasingly substituted for customs duty, excise duty and the petroleum development surcharge. The
size of the tax base has, therefore, been accordingly extended.
Tax Measures
Income Tax
Tax Rate
NIL
0.5%
1%
2%
3%
4%
5%
7.5%
10%
12.5%
15%
17.5%
21%
25%
Taxable Income
Upto Rs. 180,000
Rs. 180,001 to Rs. 250,000
Rs. 250,001 to Rs. 350,000
Rs. 350,001 to Rs. 400,000
Rs. 400,001 to Rs. 450,000
Rs. 450,001 to Rs. 550,000
Rs. 550,001 to Rs. 650,000
Rs. 650,001 to Rs. 750,000
Rs. 750,001 to Rs. 900,000
Rs. 900,001 to Rs. 1,050,000
Rs. 1,050,001 to Rs. 1,200,000
Rs. 1,200,001 to Rs. 1,450,000
Rs. 1,450,001 to Rs. 1,700,000
Rs. 1,700,001 to Rs. 1,950,000
Rs. 1,950,001 to Rs. 2,250,000
Rs. 2,250,001 to Rs. 2,850,000
Rs. 2,850,001 to Rs. 3,550,000
Rs. 3,550,001 to Rs. 4,550,000
Rs. 4,550,001 to Rs. 8,650,000
Rs. 8,650,001 and above
Tax Rate %
Nil
0.50
0.75
1.50
2.50
3.50
4.50
6.00
7.50
9.00
10.00
11.00
12.50
14.00
15.00
16.00
17.50
18.50
19.00
20.00
The limit of basic exemption for salaried individuals is being enhanced from Rs. 150,000 to Rs. 180,000 and in case of
Where the total income of a salaried taxpayer marginally exceeds the maximum limit of a slab in the table, the income
tax payable shall be the tax payable on the maximum of that
slab plus tax on:
i)
ii)
Taxable Income
Tax
Rate
Tax
Chargeable
Rs.
Total Tax
Chargeable
after
Marginal
Relief
Rs.
2.5%
11,250
11,425
3.5%
175
7.5%
67,500
9%
1,350
14%
273,000
15%
1,500
17.5%
621,250
18.5%
41,625
18.5%
841,750
19%
51,300
11
68,850
274,500
662,875
893,050
Part 1, Division II
(b) The rate of tax to be paid under section 15, in the case of
company, shall be.
S. No.
35%
Small Company
20%
Rate
25% plus
30% plus
35% plus
Rate of tax
Where the gross amount of rent 5 per cent of the gross amount of
does not exceed Rs. 400,000
rent
2)
Where the gross amount of rent Rs. 20,000 plus 10 percent of the
exceeds Rs. 400,000 but does
gross amount of rent exceeding
not exceed Rs. 1,000,000
Rs. 400,000.
3)
Where the gross amount of rent Rs. 80,000 plus 15 per cent of the
exceeds Rs. 1,000,000.
gross amount of rent exceeding
Rs. 1,000,000.
1)
Part 1, Division IV
(Section 6)
15% of the gross amount of the royalty or fee for technical services.
Part 1, Division V
(Section 7)
Rate of tax
1)
2)
Where the gross amount of rent 5 per cent of the gross amount
exceeds Rs. 150,000 but does
exceeding Rs. 150,000
not exceed Rs. 400,000
3)
Where the gross amount of rent Rs. 12,500 plus 10 per cent of the
exceeds Rs. 400,000 but does
gross amount exceeding Rs. 400,000.
not exceed Rs. 1,000,000.
4)
Where the gross amount of rent Rs. 72,500 plus 15 per cent of
exceeds Rs. 1,000,000.
the gross amount exceeding
Rs. 1,000,000.
12
S. No.
Rate of tax
1)
NIL
2)
3)
4)
Rate of tax
1)
2)
3)
Division VI Part IV
(Section 231A)
Miscellaneous
The Provincial Employees Social
Security Ordinance, 1965
Wage limit enhanced to Rs. 10,000 for applicability of
Provincial Employees Social Security Ordinance,
1965.
Employers Social Security contributions caped at 6percent .
Monthly contribution per employee enhanced to Rs. 360
per month under Social Security self assessment
scheme.
Withholding tax on
Petroleum Products
Withholding tax on
Brokerage and Commission
13
Budget at a Glance
Budget
Revised
Budget
Estimate
Estimate
Estimate
2007-08
2007-08
2008-09
......................................... (Rupees in billion) .........................................
Tax Revenue - CBR
Direct Taxes
Income tax
Others
Indirect Taxes
Customs
Sales tax
Federal excise
Others
14
388.0
20.3
408.3
367.3
21.0
388.3
477.0
19.0
496.0
154.0
375.0
91.0
2.3
622.3
1,030.6
337.6
1,368.2
466.0
902.2
58.5
258.5
122.7
51.8
75.0
80.9
1,549.6
148.0
375.0
92.0
2.3
617.3
1,005.6
393.3
1,398,9
457.2
941.7
142.8
275.4
129.7
32.6
1.7
424.1
1,948.0
170.0
472.0
112.0
1.4
755.4
1,251.4
427.8
1,679.2
568.3
1,110.9
221.3
300.2
124.4
78.9
25.1
149.0
2,009.8
437.4
204.5
641.9
275.0
78.9
60.5
1,056.3
564.2
317.5
881.7
277.2
293.4
63.9
1,516.2
619.4
310.1
929.5
296.1
201.1
66.5
1,493.2
470.0
23.3
493.3
1,549.6
395.1
36.7
431.8
1,948.0
472.7
43.9
516.6
2,009.8
There are those who look at things the way they are and
ask whyI dream of things that never were and
ask why not?
(Robert F Kennedy)
ple.We can not live on this trade based economy.Trade in shares, trade in goods .trade
in properties.The solutions are manufacturing
and agriculture and proper allocation of resources.
The time ahead is difficult..But do we have
choice..Who will bring change? Change will
come if we really believe in ourselves
My theme for this year is whether it is New Direction
or Compulsive Action ?
tice of India:
One would wish that one could get the enthusiasm of
Justice Holmes that taxes are the price of civilization and
one would like to pay that price to buy civilization. But
the question which many ordinary taxpayers very often,
in a country of shortages, with ostentatious consumption, and deprivation for the large masses, ask is, does
he with taxes buy civilization or does he facilitate the
waste and ostentation of the few. Unless waste and ostentation in government spending are avoided or eschewed, no amount of moral sermons would change peoples attitude to tax avoidance (CWT v Arvind 173 ITR
479, 487).
(Nani Palkhivala; We, the Nation)
come that
15
REVENUES
Immediate issues
Expenditure
10 Shortage of Power
Revenues
Revised
Budget
Estimate Estimate
2007-2008 2008-2009
367
477
Others
21
19
388
496
Customs
148
170
Sales
375
472
Federal Excise
92
112
Others
617
755
1,005
1,251
Indirect Taxes
Rupees in Billion
Expenditure
Revised
Budget
Estimate Estimate
2007-2008 2008-2009
Current Expenditure
General Public Services
Debt Servicing
564
619
Others
317
310
881
929
277
296
Economic Affairs
293
201
Others
63
66
1,516
1,493
PSDP
395
472
Others
36
43
431
516
1,948
2,009
Development Expenditure
16
& loss account. At the moment both are not presentable. Thus they suggest:
Overview, Page VI
Major contributors to this years services growth include: wholesale and retail trade, banking and insurance, public administration, and defence and social services. All these sectors have posted strong growth in 20072008. As stated at the outset, this years growth is not
broad-based. Infact, three fourth contribution to this
years growth alone come from the services sector while
the remaining one fourth contribution owed to the
commodity-producing sector.
Is it not a blessing in disguise? Can defence be a service sector ?
If we have a growth of around 4 per cent with Agriculture and Manufacturing contributing substantially
we will achieve the objectives.
times we rely on US AID (Ayub Khan Age) then Afghan War Support (Zia ul Haq) and then War on Terror Support (Musharraf).
trade deficit.
This problem has further been aggravated by our Du-
lem. However, it is yet to be seen whether it is a Directional Change [I desire it be so] or a Compulsive
ActionLet us hope for the better.
17
Seventh Schedule
Regressive Amendment;
ism.
Sales Tax
1.
Regressive in nature;
Not required; A compulsion.
2.
Effects
126 only
l Hard earned Foreign Exchange remittance from
Shortage of water
Expensive Inputs..Fertilzers/Electricity/Pesticides
Lack of infrastructure..Storage/Transport/Roads
Is it for the past? Do we need anything for the past undisclosed income? ; This will fail conceptually if future whitening is not stopped. We do not see any action against that [Section 111(4) survives];
Non-Residents payment
18
Please
understand
it.
agriculture.Do
not
spoil
Manufacturing
Under-invoiced imports
tions are:
l Industrial
cent]
l Immediate withdrawal of WWF and WPPF
prove Employment levels and bring a larger segment of people above the poverty line. We do not
have any other choice.
Realisation of ill effects of trading shares, plots,
goods etc.
The real value addition in agriculture and manufac-
high input pricing; no protection against imports, including under invoicing; and improper cascading.
All these aspects have been identified as an issue in
the Budget Documents, however, the question is the
availability of the infrastructure for correction.
