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First Ibrahim Modaraba
Annual Report 2000
Contents
Modaraba Information
Directors' Report to the Certificate Holders
Auditors' Report to the Certificate Holders
Balance Sheet
Profit and Loss Account
Statement of Changes in Financial Position
Notes to the Accounts
Pattern of Certificate Holders
Notice of Annual Review Meeting
Modaraba Information
*Board of Directors
Sheikh Mukhtar Ahmed
(Chairman)
Sheikh Mohammad Yaseen
Mohammad Naeem Mukhtar
(Chief Executive)
Abdul Aziz Khan
Anwar-ul-Haque
* Auditors of Modaraba
M/s. M. Yousuf Adil Saleem & Co.
Chartered Accountants,
A-35, Block 7 & 8
K.C.H.S.U.
Shahrah-e-Faisal
Karachi, Pakistan.
* Bankers of Modaraba
A1-Baraka Islamic Bank
Askari Commercial Bank Limited
Emirates Bank International pjsc
Muslim Commercial Bank Limited
Bank Alfalah Limited
* Management Company
Ibrahim Modaraba (Pvt.) Limited
Ibrahim Centre
GK-7/59, Bagh-e-Zehra Street
Kharadar
Karachi, Pakistan.
* Auditors of Management Company
M/s. Saleem Ahsan & Co.
Chartered Accountants,
Ahsan Chamber
8-Syed Mouj Darya (Edward) Road
Lahore, Pakistan.
* Legal Advisor
M/s. Ch. Shahid Mahmood
Advocate
314-S, Block-B
Peoples Colony No. 1
Faisalabad, Pakistan.
* Registered Office/
Certificate Transfer Office
Ibrahim Centre
GK-7/59, Bagh-e-Zehra Street
Kharadar
Karachi, Pakistan.
Directors' Report to the Certificate Holders
We feel pleasure to present before you the 8th Annual Review of First Ibrahim Modaraba together with audited
accounts for the year ended June 30, 2000.
Financial Results
The summarized financial results of your modaraba for the year are furnished hereunder:
				For the
				Year Ended
				June 30,
				2000
				Rupees
Total income				42,131,221
Total expenditures				2,469,770
Profit before management fee				39,661,451
Modaraba company's management fee				3,966,145
Net profit after management fee				35,695,306
Unappropriated profit brought forward				1,996,737
Total profit available for appropriation				37,692,043
Appropriations
Your directors are pleased to recommend
25% cash dividend i.e. Rs. 2.50 per modaraba certificate of
Rs. 10 each out of profits earned.
Proposed dividend				29,000,000
Transfer to special reserve				3,569,531
Unappropriated profit carried forward				5,122,512
The performance of your Modaraba has been good for the year under review. The profit of your modaraba is
Rs. 35,695,306 against profit of Rs. 21,605,977 for the corresponding period of last year reflecting an increase
of 65 %.
General Review
The economic conditions of the country during the year under review remained sluggish. Your modaraba has,
however, ended another year of good performance. The modaraba has maintained steady and balanced growth
showing marked improvement in all its operational activities over the last year. The management of your modaraba
has continued to exercise cautious approach towards employment of funds and adopted strict standards of evaluation
for lending resulting into sound customer base.
Future Prospects
In the perspective of the various measures taken by the government, it is hoped that the economy will be on its
growth track in the coming year. However, the restoration of the confidence and improvement in institutional
perception will take some time. The management of your modaraba will continue its best efforts to employ all available
resources in prudent manner, so as to achieve best possible results for the maximum benefits to certificate holders.
Auditors
The present auditors, M/s. M. Yousuf Adil Saleem & Co. Chartered Accountants, being due for retirement, have
offered themselves for re-appointment for the year ending June 30, 2001. Their appointment has been confirmed
by the Board subject to approval by the Registrar Modaraba.
Acknowledgment
The board expresses its appreciation for continued guidance provided by Securities and Exchange Commission of
Pakistan, Registrar Modaraba, support from certificate holders, banks and dedicated efforts made by the staff.
					On behalf of the Board
Lahore.					Mohammad Naeem Mukhtar
November 16, 2000					Chief Executive
Auditors' Report to the Certificate Holders
We have audited the annexed balance sheet as at June 30, 2000 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, 2000 of FIRST IBRAHIM MODARABA, which are Modaraba Company's (Ibrahim Modaraba
(Private) Limited) representation and we state that we have obtained all the information and explanations
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 IBRAHIM MODARABA as required by the Modaraba Companies and Modaraba
(Floatation and Control) Ordinance, 1980, and Modaraba Companies and Modaraba Rules, 1981; and
b) in our opinion, the balance sheet and the profit & loss account have been drawn up in conformity with the
Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the 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, 2000 and the profit and the changes in financial
position for the year ended on that date;
ii) the business conducted, investment made and expenditure incurred by the Modaraba are in
accordance with the objects, terms and conditions of the Madaraba; and
iii) Modaraba has an effective system of internal control.
d) 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.
