Un-Audited Financial Statements For The Half Year Ended December 31, 2012

B.R.R. Guardian Modaraba (An Islamic Financial Institution) Managed by: B.R.R. Investments (Private) Limited B.R.R. Guardian Modaraba (An Islamic Financial Institution) Managed by: B.R.R. Investments (Private) Limited

Contents Page

Corporate Information 02

Directors' Report 03

Auditor’s Report to the Certificate Holders on Review of Interim Financial Information 04

Shariah Advisor Report 05

Condensed Interim Balance Sheet 07

Condensed Interim Profit and Loss Account 08

Condensed Interim Statement of Comprehensive Income 09

Condensed Interim Cash Flows Statement 10

Condensed Interim Statement of Changes in Equity 11

Condensed Interim Notes to the Financial Statements 12 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

CORPORATE INFORMATION Modaraba Company B.R.R. Investments (Private) Limited Chairman Mr. Rafique Dawood Chief Executive Mr. Ayaz Dawood Directors Mr. Farouq Habib Rahimtoola Mr. Muhammad Shahid Murtaza Audit Committee Mr. Farouq Habib Rahimtoola - Chairman Mr. Rafique Dawood - Member Mr. Muhammad Shahid Murtaza - Member HR Committee Mr. Farouq Habib Rahimtoola - Chairman Mr. Rafique Dawood - Member Mr. Muhammad Shahid Murtaza - Member Shariah Advisor Mufti Syed Sabir Hussain Chief Financial Officer Syed Tariq Masood Company Secretary Mr. Tahir Mehmood Auditors Ernst & Young Ford Rhodes Sidat Hyder Chartered Accountant Legal Advisor Rauf Ghaffar Law Associate Malik & Maliks Bankers Al -Baraka Bank () Limited Habib Metro Bank National Bank of Pakistan NIB Bank Limited Web-site E-mail: [email protected] Registered Office & 1900-B, Saima Trade Towers, Head Office I.I Chundrigar Road, -74000 PABX 32271875-80 37010960-65 37014641-4 Fax : 92-21-227-1912 Registrars F.D Registrar Services (SMC-Pvt.) Ltd 1705, 17th Floor, Saima Trade Towers, Tower “A”, I.I Chundrigar Road, Karachi-74000 Phone # 92-21-35478192-93 Fax # 92-21-32621233 Branch Offices Suit No. 210, 5th Floor, Siddiq Trade Centre, Main Boulevard, Gulberg - III, Lahore.

Office No. 405, 4th Floor, Islamabad Stock Exchange Tower, Jinnah Avenue, Islamabad. Security Vault G-187 Block 2, Shahrahe-e-Quaideen, PECHS Karachi-75400

2 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

DIRECTORS’ REPORT Dear Certificate holders,

The Board of Directors of B.R.R. Investments (Private) Limited, Manager of B.R.R. Guardian Modaraba (BRRGM), take pleasure in presenting the 2nd Quarter Financial statement of the Modaraba for the six months ended December 31, 2012.

Operations and performance

December 31, December 31, 2012 2011 . Rupees Total Income 187,663,609 182,819,411 Total Expenses 175,972,564 197,771,054 Operating Profit 26,184,336 14,684,366 Modaraba Company Management Fee 2,618,433 1,468,437 Profit for the Period 22,684,015 12,951,610

During the Six months period ended the Modaraba earned a profit Rs.22.68 million as compared to Rs 12.95 million profit in the same period of last year which shows the increase profit of 75.1%.

During this review period the total income of Modaraba Slightly increased by 2.6% and Operating expenses remained under control and within the budget

Your Modaraba has returned to it certificate holders 62% since June 30, 2012 including dividends, thus out performing the KSE index return of 29.6%. Further, the Certificate's Holder equity of Modaraba stand at 806.34 million and the break up value is Rs 10.33 per certificate which exceeds the par value.

Inshallah your Modaraba will continue to be profitable so that the management is able to pay higher dividends to its valued certificate holders.

On Behalf of the Board of Directors B.R.R. Investments (Private) Limited

Karachi: February 27, 2013 Rafique Dawood Chairman

3 February 27, 2013

4 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

5 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

February 27, 2013

6 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Condensed Interim Balance Sheet As at December 31, 2012

