QUARTERLY REPORT

SEPTEMBER 2023

Assisting in Development of the SME Sector in Pakistan

CONTENTS

Modaraba Information

02

Directors' Review

03

Condensed Interim Balance Sheet

07

Condensed Interim Profit and Loss Account and

Other Comprehensive Income (Un-audited)

08

Condensed Interim Cash Flow Statement (Un-audited)

09

Condensed Interim Statement of Changes in Equity

10

Notes to and Forming Part of the Condensed

Interim Financial Statements (Un-audited)

11

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For the period ended September 30, 2023

01

Modaraba Information

Modaraba Company

OLP Services Pakistan (Pvt) Limited

Directors of Modaraba Company

Mr. Shaheen Amin

Chairman

Mr. Raheel Qamar Ahmad

Managing Director

/ Chief Executive Officer

Mr. Ramon Alfrey

Director

Mr. Nausherwan Adil

Independent Director

Mian Faysal Riaz

Director

Ms. Naila Hasan

Independent Director

Ms. Aseya Qasim

Director

Company Secretary

Mr. Muhammad Siddique

Audit Committee

Mr. Nausherwan Adil

Chairman

Mr. Ramon Alfrey

Member

Mian Faysal Riaz

Member

Human Resource and Remuneration (HR&R)

Committee

Ms. Naila Hasan

Chairperson

Mr. Shaheen Amin

Member

Mr. Raheel Qamar Ahmad

Member

Risk Committee

Mian Faysal Riaz

Chairman

Mr. Nausherwan Adil

Member

Mr. Raheel Qamar Ahmad

Member

Shariah Advisor

Mufti Faisal Ahmed

Auditors

A.F.Ferguson & Co. Chartered Accountants

Bankers/ Financial Institutions

Standard Chartered Bank (Pakistan) Limited (Saadiq) Meezan Bank Limited

United Bank Limited (UBL Ameen) Bank Alfalah Limited (Islamic banking) Allied Bank Limited (Islamic banking) Bank Al Habib Limited (Islamic banking) Habib Bank Limited (Islamic banking)

Pakistan Mortgage Refinance Company Limited

Legal Advisors

Haider Ali Khan

Advocate High Court , Partner,

Fazle Ghani Advocates

Modaraba Company Registered Office

OLP Building, Plot no. 16, Sector no. 24,

Korangi Industrial Area Karachi.

Modaraba Head Office:

Office No. 601, 6th Floor,

Syedna Tahir Saifuddin Memorial Foundation Building,

Beaumont Road, Civil Lines, Karachi. Phone: (021) 38341168 Email:askus@olpmodaraba.com

Lahore Branch:

Office No-08, 1St floor,

Park Lane Tower (Mall Of Lahore) 172-Tufail Road, Lahore Cantt. Phone: (042) 38017006

Islamabad Branch:

Ground Floor, Phase 1, State Life Building No. 5, Nazimuddin Road, Blue Area, Islamabad.

Registrars & Share Registration Office:

Famco Associates (Private) Limited 8-F, Next to Hotel Faran, Nursery,

Block 6, P.E.C.H.S., Shahra-e-Faisal, Karachi. Tel: (92-21)34380101-5

Fax: (92-21) 34380106

Email: info.shares@famco.com.pk

02

For the period ended September 30, 2023

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Directors' Review

For the period ended September 30, 2023

The Board of Directors of OLP Services Pakistan (Private) Limited [formerly ORIX Services Pakistan (Private) Limited], the management company of OLP Modaraba (formerly ORIX Modaraba) is pleased to present the unaudited accounts for the three months period ended September 30, 2023.

1. Economic Outlook

The IMF expects Pakistan's economy to perform better in the current and next fiscal years. The International Monetary Fund's (IMF), forecasts a growth of 2.5% for the country's economy in the current year, doubling to 5% in the next fiscal year. This is a significant jump compared to the 0.5% contraction witnessed last fiscal year, signifying that the Fund also expected quicker economic recovery than it had forecast earlier at a 5% GDP growth rate in the 2026-27 fiscal year.

The global lender also kept the growth forecast un¬chan¬ged from its July estimate when it signed a nine-month $3 billion new financing arrangement with Pakistan. However, it revised its estimates upwards for inflation and unemployment rates for current and subsequent fiscal years. The IMF also estimated the unemployment rate in the country to have risen to 8.5% in fiscal 2023 from 6.2% in 2022, significantly higher than the earlier projection of 7%. The current fiscal year's unemployment rate has been projected at 8%.

