First National Bank Modaraba (FNBM): Quarterly Report - 30 September 2017

Transcription

2. First National Bank Modaraba First National Bank Modaraba September 30 , 2017 01
3. Quarterly Report-September 30 , 2017 Corporate Information 3 Directors’ Report 4 Condensed Interim Balance Sheet 6 Condensed Interim Profit and Loss Account 7 Condensed Interim Statement of Comprehensive Income 8 Condensed Interim Cash Flow Statement 9 Condensed Interim Statement of Changes in Equity 10 Notes to the Condensed Interim un-audited Financial Statements 11 02
4. First National Bank Modaraba CORPORATE INFORMATION Board of Directors * Mr. Rehmant Ali Hasnie Khawaja Waheed Raza Mr. Jamal Nasim Mr. Muhammad Iqbal Hussain Mr. Aamir Amin Mr. Abbas Azam Chairman Director Director Director Director Chief Executive Officer Shari’ah Advisor Mufti Ehsan Waquar Ahmed Chief Financial Officer/ Company Secretary Mr. Ali Abbass Audit Committee Mr Jamal Nasim Khawaja Waheed Raza Mr. Aamir Amin Chairman Member Member HR & Remuneration Committee Khawaja Waheed Raza Mr. Muhammad Iqbal Hussain Mr. Aamir Amin Chairman Member Member Shares Registrar Hameed Majeed Associates (Pvt.) Limited H. M. House, 7 - Bank Square, Lahore Tel: 37235081-2, Fax: 37358817 Auditors Riaz Ahmad & Company Chartered Accountants Legal Advisor Cornelius Lane & Mufti Advocates and Solicitors Nawa-i-Waqt House, 4-Shahrah-eFatima Jinnah, Lahore Tel.: 36360824, Fax: 36303301 Bankers National Bank of Pakistan Bank Alfalah Limited Al Baraka Islamic Bank Habib Bank Limited Allied Bank Limited MCB Bank Limited First Women Bank Limited Bank Islami Pakistan Limited United Bank Limited Registered Office Ground Floor, NBP RHQs Building, 26-McLagon Road, Lahore Tel: 042-99211200, Fax: 042-99213247 URL: http://www.nbmodaraba.com E-mail: info@nbmodaraba.com * Mr. Jamal Baquar has been appointed as nominee director of NBP. Approval of the Registrar Modarabas in this regard has been subsequently received on October 26, 2017. 03
5. Quarterly Report-September 30 , 2017 Directors' Review Report On behalf of the Board of Directors of National Bank Modaraba Management Company Limited (NBMMCL), the Management Company of First National Bank Modaraba (FNBM), I am pleased to present the quarterly report, together with unaudited financial statements of FNBM for the quarter ended September 30, 2017. During the period under review the focus of management remained on recovery and various means were employed for this purpose that included filing legal suits, negotiation for settlement etc. The efforts bore fruit and during the period there has been a reversal in provisioning amounting to Rs. 6.4 Million on account of recovery against settlement of an old classified account. On the operations side the Modaraba generated total income of Rs. 23 Millions in the quarter under review as compared to Rs. 53 Million in the corresponding period last year. This reduction was in line with the reduction of the portfolio size due to realization of receivables and settlements of liabilities. On the expenses side the financial charges stood at Rs. 4.4 Million compared to Rs. 8.4 Million in the corresponding quarter last year because of repayment of bank borrowings. The operating expenses were kept under check and they stood at Rs. 4.1 Million as against Rs. 3.7 Million in the corresponding period. However the slight increase was mainly due to necessary expenses of non-recurrent nature. As a result of aforesaid the earnings per certificate stood at Rs. 0.24 as compared to loss per certificate of (Rs. 0.53) in the corresponding quarter. The Board would like to take this opportunity to thank its valued certificate holders and clients for their trust and support. Besides, the Board extends its sincere gratitude to Registrar Modarabas, SECP and NBFI & Modaraba Association of Pakistan for their continued guidance and support. For and on behalf of the Board Chief Executive Officer Lahore: October 26, 2017 04
6. First National Bank Modaraba 26 05
