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ADVICE FOR INVESTORS
THE INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THE PROSPECTUS ESPECIALLY THE RISK FACTORS AT PARA 4.4 BEFORE MAKING ANY INVESTMENT DECISION

PROSPECTUS
Public Offer of 2nd Issue of Rated, Listed and Secured Term Finance Certificates (Engro Rupiya Certificates - 2nd Issue) of PKR 2,000 Million With Green Shoe Option of Additional PKR 1,000 million

ENGRO CORPORATION LIMITED
(FORMERLY ENGRO CHEMICAL PAKISTAN LIMITED)
3-YEAR FIXED RATE INSTRUMENT PROFIT @ 14.5% PER ANNUM (FIXED)

Instrument Rating “AA” (Double A) Entity Rating “AA” (Double A) By The Pakistan Credit Rating Agency Limited (“PACRA”)

Public Subscription between
June 01, 2011 – August 31, 2011 (Both Days Inclusive)
During Banking Hours

Date of Publication of this Prospectus is May 24, 2011

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ENGRO CORPORATION LIMITED TFC PROSPECTUS
GLOSSARY Engro Corp. or Company or Issuer BoD CDCPL CDS CEO CVT Date of Investment Engro Corporation Limited Board of Directors Central Depository Company of Pakistan Limited Central Depositary System Chief Executive Officer Capital Value Tax The date when investor’s subscription money is realized and credited into any of the TFC Collection accounts maintained by the Bankers to the Issue. Typically, it takes two working days for subscription money to realize in case of payments made through locally drawn instruments and up to seven working days for outstation instruments Earnings per Share Government of Pakistan The period from the Date of Investment till the Issue Date Profit for the Interim Period Initial Public Offering Independent Power Producer September 16, 2011 which will be the first day after the interim profit payment Issue of TFCs through this Prospectus Karachi Stock Exchange (Guarantee) Limited Lahore Stock Exchange (Guarantee) Limited Face value of the TFCs which is outstanding and payable to the TFC Holders at any point of time (excluding the TFC scrip for which payment of the redemption amount has been made) Pakistan Credit Rating Agency The option to redeem, in full or in part, the outstanding face value of the TFCs, which may be exercised by the TFC holders anytime after the Date of Investment provided that in case of partial put option the amount to be redeemed should either be PkR 5,000/- or in multiples thereof Karachi Stock Exchange (Guarantee) Limited (“KSE”) and Lahore Stock Exchange (Guarantee) Limited (“LSE”) Term Finance Certificate IGI Investment Bank Ltd Withholding Tax

EPS GoP Interim Period Interim Profit IPO IPP Issue Date Issue KSE LSE OUTSTANDING ISSUE PRICE

PACRA Put Option

STOCK EXCHANGES TFC TFC Trustee WHT

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ENGRO CORPORATION LIMITED TFC PROSPECTUS
TABLE OF CONTENTS

Page Number PART – I 1. APPROVALS, CONSENTS AND LISTING ON THE STOCK EXCHANGES PART – II 2. TERM FINANCE CERTIFICATES AND RELATED MATTERS PART – III 3. COMMISSIONS, BROKERAGE AND OTHER EXPENSES OF THE ISSUE PART – IV 4. HISTORY AND PROSPECTS PART – V 5. FINANCIAL INFORMATION & CREDIT RATING REPORT PART – VI 6. TRUSTEE AND SECURITY PART – VII 7. MANAGEMENT OF THE COMPANY PART – VIII 8. MISCELLANEOUS INFORMATION PART – IX 9. APPLICATION AND ALLOTMENT INSTRUCTIONS PART – X 10. SIGNATORIES TO THE PROSPECTUS PART – XI 11. MEMORANDUM OF ASSOCIATION PART – XII 12. APPLICATION FORM PART – XIII 13. REDEMPTION NOTICE

5 7 15 16 20 71 75 81 84 88 89

95

97

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000 million with Green Shoe Option of additional PKR 1.14. 2011 August 31.000/Rs.ENGRO CORPORATION LIMITED TFC PROSPECTUS Summary of the Issue Issuer Purpose of the Issue Engro Corporation Limited (“Engro”) The proceeds of the Issue will be mostly utilized to provide subordinated loans to Engro Corporation subsidiaries including Fertilizer.(Fixed) Issue Amount Tenor Profit Rate Profit payment frequency Semi Annually Profit Accrual Minimum Investment Denomination of TFC Subscription Period TFC Schedule From the Date of Investment Rs. and Foods to replace their existing debt already drawn or to be drawn.5% p.a. 2011 September 15. 2013 March 15. 2013 September 15. 2012 September 15. 2014 September 15.2) June 01.000/. PowerGen. 2014 September 15.11) PKR 2.3 3 .14) The investors/TFC holders may ask the Company for early redemption at anytime from the Date of Investment subject to a service charge of 2% of the Outstanding Issue Price and 15 day prior notice (For details refer to para 2. 5.14.or in multiples thereof 3 months Date of opening of subscription period Date of closing of subscription period Date of Interim Profit Payment1 Issue Date First Profit Payment Second Profit Payment Third Profit Payment Fourth Profit Payment Fifth Profit Payment Sixth and Final Profit Payment Principal Repayment in full Maturity Date First come first served TFCs may be held either in physical form or in book entry (scrip-less) form through CDS of CDCPL 100% of the principal amount in the thirty-sixth (36th) month (For details refer to para 2. 2014 September 15.000 million 3 years from the Issue Date 14. (For details refer to para 2. 2011 March 15. 2014 Allotment basis Holding of TFCs Principal Redemption Put Option (Early Redemption) 1 Please refer to para 2. 2011 September 16. 25. 2012 March 15.

ENGRO CORPORATION LIMITED TFC PROSPECTUS
Security The TFC has been secured by way of first ranking pari passu floating charge over all the present and future movable properties (including investments) of Engro Corporation Limited but excluding present and future trade marks and copyrights of Engro Corp. and excluding its shares in Engro Powergen Qadirpur Limited (formerly known as Engro Energy Limited) and Engro Polymer & Chemicals Limited (“Charged Assets”) at 125% of the outstanding principal amount. This charge is pari passu with the existing charge for the first TFC Issue (Trust Deed dated September 17, 2010) and has been created in favor of IGI Investment Bank Limited (“Security Trustee”) for safeguarding interest of the TFC holders. The Company may, with prior written consent of the Trustee, create further first ranking pari passu charges over the Charged Assets (For details refer to para 6.1) (i) MCB Bank Limited (ii) Standard Chartered Bank (Pakistan) Limited (iii) Bank Alfalah Limited (iv) NIB Bank Limited (v) Bank Al Habib Limited (vi) Allied Bank Limited (vii) Habib Bank Limited (viii) United Bank Limited (ix) JS Bank Limited (x) Askari Bank Limited (xi) Citibank N.A. Pakistan (xii) Faysal Bank Limited (xiii) Samba Bank Limited IGI Investment Bank Limited (“IGI”)

Bankers to the Issue

Trustee

Registrar & Transfer Agent Central Depository Company of Pakistan Limited (“CDCPL”) Entity Rating Instrument Rating Risk Factors Listing Pre-IPO Underwriting “AA” (Double A) by PACRA (For details refer to para 5.6) “AA” (Double A) by PACRA (For details refer to para 5.6) For details refer to para 4.4 Karachi Stock Exchange (“KSE”), Lahore Stock Exchange (“LSE”) None None

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ENGRO CORPORATION LIMITED TFC PROSPECTUS
PART I
1. 1.1. APPROVALS, CONSENTS AND LISTING ON THE STOCK EXCHANGES APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Approval of the Securities and Exchange Commission of Pakistan as required under section 57(1) of the Companies Ordinance, 1984 (“the Ordinance”) has been obtained for the issue, circulation and publication of this Prospectus. DISCLAIMER: It must be distinctly understood that in giving this approval, the Securities and Exchange Commission of Pakistan (SECP) does not take any responsibility for the financial soundness of the Company and any of its schemes stated herein or for the correctness of any of the statements made or opinions expressed with regards to them by Engro Corporation Limited (“Engro Corp.” or ”the Company” or “the Issuer”) in this Prospectus. SECP has not evaluated quality of the issue and its approval for the issue, circulation and publication of this prospectus should not be construed as any commitment of the same. The public/investors should conduct their own independent due diligence and analysis regarding the quality of the issue before investment in the TFC being offered through this prospectus. 1.2. CLEARANCE OF THE PROSPECTUS BY THE STOCK EXCHANGES This Prospectus for the second issue of rated, listed and secured Term Finance Certificates (“TFCs”) has been cleared by both the Karachi Stock Exchange (Guarantee) Limited (“KSE”) and the Lahore Stock Exchange (Guarantee) Limited (“LSE”) in accordance with the requirements under their Listing Regulations. DISCLAIMER: • • The publication of this document does not represent solicitation by the Stock Exchanges. The contents of this document do not constitute an invitation to invest in TFC or subscribe for any securities or other financial instrument by the Stock Exchanges, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever of the Stock Exchanges. It is clarified that information in this prospectus should not be construed as advice on any particular matter by the Stock Exchanges and must not be treated as a substitute for specific advice. The Stock Exchanges disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon this document to any one, arising from any reason, including, but not limited to, inaccuracies, incompleteness and/or mistakes, for decisions and/or actions taken based on this document. The Stock Exchanges neither take responsibility for the correctness of contents of this document nor the ability of the Company to fulfill its obligations thereunder. Advice from a suitably qualified professional should always be sought by investors in relation to any particular investment.

•

•

• •

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ENGRO CORPORATION LIMITED TFC PROSPECTUS
1.3. FILING OF PROSPECTUS AND OTHER DOCUMENTS WITH THE REGISTRAR OF COMPANIES The Company has delivered to the Registrar of Companies, Karachi as required under section 57 (3) and (4) of the Companies Ordinance 1984, a copy of this Prospectus signed by all the Directors of the Company together with the following documents attached thereto: a) A Letter No. D 590 dated March 15, 2011 from A.F.FERGUSON & CO. consenting to the issue of the Prospectus, which contains in Part V certain statements and reports issued by them as experts (which consent has not been withdrawn) Copies of contracts mentioned in Part VIII of the Prospectus Written confirmations of the Auditors and Bankers to the Issue mentioned in the Prospectus consenting to act in their respective capacities, as required under section 57(5) of the Ordinance Consent of Directors and Chief Executive of the Company to their respective appointments being made and their having been named or described as such Directors and Chief Executive in this Prospectus. The Company has filed written confirmations of such consents, as required under section 184 of the Ordinance

b) c)

d)

1.4.

LISTING ON STOCK EXCHANGES Application has been made to KSE and LSE for permission to deal in and for quotation of TFCs of the Company. If, for any reason, the application for listing is not accepted by both KSE and LSE, the Company undertakes to publish immediately in the press a notice to that effect and thereafter to refund the subscription money with markup at 14.5% per annum and if any such money is not refunded within eight days after the Company becomes liable to refund it, the directors of the Company shall be liable to refund the money from the expiration of the said eight day together with surcharge at the rate of 1.5% per month as required under the provisions of Section 72 of the Ordinance.

