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Annual Report First Equity Modaraba

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2025

Managed by: Premier Financial Services (Private) Limited CRESCENT GROUP

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MISSION AND VISION

First Equity Modaraba is committed to strive for excellence in all areas of its activities. We view our business objective of providing distirctive financial products and services that promte commerce and industry within the context of our overall objective of contributing to the nation’s prosperity.

Contexts

CORPORATE INFORMATION ...................................................................................................................... 3 TEN YEARS AT A GLANCE .......................................................................................................................... 4 REPORT OF THE DIRECTORS ..................................................................................................................... 5 REPORT OF THE DIRECTORS (URDU) .................................................................................................... 14 SHARIAH ADVISOR REVIEW REPORT ................................................................................................... 15 EXTERNAL SHARIAH AUDITOR REPORT ............................................................................................. 17 STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE .................... 18 AUDITORS’ REVIEW ON STATEMENT OF COMPLIANCE ................................................................. 21 AUDITORS’ REPORTS TO THE CERTIFICATE HOLDERS ................................................................... 26 BALANCE SHEET ...................................................................................................................................... 28 PROFIT AND LOSS ACCOUNT ............................................................................................................... 30 STATEMENT OF OTHER COMPREHENSIVE INCOME ....................................................................... 31 CASH FLOW STATEMENT ....................................................................................................................... 32 STATEMENT OF CHANGES IN EQUITY ................................................................................................ 33 NOTES TO THE FINANCIAL STATEMENTS .......................................................................................... 34 CONSOLIDATED FINANCIAL STATEMENTS ........................................................................................75 GENDER PAY GAP STATEMENT ........................................................................................................... 132 PATTERN OF CERTIFICATE HOLDING ................................................................................................ 135 NOTICE OF ANNUAL REVIEW MEETING (ENGLISH) ...................................................................... 136 NOTICE OF ANNUAL REGVIEW MEETING (URDU) ......................................................................... 137

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FIRST EQUITY MODARABA CORPORATE INFORMATION

Modaraba Company Premier Financail Services (Private) Limited

Board of Directors

Mr. Nadeem Maqbool Chairman(Non-Executive) Mr. Qaiser Ahmed Magoon (Independent) Ms. Alizeh Bashir (Non-Executive) Mr. Adil A. Ghaffar (Executive)

Audit Committee

Mr. Qaiser Ahmed Magoon Ms. Alizeh Bashir Mr. Nadeem Maqbool

Risk Managment Committe

Mr. Qaiser Ahmed Magoon Mr. Nadeem Maqbool Mr. Adil A. Ghaffar

HR Committee

Mr. Nadeem Maqbool Mr. Adil A. Ghaffar Mr. Qaiser Ahmed Magoon

Registered and Business Office

B-1004, 10th Floor Lakson Square Building # 3, Sarwar Shahedd Road, Karachi Tel: 35672815-8 Fax: 35686116 E-mail: [email protected]

Room No. 503 - 504 5th Floor, Pakistan Stock Exchange Building, Karachi Tel: 32446020-3 Fax: 32460766

Auditors

Baker Tilly Mehmood Idrees Qamar Chartered Accountants 4th Floor, Central Hotel Building. Civil Lines, Mereweather Road Karachi - Pakistan T: +92 (021)35644872-7, F: +92 (021) 35644873 Email: [email protected] www.bakertilly.pk

Bankers

Bank Al-Habib Ltd. Habib Metropolitan Bank Ltd. National Bank of Pakistan. United Bank Ltd. Bank Islami Pakistan Ltd. Meezan Bank Ltd. MCB Islamic Ltd.

Registrar

THK Associates (Pvt) Ltd. Plot No. 32-C, Jami Commercial, Street II, D.H.A. Phase VII, Karachi, Tel: +92-21-35310191-2-3 Emial: [email protected]

General Counsel

Moshin M. Tayebaly & Co. Advocates & Legal Consultants

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	June2025	600,000	524,400 50,896 37,518 7,553 13,714 - 31,116 -	665,197	2,383 - - 544,531 - 99,357 18,926	665,197	21,657 (29,050) - - - - (891)	(8,284)	(0.16) -
	June2024	600,000	524,400 59,180 (21,877) 7,170 19,674 - 31,116 -	619,663	3,160 - - 495,903 - 104,054 16,546	619,663	9,025 (27,485) - - - - (976)	(19,436)	(0.37) -
	June2023	600,000	524,400 78,616 (72,519) 6,780 10,440 - 31,128 -	578,845	3,957 - - 474,227 - 89,538 11,123	578,845	4,866 (26,381) - - - - (831)	(22,346)	(0.43) -
	June2022	600,000	524,400 100,962 (68,012) 5,898 14,764 - 30,448 -	608,460	5,060 - - 499,126 9,561 84,037 10,676	608,460	22,850 (25,789) - - - - (3,785)	(6,724)	(0.13) 10.63
	June2021	600,000	524,400 133,906 7,939 5,711 22,456 - 29,554 -	723,965	6,443 - - 563,344 8,634 62,092 83,451	723,965	44,880 (25,989) - (1,889) (246) (335) -	16,421	5.00% 0.31 12.70
Restated	June2020	600,000	524,400 117,485 (29,970) 4,551 9,730 - 29,560 -	655,757	7,788 - - 449,719 53,075 54,418 90,758	655,757	16,691 (22,552) - - -	(5,861)	- (0.11) 11.67
	June2019	600,000	524,400 123,347 (53,437) 4,252 8,333 - 29,561 -	636,456	9,125 - - 430,925 139,583 52,439 4,384	636,456	19,814 (23,117) - - -	(3,304)	- (0.06) 11.33
	June2018	600,000	524,400 126,650 (37,125) 4,046 12,283 - 29,642 -	659,895	7,931 - - 453,889 136,668 49,780 11,626	659,895	17,246 (21,439) - - -	(4,193)	- (0.08) 11.71
	June2017	600,000	524,400 130,843 (30,023) 2,864 62,860 31,464 28,730 -	751,138	8,825 10,000 - 499,291 134,320 57,308 41,394	751,138	82,329 (34,290) - (5,526) -	42,513	6.00% 0.81 12.52
TEN YEARS AT A GLANCE	June2016	600,000	524,400 119,794 (25,286) 2,934 7,940 6,817 27,845 -	664,444	16,361 19,000 - 426,898 140,333 51,063 10,789		30,680 (21,587) - - -		1.30% 0.173 11.93
									Cash Distribution Earnings per certificate Breakup value

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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

The Directors of the Premier Financial Services (Private) Limited, management company of FIRST EQUITY MODARABA (FEM) , are pleased to present their report and audited financial statements of the Modaraba together with the consolidated financial statements of the Modaraba and its wholly owned subsidiaries, Apex Financial Services (Pvt) Ltd, Capital Financial Services (Pvt) Ltd and Equity Textiles Limited for the year ended June 30, 2025

Financial Results

Loss for the year reduced to Rs. (8.28) million as compared to a loss of Rs (19.44) million for the last year translated into a loss per certificate of Rs. (0.16) as compared to Rs. (0.37) last year. The consolidated loss for the year is Rs (232.2) million as compared to the loss of Rs (414.095) million. Break-up value per certificate amounted to Rs.11.69 as against Rs. 10.71 last year.

Financial Results

	Rupees
Income	21,495,675
Expenses
OperatingExpenses	(29,043,230)
Bank Charges	(6,345)
	(29,049,575)
Operatingloss	(7,556,900)
Other Income	164,035
Loss for theyear before taxation	(7,556,900)
Taxation	(891,286)
Net loss for theyear	(8,284,151)
Lossper Certificate	(0.16)

Dividend Distribution

Since the Modaraba sustained a loss during the year, consequently, there would be no announcement of profit distribution (2024: Nil). However, to meet the regulatory requirements, the date of book closure would be from Thursday December 04 2025 to Wednesday, December 10 2025 (both days inclusive)

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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Auditors Qualification

Auditors qualified their opinion based on non-compliance of International Financial Reporting Standard relating to adjusting cost to fair value of marketable securities and any profit / (loss) should be taken / charge to profit and loss account for the year amounting to Rs 54.37 million (2024: Rs (39.7) million). Our principal stand for not accepting auditors’ qualification is based on the fact that, firstly, we do not foresee that these remeasurements are of permanent nature. Secondly, our Industry was established on the concept to distribute what it earns on yearly basis. The Regulatory changes were brought in and the blanket tax exemption earlier given to Modarabas on 90% of its profits for the year has been withdrawn. We believe that adjusting cost to fair value would tantamount to distribution of either unrealized capital gain or recovery of cost.

As envisaged in our last few annual reports, wherein it was categorically mentioned that we foresee a strong momentum in the stock market. Alhamdulillah, it was achieved in 2024-25. Furthermore, during the year, there was net unrealized gain on listed securities. Our vision and determination did not allow us to book unnecessary losses which alongwith other factors like complex tax computation and distribution, forced us to absorb the bitter pill of a qualified opinion in the matter.

Our Performance and Future Prospects

During the year, the stock market showed tremendous performance with huge contribution from banking sector. Market movements are normally influenced by several factors, including political and economic stability, currency parity, international oil prices, and interest rates. While Pakistan recorded a respectable GDP growth, its trade and current account deficits persisted and gradually widened over time due to various factors. Recently, however, key economic indicators have shown some improvement offering hope for a more promising year ahead.

Based on the strong performance of the capital market last year, we anticipate continued momentum in the coming financial year, with promising opportunities for generate strong returns.

During the year, the textile sector further deteriorated, some ventures closed while majority curtailed operations to bare minimum. While, Equity Textile Ltd (ETL), a wholly owned subsidiary, was not fully operational during the year, closely monitored the ground realities and after evaluation, its Board has decided to evaluate sale of its assets.

It is very unfortunate that concept, vision and dream of 1980 whereby a home grown industry was developed in the name of Modarabas and which were given tax exemption through “Modaraba Ordinance, 1980” has been withdrawn through the Finance Bill 2022-2023. Many Modaraba have moved of the sector and may are evaluating their position. We are closely monitoring the situation and looking at the Federal Shariat Curt verdict of December 2027 to convert the financial transaction into Shariah compliant, will take the appropriate decision which will be in the best interest of the certificate holders

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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Shariah Advisor and External Shariah Audit

As required under SCSAM, FEM’s financial transactions were duly vetted and audited by the independent Shariah Advisor and his report is annexed.

As required under the Shariah Governance Regulation, for the year we have conducted the external Shariah Audit, their report is annexed

Board of Directors & Committees

(i) total number of directors
(a) Male 3 (b) Female 1
(ii) composition including the following,-
(a) Independent directors 1 (b) Non-executive directors 2
(c) Executive directors 1

During the year under review, four board meetings were held and attended by the Directors as follows:-

	Name of Board Members	Name of Board Members	Meetings Attended
1	Mr. Nadeem Maqbool	Non-executive Director	4 out of 4
2	Ms Alizeh Bashir	Non-executive Director	4 out of 4
3	Mr Qaiser Ahmed Magoon	Independent Directors	3 out of 4
4	Mr. Adil A. Ghaffar	Executive Directors	4 out of 4

The Board has formed committees comprising of members given below.-

a) Audit Committee

Mr Qaiser Ahmed Magoon Chairman Ms Alizeh Bashir Member Mr Nadeem Maqbool Member b) HR and Remuneration Committee Mr Nadeem Maqbool Chairman Mr Adil A Ghaffar Member Mr Qaiser Ahmed Magoon Member c) Risk Management Committee Mr Nadeem Maqbool Chairman Mr Adil A Ghaffar Member Mr Qaiser Ahmed Magoon Member

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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Code of Corporate Governance

As stated in previous years Report that the Board has decided to adopt the code of corporate governance as issued by the Securities and Exchange Commission of Pakistan and made part of listing regulation

All activities are conducted as per the listing regulations /Rule Book of the stock exchanges. Vision & Mission statements, Core values, Statement of Ethics and Business Practices and Code of Conduct have been prepared and approved by the Board and have been communicated to the employees. Significant policies as required under the Code of Corporate Governance have been framed and are periodically reviewed by the Board.

As required by the Code of Corporate Governance, Directors are pleased to report that:

a. The financial statements prepared by the management of the Modaraba present fairly its true state of affairs, the result of its operations, cash flows and changes in equity;
b. Proper books of accounts of the Modaraba have been maintained;
c. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment;
d. International Financial Reporting Standards (IFRS), as applicable in Pakistan, have been followed in the preparation of financial statements and any departure there from has been adequately disclosed in the Annual Report.
e. The system of internal control is consistently applied though out the year and has been effectively implemented and monitored with ongoing efforts to improve it further;
f. A sound monitoring and control system for Anti Money Laundering and Risk Management Policy as elaborate in the guidelines have been implemented to identify, manage and report different types of risks associated within the Modaraba;
g. There is no doubt about the Modaraba’s ability to continue as a going concern. There is no risks and uncertainties is facing by FEM;
h. There are no statutory payments on account of taxes, duties, levies and charges which are outstanding as on June 30, 2024, except for those disclosed in financial statements; and
i. There has been no material departure from the best practice of corporate governance as detailed in the listing regulation /Rule Book of the Stock Exchange and Regulations framed.

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REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Pattern of Shareholding

Pattern of certificate holding as at 30th June 2025 is annexed with the annual report 2025.

Key Operating and Financial Data - is annexed with the annual report 2025.

Staff Retirement Benefits

The Modaraba’s service rules provide an unfunded gratuity scheme for the permanent employees.

Auditors

As suggested by the audit committee and the consent given by the present auditors M/s Baker Tilly Mehmood Idrees Qamar Chartered Accountants, the Board has decided to recommend their name for the approval to the Registrar Modaraba

Acknowledgement

We are thankful to Mr. Qaiser Ahmed Magoon for his invaluable contribution during his three tenures as independent director. Regulatory requirements are such that we will not be able to take further guidance from him after October 31, 2025.

We acknowledge hard work with full dedication of our employees and are thankful to our business associates, clients and financial institutions for their confidence and support. We also appreciate the guidance and cooperation received from our regulators. They have our full support and good wishes in their efforts at reforms.

On behalf of the Board

Adil A Ghaffar Chief Executive Officer

Nadeem Maqbool Chairman

Karachi Dated October 06 2025

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FIRST EQUITY MODARABA Premier Financial Services (Private) Limited، وج ٹن (FEM) یک � ےہ، ےک ڈارئرٹکیز وخیش ےک اسھت اضمرہب یک آڈٹ دشہ امایلیت روپرسٹ اور اضمرہب ےک رمہاہ اس[می ن ی ج م] ، Capital Financial Services —Apex Financial Services (Pvt) Ltd نپمکںم یتیکلم ذ و لم (Pvt) Ltd اور Equity Textiles Limited—یک ومجمیع امایلیت روپرٹ شیپ رکےت ںیہ۔ ل ئ ن م 19.44 روم 8.28 روم ےک اقمےلب ںیم پ رہ ایگ، وج زگہتش اسل ےک پ اسل ےک دوران اضمرہب اک اسخرہ مک وہ رک اھت۔ پ0.37 رو راہ، ہکبج زگہتش اسل ہی پ0.16 رو یمک ےہ۔ اس ےک اطمقب یف رسٹیکفیٹ اسخرہامنایں 414.095 روم 232.2 روم کے پ راہ، وج زگہتش اسل ےک پ ( Consolidated) اینبد رپ اسالہن اسخرہ ومجمیع اقمےلب ںیم رتہب ےہ۔ یھت۔ پ10.71 رو اسل ہی ر کبج زگہتش پ11.69 رو یلییف رسٹیکفیٹ ب ک ص)( خ ئ نل مم )(روپ قر 21,495,675 آدمین (29,043,230) جتگنٹی ارخ پآر (6,345) رزجچکنیب ا (29,049,575) تجگنٹی ارخ پلک آر (7,556,900) گنٹی اسخرہپآر 164,035 درگی آدمن (7,556,900) سکیٹ ےس لبق اسخرہ ٹیکس (891,286) (8,284,151) اسل اک اخصل اسخرہ (0.16) یف رسٹیکفیٹ اسخرہ

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��

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�oard of �irectors of Premier Financial Services (Pvt) �td, Managers of First Equity Modaraba (FEM) – a Shariah�Compliant Modaraba

��

�e have underta�en a reasonable assurance engagement as required by the Shariah �overnance Regulations, 2�2� issued by the Securities and Exchange Commission of Pa�istan (SECP). The engagement aimed to assess the compliance of First Equity Modaraba’s (FEM) financial arrangements, contracts, and transactions having Shariah implications with Shariah principles for the year ended �une ��, 2�2�.

This engagement was conducted by a multidisciplinary team comprising assurance practitioners and independent Shariah scholar(s).

��

Our review covered FEM’s financing, investment, and operational activities. The procedures included�

Examination of selected documents and records relating to FEM’s financing, investment, and operational activities.
Review of policies, internal Shariah controls, and implementation of the Shariah Advisor’s directives.
Evaluation of FEM’s compliance with AAO�F� standards and internal Shariah governance framewor�.
�iscussions with management regarding �ey transactions and compliance observations.

The review was carried out on a test�chec� basis and does not constitute a full financial audit. The responsibility for ongoing Shariah compliance rests with FEM’s management and its Shariah Advisor.

��

The criteria for this engagement include the Shariah principles and rules as defined under the Shariah �overnance Regulations, 2�2�, which were assessed for their implications on FEM’s operations and financial statements for the year ended �une ��, 2�2�.

Cont’d….Page No.2

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Statement of Compliance with Listed Companies (Code of Corporate Governance) Regulations, 2019

Name of Modaraba FIRST EQUITY MODARABA Year ending JUNE 30, 2025

The company has complied with the requirements of the Regulations in the following manner:-

The total number of directors are 4 as per the following:

a. Male: 3 b. Female: 1

The composition of board is as follows:

a) Independent Directors 1 b) Other Non-executive Director 2 c) Executive Directors 1

The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this company;
The company has prepared a code of conduct and has ensured that appropriate steps have been taken to disseminate it throughout the company along with its supporting policies and procedures;
The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. The Board has ensured that complete record of particulars of the significant policies along with their date of approval or updating is maintained by the company;
All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by the Board as empowered by the relevant provisions of the Act, Modaraba Ordinance and these Regulations;
The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose. The Board has complied with the requirements of Act, Modaraba Ordinance and the Regulations with respect to frequency, recording and circulating minutes of meeting of the Board;
The Board has a formal policy and transparent procedures for remuneration of directors in accordance with the Act and these Regulations;

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The Board has arranged Directors’ Training program. Following Directors have completed the training

Mr Adil A Ghaffar Mr Nadeem Maqbool Ms Alizeh Bashir

The Board has approved appointment of chief financial officer, company secretary and head of internal audit, including their remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations;
Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval of the Board;
The Board has formed committees comprising of members given below.-
a) Audit Committee
- Mr Qaiser Ahmed Magoon Chairman Ms Alizeh Bashir Member Mr Nadeem Maqbool Member
b) HR and Remuneration Committee
- Mr Nadeem Maqbool Chairman Member
- Mr Adil A Ghaffar Mr Qaiser Ahmed Magoon Member
c) Risk Management Committee
- Mr Nadeem Maqbool Chairman Member
- Mr Adil A Ghaffar Mr Qaiser Ahmed Magoon Member
The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for compliance;
Quarterly the Audit Committee meetings is held, whereas one meeting each of HR and Remuneration Committee and Risk Management Committee is held;
The Board has set up an effective internal audit function to who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the company;

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The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit Oversight Board of Pakistan, that they and all their partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and non-dependent children) of the chief executive officer, chief financial officer, head of internal audit, company secretary or director of the company;
The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, these Regulations or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard;
We confirm that all requirements of the Regulations have been complied with except the number of Independent Director. The Directors of Modaraba belong with MMC which is private limited company and the single independent Director has requisite education and suitable qualification and experience to carry the responsibility independently; and
We confirm that there is no noncompliance with requirements of CCGR.

On behalf of the Board

Karachi Dated October 06 2025

Adil A Ghaffar Chief Executive Officer

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Baker Tilly Mehmood Idrees Qamar Chartered Accountants 4th Floor, Central Hotel Building, Civil Lines, Mereweather Road, Karachi - Pakistan

T: +92 (021) 35644872-7 F: +92 (021) 35644873 [email protected] www.bakertilly.pk

TO THE MEMBERS OF FIRST EQUITY MODARABA REVIEW REPORT ON STATEMENT OF COMPLIANCE CONTAINED IN LISTED COMPANIES CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 (hereinafter referred to as 'Code') prepared by the Board of Directors of Premier Financial Services (Private) Limited (the Management Company) for the year ended June 30, 2025 to comply with the requirements of regulation 36 of Listed Companies (Code of Corporate Governance) Regulations.

The responsibility for compliance with the Code and the Rules is that of the Board of the Management Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the Modaraba's compliance with the provisions of the Rules and report if it does not and to highlight any noncompliance with the requirements of the Code or the Rules. A review is limited primarily to inquiries of the Modaraba's and Management Company's personnel and review of various documents prepared by the Management Company to comply with the Code and the Rules.

As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board's statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Management Company's corporate governance procedures and risks.

Further, the Code and the Rules requires the Management Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval its related party transactions distinguishing between transaction's carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price and recording proper justification for using such alternate pricing mechanism. Further, all such transactions are also required to be separately placed before the audit committee. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length price or not.

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ADVISORY -ASSURANCE - TAX

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Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Management Company's compliance, for and on behalf of Modaraba, in all material respects, with the requirements contained in the Code and the Rules as applicable to the Modaraba for the year ended June 30, 2025.

Further, we draw attention to following instance of non-compliance to the annexed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019:

Ratio of independent directors in the board of directors: As referred in point no.2(a) to the annexed Statement of Compliance, considering the limited business in the Modaraba, the single independent director has requisite education and suitable experience to carry out relevant responsibilities, therefore the Board has not appointed any other independent director.

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Engagement Partner: Muhammad Aqeel Ashraf Tabani

Karachi.

Date: October 30, 2025

UDIN: CR2025105421ObBQefx7

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BALANCE SHEET AS AT JUNE 30, 2025

EQUITY AND LIABILITIES


EQUITY AND LIABILITIES		2025	2024
	Note	------------------- Rupees ----------------
Authorized certifcate capital
60,000,000 Modaraba certifcates of Rs. 10 each		600,000,000	600,000,000

Certifcate holders' equity
Issued, subscribed and paid-up certifcate capital	5	524,400,000	524,400,000
Reserves	6	50,895,891	59,180,043
Remeasurement of defned beneft liability - actuarial gain		4,013,719	2,873,713
Unrealized loss on remeasurement of investment		33,504,577	(24,749,991)
Total certifcate holders' equity		612,814,187	561,703,765
Non-current liabilities

Deferred liability	7	7,552,903	7,170,120
Security deposit		575,000	200,000
Total non-current liabilities		8,127,903	7,370,120
Current liabilities

Creditors, accrued and other liabilities	8	13,139,512	19,473,557
Unclaimed proft distribution		31,116,073	31,116,073
Total current liabilities		44,255,585	50,589,630

Total equity and liabilities		665,197,675	619,663,515

Contingencies and commitments	9

For Premier Financial Services (Private) Limited

( Modaraba Management Company )

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Qazi Obaid Ullah Adil A. Ghaffar Chief Financial Officer Chief Executive Officer Director Director Premier Financial Services Premier Financial Services Premier Financial Services (Private) Limited (Private) Limited (Private) Limited

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BALANCE SHEET AS AT JUNE 30, 2025

ASSETS


ASSETS		2025	2024
	Note	---------------- Rupees -----------------
Non-current assets
Fixed assets

-tangible	10	1,631,066	2,288,587

-intangible	11	-	-

Investment property	12	751,667	871,667

Long term investments	13	422,119,707	418,239,233

Advances - considered good		2,510,000	2,510,000

Deposits		1,750,000	1,750,000

Total non-current assets		428,762,440	425,659,487
Current assets

Short term investments	15	122,411,132	77,664,074

Advances - considered good	16	13,482,335	12,425,129

Trade deposits and prepayments	17	15,618,316	15,311,748

Other receivables	18	65,996,924	72,057,555

Bank balances	19	18,926,528	16,545,521

Total current assets		236,435,235	194,004,028

Total assets		665,197,675	619,663,515

The annexed notes 1 to 40 form an integral part of these financial statements.

