First Habib Modaraba : Transmission of Quarterly Report for the Period ended September 30 2023

Quarterly Accounts

FOR THE QUARTER

ENDED SEPTEMBER 30, 2023

(Unaudited)

First Habib Modaraba

A n I s l a m i c F i n a n c i a l I n s t i t u t i o n

Contents

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Directors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Condensed Interim Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Condensed Interim Profit and Loss Account (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Condensed Interim Statement of Comprehensive Income (unaudited) . . . . . . . . . . . . . . . . . . . . 8

Condensed Interim Cash Flow Statement (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Condensed Interim Statement of Changes In Equity (unaudited). . . . . . . . . . . . . . . . . . . . . . . . 10

Notes To The Condensed Interim Financial Statements (unaudited) . . . . . . . . . . . . . . . . . . . . . 11

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Corporate Information

MODARABA MANAGEMENT COMPANY

Habib Metropolitan Modaraba Management Company (Private) Limited

BOARD OF DIRECTORS
Syed Rasheed Akhtar	- Chairman (Non-Executive
	Independent Director)
Mr. Muhammad Shoaib Ibrahim	- Chief Executive Officer
Mr. Usman Nurul Abedin	- Non-Executive Director
Mr. Saeed Uddin Khan	- Non-Executive
	Independent Director
Mr. Mohammad Shams Izhar	- Non-Executive Director
Dr. Irum Saba	- Non-Executive Director

LEGAL ADVISOR

Mohsin Tayebaly & Company

Ahmed & Qazi Advocates & Legal Consultants

AUDIT COMMITTEE
Mr. Saeed Uddin Khan	- Chairman
Syed Rasheed Akhtar	- 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. Muhammad Jehanzeb	- Secretary

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: [phone]

AUDITORS

BDO Ebrahim & Co.

Chartered Accountants

COMPANY SECRETARY

Ms. Aeraj Abeer

SHARIAH ADVISOR

Mufti Faisal Ahmed

BANKERS

Habib Metropolitan Bank Limited (Islamic Banking) Meezan Bank Limited

Al Baraka Bank Pakistan Limited

Bankislami Pakistan Limited

Dubai Islamic Bank Pakistan Limited

Soneri Bank Limited (Islamic Banking)

Habib Bank Limited (Islamic Banking)

REGISTERED OFFICE

6th Floor, HBZ Plaza (Hirani Centre) I.I. Chundrigar Road, Karachi.

Tel : [phone]

UAN : 111-346-346

Web : www.habibmodaraba.com

Email : [e-mail]

GEOGRAPHICAL PRESENCE - BRANCH OFFICES

Karachi Branch:

3rd Floor, Al-Manzoor Building,

Dr. Ziauddin Ahmed Road. Karachi.

Tel : [phone]

Lahore Branch:

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

Authority, Lahore.

Tel : [phone]

Islamabad Branch:

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

Tel : [phone]

Multan Branch:

Mezzanine Floor, Abdali Tower,

Abdali Road, Multan.

Tel : [phone]

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A n I s l a m i c F i n a n c i a l I n s t i t u t i o n

Directors' Report

On behalf of the Board of Directors, it is our great pleasure to present the un-audited accounts of the First Habib Modaraba (FHM) for the quarter ended September 30, 2023.

Performance of first quarter of current year remained satisfactory due to slightly better economic conditions of Pakistan. Disbursements of Rs.2.702 billion were made as compared to Rs.2.132 billion of corresponding quarter of last year. Balance sheet footing also increased by around 20% and reach to Rs.21.300 billion as compared to Rs.17.793 billion same quarter of last year. FHM has also made significant growth in profit before and after tax i.e., 95% and 80% respectively.

At present the economy of Pakistan is slightly showing positive sign and business sentiments are marginally improved. The few positive steps of caretaker government i.e., crackdown on smuggling goods, reforms in exchange company's businesses etc., are yielding some positive results. Furthermore, few encouraging news on current account position, improved home remittances, strengthening of Pak rupee against US dollar and rising index of Pakistan Stock Exchange are promising move. However, sustainability of these short term achievements is critical and most important for stability of economy.

