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Managed by :KASB Invest (Private) Limited

HALF YEARLY REPORTFOR THE PERIOD ENDED

DECEMBER 31, 2015 (UN-AUDITED)(REVIEWED BY EXTERNAL AUDITORS)

FIRSTPRUDENTIALMODARABA

If un

deliv

ered

ple

ase

retu

rn to

:

Board of Directors Syed Waseem -ul- Haq Haqqie ChairmanSyed Muhammad Rehmanullah DirectorFarrukh S. Ansari DirectorRashid K. Siddiqui Chief Executive Officer

Audit Committee Farrukh S. Ansari ChairmanSyed Muhammad Rehmanullah MemberSyed Waseem -ul- Haq Haqqie Member

Human Resource and Farrukh S. Ansari ChairmanRemuneration Committee Syed Waseem -ul- Haq Haqqie Member

Syed Muhammad Rehmanullah MemberRashid K. Siddiqui Member

Chief Financial Officer Aftab Afroz Mahmoodi

Company Secretary Zia - ul - Haq

Head of Internal Audit Syed Shahid Owais

Management Company KASB Invest (Private) Limited

Registered & Head Office 8-C, Block-6, PECHS, Off. Sharah-e-Faisal, Karachi.Tel: 021-34398852-5, 021-34370141

Auditors RSM Avais Hyder Liaquat NaumanChartered Accountants

Legal Advisor Ahmed & Qazi

Shariah Advisor Mufti Muhammad Ibrahim Essa

Bankers Habib Bank Limited (Islamic Banking)Sindh Bank LimitedBurj Bank Limited

Share Registrar C & K Management Associates (Pvt) Ltd.404, Trade Tower, Abdullah Haroon Road, Karachi.Tel: 35687839, 35685930

CONTENTS

1

CORPORATE INFORMATION

CORPORATE INFORMATION 01

DIRECTOR’S REPORT 02

AUDITOR’S REPORT TO THE CERTIFICATE HOLDERS ON REVIEW OF INTERIM FINANCIAL INFORMATION 04

CONDENSED INTERIM BALANCE SHEET 05

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT 06

CONDENSED INTERIM CASH FLOW STATEMENT 07

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY 09

SELECTED EXPLANATORY NOTES 10

First Prudential Modaraba

Dated: February 26, 2016

First Prudential ModarabaFirst Prudential Modaraba

The Board of Directors of KASB Invest (Private) Limited, the Management Company of First PrudentialModaraba is pleased to present unaudited condensed interim financial statements for the half year endedDecember 31, 2015 to the Certificate Holders.

FINANCIAL HIGHLIGHTS

Financial highlights for the period under review are summarized as under:-

OPERATIONS AND PERFORMANCE

By the Grace of Allah, First Prudential Modaraba has successfully completed its half year ended December31, 2015. The period closed with net Profit of PKR. 8.95 million and earning per Certificate was PKR. 0.10.During the period the total income was PKR.25.90million and the operating & financial charges werePKR.15.90 million.

During the period the Modaraba entered into edible oil extraction business. The fruits of investment in thesaid venture would be realized in the next quarter.

During the period the Modaraba recovered PKR. 5.4 million from the long outstanding debtors after rigorousfollow ups. The recovery measures are continuing with the same pace and a further PKR. 4.64 million hasbeen recovered after the period end.

The management has continued to adopt a cautious approach in its conduct of financing activities thusensuring steady growth and build a sound Institution for the extension of Islamic finance.

FUTURE PROSPECTS

Foreseeing growth prospects in the Pakistan’s Capital markets and with a view to capitalizing on aboveaverage market returns on our funds, the Modaraba is planning to invest in sharia complaint stocks. Thiswould include a mix of portfolio building and shorter term Capital Gains following the market trends. Inaddition, we are looking forward to explore other profitable ventures which would increase the income ofthe Modaraba by the end of the financial year.

ACKNOWLEDGEMENT

The Board greatly appreciates the support co-operation of the regulatory authorities, certificate holders,customers and bankers and looks forward to their continued support and advice in future.

We pray to Almighty Allah for the success of your Modaraba.