Conclusion
Budget for 2008-2009 has made some positive direc-
tional changes, however, this country can only prosper if we realize that Pakistan is an economic reality
not a security state
This presentation was delivered at Post Budget Seminar, organized by
Karachi Branch Council of ICMAP at Karachi on June 18, 2008.
19
Rs 496 billion
Rs 472 billion
Rs 171 billion
Rs 112 billion
TOTAL
Rs 1,251 billion
Section 20 (1):
l
In practice it has mostly placed its reliance for tax collection through the oldest withholding tax agents system
20
Amendment in:
Clause 12(3)
This clause has also included the employees of
banks and banking companies.
Clause 12(4)
l
Section 187
This section has extended the ineligibility criteria for becoming a director of listed co. to the sponsors, directors
or officers of corporate brokerage houses and shall not
apply where co. is a stock exchange.
Section 233 (1)
l
It increased the time period for submission of revised returns from 90 days to 120 days.
Clause 26(12)
l
Clause 26(16)
l
Highlights
Income Tax
Section 251
l
Clause 26 (3) a
Rice seeds, energy saving lamps, dredgers, specified solar energy equipments are
Custom
Clause 12(5)
l
Clause 26 (2) a
Clause 12 (2)
This seeks to defer the levy of CVT on power of attorney in the case of bank till the said property is
transferred to the bank.
Clause 26 (1) b
l
Clause 12 (1)
Clause 15 (1)
21
The basic limit of exemption in respect of salaried person has been increased from Rs.150,000 to Rs.180,000
and from Rs. 200,000 to Rs. 240,000 for women taxpayer.
Marginal tax relief for the salaried persons has been
given
Builders and developers will pay tax @ Rs.50 per sq. ft.
on constructed covered area and tax @ Rs.100 per sq.
yard on open plots .
Collection of fixed tax @ 0.75% at import and manufacturing stage in lieu of tax payable by dealers of electric
goods
Sales Tax
Sales tax rate has been increase from 15% to 16 %
Custom Duty
Life saving drugs has been exempted from duty.
Rice seeds, energy saving lamps, dredgers, specified solar energy equipments exempted from customs duty
Duty rate on base oil for lubricating oils reduced from
20% to 10%.
Power plants imported by WAPDA on temporary basis
exempted from customs duty.
The local industry producing water dispensers, vacuum
cleaners, gas heaters, gas stoves/cooking ranges with
ovens, air handling equipments, central heating equipments, UPS, etc have been provided inputs at 0%, 5%
and 10% rates of duty
The presentation was delivered in National Budget Seminar on
June 16, 2008 at Islamabad.
22
Background
Pakistan has a rich and vast natural resource base, covering various ecological and climatic zones; hence the
country has great potential for producing all types of food
commodities. Agriculture has an important direct and indirect role in generating economic growth. The importance of agriculture to the economy is seen in three ways:
first, it provides food to consumers and fibres for domestic industry; second, it is a source of scarce foreign exchange earnings; and third, it provides a market for industrial goods.
About 27 percent of Pakistan's total land area is
considered arable. Agriculture and related activities
engage abnout half of the work force and provide nearly
one-fourth of the GDP. By the late 1970s an intensive
land-reform effort had resulted in the expropriation of
some 1.2 million hectares (some 3 million acrea) from
landlords, the distribution of almost half of this to enants,
and the limitation of individual holdings to 40 hectares
(100 acres) of irrigated or 81 hectares (200 acres) of
nonirrigated land. Formerly an importer of wheat,
Pakistan achieved self-sufficiency in the grain by the
min-1970s. Principal crops in the late 1980s (with output
in metric tons) included sugarcane, 35 million; wheat, 14
million; rice, 4.6 million; cotton lint, 1.5 million; and
corn, 1.2 million. The livestock population included
about 17.2 million cattle, 27.5 million sheep, 33 million
goats 14 million buffalo, 3 million asses, and 150 million
chickens.
In the early 1990s, irrigation from the Indus River and its
tributaries constituted the world's largest contiguous irrigation system, capable of watering over 16 million hectares. The system includes three major storage reservoirs
and numerous barrages, headworks, canals, and distribution channels. The total length of the canal system exceeds 58,000 kilometers; there are an additional 1.6 million kilometers of farm and field ditches.
Partition placed portions of the Indus River and its tributaries under India's control, leading to prolonged disputes
between India and Pakistan over the use of Indus waters.
After nine years of negotiations and technical studies, the
issue was resolved by the Indus Waters Treaty of 1960.
After a ten-year transitional period, the treaty awarded
India use of the waters of the main eastern tributaries in
its territorythe Ravi, Beas, and Sutlej rivers. Pakistan
23
received use of the waters of the Indus River and its western tributaries, the Jhelum and Chenab rivers.
After the treaty was signed, Pakistan began an extensive
and rapid irrigation construction program, partly financed by the Indus Basin Development Fund of
US$800 million contributed by various nations, including the United States, and administered by the World
Bank. Several immense link canals were built to transfer
water from western rivers to eastern Punjab to replace
flows in eastern tributaries that India began to divert in
accordance with the terms of the treaty.
The Mangla Dam, on the Jhelum River, was completed in
1967. The dam provided the first significant water storage for the Indus irrigation system. The dam also contributes to flood control, to regulation of flows for some of
the link canals, and to the country's energy supply. At the
same time, additional construction was undertaken on
barrages and canals.
A second phase of irrigation expansion began in 1968,
when a US$1.2 billion fund, also administered by the
World Bank, was established. The key to this phase was
the Tarbela Dam on the Indus River, which is the world's
largest earth-filled dam. The dam, completed in the
1970s, reduced the destruction of periodic floods and in
1994 was a major hydroelectric generating source.
Most important for agriculture, the dam increases water
availability, particularly during low water, which usually
comes at critical growing periods. Despite massive expansion in the irrigation system, many problems remain.
The Indus irrigation system was designed to fit the availability of water in the rivers, to supply the largest area
with minimum water needs, and to achieve these objectives at low operating costs with limited technical staff.
This system design has resulted in low yields and low
cropping intensity in the Indus River plain, averaging
about one crop a year, whereas the climate and soils
could reasonably permit an average of almost 1.5 crops a
year if a more sophisticated irrigation network were in
place. The urgent need in the 1960s and 1970s to increase
crop production for domestic and export markets led to
water flows well above designed capacities. Completion
of the Mangla and Tarbela reservoirs, as well as improvements in other parts of the system, made larger water
flows possible.
24
earnings;
providing employment to 47 percent of the total work
force;
providing the main source of livelihood for the rural
population of Pakistan;
providing raw materials for many industries and a
25
forestry
fisheries
The average growth rate in this sector over last forty years
was 4.3%, which reflects good performance. Population
growth rate average over the last forty years remains around
3.00% which is slightly below the growth rate of agriculture
sector. Further with advancement in technology and awareness in emerging new global world, trend of food consumption is changing and increasing towards high nutrition and
hygienic foods. That phenomenon is also widening gap between demand and supply. Food crisis is being observed
now-a-days and it is forecasted globally in future. In this
scenario we need a higher growth rate of agriculture sector
which can fulfill our domestic requirements and surplus
could be exported to other countries to set off the increasing
demands of our imports and reduce the foreign bills deficit.
Scope of horizontal expansion in agriculture production has
become limited as after construction of Mangla and Tarbela
dams no remarkable reservoir constructed and initiated. To
secure this nature gift is likely to save our future generations. To have our right from neighbors and settle this crucial matter is the demand of this era. That matter has prime
importance and it should be planned and settled on priority.
It is equally beneficial for agriculture growth and economical power generation.
HIGHLIGHTS
1
institution.
Agriculture ministry failed in managing agriculture field and research staff and their activities.
26
II
TABLE-1
Product
Wheat
National
Peogressive
Average
Growers yield
Yield pakistan
Pakistan
(Tons/Hector) (Tons/Hector)
2.51
5.5
National
Average yield
Developed
Countries
(Tons/Hector)
7.20 (Germany)
4.00 (Australia)
2.82 (USA)
4.45 (China)
Cotton Lint
0.704
1.45
1.86 Australia)
1.24 (China)
0.80 (USA)
Sugar
49.22
110
91.97 (Australia)
73.82 (USA)
82.52 (China)
Rice Paddy
3.16
7.30
6.30 (Australia)
7.70 (USA)
6.26 (China)
Potatoes
13.34
25.00
34.41 (Australia)
43.66 (USA)
14.35 (China)
Onion Dry
13.82
26.00
42.88 (Australia)
51.18 (USA)
20.61 (China)
Apples
3.12
7.00
13.82 (Australia)
29.80 (USA)
13.71 (China)
27
Policies formulation for foreign investment with inclination to joint venture and transfer of technology.
18 There needs to make stringent laws in respect of adulteration of pestiside / fertilizers to enhance our crop
yield and protect our farmers financially.
10 Making arrangement for allied industries in vertical direction i.e. godowns, cold storages, international standard packaging, making of packed foods and drinks as
per international standard and requirement.
16 Mandatory induction of technical staff i.e. qualified agriculture experts / scientists for over all planning, monitoring and research work, management accountant for
management of accounts and analysis of cost and incomes along with other documentation.