Inflation in the month of September, 2023 bounced back to 31.4% which is the highest in four months due to increase in electricity and fuel prices. However, recent reduction in prices of petroleum products in line with global trend and improving Pak rupee parity with US dollar, the inflation numbers showed slightly downward trend. However, uncertainties are also prevailing around particularly on political fronts. The support from IMF in the shape of the current standby facility is expiring in March, 2024 and Pakistan has heavy debt repayments in coming years. According to recent report of IMF, Pakistan's key macroeconomic indicators as projected in the International Monetary Fund's Fiscal Monitor showed declining trend as compared to the projections in the Stand-By Arrangement (SBA) documents of July 2023. To achieve projection of SBA documents and its renewal will be most critical task for upcoming government.

Going forward, we expect that in current year business activities will be improved to some extent, however, overall economy will remain under stress till formation of new government after general election. Our first quarter performance remained satisfactory but slightly behind our business targets. According to our business strategy of current year, we shall move forward in cautious manner and enhance our domestic presence, continue to deliver unmatched services to our customers and add sound entities within financing portfolio.

We would like to express our sincere thanks and gratitude for the continued support and guidance provided by Securities & Exchange Commission of Pakistan and Registrar Modaraba, customers of the Modaraba for their patronage and Certificate holders, investors who have remained committed to FHM. We also appreciate dedication, high level of professionalism and hard work of employees of FHM for smooth operations and achieving satisfactory results in extremely difficult business environment.

For and on behalf of Board of Directors

Syed Rasheed Akthar	Muhammad Shoaib Ibrahim
Chairman	Chief Executive Officer

Karachi: 24th October, 2023

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First Quarter Report 2023

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First Habib Modaraba

A n I s l a m i c F i n a n c i a l I n s t i t u t i o n

Condensed Interim Balance Sheet

AS AT SEPTEMBER 30, 2023

		(Un-audited)	(Audited)
		September 30,	June 30,
	Note	2023	2023
ASSETS		--------------------- (Rupees) ---------------------
NON-CURRENT ASSETS		67,631,034
Fixed assets in own use	4	54,442,474
Intangible assets		65,936	81,143
Diminishing musharaka financing	5	12,466,044,786	12,102,544,307
Long term deposits		852,800	852,800
Deferred tax assets - net		189,567,236	169,977,273
CURRENT ASSETS		12,724,161,792	12,327,897,997
	627,500,643
Investments	6	858,857,564
Current portion of diminishing musharaka financing	5	6,288,572,586	5,879,239,824
Diminishing musharaka financing installments receivables		13,050,405	7,590,286
Advances and prepayments	7	940,223,069	1,253,786,642
Other receivables		39,549,664	24,375,360
Cash and bank balances	8	667,056,905	188,108,417
		8,575,953,272	8,211,958,093
TOTAL ASSETS		21,300,115,064	20,539,856,090
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Authorized certificate capital 280,000,000		1,400,000,000	1,400,000,000
(June 30, 2023: 280,000,000) certificates of Rs.5/- each
Issued, subscribed and paid-up certificate capital		1,108,305,000	1,108,305,000
Reserves		3,465,490,772	3,499,571,200
Certificate holders' equity		4,573,795,772	4,607,876,200
SURPLUS ON REVALUATION OF INVESTMENTS		2,768,088	5,915,958
NON-CURRENT LIABILITIES		17,402,470
Liability against right of use assets	9	19,655,522
CURRENT LIABILITIES		14,420,461,097
Certificates of investment (musharaka)	10	13,708,381,051
Current maturity of liability against right of use assets	9	5,834,134	2,769,105
Unearned lease financing and diminishing musharaka installments		42,249,313	38,359,710
Advance lease financing and diminishing musharaka installments		13,506,703	15,572,861
Trade and other payables		1,050,870,816	981,833,656
Profit payable on certificates of investment (musharaka)		404,438,832	362,344,841
Running musharaka		495,664,632	745,667,326
Unclaimed profit distributions		273,123,207	51,479,860
		16,706,148,734	15,906,408,410
TOTAL EQUITY AND LIABILITIES		21,300,115,064	20,539,856,090
CONTINGENCIES AND COMMITMENTS	11

The annexed notes from 1 to 23 form an integral part of these condensed interim financial statements.