After transferring $1.2 billion in July, as part of the $3 billion bailout programme for nine months to support the government's efforts to stabilize the country's ailing economy, the IMF is set to send its delegation to Pakistan in the last week of October to review the country's economic performance for the first quarter. Once the review is completed, Pakistan will receive the next instalment of $700 million from the IMF after its board's approval.

2. Financial Highlights

Financial results are summarized as under:

September 30,

June 30,

Balance Sheet

2023

2023

(Rupees)

Certificate capital

453,835

453,835

Total equity

1,126,054

1,176,623

Total assets

6,741,656

6,824,579

Investment in Ijarah Assets

1,525,474

1,627,562

Investments in Diminishing Musharika

4,176,821

4,269,916

Redeemable capital

2,899,355

2,896,605

Three months ended

Three months ended

September 30,

September 30,

Profit and Loss

2023

2022

(Rupees)

Revenue (net of Ijarah assets depreciation)

386,752

272,033

Financial charges

257,524

188,578

Reversal of provisions and impairments- net

(6,895)

(11,119)

Operating expenses

70,442

54,684

Profit before modaraba management company's remuneration

65,681

39,889

Profit before taxation

57,094

34,674

Net profit

40,199

24,619

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For the period ended September 30, 2023

03

3. Review of Operations

By the Grace of Allah, your Modaraba's performance during the period under review continued to be strong. The Modaraba's gross revenue (net of Ijarah assets depreciation and including other income) increased by 42.17% from PKR 272.03 million to PKR 386.75 million compared to the corresponding period of last year. The main reason behind this was 'better spreads and an increase in the benchmarking rate of profit during last year. Financial charges increased by 36.56% from PKR 188.58 million to PKR 257.52 million mainly due to upward movement of the deposit rate. Due to strong recovery efforts, provisions that were reversed amounted to PKR 6.90 million as compared to PKR 11.12 million reversal during corresponding period last year. Administrative and operating expenses increased by 28.82% from PKR 54.68 million to PKR. 70.44 million mainly due to high inflation and the increase in utilities etc., but the top line revenue increase translated into a higher Profit before taxation which increased by 64.66% from PKR 34.67 million to PKR

  1. million and a higher net profit for the quarter which increased by 63.29% from PKR 24.62 million to PKR
  1. million compared to corresponding period last year.

The portfolio of Ijarah finance, Sukuk investment and Diminishing Musharika finances stood at PKR 5,834 million compared to PKR 5,897 million as at June 30, 2023, showing a marginal decrease of 1.08% during the three months period. Similarly total assets decreased marginally by 1.22% to PKR 6,742 million compared to PKR 6,825 million as at June 30, 2023. During the period under review, the Modaraba booked fresh disbursements to the tune of PKR 568 million as compared to PKR 352 million during the corresponding period last year.

The business has been driven mainly by deepening relationships with selective clientele and initiating relationships with good names. The asset portfolio has a good mix of multi-nationals, large and medium sized local corporates, selective SME relationships and an excellent housing and consumer portfolio.

OLP Modaraba manages and monitors risk exposure very prudently. The evaluation of borrower's credit profile including repayment ability is made at the time of grant of facility and regular oversight is carried out thereon. Further, there are Portfolio Management and Early Alert committees which are responsible to ensure portfolio monitoring and timely alerts for possible untoward scenarios.

4. Credit Rating

The Pakistan Credit Rating Agency Limited (PACRA) has maintained the ratings of your Modaraba as AA (Double A) and A1+ (A one plus) for long-term and short-term respectively. These ratings indicate low expectation of credit risk and very strong capacity for timely payment of financial commitments.

5. Acknowledgement

The Board appreciates the support of regulatory authorities, certificate-holders, customers and business partners and looks forward to their support in future.

Karachi: October 25, 2023

Raheel Qamar Ahmad

Ramon Alfrey

Managing Director/ CEO

Director

04

For the period ended September 30, 2023

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For the period ended September 30, 2023

05

06

For the period ended September 30, 2023

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CONDENSED INTERIM BALANCE SHEET

AS AT SEPTEMBER 30, 2023

September 30,

June 30,

Note

2023

2023

(Un-audited)

(Audited)

ASSETS

(Rupees)