In the context of implementation of WTO and our achievements in engineering, electronics and other industries,
where we are far behind from developed countries. I think
Table-2
(Million Rupees)
SECTOR
Amount
Amount
Amount
Government
802,949
26.67
898,319
25.54
1,258,001
29.04
Agriculture
136,179
4.52
148,590
4.22
160,005
3.69
Manufacturing
928,183
30.83
1,044,203
29.68
1,238,356
28.59
Construction
42,000
1.39
54,995
1.56
74,301
1.72
240,928
8.00
275,948
7.84
322,923
7.46
101,350
3.37
140,118
3.98
176,628
4.08
NBFCs
98,259
3.26
144,224
4.10
140,644
3.25
PSEs
136,209
4.52
164,140
4.67
209,783
4.84
Consumer financing
342,852
11.39
398,858
11.34
422,519
9.75
13,727
0.46
14,325
0.41
14,344
0.33
Natural resources
10,221
0.34
11,183
0.32
16,684
0.39
18,874
0.63
42,391
1.21
94,847
2.19
69,515
2.31
90,336
2.57
102,852
2.37
7,189
0.24
9,882
0.28
11,468
0.26
62,490
2.08
80,158
2.28
88,176
2.04
3,010,925
100
3,517,670
100
4,331,531
100.00
28
GDP growth rate will increase and ultimately it will accelerate economic activities in the country.
SBP needs to introduce such policies and a program for financial institutions, which encourages banks to invests in
productive sectors like agriculture and industry and discourage to non-productive (consumer financing and capital market) loans.Further government borrowing needs to be reduced drastically. Cut from these sectors be utilized for agriculture sector and it needs to be doubled every year till the
attainment of targeted results i.e. 100% increase in agriculture production during 10 year period.
Poverty in Pakistan is largely a rural phenomenon; development of agriculture will be a principal vehicle for
alleviating rural poverty.
Increase in national reserve on one side through reduction in imports of edible oils, tea and other food items
and on other side through increased export of surplus
foods, dairy products and other horticulture items.
It will reduce and ultimately convert foreign trade deficit to foreign trade surplus.
29
Many farm workers may be relieved of their jobs on account of use of modern technologies.
Since the independence in 1947, we are quoting that agriculture is the back bone of our economy. Infect, it remains just a
saying and no solemn efforts and plan made for development of this sector. Presently, whole world is anxious about
the attainment of self sufficiency in foods and other eatables. We have potential of horizontal as well as vertical
growth in our agriculture sector. We must exert our all abilities and available sources for the development of our agriculture. It will in return, really save the future of our next
generation. No doubt corporate farming will be a step forward for prosperous Pakistan
About the Author: The author is Dy. General Manager Finance &
Accounts at Dewan Salman Fibre Limited, a leading Fibre
Manufacturing Company of Pakistan.
problems of livestock. The animals' owners live in urban areas where animals of improveo breeds are not
available. They do not make any arrangement for the
mating of their animals with superior breeds' animals.
So, the disorganized breeding system 1 ads to falling
of the quality of animals.
Mortality rate in livestock is high. Majority of our
% Change Between
1986
1996
2006
1986 &1996
2006
Cattle
1.67
2.18
3.56
30.5
63.3
Buffaloes
1.42
2.18
3.34
53.5
53.2
Sheep
4.35
4.44
4.73
2.1
6.5
Goats
6.50
7.84
11.00
20.6
40.3
Camels
0.02
0.05
0.02
150.0
60.0
Total Animals
13.06
16.69
22.65
19.6
36.7
30
gested by the experts to improve the quality of animals. There would be increase in animal wealth due
to better breeding of the animals in these centers.
riculture. To meet the food requirements of the increasing population, more land has been brought under cultivation. Grazing fields are economical for animals' owners. They cannot breed large group of animals in their houses on feed and fodder.
There is absence of commercial approach to animal
provide information about the preparation of less expensive feed and fodder for milk animals. It will improve the quality of animal products.
Commercial approach to animal husbandry and dairy
omy, government has made an independent Livestock Development Policy, to increase the development of livestock. This policy is the need of the small
livestock farmers for whom livestock is a supplementary income source. The policy includes measures to
develop small and medium livestock enterprises and
incentives forgetting up large livestock farmsn
About the Author:
31
a) Livestock
As a result of strong economic growth achieved in recent
year, the per capita income of the people have also increased. As people become more affluent, they have not
only been consuming more food but shifting their diet towards higher quality food product such as meat and dairy
products. Accordingly the demand for high quality food
such as meat and dairy products are rising and putting pressure on the prices of these commodities. In a changed environment, there is an ample scope to provide boost to the livestock and dairy sector. Unfortunately, these sectors have received little or no attention by the successive governments
in the past. It is important to note that livestock accounts for
52.2 percent of agricultural value added, contributes 11 percent to GDP and affects the lives of 30 35 million people in
rural areas. It is highly labour intensive and if proper attention is given to this sector, it will not only absorb more rural
workforce but also help alleviate rural poverty in Pakistan.
In order to achieve higher sustained growth in agriculture, it
is absolutely necessary for the government to give more attention to livestock and dairy sector because it is not immune to the mother nature.
Realizing its importance to rural poverty reduction, the government has started giving some attention only during the
last two years. It is in this perspective that livestock development policy and poultry development policy have been put
in place. Both policies are aimed at developing livestock and
Units
000 tons
000 tons
000 tons
2005-06*
39,596
13,407
24,723
34
664
767
31,970
10,726
19,779
34
664
767
2,515
1,449
554
512
2006-07**
40,872
13,913
25,465
35
682
77
32,996
11,130
20,372
35
682
777
2,618
1,498
566
554
2007-08**
42,199
14,437
26,239
35
700
787
34,064
11,550
20,991
35
700
787
2,727
1,549
578
601
The figures for milk and meat production for the year 2005-06 were calculated using the livestock population reported in livestock census 2006 and
then by applying production parameters.
The figures for milk and meat production for the year 2006-07 and 2007-08 were calculated by applying production parameters to the projected
population of 2006-07 and 2007-08 based on the inter census growth rate of livestock census 1996-2006
The figures for the milk production for the year 2005-06, 2006-07 and 2007-08 were calculated after adding the production of milk from camel and
sheep to the figures reported in the livestock census 2006.
Milk for human consumption is derived by subtracting 20% (15% wastage in transportation and 5% in calving) on the gross milk production of cows
and Buffalo.
The figures for meat production are of red meat and do not include the edible offals.
32
Units
MillionNos
000 Nos
000 Nos
000 tons
000 Nos
000 tons
2005-06*
9,712
11,418
5,602
5,723
94
43,353
10,016
20,722
12,616
2,975
9,641
40.10
20.31
300
51.45
43,795
12,160
42.81
633.48
203.28
894
277
186.49
0.70
2006-07**
10,197
11,803
5,813
5,895
95
44,325
10,131
21,283
12,910
3,009
9,901
40.57
20.85
308
52.74
44,777
12,568
44.06
652.51
209.18
921
285
191.66
0.67
2007-08**
10,712
12,202
6,032
6,074
96
45,325
10,251
21,860
13,215
3,045
10,170
41.05
21.41
317
54.07
45,788
12,992
45.36
672.24
215.30
949
293
197.02
0.67
The figures for livestock products for the year 2005-06 were calculated using the livestock population reported in livestock census 2006 and by applying production parameters.
The figures for livestock product for the years 2006-07 and 2007-08 were calculated by applying production parameters to the projected population
of 2006-07 and 2007-08
The major products of livestock is milk and meat, the production of which for last three years is shown in Table-2.
The production of other livestock products for the last three
years is shown in Table - 3.
b) Poultry
Poultry sector is one of the most vibrant segments of agriculture sector of Pakistan. This sector generates employment (direct/indirect) and income for about 1.5 million people. Poultry meat contributes 19 percent of the total meat
production in the country. The current investment in Poultry
Industry is about Rs 200 billion. Poultry sector has shown a
growth of 8-10 percent annually.
This sector has faced a tough challenge on account of Avian
Influenza (AI) outbreak in the country. The re-occurrence of
Avian Influenza was reported on 3rd February 2007 in backyard poultry/zoo and commercial poultry in Rawalpindi/Islamabad, Peshawar, Abbottabad, Mansehra, Kamalia, Summundari and Karachi areas. There have been 72 (27 commercials flocks and 45 backyard poultry and game birds) recorded cases of H5NI till March 2008, involving approximately 176.1 thousand commercial poultry (broiler/layer)
apart from game birds and backyard poultry. Zero tolerance
policy was adopted and flocks were destroyed under the supervision of state veterinarians and district administration.
Apart from projects already under implementation regard-
33
ing Avian Influenza, Ministry, Food, Agriculture & Livestock has intimated a project titled National Programs for
the Control and Preservation of Avian Influenza at a total
cost of Rs 1180.142 million. The project is of three years duration and will be implemented through out Pakistan including AJK, FATA and FANA. The proposed project objectives include improving and scaling up avian influenza surveillance, reporting and diagnostic at federal and provincial
district levels. Strengthening disease control, outbreak containment and eradication of highly pathogenic avian influenza (HPAI), compensation to farmers, increase awareness
among the farmers, consumers, veterinarians and other
stake holders regarding AI, vaccine development, improving veterinary services to enforce national animal disease
control measures.
