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First Equity Modaraba 
Annual Report 1996
Managed by:
Premier Financial Services (Private) Limited
CRESCENT GROUP
First Equity Modaraba is committed to strive for excellence in all
areas of its activity
We view our business objective of providing distinctive financial products and services 
that promote commerce and industry within the context of our overall objective of 
contributing to the nation's prosperity.
CORPORATE INFORMATION
Modaraba Company 
Premier Financial Services (Private) Limited
Board of Director
Mazhar Karim
Nadeem Maqbool
Shaukat Shafi
Maqbul Ahmad
Mohammad Arshad
Zahid Bashir
Fakhir A Rahman Chief Executive
Company Secretary 
Adil A. Ghaffar
Registered Office
3rd Floor, The Cotton Exchange
I.I. Chundrigar Road, Karachi.
Business Office
407, The Cotton Exchange
I.I. Chundrigar Road, Karachi.
Tel: 2433281-4
Fax: 2433280
Auditors
Khalid Majid Husain Rahman
Chartered Accountants
Registrars
Khalid Majid Husain Rahman
Chartered Accountants
First Floor
Modern Motors House
Beaumont Road, Karachi.
Tel: 5685693, 5685785
Fax: 5688834
General Counsel
Mohsin M. Tayebaly & Co.
Advocates & Legal Consultants
Bankers
Citibank N.A.
Crescent Investment Bank Ltd.
Habib Bank AG Zurich
Metropolitan Bank Ltd.
The Bank of Khyber
United Bank Ltd.
BUSINESS INFORMATION
First Equity Modaraba is able to assist with:
Financing under morabaha/musharaka agreements
Equity issue underwriting and placement
Leasing arrangements
Project Financing arrangements
Trading of commodities locally and internationally
For further information on how we may help in the above areas, or perhaps design a
specific solution, please contact:
Manager Credit and Marketing
407, The Cotton Exchange
I.I. Chundrigar Road
Karachi.
Tel : 2433281-4
Fax : 2433280
INVESTOR INFORMATION
For all enquiries and processing related to certificates of First Equity Modaraba (including
verification of signatures, registration of transfers, lost/duplicate certificates etc.) please
contact the Registrars:
Khalid Majid Husain Rahman
Chartered Accountants
First Floor
Modern Motors House
Beaumont Road, Karachi.
Tel: 5685693, 5685785
Fax: 5688834
However, if necessary, matters may be referred to the Company Secretary at our business
address.
REPORT OF THE DIRECTORS OF THE MODARABA COMPANY
The Directors of Premier Financial Services (Private) Limited, the management
company of FIRST EQUITY MODARABA, present their report and the audited
financial statements of the Modaraba for the year ended June 30, 1996. In
compliance with the Finance Act, 1995 the accounting date of the Modaraba was
changed from December 31 to June 30 last year. Consequently, the comparative
figures in the financial statements are for the six months ended June 30, 1995.
Financial Results
The full year results are in line with the expectation at the half year. The after tax
Re 1 earning per certificate is only marginally better than the annualised profit
and loss account comparative. While clearly low in absolute terms, the results
should be viewed relative to other modarabas and the larger financial sector. This
aspect is more fully covered in later sections of this report.
Profit and Reserves
Rupees
Profit for the year after tax is 26,119,432
which together with unappropriated profit
brought forward of 1,173,620
---------- ---------- ---------- ---------- ---------- ---------- ----------
makes available for appropriation 27,293,052
from which the Directors have decided to
transfer to special reserve 5,225,000
pay a cash dividend of 19,665,000
---------- ---------- ---------- ---------- ---------- ---------- ----------
24,890,000
---------- ---------- ---------- ---------- ---------- ---------- ----------
and carry forward as unappropriated profit 2,403,052
Performance and Policies
We believe that our investors expect and deserve a full account of our stewardship.
Our reports, therefore, endeavour to share our policy and perceptions to facilitate
objective decision making
Since commencement of operations in 1992, we have expressed concern at our
business environment. This was based on the economic conditions on the one
hand, and the framework for modarabas on the other.
It is fact that modarabas have now effectively lost all incentives initially available.
