First Imrooz Modaraba : Transmission of Quarterly Report for 1st Quarter Ended September 30, 2023

QUARTERLY ACCOUNTS

For the period ended September 30, 2023

(Un-Audited)

Managed By

A R Management Services (Private) Limited

MODARABA INFORMATION

Modaraba Management Company	A R Management Services (Private) Ltd.
Directors of Modaraba Company	Mr. Naveed Riaz - Chief Executive
	Mrs. Saadat Ikram
	Mr. Ameed Riaz
	Mr. Omar Mohammad Khan
	Mr. Aliuddin Ahmed
Chief Financial Officer	Mr. Muhammad Ali Baig
Audit Committee	Mr. Aliuddin Ahmed (Chairman)
	Mr. Omar Mohammad Khan (Member)
	Mrs. Saadat Ikram (Member)
Human Resource Committee	Mr. Aliuddin Ahmed (Chairman)
	Mr. Omar Mohammad Khan (Member)
	Mrs. Saadat Ikram (Member)
	Mr. Ameed Riaz (Member)
Company Secretary	Mr. Shabbir Ahmed Jamsa
Chief Internal Auditor	Mr. Abbas Kerani
Auditors	M/s. BDO Ebrahim & Co.
	Chartered Accountants
Bankers	Soneri Bank Limited
	Bank Alfalah Limited
	Bank AL Habib Limited
Legal Advisors	Mr. Masood Aziz Advocate
	Masood Aziz & Associates
Shariah Advisor	Mufti Abdul Qadir
Principal place of business	Room No. 405, 4th Floor
	Beaumont Plaza, Beaumont Road
	Civil Lines Quarters, Karachi.
Registered Office of the Modaraba Company	125-S, Small Industrial Area
	Kot Lakhpat, Lahore.
Certificate Registration Office	F.D. Registrar Services (Pvt) Limited
	17th Floor, Saima Trade Tower-A
	I.I. Chundrigar Road, Karachi.

REPORT OF THE DIRECTORS

The Board of Directors of A R Management Services (Private) Limited, the management company of First Imrooz Modaraba is pleased to present the condensed interim un-audited financial statements for the first quarter ended on September 30, 2023.

1. Financial Highlights

Financial results of the Modaraba are summarized as under:

		(Rupees in million)
		Three months ended
		30-Sep-23	30-Sep-22
Sales		351.81	222.65
Gross profit / (loss)		68.96	(3.87)
Operating expenses		20.82	24.38
Other income		0.27	1.28
Profit / (Loss) for the quarter		23.82	(39.16)
Earnings per certificate - basic & diluted	(Rupees)	7.94	(13.05)

1. Review of Operations
   During the quarter under review, the Modaraba's turnover increased 58% to Rs. 351.81 million when compared with the corresponding quarter FY 2023 and was largely supported by a 28% increase in sales volume.
   Due to prudent management, operating expenses decreased by 15% to Rs. 20.82 million in comparison to the corresponding quarter FY 2023. Thus, the quarter ended with profit after taxation of Rs 23.82 million and an Earnings Per Certificate of Rs. 7.94.
   The management has a positive outlook for the future due to the relatively stable exchange rate and continuing sales momentum.
2. Acknowledgement
   The Board wishes to express its thanks for continued guidance and support extended by the Registrar Modaraba and other officials of Securities and Exchange Commission of Pakistan. The Board also wishes to thank its certificate holders, bankers, business partners and the employees of the Modaraba for their continued support and co-operation.

For and on behalf of the Board

Naveed Riaz	Ameed Riaz
Chief Executive	Director
October 30, 2023

CONDENSED INTERIM BALANCE SHEET

AS AT SEPTEMBER 30, 2023

September 30,

2023

Rupees

Note (Un-audited)

ASSETS

NON CURRENT ASSETS

June 30,

2023

Rupees

(Audited)

Property and equipment

4

Intangible assets

Long term deposits

Deferred Tax

CURRENT ASSETS

Stock in trade

Trade debtors

Advances, deposits and prepayments

Taxation

Cash & bank balances

TOTAL ASSETS

EQUITY AND LIABILITIES

CAPITAL AND RESERVES

13,023,565

1,268,272

598,202

-

14,890,039

256,997,751

268,099,406

3,589,673

16,161,842

13,928,110

558,776,782

573,666,821

14,006,740

1,398,496

598,202

-

16,003,438

378,194,924

311,212,675

8,764,577

16,728,957

52,255,980

767,157,113

783,160,551

Authorised Capital
10,000,000 Modaraba Certificates of Rs. 10 each		100,000,000
Issued, subscribed and paid-up certificate capital		30,000,000
Statutory reserve		118,733,257
Revenue reserve		24,631,603
		173,364,860
NON-CURRENT LIABILITIES
Defined benefit plan - Staff gratuity		6,719,947
Obligation under financing facilities - Secured	5	1,270,227
		7,990,174
CURRENT LIABILITIES
Current portion of obligation under financing facilities - Secured	5	140,609,676
Qard-e-Hasana from Modaraba Management Company		63,000,000
Creditors, accrued and other liabilities		188,702,110
		392,311,786
TOTAL EQUITY AND LIABILITIES		573,666,821
CONTINGENCIES AND COMMITMENTS	6

