half yearly report - first ibl modarabaprofit on murabaha investment 2,013 2,013 1,007 1,007 profit...

BB

TRADING COMPANY

0322 333 3356

Suite # 105, 1st Floor, Fortune Center. 45-A,Block # 6, P.E.C.H.S., Shahrah-e-Faisal, Karachi.Tel: +92 21 3432 8610Fax: +92 21 3432 8611Web: www.firstibl.com

Half Yearly Report December 31, 2013

1

1-

2- Directors’ Report

3- Shari’ah Advisor’s Report

4-Review Report to the Certificate Holders

5- Balance Sheet

6- Profit & Loss Account

7- Statement of Other Comprehensive Income

8- Cash Flow Statement

9- Statement of Changes in Equity

10- Notes to the Accounts

Corporate Information 1

2

3

4-5

6

7

8

9

10

11-15

Table of Contents

Corporate Information

Naveed Amin Director

4 5

16.596

February 18, 2014

76

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)

FOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2013

December 31, 2012 December 31, 2012

Income Rupees '000' Rupees '000' Rupees '000' Rupees '000'

Income from ijarah 2,183 2,021 1,063 1,081

Profit on murabaha investment 2,013

2,013

1,007

1,007

Profit on musharakah investments 196

2

128

-

Income from investment property 3,748

-

1,874

-

Profit on deposits 466

-

119

-

Dividend income 9

4

9

4

Gain on disposal of fixed assets under ijarah 299

-

299

-

Other income 3,225

1,055

3,197

624

12,139

5,095

7,696

2,716

EXPENDITURES

Operating expenses (10,424)

(5,601)

(6,163)

(2,746)

Depreciation on assets under ijarah (2,065)

(2,296)

(656)

(900)

Unrealized (loss) / gain on re-measurement of investments

at fair value through profit or loss (31)

169

13

172

Finance cost (1)

(5)

(1)

(4)

Provision against non-performing Musharaka receivables (790)

-

(790)

-

Other operating expenses (125)

-

(125)

-

(13,436)

(7,733)

(7,722)

(3,478)

Loss before Modaraba Company's management fee (1,297)

(2,638)

(26)

(762)

Modaraba Company's management fee -

-

-

-

Loss before Tax (1,297)

(2,638)

(26)

(762)

Taxation -

-

-

-

Net Loss for the Period (1,297)

(2,638)

(26)

(762)

Loss per Modaraba Certificate - Basic and Diluted (0.064)

(0.131)

(0.001)

(0.038)

The annexed notes form an integral part of these condensed interim financial information (un-audited).


(Un-audited)

Half Year Ended Quarter Ended

CHIEF EXECUTIVE DIRECTOR DIRECTOR


(Un-audited) (Audited)

December 31, June 30,

2013 2013

Note Rupees '000' Rupees '000'

ASSETS

Current Assets

Cash and bank balances 5,704

3,520

Ijarah rentals receivable 5 299

317

Advances, prepayments and other receivables 35,907

36,939

Short term investment 6 14,288

22,005

Musharakah receivables 11,271

19,375

Current portion of murabaha investment 23,000

23,000

90,469

105,156

Non-Current Assets

Long term deposits 3,205

3,205

Investment properties 7 94,562

97,083

Fixed assets under ijarah arrangements 8 20,657

11,681

Fixed assets in own use 9 1,999

2,436

Intangible assets 258

423

120,681

114,828

Total Assets 211,150

219,984

LIABILITIES

Current Liabilities

Creditors, accrued and other liabilities 8,438

13,508

Musharakah finances 12,142

12,142

Current portion of security deposits 7,886

7,869

Provision of taxation 3,191

3,191

Unpresented profit warrants 9,863

7,654

41,520

44,364

Non-Current Liabilities

Long term security deposits 3,698

1,941

Total Liabilities 45,218

46,305

NET ASSETS 165,932

173,679

REPRESENTED BY:

Capital and Reserves

Issued, subscribed and paid up certificate capital 10 201,875

201,875

Reserves 43,912 43,599

Accumulated loss (79,855) (71,795)

Contingencies and commitments 11 - -

165,932 173,679


- -

CONDENSED INTERIM BALANCE SHEET (UN-AUDITED)

AS AT DECEMBER 31, 2013

8 9

Half Year Ended Half Year Ended


(Un-audited) (Un-audited)

Rupees '000' Rupees '000'

