First Fidelity Leasing Modaraba : 2nd QTR 31 DEC 2023

CONDENSED INTERIM FINANCIAL STATEMENTS

(UN-AUDITED)

FOR THE HALF YEAR ENDED

31 DECEMBER

DIRECTORS' REPORT

Directors of Fidelity Capital Management (Pvt.) Limited, the management company of First Fidelity Leasing Modaraba are pleased to present second quarter un-audited condensed interim financial information of the Modaraba for the half year ended December 31, 2023, together with auditors' review report thereon.

The Modaraba during the half year ended December 31, 2023, sustained a loss of Rs. 3.010 million, as against loss of Rs. 3.933 million earned in the corresponding six months' period. The operations of the Modaraba have resulted in loss due to certain time-based provisions, while its potential profitability depends on recovery of its major investment in the corporate tower being constructed by Enplan (Pvt.) Limited. As more elaborately discussed in the June 30, 2023 Annual Report, the Modaraba as a last option had filed legal suits against Enplan (Pvt.) Limited, which are being contested in the relevant court of laws.

In the first case for recovery of Murabaha finance of Rs 35.0 million the Modaraba Tribunal on February 03, 2022 decreed the case in favor of the Modaraba for an amount of Rs 43.772 million as principal and contracted markup, along with cost of funds from June 1, 2014 till the date of realization. M/s Enplan has preferred an appeal before the Honorable Lahore High Court wherein next date is May 02, 2024.

In the second case against recovery of Rs 204.0 million the Honorable Lahore High Court had closed the right to argue of M/s Enplan and its sponsors/guarantors. However, on September 5, 2022 M/s Enplan had submitted a miscellaneous application before the Lahore High Court for restoration of their right to defend. The Enplan miscellaneous application prima-facie is time barred. The case is fixed for hearing on May 2, 2024. If Enplan miscellaneous application is rejected the decision favoring Modaraba for recovery of Rs 204.0 million along with cost of funds till recovery is likely to be announced sooner.

Subject however to final decisions of the court the Modaraba is likely to recover the decretal amounts from auction of the mortgaged land and building. The valuation is good enough to suffice our decretal amounts. The recovery of decretal amount means we would not only be recovering our principal amounts but also receiving additional substantial amounts in the form of profit and cost of funds. The resultant recovery of amounts along with due markup shall provide much needed liquidity and profitability in future periods. The management will remain cautious, prudent and selective for its investment. We always strive to keep special emphasis on customer satisfaction and also ensuring that we follow the Islamic Shariah Principals in all our business transactions.

The Board wish to place on record its thanks to the certificate holders, regulatory authorities for their valuable support, guidance and cooperation extended to the Modaraba and look forward to their continued patronage in future. The dedication and hard work put in by the officers and staff of the Modaraba is also acknowledged.

For and on behalf of the Board of Directors

Wasim ul Haq Osmani

(Chief Executive)

Lahore:

March 28, 2024

Half Yearly Report 2023 03

Shari'ah Review Report of

First Fidelity Leasing Modaraba

For The Period Ended December 31, 2023

I have conducted the Shari'ah review of M/s First Fidelity Leasing Modaraba managed by Fidelity Capital Management (Pvt.) Limited, the Modaraba Management Company for the period ended December 31, 2023 in accordance with the requirements of the Shari'ah Compliance and Shari'ah Audit Mechanism for Modaraba's and report that in my opinion;

• 1. The Modaraba has introduced a mechanism which has strengthened the Shari'ah compliance, in letter and spirit and the systems, procedures and policies adopted by the Modaraba are in line with the Shari'ah principles;

• 2. The Modaraba's financing portfolio mainly consists on Ijara and Morabaha financing, although no fresh financing facility is extended during the year 2023 however the transactions already made were executed under my supervision/review. The agreement(s) entered into by the Modaraba are Shari'ah compliant and the financing agreement(s) have been executed on the formats as approved by the Religious Board and all the related conditions have been met;

• 3. The management of Modaraba is pursuing legal proceedings against Enplan (Pvt.) Limited, one of the recovery suit filed before Banking Court has been decreed favoring the Modaraba appeal there-against is pending before Lahore High Court. In recovery suit pending before Lahore High Court PLA of the defendants and guarantors have been dismissed, appeal for restoration of PLA's filed by the defendants before Lahore High Court which was to be heard on 25-10-2023 however the same was adjourned for 02-05-2024, in addition, suit for damages filed by Enplan against the Modaraba has been dismissed. The management is hopeful for positive and early outcome in these cases which would strengthen the cash flows of the Modaraba;

• 4. The earnings have been realized from the sources or by means prohibited by Shariah have been credited to charity account.

Recommendations

The Modaraba should accelerate its efforts for early liquidation of its investment with Enplan and should focus on new innovations and explore possibility of entering into more specialized Shari'ah compliant business modes in addition to its core business activities.