100,000,000

30,000,000

118,733,257

15,806,157

164,539,414

6,719,947

1,422,655

8,142,602

140,609,676

-

469,868,859

610,478,535

783,160,551

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

For A R Management Services (Private) Limited

(Modaraba Management Company)

NAVEED RIAZ	OMAR MOHAMMAD KHAN	MRS. SAADAT IKRAM	MUHAMMAD ALI BAIG
CHIEF EXECUTIVE	DIRECTOR	DIRECTOR	CHIEF FINANCIAL OFFICER

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023

	Quarter ended
	Jul - Sep		Jul - Sep
	2023	2022
	Rupees		Rupees
Sales	351,813,285	222,649,509
Cost of sales	(282,844,887)		(226,521,163)
Gross profit / (loss)	68,968,398	(3,871,655)
Operating expenses	(20,823,874)		(24,383,738)
Operating profit / (loss)	48,144,524	(28,255,392)
Financial charges	(8,983,003)	(2,597,216)
Other income	265,192	1,280,768
	39,426,713	(29,571,840)
Provision for Modaraba Management Company's fee	-	-
Provision for Sindh Workers' Welfare Fund	(789,677)		-
Profit / (Loss) before taxation	38,637,036	(29,571,840)
Taxation	(14,811,590)		(9,592,979)
Net Profit / (Loss) for the period	23,825,446	(39,164,819)
Other Comprehensive Income	-		-
Total Comprehensive Income / (Loss)	23,825,446		(39,164,819)
Earnings / (Loss) per certificate - basic & diluted	7.94		(13.05)

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023

	Paid-up
	certificate
Balance at June 30, 2022	30,000,000
Comprehensive income for the period: July 2022 to Sept 2022
Loss for the period	-
Other comprehensive income	-
Balance as at September 30, 2022	30,000,000
Profit distribution for the year ended
June 30, 2022 @ Rs. 5.50 per certificate	-
Comprehensive income for the period: Oct 2022 to Jun 2023
Profit for the period	-
Other comprehensive income	-
Balance at June 30, 2023	30,000,000
Comprehensive loss for the period: July 2023 to Sept 2023

Statutory		Revenue reserve
	Unappropriated
reserve
	profit
	Rupees

118,733,257	35,003,813
-	(39,164,819)
-		-
118,733,257		(4,161,006)
-	(16,500,000)
-	36,467,164
-		-
118,733,257	15,806,157

Total

183,737,070

(39,164,819)

-

144,572,251

(16,500,000)

36,467,164

-

164,539,414

Proft for the period	-	-	23,825,446	23,825,446
Other comprehensive income	-	-	-	-
Profit distribution for the year ended
June 30, 2023 @ Rs. 5/- per certificate	-	-	(15,000,000)	(15,000,000)
Balance as at September 30, 2023	30,000,000		118,733,257		24,631,603		173,364,860

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

For A R Management Services (Private) Limited

(Modaraba Management Company)

NAVEED RIAZ	OMAR MOHAMMAD KHAN	MRS. SAADAT IKRAM	MUHAMMAD ALI BAIG
CHIEF EXECUTIVE	DIRECTOR	DIRECTOR	CHIEF FINANCIAL OFFICER

CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023

Quarter ended

Sept. 30,	Sept. 30,
2023	2022
Rupees	Rupees

1. CASH FLOWS FROM OPERATING ACTIVITIES Profit / (Loss) before taxation
   Adjustments for non-cash and other items: Depreciation
   Amortization of intangible assets Financial Charges
   Amortization of deferred capital grant Provision for staff retirement gratuity (Gain) on disposal of property and equipement
   Operating profit / (loss) before working capital changes
   Changes in operating assets and liabilities Decrease / (Increase) in current assets
   Stock in trade Trade debtors
   Advances, deposits, prepayments and other receivables
   (Decrease) / Increase in current liabilities Creditors, accrued and other liabilities
   Cash (used in) / generated from operations Financial charges paid
   Income Taxes paid Staff Gratuity paid
   Net cash (used in) / generated from operating activities