CASH FLOWS FROM OPERATING ACTIVITIES

Loss before tax (1,297)

(2,638)

Adjustments for:- Depreciation on fixed assets under own use 460

272

- Depreciation on investment properties 2,521

-

- Depreciation on fixed assets under ijarah arrangements 2,065

2,296

- Amortization on intangible assets 165

165

- Provision in respect of profit on Musharaka facilities 790

-

- Revaluation loss / (gain) on investment at fair value through profit or loss 31

(169)

- Gain on disposal of fixed assets under own use -

(431)

- Balances written back - net (1,835)

-

- Gain on termination of ijarah arrangements (299)

-

- Finance cost 1

5

- Profit on bank deposits (466)

-

- Dividend income (9)

(4)

3,424

2,134

Operating profit / (loss) before working capital changes2,127

(504)

(Increase) / Decrease in operating assets

Advances, prepayments and other receivables 328

3,064

Ijarah rentals receivable 18

36

Short term musharakah investment 7,314

18,442

Long term security deposits - ijarah 1,774

(310)

Creditors, accrued and other liabilities (2,525)

(1,071)

Net changes in working capital 6,909 20,161

Cash generated from operations 9,036 19,657

Finance cost paid (1)

(5) Income taxes paid (7)

(1)

Dividend income received 9

4

Profit received on bank deposits 466

-

Net Cash from Operating Activities 9,503

19,655

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets under ijarah arrangements (11,979)

-

Purchase of fixed assets under own use (23)

-

Proceeds from disposal of ijarah assets 1,237

476

Proceeds from sale of short term investments 8,000

-

Long term loans and deposits -

200

Net Cash (used in) / generated from Investing Activities (2,765)

676

CASH FLOW FROM FINANCING ACTIVITIES

Musharaka finances -

(2,500)

Short term finance -

(8)

Dividends paid (4,554)

(36)

Net Cash used in Financing Activities (4,554)

(2,544)

Net Increase in Cash and Cash Equivalents 2,184

17,787

Cash and cash equivalents at the beginning of the period 3,520

46

Cash and Cash Equivalents at the end of the Period 5,704 17,833


CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2013



Rupees '000' Rupees '000' Rupees '000' Rupees '000'

Net Loss for the Period (1,297)

(2,638)

(26)

(762)

Other comprehensive income

Items that may be reclassified subsequently to profit and loss

Net unrealized gain / (loss) in value of available for sale investments 313

288

835

(315)

Total Comprehensive (Loss) / Income for the Period (984)

(2,350)

809

(1,077)


(Un-audited)

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2013

Half Year Ended Quarter Ended



10 11

Note 1

General Information

Note 2

Basis of Preparation

2.1

2.2

2.3

2.4

2.5

Note 3

Accounting Policies

Note 4

Taxation

NOTES TO THE CONDENSED INTERIM

FINANCIAL INFORMATION (UN-AUDITED)

FOR THE HALF YEAR ENDED DECEMBER 31, 2013

This condensed interim financial information has been prepared in accordance with the directives issued by

the Securities & Exchange Commission of Pakistan (SECP) and is in compliance with the International

Accounting Standard - 34 (Interim Financial Reporting) and being submitted to certificate holders as required

by Section 245 of the Companies Ordinance, 1984.

First IBL Modaraba ("the Modaraba") is a multi purpose, perpetual and multi dimensional Modaraba formed under

the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and Rules framed thereunder,

having its registered office at Suite # 105, 1st Floor, Fortune center, 45-A, Block-6, PECHS, Shahrah-e-Faisal,

Karachi. The Modaraba is managed by IBL Modaraba Management (Private) Limited (Modaraba Management

Company) incorporated in Pakistan under the Companies Ordinance, 1984 and registered with the Registrar of

Modaraba Companies. The Modaraba is listed on Karachi, Lahore and Islamabad stock exchanges. The Modaraba

commenced its operations on October 19, 1989 and is currently engaged in various Islamic modes of financing and

operations including Ijarah, Musharaka and Murabaha arrangements.

This financial information should be read in conjunction with annual audited financial statements for the year

ended June 30, 2013. Comparative balance sheet is extracted from annual audited financial statements for

the year ended June 30, 2013; whereas, comparative profit and loss account, statement of changes in equity

and cash flows statement are stated from unaudited interim financial information for the half year ended on

December 31, 2012.