It has also been recommended that the remaining amount kept under the head of charity should be disbursed AS soon as cash flows are included.

Conclusion:

In my opinion and to the best of my knowledge and information provided by FFLM management with relevant explanation, I am of the view that during the period overall business operations of the Modaraba are Shariah Compliant.

May Allah make us successful in this world and hereafter and forgive our mistakes.

__________________________ Mufti Altaf Ahmed

Shari'ah Advisor

Dated: March 27, 2024

Half Yearly Report 2023 07

December 31,	June 30,
2023	2023
Note	(Un-audited)	(Audited)
ASSETS	Rupees	Rupees
Current Assets
Cash and bank balances	113,176	177,089
Profit receivable on murabaha arrangements	4	3,237,068	6,099,562
Unearned murabaha profit receivable	243,973	1,328,271
Ijarah rentals receivable	5	11,925,216	10,975,744
Short term investments under murabaha arrangements	6	78,442,999	75,942,999
Other receivables	7	5,721,380	5,721,380
Advance income tax	1,054,539	1,044,005
Current portion of long term advances	8	539,091	235,204
101,277,442	101,524,254
Non-Current Assets
Long term advances	8	539,267	934,846
Membership assets	9	3,510,000	3,510,000
Long term investments under murabaha arrangements	-	2,500,000
Assets leased out under ijarah contracts	10	24,701,253	24,877,315
Property and equipment	11	224,124,024	224,134,473
252,874,544	255,956,634
Total Assets	354,151,986	357,480,888
LIABILITIES
Current Liabilities
Accrued and other liabilities	12	6,428,141	5,560,114
Unclaimed profit distribution	16,863,739	16,863,739
Deferred murabaha income	243,973	1,328,271
Current portion of security deposits	13	4,175,507	4,202,257
27,711,360	27,954,381
Non-Current Liabilities
Security deposits	13	4,041,500	4,175,250
Employees retirement benefits	585,927	528,050
4,627,427	4,703,300
Total Liabilities	32,338,787	32,657,681
NET ASSETS	321,813,199	324,823,207
REPRESENTED BY
CAPITAL AND RESERVES
Certificate capital	14	264,138,040	264,138,040
Reserves	57,675,159	60,685,167
321,813,199	324,823,207
Contingencies and Commitments	15	-	-

The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements (un-audited).

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) FOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2023 Half year ended December 31, Quarter ended December 31,2023 2022 2023 2022 NoteRupees Rupees -------- Unaudited ----------Rupees Rupees -------- Unaudited ----------Income from ijarah Profit on murabaha finances Other income 16 4,923,110 2,647,243 60,996 7,631,349 6,504,589 2,835,458 573,457 9,913,504 2,572,761 2,967,939 1,129,119 1,306,919 51,347 3,753,227 286,675 4,561,533 Expenses Depreciation of fixed assets under ijarah arrangements 10 Administrative and general expenses (3,216,062) (5,620,640) (4,573,017) (5,828,066) (1,633,395) (3,108,220) (2,283,491) (2,972,948) (8,836,702) (10,401,083) (4,741,615) (5,256,439) Operating Loss before Provisions and Taxation (1,205,353) (487,579) (988,388) (694,906) Provisions Provision against other receivables Provision against long term advances Provision against non-performing investments-net (1,497,231) (61,700) (245,724) (1,804,655) (1,999,212) - (1,446,792) (3,446,004) (1,497,231) (61,700) - -(245,724) (1,446,792) (1,804,655) (1,446,792) Operating Loss (3,010,008) (3,933,583) (2,793,043) (2,141,698) Charge of Modaraba Management Company's fee Provision for workers' welfare fund - -- -- -- - Loss before Taxation (3,010,008) (3,933,583) (2,793,043) (2,141,698) Taxation - - - - Net Loss for the Period (3,010,008) (3,933,583) (2,793,043) (2,141,698) Loss per Certificate - Basic and Diluted (0.114) (0.149) (0.106) (0.081)The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements (un-audited). Chief Executive Officer Half Yearly Report 2023 09

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE HALF YEAR AND QUARTER ENDED DECEMBER 31, 2023

Half year ended December 31,	Quarter ended December 31,
2023	2022	2023	2022

Rupees Rupees -------- Unaudited ----------

Rupees Rupees -------- Unaudited ----------

Net Loss for the Period	(3,010,008)	(3,933,583)	(2,793,043)	(2,141,698)
Other Comprehensive Income:
Items that will not be reclassified to profit or loss	-	-	-	-
Items that may be reclassified subsequently to profit or loss	-	-	-	-
Other comprehensive income for the period	-	-	-	-
Total Comprehensive Loss for the Period	(3,010,008)	(3,933,583)	(2,793,043)	(2,141,698)

The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements (un-audited).