7. Quarterly Report-September 30 , 2017 CONDENSED INTERIM BALANCE SHEET (UNAUDITED) AS AT SEPTEMBER 30, 2017 NOTE Un-audited September 2017 Rupees audited June 2017 Rupees ASSETS CURRENT ASSETS Bank balances Short term murabaha investments - secured Short term Musharaka - unsecured Accrued profit Ijarah rentals receivable Advances, prepayments and other receivables Current portion of non-current assets 17,054,739 19,216,842 50,000,000 663,870 62,159,696 3,714,756 86,656,440 239,466,344 49,707,521 19,216,842 388,493 69,947,032 3,843,324 103,049,027 246,152,239 1,251,514 5,197,192 1,629,081 740,566 1,651,514 10,497,347 1,725,105 1,000,882 Ijarah assets Fixed assets - own use 213,231,025 7,224 247,443,653 7,732 TOTAL ASSETS 222,056,602 461,522,946 262,326,233 508,478,472 2,100,000 2,654,776 183,256,754 25,619,971 172,897,101 386,528,602 2,094,045 2,654,776 201,634,754 27,265,399 195,897,100 429,546,074 19,976,015 8,333,336 24,431,871 52,741,222 439,269,824 21,500,787 16,666,670 24,431,871 62,599,328 492,145,402 22,253,122 16,333,070 250,000,000 (227,746,878) 250,000,000 (233,666,930) 22,253,122 16,333,070 3 4 5 6 NON-CURRENT ASSETS Net investment in ijarah finance Diminishing musharaka financing - secured Long term murabaha investments - secured Long term loans and deposits 7 8 LIABILITIES CURRENT LIABILITIES Accrued profit Deferred murabaha income Short term finances - secured Creditors, accrued and other liabilities Current portion of non-current liabilities ### 9 10 NON-CURRENT LIABILITIES Security deposits against ijarah assets Long term finances - secured Deferred murabaha income TOTAL LIABILITIES NET ASSETS FINANCED BY Certificate capital Reserves TOTAL EQUITY AND RESERVES CONTINGENCIES AND COMMITMENTS 14 The annexed notes form an integral part of these financial statements. Lahore: October 26, 2017 Chief Executive Officer National Bank Modaraba Management Company Limited Director National Bank Modaraba Management Company Limited 06 Director National Bank Modaraba Management Company Limited
8. First National Bank Modaraba CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UNAUDITED) FOR THE PERIOD ENDED SEPTEMBER 30, 2017 NOTE OPERATING REVENUE Income from lease/ ijarah Profit on morabaha investment Profit on musharaka investment Profit on diminishing musharaka investment Profit on bank deposits Gain on sale fixed asset Other income OPERATING EXPENSES Depreciation on ijarah assets Operating expenses Financial charges 14 OPERATING PROFIT / (LOSS) BEFORE PROVISION AND TAXATION Reversal of provision charged on non-performing receivables Modaraba Company's Management Fee PROFIT / LOSS BEFORE TAXATION Taxation PROFIT / LOSS AFTER TAXATION EARNINGS PER CERTIFICATE - BASIC AND DILUTED (Un-audited) SEP 30 2017 Rupees (Un-audited) SEP 30 2016 Rupees 21,526,100 43,056 688,561 418,621 261,991 10,000 22,948,328 49,701,374 1,223,490 14,160,767 4,115,428 4,486,855 22,763,050 185,278 39,736,806 3,758,526 8,436,770 51,932,102 1,857,000 (6,392,557) 6,577,835 657,784 5,920,052 15,150,032 (13,293,032) (13,293,032) 5,920,052 (13,293,032) 0.24 (0.53) 1,356,382 152,949 1,323,297 31,610 53,789,102 The annexed notes form an integral part of these financial statements Lahore: October 26, 2017 Chief Executive Officer National Bank Modaraba Management Company Limited Director National Bank Modaraba Management Company Limited 07 Director National Bank Modaraba Management Company Limited
9. Quarterly Report-September 30 , 2017 CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE PERIOD ENDED SEPTEMBER 30, 2017 2017 Rupees LOSS AFTER TAXATION 5,920,052 OTHER COMPREHENSIVE INCOME - TOTAL COMPREHENSIVE LOSS FOR THE PERIOD 5,920,052 2016 Rupees (13,293,032) (13,293,032) The annexed notes form an integral part of these financial statements. Lahore: October 26, 2017 Chief Executive Officer National Bank Modaraba Management Company Limited Director National Bank Modaraba Management Company Limited 08 Director National Bank Modaraba Management Company Limited
10. First National Bank Modaraba CASH FLOW STATEMENT (UNAUDITED) FOR THE PERIOD ENDED SEPTEMBER 30, 2017 NOTE CASH FLOWS FROM OPERATING ACTIVITIES Loss before taxation 2017 Rupees 2016 Rupees 5,920,052 (13,293,032) 14,160,767 (6,392,557) (261,991) 4,486,855 (418,621) 11,574,453 39,759,234 15,150,032 (1,323,297) 8,436,770 (152,949) 61,869,790 (232,321) 8,069,089 3,272,970 (43,056) 24,144,125 (50,000,000) 1,503,680 (13,285,512) (889,824) 14,190,160 (11,743,127) 2,600,000 1,221,149 5,378,358 Creditors, accrued and other liabilities Long term security deposits - net (1,645,428) (24,524,772) (26,170,200) (39,455,712) 1,702,038 (961,526) 740,512 6,118,870 Cash generated from operations (21,961,207) 54,695,628 Finance cost paid Income taxes paid Profit received on bank deposits Net cash generated from operating activities (4,480,900) 186,299 (26,255,808) (8,995,696) 504,167 152,949 46,357,048 CASH FLOW FROM INVESTING ACTIVITIES Ijarah assets acquired Fixed assets - own use acquired Proceeds from disposal of ijarah assets Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES 20,314,360 20,314,360 (22,428) 2,356,204 2,333,776 Short term finances Short term certificates of musharaka Long term finances - net Net cash used in financing activities (18,378,000) (8,333,334) (26,711,334) (25,049,000) (25,049,000) Net increase in cash and cash equivalents (32,652,782) 23,641,824 Cash and cash equivalents at the beginning of the period 49,707,521 14,743,528 17,054,739 38,385,352 Adjustments for non cash charges and other items Depreciation / amortization Provision charged for non-performing receivables Gain on disposal of ijarah assets Finance cost Profit on bank deposits Working capital changes (Increase) / decrease in operating assets Accrued profit Ijarah rentals receivable Advances, prepayments and other receivables Profit on Musharaka Investment in Ijarah Finance Short term musharaka investments Short term murabaha investments Long term murabaha investments (Decrease) / increase in operating liabilities Cash and cash equivalents at the end of the year 3 The annexed notes form an integral part of these financial statements. Lahore: October 26, 2017 Chief Executive Officer National Bank Modaraba Management Company Limited Director National Bank Modaraba Management Company Limited 09 Director National Bank Modaraba Management Company Limited
11. Quarterly Report-September 30 , 2017 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE PERIOD ENDED SEPTEMBER 30, 2017 Reserve Certificate capital Statutory reserve Accumulated Loss Total equity Total Rupees 250,000,000 43,955,189 (206,262,437) (162,307,248) - - (13,293,032) (13,293,032) 250,000,000 43,955,189 (219,555,469) (175,600,280) - - (58,066,650) (58,066,650) 250,000,000 43,955,189 (277,622,119) (233,666,930) Profit/(Loss) for the period ended - - 5,920,052 5,920,052 Balance as at September 30, 2017 250,000,000 43,955,189 (271,702,067) (227,746,878) Balance as at June 30, 2016 Profit/(Loss) for the period Balance as at September 30, 2016 Profit/(Loss) for the period Balance as at June 30, 2017 87,692,752 74,399,720 16,333,070 22,253,122 The annexed notes form an integral part of these financial statements Lahore: October 26, 2017 Chief Executive Officer National Bank Modaraba Management Company Limited Director National Bank Modaraba Management Company Limited 10 Director National Bank Modaraba Management Company Limited
12. First National Bank Modaraba NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED) FOR THE PERIOD ENDED SEPTEMBER 30, 2017 1 LEGAL STATUS AND NATURE OF BUSINESS First National Bank 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. The Modaraba is managed by National Bank Modaraba Management Company Limited (a wholly owned subsidiary of National Bank of Pakistan), incorporated in Pakistan under the Companies Ordinance, 1984 and registered with the Registrar of Modaraba Companies. The registered office of the Modaraba is situated at 5th Floor, National Bank of Pakistan, Regional Headquarters Building, 26-Mc Lagon Road, Lahore. The Modaraba is listed on Pakistan stock exchange. It commenced its operations on 04 December 2003 and is currently engaged in various Islamic modes of financing and operations including ijarah, musharaka and murabaha arrangements. 1.1 Going concern assumption During the period, the Modaraba made an operating profit of Rupees 0.185 million, however, while the reversal of provision charged against classified assets, the Modaraba reported an overall profit of Rupees 5.920 million reducing the accumulated loss to Rupees 271.702 million which however still exceeds the total amount subscribed by the holders of modaraba certificates. This may attract the provisions of section 23 of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980. These factors have raised uncertainties that the Modaraba may not be able to continue as a going concern. Therefore, these financial statements have been prepared on the basis of estimated realisable / settlement values of assets and liabilities respectively. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies and methods of computations adopted for the preparation of this condensed interim financial information are the same as applied in the preparation of the preceding audited annual published financial statements of the Modaraba for the year ended 30 June 2017. 