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99% per annum on April 27. Profit Rate Profit on the TFC will be paid every 6 months at a fixed rate of 14. with prior written consent of the Trustee.2) whereas in case of NSBs the early redemption option does not exist. all subscription amounts up to the target amount (inclusive of the green shoe option) will be listed on the KSE and the LSE. if the target amount of.000 million is subscribed before the end of subscription date.14.5% per annum (March 02.000 million with green shoe option of additional PKR 1.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART II 2. The TFCs also offer a higher rate than the comparable 3 year PIBs that were auctioned at an effective weighted average yield of 13. For more details. 20113 . listed and secured Term Finance Certificates (“TFCs”) being the instrument of redeemable capital under Section 120 of the Ordinance for a tenor of three (3) years.savings. the minimum investment size is Rs. The redemption value of the TFCs shall be specified on the TFC itself.14.1. subscription period will be closed immediately. TERM FINANCE CERTIFICATES AND RELATED MATTERS 2nd ISSUE OF LISTED TFCS TO THE GENERAL PUBLIC The second issue consists of PKR 2. and has been created in favor of IGI Investment Bank Limited (“Security Trustee”) for safeguarding interest of the TFC holders. Moreover. The minimum amount of application for the subscription of TFCs is PKR 25.pk/nsb. 2010).000 million with green shoe option of additional PKR 1.pdf 7 . This will be the second TFC Issue offered to the general public under the brand name of “Engro Rupiya Certificate” in sets of six (6) scrips (TFCs) with an accompanying “Certification of Holding Term Finance Certificates”. the TFCs can also be redeemed directly from the Company anytime (see para 2.000/. (For details refer to para 6.000/. There is no pre-IPO placement.or in multiples thereof. each set having an aggregate face value of PKR 5.sbp. 20102 ). the entire amount is available for subscription by the public including both individual and institutional investors for three (3) months from the date of commencement of public subscription. and excluding its shares in Engro Powergen Qadirpur Limited (formerly known as Engro Energy Limited) and Engro Polymer & Chemicals Limited (“Charged Assets”) at 125% of the outstanding principal amount. Moreover. PKR 2. Since there is no minimum subscription requirement.1) 2 3 http://www.gov. 2. This charge is pari passu with the existing charge for the first TFC Issue (Trust Deed dated September 17. However. apart from being tradable on the Exchange. The Company may.for Engro TFCs whereas PIBs are typically purchased by Institutional Investors in big lots and not available for purchase in smaller amounts for individual investors. SECURED TERM FINANCE CERTIFICATES The TFC has been secured by way of first ranking pari passu floating charge over all the present and future movable properties (including investments) of Engro Corporation Limited but excluding present and future trade marks and copyrights of Engro Corp. create further first ranking pari passu charges.000/. 25.000 million to be issued in the form of rated.2.pk/ecodata/Auction-Investment.5% per annum which is higher than the latest offering of the 3 year National Savings Bond (NSB) that offers 12. please refer to para 2. 2. The TFC is structured to redeem 100% of the principal amount in the thirty-sixth (36th) month.org.asp http://www.

OPENING AND CLOSING OF SUBSCRIPTION LIST THE SUBSCRIPTION LIST WILL OPEN FOR 3 MONTHS AT THE COMMENCEMENT OF BANKING HOURS ON JUNE 01. Therefore.000 million is subscribed. 2. 2011 (BOTH DAYS INCLUSIVE) 2.3. bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations. Provident/pension/gratuity funds/trusts. must be made for a minimum of the aggregate face value of PKR 25. the same must be lodged with the application.4. ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS 1.for amounts above PKR 25.or in multiples of PKR 5.ENGRO CORPORATION LIMITED TFC PROSPECTUS 2. Allotment of TFCs shall be subject to scrutiny of applications for subscription. Applications for TFCs by the general public.000 million with green-shoe option of additional PKR 1. applications must be accompanied with a letter on applicant’s letterhead stating the legal status of the applicant. (subject to the terms of the Trust Deed and existing regulations). MINIMUM AMOUNT OF APPLICATIONS AND BASIS OF ALLOTMENT OF TFCs a) b) c) The minimum amount of application for subscription of TFCs is PKR 25. 2011 AND CLOSE AT THE END OF BANKING HOURS ON AUGUST 31.5% per annum for the number of days for which such applicants are deprived of their money plus a further three (3) days profit at the same rate.000/Applications for TFCs below the aggregate face value of PKR 25. the Bankers to the Issue shall mark each Subscription Application with the date and time of their receipt. Where applications are made by virtue of Power of Attorney. and Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. then all applications in excess of the target amount will be returned to the applicants along with profit at the rate of 14.000/. The applications not marked with date and time of receipt shall be accommodated after all the applications properly marked with date and time are accommodated.will not be entertained. In case Bankers to the Issue on any given day accept subscriptions which result in the target amount being exceeded. Mutual Funds. Allotment of TFCs will be made on first come first served basis and applications for subscription of TFCs will not be accepted once the target amount of PKR 2.5. there will be no oversubscription.000/. In order to ensure that allotment of TFCs is made to the applicants on first come first served basis. including institutions and individuals. if available. Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the State Bank of Pakistan’s Foreign Exchange Manual. d) e) 8 . 2. Foreign Nationals whether living in or outside Pakistan. INVESTOR ELIGIBILITY Investors include the following: · · · · · Pakistani citizens resident in or outside Pakistan or Persons holding two nationalities including Pakistani nationality.000/. A copy of memorandum of association or an equivalent document should also be enclosed. Copies of these documents can be attested by the bank manager/officer in the country of applicant’s residence.000/-. place of incorporation and operations and line of business. Companies. as the case may be). In case of foreign investors who are not individuals.

8. Transfer of TFCs will be subject to payment of the applicable stamp duty levied by the Provincial Government. In order to exercise the scripless option.9. without the issuance of the physical certificates and the TFC scrips (with the terms and conditions). while stamp duty on subsequent transfer will be on account of the TFC holders. The Stock Exchange concerned may also notify the fact of such default and the name of the Company by notice and also by publication in the Daily Quotation. there will be no case of refund of money to unsuccessful applicants except in the case mentioned in para 2. CREDIT AND DISPATCH OF TFCs The Company shall credit or dispatch. it will pay to the respective Exchange a penalty of PKR 5000/. 2. Stamp duty on initial issuance will be borne by the Company. TFCs ISSUED IN PRECEDING YEARS This is the second TFC Issue by the Company. TRANSFER OF TFCs 2. TFCs. For detail please refer to para 2. Following are the details of the first TFC Issue: 9 . Stamp duty on initial issuance will be borne by the Company. If the Company defaults on complying with the requirements of the Listing Regulations of either KSE or LSE. the applicant must also have a CDS account at the time of subscription.2 Transfer under Book Entry System TFCs will be declared as eligible security through CDS of CDCPL and will be eligible for transfer after the Issue Date. 2. In case where the CDS account is not mentioned or is not correct. 2. which are in the CDS.1 Physical Scrips TFCs shall be transferred in the manner as provided under the Companies Ordinance. 1997 and the Central Depository Company of Pakistan Limited Regulations. as the case may be. The transfer fee for all subsequent transfers shall be borne by the TFC holders.per day for the period during which the default continues.9. TFCs in physical form shall be delivered to the applicants through registered mail or courier service whereas scripless TFCs shall be directly credited through book entries into the respective CDS accounts of allottees maintained with the Central Depository Company of Pakistan Limited (“CDCPL”).11 below. 2. shall be subject to the terms and conditions for the issuance of the TFCs specified in Schedule 5 of the Trust Deed dated April 07.10. REFUND OF MONEY TO UNSUCCESSFUL APPLICANTS Since there will be no oversubscription.6. 2.5 (d) above.7. The TFCs issued directly for induction in the CDS. 2011 executed between the Company and the Trustee for the TFC Issue. 1984. shall subsequently be transferred in accordance with the Central Depositories Act.9. ISSUE.ENGRO CORPORATION LIMITED TFC PROSPECTUS 2. MINIMUM SUBSCRIPTION There is no requirement of minimum subscription as the issue is not project specific but the proceeds of the issue will be utilized by Engro Corp. The applicants who opt for issuance of TFCs in scripless form in the CDS should fill in the relevant columns in the Application Form. TFCs will be issued either in scripless form in the Central Depository System (“CDS”) or in the shape of physical scrips on the basis of option exercised by the applicants. TFCs within thirty (30) days from the Date of Investment. physical TFC certificates will be issued. to provide subordinated loans to its subsidiaries to replace existing debt already drawn or to be drawn.

000 million October 15. 2014) Early Redemption Amount Principal Outstanding October 15.000. 2012) 4th (January 31. 2011) 2nd (January 31.315. 2. REGISTERED INSTRUMENT TFCs will be in registered form and the Company shall maintain or cause to be maintained a register of TFC holders. 2. shall be transferred to the designated bank account of the Company and will be mostly utilized to provide subordinated loans to its subsidiaries including Fertilizer.2) or the TFCs will redeem as per schedule detailed in para 2. Investors can redeem TFCs earlier than maturity by exercising Put option (see para 2.1. 2011) 1st (July 31. and Foods to replace their existing debt already drawn or to be drawn. 2013) 5th (July 31.13.04 PKR 792.000. 2011 None 3 years To finance cash needs of Engro Corporation for investments in its subsidiaries 14.929. 2.960.367.00 (as on April 12. 2012) 3rd (July 31.194. if any.480.58 PKR 792.737 PKR 287. 2011) PKR 3.11.309.420 PKR 287. PRINCIPAL PURPOSE FOR THE USE OF SUBSCRIPTION MONEY The subscription money. The company will give a minimum of 14 days notice to the Exchange prior to the Book Closure for Profit payments. 2011 February 15.490.ENGRO CORPORATION LIMITED TFC PROSPECTUS Date of Issue Issue Size Subscription Period Date of Listing Pre-IPO Tenor Principal Purpose Profit Rate Security Trustee Credit Rating Listing Interim (January 31.262 PKR 287.538.964.252.00 PKR 792.137.14.61 PKR 792.14.5% per annum (Fixed) First ranking floating charge over certain assets of Engro Corporation Limited IGI Investment Bank Limited AA (PACRA) Karachi Stock Exchange Profit Payment Schedule Principal Repayment Schedule PKR 113.105 PKR 35.14. PowerGen. as and when received by the Bankers to the Issue. INTEREST OF TFC HOLDERS None of the TFC holders have any special or other interest in the property or profit of the Company other than that as holders of the TFC certificates of the Company.896 PKR 287. Some of the proceeds will also be retained by the Company to provide funds for servicing redemptions.233.000 million inclusive of Green Shoe option of PKR 2. REDEMPTION OF TFCs A register for TFC holders will be maintained or cause to be maintained by the Company.15 PKR 3. 2010 PKR 4.800.841. The register will be closed for a period of 7 days prior to the profit payment date.12. arising from the issuance of the TFC.517.579 PKR 287.520. 10 .424.13 PKR 792.379.49 PKR 287. 2010 – January 08. 2013) 6th (January 31.00 (as on April 12. 2011) 2.