38,637,036

983,175

130,224

8,983,003

-

-

(15,000)

10,081,402

48,718,438

121,197,173

43,113,269

5,174,904

169,485,346

(300,166,321)

(81,962,537)

(4,983,431)

(14,244,475)

-

(101,190,443)

(29,571,840)

710,746

81,899

2,597,216

(19,267)

150,370

(1,200,000)

2,320,964

(27,250,877)

(547,897,390)

20,162,240

14,530,680

(513,204,470)

573,485,604

33,030,257

(2,728,772)

(5,204,510)

(1,300,616)

23,796,360

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

Proceeds from disposal of property and equipment

Net cash generated from investing activities

1. CASH FLOWS FROM FINANCING ACTIVITIES
   Receipts of Qard-e-Hasana from Modaraba Management Company Repayment of Qard-e-Hasana to Modaraba Management Company Receipts from Musawamah finances
   Repayment of Musawamah finances Repayment of Salam finances Receipts from Musharaka finances Repayment of Musharaka finances
   Net cash generated from / (used in) financing activities

Net (decrease) / increase in cash and bank balances A+B+C

Cash and bank balances at the beginning of the period

Cash and bank balances at the end of the period

-

15,000

15,000

133,000,000

(70,000,000)

95,000,000

(95,000,000)

-

438,692,093

(438,844,521)

62,847,573

(38,327,870)

52,255,980

-

13,928,110

(235,435)

1,200,000

964,565

58,500,000

(75,000,000)

55,000,000

(55,000,000)

(688,298)

-

(3,110,311)

(20,298,609)

4,462,315

5,020,220

9,482,535

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

For A R Management Services (Private) Limited

(Modaraba Management Company)

NAVEED RIAZ	OMAR MOHAMMAD KHAN	MRS. SAADAT IKRAM	MUHAMMAD ALI BAIG
CHIEF EXECUTIVE	DIRECTOR	DIRECTOR	CHIEF FINANCIAL OFFICER

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023

1 NATURE AND STATUS OF BUSINESS

1. First Imrooz Modaraba (the Modaraba) was formed on September 27, 1993 under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980) and the Rules framed there under and is managed by A R Management Services (Private) Limited. The Modaraba commenced its commercial operations from March 01, 1994. The Modaraba is listed on Pakistan Stock Exchange.
2. The principal place of the business of the Modaraba is situated at room No. 405, 4th Floor, Beaumont Plaza, Beaumont Road, Civil Line Quarters, Karachi, in the province of Sindh, Pakistan.
3. It is a multi purpose, perpetual Modaraba and is mainly engaged in domestic and international trading activities.

2 BASIS OF PREPARATION

2.1 Statement of compliance

1. This condensed interim financial information has been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of International Accounting Standard (IAS) 34 - Interim Financial Reporting, Islamic Financial Accounting Standards (IFAS) as notified under the provisions of the Companies Act, 2017 and made applicable to Modarabas, Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, the Modaraba Companies and Modaraba Rules, 1981 and directives issued by the Securities and Exchange Commission of Pakistan (SECP) ['the Modaraba Regulations'].
   Wherever the requirements of 'the Modaraba Regulations' differ from the requirements of International Accounting Standard (IAS) 34 - Interim Financial Reporting and Islamic Financial Accounting Standards (IFAS) as notified under the provisions of the Companies Act, 2017 and made applicable to Modarabas, requirements of 'the Modaraba Regulations' have been followed.
2. The disclosures made in this condensed interim financial information have, however, been limited based on the requirements of IAS 34. This condensed interim financial information does not include all the information and disclosures required in a full set of financial statements and should be read in conjunction with the annual published audited financial statements of the Modaraba for the year ended June 30, 2023.
3. The comparative statement of balance sheet presented in this condensed interim financial information has been extracted from the annual audited financial statements of the Modaraba for the year ended June 30, 2023, whereas the comparative condensed interim profit and loss account, condensed interim cash flow statement, condensed interim statement of changes in equity of the Modaraba are extracted from the unaudited condensed interim financial information for the quarter ended September 30, 2022.
4. This condensed interim financial information is un-audited.

1. Basis of measurement
   This condensed interim financial information has been prepared under the historical cost convention except for defined benefit plan - staff gratuity which is carried as per actuarial valuation.
2. Functional and presentation currency
   This condensed interim financial information is prepared in Pakistani Rupees which is the Modaraba's functional and presentation currency. The figures in this condensed interim financial information have been rounded off to the nearest rupee unless otherwise specified.