For Premier Financial Services (Private) Limited ( Modaraba Management Company )

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Page # 30

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2025

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----- Start of picture text -----

2025 2024
Note ---------------- Rupees -----------------
INCOME 20 21,492,675 8,879,342
Operating expenses 21 (29,043,230) (27,484,072)
Financial charges 22 (6,345) (899)
(29,049,575) (27,484,971)
Operating loss (7,556,900) (18,605,629)
Other income 23 164,035 146,063
Loss before income tax and levy (final & minimum tax) (7,392,865) (18,459,566)
Final taxes 24.3 (610,730) (771,864)
Minimum taxes 24.4 (267,117) (164,212)
Loss before income tax (8,270,712) (19,395,642)
Income tax
- Current For the year - -
Prior year (13,439) (40,337)
(13,439) (40,337)
Loss after income tax (8,284,151) (19,435,979)
Loss per certificate - basic and diluted 26 (0.16) (0.37)
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For Premier Financial Services (Private) Limited

( Modaraba Management Company )

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Adil A. Ghaffar Chief Executive Officer Director Director Premier Financial Services Premier Financial Services Premier Financial Services (Private) Limited (Private) Limited (Private) Limited

Qazi Obaid Ullah Chief Financial Officer

Page # 31

STATEMENT OF COMPREHENCSIVE INCOME FOR THE YEAR ENDED JUNE 30, 2025

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2025 2024
Other comprehensive income ------------------- Rupees ---------------
Items that will be subsequently reclassified:
- Unrealized gain / (loss) on remeasurement of investment 70,330,779 48,326,927
- Reversal of unrealized gain on disposal of investments (15,956,685) (8,606,428)
Items that will not be subsequently reclassified:
- Remeasurement of defined benefit liability 1,140,006 1,185,570
- Unrealized gain on remeasurement of investment held at
'fair value through other comprehensive income' 3,880,474 9,737,003
Other comprehensive income 59,394,574 50,643,072
Total comprehensive income / (loss) for the year 51,110,423 31,207,093
----- End of picture text -----

The annexed notes 1 to 40 form an integral part of these financial statements.

Qazi Obaid Ullah Chief Financial Officer

Adil A. Ghaffar Chief Executive Officer Director Director Premier Financial Services Premier Financial Services Premier Financial Services (Private) Limited (Private) Limited (Private) Limited

Page # 32

CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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Page # 33

CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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2025 2024
Note ------------------- Rupees ---------------
CASHFLOWS FROM OPERATING ACTIVITIES
Loss before income tax and levy (final & minimum tax) (7,392,865) (18,459,566)
Adjustments for non-cash and other items:
Depreciation on tangible assets 771,981 782,102
Depreciation on investment property 120,000 120,000
Provision for gratuity 1,522,789 1,575,363
Dividend income (4,071,537) (5,145,758)
(1,656,767) (2,668,293)
Cash used in operations before working capital changes (9,049,632) (21,127,859)
Working capital changes:
Decrease / (Increase) in operating assets
Advance 10,780 41,290
Trade deposits and prepayments (306,568) (18,281)
Other receivables 6,060,631 (14,102,709)
5,764,843 (14,079,700)
(Decrease) / Increase in operating liabilities 375,000 -
Creditors, accrued and other liabilities (6,334,045) 9,232,898
(5,959,045) 9,232,898
Dividend paid - (11,798)
Tax paid (1,959,272) (1,412,638)
Net cash used in operating activities (11,203,106) (27,399,097)
CASHFLOWS FROM INVESTING ACTIVITIES
Investments - net 9,627,036 27,781,507
Dividend received 4,071,537 5,145,758
Purchase of tangible assets (114,460) (105,200)
Net cash generated from investing activities 13,584,113 32,822,065
Net increase in cash and cash equivalents 2,381,007 5,422,968
Cash and cash equivalents at beginning of the year 16,545,521 11,122,553
Cash and cash equivalents at the end of the year 19 18,926,528 16,545,521
The annexed notes 1 to 40 form an integral part of these financial statements.
----- End of picture text -----

For Premier Financial Services (Private) Limited ( Modaraba Management Company )

Page # 34

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

1. LEGAL STATUS AND NATURE OF THE BUSINESS

First Equity Modaraba (the Modaraba) was formed in 1991 under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the Rules framed there under and is managed by Premier Financial Services (Private) Limited (the Modaraba Management Company), a company incorporated in Pakistan.

The Modaraba is a perpetual, multipurpose modaraba and is able to undertake a variety of fund and fee based activities. These include trading, manufacturing, equity investment and their financing and facilitation. The Modaraba is a Trading Right Entitlement Certificate (TREC) holder of the Pakistan Stock Exchange Limited and is currently operating its brokerage activities in Pakistan Stock Exchange Limited.

The Modaraba is listed on Pakistan Stock Exchange Limited. The registered office of the Modaraba is situated at B-1004, 10th floor, Lakson Square Building 3, Sarwar Shaheed Road, Karachi. The Modaraba has the following wholly owned subsidiary companies.

Equity Textiles Limited
Capital Financial Services (Private) Limited
- Apex Financial Services (Private) Limited

2. BASIS OF PREPARATION

2.1 Statement of compliance

These financial statements have been prepared in accordance with the requirements of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, the Modaraba Companies and Modaraba Rules, 1981, Trust Deed and directives issued by the Securities and Exchange Commission of Pakistan (the SECP) (‘collectively the applicable Modaraba laws, the Modaraba Regulations’) together with approved accounting standards as applicable in Pakistan to Modarabas. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) and Islamic Financial Accounting Standards (IFAS) as notified under the provisions of the Companies Act, 2017 and made applicable to modarabas under ‘the Modaraba Regulations’. Wherever the requirements of the applicable Modaraba laws, the Modaraba Regulations differ with the requirement of IFRSs, the requirement of collectively the applicable Modaraba laws, the Modaraba Regulations and IFAS shall prevail.

2.2 Basis of measurement

These financial statements have been prepared under the "historical cost convention" except for the revaluation of certain financial assets which are stated at fair value. These financial statements have been prepared following accrual basis of accounting except for cash flow information. The Modaraba follows trade date accounting for recording of all of its financial assets and liabilities.

2.3 Functional and presentation currency

These financial statements have been presented in Pakistan Rupees, which is the functional and presentation currency of the Modaraba.

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Page # 35

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

2.4 Significant accounting estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making judgments about carrying values of assets and liabilities. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future period effected.

Judgments made by the management in the application of approved accounting standards, as applicable in Pakistan, that have significant effect on the financial statements and estimates with a significant risk of material judgment in the next year are as follows:

				Note	Note
a)	Useful life of depreciable assets / amortizable assets		4.1 & 4.2
b)	Impairment of assets	4.1.1, 4.2,			4.4.1 & 4.12
c)	Classifcation of investments			4.4
d)	Income tax			4.6
e)	Provision for staf gratuity			4.8
f)	Provision for non-performing assets			4.12

3. STANDARDS, INTERPRETATIONS AND AMENDMENTS TO THE APPROVED ACCOUNTING STANDARDS

There are certain amendments and interpretations to the accounting and reporting standards which are mandatory for the Company’s annual accounting period which began on July 01, 2024. However, these do 3.1 not have any significant impact on the Company’s financial statements except as disclosed in note 4 to these financial statements.

Standards, amendments and interpretations to existing standards that are not yet effective and have not been
3.2 early adopted by the Company:

		Efective date
		(annual reporting periods
		beginning on or after)
IAS 21	The Efects of Changes in Foreign Exchange Rates (Amendments)	January 01, 2025
IFRS 7	Financial Instruments: Disclosures (Amendments)	January 01, 2026
IFRS 9	Financial Instruments: Classifcation and Measurement (Amendments)	January 01, 2026
IFRS 17	Insurance Contracts	January 01, 2026
	Annual improvements to IFRS 7, IFRS 9 and IAS 7 (Statement of Cash Flows)	January 01, 2026

Page # 36

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

3.3 The above standards, amendments to approved accounting standards and interpretations are not likely to have any material impact on the Company’s financial statements.
3.4 Other than the aforesaid standards, interpretations and amendments, International Accounting Standards Board (IASB) has also issued the following standards and interpretation, which have not been notified locally by the Securities and Exchange Commission of Pakistan (SECP) as at June 30, 2025;

IFRS 1 First-time Adoption of International Financial Reporting Standards IFRIC 12 Service Concession Arrangement IFRS 18 Presentation and Disclosures in Financial Statements IFRS 19 Subsidiaries without Public Accountability: Disclosures

4. MATERIAL ACCOUNTING POLICY INFORMATION

The principal accounting policies applied in the presentation of these financial statements are set out below.

4.1 Fixed Assets

4.1.1 Tangible

Fixed assets are stated at cost less accumulated depreciation and identified impairment loss, if any.

Depreciation is charged to income applying the straight line method whereby the depreciable amount of an asset is written off over its estimated useful life. Depreciation is charged at rates stated in note 10.

Depreciation on additions is charged from the month during which the asset is put to use. For disposals during the year, depreciation is charged up to the month preceding the month of disposal.

The assets' residual value and useful lives are reviewed and adjusted, if appropriate, at each statement of financial position date.

Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalized. Expenditure incurred subsequent to the initial acquisition of assets are capitalized only when it meets the recognition criteria. The profit or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognized as an income or expense.

The Modaraba assesses at each statement of financial position date whether there is any indication that fixed assets may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying values exceed the respective recoverable amounts, assets are written down to their recoverable amounts and the resulting impairment loss is recognized in income currently. The recoverable amount is the higher of an assets’ fair value less costs to sell and value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the assets’ revised carrying amount over its estimated useful lives.

4.1.2 Intangible

Intangible assets are stated at cost less impairment, if any. The carrying amount is reviewed at each balance sheet date to assess whether it is in excess of its recoverable amount and where the carrying value exceeds estimated recoverable amount, it is written down to its estimated recoverable amount.

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Page # 37

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4.2 Investment property

Property held to earn rentals or for capital appreciation or for both is classified as investment property. The investment property of the Modaraba comprises of office premises and is valued using the cost method i.e. at cost less any accumulated depreciation and any identified impairment loss.

Depreciation on office premises is charged to profit and loss account on the straight line method so as to write off the depreciable amount of office premises over its estimated useful life at the rate defined in note no. 12. Depreciation on additions to investment property is charged from the month in which a property is acquired or capitalized while no depreciation is charged for the month in which the property is disposed off.

The Modaraba assesses at each statement of financial position date whether there is any indication that investment property may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying amounts exceed the respective recoverable amount, assets are written down to their recoverable amount and the resulting impairment loss is recognized in profit and loss account. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its remaining estimated useful life.

The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognized as an income or expense.

4.3 Deferred cost and amortization

The deferred cost is written off over a period not exceeding five years in accordance with the requirements of third schedule of Modaraba Companies and Modaraba Rules, 1981.

4.4 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised in the Modaraba statement of assets and liabilities when the Modaraba becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the income statement.

4.4.1 Financial assets

Initial Measurement

The Modaraba classifies its financial assets into following three categories:

measured at amortized cost (AC);
fair value through profit or loss (FVTPL); and
fair value through other comprehensive income (FVOCI);

Page # 38

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

A financial asset is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

Subsequent measurement:

These assets are subsequently measured at fair value. Interest / markup income calculated using the effective interest method, and impairment are recognized in the statement of profit or loss account. Other net gains and Debt Investments at FVOCI losses are recognized in other comprehensive income. On de-recognition, gains and losses accumulated in other comprehensive income are reclassified to the statement of profit or loss.

These assets are subsequently measured at fair value. Net gains and Financial assets at FVTPL losses, including any interest / markup or dividend income, are recognized in the statement of profit or loss.

Financial assets measured at these assets are subsequently measured at Financial assets measured at amortized cost using the effective amortized cost interest method. The amortized cost amortized cost is reduced by impairment losses. Interest / markup income, and impairment are recognized in the statement of profit or loss. These assets are subsequently measured at fair value. Dividends are recognized as income in the statement of profit or loss account unless the dividend clearly represents a recovery of part of the cost of the Equity Investments at FVOCI investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to the statement of profit or loss.

Impairment of financial assets

IFRS 9’s impairment requirements use more forward-looking information to recognize expected credit losses – the ‘expected credit loss (ECL) model’. This replaces IAS 39’s ‘incurred loss model’. Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortized cost and FVOCI that are not measured at fair value through profit or loss.

Recognition of credit losses is no longer dependent on the Modaraba first identifying a credit loss event. Instead the Modaraba considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Provision of financial assets (i.e. Musharaka, Ijarah and Murabaha) is recognized in accordance with the criteria laid down in prudential regulations issued by Securities and Exchange commission of Pakistan (SECP) and is charged to the statement of profit or loss in the period to which it relates.

Financial liabilities

4.4.2 Financial liabilities are initially recognized on trade date i.e. date on which the Modaraba becomes party to the respective contractual provisions. The Modaraba derecognizes the financial liabilities when contractual obligations are discharged or cancelled or expired. Financial liability other than at fair value through profit or loss are initially measured at fair value less any directly attributable transaction cost. Subsequent to initial recognition, these liabilities are measured at amortized cost using effective interest rate method.
4.4.3 Investment in subsidiary

Investment in subsidiary is initially recognized at cost. At subsequent reporting dates, the recoverable amounts are estimated to determine the extent of impairment losses, if any, and carrying amounts of investments are adjusted accordingly. Impairment losses are recognized as expense. Where impairment losses subsequently reverse, the carrying amounts of the investments are increased to the revised recoverable amounts but limited to the extent of initial cost of investments. A reversal of impairment loss is recognized in the statement of profit and loss.

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Page # 39

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4.5 Revenue recognition

Income from Morabaha / Musharaka transactions is recognized on the basis of pro-rata accrual of the
(a) estimated profit earned during the year.
(b) Dividend income is recognized when the right to receive dividend is established.
(c) Brokerage commission and fee income is recognized when accrued.
(d) Profit on PLS deposits is recognized on an accrual basis.
(e) Capital gains or losses arising on sale of investments are taken to income in the period in which they arise.
(f) Unrealized income is suspended, where necessary, on non-performing assets (including non-performing net investment in ijarah and murabaha and musharaka finances), in accordance with the requirements of the Prudential Regulations for Modarabas issued by the SECP.
4.6 Taxation and levy (final and minimum tax)
4.6.1 Levy - final and minimum tax

Computation of minimum tax chargeable under various sections of ITO 2001, provisions of such sections require its comparison with amount of tax attributable to income streams taxable at general rate of taxation, such minimum taxes are not fully outside the scope of IAS-12 and a certain portion of them falls in scope of IAS - 12. Based on this, the minimum taxes under ITO 2001 are hybrid taxes which comprise of a component within the scope of IAS - 12 and a component within the scope of IFRIC - 21 / IAS - 37.

As regards final taxes, its computation is based on revenue or other bases other than taxable income, therefore, final taxes fall under levy within the scope of IFRIC – 21 / IAS – 37, hence treated and classified accordingly, as per the requirements of / and guidelines issued by ICAP.

In identifying and classifying each component of minimum tax being hybrid in nature, company designate the amount calculated on taxable income using the notified tax rate as an income tax within the scope of IAS – 12 “Income taxes” and recognize it as current income tax expense. Any excess over the amount designed as income tax, is recognized as a levy falling under the scope of IFRIC – 21 / IAS – 37.

4.6.2 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the statement of profit or loss except to the extent that it relates to item recognized directly in other comprehensive income in which case it is recognized in other comprehensive income.

Current

The charge for current taxation is based on taxable income at the current rates of taxation after taking into account tax credit and tax rebates realisable, if any.

Prior tax

The charge for prior tax includes adjustments to charge for prior years which arises from assessments / developments made during the year, if any.

Deferred

The Modaraba accounts for deferred taxation on all material temporary differences using the liability method arising between the amounts attributed to assets and liabilities for financial reporting purposes and financial statements used for taxation purposes.

Page # 40

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4.7 Foreign currency translation

All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at exchange rates prevailing at the statement of financial position date. Transactions in foreign currencies are translated into Pak rupees at exchange rate prevailing at the date of transaction. All non-monetary items are translated into rupees at exchange rate prevailing on the date of transaction or on the date when fair values are determined.

4.8 Retirement benefits

The Modaraba operates an Unfunded Gratuity for its permanent employees who complete the qualifying period of service. Provision has been made in accordance with actuarial recommendations using the Projected Unit Credit Method. The results of current valuation are summarized in Note 7. Actuarial gains / losses are recognized over the average lives of the employees.

4.9 Offsetting of financial assets and financial liabilities

A financial asset and financial liability is offset and the net amount is reported in the statement of financial position if the Modaraba has a legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

4.10 Provisions

Provisions are recognized in the statement of financial position when the Modaraba has a legal or constructive obligation as a result of past event and it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and reliable estimate can be made of the amount of the obligation.

4.11 Profit distribution to certificates holders

Profit distribution to certificate holders is recognized as liability in the period in which such distribution is announced.

4.12 Impairment of Non-financial assets

The carrying amount of Modaraba’s assets are reviewed at each statement of financial position date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated and impaired losses are recognized in the statement of profit or loss.

4.13 Segment reporting

A segment is a distinguishable component of the Modaraba that is engaged in business activities from which the Modaraba earns revenues and incur expenses and its results are regularly reviewed by the Modaraba's Chief Operating Decision Maker to make decision about resources to be allocated to the segment and assess its performance. Further, discrete financial information is available for each segment.

Based on internal management reporting structure, services provided and products produced and sold, the Modaraba is organized into the following four operating segments:

Musharaka facility
Brokerage operation - Capital market - Others

Management monitors the operating results of above mentioned segments separately for the purpose of making decisions about resources to be allocated and assessing performance.

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Page # 41

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4.14 Earnings per certificate

The Modaraba presents earnings per certificate (EPC) data for its certificates. Basic EPC is calculated by dividing the profit or loss attributable to certificate holders of the Modaraba by weighted average number of certificates outstanding during the year. Diluted EPC is determined by adjusting the profit or loss attributable to certificate holders and the weighted average number of certificates outstanding for the effects of all dilutive potential certificates.

4.15 Related party transactions

All transactions with related party, if any, are recorded at an arm’s length basis.

4.16 Cash and cash equivalents

For the purposes of cash flow statement, cash and cash equivalents comprise cash in hand and cash with banks.

4.17 Functional and reporting currency

Items included in the financial statements are measured using the currency of primary economic environment in which the Modaraba operates. The financial statements are presented in Pakistani Rupees, which is the Modaraba’s functional and presentation currency.

4.18 Capital Risk Management

The Modaraba’s objective when managing capital is to safe guard the Modaraba’s ability to continue as a going concern so that it can provide returns for certificate holders and benefits for other stakeholders and to maintain a strong capital base to support the sustained development of its businesses.

The Modaraba manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Modaraba may adjust the amount of dividend paid to certificate holders or issue new certificates.

Page # 42

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

5. ISSUED, SUBSCRIBED AND PAID-UP CERTIFICATE CAPITAL

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||||||
|---|---|---|---|---|
|2025|2024|2025|2024|
|--- Number of certificates ---|Note|-------------- Rupees ------------|
|46,220,000|46,220,000|5.1|462,200,000|462,200,000|
|6,220,000|6,220,000|5.2|2,200,000|62,200,000|
|52,440,000|52,440,000|524,400,000|524,400,000|
|5.1|
|Modaraba certificates of Rs. 10 each fully paid-up in cash.|
|5.2|
|Modaraba certificates of Rs. 10 each issued as fully paid-up bonus certificates.|
|2025|
|5.3|PATTERN OF SHARHOLDING|
|Shares held|Percentage|
|Directors and their spouse(s) and minor children|
|Mr. Nadeem Maqbool|608,356|1.160%|
|Mrs. Nazia Maqbool|144,660|0.276%|
|Mr. Qaiser Ahmed Magoon|1,000|0.002%|
|Ms. Alizeh Bashir|98,706|0.188%|
|Associated companies, undertakings and related parties|13,709,834|26.144%|
|Public Sector Companies and Corporations|1,498,659|2.858%|
|Banks, development finance institutions, non- banking finance companies,|
|3,457,004|6.592%|
|insurance companies, takaful, modarabas and pension funds|
|Others|32,921,781|62.780%|
|52,440,000|100%|

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5.4 Below are the names of shareholders having more than 5% of the shares and all changes in shareholding above 5%.

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----- Start of picture text -----

||||||
|---|---|---|---|---|
|2025|2024|2025|2024|
|Name of shareholders|-------------- % of holding -------|
|Humera Muhammad Iqbal|
|5,809,784|5,809,784|11.079%|11.079%|
|Premier Financial Services (Private) Limited|
|(Modaraba Management Company)|
|5,533,081|5,533,081|10.551%|10.551%|
|Premier Insurance Limited|
|4,680,000|4,680,000|8.924%|8.924%|
|Durain Cassim|3,500,000|3,500,000|6.674%|6.632%|
|Dinaz Cassim|3,500,000|3,500,000|6.674%|6.172%|
|Sharik Bashir|3,209,171|3,209,171|6.120%|6.120%|
|Suraj Cotton Limited|3,277,899|1,906,500|6.251%|3.636%|

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Page # 43

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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----- Start of picture text -----

2025 2024
6. RESERVES -------------- Rupees ------------
Capital reserve
Statutory reserve 164,334,210 64,334,210
Certificate premium account 131,100,000 131,100,000
Revenue reserve
Accumulated loss (261,859,355) (253,575,203)
General reserve 17,321,036 17,321,036
50,895,891 59,180,043
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6.1 In accordance with the Prudential Regulations for Modarabas, the Modaraba is required to transfer an amount not less than 20% and not more than 50% of its after tax profts to statutory reserve until the reserve fund equals the certifcate capital. 2025 2024 7. DEFERRED LIABILITY Note -------------- Rupees ------------ Staf gratuity *7.2* 7,552,903 7,170,120

7,552,903 7,170,120

7.1General description

Employees, after completion of one year of service, shall be entitled for gratuity on leaving the Modaraba's employment. Gratuity shall be paid on the basis of one month’s last drawn monthly gross salary for each completed year of service.

Annual provision is based on actuarial valuation, which was carried out as at June 30, 2025 on September 15, 2025 using the Projected Unit Method.

7.2 Amount recognized in the statement of fnancial position are as follows: Present value of defned beneft obligation	2025 2024 -------------- Rupees ------------ 7,552,903 7,170,120	2025 2024 -------------- Rupees ------------ 7,552,903 7,170,120
Total defned beneft	7,552,903	7,170,120

7.3 Movement in defned beneft obligation Opening balance	7,170,120	6,780,327
Charged for the defned beneft plan
Current service cost	465,196	473,560
Net interest	1,057,593	1,101,803
Actuarial gain on obligation	(1,140,006)	(1,185,570)
	382,783	389,793
	7,552,903	7,170,120

Page # 44

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

		2025 2024
7.4 Actuarial assumptions Valuation discount rate Salary increase rate -short term (period of next one year) Salary increase rate- long term The expected maturity analysis of undiscounted retirement beneft obligation is:		------ Rates per annum ------ 14.75% 16.25% 11.75% 14.75% 11.75% 14.75% 2025 Un-discounted payments ------------ Rupees ------------
2026		167,832
2027		193,123
2028		3,798,015
2029		162,159
2030 and onwards		38,511,471

Mortality rates assumed were based on the SLIC 2001-2005 (Standard Life table for Pakistani insured population) mortality table.

The rates for withdrawal from service and retirement on ill-health grounds are based on industry / country experience.

Reasonable possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amount shown below:

	Impact on defned beneft	Impact on defned beneft	obligation
	Change in	Increase	Decrease
	assumptions
	---- (%) ----	------------ Rupees ------------
Discount rate	1%	7,137,747	8,020,837
Salary growth rate	1%	8,020,761	7,130,293

The expected gratuity expense for the next year amounted to Rs. 1.163 million. This is the amount by which defined benefit liability is expected to increase.

Risks to which the scheme maintained by the Company is exposed are as follows such as:

Salary risk

The risk that the final salary at the time of cessation of service is higher than what was assumed. Since the benefit is calculated on the final salary, the benefit amount increases similarly.

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Page # 45

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

Mortality risk

The risk that the actual mortality experience is different than the assumed mortality. This effect is more pronounced in schemes where the age and service distribution is on the higher side.

Withdrawal risk

The risk of actual withdrawals experience is different from assumed withdrawal probability. The significance of the withdrawal risk varies with the age, service and the entitled benefits of the beneficiary.