5% per annum An interim profit payment at the rate of 14.5% for the period from the Date of Investment till the Issue Date will be made.000 1. All payments will be made either through crossed cheque.00% Notes: · The above redemption schedule includes interim profit payment of PKR 1. In case of cheque or pay order. · The above redemption may be subject to Income Tax.631. pay order or direct bank deposit on the basis of option exercised by the applicant in the TFCs Subscription Application. 2.00 181.50 1. For applicability of these.00% 25. the TFC holders will not need to physically go to the counters of any specific bank in order to have the TFCs redeemed.25 0.23 Total Principal Principal Payment Payment in % Outstanding 951.00% 35.000 Total 25.29 1. please refer to para 2.1TFCs held till Maturity For TFCs held till maturity.50 1.00% 25.812.000 Profit @ 14. the instrument will be dispatched to the mailing address of the registered holder of the TFC.057.631.50 1.00% 25.25 0. 11 . pay order or direct bank deposit on the basis of option exercised by the applicant in the TFCs Subscription Application.25 0.25 0.193.812.000 26.006.50 1.631.5% Tax @ 10% 105.14.73 181.29 Zakat @ Withholding 2. The terms of redemption of TFCs held till maturity are as follows: Tenor Principal Repayment Profit Rate Profit Payment 3 years The TFC is structured to redeem 100% of the Principal amount in the 36th month 14. For its applicability. In case of cheque or pay order.29 for the period from the opening date of subscription till the Issue Date · The above redemption schedule includes deduction of Zakat and Withholding Tax.000 1.812.25 625.000 1.00% 25.25 181.00 1.50 1. the instrument will be dispatched to the mailing address of the registered holder of the TFC.00% 25.057.25 625.812.25 100.ENGRO CORPORATION LIMITED TFC PROSPECTUS All payments will be made either through crossed cheque.000 1.812.000 1.25 181.5% per annum is set out in the table below: Principal Months Redemption 0 6 12 18 24 30 36 25.25 181.06 100.25 0.25 181. of an aggregate face value of PKR 25.56 0.114.17.18 below respectively.50 11. please refer to para 2.00% 25.5% 1. All subsequent profits will be payable semi-annually in arrears on the outstanding Principal amount from the Issue Date The redemption schedule for TFCs subscribed on the opening date of subscription and held till Maturity.16 and 2.000 based on profit rate of 14.932.631.812.631.

TFCs applied for redemption will not be tradable in the secondary market.13 98.25 612.812.631.29 1.5% Tax @ 10% 105.54 Zakat @ Withholding 2. TFC holders can exercise the Put Option by submitting Redemption Notice directly to the Company or to any of the branches of the following banks: · · MCB Bank Limited Standard Chartered Bank (Pakistan) Limited In case of TFCs held in CDS.00% 25.00% 25.000 1. 12 .631.812.69 Notes: · The above redemption schedule includes interim profit payment of PKR 1. · Profit will be paid to the TFC holder till the date the Company pays the redemption amount and will be computed on 365 day year basis.00% 25.5% 1.or in multiples thereof.18 below.16 and 2.500 Profit @ 14.25 181.5% per annum and redeemed at the end of 27th month from the Issue Date is set out in the table below: Principal Months Redemption 0 6 12 18 24 27 24.812.000 1. TFCs held in CDS will be cancelled when the redemption notice is received by the Company. In case of TFCs held in physical form. 15 day prior written notice. the investor will have to surrender the certificates along with the redemption notice.25 0.25 0.000 1.50 1. please refer to para 2. For applicability of these.50 906.25 0. TFC holders can exercise the Put Option as per the Central Depository Company of Pakistan Limited Regulations. respectively. By way of an example.213. PLEASE NOTE THAT THE ISSUER HAS NO CALL OPTION.703.17.000 1.057.631.50 90.00% 25.63 612.057.500 Total 24.25 181.35 Total Principal Principal Payment Payment in % Outstanding 951.00% 32.50 921. and in case of partial put option the amount to be redeemed should either be PKR 5.56 0.000/.000 based on profit rate of 14.25 181.812.00% 25. In case of physical certificates. For its applicability.000 24.50 1. the redemption schedule for TFCs subscribed on the opening date of subscription for an aggregate face value of PkR 25.ENGRO CORPORATION LIMITED TFC PROSPECTUS 2. · The above redemption may be subject to Income Tax.14. please refer to para 2. · The above redemption schedule includes deduction of a service charge of 2% of the outstanding Issue Price of the TFC.25 9. Profit will be paid till the date the Company makes the redemption payment.73 181.25 0.29 for the period from the opening date of subscription till the Issue Date · The above redemption schedule includes deduction of Zakat and Withholding Tax.2 Put Option (Early redemption) Investors have the option to pre-maturely redeem the outstanding TFCs anytime from the Date of Investment subject to a service charge of 2% on Outstanding Issue Price.179.50 1.631.

17. all subsequent profits will be payable semi-annually in arrears on the outstanding Principal amount. 2013 September 16. 2012 March 15.5% per annum from the Date of Investment. 2013 March 16. 2012 September 15. 1980) etc. 2011. Para (a). 2013 March 15. 2012 to September 15. 2. 2. Currently. 2001. 13 . Part 3. According to this Ordinance. the Company is expected to have adequate funds to meet its financial obligations arising from the issue of TFCs.3 Profit Payments Profit will be paid at a fixed rate of 14. Currently. Second Schedule of Income Tax Ordinance 2001. 2011 to March 15. 2011. 2014 2. Subsequent tax rates will be applicable as per the then prevailing rates.18. Zakat shall be deducted at the time of redemption of the principal amount of the TFCs or on the market value based on the closing rate on KSE on the first day of Ramzan. no redemption reserve is being created for the redemption of TFCs. and shall be deemed to be the final discharge of tax liability on the profit arising to a tax payer other than a company. 2012 March 16.15. Funds (subject to being qualified for non-deduction of Zakat in terms of the Zakat and Ushr Ordinance. REDEMPTION RESERVE In view of the secured nature and good credit rating (“AA”). the tax shall be deducted @ 10% of the gross amount of profit paid as per the First Schedule.ENGRO CORPORATION LIMITED TFC PROSPECTUS 2. From the Issue Date. Therefore. whichever is lower. 2014 Profit Payment Date September 15.50% on such dates as the concerned TFC becomes due for redemption in a Zakat year. 2001. 2013 to September 15. 2011 March 15. Division 1. and in case of certain non-corporate entities such as Trusts. there is an additional surcharge of 15% of the total income tax amount which is applicable till June 30. 2014 September 15. from profit payments to all investors except companies and resident individuals whose investment amount is up to PKR 150. an interim profit payment for the period from the Date of Investment till the Issue Date will be made. under subsection 3 of Section 151 of the Income Tax Ordinance. INCOME TAX Any income derived from the Term Finance Certificates shall be subject to income tax as per the Income Tax Ordinance. part (IV). is required to withhold tax at the rate of 10% (or the then prevailing rate). except where a statutory declaration of exemption is filed. DEDUCTION OF WITHHOLDING TAX Engro Corp. To bring all TFCs at par. at the rate of 2.000 under Clause 59. 2014 to September 15. The following table illustrates profit payment for the interim period and for the three years period commencing from the Issue Date: Profit Payment Interim First Second Third Fourth Fifth Sixth & Final Profit Period Interim Period September 16. 2012 to March 15. 2012 September 16. 2014 March 16. 2013 September 15.16. there is an additional surcharge of 15% of the total income tax amount which is applicable till June 30. 2013 to March 15. Subsequent tax rates will be applicable as per the then prevailing rates.14. DEDUCTION OF ZAKAT Zakat is deductible in case of TFCs held by Muslim citizens of Pakistan. 2.

02% Capital Value Tax (“CVT”) will be charged on purchase of all modaraba certificates and instruments of redeemable capital as defined in the Companies Ordinance. providing for all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Marketable lots are defined as any amount upto PKR 1 million face value with minimum face value of PKR 25. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilized.000 face value or more than PKR 1 million face value. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse.50% and 1. The balance of deferred tax liability for Engro Corporation Limited as at December 31.22.ENGRO CORPORATION LIMITED TFC PROSPECTUS 2. interest rates and credit risk on the issuer. Break up is as follows: Accelerated depreciation Retirement & other Service benefits Amounts in ‘000 PKR 1.297. 2001 & Capital Value Tax (Finance Act 1989) the following charges are applicable on sale/purchase of securities: · 0. MARKET MAKING The TFCs will be listed on KSE and LSE. 2. for marketable or non-marketable lots respectively. JS Global Capital Limited will act as Market Maker for the issue.50% in yield.000 and Non-Marketable lots are defined as any amount less than PKR 25.822 PKR (525) PKR 1. The role of the market maker will be to offer bid & ask quotes for the TFCs at a spread of 0. 2. CAPITAL VALUE TAX & WITHOLDING TAX ON SALE/PURCHASE OF TFCs Pursuant to the provisions of Section 233A of the Income Tax Ordinance. and instruments of redeemable capital as defined in the Companies Ordinance. Price will be determined by market maker in light of prevailing liquidity. 1984.297 14 . · 2.20. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. based on the laws that have been enacted or substantively enacted by the reporting date. modaraba certificates. DISCLOSURE OF DEFERRED TAXATION Deferred tax is recognized using the balance sheet method. or equivalent price terms.21.01% Withholding Tax (“WHT”) will be charged on sale of all shares. 2010 is PKR 1. Market Maker will trade TFCs which are either available for transfer with CDS or physically in the form of printed certificates. CAPITAL GAINS TAX Any capital gains derived from the sale of Term Finance Certificates shall be subject to capital gains tax as per the Income Tax Ordinance.19. 2001. 1984 0.

500 500.000 1. COMMISSIONS. LSE and ISE at the rate of 0.3. 3.000. 3.500 15 .15% Amount in PKR 15.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART III 3.000.000 50.000 107.000.000 4.152.000 90.2.50% 0.500.000 370.000 100.000 67.500/-.000.5% of the amount collected.25% 0.000 1.000 1.000.000 1. in respect of accepted applications will be paid to the Bankers to the issue for services to be rendered by them in connection with the public offer. 3.000 25.000 7.500.000 2.000. The details of the expenses of the issue are as follows: Expenses Category Commission to the Bankers to the Issue Promotion by the Bankers to the Issue Brokerage to the members of Stock Exchanges Stamp Duty – Sindh Rating Fee – Initial Initial Listing Fee of the Stock Exchanges Processing Fee of the Securities & Exchange Commission of Pakistan Annual Listing Fee of the Stock Exchanges Service Charges of the Lahore Stock Exchange CDCPL Fee Trustee Fee Registrar Fee Annual Market Making Fee to JS Global Capital Limited Printing & Publication Expenses of Prospectus Marketing Legal Expenses Out of Pocket Expenses Total Rate 0. BROKERAGE For the public offer.000 21.000.000 1.1. the Company will pay brokerage to the members of KSE.500.500.152.25% of the value of TFCs actually sold through them. EXPENSES OF THE ISSUE The maximum initial expenses of the issue paid or payable by the Company inclusive of all commissions are estimated to be PKR 107. BROKERAGE AND OTHER EXPENSES OF THE ISSUE COMMISSION TO THE BANKERS TO THE ISSUE A commission at the rate of 0.