It is also fact that all restrictions on our business continue. Indeed, the regulatory
requirements are multiplying and our fears about the economy are being
confirmed. This is the context in which we evaluate our performance.
REPORT OF THE DIRECTORS OF THE MODARABA COMPANY
Although there is only a modest profit distribution for the year, the investors'
interest has been fully protected. This is evidenced by
orderly reduction in equity investments enabled by appropriate provisioning
Policies;
timely change of accounting date with a 21.5% cash dividend for the
resultant eighteen months period a year ago; and
book value per certificate in excess of Rs. 10.80 after all necessary
provisioning and the current profit distribution.
There have been no cash calls in the form of right issues. Profit distribution levels
required of modarabas have prevented reserves creation and have diluted
earnings. While this past imbalance requires correction, we also have to be
mindful of investor expectations in the short term.
Regulation and Taxation
Development in both areas are negative. Untenable interpretations of taxation
laws and new duties and taxes have aggravated difficulties. The significance of
these matters has compelled individual and collective recourse to the courts. As
the issues affect both mobilisation and deployment of funds, proper planning
becomes critical yet more difficult.
Regulatory developments include mandatory cash reserves and credit ratings.
Both of these will add to cost with no benefit apparent. Restrictions on bank
lending to modarabas are likely to further squeeze the sector.
The deep discount at which modaraba certificates are priced is reflective of
investor perception. The managers have been made the convenient scapegoats. It
is forgotten that the managers and sponsors are the largest single investors in
each modaraba. Not being responsible for the post flotation taxation and
regulatory turnaround, their predicament is greater than others. Instead of being
allowed to focus on managing the change, they are somehow deemed liable for
the downturn. Their input continues to be largely disregarded in the policy
making with obvious consequences.
It is unfortunate that the demonstrated potential of this sector should be so                                     t~
systematically dismantled. The policy makers have been urged to level the playing                                     ~..~'~!
field for modarabas. A continuation of unilateral action, though well intentioned,                                    i!~~?
will eventually defeat even the most persistent managers. With two modarabas                                     ~
having announced exit plans, others may well follow. In the worst cases, where                                     ~i~!
modarabas are unable to recoup losses as going concerns, investors will suffer.
Prospects
Given the present uncertainties, our paramount concern is to preserve our equity.
Expansion of business in size and scope, an obvious priority, is dependent on
bankable opportunities. We are fortunate in not having high cost leveraging or tax
depreciation reversals to compel compromises.
Acknowledgments
We mourn the recent passing away of Mr. N.M. Uquaili, our Chairman, and
acknowledge a debt of gratitude to him. He was a founding father of our national
financial and economic system and a source of wisdom and inspiration to us. We
shall miss Mr. Uquaili as we progress along the way shown by him.
We are grateful for the support of our investors, business associates and
employees. We are also thankful for the guidance and co-operation received from
our regulators.
Auditors
The present auditors, Khalid Majid Husain Rahman, Chartered Accountants,
have consented to their re-appointment for the year ending June 30, 1997. The
Directors have confirmed their appointment subject to the required official
approval.
On behalf of the Board
FAKHIR A RAHMAN
Chief Executive
AUDITORS' REPORT TO THE CERTIFICATE HOLDERS
We have audited the annexed Balance Sheet as at June 30, 1996 and the related
Profit and Loss Account and Statement of Changes in Financial Position together
with the Notes to the Accounts for the year ended June 30, 1996 of First Equity
Modaraba which are Modaraba Company's [Premier Financial Services (Private)
Limited] representation and we state that we have obtained all the information
and explanation which we required and, after due verification thereof, we report
that:
(a) in our opinion, proper books of account have been kept by the Modaraba
Company in respect of First Equity Modaraba as required by the Modaraba
Companies and Modaraba (Floatation and Control) Ordinance, 1980, and
Modaraba Companies and Modaraba Rules, 1981;
(b) in our opinion, the Balance Sheet and the Profit and Loss Account have
  been drawn up in conformity with the Modaraba Companies and
  Modaraba (Floatation and Control) Ordinance, 1980, and Modaraba
  Companies and Modaraba Rules, 1981; and
(c) in our opinion and to the best of our information and according to the
explanations given to us:
(i) the Balance Sheet and the related Profit and Loss Account and
  Statement of Changes in Financial Position, which are in agreement
  with the books of account, exhibit respectively a true and fair view of
  the state of the Modaraba's affairs as at June 30, 1996 and the profit
  and changes in the financial position for the year ended on that date;
(ii) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980,
  has been deducted by the Modaraba and deposited in the Central
  Zakat Fund established under section 7 of that Ordinance; and
(iii) the business conducted, investments made and expenditure incurred
  by the Modaraba are in accordance with the objects, terms and
  conditions of the Modaraba.
