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  • Mr. Basheer A. Chowdry has been elected Chairman for the Year 2017-18 while Mr. Muhammad Naimuddin Farooqui as Senior Vice Chairman and Dr. Fakhara Rizwan as Vice Chairperson of NBFI & Modaraba association of Pakistan.
  • The 7th Annual General Meeting of the Association held on 26th September 2017 at the Conference Hall of the Association.
  • Mr. Ayaz Dawood has been elected Chairman for the Year 2016-17 while Mr. Murtaza Ahmed Ali as Senior Vice Chairman and Mr. Rashid Kamal Siddiqui as Vice Chairman of NBFI & Modaraba association of Pakistan.
  • 6th Annual General Meeting of the Association held on 21st September 2016 at the Conference Hall of the Association.
  • SECP issued Draft Amendments in Modaraba Companies and Modaraba (Floatation & Control) Ordinance, 1980
  • The NBFI & Modaraba Association of Pakistan announced its Election Schedule for the election of Executive Committee and Office Bearers for the year 2017-2018

This feasibility is premeditated to outline the benefits Leasing Association of Pakistan and Modaraba Association of Pakistan is expected to reap through the formation of a new combined association and thereafter ceasing to exist individually as separate associations.

A brief description of the legal stature and nature of operations of both associations is as follows

Leasing Association of Pakistan was established as an Association of Persons (AOP) and was granted License No.139 under section 3 of the Trade Organizations Ordinance, 1961 by Ministry of Commerce, Government of Pakistan onMarch 28, 1995 and thereafter granted Certificate of Incorporation under section 32 & 42 of the Companies Ordinance, 1984 by SECP with effect fromJune 22, 1995.

The prime objects of the association, interalia includes

  • To serve as a forum of the leasing companies to confer on all issues of common interest and to formulate joint strategies;
  • To represent the member companies collectively before all Government authorities and or agencies on matters relating to the leasing business inPakistan;
  • To coordinate the activities and to promote, safeguard and protect the interests of the members in exercise of their leasing business;

Modaraba Association of Pakistan was incorporated as a company limited by guarantee under the Companies Ordinance, 1984 on17 April, 1994.

The prime objects of the association, interalia includes

  • Promotion of the Islamic way of business through the provision of riba-free financing in accordance with the Sharia
  • To promote the establishment and operation of modaraba through the mass media a
  • To encourage public awareness of the role of modarabas in the provisions of Islamic modes of financing.
  • Promotion, safeguard and protection of the interests of the members of the Association in their conduct of Islamic modes of business and finance.

The Director General, Trade Organization (DGTO) via its letter dated  June 25, 2008, has advised both associations to merge and apply for a fresh registration and license under the new Trade Ordinance, 2007 (TOO 2007). However, members of both associations have unanimously decided to form a new association with same members and thereafter cease to exist individually. The two associations have also invited Investment Banks to become members of the proposed association.

  1. Structure

Secretary General

Mr. Muhammad Samiullah

Sponsors

The Proposed Association will have the following promoters:

 

Name

Organisation

1

Mr. Humayun Murad

ORIX Leasing Pakistan Limited

3

Mr. Rafique Dawood

First Dawood Investment Bank Limited

2

Mr. Mohammed Khalid Ali

Security Leasing Corporation Limited

5

Mr. Farrukh S. Ansari

Saudi Pak Leasing Company Limited

4

Mr. Siyyid Tahir Nawazish

First Fidelity Leasing Modaraba

6

Mr. Jalaluddin Ahmed

First Al-Noor Modaraba

7

Syed Anvaar Rasool

First Habib Bank Modaraba

8

Mr. Amir Iftikhar Khan

First Elite Capital Modaraba

9

Mrs. Hamida Aqeel

Al-Zaamin InvestBank

10

Mr. Shams Ghani

Allied Rental Modaraba

 

  1. Governing body

The governing body will be the executive committee which shall comprise of members of both LAP and MAP. The requirement for minimum number of members of the committee will be 10 and maximum 30.

  1. Membership structure

Proposed Association shall have the following membership structure:

Modarabas

27

Leasing Companies

10

Investment Banks

03 

Total

40 


                                                                                              

  1. Objectives

The proposed association will pursue following objectives:

  1. To promote, safeguard & protect the interest of the members of the Association in the conduct of their modaraba , leasing business , investment finance services , housing finance , investment advisory service , discounting service , venture capital and such other business as permitted to be conducted by the members of the Association
  1. Serve as a forum of the members of the Association to confer on all issues of common interest and to formulate joint strategies.
  1. Encourage cooperation and unanimity amongst the members of the Association on all matters connected with their common goal.
  1. To promote Islamic way of business through the provision of riba-free financing in accordance with the Sharia.
  1. To promote the business of leasing and leasing operations of all kinds.
  1. To act as an organ of communication for and to represent members of the Association in all or any of their relationships with any Government , Federal or Provincial , local , municipal , and other public authorities & trade associations.
  1. Work actively for the eradication of unethical business practice and to promote honorable business practice in the conduct of their business by the members of the Association.