ECPL was later renamed Engro Corporation Limited on January 01. and its fertilizer business demerged into a new company Engro Fertilizers Limited.982.63% 12. Engro Corp’s corporate and social responsibility initiatives have been recognized internationally at various forums. the shareholding structure of Engro Corporation Limited was as follows: Shareholding Breakdown Shareholder Category Joint Stock Companies · Dawood Hercules Chemical Ltd.277.698 21.764 124.433.736.67 million.91% 0. PVC.284. Engro Corporation Limited is listed on the Karachi.32% 1.819 % Shareholding 46. The following is a summary financial snapshot of Engro Corporation Limited on a consolidated basis: 1 2 Audited accounts as of December 31. As a testament to Engro Corp.790 327.260.883 11. through various subsidiaries and joint ventures.09% 4.884 6.408 77. of Shares held 151. 2010. Shareholding Structure As of December 31.114. A significant part of this change is the demerger and transfer of Engro’s expanding fertilizer business into a separate wholly owned subsidiary. the Company has been a frequent winner of the Corporate Excellence Award of the Management Association of Pakistan as well as the Top 25 Companies’ Award of the Karachi Stock Exchange. there has been a 20% bonus issue which has increased the total shareholding to 393. Engro Corporation Limited was formed in the interest of better managing and overseeing businesses of subsidiaries and affiliates that are currently part of Engro's capital investments.518.251 17.243 14.608.247.194 30. the Company was renamed Engro Chemical Pakistan Limited (ECPL) in 1991 when Exxon decided to divest out of the fertilizer business globally.37 million where as total market2 capitalization stood at PKR 63. Ltd.004. 2010 16 .00% In March 2011. 4. Lahore and Islamabad stock exchanges and has a total paid-up capital1 of PKR 3.183 shares. HISTORY AND PROSPECTS BACKGROUND AND HISTORY Established in 1965 as a fertilizer company and subsequently named Exxon Chemical Pakistan Limited.‘s blue chip corporate status.1.48% 5.019.27% 100. bulk chemical storage.07% 23.625.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART IV 4. Modaraba Companies Investment Companies Cooperative Societies Others Total No. food processing.23% 6. power generation etc. Further.363 40. 2010. Engro Corporation Limited has diverse business interests in fertilizer. Individuals Financial Institutions Insurance Companies · Central Insurance Co. 2010 As of December 31.

344 132.279 7.03 *As of 31 December 17 .935 8.A. This exposes the Company to the risks that diversification may pose. Engro Fertilizers Ltd.667 32.761 2. (Joint Venture) Arabian Sea Country Club (Affiliate) 4.066.000.19% 100% 100% 100% 100% 62.4. The Company also aims to capitalize on the synergies between its various subsidiaries and joint ventures.072. Engro Corp. information technology.55 12.010.682 10.529 12.277 8. 2010 79.000 25.34 2008 40.49 12.258 1.000 45.796 20.ENGRO CORPORATION LIMITED TFC PROSPECTUS Year Ended December * (Rs.000 500.778 130.115 164. of shares held by Engro Corp.236 30.107 9.74 94.105 102.65 19.000 250.856 1.807 29.51 58.15 30.43 15. Engro Foods Ltd.476.000. Avanceon Ltd.958 1.91 11.121 2.000 1.973 4.152 3. PVC manufacturing and bulk chemical handling and storage business.548 80.00 164.00 265.72 6.45 11. Engro Vopak Terminal Ltd.87 7. Million) Revenue Profit After Tax Shareholders’ Equity Total Assets Total Liabilities Total Paid-up Capital Net Profit Margin (%) Return On Equity (ROE) % Breakup Value per share (PKR) Earnings Per share (PKR) Dividend Per share (PKR) Market value per share (PKR) Price to Earnings ratio (x) 4.802 57.49 st 2005 18. Following are the subsidiaries and affiliates of the Company as at December 31.31 14.240 2. has been diversifying and expanding in a number of sectors including foods.75 17.790 34.976 6.35 2009 58. No.78 6.254 2.810.800.128 10.00 13.000 Percentage Holding 56. 372.00 193.979 6. 4.000 700.41 21.23 12.397 6.541 14.278 49. FINANCIAL OVERVIEW Engro Corp.27 14.663 3.877 18.97 2007 34. Engro Eximp (Pvt) Ltd.000 36. power generation.3. Diversification In order to diversify future cash flows of the Company.49 19.’s income comprises of dividends received from its subsidiaries and royalty income from its fertilizer business. Engro Management Services (Pvt) Ltd.46 4.67% 10% 100% 50% N.52 110.00 169.39 6.87 2006 20.000. RISK FACTORS Business Risks i. PRINCIPAL PRODUCTS Engro Corporation Limited is a holding company and is responsible for the long term vision and profitable growth of the Company and its subsidiaries and affiliates.07 17.757 2.00 96.47 14.000 48.054 10.53 9.2.81 9.97 98. Engro Powergen Qadirpur Ltd. 2010: Subsidiaries and Affiliates Engro Polymer & Chemicals Ltd.126 23.90 104.00 183.09 20. Engro PowerGen Ltd.22 49.

2. Liquidity Risk By investing in the TFC the investor assumes the risk of not being able to sell the TFC without adversely affecting the price of the instrument. Engro Corp’s recent diversification into food business has been very successful with the flagship brand “Olpers” capturing 36% of the market share in a short span of time and the IPP of Engro Powergen Qadirpur Limited (formerly known as Engro Energy Limited) achieving commercial operations date in record time. the chances of default are very low as confirmed by the TFC Rating. iii. which will act as provider of liquidity for TFC’s during the life of the instrument by facilitating secondary market trades. Default Risk Given the secured nature of the instrument. the Company has been assigned a long term entity rating of “AA” (Double A) and short term entity rating of “A1+” (A One plus) by PACRA. The Instrument has been assigned rating of “AA” (Double A) by PACRA. Investors can also exercise the Put Option anytime from the Date of Investment as explained in detail in para 2. Interest Rate or Price Risk Fluctuations in interest rates. the market maker would also make market for the instrument. and Mitsubishi Corporation in Engro Asahi) to provide the necessary technical expertise. Where required. Further. while there is a default risk. Mitigants The TFC’s are to be listed on KSE and LSE. all ventures are backed by extensive due diligence and/or through participation of world-renowned joint venture partners (Vopak in Engro Vopak Terminal Limited. and underlying inflation. Instrument Risks i. Individual companies are run by independent teams of professional and competent management personnel. may adversely affect the yield to the investors.ENGRO CORPORATION LIMITED TFC PROSPECTUS Mitigants Engro Corporation Limited has a successful track record in profitably managing its associated businesses. ii. Mitigants The structure of the product is such that the investor can redeem the TFCs anytime after the Date of Investment. has hired experienced professionals. 18 . Mitigants Instrument has been secured by first ranking pari passu floating charge over the shareholding of Engro Corp. Engro Corp. in some of its subsidiary companies and affiliates and certain other assets of the Company at 125% of the outstanding principal amount.14. as in Engro Foods Limited. Furthermore. In addition.

Any unforeseen events such as problems arising out of lower than projected production and sales by subsidiaries and affiliates. Note: It is stated that all material risk factors with respect to this issue have been disclosed to the best of our knowledge and belief and that nothing has been concealed in this respect. vi. Capital Market Risk The TFC issue will be listed on KSE and LSE and the TFC holders will be able to sell or buy TFC’s through the members of KSE and LSE and through market maker subsequent to the listing of the issue. v. Financial Projection Risk The Company has prepared financial projections on the basis of various assumptions that current market conditions continue to prevail and are subject to change. 19 . may affect the redemption and profit for the TFC investors. Regulatory Risk Changes in the regulatory framework may have an effect on the returns to investors in so far as such changes impact the return on the TFCs ix. The investors assume the risk that due to the unforeseen events the Company may not be able to maintain consistent growth. vii.ENGRO CORPORATION LIMITED TFC PROSPECTUS iv. Changes in Tax Regime Any adverse change in the existing Tax regime for investment in TFCs. Reinvestment Risk Investors in fixed income securities face the risk that the interest rate at which the interim cash flows can be re-invested may fall and that the investor may not have suitable avenues for investing interim cash flows. Hence price may rise or fall and result in increase or decrease in the value of TFC’s to any extent. Exchange Rate Risk Depreciation of the Rupee may adversely affect the yield to the overseas investors. and consequent receipt of dividends by the Company have not been taken into account. Price of TFC’s will depend on the bond market behavior and the performance of the Company. viii.

Marine Drive. 1984. 2009 and 2010. 20 . Whereas for the years ended December 31. 2006 to December 31. 2011 D 588 The Board of Directors Engro Corporation Limited 7th & 8th Floor. for inclusion in the prospectus for proposed issue of rated. 2008 were audited by KPMG Taseer Hadi & Co. 2010 have been audited by us. pending designation from the Securities and Exchange Commission of Pakistan (SECP) as company entitled for Group Relief under the Income Tax Ordinance. the auditors’ opinion was also unqualified in all respects except that due to a fire at the Company’s premises on August 19.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART V FINANCIAL INFORMATION & CREDIT RATING REPORT 5. the auditors’ report for the years 2007. The financial statements of the Company and the Group for the years ended December 31. 2010. The auditors issued an unqualified opinion on the financial statements for the year ended December 31. No emphasis of matter paragraph has been included in the auditors’ report for the year ended December 31. 2001. 2007. listed and secured Term Finance Certificates by the Company. 2008. Clifton Karachi – 75600. The Harbour Front Building HC No. Pakistan Dear Sirs AUDITORS’ REPORT UNDER SECTION 53(1) READ WITH CLAUSE 28 OF SECTION 2 OF PART I OF THE SECOND SCHEDULE TO THE COMPANIES ORDINANCE. reviewed the audited unconsolidated financial statements of Engro Corporation Limited (the Company) and the audited consolidated financial statements of the Company and its subsidiaries (the Group) for the five years ended December 31. documents and books of accounts of the Company relating to prior years were destroyed. 2008 and 2009 included an emphasis of matter paragraph that the Company has recognized the effect of acquisition of taxable losses of a subsidiary company. 2006. As disclosed in the 2010 financial statements. 2006 to December 31 2010. Further.. Records in electronic form remained intact and certain hard copy records relating to financial year 2006 have not been recreated. 3. Chartered Accountants whereas the financial statements for the years ended December 31.1 AUDITOR’S CERTIFICATE March 15. 2009 and December 31. the subsidiary company during the year was designated as part of the Group of Engro Corporation Limited by the SECP and the Company’s appeal against the disallowance of the aforementioned Group Relief was also decided in the Company’s favour by the Appellate Tribunal for the years ended December 31. 2007. 1984 FOR THE PURPOSE OF INCLUSION IN THE PROSPECTUS FOR TERM FINANCE CERTIFICATES BY ENGRO CORPORATION LIMITED We have. 2006 and 2007. Block 4. certain records. for the purpose of reporting under section 53(1) read with clause 28 of Section 2 of Part I of the Second Schedule to the Companies Ordinance.

2006 and December 31. KPMG Taseer Hadi & Co. 2010 December 31. 2009 and December 31. Ferguson & Co. 2010 December 31. 2006 Engro Foods Limited 100% to December 31. 2010 June 29. Auditors A. Engro Fertilizers Limited 100% A. 2009 and December 31. Ferguson & Co. F. alongwith the details of their respective auditors are as follows: Name of the Subsidiary Companies Percentage of holding Years Ended December 31. Ferguson & Co. F. 2008 to December 31.19% to December 31. F. 2006 to Engro Management Services (Private) Limited December 31. 2008 100% December 31. 2009. Ferguson & Co. A. KPMG Taseer Hadi & Co. KPMG Taseer Hadi & Co.ENGRO CORPORATION LIMITED TFC PROSPECTUS The Group comprises of Engro Corporation Limited and seven subsidiary companies. to December 31. F. A. 2010 A. 2010 December 31. A. 2010 December 31. F. 2006 Engro Polymer & Chemicals Limited 56. Ferguson & Co. 2007 Avanceon Limited 62. F. 2009 and December 31. Ferguson & Co. 2010 December 31. 2008 December 31. 21 . 2008 Engro PowerGen Limited 100% December 31. Fakharuddin Yousaf Ali & Co. 2006 to Engro Eximp (Private) Limited 100% December 31. Ferguson & Co. the date of incorporation. F.67% December 31. The percentage of shareholding in the subsidiary companies. A.

