Transmission of Annual Report for the Year Ended 2025-06-30

First Habib Modaraba

(An Islam ic Financial Institution)

(Managed by: HabibMetro Modaraba Management)

1985-2025

September 15, 2025

The General Manager

Pakistan Stock Exchange Limited Stock Exchange Building,

Stock Exchange Road, Karachi.

TRANSMISSION OF THE ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 2025

Dear Sir,

We would like to inform you that the Annual Repos of First Habib Modaraba (FHM) for the year ended June 30, 2025 has been transmitted through PUCARS and is also available on the Modaraba's website from where it can be downloaded using the following link:

https://www.habibmodaraba.com/fit1ancial-state»ents

You may please inform the TRE Certificate Holders of the Exchange accordingly. Yours ttuly,

Ayesha sheed

Compan cretary

6th Floor, HBZ Plaza, (Hirani €entre) l.l. Chundrigar Road. Karachi-74200

UAN: J11-346 346 TEL: 32635949-51

E-fXAIL: fhm@habibmodaraba.com WEBSITE• https://www.habibmodaraba.‹om

HMMM is a subsidiary of Habib Metropolitan Bank

1ABIBCO

Modaraba Management

(AN ISLAMIC FINANCIAL INSTITUTIO N)

ANNUAL REPORT

2025

Years . A Journey Of Continuous Success

It is journey of 40 years of Dedication, Passion and Achievement through Legacy of Trust, Integrity and Innovation of First Habib Modaraba. Our commitment to excellence has enabled us to navigate challenges, seize opportunities, and achieve remarkable success.

It is a testament to our institution's resilience and adaptability.

We'd like to express our heartfelt gratitude to our customers, partners, and investors for their unwavering support and trust. Their confidence in our vision and strategy has been instrumental in our success. We're honoured to have them as part of our journey.

We value dedicated and hard work of incredible team for their tireless efforts and commitment to our mission. Their true dedication has been driving force of success.

As we celebrate this milestone, we are excited about the future and the opportunities that lie ahead. We are committed to continue our journey of success with focus approach, dedication, commitment and innovation.

We are confident that with the support of our investors,

partners and other stakeholders Insha'Allah, we will achieve even greater heights.

Congratulation to all on this remarkable milestone.

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72

Strategy and Resource Allocation

1. Strategic Objective

2. Resource Allocation Plan

3. Key Resources And Capabilities

4. Modraba's Strategy

79-80 Key Performance

Indicators

81-82 Significant Plan, Objective & Strategies

83 Liquidity Management

84

Risks & Opportunities

1. Risk Management Framework

2. Risk Appetite

88-92 Key Risks And Opportunities

1. Sources Of Risks And Opportunities

2. Specific Steps To Mitigate Risks

95-97 Risk Tolerance Level

98 Risk Of Supply Chain

& External Environment

6 Entity Rating

7 Corporate Information

8 Banking Partners

9 Our Business Partners

18 About First Habib Modaraba

20-21 Vision And Mission

1. Code Of Business Conduct & Ethics

2. Core Values

24-25 Awards And Recognition 26-27 Awards Calendar

28-29 Key Financial Highlights

31 Financial Performance Journey

32-35 Chairman's Review Report 36-37 Ceo's Message

38-39 Director's Profile

1. Role Of Chairman & Ceo

2. Group Structure

44-55 Director's Report

58-59 Product Details

1. Geographical Presence

2. Major Events

62-63 Organizational Structure

65 Performance Of Modaraba 66-67 PESTEL Analysis

69 SWOT Analysis

Organizational Overview

56

4

178

Business Model

180-181 Business Model

126

Corporate Governance

156

Analysis of Financial Information

160-161 Key Financial Data

1. Horizontal Analysis

2. Vertical Analysis

176-177 DuPont Analysis

164 Cash Flows Analysis

172 Quarterly Analysis

173 Share Price Sensitivity Analysis

174-175 Statement Of Value Added

First Habib Modaraba ANNUAL REPORT 2025

YEARS

5

194

Stakeholders Relationship & Engagement

200

Striving for Excellence

in Corporate Reporting

202 Reporting Framework

202 IIR Framework Adoption

182

IT Governance &

Cyber Security

187 IT Governance Policy

184 IT Controls Of Modaraba

184 Legal & Regulatory Impact of Cyber Risk

184 Cyber Security Programs, Procedures & Strategy

1. Cybersecurity Oversight

2. Early Warning System

1. Contingency and Disaster Recovery Plan

2. Advancements in Digital Transformation

186 Cybersecurity Education And Training

100

Sustainability & CSR

102-103 Risk & Opportunities

Related To Sustainability

104 Climate Related Risk & Opportunities

105-106 Sustainability & DE&I

(Strategies, Priorities, and Targets)