(Un-audited) (Audited) December 31, June 30, 2012 2012 Note ------(Rupees) ------ASSETS Current assets Cash and bank balances 4 297,020,457 231,630,479 Musharaka finances 5 377,483,826 385,061,421 Short-term investments 6 500,317,378 467,242,582 Lease rental receivable 16,684,722 22,352,840 Loans, advances and prepayments 2,828,988 2,588,502 Accrued profit 7 54,499,841 84,579,105 Other receivables 8 6,758,207 9,311,552 Taxation refundable 6,550,340 5,910,372 Total current assets 1,262,143,759 1,208,676,853 Assets classified as held-for-trading 291,500 461,500 1,262,435,259 1,209,138,353 Non-current assets Long-term portion of musharaka finances 5 344,726,909 432,200,269 Long-term loans and deposit 14,116,510 13,942,253 Trading right entitlement / ordinary shares 9 7,750,000 - Fixed assets 10 734,529,239 728,508,897 Investment properties 642,842,197 659,761,987 Total non-current assets 1,743,964,855 1,834,413,406 Total assets 3,006,400,114 3,043,551,759 LIABILITIES Current liabilities Murabaha, musharaka and finance under mark-up arrangements 11 705,749,097 763,611,669 Current portion of diminishing musharaka based Term Finance Certificates 110,000,000 55,000,000 Current portion of customers' security deposits 14,778,530 8,954,899 Creditors, accrued and other liabilities 12 52,996,037 39,829,606 Accrued profit on borrowings 349,512,027 338,189,472 Profit payable 23,164,833 21,061,306 Total current liabilities 1,256,200,524 1,226,646,952 Non-current liabilities Diminishing musharaka based Term Finance Certificates 647,500,000 717,500,000 Long-term portion of murabaha, musharaka and finance under mark-up arrangements 11 204,400,000 220,700,000 Customers' security deposits 91,953,983 105,899,473 Total non-current liabilities 943,853,983 1,044,099,473 Total liabilities 2,200,054,507 2,270,746,425 NET ASSETS 806,345,607 772,805,334 REPRESENTED BY Certificate capital 780,462,550 780,462,550 Capital reserves 523,823,582 523,823,582 Accumulated loss (582,248,346) (590,884,036) Unrealised gain on available-for-sale investments - net 84,307,821 59,403,238 806,345,607 772,805,334 COMMITMENTS 13 The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

For B.R.R. Investments (Private) Limited (Management Company)

Chief Executive Officer Director Director 7 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Condensed Interim Profit And Loss Account For The Half Year And Quarter Ended December 31, 2012 (Un-Audited)

Half year ended Quarter ended December 31, December 31, December 31, December 31, 2012 2011 2012 2011 Note ------(Rupees) ------(Rupees) ------INCOME Lease rentals 25,876,381 39,131,464 13,729,380 27,275,766 Musharaka finances 67,352,774 77,741,010 31,519,045 38,988,082 Profit on bank balances 13,661,158 6,373,179 6,218,106 3,275,081 Return on investments - net 14 36,436,053 13,683,072 29,065,935 4,379,575 Rental income 39,723,185 40,761,753 19,914,298 22,721,370 Other income 15 4,614,058 5,128,933 560,450 4,965,705 187,663,609 182,819,411 101,007,214 101,605,579

EXPENSES Amortisation on leased assets 7,892,530 14,904,270 3,633,987 6,917,795 Impairment loss on available- - for-sale investments - 2,140,408 2,256,657 2,140,408 Operating expenses 60,899,172 54,546,020 30,585,893 28,480,241 Financial charges 107,180,862 126,180,356 50,735,105 62,893,626 175,972,564 197,771,054 87,211,642 100,432,070

11,691,045 (14,951,643) 13,795,572 1,173,509 Reversal of provision for doubtful receivables - net 16 14,493,291 29,636,009 6,538,591 (326,756) 26,184,336 14,684,366 20,334,163 846,753 Modaraba Management Company's fee 2,618,433 1,468,437 2,033,416 84,675 Sales tax on Modaraba Management fee 418,949 - 325,347 - Provision for Workers' Welfare Fund 462,939 264,319 359,508 15,242 Profit before taxation 22,684,015 12,951,610 17,615,892 746,836

Taxation 18 - - - - Net profit for the period 22,684,015 12,951,610 17,615,892 746,836

Earnings per certificate - basic and diluted 0.29 0.17 0.23 0.01

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

For B.R.R. Investments (Private) Limited (Management Company)

Chief Executive Officer Director Director

8 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Condensed Interim Statement of Comprehensive Income For The Half Year And Quarter Ended December 31, 2012 (Un-Audited)

Half year ended Quarter ended December 31, December 31, December 31, December 31, 2012 2011 2012 2011 ------(Rupees) ------

Profit after taxation 22,684,015 12,951,610 17,615,892 746,836

Other comprehensive income

Unrealised gain / (loss) on available-for-sale investments - net 24,904,583 24,007,868 1,377,034 (9,806,896)

Total comprehensive income / (loss) for the period 47,588,598 36,959,478 18,992,926 (9,060,060)

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

For B.R.R. Investments (Private) Limited (Management Company)

Chief Executive Officer Director Director

9 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Condensed Interim Cash Flows Statement For The Half Year Ended December 31, 2012 (Un-Audited)