ENGRO CORPORATION LIMITED TFC PROSPECTUS In accordance with section 53(1) read with clause 28 of Section 2 of Part I of the Second Schedule to the Companies Ordinance. 2010 The summary of assets.603 806.287.514 27.076 1. liabilities and shareholders’ equity of the Company and the Group as at December 31.943 4.910 197.677 5.550 31.148 2. plant and equipment Exploration and evaluation expenditure Biological assets Intangible assets Long term investments Deferred employee compensation expense Long term loans and advances Current Assets Stores.178 26.474.843. we report that: 1.505 193.896.827 3. LIABILITIES AND SHAREHOLDERS’ EQUITY AS AT DECEMBER 31.314 4.439 164. spares and loose tools Stock-in-trade Trade debts Deferred employee compensation expense Loans. ENGRO CORPORATION LIMITED AND THE GROUP SUMMARY OF ASSETS.623.031 33.136.082.453 1.188 4.829 2.120.013 1.458 131.148 356.584 3.452 136.712.701 1.696.494.114.010.778.131.323 514. 1984.426.910.970.293 877.941 8. 2010 were as follows: The The Group Company Rupees (Amounts in thousand) ASSETS Non-Current Assets Property.1 22 .408 4. deposits and prepayments Other receivables Derivative financial instruments Taxes recoverable Short term investments Cash and bank balances TOTAL ASSETS 139.393 128.286 428. advances.

015 The Group 23 .247 180.392 3.369 10.886 117.024 34.787 13.310 23. subscribed and paid-up Share premium Employee share option compensation reserve Hedging reserve Revaluation reserve on business combination Maintenance reserve Exchange revaluation reserve General reserve Unappropriated profit Non Controlling Interest Total Equity Non-Current Liabilities Borrowings Derivative financial instruments Obligations under finance lease Deferred taxation Employee housing subsidy Retirement and other service benefits obligations Deferred liabilities Current Liabilities Trade and other payables Accrued interest / mark-up Current portion of : .borrowings .040.010.321.639 3.270 27.698 197.778.715.061 74.751.384.455 (927.429.277.214 2.429.045 130.044 65.775 1.849 805.912.000 3.obligations under finance lease .304 31.deferred liabilities Short-term borrowings Derivative financial instruments Taxation Unclaimed dividends Total Liabilities TOTAL EQUITY AND LIABILITIES 267.277.663.954.630 37.847 89.471.154 18.279 92. 10 each Issued.297 2.883 4.550.813 4.622 30.240 12.630 3.226 347.061 162.722.438) 104.453 15.500.000.577 28.000 ordinary shares of Rs.543.516.240 8.614.943 12.151.776.000 3.598.776.536 57.115.000 3.550.452 1.156 23.998 2.369 10.550 1.053.457 3.146 27.437 164.ENGRO CORPORATION LIMITED TFC PROSPECTUS The Company Rupees (Amounts in thousand) EQUITY AND LIABILITIES Equity Share Capital Authorised 350.639 27.829 180.047 5.053.957.500.991 3.619.

2 CONTINGENCIES AND COMMITMENTS Contingencies and commitments reported in the financial statements as at December 31. 1. 2010) calculated at the dollar rupee exchange rate prevailing on the business day prior to the date of notices issued by IFC to exercise the conversion option.2.2.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 1.000 has been availed while USD 30.3) .400.000 857. Engro Energy Limited). As at December 31.000 65.1 Guarantees The Company Rupees Corporate Guarantees issued in favour of Subsidiary Companies: .000 1. 2015. 2010. Engro Energy Limited). 205 per ordinary share (Rs. 24 . carrying mark-up payable by the Company for rupee finances of like maturities plus a margin of 1%. The effect of IFC conversion in substance would result in a loan from the Company having the same repayment terms / dates as that of the extinguished loan of IFC i.000 857. The project support is contingent upon occurrence or non-occurrence of specified future events. The project is complete and lender NOCs are awaited.Avanceon Limited The Group 65. Further.186.000 issued to Allied Bank Limited to open DSRA letter of credit in favour of the Subsidiary Company’s senior long term lenders.642.000.e.4 Project completion support to lenders The Company has extended project completion support to the lenders of Engro Powergen Qadirpur Limited (formerly. the Company has also issued a corporate guarantee to International Finance Corporation (IFC) for USD 80. a subsidiary of Engro PowerGen Limited for US$ 15. 2010 have been reproduced below: 1.000 242. Such option is to be exercised within a period of no more than five years from the date of disbursement of loan.84 as at December 31.000 under the Amended Agreement entered into by the Subsidiary Company with IFC. a subsidiary of Engro PowerGen Limited (1. USD 50. three half yearly installments commencing from September 15. into ordinary shares of the Company at Rs. the IFC loan amount then outstanding against the Subsidiary Company would stand reduced by the conversion option amount and the Subsidiary Company would pay the rupee equivalent of the corresponding conversion amount to the Company which would simultaneously be given to the Subsidiary Company as a subordinated loan.2.000 242.2) .2. 1.Engro Powergen Qadirpur Limited (formerly.Engro Fertilizers Limited (1. IFC has an option to convert a tranche of the disbursed loan amounting to USD 15.2 In addition to above.000 is still undisbursed.2.642.3 The Company has provided Corporate Guarantee amounting to USD 10. The Company has entered during the year into an agreement with the Subsidiary Company that in the event IFC exercises the aforementioned conversion option.2.

830. imposed by the State Bank of Pakistan (SBP) for alleged late payment of foreign exchange risk cover fee on long term loans and has filed a suit in the High Court of Sindh. 1. a subsidiary of Engro PowerGen Limited. Engro Powergen Qadirpur Limited is required to provide bank guarantee in favor of SNGPL for an amount equivalent to three months contractual quantities of gas.2. This includes bank guarantee which has been given by Engro Powergen Qadirpur Limited (formerly.2.6 Bank guarantees Bank guarantees of Rs. 1.2. a lawsuit has been filed against Engro Foods Supply Chain (Private) Limited). Engro Foods Supply Chain (Private) Limited. 1. However. Engro Energy Limited). 1.936 paid and expensed in 1997.018. As per the aforesaid agreement.36.2. to Sui Northern Gas Pipelines Limited (SNGPL) amounting to Rs. acquired by Engro Foods Supply Chain (Private) Limited of rice processing plant. based on the opinion of legal advisor is confident that the matter will be decided in its favour.618 was. A partial refund of Rs. Sheikhupura by certain previous coworkers claiming pre-emptive rights over a portion of the land.7 Post dated cheques Post dated cheques issued by the Subsidiary Company (Avanceon Limited) to Customs and Excise Department for the clearance of Rockwell Automation and Honeywell shipments and to IGI Insurance Company Limited as security against insurance guarantees issued by them in favor of AES Lalpir and Nestle Ltd for performance of contracts amounting to Rs.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 1. 99. The award for the second arbitration has not been recognised due to inherent uncertainties arising from its challenge in the High Court of Sindh. The sole arbitrator in the second case has awarded the Company Rs.800 whereas the award for the earlier years is awaited. 1. 1.10 Lawsuit filed by previous co-workers over a portion of the land During the year.126 in accordance with the terms of Gas Supply Agreement with the SNGPL.8 Recovery of penalties imposed by the State Bank of Pakistan The Subsidiary Company (Engro Fertilizers Limited) is contesting the penalty of Rs. 10.596. not acknowledged as debts amounts to Rs. a subsidiary of Engro Foods Limited in the Civil Court.5 Claims including pending lawsuits Claims including pending lawsuits against the Subsidiary Company (Engro Fertilizers Limited). recovered in 1999 from SBP and the recovery of the balance amount is dependent on the Court’s decision.9 Arbitration proceedings for recovery of marketing incidentals The Subsidiary Company (Engro Fertilizers Limited) had commenced two separate arbitration proceedings against the Government of Pakistan for non-payment of marketing incidentals relating to the years 1983-84 and 1985-86 respectively. 62.2. 47. 3.939 have been issued in favour of third parties. however.003.2. Engro Foods Supply Chain (Private) Limited has filed its written statement thereagainst and the case is currently being heard. 25 .

a related party. is obligated under non-cancellable operating leases for computer & office equipment which expire at various dates through 2011.349. The Subsidiary Company (Engro Polymer and Chemicals Limited) has entered into operating lease arrangements with Al-Rahim Trading Terminal and Dawood Hercules Limited .600 50. The lease shall expire on April 30.11 Commitments The Company Rupees (i) (ii) Property.732 (iii) Avanceon LP (USA). 2.400 167. a subsidiary of Avanceon Limited.212 (iv) Avanceon Limited leases its facilities from Cornerstone Investments (a related party) under an operating lease at a monthly rental of Rs. 2011 and future commitments in respect thereof amounts to Rs. The future lease commitments related to non-cancellable operating leases as of December 31.2.840 57. 2019. The total lease rentals due under these lease arrangements are payable in monthly installments till July 31. 9. respectively.446. 2010 are as follows: Rupees Not later than one year Later than one year and not later than five years Later than five years 1. for storage and handling of Ethylene Di Chloride (EDC) and Caustic soda. The future aggregate lease payments under these arrangements are as follows: Rupees Not later than one year Later than one year and not later than five years Later than five years 59.212 1.137 The Group - 143.396 all of which are due not later than one year.840 (v) 26 .ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 1. plant and equipment Letter of credits other than for capital expenditure 2.

ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 2. Engro Corporation Limited now functions as a Holding Company consequent to demerger of the Fertilizer Undertaking to the Subsidiary Company.783 (13.727) 3.1.250 23.235.259 (1.453) 4.131) (130.920.579) (1. Engro Fertilizers Limited.154.547.237.240.016) 1.618.975 (136.904) 1.508.481.538.748 2.957.947 (38.196. The above figures are as reported in the respective years’ published financial statements except certain items that have been rearranged for consistency of classification.773) (92.744.467 (424.724) 3.257. Effective January 1.198 (17.023) (874. For earnings per share. as referred to in section 5.583 2006 Net sales Cost of sales GROSS PROFIT Selling and distribution expenses - 17.183.504) 5.600 368. 2010.641. 27 .559 (339.240.945. 3.730) 2.000 88.429 (1.885.755.635) 6.000 257.330) 2.929) 3.176) 6.430 23.278.689) 5. 2009 2008 2007 Rupees 30.705 1.934 (579.793) 4.931.222 (18. ENGRO CORPORATION LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEARS ENDED DECEMBER 31. 2006 TO DECEMBER 31.317.1. refer section 6 of this report.948) (2.254 (287.696) 3.556) (1.640.144) 4.584 (388.364.551) (649.320.701 212.110) (1.120.946 (1.176) 4. 2010 2010 Year ended December 31.080.563 (1.811.657.168 1.675.520 (23.512 (1.262.396 148.176) (362.524) 4.815) 4.326 Dividend income Royalty income Administrative expenses Other operating income Other operating expenses Finance cost 1.171.656 (897.344 (1.652) 433. through a Scheme of Arrangement.601.959 PROFIT BEFORE TAXATION Taxation PROFIT AFTER TAXATION Note: 1.986.430) (535.574 (964.214. 2.605.529 970.088.444.204.