107-11 Statement on

Sustainability & CSR

1. Sustainable Development Goals And Modaraba's Contribution

2. Corporate Social Responsibility (CSR) Practices

114-117 Board Oversight On

Governance, ESG, and Sustainable Finance

118-125 Modaraba's Initiatives For CSR

84

Future Outlook

90-191 Forward Looking

Statement

192 Adaption Of Artificial Intelligence

1. Sources Of Information And Assumptions

2. Future Research And Development Initiatives

206

Financial Statements

208-212 Auditor's Report To

Certificate Holders

1. Statement Of Financial Position

2. Statement Of Profit Or Loss

1. Statement Of Comprehensive Income

2. Statement Of Cash Flows

3. Statement Of Changes In Equity

217-259 Notes To The Financial Statements

260

Other Information

262

263

264

265

Categories Of Certificate Holders

Pattern Of Certificate Holding

Notice Of Annual Review Meeting

BCR Index Criteria

HabibMetro

Modaraba Management

LONG TERM

SHORT TERM

LONG TERM SHORT TERM

AA+

2008

Consecutive 17 years

AA+

2024

FHM has been maintaining AA+ category rating since last 17 years

6 First Habib Modaraba ANNUAL REPORT 2025

YEARS

MODARABA MANAGEMENT COMPANY

Habib Metropolitan Modaraba Management Company (Private) Limited

Board OF DIRECTORS

Mohammad Shams Izhar - Chairman

Non-Executive Director Mr. Muhammad Shoaib Ibrahim - Chief Executive Officer Syed Rasheed Akhtar - Non-Executive

Independent Director

Mr. Saeed Uddin Khan - Non-Executive Independent Director

Mr. Usman Nurul Abedin - Non-Executive Director Dr. Irum Saba - Non-Executive Director

AUDIT COMMITTEE

Mr. Saeed Uddin Khan - Chairman

Dr. Irum Saba - Member Mr. Mohammad Shams Izhar - Member Mr. Muhammad Babar - Secretary

HUMAN RESOURCE COMMITTEE

Mr. Saeed Uddin Khan - Chairman

Syed Rasheed Akhtar - Member Mr. Mohammad Shams Izhar - Member Mr. Danish Zahid - Secretary

LEGAL ADVISOR

Mohsin Tayebaly & Company

Ahmed & Qazi Advocates & Legal Consultants

SHARES REGISTRAR

CDC Share Registrar Services Limited Share Registrar Department

CDC House, 99-B, Block "B", S.M.C.H.S

Main Shahrah-e-Faisal, Karachi,

Pakistan. Tel: 111-111-500

AUDITORS

BDO Ebrahim & Co. Chartered Accountants

COMPANY SECRETARY

Ms. Ayesha Rasheed

SHARIAH ADVISOR

Mufti Faisal Ahmed

BANKERS

Al Baraka Bank Pakistan Limited Dubai Islamic Bank Limited Faysal Bank Limited

Habib Bank Limited - (Islamic Banking)

Habib Metropolitan Bank Limited - (Islamic Banking) MCB Bank Limited - (Islamic Banking)

Meezan Bank Limited

Soneri Bank Limited - (Islamic Banking) Bank Al-Habib Limited

Bank Islami Pakistan Limited

REGISTERED OFFICE

6th Floor, HBZ Plaza (Hirani Centre)

I.I. Chundrigar Road, Karachi. Tel : 021-32635949-51

UAN : 111-346-346

Web : https://www.habibmodaraba.com Email: fhm@habibmodaraba.com

GEOGRAPHICAL PRESENCE

- BRANCH OFFICES

Karachi:

3rd Floor, Al-Manzoor Building,

Dr. Ziauddin Ahmed Road. Karachi. Tel : 021-32635949-51

Lahore:

1st Floor, 5-Z Block, Phase III, Defence Housing Authority, Lahore.

Tel : 042-35693074-76

Islamabad:

Office No. 513, 5th Floor, ISE Towers, Jinnah Avenue Blue Area, Islamabad.

Tel : 051-28994571-73

Multan:

Office # 707, 7th Floor, United Mall, Abdali Road, Multan

Tel: 061-4500121-22-23

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HabibMetro

Modaraba Management

BANKING PARTNERS

8

First Habib Modaraba ANNUAL REPORT 2025

YEARS

AUDITING & ADVISORY PARTNERS

REGULATOR AND RATING PARTNERS

LEGAL PARTNERS

Advocate & Legal Consultants

Ahmed & Qazi

9

HabibMetro

Modaraba Management

10

FHM upholds the highest moral standards in all areas in which it conducts business. Our commitment to professionalism, honesty, and transparency makes us unique. We prioritize the needs of our clients and seek to build enduring relationships founded on trust and respect. Our modaraba's values form the foundation of our business and guide our decision-making to ensure that we adhere to our core values.