For Habib Metropolitan Modaraba Management Company (Private) Limited

(Modaraba Management Company)

Chief Executive Officer

Chief Financial Officer

Director

Director

First Quarter Report 2023

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A n I s l a m i c F i n a n c i a l I n s t i t u t i o n

Condensed Interim Profit And Loss Account (Un-audited)

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

Quarter ended

		September 30,	September 30,
	Note	2023	2023
		--------------------- (Rupees) ---------------------
Income from lease financing		-	21,934,723
Income from diminishing musharaka financing		1,195,195,209	642,695,262
Provision in respect of diminishing musharaka		(86,440,186)	(33,894,927)
Administrative expenses		(62,878,164)	(48,737,880)
		1,045,876,859	581,997,178
Other income	12	69,243,338	40,036,770
		1,115,120,197	622,033,948
Financial charges	13	(804,087,040)	(462,562,030)
Modaraba Management Company's remuneration	14	(31,103,316)	(15,947,192)
Sales tax on Modaraba Management Company's remuneration	14	(4,043,431)	(2,073,135)
Provision for Workers' Welfare Fund		(5,517,728)	(2,829,033)
Profit before taxation		270,368,682	138,622,558
Taxation	15	(82,788,110)	(34,889,064)
Profit for the period		187,580,572	103,733,494
Earning per certificate - basic and diluted	16	0.85	0.51

The annexed notes from 1 to 23 form an integral part of these condensed interim financial statements.

For Habib Metropolitan Modaraba Management Company (Private) Limited

	(Modaraba Management Company)
Chief Executive Officer	Chief Financial Officer	Director	Director
First Quarter Report 2023			7

First Habib Modaraba

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Condensed Interim Statement Of Comprehensive Income (Un-audited)

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

	Quarter ended
	September 30,	September 30,
	2023	2023
	--------------------- (Rupees) ---------------------
Profit for the period	187,580,572	103,733,494
Components of other comprehensive income
reflected below equity
Items that will not be reclassified subsequently to
profit and loss account
Deficit on revaluation of investments classified as 'at fair value	(3,305,000)
through other comprehensive income'- net	(5,884,054)
Total comprehensive income for the period	184,275,572	97,849,440

The annexed notes from 1 to 23 form an integral part of these condensed interim financial statements.

For Habib Metropolitan Modaraba Management Company (Private) Limited

(Modaraba Management Company)

Chief Executive Officer

Chief Financial Officer

Director

Director

First Quarter Report 2023

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First Habib Modaraba

A n I s l a m i c F i n a n c i a l I n s t i t u t i o n

Condensed Interim Cash Flow Statement (Un-audited)