The production of domestic/rural & commercial and rural
poultry and products for last three years is given below:
Units
Million No s
000 Tons
Million No s
000 Tons
2005-06*
72.95
8.61
34.23
30.12
3423
94.67
0.70
31.14
0.95
2006-07**
74.02
8.84
34.84
30.34
3484
96.54
0.67
29.85
0.91
2007-08**
75.11
9.08
35.47
30.57
3547
98.45
0.67
29.85
0.91
Million Nos
000 Tons
23.20
337.00
6.90
352.00
6258
416.55
24.82
370.70
7.25
387.20
6682
456.95
26.56
407.77
7.61
425.92
7136
501.30
Million Nos
000 Tons
352.00
441
9712
512
387.20
477
10197
554
425.92
518
10712
601
34
ii)
v. Fisheries
The share of fisheries in GDP, though small, but it does contribute to the foreign exchange earnings through export besides providing proteins to the populace. The nutritional
value of fish is very high, with a protein content, low cholesterol content and many useful dietary supplements. Government of Pakistan is taking a number of steps to improve fisheries sector. A number of initiatives are being taken by federal and provincial fisheries departments which include inter alia strengthening of extension services, introduction of
new fishing methodologies, development of value added
products, enhancement of per capita consumption of fish,
upgradaion of socio-economic conditions of the fishermens
community.
Marine Fisheries Department is executing following development projects
i)
Reduction in Seafood Post Harvest Losses by Improvement of Fish Holds of Local Fishing Boats
which is aimed at to start a programme of post harvest
losses through modification of the fish holds of the local fishing boats to enhance the export earnings. Due to
improvement in the fish holds, post harvest losses will
be reduced substantially making available additional
quality raw material for the processing plants.
iii) Two other projects i.e. Accreditation of quality control laboratories of Marine Fisheries Department and
Establishment of an Integrated National Animal and
Plant Health Inspection Service (NAPHIS) are also
being implemented to provide improved quality control
services to the seafood export industry. These two projects are aimed to get the laboratories of the Marine
Fisheries Department accredited with international
bodies and meet the requirements of ISO.
During the period July-March 2007-08, the total marine and
inland fish production was estimated to be 640,000 M. tons.
Out of which share of marine fish is 390,000 M. tons and inland contributed is 250,000 M. tons. The production for the
year 2006-07 was estimated to be 578,000 M. tons in which
353,000 M. tons was from marine and the remaining was
225,000 M. tons was produced by inland fishery sector.
Main buyers of fish and fish preparations are Japan, USA
Middle East, Sri Lanka, and China etc. Pakistan earned US$
188.5 million during July-March (2007-08) and over
100,000 M. tons of fish and fishery products were ex portedn
Table 5
Livestock Products
(000 tonnes)
Fiscal
Year
Milk #
Beef
Mutton
Poultry
Meat
Bones
Fat
Blood
1990-91
15,481
765
665
151
48.1
7.9
259.0
1991-92
16,280
803
713
169
49.3
8.3
265.0
1992-93
17,120
844
763
265
50.5
8.1
271.0
1993-94
18,006
887
817
296
51.7
9.0
277.0
1994-95
18,986
931
875
308
53.1
9.4
283.0
1995-96
22,970
898
587
355
38.1
15.6
295.7
1996-97
23,580
919
602
387
38.3
16.2
302.3
1997-98
24,215
940
617
284
38.5
16.7
309.2
1998-99
24,876
963
633
310
38.7
17.3
316.3
1999-00
25,566
986
649
322
38.9
17.9
324.0
2000-01
26,284
1,010
666
339
39.2
18.6
331.4
2001-02
27,031
1,034
683
355
39.4
19.3
339.4
2002-03
27,811
1,060
702
370
39.7
19.9
347.6
2003-04
28,624
1,087
720
378
39.9
20.7
356.2
2004-05
29,438
1,115
739
384
40.0
20.7
365.1
2005-06 *
31,970
1,449
554
512
40.1
20.3
633.5
2006-07 @
32,996
1,498
566
554
40.6
20.8
652.5
2007-08 @
34,064
1,549
554
601
41.0
21.4
672.2
Source: Livestock Division
* Population figures are actual figures of Livestock Census 2006.
# Human Consumption
@ Estimated figures based on Inter census growth rate of livestock census 1996 & 2006
101.8
104.5
107.2
110.0
113.0
110.1
112.6
115.2
117.8
120.6
123.5
126.5
129.7
132.9
136.3
203.3
209.2
215.3
40.1
42.5
45.1
47.3
50.7
32.0
32.8
33.6
34.4
40.9
41.8
42.9
44.0
45
45.2
51.4
52.7
54.1
35
Wool
Hair
Eggs Hides
(Mln. (Mln.
Nos.) Nos.)
4,490
5.9
4,914
6.0
5,164
6.1
5,740
6.2
5,927
6.3
5,757
7.0
6,015
7.1
5,737
7.3
8,261
7.5
7,321
7.6
7,505
7.8
7,679
7.9
7,860
8.2
2 8,102
8.4
8,529
8.4
9,712
11.4
10,197
11.8
10,712
12.2
Skins
(Mln.
Nos.)
32.7
33.9
36.0
37.8
39.3
32.7
34.5
35.3
36.3
37.2
38.2
39.2
40.3
42.4
42.6
43.3
44.3
45.3
Article of Merit
tudents of group decision making have written extensively about what determines the quality of group decision making. Of particular interest are articles that explore the general theme of how or why a group of smart
people can make terrible decisions and, when confronted with overwhelming evidence that the decisions
are bad, remain committed to such decisions.
36
Article of Merit
the seats. And the positions of CEO and board chairman
were not held by the same person.
Diverse Opinion
When social loafing is left unchecked and becomes standard operational procedure in a Board culture, it may lead
to a social psychological condition called herding. Herding involves the coalescing of group ideologies and practices around those of one central figure or small cluster of
charismatic figures. Social groups beset with herding in-
37
Article of Merit
clude members best described as sheeple; those who accept dominant lines of thinking without criticism or reflection, and view more utility in maintaining the status
quo than upsetting the proverbial apple cart. Although
extensive loafing in a group isn't a prerequisite of herding
behaviour, excessive loafing is indeed a strong predictor
of the development of sheeple cognitive states and social
practices within a group. The sheeple phenomenon may
be one characteristic of boards that observers characterize as inattentive or failing to challenge important management strategies or decisions.
members envision their roles as contributing to the completion of a worthy task, then they are more likely to attribute their work efforts to their sense of self and participate with more frequency and quality. Choice provides
group members with an opportunity to choose the task
they wish to fulfill; in other words, it allows for individual agency within the group. Arbitrarily assigning roles
in a group often causes complaints, disinterest, resistance, and frustration. Permitting members to choose
their role stimulates team-building and co-operative
work.
Independent Opinion
38
Article of Merit
tion package usually centred on financial or
accounting-based reports doesn't necessarily support
this idea. Board members should be able to solicit and
evaluate the type of information that they want, not what
is dictated and directed by senior management. What remains a challenge, however, is developing an effective
means to promote collaboration and solicitation of the
views of the various experts that constitute the board.
Conclusions
While the manipulation of board inputs through independence structures continues to receive considerable
support in governance circles, sociologists and psychologists both agree that decisions are made interactively and
interpretively as a process and not merely via a structure
of inputs. Therefore, if governance experts continue to
focus on the form of decision making over the content of
the process, there is reason to believe that governance
'meltdowns' will continue.
To move toward a more process-sensitive culture of governance, three immediate considerations might be explored. First, Chairs could attempt to engender both task
and relationoriented atmospheres in the boardroom. In
short, most groups look to one or several leaders to set the
tone for group interaction. By creating contexts wherein
individual members understand that they are responsible
for contributing to group discussions and proposing
amendments to management's strategic directions (the
task) and in which diverse knowledge bases are openly
39
Article
SMEs Need to keep a tight rein on cash flow, make sure they
can pay, and be paid on time while it is tempting to worry
sensible approach needed during the turbulent times.
40
Article
Types of Sukuk
I have discussed the basic structure of the Sukuk an Islamic
Bond in the previous issue. Now it will discuss it slightly in
detail.
There are different kinds of Sukuk of different maturities
that can be issued in a Sharia complaint manner. Issuance
of Sukuk is quite popular these days for raising long term finance and majority of the Sukuk that have been issued to
date are based on the concept of Ijarah. However, there is a
great potential still untapped in utilizing different Islamic
modes for the issuance of Sukuk.
Some of the most commonly used types of Sukuk are discussed below:
1. Sukuk-al-Ijara
41
Article
2. Sukuk-al-Musharaka/
Diminishing Musharka
Figure-2: Sukuk-al-Musharaka
This Sukuk-al-Musharaka structure has been used on a number of recent transactions.