Half year ended December 31, December 31, 2012 2011 CASH FLOW FROM OPERATING ACTIVITIES ------(Rupees) ------Profit for the period 22,684,015 12,951,610 Adjustment of non-cash and other items Depreciation 23,153,999 21,076,024 Amortisation 7,892,530 14,904,270 Impairment loss on available-for-sale investments - 2,140,408 Reversal of provision for doubtful receivables - net (14,493,291) (29,636,009) Gain / (loss) on disposal of property plant and equipment - leased (3,768,091) 29,925 Profit on disposal of property, plant and equipment - owned (423,836) (60,477) Profit on musharaka, murabaha and finance under mark-up arrangements 107,158,305 126,180,356 Return on investments - net (36,436,053) (13,683,072) 83,083,563 120,951,425 105,767,578 133,903,035 (Increase) / decrease in current assets Lease rentals receivable 5,668,118 (13,806,856) Loans, advances and prepayments (685,141) (2,551,303) Decrease in assets classified as held-for-trading 170,000 - Accrued profit 26,930,917 37,339,838 Other receivables 1,841,848 20,262,303 33,925,742 41,243,982 Decrease in current liabilities Creditors, accrued and other liabilities 13,166,481 (6,628,770) Decrease in customers security deposits (8,121,859) (509,272) 5,044,622 (7,138,042) Income tax paid (369,570) (179,941) Net cash generated from operating activities 144,368,372 167,829,034 CASH FLOW FROM INVESTING ACTIVITIES Investments made (6,801,436) (2,388,269) Income received on investments 40,295,898 11,224,363 Musharaka and murabaha finances 103,642,040 90,057,742 Addition to investment property - (33,000,000) Addition to property and equipment - owned (3,588,720) (1,719,000) Addition to property, plant and equipment - leased (7,396,500) (1,030,000) Addition to capital work-in-progress (29,101,370) (41,766,512) Proceeds from disposal of property, plant and equipment - owned 1,117,076 464,538 Proceeds from disposal of property, plant and equipment - leased 19,797,738 2,954,532 Net cash generated from investing activities 117,964,726 24,797,394 CASH FLOW FROM FINANCING ACTIVITIES Profit paid to certificate holders (11,944,798) (17,029,646) Murabaha and finance under mark-up arrangements (89,162,572) (22,687,066) Financial charges paid (95,835,750) (127,645,200) Net cash used in financing activities (196,943,120) (167,361,912) Net increase in cash and cash equivalents 65,389,978 25,264,516 Cash and cash equivalents at the beginning of the period 231,630,479 121,699,207 Cash and cash equivalents at the end of the period 297,020,457 146,963,723 The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements. For B.R.R. Investments (Private) Limited (Management Company)

Chief Executive Officer Director Director 10 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Condensed Interim Statement of Changes In Equity For The Half Year Ended December 31, 2012 (Un-Audited)

Unrealised gain on available-for- Capital reserves sale Certificate Profit prior Statutory Generalinvestments - Accumulated capital to floatation reserve reservenet loss Total ------(Rupees) ------

Balance as at July 01, 2011 780,462,550 10,532,683 498,840,899 56,000,000 28,952,417 (642,104,733) 732,683,816

Profit for the half year ended December 31, 2011 - - - - - 12,951,610 12,951,610

Other comprehensive income - - - - (4,944,549) - (4,944,549) - - - - (4,944,549) 12,951,610 8,007,061

Profit distribution for the year ended June 30, 2011 @ Re.0.25 per certificate - - - - - (19,511,564) (19,511,564)

Balance as at December 31, 2011 780,462,550 10,532,683 498,840,899 56,000,000 24,007,868 (648,664,687) 721,179,313

Profit for the half year ended June 30, 2012 - - - - - 16,230,651 16,230,651

Other comprehensive income - - - - 35,395,370 - 35,395,370 - - - - 35,395,370 16,230,651 51,626,021

Transfer to accumulated loss - - - (56,000,000) - 56,000,000 - Transfer to statutory reserve - - 14,450,000 - - (14,450,000) -

Balance as at June 30, 2012 780,462,550 10,532,683 513,290,899 - 59,403,238 (590,884,036) 772,805,334

Profit for the half year ended December 31, 2012 - - - - - 22,684,015 22,684,015

Other comprehensive income - - - - 24,904,583 - 24,904,583 - - - - 24,904,583 22,684,015 47,588,598 Profit distribution for the year ended June 30, 2012 @ Re.0.18 per certificate - - - - - (14,048,325) (14,048,325)

Balance as at December 31, 2012 780,462,550 10,532,683 513,290,899 - 84,307,821 (582,248,346) 806,345,607

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

For B.R.R. Investments (Private) Limited (Management Company)

Chief Executive Officer Director Director

11 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Condensed Interim Notes To The Financial Statements For The Half Year Ended December 31, 2012

1. LEGAL STATUS AND NATURE OF THE BUSINESS

B.R.R. Guardian Modaraba (BRRGM) is a multipurpose, perpetual Modaraba floated under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the Rules framed thereunder and is managed by B.R.R. Investments (Private) Limited, having its registered office at 19th Floor, Saima Trade Tower, I.I. Chundrigar Road, Karachi. The Modaraba is listed on the Karachi Stock Exchange Limited.

