Abstract:
This research thesis is basically about the Modaraba Companies operating m
Pakistan. The Modaraba Companies & Modaraba (Floatation & Control) Ordinance, was
introduced in Pakistan in 1980 as one of the first steps taken by the Government towards
establishing a financial system in coherence with the injunctions of Islam. The formation
of a Modaraba is done under an arrangement made between two parties: one provides the
capital (rabb-ul-Maal) and the other party, called the mudarib, contributes through his
skills. A Modaraba can undertake virtually any business activity that is not repugnant to
Sharia, the Islamic Law. There are two types of Modaraba i.e specific and multipurpose
and they can either be for fixed period or for a perpetual period, and can be formed for
either a fixed or an indefinite period. Capital is raised from the public in the form of
Modaraba Certificate which are similar to shares of companies. The literature review
section of the thesis involves an in-depth analysis of Modaraba Companies and their
rules. It also gives the basic problems tat Modaraba sector is facing.
The research methodology used in this study is descriptive. Data are basically
gathered from annual reports of Modaraba companies, articles from various sources. The
date is secondary and the study is basically based on facts and figures given in the annual
reports of Modaraba companies. For this study, research instrument used is "Index
Analysis" and analysis of percentage financial statements where income statement figures
for a base year equal 100.0 (percent) and subsequent financial statements items are
expressed as percentages of their values in the base year. The standardization of income
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statement items as percentage of totals and indexes to a base year often gives us insight
additional to those obtained from the analysis of the ratios.
In the end a set of general observations, has been given along with conclusion and
recommendations based on those conclusion for a future live of action upon this study if
some organization wants to do so. The annexure of this document also includes the rules
is regulation ofModaraba companies.
