Modaraba: FIRST HABIB BANK MODARABA - Half Year Ended December 31 2006

It is a multipurpose, perpetual Modaraba floated in Pakistan on March 16, 1991 and is currently engaged in the Shari'a compliant financial products such as leasing, Murabaha, Musharaka financing and other related business. It is managed by Habib Bank Financial Services (Private) Ltd, which is wholly owned subsidiary of Habib Bank Ltd. Its registered office is located on 18th Floor, Habib Bank Plaza opposite City Station Karachi.
As per the current tax law, income of non-trading Modarabas are exempt from income tax, provided that they distribute 90% cash profit to certificates holders out of current year's total profit after appropriating statutory reserves. The management company's Board of Directors authorised the under review interim condensed financial statements on February 03, 2007.
First Habib Bank Modaraba is listed on the Karachi, Lahore and Islamabad stock exchanges. Recently on June 19, 2007, the closing price of the Modaraba's 10- rupee certificate has been quoted at Rs 8.90 per certificate at 11 percent discount to its par value. According to the share statistics published by Daily Business Recorder for 52 weeks, the market value of its certificate ranged between Rs 7.10 and Rs 9.55 per share, below par value. It may be mentioned here that the market value of only six Modarabas of the sector has remained above par value among whom the highest price of Rs 42 was quoted by Imrooz Modaraba, followed by First Habib Modaraba at Rs 13.60 per five rupee certificate. The market value of Standard Chartered Modaraba also remained much above the par value. The Modaraba's management's company's parent company lends support to the Modaraba in terms of various transactions such as lending, deposits and providing financial expertise through senior executives. This makes the Modaraba's operation fairly safe interim of low risk and access to high networth individual and corporate clients.
On December 31, 2006 the Modaraba's leased assets amounted to Rs 975.97 million as against Rs 1,033.63 million on June 30, 2006.
Total lease disbursement amounting to Rs 213 million, was made during the period and in the last corresponding period there was disbursement of Rs 198 million. The leasing industry continued to face challenging environment while its total income increased its profit declined. The company posted net profit at Rs 24.16 million (HYD 05-06: Rs 31.38 million).

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Performance Statistics                           (Million Rupees)

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Balance Sheet                                             -As At-

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                                        December 31       June 30

                                               2006          2006

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                                         Un-audited       Audited

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Certificate Capital Paid-up:                 397.07        397.07

Reserves & Surplus:                          231.86        253.57

Certificate Holder's Equity:                 628.93        650.64

L.T. Debts:                                   91.67        162.50

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Security Deposits Against

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Assets Leased Out:                            41.62         38.20

Current Liabilities:                         437.59        365.10

Assets in Own Use:                             0.72          0.68

Assets Given on Lease:                       975.87      1,033.63

L.T. Investments:                             40.37         50.00

L.T. Deposit:                                  0.15          0.15

Current Assets:                              182.70        131.98

Total Assets:                              1,199.81      1,216.44

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Profit & Loss A/c for Half Year Ended               -December 31-

                                               2006          2005

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Operating Income:                            283.97        244.57

Other Income:                                  0.81          1.03

Total Income                                 284.78        245.60

Operating (Costs):                         (232.02)      (186.02)

(Profit/Markup) on Morabaha/Musharaka:      (25.91)       (21.21)

(Provision) Against Lease

Rentals Receivable-Net:                           -          3.50

Total (Expenses & Provision):              (257.93)      (210.73)

Modaraba CO's Management (Fee):                2.69          3.49

Profit for The Period:                        24.16         31.38

Earnings Per 10-Rupee Certificate (Rs)         0.61          0.79

Certificate Price (Rs) on 19/06/07:            8.90             -

Price/Earning Ratio:                          14.59             -

Debt/Equity Ratio:                            13:87         20:80

Current Ratio:                                 0.42          0.36

Lease/Total Income Ratio (%):                   N.A           N.A

Net Profit/Total Income Ratio (%):             8.48         12.78

R.O.A. (%):                                    2.01          2.58

R.O.E. (%):                                    3.84          4.82

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