2.1 Basis of Preparation a) Statement of compliance This condensed interim financial information is un-audited and is being submitted to the certificate holders as required under Rule 10 of the Modaraba Companies and Modaraba Rules, 1981. This condensed interim financial information has been prepared in accordance with approved accounting standards as applicable in Pakistan for interim reporting. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan, the requirements of the 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). Wherever the requirements of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, Islamic Financial Accounting Standards (IFAS), the Modaraba Companies and Modaraba Rules, 1981 and directives issued by SECP differ with the requirements of IFRS, the requirements of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, Islamic Financial Accounting Standards (IFAS), the Modaraba Companies and Modaraba Rules, 1981 or the directives issued by SECP shall prevail. This condensed interim financial information has been prepared in accordance with the International Accounting Standard (IAS 34) "Interim Financial Reporting" as applicable in Pakistan and notified by the Securities and Exchange Commission of Pakistan (SECP). This condensed interim financial information does not include all information and disclosures made in the annual published financial statements and therefore should be read in conjunction with the audited annual published financial statements of the Modaraba for the year ended 30 June 2017. b) Accounting convention These financial statements have been prepared using the non-going concern basis of accounting on the basis of estimated realizable / settlement values of the assets and liabilities respectively. In realizable / settlement value basis, assets are carried at amount of cash and cash equivalents that could currently be obtained by selling the assets in an orderly disposal. Liabilities are 11
13. Quarterly Report-September 30 , 2017 carried at their settlement values, that is the undiscounted amounts of cash or cash equivalents expected to be paid to satisfy the liabilities in the normal course of business. Previously, these financial statements were prepared under the historical cost convention, except for certain financial instruments which were carried at their fair value. c) Critical accounting estimates and judgments 3 The preparation of this condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Modaraba's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. During the preparation of this condensed interim financial information, the significant judgments made by the management in applying the Modaraba's accounting policies and the key sources of estimation and uncertainty were the same as those that applied in preceding audited annual published financial statements of the Modaraba for the year ended 30 June 2017. Unaudited Audited September 30 June 30 2017 2017 CASH AND BANK BALANCES Rupees Rupees Cash in hand Cash at banks: Current accounts Saving accounts 4 22,345 120,968 16,911,426 17,054,739 318,688 49,388,833 49,707,521 244,025,025 244,025,025 2,654,776 246,679,801 227,462,959 19,216,842 244,025,025 244,025,025 2,654,776 246,679,801 227,462,959 19,216,842 SHORT TERM MURABAHA INVESTMENTS - SECURED Considered good Considered doubtful Add: Deferred / unearned murabaha income Less: Provision for non-performing murabaha investments 5 - SHORT TERM MUSHARAKA - UNSECURED Investment represents the amount placed with an Islamic Financial Institution for three months. Expected rate of return on the investment is 6.20% per annum. 6 CURRENT PORTION OF NON-CURRENT ASSETS Net investment in ijarah finance Diminishing musharaka financing Long term murabaha investments Long term receivables and deposits 7 7 8 18,160,176 24,023,421 43,676,078 796,765 86,656,440 31,270,867 26,098,927 45,083,734 595,499 103,049,027 50,785,554 5,134,881 55,920,435 24,235,327 31,685,108 12,273,418 18,160,176 1,251,514 79,346,691 5,134,881 84,481,572 28,652,339 55,829,233 22,906,852 31,270,867 1,651,514 NET INVESTMENT IN IJARAH FINANCE Minimum ijarah rentals receivable Residual value of ijarah assets Gross investment in ijarah finance Less: Unearned finance income Net investment in lease ijarah finance Less: Provision for doubtful net investment in ijarah finance Current portion 12