This financial information has been prepared under the historical cost convention, except for short term

investments that are measured at fair value in accordance with the requirements of International Accounting

Standard - 39 (Financial Instruments: Recognition and Measurement).

This condensed interim financial information is unaudited. However, a limited scope review of this interim

financial information has been performed by the external auditors of the Modaraba in accordance with the

requirements of the Code of Corporate Governance and they have issued their review report thereon.

This condensed interim financial information is presented in Pak Rupees, which is the Modaraba's functional

and presentational currency. All the figures have been rounded off to the nearest Pak Rupees in thousand

unless stated otherwise.

The accounting policies adopted for the preparation of this condensed interim financial information are consistent

with those applied in the preparation of published financial statements of Modaraba for the year ended June 30,

2013.

Under the current tax law, the income of non-trading modarabas is exempt from tax provided that they distribute

ninety (90) percent of their profits as cash dividend to the certificate holders out of current period's total profit after

appropriating statutory reserves. Where such profits are not distributed, provision for tax is made on taxable

income at the current tax rates applicable to Modaraba after taking into account the available tax exemptions and

tax credits, if any. Owing to loss for the period, no provision for tax has been made in condensed interim financial

information of the tax liability for six months ended December 31, 2013.

Balance as at June 30, 2012 201,875 34,314 5,679 39,993 (79,226) 162,642

Total comprehensive income for the six months

period ended December 31, 2012 - - 288 288 (2,638) (2,350)

Balance as at December 31, 2012 201,875 34,314 5,967 40,281 (81,864) 160,292

Balance as at June 30, 2013 201,875 36,171 7,428 43,599 (71,795) 173,679

Total comprehensive income for the six months

period ended December 31, 2013 - - 313 313 (1,297) (984)

Profit distributed for the year ended

June 30, 2013 - - - - (6,763) (6,763)

Balance as at December 31, 2013 201,875 36,171 7,741 43,912 (79,855) 165,932


Statutory

reserve

Rupees '000'

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2013

Particulars

Certificate

Capital

Unrealized gain

on revaluation of

available for sale

investments

Sub-total

Reserves

Accumulated

LossTotal Equity


12

13

Note 7 (Un-audited) (Audited)Investment Properties December 31, June 30,

2013 2013


Cost

Balance as at July 01, 2013 100,000 - Additions - 100,000 Balance as at December 31, 2013 100,000 100,000

Depreciation

Balance as at July 01, 2013 (2,917) - Charged during the period / year 7.1 (2,521) (2,917)Balance as at December 31, 2013 (5,438) (2,917)

94,562 97,083

7.1 The Modaraba depreciates investment properties on straight line basis @ 5% per annum.

7.2

Note 8

Fixed Assets Under Ijarah Arrangements

Written down value at the beginning of the period / year 11,681

9,461

Additions at cost 11,979 7,680

Less: Written down value of assets disposed off (938) (1,489) 22,722 15,652

Less: Depreciation charged during the period / year (2,065) (3,971) 20,657

11,681

Note 9

Fixed Assets in Own Use

Written down value at the beginning of the period / year 2,436

1,146

Additions at cost 23

1,954

2,459

3,100

Less: Depreciation charged during the period / year (460)

(664)

1,999

2,436

Note 10

Certificate Capital

Authorized:

50,000,000 Modaraba Certificates of Rs. 10 each 500,000 500,000

Issued, subscribed and paid-up:

18,500,000 18,500,000 Modaraba Certificates of Rs. 10 each

issued as fully paid in cash 185,000 185,000

1,687,500 1,687,500 Modaraba Certificates of Rs. 10 each

The fair value of the investment property as at June 30, 2013 as per valuation report of independent valuer

M/s Maricon Consultants (Private) Limited is Rs 109.5 million with forced sale value of Rs. 98.0 million.

50,000,000

issued as fully paid bonus 16,875 16,875

20,187,500 20,187,500 201,875 201,875

Note 5 (Un-audited) (Audited)Ijarah Rentals Receivable December 31, June 30,

2013 2013


Considered good 299

317

Considered doubtful

5.1

5.2 7,164

6,696

7,463

7,013

Accumulated Impairment (7,164)

(6,696)

299

317

5.1

5.2

As at the beginning of the period / year 6,696

5,351

Recognized during the period / year 521

2,277

Reversed during the period / year (53)

(932)

As at end of the period / year 7,164

6,696

Note 6

Short Term Investments

Available for sale 6.1 4,056

3,742

At fair value through profit or loss 6.2 232 263

Investments in Term Deposit Receipts- Held to Maturity 6.3 10,000 18,000 14,288 22,005

6.1 Available for sale


December 31, June 30, Name of entity

2013 2013

No. of shares/ Certificates

Holdings are in ordinary certificates / shares of Rupees 10 each.