The Modaraba's principal activity is leasing (Ijarah) of assets, deployment of funds in musharakas, murabahas and investment in properties, equity and debt securities. The Modaraba also provides custodial and management services in the name of B.R.R. Security Vault.

2. STATEMENT OF COMPLIANCE

These condensed interim financial statements have been prepared in accordance with International Accounting Standard- 34 "Interim Financial Reporting" as applicable in Pakistan.

These condensed interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the financial statements of the Modaraba for the year ended June 30, 2012.

These condensed interim financial statements are unaudited but subject to limited scope review by the auditors except for the figures of the condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended December 31, 2012 and December 31, 2011.

3. SIGNIFICANT ACCOUNTING POLICIES

The Modaraba has adopted the following amendments to IFRSs which became effective for the current period:

IAS 1 – Presentation of Financial Statements – Presentation of items of other comprehensive income (Amendment)

IAS 12 – Income Taxes - Recovery of Underlying Assets (Amendment)

The adoption of the above amendments did not have any effect on the financial statements.

(Un-audited) (Audited) December 31, June 30, 2012 2012 Note ------(Rupees) ------4. CASH AND BANK BALANCES

Cash in hand 101,769 124,700 Cash with State Bank of Pakistan - current account 4,749 7,538 Cash with banks in: - PLS savings accounts 4.1 293,265,420 225,615,921 - Current accounts 3,648,519 5,882,320 297,020,457 231,630,479

4.1 These carry mark-up at the rate ranging from 6% to 13% (2012: 5% to 13%) per annum.

12 B.R.R. Guardian Modaraba (An Islamic Financial Institution) (Un-audited) (Audited) December 31, June 30, 2012 2012 Note ------(Rupees) ------5. MUSHARAKA FINANCES

Musharaka finances 5.1 988,740,323 1,092,382,363 Less: Provision for doubtful receivables 5.1 (266,529,588) (275,120,673) 722,210,735 817,261,690 Less: Current portion of musharaka finances (377,483,826) (385,061,421) 344,726,909 432,200,269

5.1 The expected profit receivable on these arrangements ranges from 8.5% to 19.8% (2012: 8.5% to 19.80%) per annum. The arrangements are secured by way of hypothecation of stock, mortgage of property and equipment and pledge of shares. These finances are receivable on various dates up to May 31, 2019.

6. SHORT-TERM INVESTMENTS Held-for-trading - Listed Ordinary shares 6.1 50,800,765 47,873,832 - Mutual Fund Units 6.2 45,065,458 1,563,559 95,866,223 49,437,391 Available-for-sale - Listed Ordinary shares 6.3 120,053,254 98,419,472 - Mutual Fund Units 6.4 7,069,929 6,032,414 - Unlisted Ordinary shares 6.5 178,661,305 178,661,305 - Unlisted debt securities 6.6 98,666,667 134,692,000 404,451,155 417,805,191 500,317,378 467,242,582

6.1 Held-for-trading: Listed Ordinary shares Unless stated otherwise, the holdings are in fully paid ordinary shares of Rs.10 each. Number of shares (Un-audited) (Audited) December 31, June 30, December 31, June 30, 2012 2012 Name of investee 2012 2012 Personal goods 6,500 10,000 Artistic Denim Mills Limited 188,500 240,000 5,000 30,000 Azgard Nine Limited 40,450 210,000 2,053 2,053 BATA Pakistan Limited 2,773,604 1,439,297 95,498 99,998 Zephyr Textiles Limited 606,412 446,991 - 37,505 Nishat Mills Limited - 1,784,488 2,000 20,000 Nishat (Chunian) Limited 70,080 347,800 Construction and materials 45,000 63,000 D.G. Khan Cement Company Limited 2,456,100 2,480,940 1,673 1,673 AkzoNobel Pakistan Limited 144,732 219,280 15,000 17,500 Limited 2,273,100 2,019,325 Electricity - 5,000 Japan Power Generation Limited - 8,750 - 500 The Limited - 20,945 205,746 144,746 Karachi Electric Supply Company Limited 1,185,095 468,977 - 25,000 Nishat Power Limited - 367,500

13 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

Number of shares (Un-audited) (Audited) December 31, June 30, December 31, June 30, 2012 2012 Name of investee 2012 2012 Oil and gas 45,09946,999 7,557,693 5,774,767 6,250 6,250 Mari Gas Company Limited 614,688 586,313 16,850 16,850 National Refinery Limited 3,567,145 3,898,922 2,000 2,000 Oil and Gas Development Company Limited 385,220 320,880 41,250 24,000 Limited 7,292,588 4,518,960