Pur chase Undertaking
Payment for Investment
Beneficiary/
Originator
Contribution in
Kind/Expertise
Investors
SPV /Trustee
Cash
Contribution
Sukuk Certificate
Musharka
(divided into units)
Declaration of Trust over Sukuk
42
Article
Project
Transfer
Agreement
Funding Company
Mudarib
Project
Company
Construction
Term
General
Contractor
a) Participation certificates
4. Salam Sukuk
3. Mudaraba Sukuk
The issuer of these certificates is the investment agent, the
subscribers are the principals and the realized funds are the
entrusted capital of the investment. The Sukuk holders own
the assets represented by the certificates with its benefits and
risks, and they are entitled to the profits, if any. The investment agent is entitled to an agency fee irrespective of the
profit or loss of the business.
These are certificates that represent projects or activities
managed on the basis of Mudaraba by appointing one of the
partners or another person as the mudarib for the management of the operation.
5. Murabaha Sukuk
The issuer of these certificates is the Mudarib, the subscribers are the owners of capital, and the realized funds are the
Mudaraba capital. The certificate holders own the assets of
Murabaha is a specific kind of sale where the commodities are sold on a cost-plus basis.
Mudaraba in proportion to the financial value of the certificates they own. The certificate holders and the Mudarib are
This kind of sale has been adopted by the contemporary Islamic Financial Institutions as a mode of financing.
43
Article
Figure - 4
Sukuk-Holder
Sukuk
Proceeds
Deferred
Payment
Basis
Company
Murabaha
Proceeds
SPV/Trustee
Purchase of
Assets
Delivery of Assets
Vendor
6. Istisna Sukuk
Istisna is the second kind of sale where a commodity is
transacted before it comes into existence. It means to order a
manufacturer to manufacture a specific commodity for the
purchaser. The manufacturer uses his own material to manufacture the required goods. It is necessary for the validity of
Istisna, that, the price is fixed and that necessary specification of the subject matter is fully settled between the parties.
It is not necessary in Istisna that the price is paid in advance; rather it may be deferred to any time according to the
agreement of the parties.
Istisna Sukuk are issued with the aim of mobilizing funds to
be employed for the production of goods so that the goods
produced comes to be owned by the certificate holders. The
issuer of Istisna Sukuk is the manufacturer (supplier/seller), the subscribers are the buyers of the intended
product, while the funds realized from subscription are the
cost of the product. The Sukuk holders own the product and
are entitled to the sale price of the certificates or the sale
price of the product sold on the basis of a parallel Istisna', if
any.
It is permissible to trade in or redeem Istisna' certificates if
the funds have been converted, into assets owned by certificate holders. If the realised funds are immediately paid as a
price in a parallel Istisna'a contract or the manufactured item
is submitted to the ultimate purchaser, then trading in Istisna' certificates is subject to rules of disposal of debts.
The instrument of Istisna may be used for project financing
or building a bridge or a highway. The modern BOT (Buy,
Operate and Transfer) agreements may also be formalized
on the basis of Istisna. Istisna Sukuk may be issued to raise
finance for the construction of highways, motorways, airports etc
44
Article
2.
45
Article
to provide financial information, than to provide information about the financial position, performance and changes in financial position. Readers
would appreciate that there are some IFRS like IAS
24, IAS 30, IAS 32 and IAS 37 that mostly deals with
disclosure requirements. Strictly speaking, the
former framework can be labeled to suffer form limitation of scope so as to support the very development
of these standards. Their very existence can be argued
as to be out of scope to be considered for adoption by
IASB. Majority of the disclosure requirements under
the IFRS(s) (that include IAS by its very definition)
now will get support from the new framework as to
their existence that were otherwise somehow supplementary to the subject matter of the former framework.
Thirdly, the subject matter of the former framework
tors, lenders and other creditors in making decisions in their capacity as capital providers under
the proposed one. This is perhaps the only aspect of
the Exposure Draft which relatively restricts the existing version of the Objective. IASB admits this
specification of focus in its Para OB7 OB8 of the
ED, saying that these claimants are basically primary
stakeholders and all other users are those who can
benefit from financial reporting but for whom financial reporting is not primarily directed. As for internal
management, IASB maintains that they are rather
providers of financial information to the intended users; they do not constitute its primary users. As a consequence of specification of user groups under the
new framework, the term economic decisions has
also been done away with and replaced by rather
more specific decisions in their capacity as capital
providers.
It is worth mentioning here that the proposed version of
Objective is not the original version which was issued
under the Discussion Paper in July 2006. After having received almost 170 feedbacks on the discussion paper, the
IASB reconsidered that version and the proposed version
under the ED is a result of appropriate adjustments being
made in the light of comments received on that DP from
various stakeholders. Among others, the most prominent
of the stakeholders that disagreed with the initial version
of the Objective was Accounting Standards Board (ASB)
of United Kingdom.
The utility of the framework should be understood. Unlike constitution of an estate, which remains the supreme
document for all the estate by-laws, the framework (existing or proposed) is not supposed to be exhaustive and
conclusive. It is more theoretical in nature, and there is
nothing like ultra wires in standards as may he in estate
laws. As IASB itself maintains that the framework serves
merely as a guide to the Board in developing accounting
standards and resolving accounting issues that are not
addressed directly in an IAS or IFRS. However, its utility must not be downplayed as most frequently the tailoring of the standards is based on the debate of its consistency with the framework. See for example the corridor
approach allowed by IAS19 subsequent to its 2002
amendment which was inconsistent with the definition of
asset in the framework. One of the members of the Board,
Ms OMalley dissented with the rest of the Board members on this amendment (Appendix E to IAS 19, 2002
amendment); and IAS19 is now among the forthcoming
projects list of IASB
46
Economic Horizons
Large-scale manufacturing registered a growth of 4.8 percent in 2007-08 against the target of 10.9% and last year's
achievement of 8.6%., exhibiting signs of moderation on account of saturation in capacity utilization on the one hand and
power shortages along with several other factors on the other
hand.
Major nominal growth in private sector investment is witnessed in, mining & quarrying (15.3%), electricity & gas
(11.0%), financial business (11.4%), and wholesale and retail
trade (18.4%). National Savings at 13.9 percent of GDP has financed 65 percent of fixed investment in 2007-08 as against
77.7 percent last year. National savings as percentage of GDP
stood at 13.9 percent in 2007-08 far lower than last year's level
of 17.8 percent. Domestic savings has declined to 11.7 percent
of GDP from 16.0 percent of GDP.
Overall Foreign Investment during the first ten months (JulyApril) of the current fiscal year has declined by 32.2 percent
and stood at $ 3.6 billion as against $5.3 billion in the comparable period of last year.
Foreign direct investment (private) stood at $3481.6 million
during the first ten months (July-April) of the current fiscal
year as against $4180.8 million in the same period last year
thereby showing a decline of 16.7 percent. Almost 57 percent
of FDI has come from three countries, namely, the UAE, US,
and UK. US investors with 33.4 percent investment are on the
top during the first ten months (July-April) of 2007-08. Norway (4.4% or $154.8 million), Switzerland (4.1% or $141.3
million), Hong Kong (3.5% or $121.3 million), Netherlands
(2.9% or $101.0 million) and Japan (2.9% or $100.3 million)
were other contributors to FDI inflows. Three groups namely;
communication, financial business and oil & gas exploration
accounted for almost 67 percent of FDI inflows in the country.
Private portfolio investment witnessed massive decline of 91
percent by recording inflow of $98.9 million as against
$1097.3 million during the comparable period of last year.
Total investment could not sustain its record level of 22.9 percent of GDP of the last fiscal year and declined to 21.6 percent
of GDP in 2007-08. However, total investment has increased
from 16.9 percent of GDP in 2002-03 to 21.6 percent of GDP in
2007-08 showing an increase of 5.7 percent of GDP in five
years.
02. AGRICULTURE
47
Economic Horizons
Cotton production at 11.7 million bales in 2007-08 has decreased by 9.3 percent in comparison to 12.9 million bales of
last year.
Wheat production is estimated at 21.7 million tons in 2007-08
as against 23.3 million tons last year, showing a decrease of 6.6
percent.
Rice production has increased from 5.4 million tons in 2006-07
to 5.6 million tons in 2007-08, showing an increase of 2.3 percent.
Sugarcane production has increased by 16.8 percent in 200708 from 54.7 million tons in last year to 63.9 million tons in
2007-08.
As regards the minor crops, the production of mung, mosoor
and mash increased by 28.4 percent, 13.8 percent and 8.8 percent, respectively. The production of chillies and onion increased by 96.1 percent, 13.8 percent respectively. The production of potato crop declined by 3.8 percent.
Agriculture credit disbursement of Rs 138.6 billion during
July-March 2007-08 is higher by 24.6 percent, as compared to
Rs 111.2 billion over last year.
Total off-take of fertilizer remained flat (0.5 percent) mainly
because offtake pattern of nutrients also changed as nitrogen
offtake increased by 11.4 percent while that of phosphate and
potash decreased by 25.3 and 33.3 percent, respectively during
July - March 2007-08. Increased international prices of 2 phosphatic and potash fertilizers overshadowed the subsidy effect
and eventually offtake could not increase and remained at almost last year's level.
48
Economic Horizons
Rs 119.4 billion is likely to materialize. In addition to this,
Pakistan could not complete the transaction of Global Depository Receipts (GDRs) of the National Bank of Pakistan and
could not launch sovereign and exchangeable bonds. Furthermore, some of the lending expected from multilateral banks
was not given.