5,244

3,600

The Searle Company Limited 648

284

392,500

392,500

Lafarge Pakistan Cement Limited 3,281

3,332

5,700

5,700

Arif Habib Corporation Limited 127

126

403,444

401,800

4,056

3,742

6.2 At fair value through profit or loss


December 31, June 30, Name of entity

2013 2012

No. of shares/ Certificates

Holdings are in ordinary certificates / shares of Rupees 10 each.

2,241

2,241

Invest Capital Investment Bank Limited 3

3

200 200 Attock Refinery Limited 42 35100,000 100,000 First Punjab Modaraba 187 225102,441 102,441 232 263

6.3

These represent rentals receivable against assets leased out under Ijarah arrangements.

Movement in accumulated impairment is as follows:

This represents investment in term deposit receipts of Habib Bank Limited and carries profit @ 8%

effectively.

14 15

Outstanding Balance at the year end

Receivable from / (payable to) Modaraba management company -

11,550

Receivable from University of Management and Technology 16,653

33,403

Receivable from Institute of Leadership & Management 8,390 14,464

Investment in Subsidiary - 57,306

Receivable from Khoja's Capital Management (Private) Limited 4,276 4,776

Transactions with related parties are carried out at arm's length in the normal course of business. The method used

for computation of consideration is comparable uncontrolled price method except for the Modaraba Company's

management fee as mentioned above.

Note 13

Date of Authorization for Issue

Note 14

General

This condensed interim financial information (un-audited) has been approved by the Board of Directors of IBL

Modaraba Management (Private) Limited and authorized for issue on February 18, 2014

No significant re-arrangements have been made in comparative condensed interim financial information (un-

audited).


10.1

10.2

10.3

IBL Modaraba Management (Private) Limited (the Management Company) hold 2,030,905 (June 30, 2013:

2,030,905) certificates of Rs 10 each.

University of Management and Technology (associated undertaking) hold 3,070,900 (June 30, 2013:

3,070,900) certificates of Rs 10 each.

One of the Director of the Management Company hold 1,515,820 (June 30, 2013: 1,515,820) certificates of

Rs 10 each.

Note 11

Contingencies and Commitments

There were no known contingencies as at December 31, 2013 (June 30, 2013: Rs. 47,957,651)

Note 12

Balances and Transactions with Related Parties

12.1

12.2

12.3 Details of transactions with related parties and balances with them at the period end are as follows:

(Un-audited) (Un-audited)

December 31, December 31,

Transaction during the period 2013 2012

Rupees '000' Rupees '000'

Related party Nature of Transaction

Expenses paid on behalf of the Management CompanyRecovery from Management Company

Management fee paid during the period

Reimbursement of expenses paid by theManagement Company

Recovery against Musharaka

Musharaka mark up received

Rent of Library Building received

Recovery against Musharaka

Musharaka mark up received / adjusted

Ijarah rental received

Recovery against receivable

-

-

1,032

789

4,750

-

3,748

5,000

-

-

500

57

1,900

-

-

15,750

250

-

2,658

342

813

-

In accordance with Section 18 of the Modaraba Companies and Modaraba (Floatation and Control)

Ordinance, 1980, management fee @ 10% of annual profits is paid to the Modaraba Management Company.

Owing to the loss during the period, the Modaraba Management Company's fee is not provided for during the

period.

Related parties comprise Management Company, major certificate holders of the Modaraba and their close

family members, directors of the management company and their close family members, key management

personnel of the management company and their close family members, the Provident Fund and entities with

common directors or under common management.

IBL Modaraba

Management

(Private) Limited

University of

Management and

Technology

Relationship

Common

Management

Common

Management

Management

Company

Holds 15.2%

of the paid up

certificates of

Institute of

Leadership &

Management

Khoja's Capital

Management

(Private) Limited

Commitments-The Modaraba has not made any capital commitments as at December 31, 2013 (June 30, 2013 : Nil)

half yearly report - first ibl modarabaprofit on murabaha investment 2,013 2,013 1,007 1,007 profit...

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