Gas water and multiutilities 183,750 183,750 Limited 3,768,713 3,583,125 38,108 38,108 Sui Northern Gas Pipelines Limited 886,012 643,644

Automobile and parts 20,000 20,000 Indus Motor Company Limited 5,400,000 4,901,600 10,000 - Agriauto Industries Limited 801,500 -

Food producers 100- Mitchell's Fruit Farms Limited 38,512 -

Chemicals 2,000 2,000 Dawood Hercules Chemicals Limited 65,080 66,020 239 54,239 Fatima Fertilizer Company Limited 6,309 1,338,076 40,000 40,000 Fauji Fertilizer Bin Qasim Limited 1,543,600 1,632,800 20,000 20,000 Limited 2,342,800 2,221,000 5,247 3,327 ICI Pakistan Limited 912,764 436,430 15,000 15,000 Sitara Peroxide Limited 193,950 148,500 435,000 435,000 Lotte Pakistan PTA Limited 3,197,250 3,058,050

Engineering 2,000 2,000 Limited 1,129,120 965,700

Industrial transportation 4,500 4,500 Pakistan National Shipping 156,690 69,345 Corporation Limited 2,500 2,500 Pakistan International Bulk - - Terminal Limited 800 - Pakistan International Container 167,223 - Terminal Limited

Support services - 105,000 TRG Pakistan Limited - 359,100

Fixed line telecommunication - 40,000 Telecard Limited - 59,600 - 10,000 Wateen Telecom Limited - 20,000

Financial services 29,202 220,202 Jahangir Siddiqui & Company Limited 471,315 2,732,707

Forestry and paper 11,00011,000 Security Papers Limited 564,520 484,000 50,800,765 47,873,832

14 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

6.2Held-for-tradin g: Mutual Fund Units Unless stated otherwise, the holdings are in fully paid units of Rs.100 each. (Un-audited) (Audited) Number of units December 31, June 30, December 31, June 30, 2012 2012 2012 2012 Name of investee ------(Rupees) ------

408,240 408,240 First Dawood Mutual Fund 2,644,737 1,563,559 - a related party 448,422 - Dawood Islamic Fund 42,420,721 - - a related party 45,065,458 1,563,559

6.3 Available-for-sale: Listed Ordinary shares

Unless stated otherwise, the holdings are in fully paid Ordinary shares of Rs.10 each.

Number of shares December 31, June 30, 2012 2012

Oil and gas 18,750 18,750 Mari Gas Company Limited 1,844,064 1,758,938 41,500 41,500 Pakistan Refinery Limited 2,875,950 2,384,175 13,627 11,356 Company Limited 3,164,325 2,678,199 16,500 16,500 Brushane LPG Pakistan Limited 648,720 788,865 (Formerly Shell Gas LPG Pakistan Limited) 18,750 18,750 Limited 2,553,563 2,396,813

Chemicals 50,052 50,052 Linde Pakistan Limited 7,682,481 6,353,601 277 277 Dawood Hercules Corporation Limited 9,014 9,144 75,769 75,769 Fauji Fertilizer Company Limited 8,875,581 8,414,147 14,999 14,999 Sitara Chemical Industries Limited 2,684,821 1,575,645

Industrial metals and mining 49,655 52,655 International Industries Limited 1,634,146 1,487,504

Construction and materials 90 90 Factory Limited 1,311 417

Industrial engineering 20,700 22,500 Al Ghazi Tractors Limited 4,934,466 4,620,150 56,000 56,000 KSB Pumps Company Limited 3,640,000 3,058,720

Industrial transportation 1,000 4,000 Pakistan International Container 209,030 584,000 Terminal Limited 5,000 5,000 Pakistan National Shipping Corporation 174,100 77,050

Food producers 4,550 5,390 Limited 45,954,999 38,154,948 (Par value Rs.50 each)

15 B.R.R. Guardian Modaraba (An Islamic Financial Institution) (Un-audited) (Audited) Number of shares December 31, June 30, December 31, June 30, 2012 2012 2012 2012 Name of investee ------(Rupees) ------

Personal goods 35,000 35,000 Artistic Denim Mills Limited 1,015,000 840,000 300 300 Ghazi Fabrics International Limited 1,488 1,140 505 23,000 Nishat Mills Limited 32,244 1,094,340 3,234 3,234 Sapphire Fibres Limited 561,971 399,334 8,890 8,890 Sapphire Textile Mills Limited 1,962,734 1,244,600 20,000 20,000 Textile Mills Limited 402,000 422,200

Pharma and bio tech 46,276 46,276 (Pakistan) Limited 10,620,342 5,509,158 31,625 31,625 GlaxoSmithKline Pakistan Limited 2,319,061 1,999,965 564 564 Highnoon Laboratories Limited 26,790 20,699

Electricity 75,600 80,100 The Hub Power Company Limited 3,420,144 3,355,389

Gas water and multiutilities 31,500 31,500 Sui Northern Gas Pipelines Limited 732,375 532,035 22,954 22,954 Sui Southern Gas Company Limited 470,787 447,603

Financial services 1,935,506 1,935,506 Dawood Capital Management Limited 5,729,097 2,612,933 - a related party 2,499,000 2,499,000 Dawood Equities Limited 5,872,650 5,597,760 3,339,922 3,339,922 First Dawood Investment Bank Limited 10,253,561 10,253,561 - a related party Less: Provision for impairment (10,253,561) (10,253,561) - - 120,053,254 98,419,472

6.4 Available-for-sale: Mutual Fund Units Unless stated otherwise, the holdings are in the fully paid units of Rs.100 each.