Khalid Majid Husain Rahman
Chartered Accountants
BALANCE SHEET
AS AT JUNE 30, 1996
1996 1995
Note Rupees Rupees
Capital and Reserves
Authorised capital
30,000,000 modaraba
certificates of Rs. 10 each 300,000,000 300,000,000
----------- -----------
Issued, subscribed and paid-up capital 3 262,200,000 262,200,000
Reserves 4 21,155,052 14,700,620
----------- -----------
283,355,052 276,900,620
Current Liabilities
Musharaka obligations - 45,000,000
Creditors, accrued expenses
and other liabilities 5 5,514,853 15,517,999
Profit distribution 19,665,000 56,373,000
Unclaimed profit distribution 3,965,232 -
Provision for taxation 4,300,000 -
----------- -----------
33,445,085 116,890,999
----------- -----------
316,800,137 393,791,619
=========== ===========
1996 1995
Note Rupees Rupees
Tangible Fixed Assets 6 135,600 248,400
Deferred Costs 7 1,126,474 2,309,102
Investments 8 53,089,901 104,697,338
Current Assets
Morabaha receivables 9 144,993,086 161,826,696
Musharaka receivables - 20,000,000
Stock-in-trade 10 11,540,260 47,142,760
Advances, deposits, prepayments
and other receivables 11 38,769,587 3,296,649
Cash and bank balances 12 67,145,229 54,270,674
----------- -----------
262,448,162 286,536,779
----------- -----------
316,800,137 393,791,619
=========== ===========
The annexed notes form an integral part of these accounts.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1996
Six Months
June 30, Ended June
1996  30, 1995
Note Rupees Rupees
Income 13 50,878,442 28,717,088
Expenditure
Operating expenses 14 6,445,041 2,154,163
Profit on musharaka obligations 6,972,026 3,202,603
----------- -----------
13,417,067 5,356,766
----------- -----------
37,461,375 23,360,322
Provision for diminution in value of
investments (4,000,000) (10,177,660)
----------- -----------
33,461,375 13,182,662
Modaraba Company's management fee 3,041,943 1,198,424
----------- -----------
Profit before Taxation 30,419,432 11,984,238
Taxation 4,300,000 -
----------- -----------
Profit after Taxation 26,119,432 11,984,238
Unappropriated profit brought forward 1,173,620 4,699,382
----------- -----------
Profit available for appropriation 27,293,052 16,683,620
Appropriations
Special reserve 5,225,000 2,400,000
Profit distribution @ 7.5% (1995: @ 5.00%) 19,665,000 13,110,000
----------- -----------
24,890,000 15,510,000
----------- -----------
Unappropriated profit carried forward 2,403,052 1,173,620
=========== ===========
The annexed notes form an integral part of these accounts.