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----- Start of picture text -----

2025 2024
Note ------------ Rupees ------------
8. CREDITORS, ACCRUED AND OTHER LIABILITIES
Payable to clients 8.1 8,292,833 11,497,179
Accrued expenses 4,388,626 6,543,633
Other liabilities 8.2 458,053 1,432,745
13,139,512 19,473,557
----- End of picture text -----

8.1 Payable to clients include payable to related parties amounting to Rs. 569,174.

Other liabilities include Rs. 58,053 (2024: Rs. 1,190,745) payable to Premier Financial Services (Private) 8.2 Limited.

CONTINGENCIES AND COMMITMENTS

Modaraba has filed a suit against Samba Bank Limited for the recovery of deposit amounting to Rs. 21 million along with mark up. The matter is pending before the Honorable High Court of Sindh. Management of the Modaraba and its legal advisor are of the opinion that Modaraba has reasonable chance and it appears unlikely that Modaraba may suffer any loss from the same.

Modaraba has filed a suit against SECP for declaration and permanent injunction before the High Court of Sindh restraining SECP from cancelling, lapsing, extinguishing or affecting its Trading Right Entitlement Certificate issued by Pakistan Stock Exchange or any right of the Company under the same and directing SECP to grant permission for incorporating a wholly owned subsidiary company for transfer of the Certificate to such company. The Court passed ad interim orders restraining SECP from taking any coercive action against the Company and to maintain status quo. The matter is at the stage of hearing of applications.

Page # 46

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

10. TANGIBLE ASSETS


	Ofce premises	Furniture and fxtures			Motor vehicles	Computers	Ofce equipments				Total
	------------------------------------------------ Rupees ------------------------------------------------

Net carrying value basis
Year ended June 30, 2024
Opening net book value	2,463,356		2		1	304,961		197,169			2,965,489
Additions - at cost	-		-		-	105,200					105,200
Disposal
Cost	-		-		-	-		-			-

Accumulated depreciation	-		-		-	-		-			-
	-		-		-	-		-			-
Depreciation charge	(511,838)		-		-	(176,878)		(93,386)			(782,102)
Closing net book value	1,951,518		2		1	233,283		103,783			2,288,587

Gross carrying value basis
As at June 30, 2024
Cost	10,380,294		105,059		2,745,635	923,906		1,062,245		15,217,139
Accumulated depreciation	(8,428,776)		(105,057)	(2,745,634)		(690,623)		(958,462)	(12,928,552)
Net book value	1,951,518		2		1	233,283		103,783			2,288,587

Net carrying value basis
Year ended June 30, 2025
Opening net book value	1,951,518		2		1	233,283		103,783			2,288,587
Additions - at cost	-		-		-	31,000		83,460			114,460
Disposal
Cost Accumulated depreciation	- -		- -		- -	- -		- -			- -
	-		-		-	-		-			-
Depreciation charge	(518,954)		-		-	(157,726)		(95,301)			(771,981)
Closing net book value	1,432,564		2		1	106,557		91,942			1,631,066

Gross carrying value basis
As at June 30, 2025
Cost	10,380,294		105,059		2,745,635	954,906		1,145,705		15,331,599
Accumulated depreciation	(8,947,730)		(105,057)	(2,745,634)		(848,349)	(1,053,763)		(13,700,533)
Net book value	1,432,564		2		1	106,557		91,942			1,631,066

Depreciation (% per annum)	5%		20%		20%	33%		20%

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Page # 47

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
		Note	------------- Rupees -----------
11.	INTANGIBLE ASSETS
	Cost	11.1	10,000,000	10,000,000
	Advance against TREC		(10,000,000)	(10,000,000)

			-	-

11.1	The Modaraba has received Rs.10 million against the sale of Trading Right Entitlement Certifcate (TREC) to
	wholly owned subsidiaries (Capital Financial Services (Private) Limited and Apex Financial Services (Private)
	Limited) in pursuance of the agreement dated April 18, 2017.
			Ofce Premises
			2025	2024
12.	INVESTMENT PROPERTY		------------- Rupees -----------
	Net carrying value basis
	Year ended June 30,
	Opening net book value		871,667	991,667
	Additions - at cost		-	-
	Depreciation charge		(120,000)	(120,000)
	Closing net book value		751,667	871,667
	Gross carrying value basis
	As at June 30
	Cost		2,400,000	2,400,000
	Accumulated depreciation		(1,648,333)	(1,528,333)

	Net book value		751,667	871,667
	Depreciation (% per annum)		5%	5%
12.1	The fair value of investment property as at June 30, 2025 Rs. 10,643,440 (2024: Rs. 8,869,536) as per
	valuation report of independent valuer.
		Note	2025 2024 ------------ Rupees ------------
13.	*LONG TERM INVESTMENT*
	*Investment in subsidiaries*	13.1	350,000,000	350,000,000
	*Investment in equity securities*
	*- held at fair value through other comprehensive income*
	Un-listed securities	13.2	72,119,707	68,239,233
			422,119,707	418,239,233

Page # 48

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

13.1 Investment in subsidiaries

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----- Start of picture text -----

2025 2024 2025 2024
--------- Numbers --------- ------------ Rupees ------------
500,000 500,000 Capital Financial Services (Pvt.) Ltd. 13.1.1 50,000,000 50,000,000
500,000 500,000 Apex Financial Services (Pvt.) Ltd. 13.1.1 50,000,000 50,000,000
25,000,000 25,000,000 Equity Textiles Ltd. 13.1.2 250,000,000 250,000,000
26,000,000 26,000,000 350,000,000 350,000,000
----- End of picture text -----

13.1.1 Capital Financial Services (Private) Limited (CFSL) and Apex Financial Services (Private) Limited (AFSL) are wholly owned subsidiaries of the Modaraba having ordinary shares per unit of Rs. 100 each. Net assets value per share of CFSL & AFSL is Rs. 17.64 (2024: Rs. 8.73) and Rs. 34.98 (2024: 17.32) as per financial statements as at June 30, 2025 audited by Baker Tilly Mehmood Idrees Qamar, Chartered Accountants.
13.1.2 Equity Textiles Limited is a wholly owned subsidiary of the Modaraba. Net assets value per share of Equity Textiles Limited is Rs. 34.24 (2024: Rs. 31.13) as per financial statements as at June 30, 2025 audited by BDO Ebrahim & Company, Chartered Accountants.
13.2 Investment in equity securities

13.2.1 Unlisted securities

The holding is in ordinary shares of Rs. 10 each.

2025 2024 --------- Numbers --------- Name of investee	2025 2024 --------- Numbers --------- Name of investee	2025 2024 --------- Numbers --------- Name of investee	2025 2024 --------- Numbers --------- Name of investee	Note	2025 2024 ------------ Rupees ------------	2025 2024 ------------ Rupees ------------
50,000	50,000		Sapphire Power Generation Ltd.	13.2.1.1	6,576,000	5,559,744
3,034,603	3,034,603	ISE Towers REIT Management Co. Ltd.		13.2.1.2	65,501,906	62,637,688
78,150	78,150		Callmate Telips Telecom Ltd.	13.2.1.3	1	1
22,000	22,000	Javed Omer Vohra & Company Ltd.		13.2.1.4	41,800	41,800
3,184,753	3,184,753				72,119,707	68,239,233

13.2.1.1 Net assets value per share of Sapphire Power Generation Limited is Rs. 131.52 (2024: Rs. 111.19) as per financial statements as at June 30, 2025 audited by Shinewing Hameed Chaudhri & Co., Chartered Accountants.
13.2.1.2 Net assets value per share of ISE Towers REIT Management Company Limited Rs. 21.58 (June 30, 2024: Rs. 21.08) as per financial statements as at March 31, 2025. The auditors are BDO Ebrahim & Company, Chartered Accountants.
13.2.1.3 The investee company is in the process of winding up. Hence net assets value per share is not available.
13.2.1.4 The investee company had been de-listed in prior year. Therefore, the investment has been reclassified from listed securities to un-listed securities. Currently, the investment is carried at Rs. 1.90 per share (quoted price of last trading day before de-listing)

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Page # 49

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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----- Start of picture text -----

2025 2024
14. ADVANCES - CONSIDERED GOOD ------------ Rupees ------------
Advance paid to PMEX 2,510,000 2,510,000
2,510,000 2,510,000
----- End of picture text -----

14.1 This represents in amount paid to PMEX against purchase of one room in PMEX building (Formerly: Hyatt Regency) location at M.T. Road, Karachi.

15.
SHORT TERM INVESTMENT
Note
Investment classifed at fair value through statement of proft or loss
Listed securities
15.1
15.1
Listed securities
2024
2025
Name of investee
--------- Numbers ---------
Oil and gas
7,174
-
Sui Northern Gas Pipeline Limited
-
104,408Oil & Gas Development Company Limited
Chemicals
98,500
98,500Ghani Global Glass Limited
27,850
27,850Ghani Global Holdings Limited
Food & Personal Care Products
639,000
639,000Al-Shaheer Corporation Limited
115,675
110,000Unity Foods Limited
Construction and materials
500
500Bestway Cement Limited
279,000
279,000Dewan Cement Limited
362,775
32,500Fly Cement Limited
3,400
-
Cherat Cement Company Limited
1,350,000
1,350,000Power Cement Limited
90,000
10,000Fauji Cement Company Limited
83,222
68,895Maple Leaf Cement Factory Limited
Pharma and biotech
13,050
19,050The Searle Pakistan Limited
-
5,845BF Biosciences
Paper & Board
59,400
59,400Roshan Packages Limited

2025

Page # 50

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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----- Start of picture text -----

2024 2025 2025 2024
--------- Numbers --------- Name of investee ------------ Rupees ------------
----- End of picture text -----

		Engineering
13,375		13,375 Agha Steel Industries Limited	114,891	134,018
		Personal Care
67,500		60,000 Treet Corporation Limited	1,420,200	1,050,300
		Textile Composites
209,000		40,000 International Knitwear Limited	809,600	2,752,530
4,498		4,200 Nishat Mills Limited	528,696	318,683
		Miscellaneous
46,057		27,500 EcoPack Limited	1,823,800	717,568
		Fertilizer
38,000		38,000First UDL Modaraba	421,800	304,000
		Automobile Assembler
14,899		2,140Ghandhara Industries Limited	1,391,920	4,073,238
		Fixed line telecommunication
708,500		703,500"Pakistan Telecommunication Company Limited"	17,897,040	8,509,085
949,000		949,000 Worldcall Telecom Limited	1,499,420	1,195,740
		Securities Companies
1,602,953	1,415,800Pakistan Stock Exchange Limited		39,599,926	20,533,828
		Cable & electrical goods
444,750		444,750Waves Singer Pakistan Limited	3,486,840	3,122,145
		Power Generation Distribution & Electricity
1,010,000	1,010,000K-Electric Limited		5,302,500	4,676,300
8,238,078	7,513,213		122,411,133	77,664,074

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Page # 51

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

16.	ADVANCES - CONSIDERED GOOD	Note		2025 2024 ------------ Rupees ------------	2025 2024 ------------ Rupees ------------	2025 2024 ------------ Rupees ------------
	Employee	16.1		157,642		168,422
	Advance tax - net			13,324,693		12,256,707
				13,482,335		12,425,129
16.1	The maximum aggregate amount due from employees at the end of any month during the year was Rs. 537,323 (2024: Rs. 209,292).
17.	TRADE DEPOSITS AND PREPAYMENTS	Note		2025 2024 ------------ Rupees ------------
	Deposits	17.1		14,966,855		14,966,855
	Prepayments			651,461		344,893
				15,618,316		15,311,748
17.1	This includes an amount of Rs. 14,557,956 (2024: Rs. 14,557,956) that Samba Bank Limited (refer note 11).		pertains to the		deposits held with
18.	OTHER RECEIVABLES	Note		2025 2023 ------------ Rupees ------------
	Receivable from clients	18.1 & 18.2		19,168,571		19,205,797
	Musharakah proft recievable			1,795,152		1,795,152
	Others	18.2		45,033,201		51,056,607
18.1	Receivable from clients			65,996,924		72,057,555

	Considered good			19,168,571		19,205,797


				19,168,571		19,205,797

18.2	Receivable from clients and others include receivable from related parties amounting to Rs. 44,421,649 (2024: Rs. 49,484,556).
19	BANK BALANCE	Note		2025 2024 ------------ Rupees ------------
	-in current accounts			1,376,206		1,376,205
	-in saving accounts (Islamic Bank)	19.2		17,550,322		15,169,316
				18,926,528		16,545,521

19.1	Customer and proprietor wise balances Proprietor account balances Client account balances	Note		2025 2024 ------------ Rupees ------------ 10,633,687 4,674,451 8,292,841 11,871,070 18,926,528 16,545,521

Page # 52

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

19.2 These carry profit at rates ranging from 8% to 11% (2024: 13% to 18%) per annum.

		2025	2024
20.	INCOME Note Brokerage commission Capital gain / (loss) Dividend Rental	------------ Rupees ------------ 2,225,979 1,075,096 10,624,709 (157,512) 4,071,537 5,145,758 4,570,450 2,816,000
		21,492,675	8,879,342

21.	OPERATING EXPENSES Salaries, allowances and benefts 34.3 9,735,602 Traveling, conveyance and entertainment 480,538 Telephone and postage 548,691 Utility charges 753,326 Insurance 491,417 Printing, stationery and advertisement 443,275 Fees and subscriptions 2,435,276 Vehicle running and maintenance 3,430,567 Depreciation 11 & 13 891,981 Facilities and services 4,768,040 Repair and maintenance 2,071,500 Auditor's remuneration 21.1 511,320 Legal and professional 1,410,488 Shariah advisor 250,000 KSE, CDC & SECP charges 612,709 Others 208,500		8,863,961 452,794 422,148 775,576 511,841 221,613 2,349,373 3,674,483 902,102 4,768,040 1,835,168 505,720 894,094 231,250 742,157 333,752
		29,043,230	27,484,072

21.1	Auditors' remuneration Audit fee Half yearly review Other fees	412,820 44,000 54,500	409,720 40,000 56,000
		511,320	505,720

22.	FINANCIAL CHARGES
	Bank charges	6,345	899
		6,345	899

23.	OTHER INCOME
	Proft on investment accounts with Islamic bank	164,035	146,063
		164,035	146,063

Page # 53

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

24. TAXATION

The income tax returns of the Company have been filed up to tax year 2024 under the Universal Self Assessment Scheme. This scheme provides that the return filed is deemed to be an assessment order. The returns may be 24.1 selected for audit within five years. The Income Tax Commissioner may amend assessment if any objection is raised during audit.

Since, there is no accounting profit during the year ended June 30, 2025 and tax has been charged under 24.2 minimum tax provisions therefore, no tax reconciliation is prepared for the year then ended.

This represents final taxes paid under section 150 & 37A of Income Tax Ordinance (ITO, 2001) representing 24.3 levy in terms of requirements of IFRIC - 21 / IAS - 37.

This represents portion of minimum tax paid under section 113, 233 & 153(1)(b) of Income Tax Ordinance 24.4 (ITO, 2001), representing levy in terms of requirements of IFRIC - 21 / IAS - 37.

DEFERRED TAXATION Taxable temporary diferences Investment in unlisted shares Deductible temporary diferences Fixed assets Deferred liability (For gratuity) Net deferred income tax asset				2025 2024 ------------ Rupees ------------ - - - - (681,716) (714,930) (2,190,342) (2,079,335) (2,872,058) (2,794,265) (2,872,058) (2,794,265)	2025 2024 ------------ Rupees ------------ - - - - (681,716) (714,930) (2,190,342) (2,079,335) (2,872,058) (2,794,265) (2,872,058) (2,794,265)
Unrecognized deferred income tax (asset) / liability				2,872,058 2,794,265

				- -

Deferred tax asset as at June 30, 2025 amounting to Rs. 2,872,058 (2024: Rs. 2,794,265) has not been recognized in these fnancial statements due to uncertainty in availability of sufcient future taxable profts as these temporary diferences are not likely to reverse in the foreseeable future.
LOSS PER CERTIFICATE - BASIC AND DILUTED				2025 2024 ------------ Rupees ------------
Loss after income tax				(8,284,151) (19,435,979)
				------------ Numbers ------------
Weighted average number of certifcates outstanding during the year				52,440,000 52,440,000
				------------ Rupees ------------
Loss per certifcate - basic and diluted				(0.16) (0.37)

25. DEFERRED TAXATION

Deferred tax asset as at June 30, 2025 amounting to Rs. 2,872,058 (2024: Rs. 2,794,265) has not been 25.1 recognized in these financial statements due to uncertainty in availability of sufficient future taxable profits as these temporary differences are not likely to reverse in the foreseeable future.

26. LOSS PER CERTIFICATE - BASIC AND DILUTED

There is no dilution effect on the basic earnings per share of the Modaraba as the Modaraba has no such commitments.

26.1

Page # 54

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

27. PLEDGE SECURITIES

There are no securities of the House or any one of its sub accounts pledged to any financial institution as at June 30, 2025.

28. CUSTOMER ASSETS HELD IN CDC

The house holds 22,339,886 securities of his client in the clients CDC sub accounts having approx. fair value Rs. 719,149,319.

29. RISK MANAGEMENT POLICIES AND OBJECTIVES

Financial risk management

The board of directors of the Modaraba Management Company has overall responsibility for the establishment and oversight of the Modaraba's risk management framework. The Modaraba has exposure to the following risks from its use of financial instruments:

Credit risk
Liquidity risk
Market risk
Operational risk

Credit and concentration risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss, without taking into account the fair value of any collateral. Concentration of credit risk arises when a number of counterparties are engaged in similar business activities or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations of credit risk indicate the relative sensitivity of the Modaraba's performance to developments affecting a particular industry.

Credit risk of the Modaraba arises principally from the investments, Musharaka / Morabaha receivables, advances, trade deposits and other receivables. The carrying amount of financial assets represents the maximum credit exposure. To reduce the exposure to credit risk, the Modaraba has developed a formal approval process whereby credit limits are applied to its customers. The management continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful for recovery.

The Carrying amount of financial assets represents the maximum credit exposure before any credit enhancements. The maximum exposure to credit risk at the reporting date is:

	2025 2024 ------------ Rupees ------------	2025 2024 ------------ Rupees ------------
Investment	544,530,839	495,903,307
Advances-considered good	15,992,335	14,935,129
Trade deposits and prepayments	17,368,316	17,061,748
Other receivables	65,996,924	72,057,555
	643,888,414	599,957,740
Liquidity risk

Liquidity risk

Liquidity risk is the risk that the Modaraba will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk arises because of the possibility that the Modaraba could be required to pay its liabilities earlier than expected or difficulty in raising funds to meet commitments associated with financial liabilities as they fall due. The Modaraba’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Modaraba’s reputation.

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Page # 55

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025


			2025
	“Less than one year”		Over one year but less than fve years		Over one year but less than fve years		Total
	------------------------------ Rupees ------------------------------
Assets
Long term investments	-		72,119,707			350,000,000	422,119,707
Short term investments	122,411,132		-			-	122,411,132
Advances	-		2,510,000			-	2,510,000
Deposits	14,966,855		1,750,000			-	16,716,855
Other receivables	65,996,924		-			-	65,996,924
Bank balances	18,926,528		-			-	18,926,528
	222,301,439		76,379,707			350,000,000	648,681,146
Liabilities
Deferred liability	-		-			7,552,903	7,552,903
Security Deposit	-		575,000			-	575,000
Creditors, accrued and other liabilities	13,139,512		-			-	13,139,512
Unclaimed proft distribution	31,116,073 44,255,585		- 575,000			- 7,552,903	31,116,073 52,383,488
Net balance	178,045,854		75,804,707			342,447,097	596,297,658


			2024

	“Less than one year”	Over one year but less than fve years		Over fve years			Total
	------------------------------ Rupees ------------------------------
Assets
Long term investments	-		68,239,233			350,000,000	418,239,233
Short term investments	77,664,074		-			-	77,664,074
Advances	-		2,510,000			-	2,510,000
Deposits	14,966,855		1,750,000			-	16,716,855
Other receivables	72,057,555		-			-	72,057,555
Bank balances	16,545,521		-			-	16,545,521
	181,234,006		72,499,233			350,000,000	603,733,238
Liabilities
Deferred liability	-		-			7,170,120	7,170,120
Security Deposit	-		200,000			-	200,000
Creditors, accrued and other liabilities	19,473,557		-			-	19,473,557
Unclaimed proft distribution	31,116,073 50,589,630		- 200,000			- 7,170,120	31,116,073 57,959,750
Net balance	130,644,376		72,299,233			342,829,880	545,773,489

Page # 56

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

Market risk

Market risk is the risk that the value of the financial instrument may fluctuate as a result of changes in market interest rates or the market price due to a change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply and demand of securities and liquidity in the market.

Operational Risk

Operational Risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes, technology and infrastructure supporting the Modaraba’s operations either internally within the Modaraba or externally at the Modaraba’s service providers, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of investment management behavior. Operational risks arise from all of the Modaraba’s activities.

The Modaraba’s objective is to manage operational risk so as to balance limiting of financial losses and damage to its reputation with achieving its objective of generating returns for certificate holders. The primary responsibility for the development and implementation of controls over operational risk rests with the Board of Directors of the Management Company. This responsibility encompasses the controls in the following areas:

Requirements for appropriate segregation of duties between various functions, roles and responsibilities;
Requirements for the reconciliation and monitoring of transactions;
Compliance with regulatory and other legal requirements;
Documentation of controls and procedures;
Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified;
Ethical and business standards; and
Risk mitigation, including insurance where this is effective.

30. FAIR VALUE OF FINANCIAL INSTRUMENTS

he Modaraba is of the view that the fair market value of most of the financial assets and financial liabilities are not significantly different from their carrying amounts.

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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

Financial instruments by category Financial assets: At amortized cost Advances Deposits Other receivables Bank balances Financial assets at fair value through proft or loss Short term investments Financial assets at fair value through other comprehensive income Long term investments Financial assets at cost Long term investment in subsidiary Financial liabilities: Financial liabilities at amortized cost Deferred liability Security deposit Creditors, accrued and other liabilities Unclaimed proft distribution	2025 2024 ------------ Rupees ------------ 2,510,000 2,510,000 16,716,855 16,716,855 65,996,924 72,057,555 18,926,528 16,545,521 122,411,132 77,664,074 72,119,707 68,239,233 298,681,146 253,733,238 350,000,000 350,000,000 7,552,903 7,170,120 575,000 200,000 13,139,512 19,473,557 31,116,073 31,116,073 52,383,488 57,959,750	2025 2024 ------------ Rupees ------------ 2,510,000 2,510,000 16,716,855 16,716,855 65,996,924 72,057,555 18,926,528 16,545,521 122,411,132 77,664,074 72,119,707 68,239,233 298,681,146 253,733,238 350,000,000 350,000,000 7,552,903 7,170,120 575,000 200,000 13,139,512 19,473,557 31,116,073 31,116,073 52,383,488 57,959,750

On balance sheet gap	596,297,658	545,773,489

30.1 Financial instruments by category

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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

31. MATURITIES OF ASSETS AND LIABILITIES

The following analysis is based on the contractual/expected maturities of assets and liabilities which may not necessarily correspond with actual maturities.

