First IBL ModarabaHALF YEARLY REPORT DECEMBER 31, 2017

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Table of Contents

1- Corporate Information

2- Directors’ Report (English & Urdu)

3- Shari’ah Adviser Report

4- Auditor’s Report

5- Balance Sheet

6- Profit & Loss Account

7- Statement of Comprehensive Income

8- Cash Flow Statement

9- Statement of Changes in Equity

10- Notes to the Accounts

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CORPORATE INFORMATION

Modaraba Management Company IBL Modaraba Management (Pvt.) Limited

Board of Directors Dr. Hasan Sohaib Murad Chairman/ CEOShaheen Rashid DirectorArslan Khan Khakwani Director

Naveed Amin

Director

Chief Operating Officer

Shiraz Butt

Company Secretary

Hassan Fareed

Chief Financial Officer

Zeeshan Ahmed

Internal Auditor

Hasnain Shafqat

Audit Committee

Naveed Amin

Chairman

Shaheen Rashid

Member Arslan Khan Khakwani Member

Muhammed Ilyas Secretary

Sharia’ah Advisor

Dr. Salman Ahmed Khan

Legal Advisor

M/s. Holscott International [Legal Services]

Auditors to Modaraba

M/s. Horwath Hussain Chaudhry & Co.

Charted Accountants

Bankers

Habib Bank Limited –

Islamic Banking

Meezan Bank Limited

MCB Islamic Bank Limited

Registrar

Corp Tec Associates (Pvt.) Limited503 E, Johar Town, Lahore.

Registered Office Room #1, 87 Aurangzeb BlockNew Garden Town, Lahore.

Principal Office 87 Aurangzeb Block, New Garden Town, Lahore.

1

The Board of Directors of M/s IBL Moadaraba Management (Private) Limited [IBLMM], the Management Company of First IBL Modaraba [FIBLM], is pleased to present the half yearly reviewed (un audited) results of First IBL Modaraba for the period ended December 31, 2017 along with Directors’ Report to its certificate holders.

During the reporting period modaraba showed tremendous progress. There is an increase of 173% in net profit for the period ended December 31, 2017 which shows the heartily efforts of management for showing better profits for its certificate holders.

Major source of income and their contribution are Ijarah (63%), musharikah (18.27%), murabaha (0.14%) and investment property (17.89%).

Despite of inflationary effect and day by day increasing cost of operations there was meagre increase of 1.20% in total expenses. Total expenses were stood at Rs. 18.586 million as compare to Rs. 18.632 million in the preceding period.

In order to enhance business FIBLM invested Rs. 5.874 million in ijarah segments, Rs. 35.6 million in Musharikah segments and Rs. 1 million in Murabaha segments. The managementforesee further improvement in this in near future.

To enhance equity base, FIBLM during the period under review has started the process of further issue of certificates other than rights, amount of Rs. 15 million has already received in this regards and reported under the head of short term borrowing.

FIBLM team is putting its best efforts to recover the un verifiable receivables and it is probable that we will get positive response from our debtors in near future.

For sustainability and to increase profitability of modaraba, the management is putting its best efforts and the result is evident from the current period financial results. Further the management is working on different business plans and implementing new

improved business methodologies and approaches to get better results.

Acknowledgement:

The board would like to express its gratitude to the Securities & Exchange Commission of Pakistan, Registrar Modarabas, State Bank of Pakistan and NBFI & Modaraba Association of Pakistan for providing us their usual support and guidance.

The board appreciates and pays gratitude to its certificate holders and customers for entrusting their confidence on us and assure them maintenance of adequate internal controls, personalize services and also to maintain an ideal environment of good corporate governance in all areas of the activities.