STATEMENT OF CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT)
FOR THE YEAR ENDED JUNE 30, 1996
Six Months
June 30, Ended June 
1996 30, 1995
Rupees Rupees
Cash Flows from Operating Activities
Profit for the year before tax 30,419,432 11,984,238
Adjustments for :
----------- -----------
Depreciation 112,800 56,400
Amortisation of deferred costs 1,182,628 591,726
Provision for diminution in
value of investments 4,000,000 10,177,660
Loss / (profit) on sale of investments 59,785 (1,799,192)
Dividend income (451,065) (2,928,010)
----------- -----------
4,904,148 6,098,584
----------- -----------
35,323,580 18,082,822
(Increase)/decrease in current assets
----------- -----------
Morabaha receivables 16,833,610 (26,251,614)
Musharaka receivables 20,000,000 15,000,000
Stock-in-trade 35,602,500 (47,142,760)
Advances, deposits, prepayments
and other receivables (35,472,998) (896,458)
----------- -----------
36,963,172 (59,290,832)
(Decrease)/increase in current liabilities
Creditors, accrued expenses
and other liabilities (10,003,146) 2,643,518
----------- -----------
Net Cash from / (used in) Operating
Activities Carried forward 62,283,606 (38,564,492)
STATEMENT OF CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT)
FOR THE YEAR ENDED JUNE 30, 1996
Six Months
June 30, Ended June 
1996 30, 1995
Rupees Rupees
Net Cash from / (used in) in operating
Activities Brought forward 62,283,606 (38,564,492)
Cash Flows from Investing Activities
Dividend income 451,065 2,928,010
(Loss) / profit on sale of investments (59,785) 1,799,192
Decrease / (increase) in investments 47,607,437 (12,455,618)
----------- -----------
Net Cash from / (used in) Investing Activities 47,998,717 (7,728,416)
Cash Flow from Financing Activities
(Decrease) / increase in musharaka obligations (45,000,000) 15,000,000
Dividend paid (52,407,768)
----------- -----------
Net Cash (used in ) / from financing Activities  (97,407,768) 15,000,000
----------- -----------
Net increase / (decrease) in cash and bank balances 12,874,555 (31,292,908)
Cash and bank balances at the
beginning of the year 54,270,674 85,563,582
----------- -----------
Cash and bank balances at the
end of the year 67,145,229 54,270,674
=========== ===========
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1996
1. Legal Status and Nature of Business
First Equity Modaraba was formed under the Modaraba Companies and Modaraba
(Floatation and Control) Ordinance, 1980 and the Rules framed thereunder and is
managed by Premier Financial Services (Private) Limited.
The Modaraba is a perpetual, multipurpose modaraba able to undertake a variety
of fund and fee based activities. These include trading, manufacturing, equity
investment and their financing and facilitation.
The Modaraba is listed on Karachi, Lahore and Islamabad Stock Exchanges.
2. Significant Accounting Policies
2.1 Accounting convention
These financial statements have been prepared under the historical cost
convention.
2.2 Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation. Depreciation is
charged to income applying the straight line method whereby the cost of an
asset is written off over its estimated useful life. Normal repairs and
maintenance are charged to income as and when incurred. Gains and losses on
disposal of assets are taken to the profit and loss account.
2.3 Deferred costs
Expenses incurred in connection with the floatation and capital enhancement
of the Modaraba are being written off over a period of five years on a
proportionate basis as the benefit of these expenses will be derived over an
extended period of time.
2.4 Investments
(a) Investments are stated at cost and provisions are made for permanent
diminution in value, if any.
Gains and losses on disposal of investments are taken to the profit and
loss account.
2.5 Stock-in-trade
Stock-in-trade is stated at the lower of average cost and net realisable value.
Stock in transit is valued at cost comprising invoice values plus other charges
paid thereon. Net realisable value signifies the estimated selling price in the
ordinary course of business less costs necessarily to be incurred to make the
sale.
2.6 Revenue recognition
Income from musharaka transactions is recognised on the basis of
pro-rata accrual of the estimated profit earned during the year.
(b) Income from morabaha transactions is recognised on the basis of pro-rata
accrual of profit earned during the year.
(c) Sales are recognised when goods are identified for despatch and invoiced.
(d) Dividend income is recognised when the right to the dividend is
established.
(e) Commission and fee income is recognised when received.
(f) Profit on PLS deposits is recognised on accrual basis.
2.7 Taxation
Provision for current taxation is made on taxable income at applicable tax rates
after taking into account tax rebates and credits available, if any.
Deferred taxation is accounted for on all material timing differences using the
liability method.
3. Issued, Subscribed and paid-up Capital
Fully paid modaraba certificates of Rs. 10 each.
1995 1996 1996 1995
Number Number Rupees Rupees
20,000,000 20,000,000 Issued for cash 200,000,000 200,000,000
Issued as bonus
6,220,000 6,220,000 certificates 62,200,000 62,200,000
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
26,220,000 26,220,000 262,200,000 262,200,000
=========== =========== =========== =========== =========== =========== =========== ===========
4. Reserves
Special Unappropriated
reserve profit
Rupees Rupees
At beginning of the year 13,527,000 1,173,620 14,700,620 15,826,382
Transfer from/(to)
profit and loss account 5,225,000 1,229,432 6,454,432 (1,125,762)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
At end of the year 18,752,000 2,403,052 21,155,052 14,700,620
=========== =========== =========== =========== =========== =========== =========== ===========
The special reserve is created and held in compliance with the State Bank of
Pakistan's regulations for Non-Bank Financial Institutions.
