Registration of modaraba company: SECP proposes reduction in application fee

The Securities and Exchange Commission of Pakistan (SECP) has proposed major reduction in application fee from Rs250,000 to Rs100,000 for registration of a modaraba company.

The SECP issued SRO 84 (I)/2020 here on Monday to issue draft amendments in the Modaraba Companies and Modaraba Rules, 1981. Presently, the fee for registration of a Modaraba company is Rs250,000.

According to the revised fee structure for Modaraba sector, the application for authorisation to float modaraba should accompany fee of 0.25 percent of the nominal amount.

Under the new regulations, every statement of financial position of a modaraba shall give a true and fair view of the state of affairs of the modaraba as at the end of its financial year, and every statement of profit and loss and other comprehensive income, cash flow statement and statement of changes in equity of a modaraba shall respectively give a true and fair view of the result of its operations, cash flows and changes in equity for the year then ended.

The annual report required by Section 14 to be furnished by the modaraba company shall include a statement of financial position, a statement of profit and loss and other comprehensive income, a cash flow statement and a statement of changes in equity in respect of each modaraba and fullest information and explanations in regard to any reservation, observation, qualification or adverse remarks contained in the auditor's report, it has been proposed.

The statement of financial position and statement of profit and loss and other comprehensive income, included in the annual report prepared by the modaraba company shall comply with the requirements of the Third Schedule as nearly as possible and the statement of financial position, statement of profit and loss and other comprehensive income, cash flow statement and statement of changes in equity prepared by the modaraba company shall conform with such International Accounting Standards and other standards as are notified from time to time in the official Gazette by the SECP under sections 510, and 225 of the Companies Act, 2017.

The statement of financial position, statement of profit and loss and other comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof and statement of profit and loss and other comprehensive income, and statement of financial changes shall be audited by the auditor of the modaraba and the report of the auditor shall be as set out in Form XI, it has been proposed.

The directors of every modaraba company shall, on some date not later than 18 months after the floatation of each modaraba and subsequently once at least in every calendar year, prepare an annual statement of financial position and statement of profit and loss and other comprehensive income in respect of each modaraba for the period in the case of the first account since the floatation of the modaraba and in any other case since the preceding account, the SECP has proposed.