The Securities and Exchange Commission of Pakistan (SECP) has introduced limitations on modaraba companies regarding the validation of their financial position statements.
In this regard, the SECP has instructed modaraba companies to ensure that each financial position statement accurately reflects the condition of the respective Modaraba companies.
In accordance with the amendments to the Modaraba Companies and Modaraba Rules, 1981, the SECP has mandated that every financial position statement of a Modaraba must present a true and fair depiction of the Modaraba’s status at the conclusion of its financial year. Similarly, each statement of profit and loss, comprehensive income, cash flow, and changes in equity of a modaraba must also accurately represent the outcomes of its operations, cash flows, and equity alterations for the respective fiscal year.
The Modaraba company’s annual report must encompass a statement of financial position, a statement of profit and loss along with comprehensive income, a cash flow statement, and a statement of changes in equity for each Modaraba. It should also provide comprehensive information and explanations regarding any reservations, observations, qualifications, or adverse remarks highlighted in the auditor’s report.
SECP emphasized that quarterly financial statements should be published on the Modaraba’s website for certificate holders’ reference and electronically transmitted to the registrar and securities exchange within the specified timeframe.
Furthermore, SECP stipulated that the statement of financial position, statement of profit and loss along with comprehensive income, cash flow statement, and statement of changes in equity must bear the signatures of the chief executive and two directors of the Modaraba company.