1996 1995
Rupees Rupees
5. Creditors Accrued Expenses and
Other liabilities
Creditors 1,289,337 9,216,401
Accrued expenses 562,461 560,293
Due to associated undertakings 3,663,055 2,538,703
Profit accrued on musharakas - 3,202,602
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
5,514,853 15,517,999
=========== =========== =========== =========== =========== =========== =========== ===========
6. Tangible Fixed Assets
Motor vehicles
Cost at beginning and end of the year 564,000 564,000
Accumulated depreciation (428,400) (315,600)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Book value at end of the year 135,600 248,400
=========== =========== =========== =========== =========== =========== =========== ===========
Depreciation charged during the
year @ 20% per anum 112,800 56,400
=========== =========== =========== =========== =========== =========== =========== ===========
7. Deferred Costs
Listing and registration fees 1,203,757 1,203,757
Advertising and promotion expenses 1,242,184 1,242,184
Certificate issue expenses 2,224,469 2,224,469
Other floatation expenses 1,242,732 1,242,732
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
5,913,142 5,913,142
Amortisation to date (4,786,668) (3,604,040)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
1,126,474 2,309,102
=========== =========== =========== =========== =========== =========== =========== ===========
1996 1995
Note Rupees Rupees
8. Investments
Listed Securities
Associated undertakings 8.1 21,881,111 27,037,951
Other 8.2 44,408,790 86,859,387
---------- ----------
66,289,901 113,897,338
Unlisted Securities
Associated undertakings 8.3 10,000,000 10,000,000
Others 8.4 1,800,000 1,800,000
---------- ----------
11,800,000 11,800,000
---------- ----------
78,089,901 125,697,338
Less: Provision for diminution in value (25,000,000) (21,000,000)
---------- ----------
53,089,901 104,697,338
=========== ===========
Market value of listed securities at June 30, 1996 aggregated Rs. 43,517,234
(1995: Rs. 92,427,535)
8.1 Investment in listed securities - associated undertakings
Unless stated otherwise the holdings are in ordinary shares of Rs. 10 each.
1995 1996 1996 1995
Number Number Rupees Rupees
24,084 24,084 Crescent Boards Ltd. 487,462 487,462
99,907 22,407 Crescent Investment Bank
Ltd. 1,134,372 5,433,072
- 2,000 Crescent Steel and Allied
Products Ltd. 104,350 -
231,814 254,995 Crescent Sugar Mills &
Distillery Ltd. 4,665,106 4,665,106
226,885 226,885 Pakistan Industrial Leasing
Corporation Ltd. 9,011,312 9,011,312
376,515 319,515 Premier Insurance Company
of Pakistan Ltd. 5,532,319 6,519,559
(Ordinary shares of Rs. 5 each)
16,500 19,965 Shakarganj Mills Ltd. 506,250 481,500
28,400 28,400 Suraj Cotton Mills Ltd. 439,940 439,940
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
21,881,111 27,037,951
=========== =========== =========== =========== =========== =========== =========== ===========
8.2 Investment in listed securities - others
Unless stated otherwise the holdings are in ordinary shares/modaraba certificates
of Rs. 10 each.
1995 1996 1996 1995
Number Number Rupees Rupees
12,500 16,250 A1-Ghazi Tractors Ltd. 1,035,960 1,035,960
(Ordinary shares of Rs. 5 each)
36,225 32,225 Bankers Equity Ltd. 1,116,497 1,400,127
13,200 13,200 BRR Capital Modaraba 234,842 232,816
Managed by
BRR Investments (Pvt.) Ltd.
