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First Ibrahim Modaraba
Annual Report 1999
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 Holdings
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
Al-Baraka Islamic Bank
Askari Commercial Bank Limited
Emirates Bank International pjsc
Muslim Commercial Bank 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. Khurshid Law Associates
Advocates
158, District Courts
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 7th Annual Review of First Ibrahim Modaraba together with audited     
accounts for the year ended June 30, 1999.
Financial Results     
The summarized financial results of your modaraba for the year are furnished hereunder:     
For the
Year Ended  
June 30,
1999
Rupees
Total income 26,213,773
Total expenditures 2,447,198
Profit before management fee 23,766,575
Modaraba company's management fee 2,160,598
Profit before taxation 21,605,977
Provision for taxation (prior year) 679,050
Net profit ahar taxation 20,926,927
Unappropriated profit brought forward 335,195
Total profit available for appropriation 21,262,122
Appropriations
Your directors are pleased to recommend 13 % dividend i.e. Rs. 1.30
per modaraba certificate of Rs. 10 each out of profits earned.
Proposed dividend 15,080,000
Transfer to special reserve 4,185,385
Unappropriated profit carried forward 1,996,737
Earning per certificate 1.80
The performance of your Modaraba during the year under review has been satisfactory. The profit after management
fee increased by 37% when compared with the previous year despite overall slump in economy.
General Review
The year under review was a difficult one due to overall depressed economic activity. Most of the key indicators
registered decline in almost all business sectors. However, your modaraba has kept its progressive growth during
the year showing improvements in business volume as well as in profit. The management of your modaraba has
continued to maintain its policy of prudent and cautious business of musharaka and morabaha resulting into
steady profit generation with no default in the recovery.
Future Prospects
The economic indicators are not very encouraging, however, we expect a positive change in the coming months.
The management of your modaraba will continue its efforts to consolidate the position in current economic
situation and will explore all opportunities for its further growth.
Solution of Year 2000 Problem
All the computer systems of your modaraba including hardware and software are fully Y2K complaint.
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, 2000. 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
Place: Lahore. Mohamrnad Naeem Mukhtar
Date: November 15, 1999. Chief Executive
Auditors' Report to the Certificate Holders
We have audited the annexed balance sheet as at June 30, 1999 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, 1999 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 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, 1999 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
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.
Place: Lahore. M. Yousuf Adil Saleem & Co.
Date: November 15, 1999. Chartered Accountants
Balance Sheet 
as at June 30, 1 9 9 9
1999 1998
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 20,881,273 16,695,888
Unappropriated profit 1,996, 737 335,195
------------------- -------------------
138,878,010 133,031,083
Deferred Liabilities
Gratuity -- 126,937
Current Liabilities
Short term loan 4 -- 2,500,000
Management fee payable 2,160,598 1,577,071
Accrued expenses 30,000 118,280
Provision for taxation -- 3,973,989
Dividend payable 212,462 105,348
Proposed cash dividend 15,080,000 11,600,000
------------------- -------------------
17,483,060 19,874,688
------------------- -------------------
156,361,070 153,032,708
=========== ===========
Operating Fixed Assets 5 733,101 756,889
Security Deposits 200,000 --
Current Assets
Investment in securities 6 7,411,637 13,555,646
Morabaha receivables 7 38,898,000 34,948,606
Musharaka receivables 8 89,000,000 80,000,000
Advances, deposits, prepayments
and other receivables 9 17,430,519 21,442,555
Cash and bank balances 10 2,687,813 2,329,012
------------------- -------------------
155,427,969 152,275,819
------------------- -------------------
156,361,070 153,032,708
=========== ===========
The annexed notes from 1 to 20 form an integral part of these accounts.
Chief Executive Director Director
Profit and Loss Account
for the year ended June 30,  1999
1999 1998
Note Rupees Rupees
Profit on Morabahas/Musharakas 24,076,150 22,278,366
Operating expenses
Administrative expenses 11 1,976,658 2,217,997
Financial charges 12 470,540 472,840
------------------- -------------------
2,447,198 2,690,837
Operating profit 21,628,952 19,587,529
Other income 2,137,623 1,968,898
------------------- -------------------
23,766,575 21,556,427
Other charges 13 -- 4,208,650
Profit before modaraba company's
management fee 23,766,575 17,347,777
Modaraba company s management fee 2,160,598 1,577,071
------------------- -------------------
Profit before taxation 21,605,977 15,770,706
Provision for taxation
Current year -- 1,971,338
Prior year 679,050 --
------------------- -------------------
679,050 1,971,338
------------------- -------------------
Net profit after taxation 20,926,927 13,799,368
Unappropriated profit brought forward 335,195 895,701
------------------- -------------------
Profit available for appropriation 21,262,122 14,695,069
Appropriation:
Special reserve 4,185,385 2,759,874
Proposed cash dividend @ 13 % (1998: @ 10%) 15,080,000 11,600,000
------------------- -------------------
19,265,385 14,359,874
------------------- -------------------
Unappropriated profit carried forward    1,996,737 335,195
=========== ===========
Earning per certificate 1 6 1.8 0 1.19
The annexed notes from 1 to 20 form an integral part of these accounts.