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

		September 30,	September 30,
	Note	2023	2023
		--------------------- (Rupees) ---------------------
CASH FLOW FROM OPERATING ACTIVITIES		270,368,682
Profit for the period		138,622,558
Adjustment for:		4,884,136
Depreciation and amortization		30,745,827
Financial charges		804,087,040	433,298,086
Gain on transfer of lease financing assets - net		-	(559,370)
Loss on disposal of assets in own use - net		1,009,483	-
Gain on disposal of assets in own use	12	-	(11,668)
Provision in respect of diminishing musharaka		86,440,186	33,894,927
Changes in working capital		896,420,845	497,367,802
Decrease / (increase) in current assets		(5,460,119)
Diminishing musharaka financing installments receivables		(33,065,881)
Advances and prepayments		313,563,573	(75,746,241)
Other receivables		68,968,262	(2,694,937)
(Decrease) / increase in current liabilities		377,071,716	(111,507,059)
	3,889,603
Unearned lease financing and diminishing musharaka installments		16,031,340
Advance lease financing and diminishing musharaka installments		(2,066,158)	2,735,007
Trade and other payables		450,040,102	1,553,619
		451,863,547	20,319,966
Cash generated from operations		1,995,724,790	544,803,267
Proceeds from transfer of lease financing assets		-	4,198,551
Diminishing musharaka financing - net		(686,393,055)	(490,548,246)
Long term advances, deposits and prepayments		-	25,000
Security deposits against lease financing assets		-	(1,016,450)
Financial charges paid		(725,347,555)	(403,977,803)
Tax paid		(84,142,566)	(5,914,709)
		(1,495,883,176)	(897,233,657)
Net cash generated from / (used in) operating activities		499,841,614	(352,430,390)
CASH FLOW FROM INVESTING ACTIVITIES		(23,347,719)
Purchase of assets in own use	4.1.1	(833,750)
Proceeds from sale / maturity of investments - net		(228,051,921)	-
Payments of lease rentals	9	(168,859)	(143,553)
Proceeds from sale of assets in own use		7,699,028	89,505
Net cash used in investing activities		(243,869,471)	(887,798)
CASH FLOW FROM FINANCING ACTIVITIES		(221,643,347)
Dividend paid		(110,632)
Running Musharaka		(250,002,694)	-
Certificates of investment (musharaka)		712,080,046	506,066,270
Net cash inflow from financing activities		240,434,005	505,955,638
Net increase in cash and cash equivalents during the period		496,406,147	152,637,450
Cash and cash equivalents at the beginning of the period		(197,618,432)	(329,366,278)
Cash and cash equivalents at the end of the period	17	298,787,715	(176,728,828)

The annexed notes from 1 to 23 form an integral part of these condensed interim financial statements.

For Habib Metropolitan Modaraba Management Company (Private) Limited

(Modaraba Management Company)

Chief Executive Officer

Chief Financial Officer

Director

Director

First Quarter Report 2023

9

First Habib Modaraba

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Condensed Interim Statement Of Changes In Equity (Un-audited)

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

			Capital reserves		Revenue reserves
	Certificate	Certificate	Amalgamation	Statutory	General	Unappropriated
	capital	premium	reserve	reserves	reserves	profit	Total equity
	---------------------------------------------------------		(R upees) ---------------------------------------------------------
Balance as at June 30, 2022 (Audited)	1,008,000,000	378,000,000	-	1,284,362,639	740,000,000	557,156,812	3,967,519,451
Total comprehensive income for the period	-	-	-	-	-	103,733,494	103,733,494
Profit distribution for the year ended
June 30, 2022 @ Rs.1.00/- per certificate	-	-	-	-	-	(201,600,000)	(201,600,000)
Balance as at September 30, 2022	1,008,000,000	378,000,000	-	1,284,362,639	740,000,000	459,290,306	3,869,652,945
Balance as at June 30, 2023 (Audited)	1,108,305,000	378,000,000	233,003,899	1,284,362,639	1,340,000,000	264,204,662	4,607,876,200
Total comprehensive income for the period	-	-	-	-	-	187,580,572	187,580,572
Profit distribution for the year ended
June 30, 2023 @ Rs.1.00/- per certificate	-	-	-	-	-	(221,661,000)	(221,661,000)
Balance as at September 30, 2023	1,108,305,000	378,000,000	233,003,899	1,284,362,639	1,340,000,000	230,124,234	4,573,795,772

The annexed notes from 1 to 23 form an integral part of these condensed interim financial statements.

For Habib Metropolitan Modaraba Management Company (Private) Limited

(Modaraba Management Company)

Chief Executive Officer

Chief Financial Officer

Director

Director

First Quarter Report 2023

10