17,600 33,000 Cherat Cement Ltd. 2,427,185 1,963,150
25,000 - Citicorp Investment Bank Ltd. - 1,562,164
430,800 430,800 Crescent Leasing Corporation
Ltd. 5,708,730 5,708,730
68,417 50,081 Crescent Textile Mills Ltd. 1,304,063 1,997,983
16,000 - Dawood Leasing Company
Ltd. - 192,505
29,000 - Dhan Fibre Ltd. - 407,745
5,750 300 Essa Cement Industries Ltd. 14,562 500,150
20,000 - Fauji Fertilizer Company Ltd. - 1,761,500
20,000 - Faysal Bank Ltd. - 657,250
2,000 - First Grindlays Modaraba - 58,400
Managed by
Grindlays Services of Pakistan
(Pvt.) Ltd.
49,179 2,179 First UDL Modaraba 11,949 539,179
Managed by
UDL Modaraba Management
(Pvt.) Ltd.
- 4,000 FFC - Jordan Fertilizer
Company Ltd. 61,170 -
52,375 52,375 Gadoon Textile Mills Ltd. 3,208,095 3,208,095
25,000 19,500 Habib Arkady Ltd. 217,085 278,300
(Ordinary shares of Rs. 5 each)
- 22,000 Hub Power Company Ltd. 736,445 -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Carried forward 16,076,583 21,504,054
1995 1996 1996 1995
Number Number Rupees Rupees
Brought forward 16,076,583 21,504,054
500,000 150,000 Ibrahim Fibres Ltd. 2,400,000 8,000,000
8,000 ICI Pakistan Ltd. - 1,894,330
20,000 InterAsia Leasing Company
Ltd. - 200,000
20,000 20,000 Kohinoor Weaving Mills Ltd. - 297,111
90,000 500 LTV Capital Modaraba - 792,225
Managed by
National Technology Development
Corporation Ltd.
(Modaraba certificates of Rs. 5 each)
15,000 - Lucky Cement Ltd. - 317,550
10,800 10,300 Modaraba Al-Mali - 222,800
Managed by
Modaraba Al-Mal
Corporation Ltd.
33,125 1,775 National Development Leasing
Corporation Ltd. 64,385 1,290,250
8,000 8,000 National Refinery Ltd. 604,000 604,000
18,000 18,000 Nishat (Chunian) Ltd. 380,200 380,200
15,000 16,500 Pakistan Industrial &
Commercial Leasing Ltd. 415,600 415,600
7,800 500 Pakistan State Oil Ltd. 127,842 2,592,885
- 5,000 Pakistan Tobacco Company Ltd. 182,250 -
47,100 47,100 Pakistan Venture Capital Ltd. 471,000 471,000
468,750 - Pakland Cement Ltd. - 25,046,875
- 11,000 Paramount Leasing
Company Ltd 108,130 -
1,975 100 PTC Vouchers 409,250 8,998,475
(convertible into 100 shares each
of Pakistan Telecommunication
Corporation Ltd.)
7,312 573 Saif Textile Mills Ltd. 6,869 154,439
- 115,800  Sana Industries Ltd. 10,306,200 -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Carried forward 32,064,370 73,181,794
1995 1996 1996 1995
Number Number Rupees Rupees
Brought forward 32,064,370 73,181'794
23,800 24,300 Sapphire Fibres Ltd. 1,330,684 1,315,584
13,225 23,225 Searle Pakistan Ltd. 1,625,845 1,181,800
8,500 8,500 Service Fabrics Ltd. 110,630 110,630
13,500 13,500 Service (Textile) Industries
Ltd. 413,838 413,838
- 15,000 Southern Electric Power
Company Ltd. 224,625 -
13,225 30 Standard Chartered Mercantile 1,083 641,871
Leasing Company Ltd.
243,120 224,744 Sui Northern Gas Pipelines
Ltd. 6,266,330 8,134, 390
9,000 13,800 Sui Southern Gas Company
Ltd. 444,970 371,000
33,350 33,350 Third Prudential Modaraba 228,165 228,165
Managed by
Prudential Capital
Management Ltd.
15,000 15,000 Tri-Star Power Ltd. 815,500 815,500
27,000 75,000 Tri-Star Shipping Lines Ltd. 830,970 380,855
6,000 6,000 Zahoor Textile Mills Ltd. 51,780 51,780
2,000 - Zainab Textile Mills Ltd. - 32,180
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
44,408,790 86,859,387
8.3 Investment in unlisted securities - associated undertakings
The holdings are in ordinary shares of Rs. 10 each.
