FIRST PRUDENTIAL MODARABA

Merger of three Modarabas leads to greater synergy

By SHABBIR H. KAZMI
Jan 26 - Feb 01, 2004

Prudential Capital Management, the management company, was incorporated in 1988. It floated three modarabas namely, First Prudential Modaraba in 1989, Second Prudential Modaraba in 1990 and Third Prudential Modaraba in 1991. However, in line with government policy to encourage mergers and also to consolidate resources to cut operational costs and to attain operational synergy, Second and Third Modarabas have been merged into First Prudential Modaraba in the year 2001. As a result, the paid up capital of merged entity stands at Rs 872.177 million, being the highest for any perpetual and multipurpose Modaraba.

The objectives of First Prudential Modaraba (FPM) interalia include participating in Musharika, Morabaha, Modaraba and providing financial assistance for working capital needs, leasing of all types of assets with special emphasis in industrial machinery including securitization of lease portfolios of leasing companies, collaborating with other companies and Modarabas in business and commercial activities including syndication and leveraged leasing, and underwriting public issues of shares. Modaraba's mission is to create and maintain a progressive position in the Modaraba sector and endeavor to promote Riba-free economy in the country.

The FPM has posted Rs 102 million profit after tax for the year ending June 30, 2003 that is 229% higher than Rs 31 million profit earned during the preceding financial year. This achievement has not only endorsed the strategy of the management with regard to merger of Group Modarabas but also validated the operational plan prepared for revival of Modaraba based on expansion of operations over a broad spectrum of economic sectors and clients.

Despite cut-throat competition, in credit market, the FPM managed to bring in new business of Morabaha finance and Musharika investment to the tune of Rs 105 million and Rs 44 million respectively. The bullish trend in stock market enabled the Modaraba to post Rs 32.6 million capital gains. Other factors contributing towards revenue were Rs 15.7 million dividend income, lease rentals and profit on Modaraba and Musharika finances.

The management also succeeded in containing administrative expenses and reducing financial charges. The continued efforts for recovery of outstanding dues yielded satisfactory results. A total sum of Rs 138.8 million was recovered including classified overdues of Rs 26.8 million, resulting in reversal of provisions made in the past.

EQUITY

(Rs in million)

YEAR

AMOUNT

1999

190.74

2000

223.31

2001

84.66

2002

342.15

2003

444.02

BALANCE SHEET FOOTING

(Rs in million)

YEAR

AMOUNT

1999

223.57

2000

248.52

2001

97.07

2002

366.09

2003

474.00

TOTAL INCOME

(Rs in million)

YEAR

AMOUNT

1999

23.34

2000

21.28

2001

4.82

2002

32.12

2003

79.16

PROFIT AFTER TAX

(Rs in million)

YEAR

AMOUNT

1999

16.08

2000

48.85

2001

(138.66)

2002

31.02

2003

102.07

 


 

BOARD OF DIRECTORS

MR. MAHMUD JAVED PARWAZ

Director & CEO

MR. MAZHARUL HAQUE SIDDIQUI

Director

MR. FAZAL M. MUGHAL

Director

DR. MUHAMMAD HUSSAIN

Director

MR. ATTAULLAH KHAN

Director

MR. ASAD IQBAL SIDDIQUI

Director

MR. MUHAMMAD ASIF

Director