3

DIRECTORS’ REPORT

2

December 31,2015

Rs “000”

June2015

Rs “000”

Rashid K. SiddiquiChief Executive Officer

First Prudential Modaraba

Introduction

We have reviewed the accompanying condensed interim balance sheet of FIRST PRUDENTIALMODARABA(the Modaraba)as at December 31, 2015, the related condensed interim profit and lossaccount, condensed interim cash flow statement, condensed interim statement of changes in equity andnotes to the accounts for the six months period ended (here-in-after referred to as the "interim financialinformation"). Management of Modaraba Company is responsible for the preparation and presentation ofthis interim financial information in accordance with approved accounting standards as applicable inPakistan. Our responsibility is to express a conclusion on this interim financial information based on ourreview.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410,"Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A reviewof interim financial information consists of making inquiries, primarily of persons responsible for financialand accounting matters, and applying analytical and other review procedures. A review is substantiallyless in scope than an audit conducted in accordance with International Standards on Auditing andconsequently does not enable us to obtain assurance that we would become aware of all significant mattersthat might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanyinginterim financial information as at December 31, 2015 is not prepared, in all material respects, in accordancewith approved accounting standards as applicable in Pakistan for interim financial reporting.

Other matters

The figures for the quarters ended December 31, 2015 and December 31, 2014 in the condensed interimprofit and loss account has not been reviewed and we do not express a conclusion on them.

4

Chartered AccountantsKarachiDated: 26 February, 2016

Engagement Partner: Adnan Zaman

RSM Avais Hyder Liaquat NaumanChartered Accountants

407, Progressive Plaza, Beaumont Road,Karachi, 75530-Pakistan.

T: +92 (21) 35655975-6F: +92 (21) 3565-5977

W: www.rsmpakistan.pk

INDEPENDENT AUDITORS’ REPORT TO THECERTIFICATE HOLDERS ON REVIEW OFCONDENSED INTERIM FINANCIAL INFORMATION

RSM Awais Hyder Liaquat Nauman is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independentaccounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction .

THE POWER OF BEING UNDERSTOODAUDIT TAX CONSULTING

First Prudential Modaraba

CONDENSED NOTES TO INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2015

1. LEGAL STATUS AND NATURE OF BUSINESS

1.1 First Prudential Modaraba (the Modaraba) is a multipurpose, perpetual Modaraba. The Modaraba isregistered under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 andthe Modaraba Companies and Modaraba Rules, 1981 and was managed by Prudential Capital ManagementLimited (PCML). In pursuance of instructions received from Securities and Exchange Commission ofPakistan (SECP), KASB Invest (Private) Limited has taken over the management and administrative controlof First Prudential Modaraba effective from November 13, 2014.

1.2 The registered office of the Modaraba is situated at 8-C Block 6, PECHS, Shahrah e Faisal, Karachi.The Modaraba is listed on Karachi, Lahore and Islamabad Stock Exchanges (now Pakistan Stock Exchangepost demutualization of all Stock Exchanges). The Modaraba is currently engaged in various modes ofIslamic fundings and businesses which include ijarah financing, deployment of fund in musharika, morabahaand investment in securities.

1.3 These financial statements are presented in Pak Rupees, which is the Modaraba's functional andpresentation currency.

2. BASIS OF PREPARATION

2.1 STATEMENT OF COMPLIANCE

The condensed interim financial statements for the six months period ended December 31, 2015 havebeen prepared in accordance with the requirements of the International Accounting Standard - 34 “InterimFinancial Reporting” as applicable in Pakistan and the requirements of Modaraba Companies and Modaraba(Floatation and Control) Ordinance 1980, Modaraba Companies and Modaraba Rules, 1981 and PrudentialRegulations for Modaraba and directives issued by Securities and Exchange Commission of Pakistan (theModaraba regulations). The condensed interim financial statements do not include all the information anddisclosures required in the annual financial statements, and should be read in conjunction with theModaraba’s annual Financial Statements for the year ended June 30, 2015.The figures for the half yearended December 31, 2015 have been subjected to limited scope review by the auditors as required bythe Code of Corporate Governance.

2.2 This condensed interim financial statement comprises of the condensed interim balance sheet as atDecember 31, 2015 and the condensed interim profit and loss account, condensed interim statement ofcomprehensive income, condensed interim cash flow statement and condensed interim statement ofchanges in equity and the notes forming part thereof for the half year ended December 31, 2015 whichhave been subjected to a review but not audited.

2.3 The comparative condensed balance sheet, presented in this condensed interim financial statements,as at June 30, 2015 has been extracted from the annual audited financial statements of the Modarabafor the year ended June 30, 2015 whereas the comparative condensed interim profit and loss account,condensed interim statement of comprehensive income, condensed interim cash flow statement andcondensed interim statement of changes in equity for the half year ended December 31, 2014 have beenextracted from the condensed interim financial statements for the half year ended December 31, 2014which were subjected to a review but not audited.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies adopted by the Modaraba in the preparation of these condensed interim financialstatements are the same as those applied in preparation of the preceding published financial statementsof the Modaraba for the year ended June 30, 2015.