	Upto one month	Over one month to one	Over one month to one	2025 Over one year to fve	Over fve years	Over fve years	Total
			year	years


	------------------------------ Rupees				------------------------------
Assets
Long term investments	-		-	72,119,707		350,000,000	422,119,707
Short term investments	-		122,411,132	-		-	122,411,132
Advances	-		-	2,510,000		-	2,510,000
Deposits	-		14,966,855	1,750,000		-	16,716,855
Other receivables	-		65,996,924	-		-	65,996,924
Bank balances	-		18,926,528	-		-	18,926,528
	-		222,301,439	76,379,707		350,000,000	648,681,146
Liabilities
Deferred liability	-		-	-		7,552,903	7,552,903
Security Deposit	-		-	575,000		-	575,000
Creditors, accrued and other liabilities	-		13,139,512	-		-	13,139,512
Unclaimed proft distribution	-		31,116,073	-		-	31,116,073
	-		44,255,585	575,000		7,552,903	52,383,488
Net balance	-		178,045,854	75,804,707		342,447,097	596,297,658
				2024
	Upto one month	Over one month to one		Over one year to fve	Over fve years		Total
			year	years
*Assets*	------------------------------ Rupees				------------------------------
Long term investments	-		-	68,239,233		350,000,000	418,239,233
Short term investments	-		77,664,074	-		-	77,664,074
Advances	-		-	2,510,000		-	2,510,000
Deposits	-		14,966,855	1,750,000		-	16,716,855
Other receivables	-		72,057,555	-		-	72,057,555
Bank balances	-		16,545,521	-		-	16,545,521
	-		181,234,006	72,499,233		350,000,000	603,733,238
Liabilities
Deferred liability	-		-	-		7,170,120	7,170,120
Security Deposit	-		-	200,000		-	200,000
Creditors, accrued and other liabilities	-		19,473,557	-		-	19,473,557
Unclaimed proft distribution	-		31,116,073	-		-	31,116,073
	-		50,589,630	200,000		7,170,120	57,959,750
Net balance	-		130,644,376	72,299,233		342,829,880	545,773,489

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Page # 59

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

	YIELD / PROFIT RATE RISK EXPOSURE	YIELD / PROFIT RATE RISK EXPOSURE					2025			Description Efective yield / proft risk % Total Yield / proft bearing maturing Non yield / proft bearing maturing With in one After one Sub-total With in one After one Sub-total	Description Efective yield / proft risk % Total Yield / proft bearing maturing Non yield / proft bearing maturing With in one After one Sub-total With in one After one Sub-total	Description Efective yield / proft risk % Total Yield / proft bearing maturing Non yield / proft bearing maturing With in one After one Sub-total With in one After one Sub-total	Description Efective yield / proft risk % Total Yield / proft bearing maturing Non yield / proft bearing maturing With in one After one Sub-total With in one After one Sub-total	Description Efective yield / proft risk % Total Yield / proft bearing maturing Non yield / proft bearing maturing With in one After one Sub-total With in one After one Sub-total	year year year year	year year year year	year year year year			Financial assets	Long term investments - - - - 422,119,707 422,119,707 422,119,707	Short term investments 122,411,132 - 122,411,132 - - - 122,411,132	Advances - - - - 2,510,000 2,510,000 2,510,000	Deposits - - - 14,966,855 1,750,000 16,716,855 16,716,855	Other receivables - - - 65,996,924 - 65,996,924 65,996,924	Bank balances 3.5% to 7% 17,550,322 - 17,550,322 1,376,206 - 1,376,206 18,926,528		139,961,454 - 139,961,454 82,339,985 426,379,707 508,719,692 648,681,146 Financial Liabilities	Deferred liability - - - - 7,552,903 7,552,903 7,552,903	Security deposit - - - - 575,000 575,000 575,000	Creditors, accrued and other liabilities - - - 13,139,512 - 13,139,512 13,139,512	Unclaimed proft distribution - - - 31,116,073 - 31,116,073 31,116,073		- - - 44,255,585 8,127,903 52,383,488 52,383,488		On Balance Sheet Gap 139,961,454 - 139,961,454 38,084,400 418,251,804 456,336,204 596,297,658	On Balance Sheet Gap 139,961,454 - 139,961,454 38,084,400 418,251,804 456,336,204 596,297,658	The above analysis is based on the contractual/expected maturities of assets and liabilities which may not necessarily correspond with actual maturities.	Yield risk is the risk of decline in earning due to adverse movement of the yield curve. Proft rate risk is the risk that the value of the fnancial instruments will fuctuate due to changes in the market proft rates.

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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025


2024	Total Non yield / proft bearing maturing			With in one year After one year Sub-total			- 418,239,233 418,239,233 418,239,233	- - - 77,664,074	- 2,510,000 2,510,000 2,510,000	14,966,855 1,750,000 16,716,855 16,716,855	72,057,555 - 72,057,555 72,057,555	1,376,205 - 1,376,205 16,545,521	88,400,616 422,499,233 510,899,848 603,733,238		- 7,170,120 7,170,120 7,170,120	- 200,000 200,000 200,000	19,473,557 - 19,473,557 19,473,557			31,116,073 - 31,116,073 31,116,073	50,589,630 7,370,120 57,959,750 57,959,750	37,810,986 415,129,113 452,940,099 545,773,489

	Yield / proft bearing maturing			With in one After one Sub-total	year year		- - -	77,664,074 - 77,664,074	- - -	- - -	- - -	15,169,316 - 15,169,316	92,833,390 - 92,833,390		- - -	- - -		- - -		- - -	- - -	92,833,390 - 92,833,390
	Efective yield / proft risk %		age									3.5% to 7%

		Description				Financial assets	Long term investments	Short term investments	Advances	Deposits	Other receivables	Bank balances		Financial Liabilities	Deferred liability	Security deposit	Creditors, accrued and other		liabilities	Unclaimed proft distribution		On balance sheet Gap

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TRANSACTIONS WITH RELATED PARTIES

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

33. SEGMENT INFORMATION

The Modaraba has three primary sources of revenue i.e. Musharaka facility, brokerage operations and capital market based on the nature of business and related risk associated with each type of business segment which are not deemed by the management to be sufficiently significant to disclose as separate items are reported under

Segment assets and liabilities include all assets and liabilities related to the segment and relevant proportion of the assets and liabilities allocated to the segment on reasonable basis.

Segment revenue and expenses included all revenue and expenses related to the segment and relevant proportion of the revenue and expenses allocated to the segment on reasonable basis.


				2025						2024


Particulars		Brokerage operation		Capital market	Others			Total		Total

	-----------------------------------------Rupees--------------------------------------
Segment revenues		2,225,979		14,696,246	4,734,485		21,656,710			9,025,405
Segment result Unallocated cost Operating expenses		(7,555,380)		14,696,246 -	4,734,485 -			11,875,351 -	3,780,204 (22,239,770)

Loss before taxation Taxation		-		-	-		(7,392,865) (891,286)		(18,459,566) (976,413)
Loss for the year							(8,284,151)		(19,435,979)

Other information Segment assets Unallocated assets		20,180,870 -	194,489,038 -		751,667 -		215,421,575 449,776,100		167,286,499 452,377,016
Total assets		20,180,870	194,489,038		751,667	665,197,675			619,663,515

Segment liabilities Unallocated liabilities		8,292,833 -		- -	975,000 -			9,267,833 43,115,655		11,939,178 46,020,572
Total liabilities		8,292,833		-	975,000		52,383,488			57,959,750

TRANSACTIONS WITH RELATED PARTIES

The related parties of the Modaraba comprise the Modaraba Management Company, subsidiary company, staff retirement funds, directors of the Modaraba Management Company and key management personnel. Transactions with related parties are entered into at arm's length.

Transactions with related parties other than remuneration and benefits to officers and employees under the terms of their employment are as follows:

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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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2025 2024
34.1 Balance outstanding at year end ------------ Rupees ------------
Modaraba Management Company
Current account payable 58,053 1,190,745
Subsidiary companies
Investment in Equity Textiles Limited 250,000,000 250,000,000
Investment in Capital Financial Services (Private) Limited 50,000,000 50,000,000
Investment in Apex Financial Services 50,000,000 50,000,000
Receivable from / payable to wholly owned subsidiary companies
Apex Financial Services (Private) Limited 23,515,424 25,594,697
Capital Financial Services (Private) Limited 20,855,912 23,889,859
Other related parties (including key management personnel)
Deferred liability staff gratuity 7,552,903 7,170,120
Brokerage house client receivable 50,014 59,882
34.2 Transactions during the year Relationship
Modaraba Management Company
Reimbursement 4,768,040 4,768,040
Other related parties (including key management personnel)
Contribution to staff gratuity fund
1,522,789 1,575,363
Subsidiary companies
Key Management Personnel /
Services acquired
Associated company
598,973 520,866
Key Management Personnel /
Brokerage commission earned 1,484,040 821,038
Associated company
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34.3 Remuneration of executives and other employees

The aggregate amount charged in the financial statements for remuneration, including benefits to 7 (2024: 7) employees of the Modaraba is:

	2025	2025	2024	2024
	Executives	Other	Executives	Other
		employees		employees
	----------------------------------- Rupees --------------------------------
Salaries and allowances	2,931,120	2,343,180	2,798,960	2,132,240
Leave fare & encashment	240,910	112,900	371,680	147,417
Expenses reimbursed: Medical	716,972	488,331	367,100	213,541
	3,889,002	2,944,411	3,537,740	2,493,198

34.4 Salaries, allowances and benefits include provision for gratuity of Rs. 1,522,789 (2024: Rs. 1,575,363). Officers are also provided with free use of the Modaraba maintained cars.

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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

35. COMPUTATION OF LIQUID CAPITAL

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Net
Value in Hair Cut /
S. No. Head of Account Adjusted
Pak Rupees Adjustments
Value
1. Assets
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S. No.	Head of Account	Value in Pak Rupees	Hair Cut / Adjustments	Net Adjusted Value
1. Assets

1.1	Property & Equipment	2,382,733	100%	-
1.2	Intangible Assets
1.3	Investment in Govt. Securities
1.4	Investment in Debt. Securities
	If listed than:
	i. 5% of the balance sheet value in the case of tenure upto 1year.
	ii. 7.5% of the balance sheet value,in the case of tenure from 1-3years.
	iii. 10% of the balance sheet value, in the case of tenure of more than 3 years.
	If unlisted than:
	i. 10% of the balance sheet value in the case of tenure upto 1year.
	ii. 12.5% of the balance sheet value,in the case of tenure from 1-3years.
	iii. 15% of the balance sheet value,in the case of tenure of more than 3years.
1.5	Investment in Equity Securities
	i. If listed 15% or VaR of each securities on the cutof date as computed by the Securities Exchange for respective securities whichever is higher. (Provided that if any of these securities are pledged with the securities exchange for base minimum capital requirement, 100% haircut on the value of eligible securities to the extent of minimum required value of Base minimum capital	122,411,132	21,532,030	100,879,102
	ii. If unlisted, 100% of carrying value.	72,119,707	100%	-
1.6	Investment in subsidiaries	350,000,000	100%	-
1.7	Investment inassociated companies/undertaking
	i. If listed 20% or VaR of each securities as computed by the Securities Exchange for respective securities whichever is higher.
	ii. If unlisted, 100% of net value.
1.8	Statutory or regulatory deposits/basic deposits with the exchanges, clearing house or central depository or any other entity.
	(i) 100% of net value, however any excess amount of cash deposited with securities exchange to comply with requirements of base minimum capital maybe taken in the calculation of LC	4,285,000	100%	-
1.9	Margin deposits with exchange and clearinghouse.	350,000	-	350,000
1.10	Deposit with authorized intermediaryagainst borrowed securities under SLB.
1.11	Other deposits andprepayments	15,243,316	100%	-
1.12	Accrued interest, proft or mark-up on amounts placed with fnancial institutions or debt securities etc.(Nil)
	100% in respect of markup accrued on loans to directors, subsidiaries and other relatedparties
1.13	Dividends receivables.	-	-	-
1.14	~~"Amounts receivable against Repo fnancing.~~ Amount paid as purchaser under the REPO agreement. (Securities purchased under repo arrangement shall not be included in the investments.)"
1.15	Advances and receivables other than trade Receivables;
	(i) No haircut may be applied on the short term loan to employees provided these loans are secured and due for repayments within 12 months.	157,642	0%	157,642
	(ii) No haircut may be applied to the advance tax to the extent it is netted with provision of taxation .	13,324,693	100%	-
	(iii) In all other cases 100% of net value	46,828,353	100%	-
1.16	Receivables from clearing house or securities exchange(s)
	100% value of claims other than those on account of entitlements against trading of securities in all markets including MtM gains.	-	-	-

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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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Value in Hair Cut / Net Adjusted
S. No. Head of Account
Pak Rupees Adjustments Value
Receivables from customers
i. In case receivables are against margin financing, the aggregate if
(i) value of securities held in the blocked account after applying VAR based
Haircut,
(ii) cash deposited as collateral by the financee
(iii) market value of any securities deposited as collateral after applying VaR
based haircut.
i. Lower of net balance sheet value or value determined through
adjustments.
ii. Incase receivables are against margin trading, 5% of the net balance sheet
value.
ii. Net amount after deducting haircut
iii. Incase receivables are against securities borrowings under SLB, the
amount paid to NCCPL as collateral upon entering into contract,
iii. Net amount after deducting haircut
1.17 iv. Incase of other trade receivables not more than 5 days overdue, 0% of
the net balance sheet value. 90,401 0% 90,401
iv. Balance sheet value
v. Incase of other trade receivables are overdue, or 5 days or more, the
aggregate of (i) the market value of securities purchased for customers
and held in sub-accounts after applying VAR based haircuts, (ii) cash
19,077,769 4,785,076 4,785,076
deposited as collateral by the respective customer and (iii) the market
value of securities held as collateral after applying VaR based haircuts.
v. Lower of net balance sheet value or value determined through adjustments
vi. In the case of amount of receivables from related parties, values determined
after applying applicable haircuts on underlying securities readily available
in respective CDS account of the related party in the following manner;
(a) Up to 30 days, values determined after applying var based haircuts.
400 400 400
(b) Above 30 days but upto 90 days, values determined after applying 50% or
var based haircuts whichever is higher.
(c) above 90 days 100% haircut shall be applicable.
vi. Lower of net balance sheet value or value determined through adjustments
Cash and Bank balances
i. Bank Balance-proprietory accounts 10,633,687 - 10,633,687
1.18
ii. Bank balance-customer accounts 8,292,841 - 8,292,841
iii. Cash in hand - - -
Subscription money against investment in IPO/ offer for sale (asset)
(i) No haircut may be applied in respect of amount paid as subscription money
provided that shares have not been allotted or are not included in the
investments of securities broker.
(ii) In case of Investment in IPO where shares have been allotted but not yet
1.19
credited in CDS Account, 25% haircuts will be applicable on the value of
such securities.
(iii) In case of subscription in right shares where the shares have not yet been
credited in CDS account, 15% or VAR based haircut whichever is higher,
will be applied on Right Shares.
1.20 Total Assets 665,197,674 125,189,149
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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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Value in Hair Cut / Net Adjusted
S. No. Head of Account
Pak Rupees Adjustments Value
2. Liabilities
2.1 Trade Payables
i. Payable to exchanges and clearing house - -
ii. Payable against leveraged market products
iii. Payable to customers 8,292,833 0% 8,292,833
Current Liabilities
i. Statutory and regulatory dues
ii. Accruals and other payables 4,846,679 0% 4,846,679
iii. Short-term borrowings
2.2 iv. Current portion of subordinated loans
v. Current portion of long term liabilities
vi. Deferred Liabilities
vii. Provision for taxation
viii. Other liabilities as per accounting principles and included in the financial statements 31,116,073 0%
31,116,073
Non-Current Liabilities
i. Long-Term financing
2.3 ii. Other liabilities as per accounting principles and included in the financial statements 575,000 0% 575,000
iii. Staff retirement benefits 7,552,903 0% 7,552,903
Note: (a) 100% haircut may be allowed against long term portion of financing obtained from a financial institution including
amount due against finance leases. (b) Nill in all other cases
Subordinated Loans
2.4
i. 100% of Subordinated loans which fulfill the conditions specified by SECP are allowed to be deducted:
Advance against shares for Increase in Capital of Securities broker:
100% haircut may be allowed in respect of advance against shares if:
a. The existing authorized share capital allows the proposed enhanced share capital
2.5 b. Boad of Directors of the company has approved the increase in capital
c. Relevant Regulatory approvals have been obtained
d. There is no unreasonable delay in issue of shares against advance and all regulatory requirements relating to the increase in
paid up capital have been completed.
2.6 Total Liabilities 52,383,488 - 52,383,488
3. Ranking Liabilities Relating to :
Concentration in Margin Financing
The amount calculated client-to- client basis by which any amount receivable from any of the financees exceed 10% of the
3.1 aggregate of amounts receivable from total finances.
(Provided that above prescribed adjustments shall not be applicable where the aggregate amount of receivable against
margin financing does not exceed Rs 5 million)
Note: Only amount exceeding by 10% of each fnancee from aggregate amount shall be include in the ranking liabilities
Concentration in securities lending and borrowing
The amount by which the aggregate of:
(i) Amount deposited by the borrower with NCCPL
3.2 (Ii) Cash margins paid and
(iii) The market value of securities pledged as margins exceed the 110% of the market value of shares borrowed
(Note only amount exceeding by 110% of each borrower from market value of shares borrowed shall be included in the
ranking liabilities)
Net underwriting Commitments
(a) in the case of right issues : if the market value of securities is less than or equal to the subscription price;
the aggregate of:
3.3 (i) the 50% of Haircut multiplied by the underwriting commitments and
(ii) the value by which the underwriting commitments exceeds the market price of the securities.
In the case of rights issues where the market price of securities is greater than the subscription price, 5% of the Haircut
multiplied by the net underwriting commitment
(b) in any other case : 12.5% of the net underwriting commitments
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NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

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Net
Value in Hair Cut /
S. No. Head of Account Adjusted
Pak Rupees Adjustments Value
Negative equity of subsidiary
3.4
The amount by which the total assets of the subsidiary ( excluding any amount
due from the subsidiary) exceed the total liabilities of the subsidiary
Foreign exchange agreements and foreign currency positions
3.5 5% of the net position in foreign currency.Net position in foreign currency means
the difference of total assets denominated in foreign currency less total liabilities
denominated in foreign currency
3.6 Amount Payable under REPO
Repo adjustment
In the case of financier/purchaser the total amount receivable under Repo less the
110% of the market value of underlying securities.
3.7 In the case of financee/seller the market value of underlying securities after
applying haircut less the total amount received ,less value of any securities
deposited as collateral by the purchaser after applying haircut less any cash
deposited by the purchaser.
Concentrated proprietary positions
3.8 If the market value of any security is between 25% and 51% of the total proprietary
1,979,996
positions then 5% of the value of such security .If the market of a security exceeds
51% of the proprietary position, then 10% of the value of such security
Opening Positions in futures and options
i. In case of customer positions, the total margin requirements in respect of open
positions less the amount of cash deposited by the customer and the value of
3.9 securities held as collateral/ pledged with securities exchange after applying
VaR haircuts
ii. In case of proprietary positions , the total margin requirements in respect of
open positions to the extent not already met
Short sell positions
i. Incase of customer positions, the market value of shares sold short in ready
market on behalf of customers after increasing the same with the VaR based
haircuts less the cash deposited by the customer as collateral and the value of
3.10
securities held as collateral after applying VAR based Haircuts
ii. Incase of proprietory positions, the market value of shares sold short in ready
market and not yet settled increased by the amount of VAR based haircut less
the value of securities pledged as collateral after applying haircuts.
3.11 Total Ranking Liabilities - - 1,979,996
612,814,186 70,825,665
Calculations Summary of Liquid Capital
(i) Adjusted value of Assets (serial number 1.20) 125,189,149
(ii) Less: Adjusted value of liabilities (serial number 2.6) (52,383,488)
(iii) Less: Total ranking liabilities (series number 3.11) (1,979,996)
70,825,665
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Page # 67

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

36. NUMBER OF EMPLOYEES

Total number of employees of the Modaraba as at June 30, 2025 are 7 (2024: 7). Average number of employees of the Modaraba during the year 7 (2024: 7).

2025 2024 CAPITAL ADEQUACY LEVEL ------------ Rupees -----------Total assets 660,197,675 619,663,515 Less: Total liabilities (52,383,488) (57,959,750) - - Revaluation reserves (created upon revaluation of fixed assets) Capital adequacy level 607,814,187 561,703,765

37. CAPITAL ADEQUACY LEVEL

38. CORRESPONDING FIGURES

Figures have been rounded off to the nearest rupee.

39. AUTHORIZATION FOR ISSUE

These financial statements were authorized for issue in accordance with a resolution of the Board of Directors on October 06, 2025 .

40. GENERAL

40.1 Figures in these financial statements have been rounded off to the nearest rupee.

The corresponding figures, wherever necessary, have been re-arranged / re-classified for the purpose of 40.2 comparison.

40.3 Prior year figures have been reclassified for the purpose of better presentation and comparison.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, 2025

		2025	2024
	Note	----------------- Rupees ----------------
EQUITY AND LIABILITIES
Authorized certifcate capital
60,000,000 Modaraba certifcates of Rs. 10 each		600,000,000	600,000,000
Certifcate holders' equity
Certifcate capital	5	524,400,000	524,400,000
Reserves	6	(66,128,534)	124,347,917
Remeasurement of defned beneft liability - actuarial gain		4,013,719	2,873,713
Surplus on revaluation of fxed assets	7	674,639,525	416,785,158
Unrealised loss on remeasurement of investments		5,614,015	(68,059,803)
Total certifcates holders' equity		1,142,538,725	1,000,346,985
Non-current liabilities
Liability against assets subject to fnance lease	8	-	7,304,667
Deferred liabilities	9	112,248,316	19,944,264
Security deposit		575,000	200,000
Total non-current liabilities		112,823,316	27,448,931
Current liabilities

Short term borrowings	11	52,883,893	210,530,034
Current portion of long term liabilities	12	298,707,437	309,466,334
Creditors, accrued and other liabilities	13	457,030,473	631,282,616
Accrued mark up	14	14,804,653	17,092,518
Unclaimed proft distribution		31,116,072	31,116,072
Total current liabilities		854,542,528	1,199,487,574

Total equity and liabilities		2,109,904,569	2,227,283,490

Contingencies and commitments	15

Page # 76

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, 2025

		2025	2024
	Note	------------------- Rupees -----------------
ASSETS
Non-current assets
Fixed assets

- tangible	16	78,578,183	1,117,579,973
- intangible	17	17,373,793	18,193,103
Investment property	18	751,667	871,667
Long term investments	19	82,719,823	77,559,787
Advances		2,510,000	2,510,000
Deposits		1,750,000	8,410,800
Total non-current assets		183,683,466	1,225,125,330
Current assets

Stores and spares	20	38,896,486	63,849,439
Stock in trade	21	42,633,230	343,303,062
Trade debts	22	-	79,285,180
Short term investments	23	173,363,666	119,995,949
Advances - considered good	24	5,921,702	4,793,955
Trade deposits and prepayments	25	74,949,921	118,021,850
Other receivables	26	138,856,285	204,981,174
Tax refund from government authorities	27	34,014,098	21,813,739
Taxation - net	28	19,215,894	26,509,062
Cash and bank balances	29	26,418,646	19,604,750
Total current assets		554,269,928	1,002,158,160
Assets classifed as held for sale	30	1,371,951,175	-

Total assets		2,109,904,569	2,227,283,490

The annexed notes from 1 to 47 form an integral part of these consolidated financial statements.

Qazi Obaid Ullah Chief Financial Officer

Adil A. Ghaffar Chief Executive Officer

Director Director

Premier Financial Services Premier Financial Services Premier Financial Services (Private) Limited (Private) Limited (Private) Limited

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Page # 77

CONSOLIDATED PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
		Note	------------------- Rupees -----------------
Income - net		31	(141,162,214)	(275,730,698)
Expenditures
Operating expenses		32	(92,877,463)	(103,089,348)
Distribution and	selling expenses	33	(3,349,690)	(24,653,159)
			(96,227,153)	(127,742,507)

Operating loss			(237,389,367)	(403,473,205)
Financial charges		34	(23,434,736)	(115,922,490)
Other income		35	10,028,349	8,946,328
Other charges		36	(4,943,967)	-
Loss before income tax and levy (fnal & minimum tax)			(255,739,721)	(510,449,367)
Final taxes		*37.3*	(719,648)	(7,881,337
Minimum tax		*37.4*	(6,111,687)	(55,766,518)

Loss before income tax Income tax - Current For the year Prior year - Deferred tax			(262,571,056) - (7,064) 30,423,153	(574,097,222) - (3,326,227) 163,328,084
			30,416,089	160,001,857
Loss after income tax			(232,154,967)	414,095,365)

Loss per certifcate - basic and diluted		38	(4.43)	(7.90)

Page # 78

CONSOLIDATED PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED JUNE 30, 2025

	2025	2024
	------------------- Rupees -------------
	----
Loss after income tax	(232,154,967)	(414,095,365)
Other comprehensive income
*Items that will be subsequently reclassifed:*
Unrealized gain / (loss) on remeasurement of investments	84,470,467	66,190,380
Loss realised on disposal of investments	(15,956,685)	(8,606,428)
	68,513,782	57,583,952
*Items that will not be subsequently reclassifed:*
Remeasurement of defned beneft liability	1,140,006	1,185,570
Unrealized gain on remeasurement of investment held at FVTOCI	5,160,036	9,737,227
Other comprehensive income / (loss)	6,300,042	10,922,797
Revaluation surplus - net of deferred taxation	299,532,883	-

Other comprehensive income	374,346,707	68,506,749
Total comprehensive loss for the year	142,191,740	(345,588,616)

The annexed notes from 1 to 47 form an integral part of these consolidated financial statements.