The brunt of adjustments on the financing side fell on domestic
sources. Against the budgeted financing of Rs 131 billion from
domestic sources, it increased to Rs 564 billion. Within domestic sources the bulk (82.2 percent) of financing came from
banks while the remaining Rs 100 billion or 17.8 percent came
from non-bank sources. Most importantly, the borrowings
from the State Bank of Pakistan (SBP) reached an alarming
level consequently; the money supply growth for the year
2007-08 is expected to breach the target of 13.7 percent.
Public debt as a percentage of GDP (a critical indicator of the
country's debt burden), stood at 85 percent in end-June 2000,
has declined to 55.2 percent by end-June 2007 - a reduction of
almost 30 percentage points of GDP in seven years. The declining trend in public debt is likely to be reversed in 2007-08,
mainly on account of yawning fiscal and current account deficits and a sharp depreciation of the rupee vis-a-vis the US dollar. By end-March 2008 the public debt as percentage of full
year GDP stood at 53.5 percent.
By end-June 2007 total domestic debt stood at Rs. 2610.2 billion which was estimated at 30 percent of GDP. The outstanding stock of domestic debt rose by Rs 409.9 billion and stood at
Rs. 3020.1 billion by end-March 2008 or 30.3 percent of GDP.
The domestic debt has increased by 15.7 percent by end-March
2008 over end-June 2007. The increase in domestic debt
mainly emanates from floating debt (27.1%) while the other
two components, unfunded and permanent, witnessed a modest growth of 6.1 percent and 9.4 percent, respectively.
07. INFLATION
49
Economic Horizons
The Wholesale Price Index (WPI) during July-April, 2007-08
have increased by 13.7 percent, as against 6.9 percent of last
year.
The Sensitive Price Indicator (SPI) has recorded an increase of
14.1 percent during July-April, 200708, as against 11.1 percent
of last year.
The increase in inflation rate during the current year 2007-08 is
attributable to the increase in food price inflation which has
been due to increase in prices of wheat, edible oil, rice, pulses,
milk, poultry, meat, fresh vegetables and fruits.
10. EDUCATION
Education is essential for the maintenance and development of
the quality of human life as well as for economic activities;
therefore, the government has adopted this sector as one of the
pillars for poverty reduction and benefit to masses.
The overall literacy rate (10 years & above) was 45 percent in
2001 which has increased to 55 percent in 2006-07, indicating
a 10 percentage points increase over period of only six years.
Pakistan's current account deficit further widen to $ 11.6 billion (6.8% of GDP) in the first ten months (July-April) of the
current fiscal year from 6.6 billion (4.6% of GDP) in the same
period last year. The deterioration in current account deficit
mainly emanated from the sharply widening trade deficit along
with increase in net outflows from services and income
50
Male literacy rate (10 years & above) increased from 58 percent in 2001 to 67 percent in 2006-07 while it increased from
32 to 42 percent for female during the same period. Literacy remains higher in urban areas (72%) than in rural areas (45%)
during 2006-07.
Province wise literacy data for PSLM (2006-07) shows Punjab
to be on the top (58 percent) followed by Sindh (55 percent),
NWFP (47 percent) and Balochistan (42 percent).
Economic Horizons
According to the PSLM Survey data 2006-07, the overall
school attendance (age 10 years and above)
07, with manufacturing (13.54%) and trade(14.43%) & services(14.41%) absorbing a growing share of the work force.
is 57% (69% for male and 44% for female) in 2006-07 compared to 55% (68% for male and 42% for female) in 2004-05.
13. POVERTY
The latest estimates for poverty available are for the year 200506 when economic conditions were altogether different as of
today. For 2005-06 inflation-adjusted poverty line used is
Rs.944.47 per adult equivalent per month, up from Rs.878.64
in 2004-05.
Headcount ratio, i.e., percentage of population below the poverty line has fallen marginally from 23.94 percent in 2004-05 to
22.32 percent in 2005-06, an improvement of 1.62 percentage
points. Poverty in rural areas declined from 28.13 percent to
27.0 percent, showing an improvement of 1.13 percentage
points between 2004-05 and 2005-06.
Poverty in Urban areas also registered a decline from 14.94
percent to 13.1 percent during 2004-05 and 2005-06, thereby,
depicting an improvement of 1.84 percentage points in the period.
The poverty estimates of 2005-06 are consistent with ground
realities of that particular year and it is yet to be seen how far
the recent upsurge in food prices has impacted the poverty profile in the country.
Government's commitment to follow a sustained poverty reduction strategy and adhere to Fiscal Responsibility and Debt
Limitation Act stipulation of allocating a minimum of 4.5 of
GDP to social and poverty related expenditures is clearly reflected in the allocations for 2007-08. Expenditures on propoor sectors in 2006-07 at 5.7 percent of GDP were well above
the requirement under the Law. These expenditures are projected to grow in nominal terms by roughly 20 percent over the
2006-07 levels and be 6.0 percent of GDP in 2007-08. If the entire subsidy on imported wheat during the current year is considered as pro-poor expenditure, and off-setting cuts are not
made in education and health, the final figure is expected to be
even higher than the projected one.
51
Economic Horizons
PIA carried 5.415 million passengers in 2007 as against 5.732
million in 2006 showing a decrease of 5.5 percent. While having to deal with challenges of rising fuel costs and imposition
of a ban placed by the European Union, the Airline suffered
losses of 13.4 billion in the outgoing fiscal year. Along with
PIA, there are three private sector airlines operating in Pakistan.
Telecom sector continued to show a stellar growth in last few
years. Tele-density in the country has jumped from a mere 6%
to 57% (Mar- 08) in few years. On average, more than 2 million
subscribers are being added on cellular mobile networks per
month which is an exemplary growth in the region. Pakistan
has become one of the fastest growing mobile markets among
the emerging telecom markets. This year the sector grew by
80% whereas average growth rate in last 4 years is more than
100%. Today total subscriber base stands at 82.5 million (Mar
2008) whereas it was 34.5 million in 2006. Pakistan's broadband market has been slow despite the fact that services have
been available since almost five years.
Currently there are a total of almost 12,689 Broadband subscribers. According to estimates by the Internet Service Providers Association of Pakistan (ISPAK), currently there are
about 3.5 million internet subscribers all across in Pakistan
where total users crossed 17 million marks. Currently around
3,008 cities are connected to internet cities.
52
CNG
Presently, some 2,068 CNG stations are operating in the country. By March 2008 about 1.7 million vehicles were converted
to CNG as compared to 1.35 million vehicles during the same
period last year, showing an increase of 26 percent. With these
developments Pakistan has become the leading country in Asia
and the third largest user of CNG in the world.
16. ENVIRONMENT
According to a recent assessment made by the World Bank
(WB)1, the cost of environmental neglect and degradation to
Pakistan's economy has amounted to Rs. 365 billion during the
current year.
The latest red-list of endangered species in Pakistan, released
by the World Conservation Union (IUCN), includes the Blue
Whale, Fin Whale, Hotson's Mouse-like Hamster, Indus River
Dolphin, Markhor, Urial, Snow Leopard, Woolly Flying
Squirrel, Brown Grizzly Bear, Western tragopan, Hobara Bustard, Siberian White Crane, Olive ridly turtle, Green turtle,
Marmot, Blackbuck and Sand Cat.
In order to address environmental concerns at the national level
a multifaceted programme, National Environment Action Plan
(NEAP) was launched by the government in 2001. In March
2007, NEAP-SP programme entered its second phase. Pakistan
has also shown its commitment to numerous non-legally binding instruments and Multilateral Environmental Agreements
(MEAs), at the international level.
Pakistan is likely to achieve many of the Medium Term Development Framework (MTDF) 2009-10 and Millennium Development Goals (MDGs) 2015 Targets in advance. For instance,
the protected area for conservation of wildlife (%age of total
area) was estimated at 11.3% during 2007-08 while according
to MTFD and MDG targets the targeted levels were 11.6% and
12.0%, respectively.
Pakistan is the largest user of CNG in Asia and has become the
third-leading country in the world to use CNG to fuel vehicles
after Argentina and Brazil. The number of petrol & diesel vehicles using CNG fuel stood at 1,700,000 for 2007-08, whereas
the targeted levels were estimated at 800,000 in case of MTDF
and 920,000 in case of MDGs.
To promote sustainable conservation of natural resources the
government has launched numerous projects during the recent
years, in collaboration with international agencies, targeting
major areas of environment i.e. Air, Water, Land, Forests and
Biodiversity. These initiatives mainly include, Pakistan Wetlands Programme (PWP), Self Monitoring and Reporting tool
(SMART), Sustainable Land Management (SLM) and 'Mainstreaming biodiversity in Juniper forest ecosystem'.
The Government in collaboration with various concerned organizations has recently initiated the Technical Advisory Panel
(TAP) on Climate Change. The official launch of the TAP was
held on February 15, 2008. Funded by the Royal Norwegian
Embassy and the Department for International Development,
U.K., and TAP is a joint initiative of the Ministry of Environment, Government of Pakistan, and The World Conservation
Union (IUCN).
