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040706
SECURITIES AND EXCHANGE
COMMISSION OF PAKISTAN
SPECIALIZED COMPANIES DIVISION
No. SC/M/RS/PR/2004-966 July 5, 2004
Subject: Prudential Regulations for Modarabas
Attention is invited to Clause 5 (1) B of Part III of Prudential Regulations for Modarabas issued vide Circular No. 4 of 2004 dated January 28, 2004. In view of practical difficulties being faced by the industry and on representation of the industry association, the following amendment in clause 5 (1) B of Part III of the Prudential Regulations for Modarabas is made with immediate effect and until further orders:
| CLASSIFICATION | DETERMINANT |
TREATMENT OF INCOME |
PROVISIONS TO BE MADE |
| (1) | (2) | (3) | (4) |
|
1. OAEM (Other Assets Especially Mentioned). |
Where rental, mark-up/ interest/profit or principal is overdue (past due) by 180- days from the due date. |
Unrealized markup/ interest/profit to be put in Suspense Account and not to be credited to Income Account except when realized in cash |
No Provision is required.
|
With respect to the above change, all Modarabas shall also adhere to the following:
(i) In case where a medium or a long term financing facility has one year or less than one year of remaining maturity, it will be classified in accordance with the directions given in clause 5 (1) (A) of Part III of Prudential Regulations for Modarabas which details the classification guidelines for Short Term Financing Facilities.
(ii) In case of a medium or long term financing facility for Computers or other equipment used in Information Technology, which has high obsolescence, the directions given in clause 5 (1) (A) of Part III of Prudential
Regulations for Modarabas will be followed.
(Akbar Shah)
Registrar
Modaraba Companies and Modaraba
Distribution:
1. Chief Executives of all
Modaraba Companies.
2. Managing Directors of all Stock Exchanges.
3. The President, Institute of Chartered Accountants of Pakistan.
4. The President, Institute of Cost & Management of Accountants.
5. Modaraba Association of Pakistan
6. Central Desk Incharge, Associated Press of Pakistan.
7. Press Information Department.
8. Director (I.T), SEC.
9. Office copy.
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