The Board also appreciates

team of the Modaraba for their dedication and hard work for the growth of the Modaraba in all areas of its activities.

for & On behalf ofThe Board of Directors of IBL Modaraba Management (Pvt.) Limited:

Dr. Hasan Sohaib MuradChairmanFebruary 20, 2018

2

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18.586

4

February 20, 2018

5

February 20, 2018

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CHIEF EXECUTIVE DIRECTOR DIRECTOR

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CHIEF EXECUTIVE DIRECTOR DIRECTOR

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Items that may be reclassified subsequently to profit & loss

Other comprehensive income

CHIEF EXECUTIVE DIRECTOR DIRECTOR

8

Half Year Ended Half Year Ended

December 31, December 31,2017 2016

2,358,900 863,078

322,086

244,872

2,500,014

2,500,014

6,056,217

6,311,461

-

41,664

-

(492,561)

-

(1,746,548)

-

(763,089)

(59,219)

(1,279,899)

-

(103,659)

8,819,098

4,712,255

11,177,998

5,575,333

18,730

2,164,384

(3,275,681)

492,007

(1,038,626)

(2,224,413)

(730,768) 18,340,882

1,834,740 2,344,205 (667,295) (678,523)

(3,858,900)

20,438,542

7,319,098

26,013,875

(47,654)

(109,681)

59,219

1,279,899

7,330,663

27,184,093

(5,874,500)

(7,082,100)

(141,990)

(246,550)

-

6,882,582

345,258

(38,000,000)

90,000

-

-

103,659

(5,581,232)

(38,342,409)

-

(2,500,000)

-

5,000,000

(6,089,046)

(5,695,762)

(6,089,046)

(3,195,762)

(4,339,615) (14,354,078)

13,917,457 20,702,418

9,577,842 6,348,340

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax

Adjustments for:- Depreciation of fixed assets under own use- Depreciation of investment properties- Depreciation of fixed assets under ijarah arrangements- Amortization of intangible asset- Provision in respect of profit on musharaka facilities- Reversal of provision in respect of musharaka facilities- Revaluation (gain) on investment at fair value through profit or loss- Profit on bank deposits- Dividend income

Operating profit before working capital changes

(Increase) / Decrease in operating assets and liabilities

Advances, prepayments and other receivables

Ijarah rentals receivable

Musharaka receivables

Long term murabaha receivable

Long term security deposits - ijarah

Creditors, accrued and other liabilities

Net cash (used in) / generated from changes in working capital

Cash Generated from Operations

Income taxes paid

Profit received on bank deposits

Net Cash Generated from Operating Activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets under ijarah arrangements

Purchase of fixed assets under own use

Proceeds from disposal of assets on termination / completion of ijarahs

Short term investments - net

Long term loans and deposits

Dividend income received

Net Cash Used in Investing Activities

CASH FLOW FROM FINANCING ACTIVITIES

Musharaka finances repaid

Short term borrowing

Dividends paid

Net Cash used in Financing Activities

Net Decrease in Cash and Cash Equivalents

Cash and cash equivalents at the beginning of the period

Cash and Cash Equivalents at the end of the Period

The annexed notes form an integral part of this condensed

interim financial information (un-audited).

CHIEF EXECUTIVE DIRECTOR DIRECTOR

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CHIEF EXECUTIVE DIRECTOR DIRECTOR

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Note 1

General Information

Note 2

Basis of Preparation

2.1

2.2

2.3

2.4

2.5

Note 3

Accounting Policies

Note 4

Taxation

First IBL Modaraba ("the Modaraba") is a multi purpose, perpetual and multi dimensional Modaraba formed under the

Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and rules framed thereunder, having its

registered office at Room # 1, 87 Aurangzeb Block, New Garden Town, Lahore. The Modaraba is managed by IBL

Modaraba Management (Private) Limited (Modaraba Management Company) incorporated in Pakistan under the

Companies Ordinance, 1984 and registered with the Registrar of Modaraba Companies. The Modaraba is domiciledin

Pakistan and its certificates are listed on Pakistan Stock Exchange Limited (PSX). The Modaraba commenced its

operations on October 19, 1989 and is currently engaged in various Islamic modes of financing and operations

including Ijarah, Musharaka and Murabaha arrangements.

