By MUHAMMAD SHOAIB IBRAHIM, Business Recorder
First Habib Modaraba (FHM) with an enviable track record of more than quarter of a century is the success story of sheer hard work and commitment to provide the investors a sound and continuous return. Consistency in distribution of dividends among the certificate holders along with increase in certificate holders’ equity has made FHM a leading Modaraba with the highest equity within Modaraba sector.
FHM being pioneer in the Modaraba and Non-Banking Islamic Financial sector played a vital role for promotion of Islamic Finance in Pakistan’s Islamic Financial Market. Over the years the FHM has been continuously recognising for its excellent performance, good corporate governance, best report culture and sound and stable credit rating from various prestigious institutions.
FHM always remain best performing Modaraba within the Modaraba sector. The management of FHM is heir of rich tradition of trading and banking and finance. Business Operations of FHM have always been backed by valuable expertise in the field of fund management.
Our corporate strategy is derived from our vision and mission statements and its primary objective is to make long term and sustainable development. The key elements of our corporate strategy are to effectively employ available resources, develop business segments and maximise business opportunities backed by innovative technological solutions. Due to FHM’s strategic focus on growth in prudent manner and well define corporate policies are continuously delivering positive results.
We have divided our strategy at three levels ie Corporate, Business and Operation. From time to time we review our strategies of various segments falling in under above broad categories and refresh them as per requirement of business development and operational efficiency.
The efficacy of FHM’s business strategy and prudent risk management policies have always supported the management to maintain outstanding assets quality while ensuring sustainability of performance despite the increasingly competitive operating environment in Pakistan’s financial market.
At FHM we have the legacy of making the finest mechanism of penetrating a good corporate environment and mitigate the potential risk and threats within our operations.
The control index matrix at FHM primarily demonstrate through
1. Quality human resource induction
2. Better infrastructure.
3. Well define policies and processes of operations. The Management has their clear views on internal control without isolating the other important area ie, economic and legal environment. By the grace of God, FHM has been maintaining its status as leading Modaraba within the Modaraba sector and rank in top ranking position amongst its peer group. It is matter of great satisfaction that FHM has been maintaining its history of continuous payment of dividend to its Certificate Holders for last 28 years with average pay out of around 17%. Within last 14 years the average payment of dividend is around 20%.
The main component of success of FHM is excellent team work across all levels of the organisation. Due to hard and dedicated work of all staff members made FHM the premier Modaraba within the Modaraba sector. Following achievements remained hallmark during the 28 years of operations of FHM.
— Unbroken history of payment of dividend to Certificate holders since commencement of business.
— Remained a profitable venture throughout the business operations.
— Leading Modaraba in terms of equity and profitability.
— Recipient of “Corporate Excellence Award” from Management Association of Pakistan for last six consecutive years.
— Recipient of best performing Modaraba awards for last several years from NBFI and Modaraba Association of Pakistan. So far FHM has secured 12 awards within last 14 years.
— Recipient of Best Corporate Report Award from the Joint Committee of ICAP & ICMAP for last four consecutive years
— Recipient of Certificate of Merit Award from SAFA for Best Presented Accounts and Corporate Governance Disclosures for last three consecutive years
— Recipient of “Brand of the Year” award of the year 2010 from the Brands Foundation of Pakistan.
As a part of Islamic Finance Service Industry (IFSI) we feel that IFSI is a potential sector and despite of challenging economic environment globally this industry has been able to sustain their growth. The industry with its increasingly international footprint continues to demonstrate its resilience. The range of Shari’ah-compliant products and services available globally has significantly widened and capturing the market share.
Moreover, there are dedicated regulatory, accountings, Shariah and academic institutions at local and global level that are providing support in establishing sound foundations for the Islamic Financial System. The significant growth of Islamic finance is reflective of increasing acceptability world-wide.
In Pakistan, the size of Islamic Finance assets is also growing with good pace. The State Bank of Pakistan is playing very vibrant role for Promotion of Islamic finance within the country. Likewise, on other front, the SECP is also putting its strenuous efforts for developing of Islamic finance within the non-banking financial sector (NBFIs) and capital market. Various steps have been taken for further development of Modarabas, Takaful, Islamic Mutual Fund and Islamic capital market.
Last year a significant move was made from Registrar Modaraba, SECP, through issuance of detailed guidelines for Shariah Compliance and Shariah Audit Mechanism for Modarabas first time since inception of Modaraba sector. This was a remarkable effort from the office of Registrar of Modaraba for promotion of Modaraba sector as an Islamic Financial Institutions and it is expected that this sector will further progress.
As per requirement of Shariah guidelines we had established Shariah Compliance department and this department is fully functional in line with directive of circular under the monitoring of internal Shariah auditor and supervision of Shariah Advisor. The management of FHM is fully committed for Shariah governance and Shariah compliance culture within the Modaraba. Strong and effective Shariah governance and compliance culture within the Modaraba is the prime objective of FHM.
In line with our corporate objective and our business need, we Insha’Allah continue to execute upon both our broad strategic roadmap as well as our specific priorities in order to deliver results at entire satisfaction of our all stakeholders. We being part of Modaraba sector will play our due role to tap the benefit and opportunities of this potential sector. However, our strategic focus would remain on steady growth with cautiousness. We would continue to adopt proactive and cautious approach in building quality assets portfolio set high standards of performance and give even better results based on Shariah principles of Islamic finance.