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023

3 SIGNIFICANT ACCOUNTING AND RISK MANAGEMENT POLICIES, ACCOUNTING ESTIMATES, JUDGEMENT AND CHANGES THEREIN

1. The accounting policies adopted for the preparation of the condensed interim financial information are the same as those applied in the preparation of the annual audited financial statements of the Modaraba for the year ended June 30, 2023.
2. The preparation of this condensed interim financial information in conformity with approved accounting standards requires management to make estimates, assumptions and use of judgements that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. Revisions to accounting estimates are recognised prospectively commencing from the period of revision.
3. The significant estimates, judgements and assumptions made by the management in applying the accounting policies and the key sources of estimation uncertainty are the same as those applied to the annual audited financial statements as at and for the year ended June 30, 2023.
4. There are certain standards, interpretations and amendments to approved accounting standards which have been published and are mandatory for the Modaraba's accounting period beginning on or after January 01, 2021. These standards, interpretations and amendments are either not relevant to the Modaraba's operations or are not expected to have a significant effect on this condensed interim financial information.
5. The Modaraba's financial risk management objectives and policies are consistent with that disclosed in annual audited financial statements of the Modaraba for the year ended June 30, 2023.

September 30,

2023

(Rupees)

Note (Un-audited)

4 PROPERTY AND EQUIPMENT

Following additions and disposals, at cost, were made during the period / year :

	Opening fixed assets (Net book value)	14,006,740
	Additions	-
	Disposals	(42,850)
	Depreciation charge for the period / year	(983,175)
	Depreciation on disposals during the period / year	42,850
	Closing fixed assets (Net book value)	13,023,565
5	OBLIGATION UNDER FINANCING FACILITIES - SECURED

June 30,

2023

(Rupees)

(Audited)

8,061,008

8,993,610

(2,216,259)

(2,866,155)

2,034,536

14,006,740

Musharaka financing facility	5.1 & 5.2
Less: non-current portion under
Musharaka financing facility	5.1 & 5.2
Current portion under Musharaka financing facility
Musawamah Financing Facility	5.3

1,879,904

(1,270,227)

609,676

140,000,000

140,609,676

2,032,331

(1,422,655)

609,676

140,000,000

140,609,676

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2023

1. The Modaraba has availed Running Musharaka Financing facility from Bank AL Habib Limited with sanctioned limit of Rs. 30 million (June 30, 2023 : Rs. 30 million). This facility has been obtained to finance working capital requirements of the Modaraba carries profit at the rate of 1.5% (June 30, 2023 : 1.5%) over 3 months average KIBOR.
2. In prior year, the Modaraba had obtained Diminishing Musharaka financing facility with a sanctioned limit of Rs. 10 million from Bank AL Habib Limited for the purchase of locally manufactured brand new / used commercial and non- commercial vehicles for Modaraba's / staff use. The facility carries profit at the rate 2.25% over 1 year KIBOR and is repayable within 5 years from the date of delivery of vehicle(s).
3. The Modaraba has also availed Musawamah finance facility from Bank AL Habib Limited with a sanctioned limit of Rs. 230 million (June 30, 2023: Rs. 130 million) to finance sale of inventory owned by the Modaraba. The facility carries profit at the rate of 1.5% (June 30, 2023 : 1.5%) over 3 months average KIBOR.
4. All facilities are secured against hypothecation charge on current assets (stock in trade and trade debts) of Modaraba.

6 CONTINGENCIES AND COMMITMENTS

6.1 Contingencies

1. There is no change in the status of matter of show cause notice issued to the Modaraba by the Collectorate of Customs (Adjudication-II), for recovery of Customs Duty along with allied taxed as reported in note 22.1.2 to the published financial statements of the Modaraba for the year ended June 30, 2023.
2. The Modaraba has issued post dated cheques to the Collector of Customs amounting to Rs. 49.18 million (June 30, 2023 : Rs. 47 million) on account of custom dues and taxes on goods at bonded warehouse.

6.2 Commitments

Commitments in respect of outstanding letters of credit as at year end date for trading stock are amounting to Rs. 32 million (June 30, 2023 : Rs. NIL).

7 TAXATION

Provision for taxation is based on taxable income for the year at the current rates of taxation after taking into account tax credits and exemptions available, if any. For items covered under minimum tax regime (MTR), the management compared it with normal tax regime (NTR), alternate corporate tax (ACT) and turnover tax and record tax on the basis of which ever is higher. The Modaraba has followed a policy for tax recognition, whereby the tax paid at import stage is recognized as tax expense in the year in which the related goods are sold and the portion of the tax paid pertaining to the unsold inventory is carried forward in the balance sheet as an advance tax.