12

To bring innovation in its product category is one of the priorities of FHM. Our emphasis on product innovation guarantees our clients' access to the newest resources and opportunities in the rapidly changing business environment.

YEARS

HabibMetro

Modaraba Management 13

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FHM is very proud to offer services that are catered to the specific requirements of each client. We also provide our clients with professional advice and guidance to take informed decision for their business growth and sustainablity. At FHM, our core objective is to continuously exceed our clients' expectations while providing outstanding services.

ABOUT

THE

REPORT

First Habib Modaraba (FHM) is dedicated to upholding the principles of transparency and value creation. We prioritize strong corporate governance and exemplary leadership, while maintaining a transparent and prudent approaches.

As one of the leading Modaraba within the modaraba sector, FHM plays a vital role in the economy. Our presence at the grassroots level and wide customer base contribute significantly to its growth.

In this Annual Report, our aim is to provide comprehensive insights into our endeavors. We wish to showcase how efficiently we utilize our resources and facilitate a thorough assessment of our business. Following the International Integrated Reporting (IIR) Framework, this report offers an understanding of our strategic thinking. It covers various aspects such as strategy, governance, performance, and prospects within the global environment.

Scope and Boundary of Reporting

To continuously enhance the quality of information shared with stakeholders, we conduct an annual review of the IIR Framework. This report incorporates all Content Elements of the IIR Framework which includes the following sections:

Strategy and resource allocation

Risks and opportunities

Governance

Organizational overview

Sustainability

Performance Outlook

Corporate social responsibility

Stakeholder relationship and engagement

Excellence in corporate reporting

First Habib Modaraba ANNUAL REPORT 2025

16

YEARS

We are dedicated to continuously evaluating and improving our approach to reporting by adhering to the highest standards of reporting practices and fulfilling the expectations of our stakeholders. Our objective is to offer transparency into how we create sustainable value for the communities we serve. We take a systematic approach by presenting both financial and non-financial information that directly relates to our business activities, supported by relevant explanations.

Reporting Period

This report encompasses the timeframe from July 01, 2024, to June 30, 2025, and provides a comprehensive overview of FHM.

External Assurance

To ensure impartiality and objectivity as required by regulatory bodies, our independent external auditors

M/s. BDO Ebrahim & Co. has carefully examined the First Habib Modaraba's Financial Statements. The external auditors are regularly rotated every five years, guaranteeing their independence and unbiased assessment.

Contact

For further clarification and feedback on this report, please contact vide email: fhm@habibmodaraba.com

YEARS

HabibMetro

Modaraba Management 17

ABOUT

First Habib Modaraba (FHM) a subsidiary of Habib Metropolitan Bank, Limited, established in 1985, and has completed 40th years of successful business operation. Throughout FHM has maintained longstanding drive towards sustaining its position as leading Modaraba within NBFI and Modaraba sector of Pakistan.

It is journey of 40 years of Dedication, Passion and Achievement through Legacy of Trust, Integrity and Innovation of First Habib Modaraba. Our commitment to excellence has enabled us to navigate challenges, seize opportunities, and achieve remarkable success. It is a testament to our institution's resilience and adaptability.

Our pledge to enhance value for our stakeholders, driven through resilience of our business model and determination of our team members made us sound and leading Modaraba within the Modaraba sector. The Relationships that exceed beyond normal business this is how we have acquired the standing we possess today as most progressive Modaraba holding the loyalty and trust of thousands of stakeholders across the country. Our achievements are evidence to the solid business fundamentals and consistent financial management policies practiced across the Modaraba. Our focused business strategy keeps us firmly on path of sustainable growth and profitability.

Our constant commitment for corporate excellence have not only kept us as leading Modaraba within the sector but also earned us recognition at national and international level. So far, FHM has secured several awards/accolades on best performance, best corporate report, best corporate disclosure and corporate excellence from reputable bodies, such as NBFI and Modaraba Association, ICAP and ICMAP, Management Association of Pakistan, and SAFA an apex body of SAARC. Furthermore, since last 17 years FHM has been securing AA+ rating as long term rating from Pakistan Credit Rating Agency Ltd., (PACRA) which depict soundness of the entity and also matter of great satisfaction for our investors.

As one of leading non-banking Islamic financial institutions, our core corporate objective always drive to create value for the society at large. Our financial strength, risk management protocols, governance framework and aspirations for sustainable growth are directly attributable to a discipline that regularly brings prosperity to our all stakeholders particularly our worthy investors and customers.

Ambition, discipline and corporate excellence always motivate us for even better results. It is the combination of these key elements that frame our optimistic

outlook for the future as well.

We sincerely believe that above all success and achievements are due to Blessing of Allah (SWT) and hard and dedicated work of entire staff members through excellent team work across all levels of the organization. We thank Almighty Allah and bow our head for His blessing and bestowing upon us of journey of continuous success.

First Habib Modaraba ANNUAL REPORT 2025

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