This condensed interim financial information has been prepared in accordance with the directives issued by the

Securities & Exchange Commission of Pakistan (SECP) and is in compliance with the International Accounting

Standard - 34 (Interim Financial Reporting) and being submitted to certificate holders as required under law.

This financial information should be read in conjunction with annual audited financial statements for the year

ended June 30, 2017. Comparative balance sheet is extracted from annual audited financial statements for the

year ended June 30, 2017; whereas, comparative profit and loss account, statement of comprehensive income,

cash flows statement and statement of changes in equity are extracted from unaudited interim financial

information for the half year ended on December 31, 2017.

This financial information has been prepared under the historical cost convention, except for short term

investments that are measured at fair value in accordance with the requirements of International Accounting

Standard - 39 (Financial Instruments: Recognition and Measurement).

This condensed interim financial information is unaudited. However, a limited scope review of this interim

financial information has been performed by the external auditors of the Modaraba in accordance with the

requirements of the Code of Corporate Governance and they have issued their review report thereon.

This condensed interim financial information is presented in Pak Rupees, which is the Modaraba's functional

and presentational currency. All the figures have been rounded off to the nearest Pak Rupees unless stated

otherwise.

The accounting policies adopted for the preparation of this condensed interim financial information are consistent with

those applied in the preparation of annual audited financial statements of Modaraba for the year ended June 30, 2017.

Under the current tax law, the income of non-trading modarabas is exempt from tax provided that they distribute

ninety (90) percent of their profits as cash dividend to the certificate holders out of current period's total profit after

appropriating statutory reserves. Where such profits are not distributed, provision for tax is made on taxable income at

the current tax rates applicable to Modaraba after taking into account the available tax exemptions and tax credits, if

any. As the management is intending to follow the aforesaid policy for profit distribution for the current year, no

provision with respect to current and deferred taxation has been made in these condensed interim financial

statements.

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9.1 Written down value at the beginning of the period / year 333,646

780,032

Additions at cost 2,374,990 246,550

Less: Written down value of assets disposed off - (1,545,510) 2,708,636 (518,928)

Less: Depreciation charged during the period / year (322,086) 852,574 2,386,550

333,646

3,546,725 3,546,725 35,467,250 35,467,250

Note 9

Fixed Assets Under Own Use

Operating fixed assets 9.1 2,386,550 333,646 Capital work in progress - Advance for purchase of vehicle -

2,233,000

2,386,550

2,566,646

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CHIEF EXECUTIVE DIRECTOR DIRECTOR

Murabaha receivable and profit on murabaha receivable

Engineering 754,300 - - -

Musharaka receivable and profit on musharaka receivable

Media advertising 33,020,304

45.0

37,736,695

52.8

Construction 23,350,814

32.0

27,811,734

39.0

Individual 17,075,948

23.0

5,863,086

8.2

73,447,066

100.00

71,411,515

100.00

Ijarah receivable

Medical and pharmaceuticals - - 67,483 17.9

Media advertising 2,903,550 79.5 4,200 1.1 Individuals 695,949 19.1 138,750 36.9 Others 52,545

1.4

165,930

44.1 3,652,044

100.00

376,363

100.00

Investment in ijarah under (IFAS-2)

Individuals 19,052,589

45.30

21,118,131

49.9

Medical and pharmaceuticals 1,439,752

3.40

1,484,196

3.5

Media advertising 11,536,312

27.40

13,827,979

32.7

Leasing 283,906

0.70

283,906

0.7

Hotel 120,000

0.30

120,000

0.3

Engineering 60,000 0.10 60,000 0.1

Others 9,612,809 22.80 5,392,873 12.842,105,368 100.00 42,287,085 100.00

February 20, 2018.

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