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Page # 79

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2025

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2025 2024
Note ------------------- Rupees -----------------
CASHFLOWS FROM OPERATING ACTIVITIES
Loss before income tax and levy (final & minimum tax) (255,739,721) (510,449,367)
Adjustments for non-cash and other items:
Depreciation 112,528,487 121,573,958
Amortization on intangible asset 819,311 707,102
Provision for doubtful debts 94,630 -
Provision for gratuity 1,522,789 1,575,363
Dividend income (4,071,537) (5,145,758)
Gain on sale of asset (7,022,899) -
Provision of slow moving items 4,182,048 -
Financial charges 23,434,736 115,922,490
131,487,565 234,633,155
Cash used in operations before working capital changes (124,252,156) (275,816,212)
Working capital changes
(Increase) / decrease in operating assets
Store, spares and loose tools 24,952,953 (3,797,110)
Stock-in-trade 300,669,832 227,833,644
Trade debts 75,008,502 470,739,771
Advances (1,127,747) 7,361,025
Trade deposits and prepayments 43,071,929 (6,018,283)
Other receivables 66,124,889 (178,238,847)
508,700,358 517,880,200
(Decrease) / increase in operating liabilities
Short term borrowing (157,646,141) 118,038,518
Creditors, accrued and other liabilities (174,252,143) (239,639,909)
(331,898,284) (121,601,391)
Financial charges paid (25,722,601) (102,473,603)
Dividend paid - (11,799)
Taxes paid (11,745,586) (21,302,292)
Net cash generated from / (used in) operating activities 15,081,731 (3,325,097)
FIRST EQUITY MODARBA
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Page # 80

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2025

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2025 2024
Note ------------------- Rupees -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investments - net 15,146,065 34,046,788
Long term deposits - net 7,035,800 577,000
Purchases of intangible assets - (5,487,601)
Dividend received 4,071,537 5,145,758
Sale proceeds on disposal of assets 8,857,257 -
Purchases of tangible assets (25,314,930) (44,489,263)
Net cash used in investing activities 9,795,729 (10,207,318)
CASH FLOWS FROM FINANCING ACTIVITIES
Liabilities against asset subject to finance lease - net (18,801,352) (16,353,872)
GIDC payable 737,788 8,013,819
Net cash used in financing activities (18,063,564) (8,340,053)
Net decrease in cash and cash equivalents 6,813,896 (21,872,468)
Cash and cash equivalents at beginning of the year 19,604,750 41,477,218
Cash and cash equivalents at the end of the year 26,418,646 19,604,750
The annexed notes from 1 to 47 form an integral part of these consolidated financial statements.
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Adil A. Ghaffar Chief Executive Officer Director Director Premier Financial Services Premier Financial Services Premier Financial Services (Private) Limited (Private) Limited (Private) Limited

Qazi Obaid Ullah Chief Financial Officer

Page # 81

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2025


				Certifcate Capital Statutory reserve Certifcate premium account General reserve Accumulated loss Total reserves Remeasurement of defned beneft liability Surplus on revaluation of fxed assets Unrealised loss on remeasurement of investments Total*					-------------------------------------------------------------------------------------- Rupees --------------------------------------------------------------------------------------		Balance as at June 30, 2023 524,400,000 164,334,210 131,100,000 17,321,036 179,378,574 492,133,820 1,364,966 514,549,578 (124,338,089) 1,345,935,601	Proft for the year - - - - (414,095,365) (414,095,365) - - - (414,095,365)	Other comprehensive income for the year - - - - - - 1,185,570 - 67,321,179 68,506,749	Incremental depreciation on revaluation	surplus net of deferred tax - - - - 46,309,462 46,309,462 - (46,309,462) - -				Balance as at June 30, 2024 524,400,000 164,334,210 131,100,000 17,321,036(188,407,329) 124,347,917 2,873,713 416,785,158 (68,059,803) 1,000,346,985	Loss for the year - - - - (232,154,967) (232,154,967) - - - (232,154,967)	Other comprehensive income for the year - - - - - - 1,140,006 - 73,673,818 74,813,824	Revaluation surplus during the year - - - - - - - 299,532,883 - 299,532,883	Incremental depreciation on revaluation surplus net of deferred tax - - - - 41,678,516 41,678,516 - (41,678,516) - -	Balance as at June 30, 2025 524,400,000 164,334,210 131,100,000 17,321,036 (378,883,780) (66,128,534) 4,013,719 674,639,525 5,614,015 1,142,538,725				* In accordance with the Prudential Regulations for Modarabas, the Modaraba is required to transfer an amount not less than 20% and not more than 50% of its after tax profts to statutory reserve until the reserve funds equals the certifcate capital. Thereafter, a sum not less than 5% of the after tax profts is required to be transferred to the statutory reserve.	The annexed notes from 1 to 46 form an integral part of these consolidated fnancial statements.

Page # 82

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2024

1. LEGAL STATUS AND NATURE OF BUSINESS

The Group consist of First Equity Modaraba (the Modaraba) and its subsidiaries, Equity Textiles Limited (ETL), Capital Financial Services (Private) Limited and Apex Financial Services (Private) Limited.

1.1 First Equity Modaraba

The Modaraba is a perpetual, multipurpose modaraba and is able to undertake a variety of fund and fee based activities. The Modaraba is a Trading Right Entitlement Certificate (TREC) holder of the Pakistan Stock Exchange Limited and is currently operating its brokerage activities in Pakistan Stock Exchange Limited.

The Modaraba is holding Equity Textiles Limited, Capital Financial Services (Private) Limited and Apex Financial Services (Private) Limited as a wholly owned subsidiary companies.

1.2 Equity Textiles Limited

Equity Textiles Limited (ETL) was incorporated in Pakistan on May 31, 2005 as a Public Limited Company under the Companies Ordinance, 1984. The registered office of ETL is situated at 3rd Floor, Cotton Exchange Building, I.I. Chundrigar Road, Karachi. The principal activities of ETL is manufacturing and sale of textile products. ETL commenced its commercial operations on April 1, 2007.

During the year ended 30 June 2025, the Subsidiary incurred a net loss of Rs. 223.080 million (2024: Rs. 373.664 million). As of that date, the Subsidiary’s current liabilities exceeded its current assets by Rs. 501.190 million. Additionally, the Subsidiary’s manufacturing plant has remained non-operational since September 2024, with only limited toll manufacturing activities and the sale of closing stock and raw materials taking place during the year, primarily due to elevated production costs.

The Subsidiary is considering the disposal of its leasehold land, factory and colony building, plant and machinery, generators, electrical installations, and factory equipment, subject to approval by its Board of Directors and, subsequently, by shareholders in the forthcoming general meeting. These circumstances indicate the existence of a material uncertainty that may cast significant doubt on the Subsidiary’s ability to continue as a going concern and, therefore, on its ability to realize assets and discharge liabilities in the normal course of business.

However, management of the Group believes that these circumstances do not cast significant doubt on the Group’s ability to continue as a going concern, as the financial position and cash flows of the Modaraba and its other operations remain stable. Accordingly, these consolidated financial statements have been prepared on a going concern basis.

The Company intends to utilize the disposal proceeds for further business activities. Accordingly, these financial statements have been prepared on a going concern basis.

1.3 Capital Financial Services (Private) Limited

Capital Financial Services (Private) Limited was incorporated in Pakistan on November 13, 2015 as Private Limited Company by shares under the Companies Ordinance, 1984. The registered office of the Company is situated at B-1004, 10th Floor, Lakson Square Building no. 3, Sarwar Shaheed Road, Karachi. The principal activities of the company is to act as member / broker of the Pakistan Stock Exchange and to carry on the business of brokerage services in stock, shares etc.

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Page # 83

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

1.4 Apex Financial Services (Private) Limited

Apex Financial Services (Private) Limited was incorporated in Pakistan on November 13, 2015 as Private Limited Company by shares under the Companies Ordinance, 1984. The registered office of the Company is situated at B-1004, 10th Floor, Lakson Square Building no. 3, Sarwar Shaheed Road, Karachi. The principal activities of the company is to act as member / broker of the Pakistan Stock Exchange and to carry on the business of brokerage services in stock, shares etc.

1.5 Consolidation procedures

Subsidiaries

Subsidiaries are all entities over which the group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights or the parent - subsidiary relationship meet the definition as given in section 3 of the Companies Act, 2017. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group and are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the profit and loss account.

Transactions eliminated on consolidation

Inter-company transactions, balances and unrealized gains/losses on transactions between Group companies are eliminated.

Functional and reporting currency of group

Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the group operates. The consolidated financial statements are presented in Pakistani Rupees which is the functional and presentation currency of all the group companies.

1.6 Basis of consolidation

These consolidated financial statements include the accounts of group [First Equity Modaraba and its subsidiary companies, Equity Textile Mills Limited, Apex Financial Services (Private) Limited and Capital Financial Services (Private) Limited - (100% - Holding)]. Financial Statements of subsidiary companies have been consolidated on a line-by-line basis.

All material inter-company balances, transactions and resulting unrealized profit and losses have been eliminated.

2. BASIS OF PREPARATION

2.1 Statement of compliance

2.2 Basis of measurement

Page # 84

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

2.3 Functional and presentation currency

These financial statements have been presented in Pakistan Rupees, which is the functional and presentation currency of the Group.

2.4
Significant accounting estimates and judgments

The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. Estimates and judgments are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under circumstances. However, assumptions and judgments made by management in the application of accounting policies that have significant effect on the financial statements are not expected to result in material adjustment to the carrying amounts of assets and liabilities in the next year. The areas involving a higher degree of judgments or complexity or areas where assumptions and estimates are significant to the financial estimates are as follows:

		Note
a)	Useful life of depreciable assets/amortizable assets	4.1 & 4.2
b)	Impairment of assets	4.18
c)	Classifcation of investments	4.3
d)	Income tax	4.11
e)	Provision for staf gratuity	4.13

STANDARDS, INTERPRETATIONS AND AMENDMENTS TO THE APPROVED ACCOUNTING 3. STANDARDS

There are certain amendments and interpretations to the accounting and reporting standards which
3.1 are mandatory for the Company’s annual accounting period which began on July 01, 2024. However, these do not have any significant impact on the Company’s financial statements except as disclosed in note 4 to these financial statements.
Standards, amendments and interpretations to existing standards that are not yet effective and have
3.2 not been early adopted by the Company:

		"Efective	"Efective	date
		(annual reporting periods
		beginning	on or after)"

IAS 21	The Efects of Changes in Foreign Exchange Rates (Amendments)	January 01,		2025
IFRS 7	Financial Instruments: Disclosures (Amendments)	January 01,		2026
IFRS 9	Financial Instruments: Classifcation and Measure- ment (Amendments)	January 01,		2026
IFRS 17	Insurance Contracts	January 01,		2026
"Annual improvements to IFRS 7, IFRS 9, IFRS 10 (Consolidated Financial Statements) and IAS 7 (Statement of Cash Flows)"		January 01,		2026

3.3 The above standards, amendments to approved accounting standards and interpretations are not likely to have any material impact on the Company’s financial statements.

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Page # 85

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

3.4 Other than the aforesaid standards, interpretations and amendments, International Accounting Standards Board (IASB) has also issued the following standards and interpretation, which have not been notified locally by the Securities and Exchange Commission of Pakistan (SECP) as at June 30, 2025;

IFRS 1 First-time Adoption of International Financial Reporting Standards

IFRIC 12 Service Concession Arrangement IFRS 18 Presentation and Disclosures in Financial Statements IFRS 19 Subsidiaries without Public Accountability: Disclosures

4. MATERIAL ACCOUNTING POLICIES INFORMATION

The material accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

4.1 Fixed assets

4.1.1 Tangible

Fixed assets are stated at cost/revalued amount less accumulated depreciation and identified impairment loss, if any. Capital work-in-progress is stated at cost. Cost of operating fixed assets comprises historical cost, borrowing cost and other expenditures pertaining to the acquisition, construction, erection and installation of these assets.

The Group charges depreciation on the straight line method, whereby the depreciable amount of an asset is written off over its estimated useful life. Depreciation is charged at rates stated in note 18. Full depreciation is charged on additions, except major additions or extensions to production, facilities which are depreciated on pro-rata basis for the duration of use during the year. Group charges depreciation on additions from the month during which the asset is put to use. For disposals during the year, depreciation is charged up to the month preceding the month of disposal. The Group accounts for impairment, where indication exists, by reducing the carrying value to the estimated recoverable amount.

The assets’ residual value and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.

Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalized. Expenditures incurred subsequent to the initial acquisition of assets are capitalized only when it meets the recognition criteria. The profit or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognized as an income or expense.

The Group assesses at each reporting date whether there is any indication that fixed assets may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amounts. Where carrying values exceed the respective recoverable amount, assets are written down to their recoverable amounts and the resulting impairment loss is recognized in profit and loss account. The recoverable amount is the higher of an assets’ fair value less costs to sell and value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the assets’ revised carrying amount over its estimated useful lives.

Page # 86

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

4.1.2 Capital work-in-progress

Capital work-in-progress is stated at cost and consist of expenditure incurred, advances made and other costs directly attributable to operating fixed assets in the course of their construction and installation. Cost also includes applicable borrowing costs. Transfers are made to relevant operating fixed assets category as and when assets are available for use intended by the management.

4.1.3 Finance lease

Assets held under finance leases are recognized as assets of the Group at their fair value at the date of acquisition or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Financial charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability.

Depreciation is charged at rates used for similar owned assets, so as to depreciate the assets over their estimated useful lives in view of certainty of ownership of the assets at the end of the lease term.

Income arising from sale and lease back transactions, if any, is deferred and amortized equally over the lease period.

4.1.4 Operating lease

Lease payments under operating leases (net of any incentives received from the lessor) are charged to profit and loss account on a straight line basis over the respective lease term.

4.1.5 Intangible

4.2 Investment property

Depreciation on office premises is charged to profit and loss account on the straight line method so as to write off the depreciable amount of office premises over its estimated useful life at the rate defined in note 20. Depreciation on additions to investment property is charged from the month in which a property is acquired or capitalized while no depreciation is charged for the month in which the property is disposed off.

The Group assesses at each balance sheet date whether there is any indication that investment property may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying amounts exceed the respective recoverable amount, assets are written down to their recoverable amount and the resulting impairment loss is recognized in profit and loss account. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its estimated useful life.

The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognized as an income or expense.

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Page # 87

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

4.3 Financial instruments

4.3.1 Financial assets

Initial Measurement

"The Group classifies its financial assets into following three categories:

measured at amortized cost.
fair value through profit or loss (FVTPL); and
fair value through other comprehensive income (FVOCI);"

A financial asset is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

Subsequent measurement

Debt Investments at FVOCI
These assets are subsequently measured at fair value. Interest / markup income calculated using the effective interest method, and impairment are recognized in the statement of profit or loss account. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to the statement of profit and loss.
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest / markup or dividend income, are recognized in the statement of profit and loss.
Financial assets measured at amortized cost

Financial assets measured at these assets are subsequently measured at amortized cost using the effective amortized cost interest method. The amortized cost is reduced by impairment losses. Interest / markup income, and impairment are recognized in the statement of profit and loss.

Equity Investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognized as income in the statement of profit or loss account unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to the statement of profit and loss.

Impairment of financial assets

Page # 88

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

4.3.2 Financial liabilities

Financial liabilities are initially recognized on trade date i.e. date on which the Group becomes party to the respective contractual provisions. The Group derecognizes the financial liabilities when contractual obligations are discharged or cancelled or expired. Financial liability other than at fair value through profit or loss are initially measured at fair value less any directly attributable transaction cost. Subsequent to initial recognition, these liabilities are measured at amortized cost using effective interest rate method.

4.4

Stores, spares and loose tools

These are valued at weighted average cost except for items in transit, which are valued at cost comprising invoice value, plus other charges paid thereon. Provision is made for slow moving and obsolete items.

4.5 Stock-in-trade

These are valued at the lower of cost and net realizable value except waste, which is valued at net realizable value determined on the basis of contract price. The cost is determined as follows:

Raw materials Weighted average cost Weighted average manufacturing cost including a Work-in-progress and finished goods proportion of production overheads

Waste Net realizable value

Net realizable value represents estimated selling prices in the ordinary course of business less expenses incidental to making the sale.

4.6 Trade debts

Trade debts are carried at the amounts billed / charged which is fair value of consideration to be received in the future. An estimate is made for doubtful receivables based on review of outstanding amounts at the year end, if any. Provision is made against those having no activity during the current period and are considered doubtful by the management. Balances considered bad and irrecoverable are written off when identified.

4.7 Other receivables

Other receivables are recognized at nominal amount which is fair value of the consideration to be received in the future.

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4.8 Creditors, accrued and other liabilities

Page # 89

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received.

Revenue recognition

(a) Income from Morabaha / Musharaka transactions is recognized on the basis of pro-rata accrual of the estimated profit earned during the year.
(b) Dividend income is recognized when the right to receive dividend is established.
(c) Brokerage commission and fee income is recognized when accrued.
- Profit on PLS deposits is recognized on an accrual basis.
(d)
(e) Capital gains or losses arising on sale of investments are taken to income in the period in which they arise.
(f) Sales are recognized on dispatch of goods to customers, when risk and rewards of ownership are transferred. Scrap sales are recognized at realized amount when delivery is made to customers.
(g) Profit on investment accounts with Islamic banks is recognized on an accrual basis.
(h) Rent from investment property is recorded on accrual basis.
4.10 Borrowing cost

Financing and borrowings are recorded at the amounts received. Financial charges are accounted for on accrual basis. Financial charges on long term financing is capitalized up to the date of commissioning of respective property, plant and equipment acquired out of the proceeds of such long term financing. Other financial charges are charged to profit and loss account in the year in which they are incurred.

4.11 Taxation

4.11.1 Parent company

Current

The charge for taxation is based on taxable income at current rates of taxation after taking into account tax credits and tax rebates available, if any or minimum tax under the provisions of the Income Tax Ordinance, 2001. For items covered under final tax regime, provision is made according to the final tax rate provided in the Income Tax Ordinance, 2001.

Deferred

Deferred tax is recognized using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the tax base. This is recognized on the basis of expected manner of the realization and the settlement of the carrying amount of assets and liabilities using the tax rates enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognized for all deductible temporary differences and carry forward of unused tax losses, if any, to the extent that future taxable profits will be available against which the deductible temporary differences can be utilized. Deferred tax assets are reduced to the extent that is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.

Page # 90

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

4.11.2 Subsidiary companies

Current

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred

Deferred taxation is accounted for using the balance sheet liability method providing for temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary timing differences and deferred tax assets to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilized.

Deferred tax is calculated based on the rates that have been enacted or substantively enacted upto the balance sheet date and are expected to apply to the period when the difference arises.

4.12 Foreign currency translation

Parent company

All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at exchange rates prevailing at the balance sheet date. Transactions in foreign currencies are translated into Pak rupees at exchange rate prevailing at the date of transaction. All non-monetary items are translated into rupees at exchange rate prevailing on the date of transaction or on the date when fair values are determined. Exchange differences are included in income currently.

Subsidiary companies

Assets and liabilities in foreign currencies are translated at the rates of exchange prevailing at balance sheet date or at the contracted rates while foreign currency transactions are recorded at the rates of exchange prevailing at the transaction date or at the contracted rates. Exchange gains and losses are charged to income currently.

4.13

Retirement benefits

Defined benefit plan

The Group operates an unfunded gratuity for its permanent employees who complete the qualifying period of service. Provision has been made in accordance with actuarial recommendations using the Projected Unit Credit Method. The results of current valuation are summarized in Note 10 of these financial statements. Actuarial gains / losses are recognized over the average lives of the employees.

Defined contribution plan

The subsidiary operates a funded employees’ provident fund scheme for its permanent employees. Equal monthly contributions at the rate of 6% of basic pay are made both by the Company and employees to the Fund.

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Page # 91

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

Employee compensated absences

Compensated absences are accounted for in the period in which the absences are earned.

4.14 Offsetting of financial assets and financial liabilities

A financial asset and financial liability is offset and the net amount is reported in the balance sheet if the Group has a legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

4.15 Derivative financial instruments

The Group enters into derivative financial instruments. These are initially recorded at cost and are remeasured to fair value at subsequent reporting dates. Any resulting gain or loss is recognized in current year income. Derivatives with positive market values are included in other receivables and derivatives with negative market values are included in other liabilities in the balance sheet.

4.16 Provisions

Provisions are recognized in the balance sheet when the Group has a legal or constructive obligation as a result of past event and it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and reliable estimate can be made of the amount of the obligation.

4.17
Profit distribution to certificates holders

Profit distribution to certificate holders is recognized as liability in the period in which such distribution is announced.

4.18 Impairment

The carrying amount of Group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated and impaired losses are recognized in the profit and loss account.

4.19 Segment reporting

A segment is a distinguishable component of the Group that is engaged in business activities from which the Group earns revenues and incur expenses and its results are regularly reviewed by the Group's Chief Operating Decision Maker to make decision about resources to be allocated to the segment and assess its performance. Further, discrete financial information is available for each segment.

Based on internal management reporting structure, services provided and products produced and sold, the Group is organized into the following four operating segments:

Musharaka facility
Brokerage operation
Capital market
Textile business
Others

Management monitors the operating results of above mentioned segments separately for the purpose of making decisions about resources to be allocated and of assessing performance.

Page # 92

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

4.20 Related party transactions
Parent

All transactions with related parties, if any, are recorded at an arm's length basis.

Subsidiary companies

Transactions and contracts with the related parties are based on the policy that all transactions between the Companies and related parties are carried out at an arm’s length. These prices are determined in accordance with the methods prescribed in the Companies Act, 2017.

4.21 Cash and cash equivalents

For the purposes of cash flow statement, cash and cash equivalents comprise cash in hand and cash with banks net of borrowing considered as being in the nature of financing activities.

4.22 Functional and reporting currency

Items include in the financial statements are measured using the currency of primary economic environment in which the Group operates. The financial statements are presented in Pakistani Rupees, which is the Group's functional and presentation currency.

4.23 Capital Risk Management

The Group's objective when managing capital is to safeguard the Group's ability to continue as a going concern so that it can provide returns for certificate holders and benefits for other stakeholders and to maintain a strong capital base to support the sustained development of its businesses.

The Group manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend paid to certificate holders or issue new certificates.

4.24 Subsidiary accounting judgment and critical estimates / assumptions

The preparation of financial statements in conformity with approved accounting standards requires the management to:-

exercise its judgment in process of applying the Group’s accounting policies, and
use of certain critical accounting estimates and assumptions concerning the future.

These involve critical accounting estimates and significant assumptions concerning the future are discussed below:-

Income taxes

The Companies takes into account relevant provisions of the prevailing income tax laws while providing for current and deferred taxes as explained in notes to these financial statements.

Property, plant and equipment

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Page # 93

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

Management has made estimates of residual values, useful lives and recoverable amounts of certain items of property, plant and equipment. Any change in these estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with corresponding effect on the depreciation charge and impairment loss.

Stores and spares

Management has made estimates for realizable amount of slow moving and obsolete stores and spares items to determine provision for slow moving and obsolete items. Any future change in the estimated realizable amounts might affect carrying amount of stores and spares with corresponding affect on amounts recognized in profit and loss account as provision / reversal.

Page # 94

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

5. CERTIFICATE CAPITAL

2025		2024		2025	2024
--- Number of	certifcates ---		Note	-------------- Rupees ------------
46,220,000		46,220,000	*5.1*	462,200,000	462,200,000
6,220,000		6,220,000	*5.2*	62,200,000	62,200,000

52,440,000		52,440,000		524,400,000	524,400,000

5.1 Modaraba certificates of Rs. 10 each fully paid-up in cash.
5.2 Modaraba certificates of Rs. 10 each issued as fully paid-up bonus certificates.
5.3 Certificates held by the Management Company: 5,532,296 (2023: 5,532,296).

