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MISSION AND VISION
First Equity Modaraba is committed to strive for excellence in all areas of its activities. We view our business objective of providing distirctive financial products and services that promte commerce and industry within the context of our overall objective of
contributing to the nation's prosperity.
Contexts
CORPORATE INFORMATION | 3 |
TEN YEARS AT A GLANCE | 4 |
SHARIEAH REVIEW REPORT | 5 |
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE | 7 |
REPORT OF THE DIRECTORS | 8 |
REPORT OF THE DIRECTORS (URDU) | 14 |
AUDITORS REVIEW ON STATEMENT OF COMPLIANCE | 15 |
AUDITORS' REPORTS TO THE CERTIFICATE HOLDERS | 16 |
BALANCE SHEET | 21 |
PROFIT AND LOSS ACCOUNT | 23 |
STATEMENT OF OTHER COMPREHENSIVE INCOME | 24 |
CASH FLOW STATEMENT | 25 |
STATEMENT OF CHANGES IN EQUITY | 26 |
NOTES TO THE FINANCIAL STATEMENTS | 27 |
CONSOLIDATED FINANCIAL STATEMENTS | 64 |
NOTEICE OF ANNUAL REVIEW MEETING (ENGLISH) | 130 |
NOTICE OF ANNUAL REGVIEW MEETING (URDU) | 131 |
PATTERN OF CERTIFICATE HOLDING | 132 |
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FIRST EQUITY MODARABA
CORPORATE INFORMATION
Modaraba Company
Premier Financail Services (Private) Limited
Board of Directors | Audit Committee |
Mr. Nadeem Maqbool Chairman(Non-Executive) | Mr. Qaiser Ahmed Magoon |
Mr. Qaiser Ahmed Magoon (Independent) | Ms. Alizeh Bashir |
Ms. Alizeh Bashir (Non-Executive) | Mr. Nadeem Maqbool |
Mr. Adil A. Ghaffar (Executive) |
Risk Managment Committe | HR Committee |
Mr. Qaiser Ahmed Magoon | Mr. Nadeem Maqbool |
Mr. Nadeem Maqbool | Mr. Adil A. Ghaffar |
Mr. Adil A. Ghaffar | Mr. Qaiser Ahmed Magoon |
Registered and Business Office | |
B-1004, 10th Floor | Room No. 503 - 504 |
Lakson Square Building # 3, | 5th Floor, |
Sarwar Shahedd Road, | Pakistan Stock Exchange |
Karachi | Building, Karachi |
Tel: 35672815-8 | Tel: 32446020-3 |
Fax: 35686116 | Fax: 32460766 |
E-mail: info@firstequitymodaraba.com.pk | |
Auditors | Bankers |
Baker Tilly Mehmood Idrees Qamar | Bank Al-Habib Ltd. |
Chartered Accountants | Habib Metropolitan Bank Ltd. |
4th Floor, Central Hotel Building. | National Bank of Pakistan. |
Civil Lines, Mereweather Road | United Bank Ltd. |
Karachi - Pakistan | Bank Islami Pakistan Ltd. |
T: +92 (021)35644872-7, F: +92 (021) 35644873 | Meezan Bank Ltd. |
Email: info@bakertilly.pk | MCB Islamic Ltd. |
www.bakertilly.pk |
FIRST EQUITY MODARBA
Registrar | General Counsel |
THK Associates (Pvt) Ltd. | Moshin M. Tayebaly & Co. |
Plot No. 32-C, Jami Commercial, | Advocates & Legal Consultants |
Street II, D.H.A. Phase VII, Karachi, | |
Tel: +92-21-35310191-2-3 | |
Emial: cst@thk.com.pk |
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FIRST EQUITY MODARBA
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FIRST EQUITY MODARBA
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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY
The Directors of the Premier Financial Services (Private) Limited, management company of FIRST EQUITY MODARABA (FEM), are pleased to present their report and audited financial statements of the Modaraba together with the consolidated financial statements of the Modaraba and its wholly owned subsidiaries, Apex Financial Services (Pvt) Ltd, Capital Financial Services (Pvt) Ltd and Equity Textiles Limited for the year ended June 30, 2024.
Financial Results
FEM, incurred loss for the year amounted to Rs. (19.44) million as compared to loss of Rs (22.35) million for the last year translated in a loss per certificate of Rs. (0.37) as compared to Rs. (0.43) last year. The consolidated loss for the year is Rs (414) million as compared to loss of Rs (252) million. Break-up value per certificate amounted to Rs.10.71 as against Rs. 10.12 last year.
Financial Results
Income
Expenses
Operating Expenses
Bank Charges
Operating loss
Other Income
Loss for the year before taxation Taxation
Net loss for the year
Loss per Certificate
Rupees
8,879,342
(27,484,072)
(889)
(27,484,971)
(18,605,629)
146,063
(18,459,566)
(976,413)
(19,435,979)
(0.37)
Dividend Distribution
Since the Modaraba sustained loss during the year, consequently, there would be no announcement of profit distribution (2023: Nil). However, to meet the regulatory requirements, the date of book closure would be from Wednesday November 27 2024 to Friday December 06 2024 (both days inclusive)
Auditors Qualification
Auditors qualified their opinion based on non-compliance of International Financial Reporting Standard relating to adjusting cost to fair value of marketable securities and any profit / (loss) should be taken / charge to profit and loss account for the year amounting to Rs 39.7 million (2023: Rs(10.667) million). Our principal stand for not accepting auditors' qualification is based on the fact that, firstly, we do not foresee that these re-measurements are of permanent nature. Secondly, our Industry was established on the concept to distribute what it earns on yearly basis. The Regulatory changes were brought in and blanket tax exemption earlier given to Modarabas distributing 90% of its profits for the year has been withdrawn. We believe that adjusting cost to fair value would tantamount to distribution of either unrealized capital gain or recovery of cost.
