FIRST HABIB MODARABA

Maintaining growth momentum despite growing competition

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

First Habib Modaraba (FHM) commenced its business operations as a multipurpose and perpetual modaraba in 1985 with an initial paid up capital of Rs 25 million. The sponsors of the Modaraba are Habib Group, having a long history and interest in diversified business sectors. As on June 30, 2003 its total equity was Rs 471.76 million, comprising of Rs 252 million paid up capital and Rs 219.46 million reserves. The FHM enjoys a unique distinction that ever since the inception it has been distributing dividend among the certificate holders, either in cash or stock.

The financial strength of FHM can be gauged by the credit rating assigned by Pakistan Credit Rating Agency (PACRA). Based on financial results for the year June 30, 2003, PACRA has assigned the entity rating at AA- (double A minus) and A1+ (single A one plus) for long-term and short-term respectively for the FHM. It is worth mentioning that A1+ is the highest level in PACRA's rating scale for short-term rating.

Some of the highlights indicating the highest level of professional management are: since inception, the average payment of profit has been about 16%, infection free lease portfolio, no provision for bad or doubtful debts and above all constant growth of a diversified lease portfolio.

At present, the FHM is involved in various Sharia approved modes of business activities such as Musharika, Morabaha and Ijarah financing, investment in capital market and issuance of Certificates of Musharika to prospective investors on profit and loss sharing basis. It has a diversified lease portfolio. The largest percentage of the portfolio pertains to banks and financial institutions (35.10%) followed by textiles (14.39), services (11.91%) and Fuel and energy.

The FHM has also made about Rs 64 million investment in shares of various listed companies. Out of this, the largest percentage pertains to financial sector. The market value of this investment stood around Rs 135 million at the time of publication of the latest Annual Report.

The FHM has posted Rs 743.6 million gross revenue and Rs 69.6 million profit after tax for the year ending June 30, 2003. In the gross revenue Rs 731.6 was drawn from lease rentals. During the year 2003, the FHM continued its growth momentum and disbursed Rs 944 million new leases. The management also succeeded in improving dividend payout and distributed 21 dividend among the certificate holders. In recognition of high dividend payout, the FHM has been awarded Excellence Award by the Modaraba Association of Pakistan for last three consecutive years.

EQUITY

(Rs in million)

YEAR

AMOUNT

1999

345.23

2000

357.00

2001

368.81

2002

423.24

2003

471.78

BALANCE SHEET FOOTING

(Rs in million)

YEAR

AMOUNT

1999

599.38

2000

687.04

2001

1,004.86

2002

1,259.57

2003

1,592.58

TOTAL INCOME

(Rs in million)

YEAR

AMOUNT

1999

351.75

2000

365.79

2001

412.33

2002

567.05

2003

743.62

PROFIT AFTER TAX

(Rs in million)

YEAR

AMOUNT

1999

65.07

2000

68.48

2001

68.51

2002

65.06

2003

69.56

 


 

BOARD OF DIRECTORS

MR. WAZIR HUSAIN JAFREE

Chairman & CEO

MR. MUHAMMAD SHOAIB

Director

MR. ABBAS ALI MOHAMMAD

Director

MR. SHEIKH EHSANUDDIN

Director

MR. DARA F. MIRZA

Director