		2025	2024
6.	RESERVES	-------------- Rupees ------------
	Capital reserves
	Statutory reserve	164,334,210	164,334,210
	Certifcate premium account	131,100,000	131,100,000
	Revenue reserve
	Accumulated proft	(378,883,780)	(188,407,329)
	General reserve	17,321,036	17,321,036

		(66,128,534)	124,347,917

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Page # 95

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

	FOR THE YEAR ENDED JUNE 30, 2025	FOR THE YEAR ENDED JUNE 30, 2025	FOR THE YEAR ENDED JUNE 30, 2025	FOR THE YEAR ENDED JUNE 30, 2025
6.1	In accordance with the Prudential Regulations for Modarabas, the Modaraba is required to not less than 20% and not more than 50% of its after tax profts to statutory reserve until the the certifcate capital. 2025				transfer an amount reserve fund equals 2024
7.	SURPLUS ON REVALUATION OF FIXED ASSETS	Note		-------------- Rupees ------------
	Opening balance			416,785,158			652,245,943
	Efect of surplus recognized during the year			592,113,491			-
	Movement of revaluation surplus during the year	*7.1*		(58,702,135)			(65,224,594)
	Movement of deferred tax during the year	*7.2*		(275,556,989)		(170,236,191)
	Closing balance			674,639,525			416,785,158
7.1	Movement of revaluation surplus
	Less: transfer to unappropriated proft in respect of incremental depreciation charged during the year - (net of deferred tax)			(41,678,516)			(46,309,462)
	Related deferred tax liability			(17,023,619)			(18,915,132)
				(58,702,135)			(65,224,594)
				2025			2024
7.2	Movement of deferred tax liability			-------------- Rupees ------------
	Opening balance			(170,236,191)			(189,151,323)
	Efect of surplus recognized during the year		(122,344,417)				(1,421,780)
	Less: incremental depreciation charged during the year transferred to the statement of proft or loss			17,023,619			20,336,912
	Closing balance			~~275,556,989)~~		~~(170,236,191)~~
				2025			2024
8.	LIABILITY AGAINST ASSETS SUBJECT TO FINANCE LEASE			-------------- Rupees ------------
	Opening balance Payments / adjustments during the year			22,597,219 (18,801,352)			38,951,091 (16,353,872)
				3,795,867			22,597,219
	Less: Payable within one year shown under current liabilities			(3,795,867)			(15,292,552)

				~~-~~			~~7,304,667~~

Page # 96

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

8.1 This represents finance lease entered into with financial institution for vehicles and plant and machinery. Financing at the rate of 6 month KIBOR plus 3.00% per annum have been used as a discounting factor. At the end of the lease period the ownership of assets shall be transferred to the Company upon the payment of residual values of the assets. The future minimum lease payments to which the Company is committed under the lease agreements and the periods in which they will become due are as follows:

		Upto one	2025 One to fve		Total	Total	Total	Total		Upto one	2024 One to fve	2024 One to fve			Total
		year	years							year		years




	------------------------------------------							Rupees --------------------------------------------
Minimum outstanding lease payments		3,803,856	-		3,803,856					17,367,780	7,309,829				24,677,609
Financial charges not due		(7,989)	-			(7,989)				(2,075,228)		(5,162)		(2,080,390)
Present value of minimum
lease payments		3,795,867	-		3,795,867					15,292,552	7,304,667				22,597,219
Payable within one year shown under current liabilities		(3,795,867)	-	(3,795,867)					(15,292,552)			-	(15,292,552)


		-	-				-			-	7,304,667				7,304,667

			2025	2024
9.	DEFERRED LIABILITIES	Note	-------- Rupees ----------
	Deferred taxation	*9.1*	04,695,413	12,774,144
	Staf gratuity	*9.2*	7,552,903	7,170,120
			112,248,316	19,944,264

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Page # 97

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

9.1 Deferred taxation liability / asset

The net balance for deferred taxation is in respect of the following temporary differences:

			2025	2024
		Note	-------------- Rupees ------------
	Deferred tax liabilities
	Accelerated tax depreciation allowance Revaluation of operating fxed assets Lease rentals		69,878,544 275,556,995 11,415,573	79,646,628 170,236,191 7,353,890
			356,851,112	257,236,709
	Deferred tax assets
	Provision for bad debts against local debtors Tax losses Turnover tax		3,047,396 187,661,427 61,446,876	3,019,954 143,757,183 97,685,428
			252,155,699	244,462,565
			104,695,413	12,774,144

9.2	Staf gratuity	*9.2.2*	7,552,903	7,170,120

9.2.1 General description

Employees, after completion of one year of service, shall be entitled for gratuity on leaving the Group’s employment. Gratuity shall be paid on the basis of one month’s last drawn monthly gross salary for each completed year of service.

Annual provision is based on actuarial valuation, which was carried out as at June 30, 2025 on September 15, 2025 using the Projected Unit Method.

		2025	2024
9.2.2	Amount recognized in the balance sheet is as follow:	-------------- Rupees ------------
	Present value of defned beneft obligation	7,552,903	7,170,120
	Total defned beneft obligation	7,552,903	7,170,120

Page # 98

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

		2025	2024
9.2.3	Movement in defned beneft obligation	-------------- Rupees ------------
	Opening balance Charged for the defned beneft plan	7,170,120	6,780,327
	Current service cost	465,196	473,560
	Net interest	1,057,593	1,101,803
	Acturial gain on obligation	(1,140,006)	(1,185,570)
		382,783	389,793
	Benefts paid	-	-
	Closing balance	7,552,903	7,170,120

9.2.4	Actuarial assumptions
	Valuation discount rate	14.75	16.25%
	Salary increase rate	11.75%	14.75%

9.2.4 Actuarial assumptions

The expected maturity analysis of undiscounted retirement benefit obligation is:

		2025
		Un-discounted payments
		-------------- Rupees ------------
2026		167,832
2027		193,123
2028		3,798,015
2029 2030	and onwards	162,159 38,511,471

Mortality rates assumed were based on the SLIC 2001-2005 (Standard Llife table for Pakistani insured population) mortality table.

The rates for withdrawal from service and retirement on ill-health grounds are based on industry / country experience.

			Impact	on defned beneft obligaton	on defned beneft obligaton
	Change in assumptons			Increase	Decrease
		----	(%) ----	------- Rupees -------
Discount rate			1%	7,137,747	8,020,837
Salary growth rate			1%	8,020,761	7,130,293

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Page # 99

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

The expected gratuity expense for the next year amounted to Rs. 1.328 million. This is the amount by which defined benefit liability is expected to increase.

Risks to which the scheme maintained by the Group is exposed are as follows such as:

Salary risk: The risk that the final salary at the time of cessation of service is higher than what was assumed. Since the benefit is calculated on the final salary, the benefit amount increases similarly.

Mortality risk: The risk that the actual mortality experience is different than the assumed mortality. This effect is more pronounced in schemes where the age and service distribution is on the higher side.

Withdrawal risk: The risk of actual withdrawals experience is different from assumed withdrawal probability. The significance of the withdrawal risk varies with the age, service and the entitled benefits of the beneficiary.

					2025			2024
10.	GIDC	PAYABLE	Note		---------- Rupees ----------
	GIDC	payable	10.1		294,911,570			294,173,782

10.1 The amount was payable in respect of Gas Infrastructure Development Cess (GIDC) levied under GIDC Act, 2015. In November 2020, the Supreme Court dismissed the review petition seeking review of its order issued in favor of recovery for GIDC arrears. The liability is recognized as per the guidelines issued by Institute of Chartered Accountants of Pakistan dated January 21, 2021.

		2025	2024
SHORT TERM BORROWING	Note	---------- Rupees ----------
Secured - Financial institutions (Running fnance arrangements)
Habib Bank Limited - Hypothecation		-	9,625,488
Bank of Punjab FIM	11.1	52,883,893	200,904,546
		52,883,893	210,530,034

11. SHORT TERM BORROWING

11.1 The facility is obtained for import / purchase of raw cotton bales and to finance working capital requirement of the Company. This facility is secured against First parri passu hypothecation charge of Rs. 467 million with 25% margin on present and future assets of the Company. The finance carries markup at the rate of 6 month KIBOR plus 200 basis points to be calculated on monthly basis. The total sanctioned limit is Rs. 350 million (2024: 350 million).

Page # 100

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
12.	CURRENT PORTION OF LONG TERM LIABILITIES	Note	-------------- Rupees ------------
	Liabilities against asset subject to fnance lease	8	3,795,867	15,292,552
	Current portion of GIDC payable		294,911,570	294,173,782
			298,707,437	309,466,334
13.	CREDITORS, ACCRUED AND OTHER LIABILITIES
	Creditors		216,794,516	368,215,306
	Accrued expenses		196,261,845	178,522,208
	Payable to clients		8,292,833	11,497,178
	Sale tax payable		27,805	136,794
	Withholding tax payable		2,831,395	2,661,377
	Minimum Tax levy		5,844,570	55,602,306
	Other liabilities		26,977,509	14,647,447
			457,030,473	631,282,616

14. ACCRUED MARK-UP

Short Term borrowing	14,804,653		17,092,518
	14,804,653		17,092,518

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Page # 101

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

15. CONTINGENCIES AND COMMITMENTS

15.1 Contingencies

There is a contingent liability in favour of Sui Gas Company Limited aggregating to amount Rs. 86.689 million. Sindh High Court has recently passed order in favour of Equity Textiles Limited. However, SSGCL has challenged the impugned SHC judgement in Supreme Court. The company is expecting favourable outcome.

In prior years, the Assistant Commissioner of Inland Revenue (ACIR) has issued show cause notice for short payment of further tax under section 11 (2) of Sales Tax Act, 1990 for the tax years 2016 and 2017. This pertains to Further tax on zero rated supply and according to provisions of Sales tax Act, 1990 further tax cannot be imposed on zero rated supplies. The Company had filed appeal to the Honorable High Court of Sindh and subsequently, the High Court of Sindh has passed restraining order against the notice. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, no provision has been made in these financial statements in respect of this matter. The matter is pending in the High Court of Sindh.

In prior years, the Assistant Commissioner of Inland Revenue (ACIR) has issued show cause notice for payment of sales tax and further tax amounting to Rs. 5.271 million under section 11 of Sales Tax Act, 1990 on the sale of goods to M/s Vezel Enterprises. The Company has filed appeal to the High Court of Sindh and subsequently, the High Court of Sindh has passed restraining order against the notice. This pertains to blacklisting issue of Vezel Enterprises. Actually, customer had blacklisted after supply of goods and there are number of rulings of High Court that supplier cannot be panelized if the customer blacklisted after the date of actual supply. The matter is pending with High Court of Sindh. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, no provision has been made in these financial statements in respect of this matter.

In prior year, the Officer Inland Revenue, (OIR) has issued show cause notice u/s 11((I) Read with Section 33(I)/5 of the Sales tax Act, 1990 for late payment and filing of Sales tax for the period July-2019 to November-2020. Subsequently, has passed an order No.100 of 2021 for recovery of demand for Rs.1.059 million. This pertains to late filing issue of Sales tax returns. The Company has filed an appeal before the Commissioner (Appeal) for impugned demand in term of section 45-B of Sales tax Act, 1990.The Company also had also paid Rs.1.059 million towards 10% payment of the tax adjudged tax liability in terms of provisions of Law. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, no provision has

Page # 102

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

been made in these financial statements in respect of this matter. However, the commissioner of appeal had passed order in our favour. Subsequently, the department had filed the appeal with Inland Revenue Tribunal and matter is still pending with the Tribunal.

In prior year, the Assistant Commissioner / Deputy Commissioner (ACIR) has issued show cause notice u/s 11((2) of the Sales tax Act, 1990 for late payment and late filing of Sales tax for the period August-2019 to November-2019. Subsequently, has passed an order No.08/80 of 2020 for recovery of demand for Rs.0.413 million. The Company had filed an appeal before the Commissioner (Appeal) for impugned demand in term of section 45-B of Sales tax Act, 1990. This pertains to late filing of Sales tax returns. The Commissioner of Appeal restrained order passed order had passed DCIR. The Commissioner had passed order against the Company. However, Company had filed the appeal in the Tribunal and same is pending with the Tribunal. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, had filed an appeal to the Appellate Tribunal Inland Revenue u/s 46 of the Sales tax Act, 1990 and no provision has been made in these financial statements in respect of this matter.

In prior year, the Deputy Commissioner (DCIR) has issued show cause notice u/s 11((2) of the Sales tax Act, 1990 wrong input tax for Rs.0.135 million for the period July, 2021 to November, 2021 Subsequently, (DCIR) has passed an order No.30/74 of 2022 for recovery of demand should be of Rs.0.141 million. The Company has filed an appeal before the Commissioner (Appeal) for impugned demand in term of section 45-B of Sales tax Act, 1990. This pertains to wrong input tax adjustment. However, the Commissioner Appeal passed order in our favour. However, department has filed appeal in the tribunal. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, no provision has been made in these financial statements in respect of this matter.

In prior year, the Inland Revenue Officer (IRO) has issued show cause notice u/s 11((2) of the Sales tax Act, 1990 for supplying of goods to M/s Pearl Corporation who has blacklisted by FBR after supplies made by us. Subsequently, he has passed an order No.108/ of 2021 for recovery of demand for Rs.2.970 million. This pertains to blacklisting issue of Pearl Corporation. Actually, customer had blacklisted after supply of goods. The Company has filed an appeal before the Commissioner (Appeal) for impugned demand in term of section 45-B of Sales tax Act, 1990 and also filed an appeal with High Court of Sindh for no recovery notice to be initiated till outcome of decision of Commissioner Appeal.

However, the Commissioner of appeal just passed order in our favor. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, no provision has been made in these financial statements in respect of this matter. However, the Department has filed appeal in the Tribunal and which is still pending at tribunal.

In prior year, tax year 2020, Company had filed appeal at High Court of Sindh against retrospective amendment under 65(B) of Income tax Ordinance, 2001 for reduction in rates of investment credit form 10% to 5% for the tax year 2020. Subsequently, High Court of Sindh has passed order in favor of Equity Textiles Limited in the year 2023. However, the department filed an appeal in the Supreme Court of Pakistan against the order of High Court of Sindh. The Company is defending the case under C.P.L.A. # 825-K/2023 dated 8/6/2023 at Supreme Court of Pakistan. The matter is still pending with Supreme Court of Pakistan. The Company, based on the legal advice, expects a favorable outcome of the case and accordingly, no provision has been made in these financial statements in respect of this matter.

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Page # 103

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

In prior year, the DCIR has passed order under section 221(1) of the Income Tax Ordinance, 2001 for tax year 2020 in respect of adjustment of brought forward refund pertaining to pervious tax years with the tax liability without having refund order under section 170(4) of the Ordinance resulting in tax demand of Rs.7.0 million. This pertains to adjustment of income tax refund of previous years. However, the company filed appeal before the Commissioner Inland Revenue Appeals (CIR-A) against the said order where hearing is concluded. The (CA-A) has referred the case back to DCIR for further examination and verification of prior year refunds.

In prior year, the ADCIR has passed order under section 122 (5A) of the Income Tax Ordinance, 2001 for tax year 2017 and disallowed the expenses for Rs.130.5 million. The said disallowance / addition resulted in taxable income during the period 98.577 million and tax liability amounting to Rs.4.159 million. The Company filed appeal before the Commissioner Inland Revenue Appeals (CIR-A) against the said order. The CIR-A modify the order of the officer by annulling the addition of salaries under section 21 (c) of the Ordinance and adjustment of brought forward business losses. However, remand back the issue relating to the allowability of tax credit under section 65B of the Ordinance. Subsequently, the officer has filed appeal before the Appellate Tribunal Inland Revenue (ATIR) against the order of the Commissioner Appeals and the hearing in appeal is pending. The matter is pending before the Appellate Tribunal Inland Revenue.

15.2 Commitments

Commitment in respect of letters of credit as at the reporting date amounting to Rs. Nil (2024: 24.550 million).

Page # 104

Rate	Rate	Rate	(%)	1 10 10 10 10 10 5 10 20 33 & 20 20 20 10
2025	Book value	As at June 30, 2025	--------------------------------------------------------------------------------- Rupees --------------------------------------------------------------------------------	- - - - - - 6,748,511 11,309,391 127,872 421,395 15,517,283 190,273 44,263,458
	Accumulated depreciation	As at June 30, 2025		6,642,618 334,974 - 6,977,592 297,418,837 19,158,350 - 316,577,187 90,010,418 7,812,412 - 97,822,830 1,390,764,379 63,670,325 - 1,454,434,704 96,347,788 7,362,983 - 103,710,771 70,119,033 2,365,378 - 72,484,411 17,668,163 1,034,136 - 18,702,299 19,613,702 1,256,599 - 20,870,301 1,352,765 105,522 - 1,458,287 3,431,155 263,654 - 3,694,809 24,760,077 4,227,468 (203,976) 28,783,569 1,261,196 21,140 - 1,282,336 26,039,651 4,795,546 - 30,835,197
		Disposal
		Charged during the year
		As at July 01, 2024
	Cost	As at June 30, 2025		40,140,000 - - (33,162,408) 6,977,592 489,002,349 291,523,464 - (463,948,626) 316,577,187 168,134,526 104,039,677 - (174,351,373) 97,822,830 2,017,078,540 40,047,812 - (602,691,648) 1,454,434,704 169,977,599 9,642,172 - (75,909,000) 103,710,771 93,701,904 670,627 - (21,888,120) 72,484,411 25,450,810 - - - 25,450,810 32,179,692 - - - 32,179,692 1,452,225 133,934 - - 1,586,159 4,085,204 31,000 - - 4,116,204 46,339,186 - (2,038,334) - 44,300,852 1,472,609 - - - 1,472,609 73,995,111 1,103,544 - - 75,098,655
		Non-current assets classified as held for sale
		Deletion
		Addition
		As at July 01, 2024
	Particulars			*Owned* Leasehold land Factory building Colony building Plant & machinery Gas generator Electric installations Ofce premises Grid Station Ofce equipments Computers Motor vehicles Furniture & fxtures Right of use asset Lease Asset - Machinery

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Page # 105

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

				FOR THE YEAR ENDED JUNE 30, 2025
Rate			(%)	1 10 10 10 10 10 5 10 20 20 33 & 20 20 20 20 10
2024	Book value	As at June 30, 2024	--------------------------------------------------------- Rupees ---------------------------------------------------------	33,497,382 191,583,512 78,124,108 608,273,391 73,629,811 23,582,871 7,782,647 12,565,990 99,460 18,040,770 654,049 21,579,109 211,413 - 47,955,460
	Accumulated depreciation	As at June 30, 2024		6,304,261 338,357 - 6,642,618 276,131,780 21,287,057 - 297,418,837 81,329,962 8,680,456 - 90,010,418 1,315,095,728 69,287,985 - 1,384,383,713 91,343,073 5,004,715 - 96,347,788 67,498,714 2,620,319 - 70,119,033 16,505,248 1,162,915 - 17,668,163 18,217,481 1,396,221 - 19,613,702 1,222,859 129,906 - 1,352,765 6,137,406 243,260 - 6,380,666 3,113,200 317,955 - 3,431,155 19,842,389 4,917,688 - 24,760,077 1,237,707 23,489 - 1,261,196 7,123,847 715,251 (7,839,098) - 20,711,267 5,328,384 - 26,039,651
		Disposal
		Charged during the year
		As at July 01, 2023
	Cost	As at June 30, 2024		40,140,000 - - - 40,140,000 489,002,349 - - - 489,002,349 168,134,526 - - - 168,134,526 1,991,154,104 1,503,000 - - 1,992,657,104 127,096,543 42,881,056 - - 169,977,599 93,701,904 - - - 93,701,904 25,450,810 - - - 25,450,810 32,179,692 - - - 32,179,692 1,452,225 - - - 1,452,225 24,421,436 - - - 24,421,436 3,980,004 105,200 - - 4,085,204 40,923,717 5,415,469 - - 46,339,186 1,472,609 - - - 1,472,609 13,254,560 - (13,254,560) - - 73,995,111 - - - 73,995,111
		Revaluation surplus
		Deletion
		Addition
		As at July 01, 2021
	Particulars			*Owned* Leasehold land Factory building Colony building Plant & machinery Gas generator Electric installations Ofce premises Grid Station Ofce equipments Factory equipment Computers Motor vehicles Furniture & fxtures Right of use asset Lease Asset - Vehicle Lease Asset - Machinery

Page # 106

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

		2025	2024
16.1	Depreciation for the year has been allocated as follows:	----------- Rupees -----------
	Modaraba business
	Administrative expense	771,981	782,102
	Other business
	Administrative expense	111,636,506	120,671,856

		112,408,487	121,453,958

Had there been no revaluation on specific classes of fixed assets the net book value of these assets would
16.2 have been as follows:

	2025	2024
	----------- Rupees -----------
Factory building	34,072,536	37,858,373
Colony building	7,428,091	8,253,434
Plant & machinery	335,885,277	348,183,913
Gas generator	43,733,811	48,593,124
Electric installations	6,489,408	7,210,453
Factory equipment	904,826	1,005,362
Machinery - right of use asset	43,159,912	47,955,459

	471,673,861	499,060,118

16.3 Fair value measurement

16.3.1[The Company’s factory building, colony building, plant and machinery, gas generator, electric installation, and ] factory equipment were revalued by an independent professional valuer, M/s Joseph Lobo (Private) Limited, as at June 30, 2025. The valuation was carried out using the market value method. As a result of the revaluation, a net surplus of Rs. 421.811 million was recognized and included in the carrying amounts of the respective class of assets. The corresponding surplus has been credited to the “Surplus on Revaluation of Property, Plant and Equipment”. The Company follows a policy of revaluing its assets including factory building, colony building, plant and machinery, gas generator, electric installation, and factory equipment every four years to ensure that the carrying amounts reflect fair market values.
16.3.2[Assumptions used in determining the fair value of factory building and colony building was considered to be ] level 2 in the fair value hierarchy due to significant observable inputs used in the valuation, while an assumption in respect of fair value of plant and machinery, generators, electric installations and factory equipment are considered to be on level 3 in the fair value hierarchy due to significant unobservable inputs used in the valuation.

Valuation techniques used to derive level 2 fair values

Fair value of factory building and colony building was derived using a sales comparison approach. Sale prices of comparable buildings in close proximity are adjusted for differences in key attributes such as location and size of the property. Moreover value of building also depends upon the type of construction, age and quality. The most significant input in this valuation approach is price / rate per square foot in particular locality.

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Page # 107

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

Valuation techniques used to derive level 3 fair values

In the absence of current prices in an active market, the fair values of plant and machinery, generators, electric installations and factory equipment were determined by taking into account the following factors:

Make, model, country of origin and etc.;
Operational capacity;
Present physical condition;
Resale prospects; and
Obsolescence.

The valuation was considered to be level 3 in the fair value hierarchy due to the above unobservable inputs used in the valuation. Most significant input in this valuation was the current replacement cost which was adjusted against above factors.

16.3.3 A reconciliation from opening balances to closing balances of fair value measurements categorized in level 3 is provided below:

	2025	2024
	----------- Rupees -----------
Opening balance (level 3 recurring fair values)	771,486,376	809,582,907
Additions - cost	25,150,000	44,384,056
Revaluation surplus	26,314,159	-
Depreciation charge	(78,194,230)	(82,480,587)
Closing balance (level 3 recurring fair values)	744,756,305	771,486,376

16.3.4 There were no transfers between level 2 and level 3 for recurring fair value measurements during the year.

			2025	2024
17.	INTANGIBLE	Note	----------- Rupees -----------
	Cost	*17.1*	10,000,000	10,000,000
	Intangible asset transfer from capital work in progress	*17.2*	7,373,793	8,193,103

			17,373,793	18,193,103

17.1 This represents Trading Right Entitlment certificates (TREC) of Pakistan Stock Exchange Limited.

The Modaraba has received Rs.10 million against the sale of Trading Right Entitlement Certificate (TREC) to wholly owned subsidiaries (Capital Financial Services (Private) Limited and Apex Financial Services (Private) Limited) in pursuance of the agreement dated April 18, 2017.

Page # 108

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

		2025	2024
17.2	Intangible asset transfer from capital work in progress	----------- Rupees -----------
	Net carrying value basis
	Opening book value	8,193,103	3,412,604
	Additions (at cost)	-	5,487,601
	Amortization charged	(819,311)	(707,102)

	Closing net book value	7,373,792	8,193,103

	Gross carrying value basis
	Cost	10,301,507	10,301,507
	Accumulated amortization	(2,927,714)	(2,108,404)

	Net book value	7,373,793	8,193,103

	Amortization rate per annum	10%	10%

18.
INVESTMENT PROPERTY
2 0 2 5
Rate
Cost
Accumulated depreciation
Book value
As at July 01,
2024
AdditionAs at June 30,
2025
As at July 01,
2024
Charged
during the
year
As at June 30,
2025
As at June 30,
2025
(%)
----------------------------------------------------- Rupees --------------------------------------------
Ofce premises
5
2,400,000
-
2,400,000
1,528,333
120,000
1,648,333
751,667
2,400,000
-
2,400,000
1,528,333
120,000
1,648,333
751,667
2 0 2 4
Rate
Cost
Accumulated depreciation
Book value
As at July 01,
2023
AdditionAs at June 30,
2024
As at July 01,
2023
Charged
during the
year
As at June 30,
2024
As at June 30,
2024
(%)
----------------------------------------------------- Rupees --------------------------------------------
Ofce premises
5
2,400,000
-
2,400,000
1,408,333
120,000
1,528,333
871,667
2,400,000
-
2,400,000
1,408,333
120,000
1,528,333
871,667

18.1 The fair value of investment property as at June 30, 2025 Rs. 10,643,440 (2024: Rs. 8,869,536) as per valuation report of independent valuer.