802 4.215.842 Note: 1.200.120.690 243.765 (59.718.680) 11.754 80.Owners of the Company .583) (1.861.152.289.732) 2.658.930 421.917.652) 6.314 (969. ENGRO CORPORATION LIMITED AND ITS SUBSIDIARY COMPANIES (THE GROUP) CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEARS ENDED DECEMBER 31.953) (2.193 5.142.111.876.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 3.245 2006 Net sales Cost of sales GROSS PROFIT Selling and distribution expenses 79.854 (8.836.277.216) (2.690 2. 2006 TO DECEMBER 31.097.582.283 (1.193 (778.856 390.955 (6.924) 2.065.558) (717.520 (42.936 4.983.221. 2010 2010 Year ended December 31.833.608.481) 3.038.806.718.611 (26.952.328) 4.788 409.707.131) 6.300) (4.047 1.240) (735.561) (2.321 (957.348) 10.206.253.130) 20.973.240.635 20.891 31.951 2.138. 2009 2008 2007 Rupees 58.982) (4.788 2.737.690) (438.047) 6.790.343. 2.062.821.699 34. For earnings per share.930) Other operating income Other operating expenses Finance cost 897.119.702.041) 2.Non Controlling Interest 6.494.666 3.125.200.181) 5.002 3.184.172 40.550 509.568 2.399.536) (3. refer section 6 of this report.116) 3.829 (482.625 (297.002 458.316) 7.441.106.739) (3.829 (1.047 (30.368 (44.975.206.833. 28 .695) 4. The above figures are as reported in the respective years’ published financial statements except certain items that have been rearranged for consistency of classification.868) Share of income from joint venture PROFIT BEFORE TAXATION Taxation PROFIT AFTER TAXATION 554.158.366) 7.441.133 (1.725 8.918 (88.658) (1.570 5.049 (349.842 Attributable to : .886) (5.802 245.273.138.018 (977.138.196) 13.278.982.157 (843.320.035 (15.351) 2.

and the retention of the Retained Undertaking in the Company along with the change of name of the Company to Engro Corporation Limited. 2006 to December 31.943 1.815 7 1.1 5. 2010 (the Effective Date) through a Scheme of Arrangement (the Scheme) whereby: § the Fertilizer Undertaking has been transferred and vested in Engro Fertilizers Limited against the issuance of ordinary shares of Engro Fertilizers Limited to the Company (section 5. 29 . a wholly owned subsidiary namely Engro Fertilizers Limited was incorporated on June 29.1 Financial statements for the year ended December 31.1. SIGNIFICANT DISCLOSURES MADE IN THE NOTES TO THE PUBLISHED FINANCIAL STATEMENTS OF THE COMPANY AND THE GROUP FOR THE RELEVANT FINANCIAL YEARS We reproduce below the significant disclosures made in the notes to the financial statements of the Company and the Group for the relevant years ended December 31. The division was effected on January 1.473 297. 2010 are as follows: Year ended December 31.655 6 1. 2009 decided to divide the Company into two companies by separating its fertilizer undertaking from the rest of the undertaking that was to be retained in the Company (Retained Undertaking). 2010 were bifurcated. 4. 2006 to December 31.276.303. as per the Scheme.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 4. 2010 Scheme of Arrangement The Board of Directors in their meeting on April 28.2 Bifurcated Balance Sheet as at January 1. 2010 Cash dividend Ru pees in thousand Rate of dividend (Rupees per share) Bonus issue Rupees in thousand 655. the assets and liabilities of the Company as at January 1.106 9 2009 2008 2007 2006 5.896 6 1. 2009.966.787.2). In this regard.1 WE FURTHER REPORT THAT: Details of dividend declared by the Company for the years ended December 31. 2010 In order to determine the net assets of the Retained Undertaking and the Fertilizer Undertaking for the aforementioned transfer / demerger of the Company.419 6 1. 2010: 5.1. Engro Corporation Limited henceforth will function as a Holding Company to oversee the business of the new fertilizer subsidiary as well as business of its other existing subsidiaries/associates. between the Fertilizer Undertaking and Retained Undertaking.514. § 5.1.

10 each at par.466. the management has also included the hedging reserve (negative) in the determination of share premium to eliminate the aforementioned difference. the Company may divest it but no firm decision has been taken as at December 31. the hedging reserve and revaluation surplus/reserves as at January 1. Further. 2010.993.144 10.700. 30 . as summarized below: Rupees Total assets Less: Total liabilities Net assets transferred to Engro Fertilizers Limited Add: Hedging reserve (negative) . issued by Engro Foods Limited. 10 each at a premium of Rs. in addition to existing 7.719 10. 30.000 10.565. 2010 is to be transferred to Engro Fertilizers Limited.129. 100.739.425 609.144 Hedging Reserve As per the Scheme of Arrangement. Such omission of hedging reserve created a difference of an equivalent amount in the balance sheet. the need for amendment to the Scheme of Arrangement in respect of such inclusion of hedging reserve does not arise as it does not in any way adversely affect the interest of the shareholders or creditors.999.695.144 Engro Fertilizers Limited in return issued 9.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) The net assets of the Fertilizer Undertaking transferred to Engro Fertilizers Limited as at January 1. 10 each (85% of share capital) in Engro Powergen Qadirpur Limited (formerly. against cash consideration. supported by the legal advisor. Therefore. 2010 amounted to Rs. issued by Engro PowerGen Limited. issued by Engro Polymer and Chemicals Limited.739 10.3 Investment in subsidiaries The Company.639.000 right shares of Rs. Engro Energy Limited) to Engro PowerGen Limited.000 share capital.739. on account of the Company's overall restructuring of its business to enable all direct subsidiaries to operate as holding companies for their respective lines of business. in the opinion of the Company’s management. transferred 272.739.000 ordinary shares of Rs.000. the Company also subscribed to: § § § 80. a wholly owned subsidiary of the Company. 10 each at par.164 66. With regard to the remaining 10% holding. During the year. fully paid ordinary shares of Rs. 90 per share.1.144. and 157.000 right shares of Rs.000 right shares of Rs. whereas only the revaluation surplus/reserves (hedging reserve omitted) is to be deducted by Engro Fertilizers Limited from the net assets so transferred to determine the share premium amount over and above the Rs.410. 10 each plus share premium to the Company against the aforementioned adjustment as follows: Rupees Shares at par value Share premium 100. during the year.refer note below Adjustment pertaining to transfer of Fertilizer Undertaking 76. 5. this being an inadvertent omission in the Scheme of Arrangement. 10.

2010. The production is now expected to commence by end of February 2011 and commercial production will be declared once fully tested. 2011. the Project's approval. 2010 by the Alternate Energy Development Board (AEDB) for establishing an approximately 50 MW Wind Power Generation Project in Gharo Wind Corridor. Government of Sindh to issue an exploration license for the aforementioned area to the Sindh Engro Coal Mining Company Limited. As agreed in the MoU. 31 . but could not continue for a reasonable period. 2010 for the mining lease for a period of 30 years. Under the LOI. 2007. 2010.6 sq. is linked to and dependent on the feasibility of mine mouth power plant (approximately 600-1200 MW) to be owned and constructed by Engro PowerGen Limited. 2010. Engro Powergen Qadirpur Limited (formerly.3 MW combined cycle power plant and has commenced commercial operations on March 27. The capacity of Enven Plant will be 1. has applied to Director General Mines and Minerals Development Department on November 30. Further.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 5. extendable to mine's life. GoS/SCA requested the Director General Mines and Mineral Development Department. the Company is required to complete the feasibility study and achieve various milestones stated therein within a period of eighteen months thereof. Ethylene Di Chloride (EDC). During the year. Sindh Engro Coal Mining Company Limited (SECMC) (a subsidiary of Engro PowerGen Limited) has been allocated an area of 79. signed between the Sindh Engro Coal Mining Company Limited and GoS/SCA. valid for a period of 25 years. as required for commissioning of commercial production. dated March 31. which was granted on August 8. 2010. Vinyl Chloride Monomer (VCM) and Power plants. EDC. due to curtailment of gas by Sui Northern Gas Pipeline Limited (SNGPL) for forty five days from January 7. through Sindh Engro Coal Mining Company Limited. Commercial operations of the PVC. A separate feasibility in this regard shell be conducted by Engro PowerGen Limited. Engro PowerGen Limited Engro Powergen Limited has been granted a Letter of Intent (LOI) on October 12. Engro Energy Limited) (a subsidiary of Engro PowerGen Limited) completed construction and testing of its 217. the Company commenced work on its expansion and backward integration project comprising setting up of a new PVC plant. However. Chlor-alkali. efforts are being made for closure on timely availability of all the required infrastructure and tariff to confirm economic viability of the Project.3 million tons of Urea per annum. upon which the integrated chemical complex stands complete. Engro Polymer & Chemicals Limited In 2006. km in Thar Coal Field. 2010.1. pursuant to Memorandum of Understanding (MoU). Further on successful completion of technical feasibility Sindh Engro Coal Mining Company Limited. The electricity generated is transmitted to the National Transmission and Despatch Company (NTDC) under the Power Purchase Agreement (PPA) dated October 26. to carry out a feasibility study. District Thar. as directed by GoS vide its letter dated November 12. Chlor-alkali and Power Plant (Gas Turbines) commenced in 2009 whereas the VCM Plant declared commercial operations during the year on September 30.4 Subsidiary Companies Engro Fertilizers Limited Engro Fertilizers Limited has been involved in the construction and setup of the Urea expansion project (Enven Plant) adjacent to existing Dharki Plant.