The Kyoto Protocol was adopted by Pakistan, under the United
Nations Framework Convention on Climate Change
(UNFCCC) at the 3rd Meeting of the Parties held in Kyoto, Japan, which entered into force on 16th February 2005. Under
the Protocol, developed countries, agreed to reduce their combined Greenhouse Gas emissions by 5.2% below the 1990 level
during the period 2008-2012n
Source: Website of Ministry of Finance www.finance.gov.pk
he IFACs PAlB Committee has made significant progress in the development of accounting profession during the period 2006-2008. Mr. Mohammad Arif Nara,
FCMA represents ICMAP on the PAIB Committee. Salient
achievements of the Committee are as under:
PAIB Committee actual/planned Outputs 2006 to 2008
The Financial Reporting Supply Chain report (IFAC Board
commissioned project but supported by Committee Technical Managers).
1. Final publication of the Preface (and accompanying
due process) to International Good Practice Guidance
(IGPG). The scope of International Good Practice
Guidance covers management accounting and financial
management, as well as broader topics with which professional accountants in business are likely to engage
alongside colleagues from other disciplines. IFAC's
purpose in issuing guidance in these areas is to foster a
common and consistent approach to those aspects of
the work of professional accountants in business not already covered by published international standards.
2. The Committee released its first principles-based guidance, Defining and Developing an Effective Code of
Conduct for Organizations. This guidance assists professional accountants and their organizations in developing and implementing a code of conduct within a
values-based culture. We have received good feedback
on its usefulness to the development and review of an
organization's ethics program (in both responses to the
ED and subsequently).
3. Final publication of the IGPG on Project Appraisal Using DCF to supoort and encourage (a) disciplined financial management in organizations, and (b) generation of long-term value.
4. Exposure drafts of proposed IGPGs on Costing to
Drive Organizational Performance and Evaluating
and Improving Governance in Organizations.
5. At the end of August 2007 published an internal control
information caper with interviews of senior professional accountants in business titled Internal Control
from a Risk-Based Perspective. This investigated their
key lessons and experiences in implementing a risk-
53
Students' Section
NOTICE
For the Students of 1998 Syllabus Switchover to 2005 Syllabus
Dear Student,
The Council of the Institute had decided that Summer 2008 Examinations would be the last attempt for the remaining students
of 1998 Syllabus and thereafter, all students would be required to complete the 2005 Syllabus to qualify the ICMAP program.
Those who have not been able to pass all the subjects of 1998 Syllabus will have to switch to 2005 Syllabus in accordance with
the equivalency schedule, which is attached for ready reference.
Please note in particular that such students will have to qualify the following subjects in addition to remaining equivalent
subjects:
1. Integrated Management of Stage-4.
2. Management Accounting-Business Strategy of Stage-6.
3. Comprehensive Examination (after qualifying all Stages 1 to 6 under 2005 Syllabus).
Please contact your nearest ICMAP coaching centre for admission in 2005 Syllabus and further information, if any required.
DIRECTOR EXAMINATIONS
EQUIVALENCY SCHEDULE
Stage
F-I
F-I
F-I
F-I
F-II
F-II
F-II
P-I
P-I
P-I
P-I
P-II
P-II
P-II
P-II
P-III
P-III
P-III
P-III
P-IV
P-IV
P-IV
P-IV
Syllabus - 1998
Subjects
Principles of Accounting
Computer Systems
Business English
Economics & Business Environment
Financial Accounting
Management Information Systems-II
Industrial & Commercial Laws
Cost Accounting
Business Communication & Report Writing
Quantitative Methods
Management Science Applications
Advanced Financial Accounting
Operational Cost Accounting
Business Taxation
Corporate Laws & Secretarial Practices
Financial Reporting
Strategic Management Accounting
Organisational Behaviour & Strategic Management
Auditing
Strategic Financial Management
Corporate Performance Audit & Evaluation
Marketing Management
Information Management & Auditing
Code
S-101
S-204
S-104
S-102
S-301
S-204
S-103
S-201
S-304
S-203
S-401
S-303
Stage
Stage-1
Stage-2
Stage-1
Stage-1
Stage-3
Stage-2
Stage-1
Stage-2
Stage-3
Stage-2
Stage-4
Stage-3
S-302
S-403
S-501
S-502
S-202
Stage-3
Stage-4
Stage-5
Stage-5
Stage-2
S-503 Stage-5
S-601 Stage-6
S-503 Stage-5
S-202 Stage-2
S-602 Stage-6
New Subjects:
Syllabus - 2005
Subjects
Fundamentals of Financial Accounting
Introduction to Information Technology
Business English
Business Economics
Financial Accounting
Introduction to Information Technology
Business Laws
Fundamentals of Cost and Management Accounting
Presentation & Communication Skills
Business Mathematics & Statistics
S-402
S-603
54
Students' Section
Reg. #
Roll #
Name
Centre
S#
Reg. #
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
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111
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113
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131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
00972275
00972652
00972656
00972658
00980020
00980065
00980099
00980106
00980133
00980182
00980628
00980636
00981060
00981480
00981499
00981620
00981622
00981684
00981776
00982368
00990046
00990047
00990519
00990539
00990540
00990612
00990617
00990660
00991679
00991682
00991702
00991847
00991862
00991864
00991891
00992276
00992323
00992326
00992337
20000022
20000121
20000324
20000344
20000447
20000780
20000964
20001024
20001040
20001099
20001111
20001195
20010049
20010191
20010195
20010304
20010442
20010782
20011300
20011499
20011661
20011689
20011725
20011731
20011764
20011807
20020174
20031430
20031630
00891881
00901341
00910483
00911715
00912084
00921970
00922520
00922596
00922706
00021037
00025633
00025865
00831292
00832048
00840154
00840214
00860117
00870003
00870045
00870646
00872121
00880435
00882025
00890602
00901160
00901589
00901607
00901657
00902041
00902448
00910086
00911099
00911118
00911966
00912532
00913127
00921458
00924140
00924889
00925121
00930014
00930197
00930369
00931615
00931645
00932424
00932641
00934495
00940013
00940069
00940146
00940241
00940438
00940739
00941358
00950012
00950042
00950181
00950208
00950216
00950824
00960060
00960131
00960183
00960251
00960494
00961334
00961404
00961412
00961453
00961541
00961961
00962522
00962562
00962694
00962820
00962965
00971175
00971768
00971787
00971796
00971844
00972147
00972210
7601
7604
7606
7610
7611
7612
7613
7616
7618
7619
7622
7624
7626
7630
7635
7641
7642
7643
7644
7649
7651
7652
7655
7656
7659
7662
7663
7670
7680
7688
7690
7691
7694
7696
7697
7698
7701
7703
7706
7707
7709
7711
7713
7714
7715
7719
7722
7724
7727
7728
7729
7738
7744
7747
7750
7751
7758
7763
7765
7766
7767
7770
7772
7779
7781
7782
7788
7789
7799
7803
7804
7805
7806
7811
7812
Roll #
7814
7817
7818
7819
7826
7827
7829
7830
7831
7834
7836
7837
7839
7843
7845
7855
7856
7860
7864
7871
7875
7876
7879
7880
7881
7882
7883
7884
7886
7887
7890
7899
7900
7901
7904
7907
7910
7911
7912
7914
7915
7920
7921
7922
7924
7925
7928
7931
7933
7934
7940
7944
7945
7946
7948
7949
7952
7953
7955
7960
7962
7965
7966
7968
7970
7979
7983
7984
8005
8007
8009
8012
8015
8018
8019
8020
8021
55
Name
Sheikh Zaheer Ul Hasan
Zulfiqar Ali
Muhammad Farooq
Asif
Zeeshan Mumtaz
Savera Sardar Zaidi
Abid Ur Rehman
Rehan
Farhan Baig
Muhammad Kamran
Sumera Maqbool Ellahi
Aleem Kifayat
Nazeer Muhammad
Muhammad Atif Salman
Muhammad Owais
Khurram Imtiaz
Azfar Aziz Khan
Muhammad Ahmer Noman
Karim Rajab Ali
Farhan
Faisal Malik
Usama Wahid
Mehjabeen Alvi
Asad Mahmood Usmani
Muhammad Asad
Amreen
Asif Javaid
Soobia Saleem Khan
Adnan Ahmed
Zia Ul Haque
Shagufta Naseem
Mahnaz
Shirin Yousuf Ali
Syed Sayid Ali
