First Equity Modaraba’s financial results for the year ended June 30, 2012

Karachi, October 3, 2012 (PPI-OT): We have to inform you that the Board of Directors of Premier Financial Services (Pvt.) Ltd the management company of First Equity Modaraba (FEM) in their meeting held today at Karachi, recommended the following:

Cash Dividend

A Cash Dividend for the year ended June 30, 2012              Nil

Bonus Shares                                                  Nil

Right Shares                                                  Nil

The financial results of the Modaraba are enclosed, along with the Auditors Report.

The Annual Review Meeting of the Certificate holders of the Modaraba will be held on October 31, 2012 at 6.30 pm at the Tipu Sultan Hall, Bangalore Town, Off Tipu Sultan Road, Karachi.

The certificate transfer book of the Modaraba will be closed from Thursday, October 8, 2012 to Wednesday, October 31, 2012 (both days inclusive). Transfer received at THK Associates (Pvt.), State Life Building # 03, Dr Zia uddin Ahmed Road Karachi at the close of die business on Wednesday, October 17, 2012 will be treated in time.

Profit and Loss Account for the Year Ended June 30, 2012








Operating expenses



Financial charges









Operating profit



Deficit on revaluation of investment classified as


financial assets at fair value through profit or loss
Other income



Other charges






Management fee




Profit before taxation








Profit for the year





Earnings per certificate- basic and diluted



Auditors’ Report to the Certificate Holders

We have audited the annexed balance sheet of First Equity Modaraba (the Modaraba) as at June 30, 2012 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof (hereinafter referred to as the financial statements), for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

These financial statements are the Modaraba Company’s  Premier Financial Services (Private) Limited] responsibility who is also responsible to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards as applicable in Pakistan and the requirements of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance 1980 (XXXI of 1980), and the Modaraba Companies and Modaraba Rules, 1981, Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting policies and significant estimates made by the Modaraba Company, as well as, evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:

(a) The Modaraba has not charged impairment loss of Rs. 33.9g million and Rs. 88.5 million in respect of investments classified as available for sale investments and investment in wholly owned subsidiary respectively.

(b) Modaraba has charged unrealized loss of Rs. 8.43 million in respect of Investment classified as held for trading investment in other comprehensive income instead of profit and loss account.

Had the impairment loss and unrealised loss been charged, the profit would have been reduced by Rs. 130.53 million, investment in subsidiary company would have been lower by Rs. 88.5 million (as per book value of Subsidiary), unrealized loss on re measurement of available for sale investments would have been lower by Rs. 33.9 million.

(c) In our opinion, proper books of accounts have been kept by the Modaraba Company in respect of the Modaraba as required by the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980), and the Modaraba Companies and Modaraba Rules, 1981;

(d) in our opinion:

(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980), and the Modaraba Companies and Modaraba Rules 1981, and are in agreement with the books of accounts and are further in agreement with accounting policies consistently applied;

(ii) the expenditure incurred during the year was for the purpose of the Modaraba’s business; and

(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects, terms and conditions of the Modaraba;

(e) in our opinion, because of the effects of the matters discussed in paragraph ‘a’ and ‘b’ above, the financial statements do not give a true and fair view of the financial position of the Modaraba as of June 30, 2012 and of its financial performance and its cash flows and changes in equity for the year then ended in accordance with International Financial Reporting Standards, the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980) and the Modaraba Companies and Modaraba Rules 1981.

(f) In our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

For more information, contact:
Qazi Obaid Ullah
Company Secretary
First Equity Modaraba
B-1004, 10th Floor, Lakson Square Building 3,
Sarwar Shaheed Road, Karachi 74200, Pakistan
Tel: (92-21) 5672815-8,
Fax: (92-21) 5886118

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