Chief Executive Director Director
Statement of Changers in Financial Position
(Cash Flow Statement) for the year ended June 30,1999
1999 1998
Rupees Rupees
A. Cash flow from operating activities
Profit before taxation 21,605,977 15,770,706
Adjustments to reconcile profit to net cash
provided by operating activities
Gratuity - 42,537
Depreciation 82,788 85,763
Amortization - 361,268
Financial charges 470,540 472,840
------------------- -------------------
Operating profit before working capital changes 22,159,305 16,733,114
=========== ===========
Changes in working capital
(Increase)/decrease in current assets  
Advances, deposits and prepayments (623,239) (307,162)
Increase/(decrease) in current liabilities   
Management fee 583,527 (25,050)
Creditors, accrued and other liabilities (88,280) 48,381
------------------- -------------------
( 127,992 ) ( 283,831 )
Cash generated from operations 22,031,313 16,449,283
Financial charges paid (470,540) (472,840)
Gratuity paid (126,937) -
Income tax paid (17,764) (68,738)
------------------- -------------------
Net cash from operating activities 21,416,072 15,907,705
=========== ===========
B. Cash flow from investing activities
Investments in securities 6,144,009 2,947,384
Morabaha receivables (3,949,394) (5,448,606)
Musharaka receivables (9,000,000) (14,000,000)
Addition in Fixed Assets (59,000) -
Security deposits (200,000) -
Proceeds from disposal of fixed assets - 127,719
------------------- -------------------
Net cash used in investing activities (7,064,385) (16,373,503)
------------------- -------------------
C. Cash flow from financing activities
Dividend paid (11,492,886) (10,780,849)
Morabaha finances received - 2,500,000
Marabaha finance paid (2,.500,000) -
------------------- -------------------
Net cash from financing activities (13,992,886) (8,280,849)
------------------- -------------------
Net (decrease)/increase in
cash and cash equivalents (A+B+C) 358,801 (8,746,647)
Cash and cash equivalents
at the beginning of the year 2,329,012 11,075,659
Cash and cash equivalents at the ------------------- -------------------
end of the year 2,687,813 2,329,012
=========== ===========
Chief Executive Director Director
Notes to the Accounts
for the year ended June 30, 1999
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".
1.2.2 Staff retirement benefits
The company operates an unfunded gratuity scheme covering all its employees. Provision is
made annually to cover the liability under the scheme.
1.2.3 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.
1.2.4 Fixed assets
Fixed assets are stated at cost less accumulated depreciation. Depreciation is charged to incotne
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.
1.2.5 Marketable securities
Investments in quoted shares are stated at lower of cost or market value determined on an
aggregate portfolio basis.
1.2.6 Revenue recognition
Sales are recognized on despatch of goods to customers.
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.
1999 1998
Rupees Rupees
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 State Bank of Pakistan
NBFI Circular No. 1 dated December 05, 1991 under this circular 20% of profits after tax are to be
transferred to a special reserve till such time that this reserve is equal to paid up capital.
4. Short term loan
It was a Morabaha facility received from First Hajveri Modaraba secured against hypothecation of
stocks & assets, promissory note and personal guarantee of directors of the Modaraba. Profit is charged
@ 23% per annum.
5. Operating fixed assets
C O S T                DEPRECIATION
Book Value
As at As at as at Accumulated
P a r t i c u 1 a rs July 01, Additions/ June 30, June 30, as at Charge for Rate
1998 (Deletion) 1999 1999 June 30, 1999 the year (%)
Furniture and fixture 970,871 -- 970,871 516,303 454,568 57,367 10
Office equipment  283,613 59,000 342,613 207,206 135,407 23,023 10
Vehicles   40,265 -- 40,265 9,592 30,673 2,398 20
------------------- ------------------- ------------------- ------------------- ------------------- -------------------
1999- Rupees   1,294,749 59,000 1,353,749 733,101 620,648 82,788
=========== =========== =========== =========== =========== ===========
1998.- Rupees   1,641,209  (346,460)   1,294,749 756,889 537,860 85,763
=========== =========== =========== =========== =========== ===========
6. Investment in securities
1999 1998
Cost Market Value Cost Market Value
Rupees Rupees Rupees Rupees
Shares of quoted companies (6.1)   11,052,943 9,529,980 16,952,943 13,349,570
Other quoted certificates     (6.2)     206,076 232,180 450,085 206,076
------------------- ------------------- ------------------- -------------------
11,259,019 9,762,160 17,403,028 13,555,646
Less: Provision for diminution
in value of investments 3,847,382 -- 3,847,382 --
------------------- ------------------- ------------------- -------------------
7,411,637 9,762,160 13,555,646 13,555,646
=========== =========== =========== ===========
6.1 Shares of quoted companies
Associated companies
Muslim Commercial Bank Ltd.
127,999 fully paid ordinary
shares of Rs. 10/- each    4,735,963 2,566,380 4,735,963 2,380,781
Ibrahim Fibres Ltd.
994,800 fully paid ordinary
shares of Rs. 10/each   6,316,980 6,963,600 6,316,980 4,824,780