1.000 is reached.479 (rectified to Rs. Engro Foods Supply Chain (Private) Limited (a subsidiary of Engro Foods Limited) is currently involved in the construction and set-up of a rice processing plant in District Sheikhupura. the drying unit of the plant was commissioned and commercial production commenced from November 7. 5. mainly on account of disallowance of Group Relief (in all three years). 2011 on first come first serve basis or earlier if the issue amount of Rs.218 on January 27. Appeal has also been filed by the Engro Fertilizers Limited with the Commissioner Inland Revenue (Appeals I). may ask the Company for early redemption at any time from the date of investment subject to service charge of 2% of the outstanding issue price. 32 .6 Group relief and other matters As a result of demerger. 600. amounting to Rs. During the year. 509.103 and Rs.9% principal in thirty sixth month from the date of issue. Rs.000 respectively.644). The tax department upon expiry of the stay period has raised a payment demand of Rs.1% of principal in five equal semiannual installments in the first thirty months and the remaining 99. against which the management intends to apply its refunds pending with the tax department. 1. Group Relief and others The Company in its tax return for financial years 2006 to 2008 (tax years 2007 to 2009) claimed the benefit of Group Relief under section 59B of the Income Tax Ordinance. However.1.000.670.384. The Certificate holder.814 for financial years 2006. 2001 (the Ordinance) on losses acquired for an equivalent cash consideration from its wholly owned subsidiary.5 Engro Rupiya Certificates (1st Issue) During the year subscription money aggregating to Rs. however.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) Engro Foods limited During the year.1. 5. as referred to in section 5.744.1.536 (net of transaction cost of Rs.000 for 2006 and 2007 respectively. IGI Investment Bank Limited has been appointed as trustees in respect of these certificates. 178. 4.319) was received by the Company from the general public against the issuance of Term Finance Certificates (Engro Rupiya Certificates). The profit is payable semi-annually at the fixed rate of 14. 3.5% from the date of investment by the Certificate holders.845 and Rs. copy rights and certain investment in subsidiary companies. Rs. 622. the Company had paid Rs. 2010. 910. while stay for payment for the balance amount was granted by the tax department till December 31. 2011. 450. Stay by the High Court of Sindh for payment of balance amount for financial year 2006 was granted to the Company pending decision of the appeal filed by the Company before the Income Tax Appellate Tribunal (ITAT). 406. Engro Foods Limited has commenced commercial production of juices. 400. During the current year. The Certificates are structured to redeem 0. The tax department raised a demand of Rs. the below major issues pertaining to Fertilizer Undertaking of the Company have been transferred to Engro Fertilizers Limited. the Engro Fertilizers Limited paid Rs.000 and Rs. 2007 and 2008 respectively. 428. Further. These Certificates are secured by way of first ranking floating charge over all the present and future movable properties of the Company except for present and future trade mark. 2010 whereas the milling unit of the plant is currently under construction and its commissioning is expected to be completed in the first half of 2011. hence further widening the portfolio of its products. Uptill last year. 170. Engro Foods Limited.000 for financial year 2008. 476. inter corporate dividend (in 2007 and 2008) and write down of inventories to net realisable value (in 2008) besides certain other issues. The Certificates are available till January 14. for financial year 2007 the issue of Group Relief was decided by the Commissioner Inland Revenue (Appeals I) in Company's favour against which the tax department filed an appeal with ITAT.

all the assessments of the Holding Company. for income years 1995 to 2002 which were in appeal at the ITAT level have been decided during the year. the Engro Powergen Qadirpur Limited taking cognizance of the 'matching principle' requested the Securities and Exchange Commission of Pakistan (SECP) to allow deferment of recognizing exchange loss on translation of borrowings under IAS 21 . 57. has sought clarification from the Institute of Chartered Accountants of Pakistan (ICAP) in respect of the indexations pertaining to (i) USD/PKR exchange rate (applicable to Engro Powergen Qadirpur Limited’s price components of debt. a requirement of section 59B of the Ordinance. as indexation of USD/PKR exchange rate related to debt component being not recognized separately as embedded derivative. return on equity. Model Customs Collectorate raised a sales tax demand of Rs. like other power companies. Further. orders were received for cases pending at ITAT relating to financial years 2006 and 2007.463. an accounting policy adopted by Engro Powergen Qadirpur Limited. return on equity during construction). being the non-designation of the Company and the Engro Foods Limited as 'companies' entitled to Group Relief by the Securities & Exchange Commission of Pakistan (SECP). comprises of various price components with indexations falling within the ambit of embedded derivatives. Engro Energy Limited).135 on certain imports of Mono Ammonium Phosphate (MAP) 10:50:0 by the Company based on the actual import value rather than the deemed value as prescribed by SRO 609(1)/2004.1. however. These regulations were framed by SECP subsequently in December 2008 and on resubmission of application. and (ii) US CPI & USD/PKR exchange rate (applicable to Engro Powergen Qadirpur Limited's price components of fixed and variable operations and maintenance – foreign). Sales Tax and Federal Excise and the management is confident that it will be decided in the Engro Fertilizers Limited’s favour and the aforementioned amount paid under protest would be fully recovered.784. the Ministry of Food. a subsidiary of Engro PowerGen Limited. 33 . 2008 that the said grade of MAP should be assessed at deemed value of import with retrospective effect. among others. Sales tax on import of Mono Ammonium Phosphate (MAP) During 2008. in respect of the aforementioned years. Agriculture and Livestock had also recommended through its letter dated June 27. The tax department however. The Company had paid the demand made under protest and filed an appeal before the Collector. 5. the Company alongwith other subsidiaries have been registered as a Group. 'Financial Instrument: Recognition and Measurement' needs to be separated from the host contract and accounted for as derivative if economic characteristics and risks are not closely related to the host contract. Engro Powergen Qadirpur Limited has also requested ICAP to prescribe a definite basis or guidelines for the valuation of such embedded derivatives considering the subjectivity involved therein. Such embedded derivative as per International Accounting Standard (IAS) 39. Further. The economic characteristics and risks of most of Engro Powergen Qadirpur Limited's tariff indexations are closely related to the economic characteristics and risks of the Power Purchase Agreement (the Host Contract). The major one being apportionment of gross profit and expenses between normal income and Final Tax Regime (FTR) income has been remanded back to the tax department by ITAT with specific directions for apportionment of gross profit on the basis of turnover as claimed by the Company.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) The main contention for disallowance of Group Relief. In addition.7 Embedded derivatives and exchange differences Tariff of Engro Powergen Qadirpur Limited (formerly. may file reference application against the ITAT decisions before the Sindh High Court. The major issues of Group Taxation and Group Relief have been decided in the Engro Fertilizers Limited’s favour in both the years. Hence have not been separated and accounted for under IAS 39 as a derivative. The Company had applied for such a designation but remained pending with SECP for want of related regulations not framed then. Further. Designation has also been granted for Group Relief and Group Taxation during the year. therefore has written back provision amounting to Rs. During the year. Engro Fertilizers Limited.Foreign Currency Transactions in the statement of comprehensive income till the clarification sought on the recognition of the foreign currency indexations from ICAP has been received. Sales Tax and Federal Excise. Engro Powergen Qadirpur Limited. An appeal has been filed before the Collector.

ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) Subsequent to year end. the vesting period will end such number of days after December 31. whereas the formal approval was granted subsequently on June 10.R.000 shares and 7. No amounts are paid or payable by the recipient on receipt of the option. has started from January 1. The above Scheme was conceptually approved by the Securities and Exchange Commission of Pakistan (SECP) before the transfer of Fertilizer Undertaking to Engro Fertilizers Limited. Engro Fertilizers Limited used Black Scholes pricing model to calculate the fair value of share options at the grant date.O 87(1)/2011 dated February 3. as referred to in section 5. 294. exchange loss amounting to Rs. For options which were initially granted by the Company after June 30. 2010 and has ended on December 31.000 shares respectively and the exercise price was adjusted to Rs. 2010 as is equal to the number of days between the date the initial option letters were issued and the date of grant of the later options by the Company. 5. 11. the entitlements were increased to 5.94 Rs.94 per share.52 per share respectively. Engro Fertilizers Limited As stated above. calculated as on January 1. 2012. Further. 11. However. 2010. 98 per ordinary share. granted share options under a new Employee Share Option Scheme (the Scheme) of the Engro Fertilizers Limited. plant and equipment and has not recognised the aforementioned embedded derivatives. The options carry neither right to dividends nor voting rights.100 ordinary shares of Engro Fertilizers Limited at an exercise price of Rs. the employees transferred to Engro Fertilizers Limited have surrendered their existing share options against which new share options have been granted under a new scheme of Engro Fertilizers Limited. Further. As per the Scheme.700. The fair value of the share options as per the model and underlying assumptions are as follows: Fair value of the share options at grant date Share price at grant date Exercise price Annual volatility Risk free rate used Dividend yield Rs. 98.937.64% 12. on surrender thereof.61 Rs.1. 2010. In view of the above S. These changes have been duly approved by the Securities and Exchange Commission of Pakistan (SECP). has been recognised in the financial statements. SECP vide S.1. 2012. Under the Scheme. Vesting period for employees who were initially granted options on or before June 30. Rs. 2008. such IPPs shall not be permitted to recognise embedded derivatives as required under IAS 39. as allowed to IPPs under the 1994 power policy. is also allowed to all IPPs having foreign currency loans. 87.R. whereafter these options can be exercised within a period of two years ending December 31. consequent to the issue of right shares in 2008 and in the current year. employees have been granted options to purchase 4. capitalization of exchange differences.500.00 41. 2008 in the Company.8 Employee Share Option Scheme Engro Corporation Limited Consequent to the demerger. 2011 has granted waiver from the requirements of IAS 21 and IAS 39 to all the Independent Power Projects (IPPs). 2010 and the Scheme being considered a continuation of the old Scheme announced by the Company.21% 5. The number of options granted to an employee are the same as the number of options of the Company surrendered by them.O. Whereby.1. 205. for a period of one year. the employees transferred to Engro Fertilizers Limited and holding share options of the Company have been.000 has been capitalised to Property. 2010. the later options can also only be exercised upto December 31. 267. the entitlements and exercise price are subject to adjustments because of issue of right shares and bonus shares.73 per share and Rs. not covered under Circular 11 of 2008. a charge based on fair value of share options i.e.71% 34 . As the vesting period has started from January 1.

2011: § § § § 5.9 Non-adjusting event after balance sheet date The Company’s Board of Directors in its meeting held on February 14.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 5.e purchase of fertilizers from the Engro Eximp (Private) Limited (EXIMP) and sale to dealers) has been transferred to EXIMP.500. Furthermore. 2009.1). a final cash dividend of Rs. After obtaining the requisite approvals from the creditors and the shareholders of the Company.562. on August 1. Engro Polymer & Chemicals Limited The new PVC plant commenced commercial production on January 1.1.3.000.500. the Subsidiary Company commenced commercial operations of Ethylene Di Chloride (EDC).1). 2009 have consented to the Company’s proposed transfer of 304 million ordinary shares of Rs. Further. The de-merger required the approval of the High Court of Sindh.1. 2009 5. 10 each in Engro Energy Limited. Such a transfer. 2010 (Effective Date). effective January 1. 20% bonus (section 4.2 per share (section 4. 2010. These plants have been set up adjacent to the Subsidiary Company’s existing PVC facilities in the Port Qasim Industrial Area. and an investment of Rs. 2009. the High Court approved the Scheme of Arrangement (Scheme) on December 9. 2010. Engro Energy Limited The Shareholders in the Extraordinary General Meeting (EOGM) held on November 27. Chlor-alkali and Power plants (Gas turbines). the entire trading operations of fertilizer business of the Company (i. The Scheme came into effect on January 1. Financial statements for the year ended December 31.e.1 Scheme of Arrangement The Board of Directors of the Company in their meeting of April 28. 2009 decided to divide the Company into two companies by separating its fertilizer undertaking from the rest of the undertaking that is to be retained in the Company as more fully explained in section 5. 2011 has proposed the following for approval of the members at the Annual General Meeting to be held on March 31. is on account of the Company’s overall restructuring of its businesses to enable all direct subsidiaries to operate as holding companies for their respective lines of business. during the year. to be effected upon completion of legal and other formalities.2 Subsidiary Companies Engro Fertilizers Limited and Engro Eximp (Private) Limited Consequent to restructuring of its businesses by the Company. the stock in hand of the Company as at December 31. 35 . to Engro PowerGen Limited (EPL) in exchange for the same number of fully paid-up shares of EPL. 2009 of goods purchased from the EXIMP has been returned.2 an increase in the authorised share capital of the Company from Rs.2. the Subsidiary Company has also commenced supply of surplus power generated from Power plants to Karachi Electric Supply Corporation (KESC). under an agreement.2.1 & 5.4.1. will act as the selling agent of EXIMP.000 in Engro Polymer & Chemicals Limited by way of subscription of right shares. Effective January 01. Accordingly.000 to Rs. 5. a bonus issue in the ratio of 1 share for every 5 shares held i. 2009. Engro Fertilizer Limited. The Vinyl Chloride Monomer (VCM) plant is still in the test production phase.2.