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Page # 109

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
19.	LONG TERM INVESTMENT	Note	----------- Rupees -----------
	*Investments classifed at fair value through other comprehensive income*
	Unlisted securities	*19.1*	72,119,707	68,239,233
	Listed securities	*19.2*	10,600,116	9,320,554
			82,719,823	77,559,787

19.1 Unlisted securities

2025 2024 Name of investee ---------- Number ----------	2025 2024 Name of investee ---------- Number ----------	2025 2024 Name of investee ---------- Number ----------	Note	2025 ---------- Rupees	2024 ----------
	50,000	50,000Sapphire Power Generation Limited	*19.1.1*	6,576,000	5,559,744
3,034,603		3,034,603ISE Towers REIT Management Co. Ltd.	*19.1.2*	65,501,906	62,637,688
	78,150	78,150Callmate Telips Telecom Limited	*19.1.3*	1	1
	22,000	22,000Javed Omer Vohra & Company Limited *19.1.4*		41,800	41,800
3,184,753		3,184,753		72,119,707	68,239,233

19.1.1[Net assets value per share of Sapphire Power Generation Limited is Rs. 131.52 (2024: Rs. 111.19) as per ] financial statements as at June 30, 2025 audited by Shinewing Hameed Chaudhri & Co., Chartered Accountants. Net assets value per share of ISE Towers REIT Management Company Limited Rs. 21.58 (June 30, 2024: Rs.
19.1.2 20.64) as per financial statements as at March 31, 2025. The auditors are BDO Ebrahim & Company, Chartered Accountants.
19.1.3 The investee company is in the process of winding up. Hence net assets value per share is not available.

The investee company had been de-listed in prior year. Therefore, the investment has been reclassified from

19.1.4 listed securities to un-listed securities. Currently, the investment is carried at Rs. 1.90 per share (quoted price of last trading day before de-listing)

19.2 Investments in associated company

	2025	2024		2025	2024
---------- Number ----------				---------- Rupees ----------
	1,579,749	964,151	Premier Insurance Limited	46,374,910	46,374,910
	1,579,749	964,151	Less: Unrealized loss on change in fair value	(35,774,794) 10,600,116	(37,054,356) 9,320,554

Page # 110

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

20. ADVANCES

This represents an amount paid to PMEX against purchase of one room in PMEX building (Formerly: Hyatt Regency) location at M.T. Road, Karachi.

			2025	2024
21.	STORES AND SPARES	Note	----------- Rupees -----------
	Store and spares		43,078,534	63,849,439
	Less: Provision for slow moving items		(4,182,048)	-
			38,896,486	63,849,439
22.	STOCK IN TRADE
	Raw material
	- in hand		42,633,230	279,027,201
	Work in process		-	173,049
	Finished goods		-	64,102,812
			42,633,230	343,303,062

			2024	2023
23.	TRADE DEBTS	Note	----------- Rupees -----------
	Unsecured - considered good		10,508,263	89,698,813
	Less: Provision for bad debts against local debtors		(10,508,263)	(10,413,633)
			-	79,285,180

24.	SHORT TERM INVESTMENTS
	*Investment classifed as fnancial asset at fair value through proft or*
	*loss*
	Listed securities	*23.1*	173,363,666	119,995,949

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Page # 111

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

23.1 Listed securities

==> picture [534 x 36] intentionally omitted <==

----- Start of picture text -----

2025 2024 2025 2024
Name of investee
------------Numbers------------- ------------ Rupees ------------
----- End of picture text -----

			Oil and gas
	106,608	13,698	Oil & Gas Development Co Ltd	4,952,850	676,850
	1,000	15,174	Sui Northern Gas Pipeline Ltd.	116,710	601,124
	110,000	88,400	Cnergyi Co. PK Limited	784,300	340,340
	432,002	697,502	Hascol Petroleum Ltd	4,173,139	4,317,537
	30,000	30,000	Hi-Tech Lubricants Ltd	1,352,700	1,369,344
	1,000	2,100	Pakistan Petroleum Limited	170,170	245,931
	800	2,500	Attock Refnery	543,536	703,180
	1,000	-	Mari Petrolium Ltd	626,890	-
	38,400	38,400	Hi-Tech Lubricants Limited	1,731,456	1,069,344
			Food
	60,000	67,500	Treet Corporation Limited	1,420,200	1,050,300
	2,000	2,000	EMCO Industries	91,820	68,940
	-	200	Clover Pakistan Limited	-	9,524
	639,000	639,000	Al-Shaheer Corporation Limited	4,933,080	5,156,730
	110,000	115,675	Unity Foods Limited	2,740,100	3,487,601
			Chemicals
	98,500	98,500	Ghani Global Glass Limited	946,585	592,970
	27,850	27,850	Ghani Global holding Limited	501,022	265,132
			Construction and materials
	500	12,500	Bestway Cement Limited	202,720	112,140
	469,000	469,000	Dewan Cement Limited	5,972,400	4,005,260
	10,000	90,000	Fauji Cement Company Limited	446,700	2,061,900
	33,000	362,775	Fly Cement Company Limited	1,875,090	3,018,288
	-	15,750	Flying cement company limited	-	131,040
	-	3,400	Cherat Cement Company Limited	-	554,642
	68,895	83,222	MapleLeaf Cement Limited	5,806,471	3,162,436
	32,000	32,000	Hyderi Construction	-	-
	1,756,500	1,756,500	Power Cement Limited	23,853,270	9,660,750
			Transport
	718,433	718,433	"Pakistan International Bulk Terminals Limited"	6,279,104	4,432,732
			Pharma and biotech
	19,050	13,050	The Searle Pakistan Limited	1,670,685	745,416
IRST EQUITY MODARBA	5,000 5,845 10,802 1,852 2,140	- - 22,500 1,852 25,999	Citi Pharma BGF Bioscience Ltd Automobile and parts Ghani Glass Automobile Limited Millat Tractors Limited Ghandhara Industries Limited	419,850 986,051 631,917 1,034,638 1,391,920	- - 919,800 1,178,020 7,107,867

Page # 112

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

==> picture [534 x 45] intentionally omitted <==

----- Start of picture text -----

2025 2024 2025 2024
Name of investee
--------- Numbers --------- ------------ Rupees ------------
----- End of picture text -----

		Paper & Board
59,400	59,400	Roshan Packages Limited	1,266,408	837,540
70,000	70,000	Merit Packaging Limited	970,900	909,300
		Engineering
122,100	107,100	Amreli Steel Limited	2,853,478	2,890,629
5,000	5,000	Lalpir Ltd	130,450	127,100
13,375	13,375	Agha Steel Industries Limited	114,891	134,018
		Textile Composites
40,000	209,000	International Knitwear Limited	809,600	2,752,530
-	4,500	Amtex Limited	-	14,220
4,200	4,498	Nishat Mills Limited	528,696	318,683
237,000	237,000	Azgard Nine Limited	2,614,110	1,789,350
		Miscellaneous
2,461	2,461	United Distributors Limited	162,401	92,066
108,000	250,000	Pace Pakistan Limited	677,160	755,000
		Telecommunication
703,500	708,500	"Pakistan Telecommunication Company Limited"	17,897,040	8,509,085
84,387	84,387	Telecard Ltd	664,970	609,274
12,000	2,500	TRG Pakistan Limited	678,120	155,125
55,100	55,100	Netsol Technologies Limited	7,326,096	7,480,106
2,147,500	1,859,500	Worldcall Telecom Limited	3,393,050	2,342,971
31,000	53,647	EcoPack Limited	2,055,920	835,820
		Modarabas
38,000	38,000	First UDL Modaraba	421,800	190,000
		Cable & electrical goods
696,750	696,750	Waves Singer Pakistan Limited	5,462,520	5,005,911
		Power Generation & Distribution
1,495,000	1,010,000	K-Electric Limited	7,848,750	4,676,300
		Securities Companies
1,495,600	1,758,453	Pakistan Stock Exchange	41,831,932	22,525,783
12,211,550	12,674,651		173,363,666	119,995,949

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Page # 113

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
24.	ADVANCES - CONSIDERED GOOD	Note	----------- Rupees -----------
	To employees		2,881,356	3,603,310
	To supplier of goods		-	989,625
	Against letter of credit		104,326	-
	Others		2,936,020	201,020
			5,921,702	4,793,955
25.	TRADE DEPOSITS AND PREPAYMENTS
	Deposits		16,439,087	16,439,088
	Margin deposit		54,582,573	101,113,068
	Security Deposit		124,800	124,800
	Prepayments		651,461	344,894
	Lease deposit		3,152,000	-
			74,949,921	118,021,850

26.	OTHER RECEIVABLES		19,168,571	19,205,797
	Sale tax recievables		2,498,917	58,454,736
	Musharakah proft recievable		1,795,152	1,795,152
	Sale tax carry forward		107,488,415	64,148,549
	Prepaid levy Others		5,844,570 2,060,660	55,602,306 5,774,634
			138,856,285	204,981,174
27.	TAX REFUND FROM GOVERNMENT AUTHORITIES
	Income tax refundable		34,014,098	21,813,739
			34,014,098	21,813,739
28.	TAXATION - NET
	Advance income tax		25,901,806	32,214,486
	Less: Provision for taxation		(6,685,912)	(5,705,424)
			19,215,894	26,509,062
29.	CASH AND BANK BALANCE
	Cash in hand		800,000	800,000
	Bank balances -in current accounts -in saving accounts	*29.1*	2,435,622 23,183,024 26,418,646	1,879,912 16,924,838 19,604,750

29.1 Effective mark-up rate in respect of PLS accounts ranges from 8% to 11% (2024: 13% to 18%) per annum.

Page # 114

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

During the reporting period, the Group’s management committed to a plan to dispose of certain non-current assets and initiated a formal process to seek approval from the Board of Directors and subsequently from the shareholders in a general meeting. These assets are expected to be disposed of within the next 12 months and have therefore been classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Accordingly, the assets classified as held for sale have been measured at the lower of their carrying amount and fair value less costs to sell. Depreciation on these assets has ceased effective from the date of classification.

			2025	2024
31.	INCOME - NET	Note	---------- Rupees ----------
	Income / (loss) from modaraba's business	31.1	22,041,205	(10,818,648)
	Loss from textile's business	31.2	(163,203,419)	(264,912,050)
			(141,162,214)	(275,730,698)
31.1	Income from modaraba's business
	Brokerage commission		2,225,979	1,075,096
	Capital loss		10,447,121	(20,244,477)
	Dividends		4,797,655	5,534,733
	Rentals		4,570,450	2,816,000
			22,041,205	(10,818,648)
31.2	Income from textile's business
	Sales
	- Local		72,320,574	5,563,818,296
	- Exports		-	1,411,130
	- Waste sales		64,797	212,933,675
	- Scrap Sales		3,529,490	4,123,160
	Sale of Raw material		283,006,329	-
			358,921,190	5,782,286,261
	Toll Manufacturing		178,686,692	-
			537,607,882	5,782,286,261
	Sale Tax		(82,227,861)	(628,989,282)
	Commission to selling agent		(351,490)	(72,285,780)
			455,028,531	5,081,011,199

	Cost of sale	31.3	(618,231,950)	(5,345,923,249)

			(163,203,419)	(264,912,050)

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Page # 115

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
31.3	Cost of sale	Note	----------- Rupees -----------

	Raw material consumed	*33.3.1*	-	4,278,840,000
	Cost of sold raw material		236,393,971	-
	Store consumed		6,441,168	66,284,695
	Packing material consumed		5,036,333	45,364,438
	Salaries, wages and other benefts		67,161,507	278,318,847
	Fuel and power		115,318,244	415,607,877
	Insurance		9,582,611	15,768,432
	Repair & maintenance		595,862	5,513,998
	Depreciation	16.1	106,566,355	114,994,832
	Other manufacturing overheads		6,860,038	10,891,205
			553,956,089	5,231,584,324
	Work in Process
	-opening stock		173,049	44,575,959
	-closing Stock		-	(173,049)
	Cost of goods manufactured		554,129,138	5,275,987,234
	Finished goods
	-opening stock		64,102,812	134,038,827
	-closing Stock		-	(64,102,812)

			618,231,950	5,345,923,249

33.3.1	Raw material consumed

	Opening stock		279,027,201	392,521,920
	Purchased during the year		-	4,165,345,281
			279,027,201	4,557,867,201
	Closing stock Cost of sold raw material		(42,633,230) (236,393,971) -	(279,027,201) - 4,278,840,000

Page # 116

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

			2025	2024
32.	OPERATING EXPENSES		---------- Rupees ----------
	Salaries, allowances and benefts	*32.2*	38,461,958	44,187,324
	Director & CEO fee		6,692,895	6,552,801
	Travelling, conveyance and entertainment		1,198,680	2,423,661
	Telephone and postage		1,054,035	1,103,573
	Rent, rates and taxes		5,217,017	5,169,828
	Electricity		2,091,212	2,030,327
	Insurance		1,696,305	1,954,637
	Printing, stationery and advertising		600,293	764,169
	Fees and subscriptions		8,746,954	6,289,206
	Vehicle running and maintenance		6,945,095	9,034,442
	Depreciation	*18.1.1 & 20*	5,962,132	6,579,127
	Facilities and utilities		4,768,040	4,768,040
	Repair and maintenance		3,030,645	3,663,481
	Annual review meeting		-	48,241
	Auditors' remuneration	*32.3*	1,272,180	1,201,294
	Legal and professional		3,115,994	4,874,399
	Shariah Advisor		250,000	231,250
	PSX & SECP charges		612,709	480,039
	Amortization Expense		819,310	707,100
	Cartage expense		7,150	47,450
	Others		334,859	978,959
			92,877,463	103,089,348

32.1 Remuneration of officers and other employees


	2025			2024

	Ofcers	Other employees		Ofcers	Other employees
	------------------------------- Rupees ---------------------------------
Salaries and allowances	2,931,120		2,343,180	2,798,960	2,132,240
Leave fare and encashments	240,910		112,900	371,680	147,417
Expenses reimbursed:
- Medical	716,972		488,331	367,100	213,541
	3,889,002		2,944,411	3,537,740	2,493,198

Page # 117

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

32.2[Salaries, allowances and benefits include provision for gratuity of Rs. 1,522,789 (2024: Rs. ] 1,575,363). Officers are also provided with free use of the Modaraba maintained cars.

			2025	2024
32.3	Auditor's remuneration	Note	----------- Rupees -----------
	Audit fee		1,097,780	880,800
	Half yearly review		40,000	40,000
	Other fees		56,000	280,494

			1,193,780	1,201,294

33.	DISTRIBUTION AND SELLING EXPENSES
	Freight loading and unloading		3,349,690	24,418,315
	Clearing forwarding exports		-	234,844

			3,349,690	24,653,159

34.	FINANCIAL CHARGES
	Mark up / interest on:
	Short term loan & running fnance - secured		19,333,878	54,957,374
	Finance lease		1,890,515	6,020,035
	Local LC		-	42,124,267
	GIDC Net		737,788	8,013,819
	Bank charges		1,472,555	4,806,995

			23,434,736	115,922,490

35.	OTHER INCOME
	Proft on IBI		188,821	169,190
	Gain on sale of fxed assets		7,022,899	-
	Other income		2,816,629	8,777,138

			10,028,349	8,946,328
36.	OTHER CHARGES Provision for slow moving items Loss on sale of stores and spares - net		4,182,048 761,919 4,943,967	- - -

Page # 118

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

37. TAXATION

37.1

The income tax returns of the Group have been filed up to tax year 2024 under the Universal Self Assessment Scheme. This scheme provides that the return filed is deemed to be an assessment order. The returns may be selected for audit within five years. The Income Tax Commissioner may amend assessment if any objection is raised during audit.

37.2[Since, there is no accounting profit during the year ended June 30, 2025 and tax has been charged under mini-] mum tax provisions therefore, no tax reconciliation is prepared for the year then ended.
37.3[This represents final taxes paid under section 150 & 37A of Income Tax Ordinance (ITO, 2001) representing ] levy in terms of requirements of IFRIC - 21 / IAS - 37.
37.4[This represents portion of minimum tax paid under section 113, 233 & 153(1)(b) of Income Tax Ordinance (ITO, ] 2001), representing levy in terms of requirements of IFRIC - 21 / IAS - 37.

		2025	2023 4
38.	LOSS PER CERTIFICATE - BASIC AND DILUTED	----------- Rupees -----------
	Loss for the year	(232,154,967)	(414,095,365)
		---------- Numbers ----------
	Weighted average number of certifcates outstanding during the year	52,440,000	52,440,000
		---------- Rupees ----------
	Loss per certifcate - basic and diluted	(4.43)	(7.90)

38.1 There is no dilution effect on the basic earnings per certificate of the Modaraba as the Modaraba has no such commitments.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

39. RISK MANAGEMENT POLICIES AND OBJECTIVES

Financial risk management

The board of directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group has exposure to the following risks from its use of financial instruments:

Credit and concentration risk
Liquidity risk
Market risk
Operational risk - Currency risk

Credit and concentration risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss, without taking into account the fair value of any collateral. Concentration of credit risk arises when a number of counterparties are engaged in similar business activities or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations of credit risk indicate the relative sensitivity of the Group’s performance to developments affecting a particular industry.

Credit risk of the Group arises principally from the investments, musharaka/morahaba receivables, advances, trade deposits and other receivables. The carrying amount of financial assets represents the maximum credit exposure. To reduce the exposure to credit risk, the Group has developed a formal approval process whereby credit limits are applied to its customers. The management continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful for recovery.

The carrying amount represents the maximum credit exposure before any credit enhancements. The maximum exposure to credit risk at the reporting date is:

			2024
Investment			197,555,736
Trade debts			79,285,180
Advances-considered good			7,303,955
Trade deposits and prepayments			126,432,650
Other receivables			204,981,174
			615,558,695

Liquidity risk

Liquidity risk is the risk that the Modaraba will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk arises because of the possibility that the Group could be required to pay its liabilities earlier than expected or difficulty in raising funds to meet commitments associated with financial liabilities as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

Page # 120

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025


				2 0 2 5


		Less than one year	Over one year but less than fve years			Total

	----------------------------- Rupees ---------------------------
Assets
Long term investments		-			82,719,823	82,719,823
Short term investments		173,363,666			-	173,363,666
Advances		5,921,702			2,510,000	8,431,702
Trade deposits		74,298,460			1,750,000	76,048,460
Other receivables		138,856,285			-	138,856,285
Bank balances		26,418,646			-	26,418,646
		418,858,759			86,979,823	505,838,582
Liabilities		-			575,000	575,000
Security deposit		3,795,867			-	3,795,867
Liabilities against asset subject to fnance lease		52,883,893			-	52,883,893
Short term borrowings		457,030,473			-	457,030,473
Creditors, accrued and other liabilities		14,804,653			-	14,804,653
Accrued mark up		31,116,072			-	31,116,072
Unclaimed proft distribution		559,630,958			575,000	560,205,958
Net balance		(140,772,199)			86,404,823	(54,367,376)
				2 0 24

		Less than one year	Over one year but less than fve years			Total

	-------------------------------- Rupees ------------------------
Assets
Long term investments		-			77,559,787	77,559,787
Trade debts		79,285,180			-	79,285,180
Short term investments		119,995,949			-	119,995,949
Advances		4,793,955			2,510,000	7,303,955
Trade deposits		117,542,752			8,410,800	125,953,552
Other receivables		204,981,174			-	204,981,174
Bank balances		19,604,750			-	19,604,750
		546,203,760			88,480,587	634,684,347
Liabilities
Security deposit		-			200,000	200,000
Liabilities against asset subject to fnance lease		14,642,828			7,304,667	21,947,495
Short term borrowings		210,530,034			-	210,530,034
Creditors, accrued and other liabilities		631,282,616			-	631,282,616
Accrued mark-up		17,092,518			-	17,092,518
Unclaimed proft distribution		31,116,072			-	31,116,072
		904,664,068			7,704,667	912,368,735
Net balance		(358,460,308)			80,775,920	(277,684,388)

Page # 121

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

Market risk

Operational Risk

Operational Risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes, technology and infrastructure supporting the Group’s operations either internally within the Group or externally at the Modaraba’s service providers, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of investment management behaviour. Operational risks arise from all of the Group’s activities.

The Group’s objective is to manage operational risk so as to balance limiting of financial losses and damage to its reputation with achieving its objective of generating returns for certificate holders. The primary responsibility for the development and implementation of controls over operational risk rests with the Board of Directors of the Management Company. This responsibility encompasses the controls in the following areas:

Requirements for appropriate segregation of duties between various functions, roles and responsibilities;
Requirements for the reconciliation and monitoring of transactions;
Compliance with regulatory and other legal requirements;
Documentation of controls and procedures;
Requirements for appropriate segregation of duties between various functions, roles and responsibilities;
Ethical and business standards; and
Risk mitigation, including insurance where this is effective.

Currency risk

Foreign currency risk is the risk that the value of financial asset or a liability will fluctuate due to a change in foreign exchange rates. It arises mainly where receivables and payables exist due to transactions entered into foreign currencies.

40. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Group is of the view that the fair market value of most of the financial assets and financial liabilities are not significantly different from their carrying amounts.

Page # 122

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

		2025	2024
40.1	Financial instruments by category	---------- Rupees ----------
	Financial assets
	At amortized cost
	Trade debts	-	79,285,180
	Advances	8,431,702	7,303,955
	Trade deposits	76,699,921	126,432,650
	Other receivables	138,856,285	204,981,174
	Bank balances	26,418,646	19,604,750
	Financial assets at fair value through proft or loss
	Short term investments	173,363,666	119,995,949
	Financial assets at fair value through OCI
	Long term investments	82,719,823	77,559,787
		506,490,043	635,163,445
	Financial liabilities
	Financial liabilities at amortized cost
	Security Deposit	575,000	200,000
	Liabilities against asset subject to fnance lease	-	7,304,667
	Short term borrowing	52,883,893	210,530,034
	Current portion of long term liabilities	298,707,437	309,466,334
	Creditors, accrued and other liabilities	457,030,473	631,282,616
	Accrued mark up	14,804,653	17,092,518
	Unclaimed proft distribution	31,116,072	31,116,072
		855,117,528	1,206,992,241

	On balance sheet gap	(348,627,485)	(571,828,796)

41. MATURITIES OF ASSETS AND LIABILITIES

The above analysis is based on the contractual / expected maturities of assets and liabilities which may not necessarily correspond with actual maturities.