Current assets

Cash and bank balances

5

345,050,620

400,254,200

Ijarah rentals receivable

6

93,961,042

103,759,046

Advances, deposits, prepayments and other receivables

319,377,245

161,625,207

Short-term investments

7

131,623,612

123,858,681

Current portion of Diminishing Musharaka

8.3

1,305,108,374

1,321,802,595

Total current assets

2,195,120,893

2,111,299,729

Non-current assets

Long-term portion of Diminishing Musharaka

8.3

2,871,712,231

2,948,113,326

Ijarah assets

9

1,525,474,234

1,627,562,155

Tangible assets

10

17,538,508

17,061,707

Intangible assets

11

4,173,974

2,194,932

Deferred tax assets

127,636,351

118,347,633

Total non-current assets

4,546,535,298

4,713,279,753

TOTAL ASSETS

6,741,656,191

6,824,579,482

LIABILITIES AND EQUITY

Current liabilities

Current portion of term finance arrangements

12

696,786,086

1,146,247,638

Current portion of security deposits

195,305,843

169,344,276

Creditors, accrued and other liabilities

424,723,500

415,240,194

Advance Ijarah rentals received

8,026,426

1,653,873

Current portion of redeemable capital

2,716,855,000

2,717,105,000

Profit distribution payable

13

150,062,234

59,295,174

Provision for taxation - net

142,114,415

129,117,535

Total current liabilities

4,333,873,504

4,638,003,690

Non-current liabilities

Long-term portion of term finance arrangements

12

806,578,597

503,762,218

Long-term portion of security deposits

292,649,724

326,691,002

Long-term portion of redeemable capital

182,500,000

179,500,000

Total non-current liabilities

1,281,728,321

1,009,953,220

TOTAL LIABILITIES

5,615,601,825

5,647,956,910

CERTIFICATE HOLDERS' EQUITY

Certificate capital

Authorised certificate capital

50,000,000 (June 30, 2023: 50,000,000) certificates of Rs. 10 each

amounting to Rs. 500,000,000 (June 30, 2023: Rs. 500,000,000)

Issued, subscribed and paid-up certificate capital

28,500,000 (June 30, 2023: 28,500,000) certificates of Rs. 10 each fully paid in cash

285,000,000

285,000,000

16,883,530 (June 30, 2023: 16,883,530) bonus certificates of Rs. 10 each

168,835,300

168,835,300

453,835,300

453,835,300

Revenue reserve

91,321,086

143,899,235

Capital reserve

580,897,980

578,888,037

1,126,054,366

1,176,622,572

TOTAL LIABILITIES AND EQUITY

6,741,656,191

6,824,579,482

CONTINGENCIES AND COMMITMENTS

14

The annexed notes from 1 to 25 form an integral part of these condensed interim financial statements.

For OLP Services Pakistan (Private) Limited

(Management Company of OLP Modaraba)

SD

SD

SD

SD

Chief Executive

Director

Director

Chief Financial Officer

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For the period ended September 30, 2023

07

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT AND OTHER COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2023

Three months

Three months

Note

period ended

period ended

September 30, 2023

September 30, 2022

(Rupees)

Ijarah rentals earned

227,476,889

238,337,259

Income on Diminishing Musharaka arrangements

272,143,749

168,672,049

Dividend income

8,945,943

-

Profit on bank balances

18,852,681

23,471,209

527,419,262

430,480,517

Financial and other charges

15

(257,524,185)

(188,578,006)

Depreciation on Ijarah assets

(141,452,618)

(169,911,304)

Reversal of impairment against Ijarah assets

12,949,261

-

141,391,720

71,991,207

(Provision) / reversal of provision against Ijarah

rentals receivable - net

(8,682,347)

2,481,694

Reversal of provision against Diminishing Musharaka - net

2,627,823

6,836,842

Reversal of provision / (provision) against other receivables - net

-

1,800,000

135,337,196

83,109,743

Other income

785,831

11,463,484

Administrative and operating expenses

(70,441,846)

(54,684,162)

65,681,181

39,889,065

Management Company's remuneration

16

(6,568,118)

(3,988,907)

Provision for services sales tax on the

Management Company's remuneration

17

(853,855)

(518,558)

Provision for Sindh Workers' Welfare Fund

18

(1,165,184)

(707,632)

Profit for the period before taxation

57,094,024

34,673,968

Taxation

19

(16,895,170)

(10,055,451)

Profit for the period after taxation

40,198,854

24,618,517

Other comprehensive income for the period

-

-

Total comprehensive income for the period

40,198,854

24,618,517

Earnings per certificate - basic and diluted

20

0.89

0.54

The annexed notes from 1 to 25 form an integral part of these condensed interim financial statements.

For OLP Services Pakistan (Private) Limited

(Management Company of OLP Modaraba)

SD

SD

SD

SD

Chief Executive

Director

Director

Chief Financial Officer

08

For the period ended September 30, 2023

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Orix Modaraba published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 09:29:41 UTC.