14. First National Bank Modaraba 8 Unaudited September 30 2017 Rupees LONG TERM MURABAHA INVESTMENTS - SECURED Considered good Considered doubtful Add : Deferred / unearned murabaha income Less: Provision for doubtful murabaha investments Less: Current portion 9 14,895,252 69,602,515 84,497,767 31,913,554 116,411,321 69,602,482 45,083,734 1,725,105 183,256,754 201,634,754 132,082,085 33,333,333 7,481,683 172,897,101 155,082,085 33,333,332 7,481,683 195,897,100 41,666,669 41,666,669 33,333,333 8,333,336 50,000,002 50,000,002 33,333,332 16,666,670 600,000,000 600,000,000 250,000,000 250,000,000 CURRENT PORTION OF NON-CURRENT LIABILITIES Security deposits against ijarah assets Long term finances - secured Deferred murabaha income 11 13,391,577 69,602,510 82,994,087 31,913,554 114,907,641 69,602,482 43,676,078 1,629,081 SHORT TERM FINANCES - SECURED From banking companies and financial institution - secured National Bank of Pakistan - associated undertaking 10 Audited June 30 2017 Rupees 12 LONG TERM FINANCES - SECURED From banking companies and financial institution - secured Demand finance from: National Bank of Pakistan - associated undertaking Others Less: Current portion 12 CERTIFICATE CAPITAL Authorised certificate capital 60,000,000 (June 30, 2016: 60,000,000) modaraba certificates of Rupees 10 each Issued, subscribed and paid-up certificate capital 25,000,000 (June 30, 2017: 25,000,000) modaraba certificates of Rupees 10 each 12.1 7,500,000 (June 30, 2017: 7,500,000) certificates of the Modaraba are held by National Bank Modaraba Management Company Limited, the Management Company. 13 CONTINGENCIES AND COMMITMENTS There were no known contingencies as at 30 September 2017. Commitments - Facilities approved but not disbursed NIL NIL - 13 -
15. Quarterly Report-September 30 , 2017 14 Unaudited September 30 2017 OPERATING EXPENSES Salaries, allowances and benefits Communication expenses Vehicle running expenses Postage and stamps Advertisement Legal and professional charges Fee and subscription Repairs and maintenance Insurance Stationary, printing and other expenses Depreciation-Owned assets Entertainment Other sundry expenses 15 2,697,463 59,290 29,788 2,736 93,761 444,056 533,766 135,442 25,000 13,840 77,626 2,660 4,115,428 Audited September 30 2016 2,895,109 73,793 39,977 17,760 6,000 264,794 262,664 46,393 12,748 28,211 22,428 87,594 1,055 3,758,526 BALANCES AND TRANSACTIONS WITH RELATED PARTIES Detail of transactions with related parties and balances outstanding with them at the period / year end are as follows: Unaudited September 30 2017 Rupees 15.1 Balances outstanding at the period / year end Accounts with National Bank of Pakistan Finances form National Bank of Pakistan 15.2 773,157 224,923,423 Unaudited September 30 2017 Rupees Transactions during the period Related party National Bank of Pakistan National Bank Modaraba Management Company Limited 15.3 Audited June 30 2016 Rupees Relationship Modaraba Management Company's holding Management Company Nature of Transaction Musharaka repaid - net Ijarah rentals received Profit accrued Profit paid Fee Accrued 26,711,334 3,146,011 4,486,855 4,480,900 657,784 295,938 251,634,756 Unaudited September 30 2017 Rupees 3,154,429 6,187,840 6,087,840 - Modaraba Management Company Fee In accordance with Section 18 of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, management fee @ 10% of annual profits is paid to the Modaraba Management Company. 16 DATE OF AUTHORIZATION FOR ISSUE These condensed interim financial statements (un audited) have been approved by the Board of Directors of National Bank Modaraba Management Company Limited and authorized for issue on October 26, 2017. 17 CORRESPONDING FIGURES Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison. However, no significant reclassification has been made. 18 GENERAL - Corresponding figures have been re-arranged / reorganised, wherever necessary, for better presentation of these condensed interim financial statements. Lahore: October 26, 2017 Chief Executive Officer National Bank Modaraba Management Company Limited Director National Bank Modaraba Management Company Limited 14 Director National Bank Modaraba Management Company Limited
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17. Quarterly Report-September 30 , 2017 2016 NOTES 16