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Page # 123

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

			2025
	Upto one month	over one month to one	over one year to fve	over fve	Total
		year	years	years
	-------------------------------- Rupees ----------------------------------
Assets
Long term investments	-	-	82,719,823	-	82,719,823
Trade debts	-	-	-	-	-
Short term investments	-	173,363,666	-	-	173,363,666
Advances	-	5,921,702	2,510,000	-	8,431,702
Trade deposits	-	74,298,460	1,750,000	-	76,048,460
Other receivables	-	138,856,285	-	-	138,856,285
Bank balances	-	26,418,646	-	-	26,418,646
	-	418,858,759	86,979,823	-	505,838,582
Liabilities
Liabilities against asset subject to fnance lease	-	3,795,867	-	-	3,795,867
Short term borrowings	-	52,883,893	-	-	52,883,893
Creditors, accrued and other liabilites	-	457,030,473	-	-	457,030,473
Accrued mark up	-	14,804,653	-	-	14,804,653
Unclaimed proft distribution	-	31,116,072	-	-	31,116,072
	-	559,630,958	-	-	559,630,958
Net balance	-	(140,772,199)	86,979,823	-	(53,792,376)
			2024
	Upto one month	over one month to one	over one year to fve	over fve	Total
		year	years	years
Assets	-------------------------------- Rupees ----------------------------------
Long term investments	-	-	77,559,787	-	77,559,787
Trade debts	-	79,285,180	-	-	79,285,180
Short term investments	-	119,995,949	-	-	119,995,949
Advances	-	4,793,955	2,510,000	-	7,303,955
Trade deposits	-	117,542,752	8,410,800	-	125,953,552
Other receivables	-	204,981,174	-	-	204,981,174
Bank balances	-	19,604,750	-	-	19,604,750
	-	546,203,760	88,480,587	-	634,684,347
Liabilities
Liabilities against asset subject to fnance lease	-	-	7,304,667	-	7,304,667
Deferred liabilities	-	-	5,897,659	-	5,897,659
Short term borrowings	-	210,530,034	-	-	210,530,034
Current portion of long term liabilities Creditors, accrued and other liabilites Accrued mark up Unclaimed proft distribution Net balance	- - - - - -	309,466,334 631,282,616 17,092,518 31,116,072 1,199,487,574 (653,283,814)	- - - - 13,202,326 75,278,261	- - - - - -	309,466,334 631,282,616 17,092,518 31,116,072 1,212,689,900 (578,005,553)

Page # 124

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

	2025	Efective yield / proft risk % age Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one year After one year Sub-total Within one year After one year Sub-total ---------------------------------------------------- Rupees ------------------------------------------------------------	Efective yield / proft risk % age Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one year After one year Sub-total Within one year After one year Sub-total ---------------------------------------------------- Rupees ------------------------------------------------------------	Efective yield / proft risk % age Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one year After one year Sub-total Within one year After one year Sub-total ---------------------------------------------------- Rupees ------------------------------------------------------------	Efective yield / proft risk % age Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one year After one year Sub-total Within one year After one year Sub-total ---------------------------------------------------- Rupees ------------------------------------------------------------		- - - - 82,719,823 82,719,823 82,719,823	- - - - - - -	- - - 173,363,666 - 173,363,666 173,363,666	- - - 5,921,702 2,510,000 8,431,702 8,431,702	- - - 74,298,460 1,750,000 76,048,460 76,048,460	- - - 138,856,285 - 138,856,285 138,856,285	3.5% to 7% 23,183,024 - 23,183,024 2,435,622 - 2,435,622 25,618,646	3.5% to 7% 23,183,024 - 23,183,024 2,435,622 - 2,435,622 25,618,646	23,183,024 - 23,183,024 394,875,735 86,979,823 481,855,558 505,038,582		- - - - 575,000 - 575,000	3,795,867 - 3,795,867 - - - 3,795,867	52,883,893 - 52,883,893 - - - 52,883,893	- - - 298,707,437 - 298,707,437 298,707,437	- - - 457,030,473 - 457,030,473 457,030,473	- - - 14,804,653 - 14,804,653 14,804,653	- - - 31,116,072 - 31,116,072 31,116,072	56,679,760 - 56,679,760 801,658,635 575,000 801,658,635 858,913,395		(33,496,736) - (33,496,736) (406,782,900) 86,404,823 (319,803,077) (353,874,813)
						Financial assets	Long term Investments	Trade debts	Short term Investments	Advances	Trade deposits	Other receivables	Bank balances			*Financial Liabilities*	Security deposit	Liabilities against asset subject to fnance lease	Short term borrowings	Current portion of long term liabilities	Creditors, accrued and other liabilities	Accrued markup	Unclaimed proft distribution			On balance sheet gap

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Page # 125

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

	2024	Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one After one Sub-total Within one After one Sub-total	Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one After one Sub-total Within one After one Sub-total	Yield / proft bearing maturing Non yield / proft bearing maturing Total Within one After one Sub-total Within one After one Sub-total	year year year year	year year year year		---------------------------------------------------- Rupees ------------------------------------------------------------	---------------------------------------------------- Rupees ------------------------------------------------------------		- - - - 77,559,787 77,559,787 77,559,787	- - - 79,285,180 - 79,285,180 79,285,180	- - - 119,995,949 - 119,995,949 119,995,949	- - - 4,793,955 2,510,000 7,303,955 7,303,955	- - - 117,676,956 8,410,800 126,087,756 126,087,756	- - - 204,981,174 - 204,981,174 204,981,174	16,924,838 - 16,924,838 1,879,912 - 1,879,912 18,804,750	16,924,838 - 16,924,838 1,879,912 - 1,879,912 18,804,750	16,924,838 - 16,924,838 528,613,126 88,480,587 617,093,713 634,018,551		- - - - 200,000 - 200,000	- 7,304,667 7,304,667 - - - 7,304,667	210,530,034 - 210,530,034 - - - 210,530,034	309,466,334 - 309,466,334 - - - 309,466,334	- - - 631,282,616 - 631,282,616 631,282,616	- - - 17,092,518 - 17,092,518 17,092,518	- - - 31,116,072 - 31,116,072 31,116,072	- - - 31,116,072 - 31,116,072 31,116,072	519,996,368 7,304,667 527,301,035 679,491,206 200,000 679,491,206 1,206,992,241		(503,071,530) (7,304,667) (510,376,197) (150,878,080) 88,280,587 (62,397,493) (572,973,690)
		Efective yield / proft risk					% age										13% to 18%
										*Financial assets*	Long term Investments	Trade debts	Short term Investments	Advances	Trade deposits	Other receivables	Bank balances			Financial Liabilities	Security deposit	Liabilities against asset subject to fnance lease	Short term borrowings	Current portion of long term liabilities	Creditors, accrued and other liabilities	Accrued markup	Unclaimed proft distribution				On balance sheet gap

Page # 126

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

42. SEGMENT INFORMATION

The Group has four primary source of revenue i.e. musharaka facility, brokerage operations, textile unit and capital market based on the nature of business and related risk associated with each type of business segment which are not deemed by the management to be sufficiently significant to disclose as separate items are reported under others.

Segment assets and liabilities included all assets and liabilities related to the segment relevant proportion of the assets and liabilities allocated to the segment on reasonable basis.

Segment revenue and expenses included all revenue and expenses related to the segment and relevant proportion of the revenue and expenses allocated to the segment on reasonable basis.

						2025				2024
	Brokerage operations			Capital market		Textile business		Others	Total	Total

	------------------------------------------ Rupees ----------------------------------------------
Segment revenues		2,225,979		14,696,246		455,380,021	14,598,799		486,901,045	5,168,385,726
Segment result		(7,555,380)		14,696,246	(162,851,929)		14,598,799		(141,112,264)	(182,782,723)
Unallocated cost
Operating expenses									(89,429,377)	(187,090,995)
Distribution and selling expenses									(3,701,180)	(24,653,159)
Financial charges									(23,434,736)	(115,922,490)
Other Charges									(4,943,967)	-
Loss before taxation									(262,621,524)	(510,449,367)
Taxation									30,416,089	96,354,002
Loss for the year									(232,205,435)	(414,095,365)
Other information
Segment assets		20,431,653	256,083,489		1,768,565,629			751,667	2,045,832,438	2,112,147,448
Unallocated assets		-		-		-		-	68,354,405	115,136,042

Total assets		20,431,653	256,083,489		1,768,565,629			751,667	2,114,186,843	2,227,283,490
Segment liabilities		4,193,241		-		912,629,787		420,000	917,243,028	1,178,596,969
		-		-		-		-	46,057,503	48,339,536
Total liabilities		4,193,241		-		912,629,787		420,000	963,300,531	1,226,936,505
									1,150,886,312	1,000,346,985

Page # 127

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

43. TRANSACTIONS WITH RELATED PARTIES

The related parties of the Group comprise the modaraba's management company, staff retirement funds, directors of the management company and key management personnel. Transactions with related parties other than remuneration and benefits to officers and employees under the terms of their employment are as follows:

==> picture [523 x 401] intentionally omitted <==

----- Start of picture text -----

||||
|---|---|---|
|2025|2024|
|43.1 Balance outstanding at year end|-------------- Rupees ------------|
|Modaraba Management Company|
|- Current account payable|58,053|1,190,745|
|Receivable from wholly owned subsidairy company|44,371,336|49,484,556|
|Other related parties (other than key management personnel)|
|- Deferred liability staff gratuity|7,552,903|7,170,120|
|- Brokerage house clients recievables|50,014|59,882|
|- Trade and other payable|26,519,456|13,274,584|
|44.2|Transactions during the year|
|Modaraba Management Company|
|- Facilities & services and electricity|4,768,040|4,768,040|
|Other related parties|
|Services acquired|598,973|520,886|
|Brokerage commission earned|1,484,040|821,038|
|Insurance Claim recievable|1,043,360|1,981,339|
|Services rendered|10,687,499|12,311,172|
|Contribution towards employees'|2,474,598|8,595,103|
|Contribution to staff gratuity fund|1,522,789|1,575,363|
|Purchaseof Goods and Services|1,463,573|790,627|
|Office rent|3,000,000|3,000,000|
|Purchase of raw material|-|2,277,211|

----- End of picture text -----

45 NUMBER OF EMPLOYEES

Total number of employees of the Group as at June 30, 2025 are 71 (2024: 78). Average number of employees of the Group 122 (2024: 513).

46 AUTHORIZATION FOR ISSUE

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These financial statements were authorized for issue in accordance with a resolution of the Board of Directors on 06 October, 2025

47 GENERAL

47.1 Figures in these financial statements have been rounded off to the nearest of rupee.

47.2 The corresponding figures, wherever necessary, have been re-arranged for purpose of comparison.

Page # 128

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

35. COMPUTATION OF LIQUID CAPITAL

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----- Start of picture text -----

Net
Value in Hair Cut /
S. No. Head of Account Adjusted
Pak Rupees Adjustments
Value
1. Assets
----- End of picture text -----

S. No.	Head of Account	Value in Pak Rupees	Hair Cut / Adjustments	Net Adjusted Value
1. Assets

1.1	Property & Equipment	2,382,733	100%	-
1.2	Intangible Assets
1.3	Investment in Govt. Securities
1.4	Investment in Debt. Securities
	If listed than:
	i. 5% of the balance sheet value in the case of tenure upto 1year.
	ii. 7.5% of the balance sheet value,in the case of tenure from 1-3years.
	iii. 10% of the balance sheet value, in the case of tenure of more than 3 years.
	If unlisted than:
	i. 10% of the balance sheet value in the case of tenure upto 1year.
	ii. 12.5% of the balance sheet value,in the case of tenure from 1-3years.
	iii. 15% of the balance sheet value,in the case of tenure of more than 3years.
1.5	Investment in Equity Securities
	i. If listed 15% or VaR of each securities on the cutof date as computed by the Securities Exchange for respective securities whichever is higher. (Provided that if any of these securities are pledged with the securities exchange for base minimum capital requirement, 100% haircut on the value of eligible securities to the extent of minimum required value of Base minimum capital	122,411,132	21,532,030	100,879,102
	ii. If unlisted,100% of carryingvalue.	72,119,707	100%	-
1.6	Investment in subsidiaries	350,000,000	100%	-
1.7	Investment inassociated companies/undertaking
	i. If listed 20% or VaR of each securities as computed by the Securities Exchange for respective securities whichever is higher.
	ii. If unlisted, 100% of net value.
1.8	Statutory or regulatory deposits/basic deposits with the exchanges, clearing house or central depository or any other entity.
	(i) 100% of net value, however any excess amount of cash deposited with securities exchange to comply with requirements of base minimum capital maybe taken in the calculation of LC	4,285,000	100%	-
1.9	Margin deposits with exchange and clearinghouse.	350,000	-	350,000
1.10	Deposit with authorized intermediaryagainst borrowed securities under SLB.
1.11	Other deposits andprepayments	15,243,316	100%	-
1.12	Accrued interest, proft or mark-up on amounts placed with fnancial institutions or debt securities etc.(Nil)
	100% in respect of markup accrued on loans to directors, subsidiaries and other relatedparties
1.13	Dividends receivables.	-	-	-
1.14	~~"Amounts receivable against Repo fnancing.~~ Amount paid as purchaser under the REPO agreement. (Securities purchased under repo arrangement shall not be included in the investments.)"
1.15	Advances and receivables other than trade Receivables;
	(i) No haircut may be applied on the short term loan to employees provided these loans are secured and due for repayments within 12 months.	157,642	0%	157,642
	(ii) No haircut may be applied to the advance tax to the extent it is netted with provision of taxation .	13,324,693	100%	-
	(iii) In all other cases 100% of net value	46,828,353	100%	-
1.16	Receivables from clearing house or securities exchange(s)
	100% value of claims other than those on account of entitlements against trading of securities in all markets including MtM gains.	-	-	-

Page # 129

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

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----- Start of picture text -----

Value in Hair Cut / Net Adjusted
S. No. Head of Account
Pak Rupees Adjustments Value
Receivables from customers
i. In case receivables are against margin financing, the aggregate if
(i) value of securities held in the blocked account after applying VAR based
Haircut,
(ii) cash deposited as collateral by the financee
(iii) market value of any securities deposited as collateral after applying VaR
based haircut.
i. Lower of net balance sheet value or value determined through
adjustments.
ii. Incase receivables are against margin trading, 5% of the net balance sheet
value.
ii. Net amount after deducting haircut
iii. Incase receivables are against securities borrowings under SLB, the
amount paid to NCCPL as collateral upon entering into contract,
iii. Net amount after deducting haircut
1.17 iv. Incase of other trade receivables not more than 5 days overdue, 0% of
the net balance sheet value. 90,401 0% 90,401
iv. Balance sheet value
v. Incase of other trade receivables are overdue, or 5 days or more, the
aggregate of (i) the market value of securities purchased for customers
and held in sub-accounts after applying VAR based haircuts, (ii) cash
19,077,769 4,785,076 4,785,076
deposited as collateral by the respective customer and (iii) the market
value of securities held as collateral after applying VaR based haircuts.
v. Lower of net balance sheet value or value determined through adjustments
vi. In the case of amount of receivables from related parties, values determined
after applying applicable haircuts on underlying securities readily available
in respective CDS account of the related party in the following manner;
(a) Up to 30 days, values determined after applying var based haircuts.
400 400 400
(b) Above 30 days but upto 90 days, values determined after applying 50% or
var based haircuts whichever is higher.
(c) above 90 days 100% haircut shall be applicable.
vi. Lower of net balance sheet value or value determined through adjustments
Cash and Bank balances
i. Bank Balance-proprietory accounts 10,633,687 - 10,633,687
1.18
ii. Bank balance-customer accounts 8,292,841 - 8,292,841
iii. Cash in hand - - -
Subscription money against investment in IPO/ offer for sale (asset)
(i) No haircut may be applied in respect of amount paid as subscription money
provided that shares have not been allotted or are not included in the
investments of securities broker.
(ii) In case of Investment in IPO where shares have been allotted but not yet
1.19
credited in CDS Account, 25% haircuts will be applicable on the value of
such securities.
(iii) In case of subscription in right shares where the shares have not yet been
credited in CDS account, 15% or VAR based haircut whichever is higher,
will be applied on Right Shares.
FIRST EQUITY MODARBA 1.20 Total Assets 665,197,674 125,189,149
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Page # 130

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

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Net
Value in Hair Cut /
S. No. Head of Account Adjusted
Pak Rupees Adjustments
Value
2. Liabilities
2.1 Trade Payables
i. Payable to exchanges and clearing house - -
ii. Payable against leveraged market products
iii. Payable to customers 8,292,833 0% 8,292,833
Current Liabilities
i. Statutory and regulatory dues
ii. Accruals and other payables 4,846,679 0% 4,846,679
iii. Short-term borrowings
2.2 iv. Current portion of subordinated loans
v. Current portion of long term liabilities
vi. Deferred Liabilities
vii. Provision for taxation
viii. Other liabilities as per accounting principles and included in the financial statements 31,116,073 0% 31,116,073
Non-Current Liabilities
i. Long-Term financing
2.3 ii. Other liabilities as per accounting principles and included in the financial statements 575,000 0% 575,000
iii. Staff retirement benefits 7,552,903 0% 7,552,903
Note: (a) 100% haircut may be allowed against long term portion of financing obtained from a financial institution including
amount due against finance leases. (b) Nill in all other cases
Subordinated Loans
2.4
i. 100% of Subordinated loans which fulfill the conditions specified by SECP are allowed to be deducted:
Advance against shares for Increase in Capital of Securities broker:
100% haircut may be allowed in respect of advance against shares if:
2.5 a. The existing authorized share capital allows the proposed enhanced share capital b. Boad of Directors of the company
has approved the increase in capital c. Relevant Regulatory approvals have been obtained d. There is no unreasonable
delay in issue of shares against advance and all regulatory requirements relating to the increase in paid up capital have been
completed.
2.6 Total Liabilities 52,383,488 - 52,383,488
3. Ranking Liabilities Relating to :
Concentration in Margin Financing
The amount calculated client-to- client basis by which any amount receivable from any of the financees exceed 10% of
3.1 the aggregate of amounts receivable from total finances.
(Provided that above prescribed adjustments shall not be applicable where the aggregate amount of receivable against
margin financing does not exceed Rs 5 million)
Note: Only amount exceeding by 10% of each fnancee from aggregate amount shall be include in the ranking liabilities
Concentration in securities lending and borrowing
The amount by which the aggregate of:
(i) Amount deposited by the borrower with NCCPL (Ii) Cash margins paid and (iii) The market value of securities
3.2
pledged as margins exceed the 110% of the market value of shares borrowed
(Note only amount exceeding by 110% of each borrower from market value of shares borrowed shall be included in the
ranking liabilities)
Net underwriting Commitments
(a) in the case of right issues : if the market value of securities is less than or equal to the subscription price;
3.3 the aggregate of:(i) the 50% of Haircut multiplied by the underwriting commitments and (ii) the value by which the
underwriting commitments exceeds the market price of the securities. In the case of rights issues where the market price
of securities is greater than the subscription price, 5% of the Haircut multiplied by the net underwriting commitment
(b) in any other case : 12.5% of the net underwriting commitments
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Page # 131

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

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Calculations Summary of Liquid Capital

	(i) Adjusted value of Assets (serial number 1.20) (ii) Less: Adjusted value of liabilities (serial number 2.6) (iii) Less: Total ranking liabilities (series number 3.11)			125,189,149 (52,383,488) (1,979,996) 70,825,665

Page # 132

GENDER PAY GAP STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

FIRST EQUITY MODARABA

Gender pay gap statement under Circular 10 of 2024 Following is the gender gap calculation for the year ended June 30 2025

1 Mean Gender Pay Gap
2 Median Gender Pay Gap 3 Any Other Data / Detail relevant

NA Modaraba has only 7 employees at two locations and all are male.

For and on Behalf of Board of Directors Premier Financial Services (Pvt) Ltd Managers of

FIRST EQUITY MODARABA

Adil A Ghaffar

Chief Executive Officer

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Page # 133

PATTERN OF HOLDING OF CERTIFICATES BY THE CERTIFICATE HOLDERS AS JUNE 30, 2025

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Page # 134

PATTERN OF HOLDING OF CERTIFICATES BY THE CERTIFICATE HOLDERS AS JUNE 30, 2025

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Page # 135

PATTERN OF HOLDING OF CERTIFICATES BY THE CERTIFICATE HOLDERS AS JUNE 30, 2025

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Page # 136

FIRST EQUITY MODARABA NOTICE OF TRANSFER BOOK CLOSURE AND 25[th] ANNUAL REVIEW MEETING

Schedule of 25[th] Annual Review Meeting

The 25[th] Annual Review Meeting (ARM) of certificate holders of First Equity Modaraba (FEM) will be held on Wednesday, December 10 2025 at 11.00 am through video link and from the Modaraba registered office B-1004 Lakson Square Building # 3 Sarwar Shaheed Road Karachi.

Normal Business at ARM

To review the performance of the Modaraba for the year ended June 30, 2025..

Book Closure

The certificate transfer book of the FEM shall remain closed from Thursday December 04 2025 to Wednesday, December 10 2025 (both days inclusive). Transfer received at THK Associates (Pvt), Plot # 32C, 2 Jami Commercial Street 11, D.H.A. Phase 7, Karachi, the close of the business on Wednesday December 03 2025 will be treated valid.

The certificate holders who are interested to attend the ARM through Video Conference, are requested to get themselves registered at earliest but not later than 24 hours before ARM date and time at [email protected] and can also give their comments and suggestion

On behalf of the Board

Qazi Obaid Ullah

Company Secretary

October 06 2025 Karachi

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Page # 137

س رم ا ب ی ف اض ئہ می جن ولس ن اور25ہٹ ب کُب ن ٹائ با ن ا

م: شول ک ئہ جن ولسی 25 کو دربمس2025دبھ، 10(اے آر امی) میٹنگ اجزئہ ںی اسالہن �یک صصح داران کےاضمرہب (افی ای امی) ٹی رفٹس ا B-1004 ر ،، رسور دیہش روڈ نسکیل اوکسارئ ڈلبگن ربمن3 ٹسجڈ آسف ہب ےک ےجب وڈیوی کنل ےک ذرےعی اور اضمحبص 11:00 رکایچ ےس دقعنم وہیگ۔ بر: کروپ عم ARM کدیگ اک اجزئہ انیل۔ یک اک وجن2025ء ےئلیک اضمرہبتتخیم اسل30 ن ت: ک ۔ FEM یک رئیش رٹارفسن سکُب

ن ہب کُب: ء FEM نں دن اشلم) دنب رےہ یگ۔ دبھ، 03کت (د دربمس2025دبھ، 10 ءسے دربمس2025 رٹارفسن بُ ک رعمجات، 04 کی 2 ، اج رکلش ارٹسٹی THK Associates (Pvt.) Ltd.، الپٹ ربمن32- Cتتخم کت ےک اکروابر ےک دربمس2025 11 ، ڈی اچی اے زیف7، رکایچ رپ وموصل وہےن وایل امتم رٹارفسنز وک درتس وصتر ایک اجےئ اگ۔ ARM ک وہ دلج از دلج ںیم رشتک ےک وخادنمشہ وہں، اںیہن وشمرہ دای اجات وج رسٹیکفیٹ وہڈلرز وڈیوی اکرفنسن ےک ذرےعی [email protected] ARM رپ اینپ ٹسجنشی رکوا ےٹنھگ لبق یک اترخی و وتق ےس مک از مک24 لیکن س ںیہ۔ ھب اراسل دںی۔ وہ اےنپ رصبتے اور اجتو سے اجبنِ وبرڈ یک ض ل عا ق س یی

Page # 138

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AI assistant

First Equity Modaraba — Annual Report 2025

71990_rns_2025-11-19_fd308b1a-52d0-441a-8b67-71dda1301c33.pdf

Annual Report First Equity Modaraba

2025

Managed by: Premier Financial Services (Private) Limited CRESCENT GROUP

MISSION AND VISION

Contexts

FIRST EQUITY MODARABA CORPORATE INFORMATION

Modaraba Company Premier Financail Services (Private) Limited

Board of Directors

Audit Committee

Risk Managment Committe

HR Committee

Registered and Business Office

Auditors

Bankers

Registrar

General Counsel

REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Financial Results

Financial Results

Dividend Distribution

REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Auditors Qualification

Our Performance and Future Prospects

REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Shariah Advisor and External Shariah Audit

Board of Directors & Committees

Code of Corporate Governance

REPORT OF THE DIRECTORS OF THE MODARABA COMPANY

Pattern of Shareholding

Staff Retirement Benefits

Auditors

Acknowledgement

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Statement of Compliance with Listed Companies (Code of Corporate Governance) Regulations, 2019

Name of Modaraba FIRST EQUITY MODARABA Year ending JUNE 30, 2025

Mr Adil A Ghaffar Mr Nadeem Maqbool Ms Alizeh Bashir

TO THE MEMBERS OF FIRST EQUITY MODARABA REVIEW REPORT ON STATEMENT OF COMPLIANCE CONTAINED IN LISTED COMPANIES CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019

BALANCE SHEET AS AT JUNE 30, 2025

EQUITY AND LIABILITIES

For Premier Financial Services (Private) Limited

BALANCE SHEET AS AT JUNE 30, 2025

ASSETS

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2025

For Premier Financial Services (Private) Limited

STATEMENT OF COMPREHENCSIVE INCOME FOR THE YEAR ENDED JUNE 30, 2025

CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

1. LEGAL STATUS AND NATURE OF THE BUSINESS

2. BASIS OF PREPARATION

2.1 Statement of compliance

2.2 Basis of measurement

2.3 Functional and presentation currency

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

2.4

Significant accounting estimates and judgments

3. STANDARDS, INTERPRETATIONS AND AMENDMENTS TO THE APPROVED ACCOUNTING STANDARDS

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4. MATERIAL ACCOUNTING POLICY INFORMATION

4.1 Fixed Assets

4.1.1 Tangible

4.1.2

Intangible

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4.2 Investment property

4.3 Deferred cost and amortization

4.4 Financial Instruments

4.4.1 Financial assets

Initial Measurement

Subsequent measurement:

Financial liabilities

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED JUNE 30, 2025

4.5 Revenue recognition

4.6.2 Taxation

First Equity Modaraba Annual Report 2025

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