Open-end mutual fund - 55,415 National Investment Trust units - 1,676,858

Equity Investment Instruments 1,046,281 1,046,281 First Dawood Mutual Fund 6,696,199 4,007,256 - a related party 78,680 81,000 NAMCO Balance Fund 373,730 348,300 7,069,929 6,032,414

16 B.R.R. Guardian Modaraba (An Islamic Financial Institution) 6.5 Available-for-sale: Investment in unlisted Ordinary shares

The holdings are in the fully paid ordinary shares of Rs.10 each.

Number of shares (Un-audited) (Audited) December 31, June 30, December 31, June 30, 2012 2012 2012 2012 Name of investee ------(Rupees) ------

956,172 956,172 Systems Limited - a related party 9,999,990 9,999,990 10,160,000 10,160,000 Burj Bank Limited 94,661,315 94,661,315 7,400,000 7,400,000 Dawood Family Takaful Limited 74,000,000 74,000,000 178,661,305 178,661,305

6.6 Available-for-sale: Investment in unlisted debt securities

Term Finance Certificates (TFCs) - 8,673 Vision Developers (Private) Limited - 34,692,000

Sukuk 20,000 20,000 Al Razi Health Care (Private) Limited 98,666,667 100,000,000 98,666,667 134,692,000

7. ACCRUED PROFIT

Accrued profit on: - PLS savings accounts 6,305,572 5,594,074 - Debt securities 1,426,445 5,286,290 - Musharaka finances 46,767,824 73,698,741 54,499,841 84,579,105

8. OTHER RECEIVABLES

Dividend receivable - unsecured, considered doubtful - 245,870 Less: Provision for doubtful receivables - (245,870) - -

Due from associated undertakings-unsecured, considered good - B.R.R. Investments (Private) Limited 4,412,560 4,912,560 - First Dawood Investment Bank Limited - 125,583 4,412,560 5,038,143

Receivable against sale of securities-unsecured, considered good 1,111,552 2,421,126 Receivable against sale of securities-unsecured, considered doubtful - 1,068,785 1,111,552 3,489,911 Less: Provision for doubtful receivables - (1,068,785) 1,111,552 2,421,126

Rent receivable - unsecured, considered good - 1,852,283

Termination dues receivable - considered doubtful 32,628,539 32,628,539 Less: Provision for doubtful receivables (32,628,539) (32,628,539) - -

17 B.R.R. Guardian Modaraba (An Islamic Financial Institution) (Un-audited) (Audited) December 31, June 30, 2012 2012 Note ------(Rupees) ------

Other receivables - secured, considered doubtful 1,296,018 1,296,018 Less: Provision for doubtful receivables (1,296,018) (1,296,018) - -

Receivable from ex-employees - unsecured, considered doubtful 51,274,920 51,274,920 Less: Provision for doubtful receivables (51,274,920) (51,274,920) - -

Rent receivable from Dawood Family Takaful Limited 1,234,095 - 6,758,207 9,311,552

9. TRADING RIGHT ENTITLEMENT / ORDINARY SHARES

Trading right entitlement / ordinary shares 7,750,000 -

9.1 In accordance with the requirement of the Stock Exchanges (Corporatisation, Demutualization and Integration) Act, 2012 (the Act), the Modaraba has received equity shares of ISE and a Trading Right Entitlement (TRE) in lieu of its membership card of ISE. The Modaraba's entitlement in respect of ISE's shares is determined on the basis of valuation of assets and liabilities of ISE as approved by the SECP and the Modaraba has been allotted 3,034,603 shares of the face value of Rs.10 each, out of which 1,820,762 shares are kept in a blocked account with CDC and the divestment of the same will be made in accordance with the requirements of the Act. The valuation and accounting treatment of TRE and shares received from ISE are being discussed in the Professional Standards and Technical Committee of the Institute of Chartered Accountants of Pakistan (ICAP) and will be finalised in due course.