Our Performance and Future Prospects
The stock market performed, and the rally was witnessed in limited stocks. World over, the stock market is always dependent on various factors including, but not limited to, political and economic stability, rupee parity, international oil prices, interest rate, etc.. Though Pakistan achieved a decent GDP number but our trade & current account remained in deficit, and slowly and gradually, these gaps were enlarged due to one or the other pretext. However, lately, numbers affecting the economy have changed significantly, giving hope for a better year ahead.
Due to current political and economic issues faced by the country, alongwith various other factors, ETL's last year BMR investments could not yield expected results and ETL sustained a loss of Rs (374m) as compared to a loss of Rs. (288m). This translates into a loss of Rs (14.95) per share as compared to loss per share of Rs (9.13) last year. ETL's book value also decreased substantially to Rs. 31.13 from Rs. 46.17 last year.
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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY
With rising current account deficit, rupee parity, increasing oil prices, inflation numbers and increase in policy rate, etc. Pakistan Stock Exchange managed itself in limited stocks. After the highest borrowing rates and inflation, the cooling period has begun. We believe that this situation will be diluted over a medium term and may take another year or two to offset this adverse impact.
It is very unfortunate that concept, vision and dream of 1980 whereby a home grown industry was developed in the name of Modarabas and which were given tax exemption through "Modaraba Ordinance, 1980" has been withdrawn through the Finance Bill 2023-2024. Long-term term visions curtailed for short-term benefits.
We are pleased to share that our vision on sharia non-compliant listed securities has been recognized in the recently introduced Shariah guidelines by SECP.
Shariah Advisor
As required under SCSAM, FEM's financial transactions were duly vetted and audited by the independent Shariah Advisor and his report is annexed.
Board of Directors & Committees
(i) total number of directors
(a) Male | 3 | ||
(b) Female | 1 | ||
(ii) composition including the following,- | |||
(a) Independent directors | 1 | ||
(b) Non-executive directors | 2 | ||
(c) Executive directors | 1 | ||
During the year under review, four board meeting were held and attend by the Directors as follows:- | |||
Name of Board Members | Meetings Attended | ||
1 | Mr. Nadeem Maqbool | Non-executive Director | 4 out of 4 |
2 | Ms Alizeh Bashir | Non-executive Director | 4 out of 4 |
3 | Mr Qaiser Ahmed Magoon | Independent Directors | 4 out of 4 |
4 | Mr. Adil A. Ghaffar | Executive Directors | 4 out of 4 |
The Board has formed committees comprising of members given below.-
FIRST EQUITY MODARBA
a) | Audit Committee | |
Mr Qaiser Ahmed Magoon | Chairman | |
Ms Alizeh Bashir | Member | |
Mr Nadeem Maqbool | Member |
- HR and Remuneration Committee
Mr Nadeem Maqbool | Chairman |
Mr Adil A Ghaffar | Member |
Mr Qaiser Ahmed Magoon | Member |
- Risk Management Committee
Mr Nadeem Maqbool | Chairman |
Mr Adil A Ghaffar | Member |
Mr Qaiser Ahmed Magoon | Member |
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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY
Code of Corporate Governance
As stated in previous years Report that the Board has decided to adopt the code of corporate governance as issued by the Securities and Exchange Commission of Pakistan and made part of listing regulation
All activities are conducted as per the listing regulations /Rule Book of the stock exchanges. Vision & Mission statements, Core values, Statement of Ethics and Business Practices and Code of Conduct have been prepared and approved by the Board and have been communicated to the employees. Significant policies as required under the Code of Corporate Governance have been framed and are periodically reviewed by the Board.
As required by the Code of Corporate Governance, Directors are pleased to report that:
- The financial statements prepared by the management of the Modaraba present fairly its true state of affairs, the result of its operations, cash flows and changes in equity;
- Proper books of accounts of the Modaraba have been maintained;
- Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment;
- International Financial Reporting Standards (IFRS), as applicable in Pakistan, have been followed in the preparation of financial statements and any departure there from has been adequately disclosed in the Annual Report.
- The system of internal control is consistently applied though out the year and has been effectively implemented and monitored with ongoing efforts to improve it further;
- A sound monitoring and control system for Anti Money Laundering and Risk Management Policy as elaborate in the guidelines have been implemented to identify, manage and report different types of risks associated within the Modaraba;
- There is no doubt about the Modaraba's ability to continue as a going concern. There is no risks and uncertainties is facing by FEM;
- There are no statutory payments on account of taxes, duties, levies and charges which are outstanding as on June 30, 2024, except for those disclosed in financial statements; and
- There has been no material departure from the best practice of corporate governance as detailed in the listing regulation /Rule Book of the Stock Exchange and Regulations framed.
Pattern of Shareholding
Pattern of certificate holding as at 30th June 2024 is annexed with the annual report 2024.
Key Operating and Financial Data - is annexed with the annual report 2024.
Staff Retirement Benefits
The Modaraba's service rules provide an unfunded gratuity scheme for the permanent employees.
Auditors
As suggested by the audit committee and the consent given by the present auditors M/s Baker Tilly Mehmood Idrees Qamar Chartered Accountants, the Board has decided to recommend their name for the approval to the Registrar Modaraba
Acknowledgement
We acknowledge hard work with full dedication of our employees and are thankful to our business associates, clients and financial institutions for their confidence and support. We also appreciate the guidance and cooperation received from our regulators. They have our full support and good wishes in their efforts at reforms.
On behalf of the Board | |
Karachi | Adil A Ghaffar |
Dated October 07 2024 | Chief Executive Officer |
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