Formation of an association and its sound operations depend upon a number of factors. The leasing and modaraba industry is enormous and calls for the need of an association that governs and coordinates its activities and is within the legal framework. The specific trade or industry that the association intends to represent has significant contribution to the economy. Hence, the formation of the proposed entity is to be looked into financially.

3.1. SUMMARY OF FINANCIAL INFORMATION

 

2010

 

2011

 

2012

Initial Contribution

2,000,000

 

 

 

 

Preliminary Expenses

(400,000)

 

 

 

 

 

1,600,000 

 

 

 

 

Receipts

5,675,000

 

5,875,000

 

6,000,000

Expenses

4,708,649

 

5,224,286

 

5,725,239

Surplus over expenditure

966,351

 

650,714

 

274,761

Accumulated reserves

966,351

 

1,617,065

 

1,891,826

 

Statements of Receipts

 

 

 

 

2010

Rs.

2011

Rs.

2012

Rs.

Annual Subscription by members

4,875,000

4,875,000

4,875,000

Miscellaneous income

800,000

1,000,000

1,125,000

 

 

Total

5,675,000

5,875,000

6,000,000

 

Statement of Expenditure

 

 

2010

Rs.

2011

Rs.

2012

Rs.

Salaries and other benefits

2,870,329

3,159,966

3,487,919

Office rent

613,000

717,000

771,000

Fees and subscriptions

230,000

250,000

275,000

Insurance

30,000

32,000

34,000

Traveling and conveyance

100,000

110,000

120,000

Printing and stationery

70,000

80,000

90,000

Telephone and telefax

90,000

100,000

110,000

Electricity

100,000

110,000

120,000

Postage and courier

25,000

28,000

31,000

Office maintenance

60,000

65,000

70,000

Entertainment

50,000

55,000

60,000

Auditors' remuneration

50,000

55,000

60,000

Books and periodicals

20,000

22,000

24,000

Legal and professional

50,000

55,000

60,000

Bank charges

10,000

15,000

20,000

Meeting expenses

100,000

110,000

120,000

Building maintenance

70,320

75,320

72,320

Vehicle running and maintenance

120,000

130,000

140,000

Miscellaneous

50,000

55,000

60,000

TOTAL

4,708,649

5,224,286

5,725,239

 

* Details of miscellaneous Income and related expenditure are as follows

       
                   

 

 

Printing of Quarterly

 

Activities

Printing of Year Book

Newsletter

Seminars & Workshops

 

2010

2011

2012

2010

2011

2012

2010

2011

2012

Expected Income

     550,000

     625,000

     680,000

  84,000

  94,000

  104,000

  216,000

  295,000

  340,000

Expected Expenditure

     486,000

     505,000

     530,000

  84,000

  94,000

  104,000

  150,000

  165,000

  190,000

Expected Surplus

       64,000

     120,000

     150,000

             -

             -

                -

    66,000

  130,000

  150,000

                   

Other Income

2010

2011

2012

           
                   

Enlistment fee - Valuers

     470,000

     500,000

     525,000

           

Miscellaneous income

     200,000

     250,000

     300,000

           
 

 

 

 

           

Net Other Income

     800,000

 1,000,000

 1,125,000

           
                   
                   

Total Income

     850,000

 1,014,000

 1,124,000

           

Enlistment fee - Valuers

     470,000

     500,000

     525,000

           

Miscellaneous

     200,000

     250,000

     300,000

           
 

 1,520,000

 1,764,000

 1,949,000

           

Expenditures

     720,000

     764,000

     824,000

           

Net Other Income

     800,000

 1,000,000

  

           

 

        Accounting Policies 

The accounting policies and method of computation adopted for the preparation of this financial information are the same as those applied in the preparation of the preceding annual financial statements of the Associations for the year endedJune 30, 2009.

4.2. Assumptions for the forecast

The forecast have been based on the following assumptions.

  1. a.     Revenue
  • Initial contribution of Rs.1,000,000 each will be made by both LAP and MAP in the new association.
  • There will be forty members making an annual contribution approximately of Rs.122,000 each, in lieu of subscription fee. 

(Based on the assumption that no change in the number of members and annual subscription would take place in the years under consideration).

  • Miscellaneous income is expected to grow at the rate of 12.5% to 20%. Prime sources of other income being

ü  Seminars and workshops.

ü  Investment income on surplus funds with banks.

b.    Expenditure

  • Salaries and other benefits are expected to increase at the rate of 10%.
  • Office rent will increase annually at the rate of 7.5%.
  • Other expenses are having an effect of inflation, increase from 8% to 15% per annum.

c.    General

  • The situation remains cordial to trade and commerce.
  • No changes in Trade Organization Ordinance that may invalidate the legal position of the proposed association subsequently.
  • The interest rate scenario remains within predictable range.

NBFI and Modaraba Association of Pakistan (Proposed) formation is projected to be financially and operationally viable on the following grounds.

a)     Despite the trend of thinning margins between expected expenses and proposed revenues of the association in next three years, the forecast does not depict losses. Hence, the undertaking appears to be financially feasible especially with the option open for marginally increasing the annual contribution.

b)    The executive committee comprises of experienced personnel in their respective domains and hence can greatly contribute to the successful functioning of the proposed association.

 

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