1995 1996
Number Number
500,000 500,000 Crescent Powertec Ltd. 5,000,000 5,000,000
500,000 500,000 Crescent Greenwood Ltd. 5,000,000 5,000,000
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
10,000,000 10,000,000
========== ========== ========== ========== ========== ========== ========== ==========
8.3.1 Net asset value per share of Crescent Powertec Ltd. and Crescent Greenwood
Ltd. is Rs. 10.00 and Rs. 9.30 as per accounts as at June 30, 1995 and
September 30, 1995 respectively. These accounts were audited by Ebrahim &                                       t:~!~
Co., Chartered Accountants, and A. F. Ferguson & Co., Chartered Accountants,
respectively.
8.4 Investment in unlisted securities - others
The holding is in ordinary shares of Rs. 10 each.
1995 1996 1996 1995
Number Number Rupees Rupees
50,000 50,000 Sapphire Power Generation
Ltd. 1,800,000 1,800,000
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
1,800,000 1,800,000
========== ========== ========== ========== ========== ========== ========== ==========
8.4.1 Net asset value per share of Sapphire Power Generation Ltd. is Rs. 18.15 as
per accounts as at June 30, 1995 audited by Riaz Ahmad & Co., Chartered
Accountants.
9. Modaraba Receivables
These arise from sales on deferred payment basis at specified profit margins. The
outstanding sums are secured and considered good.
10. Stock - In - Trade
This comprises raw cotton in hand.
1996 1995
Note Rupees Rupees
11. Advances, deposits and prepayments
and Other receivables
Advances, deposits and prepayments 11.1 15,235,433 2,145,266
Other receivables
Sale proceeds of investments 23,083,372 1,011,677
Others 450,782 139,706
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
23,534,154 1,151,383
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
38,769,587 3,296,649
========== ========== ========== ========== ========== ========== ========== ==========
11.1 Advances to staff at June 30, 1996 amounted to Rs. 76,080 (1995: Rs. 68,500).
The maximum aggregate amount due from staff at the end of any month
during the period was Rs. 114,120 (1995 · Rs. 113,200).
Advances include Rs. 15,000,000 for supply of trading goods
1996 1995
Note Rupees Rupees
12. Cash and Bank Balances
Cash in hand 10,378 5,418
Cash reserve with State Bank of Pakistan 50,000 -
Cash at bank
On current account 2,100,276 23,017
On saving account 6,760,293 1,083,344
On deposit 58,224,282 53,158,895
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
670,841,351 54,265,256
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
67,145,229 54,270,674
========== ========== ========== ========== ========== ========== ========== ==========
13. Income
Profit on morabahas / musharakas 25,828,783 14,777,626
Profit on trading 13.1 10,537,125 4,033,061
(Loss) / profit on sale of investments (59,785) 1,799,192
Dividends 451,065 2,928,010
Commission and fees 6,238,303 2,223,310
Profit on PLS deposits 7,882,951 2,955,889
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
50,878,442 28,717,088
========== ========== ========== ========== ========== ========== ========== ==========
13.1 Profit on trading
Sales 120,606,149 47,215,351
Cost of sales
Opening stock 47,142,760 -
Purchases 74,466,524 90,325,050
Closing stock (11,540,260) (47,142,760)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
110,069,024 43,182,290
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
10,537,125 4,033,061
========== ========== ========== ========== ========== ========== ========== ==========
1996 1995
Note Rupees Rupees
14. Operating Expenses
Salaries, allowances and benefits 14.1 1,959,105 675,837
Travelling, conveyance and entertainment 93,624 40,236
Telephone and postage 400,272 47,368
Electricity 119,338 47,881
Insurance 89,742 25,710
Printing, stationery and advertising 503,974 78,889
Bank charges and commission 182,048 2,038
Fees and subscriptions 128,076 79,200
Amortisation of deferred costs 1,182,628 591,726
Depreciation 112,800 56,400
Vehicle running and maintenance 193,338 38,279
Facilities and services 540,726 201,162
Repairs and maintenance 40,116 56,887
Auditors' remuneration 14.2 613,187 147,523
Legal and professional 43,300 17,586
Professional tax    127,250 -
Training and development 4,850 6,000
Zakat deducted at source 2,488 4,000
Miscellaneous 108,179 37,441
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
6,445,041 2,154,163
========== ========== ========== ========== ========== ========== ========== ==========
14.1 Remuneration of officers and other employees
The aggregate amount charged in the accounts for remuneration, including
benefits, to employees of the Modaraba are:
       1996          1995
      Rupees         Rupees
Other Other
Officers employees Officers employees
Salaries and allowances 930,308 805,114 185,165 356,895
Gratuity and leave fare - 34,377 19,800 4,900
Expenses reimbursed
-- Medical 2,211 7,350 1,827 46,232
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
932,519 846,841 206,792 408,027
========== ========== ========== ========== ========== ========== ========== ==========
Officers are also provided with free use of Modaraba maintained cars.
