SECP Makes Changes to Financial Statement Requirements for Modaraba Firms

The Securities and Exchange Commission of Pakistan (SECP) has imposed some restrictions on the modaraba companies for the authentication of their statements of financial position. In this regard, the SECP has directed modaraba companies to ensure that every statement of their financial position must give a true and fair view of the state of affairs of modaraba companies. According to the amendments made in the Modaraba Companies and Modaraba Rules, 1981, the SECP stated that every statement of financial position of a modaraba shall give a true and fair view of the state of affairs of the modaraba as at the end of its financial year. Every statement of profit and loss and other comprehensive income, cash flow statement and statement of changes in equity of a modaraba shall respectively give a true and fair view of the result of its operations, cash flows and changes in equity for the year then ended. The annual report required to be furnished by the modaraba company shall include a statement of financial position, a statement of profit and loss and other comprehensive income, a cash flow statement and a statement of changes in equity in respect of each modaraba and fullest information and explanations in regard to any reservation, observation, qualification or adverse remarks contained in the auditor’s report The quarterly financial statements shall be posted on the modaraba‘s website for the information of its certificate holders and also be transmitted electronically to the registrar and securities exchange within the period specified, SECP maintained. The statement of financial position, statement of profit and loss and other comprehensive income, cash flow statement and statement of changes in equity shall be signed by the chief executive and two directors of the modaraba company, SECP added.