10

First Prudential Modaraba

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14

11.1 This amount includes Rs. 17,889,240/- paid as advance for purchase of securities to PrudentialSecurities Limited (PSL). Remaining amount of Rs. 543,033/- is blocked in CDC-sub account of thesaid broker against various shares.

Operations of PSL had been ceased by Karachi Stock Exchange Limited (KSE) and the Modaraba hasfiled a claim with the KSE of Rs. 18 million along with margin deposit of Rs. 3 million included in longterm deposits.

11.2 This represents an unauthorised amount debited to Modaraba's account by a scheduled commercialbank on behalf of a party considered to be a group company. The Modaraba filed a suit for recoveryunder the Financial Institutions (Recovery of Finances) Ordinance, XLVI of 2001 which was decreedagainst the Modaraba only due to the reason that it was time-barred. Management filed an appeal inthe Sindh High Court against the judgment of the Banking Court. The Sindh High Court has set asidethe decree of the Banking Court with the directions that the Banking Court, in the first instance, shalldecide the application for leave to defend moved by the Bank. The case is under process with theBanking Court.

11. ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES

Advance

Income tax To staff

Prepayments

Other receivables from

Brokers on account of sale of sharesPrudential Securities Limited 11.1 A Bank 11.2 Return on deposits with banksOthersSub total

Provision for doubtful receivables 11.3

Considered Good

13,614,059 166,299

360,117

- -

974,000 731,786

15,846,261

-

15,846,261

13,523,899 328,299

274,799

- -

1,436,005 332,382

15,895,384

-

15,895,384

December 31,2015

June 30,2015

Considered Doubtful

- 1,814,000

-

65,619,559

18,432,273 10,241,347

13,466,236 109,573,415

(109,573,415)

-

December 31,2015

June 30,2015

Total

13,614,059 1,980,299

360,117

65,619,559

18,432,273 10,241,347

974,000 14,198,023

125,419,677

(109,573,415)

15,846,261

13,523,899 2,142,299

274,799

65,619,558

18,432,273 10,241,347

1,436,005 13,798,619

125,468,799

(109,573,415)

15,895,384

December 31,2015

June 30,2015

---------------Rupees---------------

- 1,814,000

-

65,619,558

18,432,273 10,241,347

- 13,466,237

109,573,415

(109,573,415)

-

(Unaudited)December 31,

2015Rupees

109,573,415 - -

109,573,415

11,253,037 9,925,146

21,178,183

(Audited)June 30,

2015Rupees

109,573,415 - -

109,573,415

11,125,851 9,427,201

20,553,052

Note

12.112.2

First Prudential ModarabaFirst Prudential Modaraba

3,000,000 66,192

3,066,192 (3,000,000)

66,192

5,344,352 -

5,344,352 (5,344,352)

-

3,000,000 66,192

3,066,192 (3,000,000)

66,192

5,344,352 41,713

5,386,065 (5,344,352)

41,713

15 16

13.113.2

12.1 Listed entities

31 December2015

Rupees

Un-Audited30 June

2015Rupees

Audited30 June

2015

Audited31 December

2015

Un-Audited

50,765

380,766

50,765

380,766

UBL Al-Ameen Islamic Preservation Fund IIICarrying valueUnrealized gain

Meezan Balance FundCarrying valueUnrealized gain

5,540,008 39,610

5,579,618

5,585,843 87,576

5,673,419 11,253,037

5,284,606 255,402

5,540,008

5,288,810 297,033

5,585,843 11,125,851

12.2 Unlisted companies

Number of shares of Rs. 10

1,107,244

191,700

843,975

1,107,244

191,700

843,975

4,173,707 (4,173,707)

-

1,041,815 (1,041,815)

-

9,427,201 497,945

9,925,146 9,925,146

4,173,707 (4,173,707)

-

1,041,815 (1,041,815)

-

12,764,715 (3,337,514)

9,427,201 9,427,201

Prudential Securities Limited (PSL)CostLess: Impairment

Prudential Discount and GuaranteeHouse LimitedCostLess: Impairment

Lahore Stock Exchange Limited Cost Less: Fair value adjustment

12.2.1 & 12.2.2

12.2.3

12.2.1 Movement of impairment

Opening balance Impairment charge during the period / year Closing balance

The breakup value of shares of Prudential Securities Limited was Rs. 3.77 per share based on last availableaudited financial statements for the year ended June 30, 2008.