1996 1995
Rupees Rupees
14.2 Auditors' remuneration
Audit fee 50,000 20,000
Out of pocket expenses 5,000 4,225
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
55,000 24,225
Special audit for State Bank of Pakistan 45,000 -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Registrar services 358,345 96,000
Out of pocket expenses 80,221 27,298
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
438,566 123,298
Tax and sundry advisory services 74,621 -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
613,187 147,523
========== ========== ========== ========== ========== ========== ========== ==========
15. Transaction with Associated Undertakings
The aggregate amounts in respect of transactions with associated undertakings
during the year, in addition to the Modaraba Company's management fee, are
purchase of goods and services Rs. 52,655,477 (1995: Rs. 423,991) and sale of goods
and services Rs. 120,606,149 (1995: Rs. 47,215,351). Further, profit of Rs. 7,553,174
(1995: Rs. 2,849,140) was received on deposits placed and maintained with Crescent
Investment Bank Limited, an associated company, in the normal course of business.
Dividend income includes Rs. 199,697 (1995: Rs. 171,143) from Premier Insurance
Company of Pakistan Limited, an associated undertaking.
16. General
The comparative figures are for the six months ended June 30, 1995 and have been
re-arranged, wherever necessary, for the purposes of comparison.
PATTERN OF HOLDING OF CERTIFICATES
BY THE CERTIFICATE HOLDERS AS AT JUNE 30, 1996
Number of Certificate Holding Total
Certificate Holders From To Certificates Held
1,942 1 100 138,255
815 101 500 200,693
3,128 501 1000 2,079,310
1,094 1001 5000 2,372,950
267 5001 10000 1,853,946
110 10001 15000 1,343,666
31 15001 20000 540,184
29 20001 25000 656,945
16 25001 30000 436,893
11 30001 35000 353,802
5 35001 40000 192,970
5 40001 45000 215,587
4 45001 50000 189,865
6 50001 55000 312,875
3 55001 60000 176,706
3 60001 65000 188,050
10 65001 70000 656,564
2 70001 75000 148,005
3 75001 80000 231,651
1 80001 85000 80,395
1 90001 95000 91,770
1 95001 100000 95,800
1 110001 115000 114,581
1 115001 120000 118,709
1 130001 135000 131,100
1 150001 155000 153,055
2 155001 160000 318,036
1 195001 200000 198,805
1 200001 205000 200,096
1 210001 215000 210,580
1 300001 305000 300,874
1 325001 330000 327,750
1 980001 985000 983,250
1 1015001 1020000 1,017,959
1 1315001 1320000 1,316,750
1 2105001 2110000 2,108,137
1 2620001 2625000 2,622,000
1 3540001 3545000 3,541,436
---------- ---------- ---------- ---------- ---------- ----------
7,504 26,220,000
========== ========== ========== ========== ========== ==========
Categories of Number of Total 
Certificate Holders Certificate Certific- Percentage
 Holders  ates Held
Individuals 7,451 12,327,847 47.02
Investment Companies 7 4,815,687 18.37
Insurance Companies 6 1,121,021 4.27
Joint Stock Companies 21 790,888 3.02
Financial Institutions 18 4,542,557 17.32
Modaraba Company 1 2,622,000 10.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
7,504 26,220,000 100.00
========== ========== ========== ========== ========== ========== ==========
FIRST EQUITY MODARABA
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