10. FIXED ASSETS

Property and equipment - owned 10.1 100,943,966 104,282,688 Property, plant and equipment - leased / Ijarah 10.2 85,736,929 97,729,235 Intangible asset 9 - 7,750,000 Capital work-in-progress 10.3 547,848,344 518,746,974 734,529,239 728,508,897

10.1 Property and equipment - owned

Following additions and disposals in assets in own use, at cost, were made during the period:

Disposals / transfer to Additions investment property * (Un-audited) (Audited) (Un-audited) (Audited) December 31, June 30, December 31, June 30, 2012 2012 2012 2012 ------(Rupees) ------(Rupees) ------

Building on leasehold land 1,400,000 80,500,000 4,431,920 *- Vehicles 2,188,720 5,488,705 3,070,015 3,196,435 Office equipment and appliances - 102,000 163,398 - 3,588,720 86,090,705 7,665,333 3,196,435

18 B.R.R. Guardian Modaraba (An Islamic Financial Institution) 10.2 Property, plant and equipment - Ijarah / leased

Following additions and disposals in assets leased out, at cost, were made during the period:

Additions Disposals (Un-audited) (Audited) (Un-audited) (Audited) December 31, June 30, December 31, June 30, 2012 2012 2012 2012 ------(Rupees) ------(Rupees) ------

Land and building (leasehold) - - 30,000,000 - Plant and machinery - - 25,210,200 91,236,000 Vehicles 6,611,500 6,482,500 14,167,000 25,414,488 Office equipment and appliances 785,000 - - 5,692,100 7,396,500 6,482,500 69,377,200 122,342,588

(Un-audited) (Audited) December 31, June 30, 2012 2012 10.3 Capital work-in-progress ------(Rupees) ------

Civil works - BRR Tower 481,428,344 452,326,974 Advance for office premises - Jofa Tower, Karachi 66,420,000 66,420,000 547,848,344 518,746,974

11. MURABAHA, MUSHARAKA AND FINANCE UNDER MARK-UP ARRANGEMENTS

Murabaha arrangements 11.1 152,500,000 152,500,000 Musharaka arrangements 11.2 708,000,000 775,800,000 Mark-up arrangements - Term finance - 6,249,998 - Running finance 11.3 49,649,097 49,761,671 910,149,097 984,311,669 Less: Long-term portion 204,400,000 220,700,000 705,749,097 763,611,669

11.1 The Modaraba has entered into Murabaha (purchase and sale) agreements with a commercial bank. As per the original contract, the Murabaha sale price was payable on deferred payment basis in quarterly/monthly installments by June 27, 2011. However, on the request of the Modaraba, the bank has granted its consent to settle the finance against the properties offered by the Modaraba. The finance is subject to expected mark-up ranging from 13.94% to 15.78% (June 30, 2012: 13.88% to 15.78%) per annum. The arrangements are secured by way of hypothecation of the leased assets and future rentals receivable.

11.2 The Modaraba has entered into Musharaka agreements with the commercial banks / financial institutions and other companies. These Musharaka arrangements are on profit sharing basis and payable upto October 20, 2014. Estimated rate of profit on Musharaka arrangement ranges from 7% to 16% (June 30, 2012: 9.5% to 16%) per annum.

11.3 The aggregate facility for running finance from a commercial bank amounted to Rs.50 million (June 30, 2012: Rs.50 million). These facilities are subject to expected mark-up rate of 14.5% to 15.5% (June 30, 2012: 14.5% to 15%) per annum and are secured by way of hypothecation of the leased assets and future rentals receivable.

19 B.R.R. Guardian Modaraba (An Islamic Financial Institution) (Un-audited) (Un-audited) December 31, December 31, 2012 2011 12. CREDITORS, ACCRUED AND OTHER LIABILITIES ------(Rupees) ------Management fee payable 2,618,433 3,368,531 Sales tax on management fee payable 418,949 538,965 Provision for Workers' Welfare Fund 462,939 595,556 Accrued liabilities 1,288,106 4,338,413 Rentals received in advance Lease 2,849,456 2,849,456 Lockers 15,142,541 14,521,650 Properties 19,522,164 3,957,824

Others 10,693,449 9,659,211 52,996,037 39,829,606 13. COMMITMENTS

Commitments for capital expenditure in respect of B.R.R Tower amounted to Rs.45.003 million (June 30, 2012: Rs.74.107 million).

(Un-audited) (Un-audited) December 31, December 31, 2012 2011 14. RETURN ON INVESTMENTS - NET ------(Rupees) ------

Dividend income 4,287,194 6,035,490 Surplus / (deficit) on revaluation of investment - held-for-trading 10,023,389 (7,844,162) Profit on term finance certificates 7,850,833 11,485,478 Gain on sale of investments 14,274,637 4,006,266 36,436,053 13,683,072 15. OTHER INCOME Gain / (loss) on disposal of property, plant and equipment - Ijarah / leased 3,768,091 (29,925) Gain on disposal of property and equipment - owned 423,836 60,477 Liabilities no longer required written back - 2,556,378 Others 422,131 2,542,003 4,614,058 5,128,933 16. REVERSAL OF PROVISION FOR DOUBTFUL RECEIVABLES - NET Provision on Musharaka (717,809) (3,463,228) Reversal of provision on Musharaka 9,308,894 29,644,765 Reversal of provision on lease receivables 5,902,206 3,454,472 14,493,291 29,636,009 17. FAIR VALUE HIERARCHY