Lahore.					M. Yousuf Adil Saleem & Co.
November 16, 2000					Chartered Accountants
Balance Sheet as at June 30, 2000
				2000	1999
			Note	Rupees	Rupees
Capital and Reserves
Certificate capital
Authorized
20,000,000 Modaraba certificates
of Rs. 10/- each				200,000,000	200,000,000
				==========	==========
Issued, subscribed and paid-up			2	116,000,000	116,000,000
Special reserve			3	24,450,804	20,881,273
Unappropriated profit				5,122,512	1,996,737
				------------------	------------------
				145,573,316	138,878,010
Current Liabilities
Short term musharaka			4	15,000,000	--
Management fee payable				3,966,145	2,160,598
Accrued expenses				614,201	30,000
Dividend payable				882,280	625,356
Proposed cash dividend				29,000,000	15,080,000
				------------------	------------------
				49,462,626	17,895,954
				------------------	------------------
				195,035,942	156,773,964
				==========	==========
Operating Fixed Assets			5	710,582	733,101
Security Deposits				200,000	200,000
Current Assets
Investment in securities			6	206,076	7,411,637
Morabaha receivables			7	41,298,000	38,898,000
Musharaka receivables			8	127,000,000	89,000,000
Advances, deposits, prepayments
and other receivables			9	3,511,319	17,430,519
Cash and bank balances			10	22,109,965	3,100,707
				------------------	------------------
				194,125,360	155,840,863
				------------------	------------------
				195,035,942	156,773,964
				==========	==========
The annexed notes from 1 to 21 form an integral part of these accounts.
	Mohammad Naeem Mukhtar		Sheikh Mohammad Yaseen		Abdul Aziz Khan
	Chief Executive		Director		Director
Profit Loss Account
for the year ended June 30, 2000
				2000	1999
			Note	Rupees	Rupees
Profit on Morabahas/Musharakas				25,590,274	24,076,150
Operating expenses
Administrative expenses			11	1,390,065	1,976,658
Financial charges			12	1,003,699	400,432
				------------------	------------------
				2,393,764	2,377,090
				------------------	------------------
Operating profit				23,196,510	21,699,060
Other income			13	16,540,947	2,137,623
				------------------	------------------
				39,737,457	23,836,683
Other charges			14	76,006	70,108
				------------------	------------------
Profit before modaraba company's
management fee				39,661,451	23,766,575
Modaraba company's management fee				3,966,145	2,160,598
				------------------	------------------
Profit before taxation				35,695,306	21,605,977
Provision for taxation
Current year				--	--
Prior year				--	679,050
				------------------	------------------
				--	679,050
				------------------	------------------
Net profit after taxation				35,695,306	20,926,927
Unappropriated profit brought forward				1,996,737	335,195
				------------------	------------------
Profit available for appropriation				37,692,043	21,262,122
Appropriation:
Special reserve				3,569,531	4,185,385
Proposed cash dividend @ 25% (1999: @ 13%)				29,000,000	15,080,000
				------------------	------------------
				32,569,531	19,265,385
				------------------	------------------
Unappropriated profit carried forward				5,122,512	1,996,737
				==========	==========
Earning per certificate			17	3.08	1.80
The annexed notes from 1 to 21 form an integral part of these accounts.
	Mohammad Naeem Mukhtar		Sheikh Mohammad Yaseen		Abdul Aziz Khan
	Chief Executive		Director		Director
Statement of Changes in Financial Position
(Cash Flow Statement) for the year ended June 30, 2000
				2000	1999
				Rupees	Rupees
A. Cash flow from operating activities
Profit before taxation				35,695,306	21,605,977
Adjustments to reconcile profit to net cash
provided by operating activities
Depreciation				80,019	82,788
Financial charges				1,003,699	400,432
				------------------	------------------
Operating profit before working capital changes				36,779,024	22,089,197
				------------------	------------------
Changes in working capital
(Increase)/decrease in current assets
Advances, deposits and prepayments				865,337	(623,239)
Increase/(decrease) in current liabilities
Management fee				1,805,547	583,527
Creditors, accrued and other liabilities				4,338	(88,280)
				------------------	------------------
				2,675,222	(127,992)
				------------------	------------------
Cash generated from operations				39,454,246	21,961,205
Financial charges paid				(423,836)	(400,432)
Gratuity paid				--	( 126,937)
Income tax paid/refunded				13,053,863	(17,764)
				------------------	------------------
Net cash from operating activities				52,084,273	21,416,072
				------------------	------------------
B. Cash flow from investing activities
Investments in securities				7,205,561	6,144,009
Morabaha receivables				(2,400,000)	(3,949,394)
Musharaka receivables				(38,000,000)	(9,000,000)
Addition in Fixed Assets				(57,500)	(59,000)
Security deposits				--	(200,000)
				------------------	------------------
Net cash used in investing activities				(33,251,939)	(7,064,385)
				------------------	------------------
C. Cash flow from financing activities
Dividend paid				(14,823,076)	(11,079,992)
Morabaha/Musharaka finances received/(paid)				15,000,000	(2,500,000)
				------------------	------------------
Net cash from financing activities				176,924	(13,579,992)
				------------------	------------------
Net (decrease)/increase in
cash and cash equivalents (A+B+C)				19,009,258	771,695
Cash and cash equivalents
at the beginning of the year				3,100,707	2,329,012
Cash and cash equivalents at the				------------------	------------------
end of the year				22,109,965	3,100,707
				==========	==========
	Mohammad Naeem Mukhtar		Sheikh Mohammad Yaseen		Abdul Aziz Khan
	Chief Executive		Director		Director
Notes to the Accounts
for the year ended June 30, 2000
1.1 Legal status and nature of business
First Ibrahim Modaraba is a multi purpose, perpetual modaraba formed under the Modaraba Companies
and Modaraba (Floatation and Control) Ordinance, 1980 and rules framed thereunder and is managed
by Ibrahim Modaraba (Pvt.) Limited, a company incorporated in Pakistan under the Companies
Ordinance, 1984 and registered with Registrar of Modaraba Companies and Modaraba under the
Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980. The Modaraba is
listed on stock exchanges in Karachi, Lahore and Islamabad.