Shariq Hussain
Sadia Jamil
Zehra Zafar
Rehan
Akber Zaker Ali
Mallick Kamran
Raheel
Muhammad Majid Khan
Muhammad Amir
Muhammad Imran
Hasnain Imam
Shujah Jadoon
Saad Raza Khan
Shabbir Ahmed
Junaid Munir
Muhammad Nasir Khan
Mazhar Hussain
Wali Ullah Hassan
Muhammad Imran
Kamran Ahmed Hashmi
Saimah Hafeez
Akber Ali
Sadia Muzafar
Muhammad Haziq
Muhammad Iftikhar Alam
Syed Jehan Zeb
Muhammad Wasif Uddin
Azhar Mehmood Ghori
Syed Ali Raza Zaidi
Muhammad Rafiq
Waqar Ahmed
Reeta Feroz
Sajed Riaz Siddiqui
Shakeel Ahmed
Muhammad Khurshid Alam
Ghulam Dastgeer Siddiqi
Arshid Rasheed
Jamil Ahmad
Tahir Sabir
Abdul Kareem
Parvez Iqbal
Zia Ullah Khan
Imran Alam
Centre
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Students' Section
S#
Reg. #
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
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192
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195
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204
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237
00931367
00934790
00941078
00941386
00950279
00950305
00950637
00951040
00951469
00961124
00961737
00961827
00961936
00961955
00962126
00963120
00963264
00963409
00970432
00971063
00971186
00971285
00971530
00971601
00971791
00972458
00972858
00973054
00973076
00980334
00980566
00990961
00991061
00991094
00991218
00992051
00992087
20000676
20000740
20010505
20012014
20012261
20020534
20021046
20032019
00911016
00933814
00962071
00971663
00971685
00991488
20000883
20000891
20001218
20022075
00962952
00971100
00971103
00981065
00981164
00981172
00991375
20000137
20000155
00900835
00910660
00910664
00912152
00922088
00922938
00933794
00935345
00935780
00940940
00950629
00951033
00951053
00951173
00951293
00960520
00960839
00961156
00962064
00962120
00971483
Roll #
8032
8041
8044
8045
8049
8052
8062
8070
8072
8079
8084
8087
8088
8089
8090
8095
8101
8107
8116
8122
8124
8131
8134
8137
8140
8142
8153
8159
8160
8165
8167
8193
8195
8197
8200
8206
8207
8218
8223
8233
8245
8246
8251
8256
8259
8284
8291
8296
8300
8301
8307
8308
8309
8310
8314
8345
8348
8349
8352
8354
8355
8362
8364
8365
8393
8398
8399
8400
8406
8414
8430
8437
8440
8445
8457
8458
8459
8461
8469
8471
8478
8483
8486
8487
8515
Name
Mazhar Ali
Gohar Aman Khan
Zubair Murtaza
Adil Ameen
Nasar Mahmood
Zahid Waseem Ramay
Hummayun Sheikh
Shan Muhammad
Muhammad Asif Manzoor
Muhammad Irfan
Sakit Saleem
Syed Muhammad Ali Naqvi
Muhammad Asif
Muhammad Nadeem Zuberi
Sheeraz Ahmad Khan
Muhammad Ramzan Khalid
Amir Wazir
Amir Ikram
Nazim Raza
Ali Raza
Sohail Iqbal
Nafees Ur Rehman
Shahnaz Akhtar
Syed Muhammad Yasir Shah
Tariq Mustafa
Asif Mushtaq
Aamer Raees
Abid Majeed
Muhammad Khuram Aziz
Muhammad Zubair
Muhammad Amir Jawad
Muhammad Usman Bashir
Muhammad Nasir
Marryum Pervaiz
Mudassar Shahzad
Muhammad Zahid
Ubaid Tayyab
Khalid Mahmood
Mohsin Abbas
Syed Najam Ul Hassan Naqvi
Afeefa Irshad
Naeem Akhter
Faisal Munir
Muhammad Khalid Noor
Muhammad Munir
Muhammad Rafiq
Mubashar Ali
Muhammad Ayyaz Ur Rehman
Sadiq Hussain
Muhammad Yasir Ali Khan
Asim Majeed
Muhammad Ansar
Babar Zahoor
Muhammad Younas
Muhammad Yaseen
Irfan Hussain
Waseem Aslam Naroo
Nasir Ahmad
Ali Muhammad Khuram Shahzad
Shahzad Ali
Muhammad Shafiq
Waqar Khalid
Manzoor Hussain
Rizwan Ahmed
Muhammad Aslam
Ansar Ali Noor
Muhammad Iqbal Qasim
Kashif Amin
Ahsan Ullah
Munir Ahmed
Nazar Farid Khan
Zahid Mahmood
Tanveer Ahmad
Muhammad Irshad
Shahid Ijaz Rajput
Syed Raza Haider
Khurram Nazir
Muhammad Jehangir Farooq
Muhammad Farooq
Akhter Mustafa
Imran Javed
Muhammad Mubeen
Amir Mahmood
Inam Ul Haque
Muhammad Abdul Rehman
56
Centre
S#
Reg. #
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Islamabad
Multan
Multan
Multan
Multan
Multan
Multan
Multan
Multan
Multan
Multan
Faisalabad
Faisalabad
Faisalabad
Faisalabad
Faisalabad
Faisalabad
Faisalabad
Faisalabad
Faisalabad
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280
281
282
283
284
285
286
287
288
289
00971505
00971887
00971954
00972038
00972377
00972407
00973171
00973282
00980386
00980908
00980916
00981099
00981375
00982064
00982073
00982165
00990207
00990971
00991006
00991229
00991279
00991541
20000406
20000410
20000418
20010198
20010979
20011018
20011059
20011186
20012170
20020276
20021354
20021414
20021483
20021815
20030987
20031357
00933871
00910947
00991608
00962517
00961648
00961661
00981395
00882309
00880211
00923868
00980234
00990849
20000384
00940923
Roll #
8516
8523
8528
8533
8539
8541
8549
8556
8566
8570
8572
8579
8582
8586
8587
8593
8603
8613
8614
8619
8622
8628
8640
8641
8642
8649
8653
8655
8658
8659
8662
8663
8664
8665
8667
8668
8670
8671
8851
8701
8705
8707
8721
8741
8745
8761
8801
8807
8813
8816
8818
8842
Name
Muhammad Faisal Nasim
Khalid Asghar Bhatti
Naveed Khalid
Muhammad Azeem
Faisal Waheed
Urfan Rafique
Furrukh Adeel
Syed Ashar Hussain
Asad Husain
Abrar Ashraf
Muhammad Khurshid
Muhammad Imran Samra
Noman Nasir
Muhammad Kamran
Samia Ashraf Bhatti
Hamid Zahoor
Muhammad Mansoor Afzal
Irfan Siddique
Muhammad Adnan
Ayesha Anwer
Munir Abbas
Muhammad Ashfaq
Mansoor Suleman
Muhammad Arshad
Saba Shahid Ali
Tahir Iqbal
Muhammad Imran
Ali Usman
Badar Munir
Muneeb Hasan
Syeda Asma Khalid
Adnan Zia
Qaiser Mehmood
Muhammad Adnan Arshad
Saman Sami
Faisal Salman
Muhammad Nadeem
Yasir Jilani
Waqas Aslam
Zulfiqar Ali
Sheraz Khan
Faiz Rahmat
Muhammad Zahid
Din Muhammad
Muhammad Rashid
Faisal Zaman
Syed Ali Raza
Omar Anwar
Sajad Ahmad
Muhammad Amin
Mudassar Zubair
Khurram Ikram
Centre
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Peshawar
Peshawar
Peshawar
Quetta
Hyderabad
Hyderabad
Abbottabad
Dubai (U.A.E)
Dubai (U.A.E)
Dubai (U.A.E)
Dubai (U.A.E)
Dubai (U.A.E)
Riyadh (S.A)
20020631
20040223
20041254
20031830
20040631
20000467
20032209
20032525
20041200
20040511
1
4
5
6
7
9
12
13
14
15
Karachi
Karachi
Karachi
Islamabad
Multan
Lahore
Lahore
Lahore
Lahore
Peshawar
20030121
20040038
20040049
20040152
20040450
20050538
00971247
20010502
20040625
20031793
20021334
20042599
00971927
00972028
20021629
20031176
20032613
20032952
1559
1756
1762
1798
1831
2063
3384
3496
3726
4683
5007
5038
5251
5253
5506
5604
5723
5766
Asif Baig
Muhammad Azam
Muhammad Javed Iqbal
Fahad Mir
Zaheer Mehmood
Naeem
Wajahat Qamar Butt
Sadaf Tabassum
Muhammad Arshad
Farhana Rasheed
Aamir Rashid
Syed Farhan Safdar
Khalid Mahmood
Hammid Ur Rehman
Anayat Hussain
Muhammad Arshad
Muhammad Usman
Muhammad Ali
Karachi
Karachi
Karachi
Karachi
Karachi
Karachi
Islamabad
Islamabad
Islamabad
Multan
Faisalabad
Faisalabad
Lahore
Lahore
Lahore
Lahore
Lahore
Lahore
Institute News
Proposed Amendments
The words eighteen years be
replaced with sixteen years
has passed the degree examination of any University or an examination recog- Add the word intermediate or
nized by the Federal Government as equivalent thereto, provided that the Coun- before wherever the word decil may relax the requirement of the degree in the case of student, who is not a gree is written
national of Pakistan.
It is, hereby, informed that students inducted at undergraduate level (after Intermediate or high school or equivalent) will be required to undergo two years of rigorous studies to strength their foundation by studying specified courses (to be decided) in English Language, Literature, Accounting, Economics, Mathematics, Quantitative Techniques, Business Studies, and Information
Technology.
The comment(s) if any with regard to above-mentioned proposed amendments may directly be sent to Secretary, Council of Institute of Cost and Management Accountants of Pakistan within 15 days from the date of publication on the following address in
a sealed envelope either by hand or through courier or through email citing subject as Feedback on Amendments in Regulation
99 of CMA Regulations, 1990:
Honorary Secretary
Institute of Cost and Management Accountants of Pakistan
ST-18/C, Block 6, Gulshan-e-Iqbal, Karachi 75300.
Email: secretary@icmap.com.pk
Feedback
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