The Modaraba uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted prices in active markets for identical assets.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

20 B.R.R. Guardian Modaraba (An Islamic Financial Institution)

As at December 31, 2012, the Modaraba held the following financial instruments measured at fair value:

December 31, 2012 Level 1 Level 2 Level 3 Total ------(Rupees) ------Investments at fair value through profit or loss - held-for-trading - Listed Ordinary shares 50,800,765 - - 50,800,765 - Closed / open end Mutual Fund Units 42,420,721 2,644,737 - 45,065,458

Available-for-sale investments - Listed Ordinary shares 120,053,254 - - 120,053,254 - Closed / open end Mutual Fund Units - 7,069,929 - 7,069,929 - Unlisted Ordinary shares - - 178,661,305 178,661,305 - Unlisted debt securities - - 98,666,667 98,666,667 213,274,740 9,714,666 277,327,972 500,317,378

As at June 30, 2012, the Modaraba held the following financial instruments measured at fair value:

June 30, 2012 Level 1 Level 2 Level 3 Total ------(Rupees) ------Investments at fair value through profit or loss - held-for-trading - Listed Ordinary shares 47,873,832 - - 47,873,832 - Open end Mutual Fund Units - 1,563,559 - 1,563,559

Available-for-sale investments - Listed Ordinary shares 98,419,472 - - 98,419,472 - Close / open end Mutual Fund Units 1,676,858 4,355,556 - 6,032,414 - Unlisted Ordinary shares - - 178,661,305 178,661,305 - Unlisted debt securities - 34,692,000 100,000,000 134,692,000 147,970,161 40,611,115 278,661,305 467,242,582

During the half year ended December 31, 2012, there were no transfers between level 1 and level 2 fair value measurements, and no transfers into and out of level 3 fair value measurements.

18. TAXATION

As per the Second Schedule to the Income Tax Ordinance, 2001, the income of a non-trading modaraba is exempt from income tax provided that it distributes 90% of its profits to its certificate holders for the year after making appropriation for statutory reserves. The Modaraba intends to avail this exemption by distributing 90% of its profits to its certificate holders after making appropriation for statutory reserves. Accordingly, no provision in respect of current and deferred tax has been made in these condensed interim financial statements.

19. RELATED PARTY TRANSACTIONS

The Modaraba has related party relationship with its Management Company, Associated Undertakings, Employee Benefit Plans, and its Key Management Personnel.

A number of transactions are entered into with related parties in the normal course of business. These include financings, investments, borrowings, sharing of common expenses and rental income.

21 B.R.R. Guardian Modaraba (An Islamic Financial Institution) (Un-audited) (Un-audited) December 31, December 31, Relationship with 2012 2011 the Company Nature of transactions ------(Rupees) ------

Management Company BRR Investments Management fee accrued 2,618,433 1,468,437 (Private) Limited Rent received - 4,000,000 Rent accrued - 2,393,100 Share of common expenses received 500,000 -

Associated undertakings First Dawood Investment Bank Limited Rent received 1,146,960 150,000 First Dawood Investment Bank Limited Share of common expenses received 1,253,726 3,188,276 First Dawood Investment Bank Limited Share of common expenses paid 385,052 1,201,419 Crescent Standard Modaraba Share of common expenses received 1,541,449 - Crescent Standard Modaraba Sale of vehicle 676,033 - Dawood Income Fund Investment made - 30,000,000 Dawood Income Fund Investment encashed - 31,104,041 Dawood Islamic Fund Investment made 40,000,000 - First Dawood Investment and other Employer Provident Fund Contribution to provident fund 832,433 885,402

19.1Group shared services

The Company has entered into arrangement with associated undertakings to share various administrative, human resource and related costs on agreed terms.

20. DATE OF AUTHORISATION FOR ISSUE

These condensed interim financial statements were authorised for issue on February 27, 2013 by the Board of Directors of B.R.R. Investments (Private) Limited.

21. RECLASSIFICATION

Corresponding figures have been rearranged and reclassified to reflected more appropriate presentation of events and transactions for the purposes of comparison. Significant reclassifications made are as follows:

From To -- (Rupees) --

Murabaha, musharaka and finance Murabaha, musharaka and finance under mark-up arrangements under mark-up arrangements - current liabilities - non current liabilities 96,500,000

22. GENERAL

22.1 Figures have been rounded of nearest to Rupee.

For B.R.R. Investments (Private) Limited (Management Company)

Chief Executive Officer Director Director 22 BOOK POST IN SERVICE SINCE 1989 UNDER CERTIFICATE Printed Matter OF POSTING . R . R B .

S T E L CU U RITY VA B.R.R. SECURITY VAULT

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