1.2 Significant accounting policies
1.2.1 Accounting convention
These accounts have been prepared on the basis of "Historical Cost Convention" and are in
accordance with all applicable International Accounting Standards.
1.2.2 Taxation
Provision for current taxation is based on taxable income at current tax rates after taking into
account tax rebates and tax credit available, if any.
1.2.3 Fixed assets
Fixed assets are stated at cost less accumulated depreciation. Depreciation is charged to income
on the reducing balance method at the rates specified in operating assets note.
Depreciation on additions during the year is charged on the basis of whole year while no
depreciation is charged on deletions during the year.
1.2.4 Marketable securities
Investments in quoted shares are stated at lower of cost or market value determined on an
aggregate portfolio basis.
1.2.5 Revenue recognition
Profit from Morabaha transaction is recognized on pro-rata accrual basis, calculated on number
of days funds were utilized.
Profit on Musharaka investments and finance is accounted for on the basis of the projected rate
of profit. The effect of adjustments, if any, between actual rate and projected rate of profit is
accounted for at the time of determination of the actual rate.
2. Certificate capital -
issued, subscribed and paid-up
Modaraba certificates of Rs. 10/- each
10,000,000	Certificates fully paid in cash			100,000,000	100,000,000
1,600,000	Issued as fully paid bonus certificates			16,000,000	16,000,000
------------------				------------------	------------------
11,600,000				116,000,000	116,000,000
==========				==========	==========
3. Special reserve
This represents the amount set aside out of profit after tax in accordance with Modaraba Rules issued
by Securities & Exchange Commission of Pakistan. Under these rules 10% of profits after tax are to be
transferred to a special reserve till such time that this reserve is equal to paid up fund.
4. Short term musharaka
It represents finance obtained from Fidelity Investment Bank Limited under musharaka arrangement
on profit and loss sharing basis. The estimated share of profit payable on the finance is 17% per annum.
5. Operating fixed assets
			COST			DEPRECIATION
		As at	Addition/	As at	As at	For the	Accumulated	Book value as	Rate
Particulars		01-07-99	(Deletion)	30-06-2000	01-07-99	year	as at 30-60-2000	at 30-06-2000	%
Furniture and fixture		970,871	57,500	1,028,371	454,568	57,380	511,948	516,423	10
Office equipment		238,088	--	238,088	84,142	15,395	99,537	138,551	10
Vehicles		40,265	--	40,265	30,673	1,918	32,591	7,674	20
Computer		104,525	--	104,525	51,265	5,326	56,591	47,934	10
		------------------	------------------	------------------	------------------	------------------	------------------	------------------
2000- Rupees		1,353,749	57,500	1,411,249	620,648	80,019	700,667	710,582
		==========	==========	==========	==========	==========	==========	==========
1999- Rupees		1,294,749	59,000	1,353,749	537,860	82,788	620,648	733,101
		==========	==========	==========	==========	==========	==========	==========
6. Investment in securities
			2000		1999
			Cost	Market Value	Cost	Market Value
			Rupees	Rupees	Rupees	Rupees
Shares of quoted companies		(6.1)	--	--	7,205,561	9,529,980
Other quoted certificates		(6.2)	206,076	323,830	206,076	232,180
			------------------	------------------	------------------	------------------
			206,076	323,830	7,411,637	9,762,160
			==========	==========	==========	==========
6.1 Shares of quoted companies
Associated companies
Muslim Commercial Bank Ltd.
127,999 fully paid ordinary
shares of Rs. 10/- each			--	--	2,380,781	2,566,380
Ibrahim Fibres Ltd.
994,800 fully paid ordinary
shares of Rs. 10/each			--	--	4,824,780	6,963,600
			------------------	------------------	------------------	------------------
			--