12.2.2 Due to adverse financial condition of the investee Company, investments have been fully impaired.

12.2.3 This represent the non-Shari'ah compliant shares acquired against the surrender of Lahore StockExchange Limited (LSE) membership card. Under the current circumstances the active market isnot available for such shares as LSE has not listed yet, therefore the net asset value based valuationhas been considered as the closest estimate of the fair value of the shares. The Modaraba hasrecognized a fair value adjustment based on latest available financial information of the investeecompany.

5,215,522-

5,215,522

5,215,522-

5,215,522

(Unaudited)December 31,

2015Rupees

(Audited)June 30,

2015Rupees

Note

14.2 Computer softwares

Opening balance period / yearAmortizationCarrying value

14.1 As per section 16 of the Stock Exchanges (Corporatization, Demutualization and Integration) Act,2012, every TREC holder was required to register itself as a broker within two years of the date ofdemutualization i.e., by August 26, 2014, failure to which would've resulted in the lapse of TREC. Theimpairement was recorded as the Modaraba did not register itself as a broker before the expiry of the saiddate.

(Unaudited)December 31,

2015Rupees

1,827,744 (1,827,744)

-

(Audited)June 30,

2015Rupees

1,827,744 (1,786,031)

41,713

First Prudential ModarabaFirst Prudential Modaraba

17 18

(Unaudited)December 31,

2015

- 207,015

- 41,500

248,515

(Unaudited)December 31,

2015

-- - --

Office equipment and appliancesFurniture and fixturesComputer equipmentMotor vehicles

(Audited)June 30,

2015

115,000 -

12,500 -

127,500

Additions(Audited)June 30,

2015

-- - --

Disposals (W.D.V)

---------------Rupees---------------

16. Property, plant and equipment - ijarahFollowing additions and disposals in Ijarah assets, were made during the period

(Unaudited)December 31,

2015

1,220,000

(Unaudited)December 31,

2015

(7,163,396)Vehicles

(Audited)June 30,

2015

(2,395,084)

Additions Disposals (W.D.V)

---------------Rupees---------------

(Audited)June 30,

2015

30,000,000

17.1 These includes properties which are acquired by the Modaraba against settlement of Morahabafacility and from defaulted parties, in prior years.

18. CONTINGENCIES AND COMMITMENTS

The taxation officer while making assessment in respect of the tax years 2006, 2007 and 2008 disallowedcertain expenses on account of apportionment between normal and presumptive income and created anadditional demand of Rs. 6.53 million.

The Modaraba had filed appeals with CIT (Appeals) against the said order, which is pending.

No provision has been made in the financial statements in this regard as management is confident thatultimate outcome of the appeals in question will be in favour of the Modaraba.

19. TAXATION

The income of the Modaraba is exempt from tax, provided not less than 90% of their profits are distributedto the certificate holders. The management intends to distribute the profit and accordingly no provisionfor tax has been made in the current period. The Modaraba is also exempt from the provisions of section113 (minimum tax) under clause 11 of Part IV of the Second Schedule of the Income Tax Ordinance, 2001.

20. RELATED PARTY TRANSACTIONS

Related parties comprise of associated undertakings and directors of the Modaraba Management Company.Modaraba, in the normal course of business carries out transactions with these related parties. Significanttransactions with related parties are as follows: -

For KASB Invest (Private) Limited(Management Company)

DIRECTOR DIRECTORCHIEF EXECUTIVE

15. PROPERTY AND EQUIPMENT - OWNED

17. INVESTMENT PROPERTIES

Opening balanceAdditionsUnrealized gain on measurement of Investment PropertyClosing balance

(Unaudited)December 31,

2015Rupees

26,550,000 - -

26,550,000

(Audited)June 30,

2015Rupees

27,080,000 -

(530,000) 26,550,000

Note

17.1

Nature of Transactions

Contribution madeManagement feeSharing of common expenses

132,552 1,028,881 2,537,709

71,299 1,589,699

-

Relationship with Modaraba

Provident fundModaraba management companyModaraba under common management

Un-AuditedDecember 31,

2015Rupees

Un-AuditedDecember 31,

2014Rupees

21. DATE OF AUTHORISATION OF ISSUE

This condensed interim financial statements have been authorised for issue on 26 February, 2016 by theBoard of Directors of the KASB Invest (Pvt) Limited.

22. FIGURES

Figures have been rounded off to the nearest Rupee.