248.3. manufacture and trade all kinds of raw. 491 acres of land at Muridke. Consequent to the demerger (refer 5.000 15. In this regard. 5.subsidiary is to produce. processed and prepared food products including agriculture. 4. 1. the Company identified that the fair values of foreign exchange forward contracts as at December 31.297.3 Financial statements for the year ended December 31.100 During the year.92% to 56.52 per share and total entitlements were increased to 7. by investing Rs. 2009.2. 5.275 1. 50 per share to the shareholders including premium of Rs. 205. 4.2) was adjusted by the Company to Rs. Engro Foods Limited has commenced commercial production of ice cream.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) Engro Foods Limited During the year.7 million shares. the exercise price of employee share option scheme (refer 5. Engro Foods Limited incorporated a new wholly owned subsidiary on November 3. 3.5 Issue of right shares with premium The Company issued 40% right shares of Rs. The principal activity of this sub . during the year.960 to Rs.1).19% while investment in Engro Energy Limited decreased from 100% to 95%.362. which is presently being sold only in selected parts of the country. dairy and farming products.950. This however. District Sheikhupura has been acquired to construct a rice processing plant.4 Foreign Exchange Forward Contract During the year.2. 36 . 2008 5. 5. 15. 5. percentage of investment in Engro Polymer and Chemicals Limited decreased from 65.1 Investment in subsidiaries The following investments were made in the subsidiary companies during the year: Name of Subsidiary Engro Energy Limited Engro Foods Limited Engro PowerGen Limited Rupees 1. Further. the Company's employees transferred to Engro Fertilizers Limited will be granted new share options under a new scheme of Engro Fertilizers Limited on surrender of existing share options. The total issue including share premium amounted to Rs.100.787.604 net of transaction cost on such issue. During the year. 2008 were overstated by Rs. 2008.1. has no impact on the profit for the year ended December 31. Baweray Akalian.173. as the fair values were recognised in the hedging reserve. The new scheme is finalized and is awaiting approval by the Board of Directors of Engro Fertilizers Limited and Securities and Exchange Commission of Pakistan. Engro Foods Supply Chain (Private) Limited (the sub-subsidiary).2. 40 per share.2.174. the commissioning of which is expected to be completed in the last quarter of 2010. This has been adjusted in the current year by restating the comparative figure from Rs. due to issue of right shares. the Company incorporated a wholly owned subsidiary by the name of Engro PowerGen Limited with the objective to undertake power projects.123.3 Employee Share Option Scheme During the year.

the Company proposed certain changes relating to ‘grant date’ in the originally approved scheme. Vesting period has started from the date of grant and shall end on December 31.5 million shares. which was obtained in the Extra Ordinary General Meeting (EGM) held on December 22. 2009 and those who are promoted by the same date. The options are exercisable in two years at exercise prices of Rs. According to the Scheme senior employees who are critical to the business operations were to be granted options to purchase five million three hundred thousand newly issued ordinary shares at an exercise price of Rs. the exercise price of Employee Share Option Scheme was adjusted by the Company to Rs. 2007. 17 per share during the financial years ended December 31. however. Engro Polymer & Chemicals Limited The Employee Share Option Scheme (the Scheme) of Engro Polymer & Chemicals Limited (EPCL) was approved by its shareholders in their Extraordinary General Meeting (EGM) held on October 8. Vesting period has started from the date of grant and shall end on December 31. equity and assets for the year ended December 31. cleared these changes subject to the approval of shareholders. 2009.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 5. where after these options can be exercised within a period of two years.2 Employee Share Option Scheme Engro Chemical Pakistan Limited During the year. 37 . As per the approved change to the Scheme the 'grant date' is the date of EGM held on October 8. No amounts are paid or payable by the recipient on receipt of the option. 2008. The options carry neither right to dividends nor voting rights. the date when the scheme was originally approved by the shareholders. The effect of the change in the grant date has been recognized in the consolidated financial statements. Future employees who join by October 31. through their letter SMD/CIW/ESOS/04/2008 dated July 10. the length of vesting period shall be the same as enjoyed by first recipients of options. 2008 and those who are promoted by the same date. 2008. 267. The number of options granted is calculated in accordance with the criticality of employee to the business and their ability and is subject to approval by the Compensation Committee. Engro Energy limited The Employee Share Option Scheme (the Scheme) of Engro Energy Limited was approved by its shareholders in their Extraordinary General Meeting (EGM) held on April 18. may also be granted options. 22 per ordinary share.73 per share and total entitlements were increased to 5. where after these options can be exercised within a period of two years. 2007 have been restated. 2008. when the Scheme was originally approved. 2010. 2011 and 2012 respectively. the length of vesting period shall be the same as enjoyed by first recipients of options. During the year. 15 and Rs. 2008. due to issue of right shares. EPCL proposed certain changes relating to 'grant date' in the originally approved Scheme. The options carry neither right to dividends nor voting rights. Further. Future employees who join by June 30. 2007 as the grant date. According to the Scheme senior employees who are critical to the business operations were to be granted options to purchase nine million three hundred thousand newly issued ordinary shares. and subsequently by SECP on September 25. 2007. These changes were approved by the shareholders in their EGM held on June 27.3. Accordingly. The Securities and Exchange Commission of Pakistan. 2008. The effect of grant of share options has been incorporated in the financial statements using August 23. No amounts are paid or payable by the recipient on receipt of the option. The number of options granted is calculated in accordance with the criticality of employee to the business and their ability and is subject to approval by the Compensation Committee. however. may also be granted options.

ENGRO CORPORATION LIMITED TFC PROSPECTUS
(Amounts in thousand) Engro Foods Limited The shareholders of Engro Foods Limited (EFL), in their meeting held on October 8, 2007, have approved an Employee Share Option Scheme (the Scheme), for granting of options to its certain eligible critical employees upto twenty one million new ordinary shares. The Scheme has been approved by the SECP on July 10, 2008 (the date of grant). Under the Scheme, vesting period commenced from the date of grant and will end on December 31, 2010. Those eligible employees who joined the Subsidiary Company after the date of grant but before December 31, 2008 are also entitled to these options, however, their vesting period will commence when they attained the right to these options and will comprise of the same number of days as the vesting period of all other eligible employees. The maximum number of options to be issued to an eligible employee is for two million five hundred thousand ordinary shares. The options are exercisable within four years at exercise prices of Rs. 17, Rs. 19, Rs. 21 and Rs. 23 per share during the financial years ended December 31, 2011, 2012, 2013 and 2014 respectively. Avanceon Group [Formerly Engro Innovative Automation (Private) Limited] The Employee Share Option scheme (the Scheme) was originally approved by the shareholders of the Subsidiary Company in their Annual General Meeting (AGM) held on March 31, 2008. According to the Scheme, senior employees who are critical to the business operations shall be granted options to purchase two million one hundred and five thousand newly issued ordinary shares at an exercise price of Rs 31.5 per ordinary share. The number of options granted is calculated in accordance with the ability and criticality of employee to the business, subject to approval by the Compensation Committee. The options carry neither right to dividends nor voting rights. Vesting period shall start from the date of grant and shall end on December 31, 2009, where after the options can be exercised within a period of two years. The effect of grant of share options has been incorporated in the consolidated financial statements except for the options of EFL as its share price is significantly less than the exercise price and the option has a nil value. 5.3.3 Interest Rate Swap Engro Chemical Pakistan Limited The Company entered into an interest rate swap agreement to hedge its interest rate exposure on floating rate committed borrowing under an Off-shore Islamic Finance Facility agreement, for a notional amount of USD 50,000 which will increase to USD 150,000 during 2009, amortizing upto September 2014. Under the Swap agreement, the Company would receive USD-Libor from Citibank N.A. Pakistan on notional amount and pay fixed 3.47% which will be settled semiannually. The fair value of the interest rate swap at the year end is negative and amounted to Rs. 648,277. The Company entered into another interest rate swap agreement to hedge its interest rate exposure on floating rate committed borrowing from a consortium of Development Finance Institutions, for a notional amount of USD 85,000 amortizing upto April 2016. Under the Swap agreement, the Company would receive USD-Libor from Standard Chartered Bank on notional amount and pay fixed 3.73% which will be settled semi-annually. The fair value of the interest rate swap at the year end is negative and amounted to Rs. 424,933.

38

ENGRO CORPORATION LIMITED TFC PROSPECTUS
(Amounts in thousand) Engro Polymer & Chemicals Limited Engro Polymer & Chemicals Limited (EPCL) entered into a interest rate swap agreement with a bank to hedge its interest rate exposure on floating rate borrowing from International Finance Corporation (IFC) for a notional amount of US$ 15,000. Under the swap agreement, EPCL would receive USD-LIBOR from the bank on notional amount and pay fixed 3.385% which will be settled semi-annually. The fair value of the interest rate swap as at December 31, 2008 is negative and amounted to Rs. 60.154. 5.3.4 Issue of right shares with premium The Company issued 10% right shares of Rs. 175 per share to the shareholders including premium of Rs. 165 per share. The total issue including share premium amounted to Rs. 3,382,214 net of transaction cost on such issue. 5.3.5 Employee Housing Subsidy The Company has announced a medium term Employee Housing Subsidy Scheme for its employees who are not entitled for Employee Share Options. Under this scheme the Company plans to disburse Rs. 540,000 as housing subsidy, which would be amortised over a period of 2.5 years of employee service. To date the Company has disbursed an amount of Rs. 152,223 and recorded an amortization in the profit and loss account amounting to Rs. 73,319. In the condensed interim financial statements for the period ended September 30, 2008 housing subsidy has been disclosed as an equity transaction whereas it is a liability transaction. Accordingly, appropriate amendments have been made in the financial statements for the year ended December 31, 2008. 5.4 Financial statements for the year ended December 31, 2007

5.4.1 Investment in subsidiaries The following investments were made in the subsidiary companies during the year: Name of Subsidiary Engro Energy (Private) Limited Engro Foods Limited Engro Polymer and Chemicals Limited Engro Innovative Automation (Private) Limited Rupees 1,579,725 797,500 1,429,661 300,000

During the year, percentage of investment in Engro Polymer and Chemicals Limited (formerly Engro Asahi Polymer and Chemicals Limited) has decreased from 80% to 65.92% while investment in Engro Innovative Automation (Pvt) limited has increased from 51% to 62.67%. 5.4.2 Significant Event During the third quarter of the financial year, a fire broke out at PNSC Building, Karachi where the Head Offices of the Company and some of its Subsidiaries were located. Immediately following this event the Company and its Subsidiaries whose Head Office were located at PNSC building, launched their Disaster Recovery Plan due to which operational disruption and financial impact resulting from this incident remained minimal.

39

ENGRO CORPORATION LIMITED TFC PROSPECTUS
(Amounts in thousand) Along with the offices of the Company and of Engro Foods Limited, Engro Energy Limited, Engro Eximp (Private) Limited and Engro Management Service (Private) Limited, the fire also destroyed a substantial portion of their hard copy records related to the financial years 2005, 2006 and the period January 01, 2007 to August 19, 2007 although electronic data remained largely intact due to their Disaster Recovery Plan. The management launched an initiative to recreate significant lost records and was successful in gathering the same in respect of the current reported financial year. Records related to the already reported financial years 2005 and 2006 have not been recreated to date. 5.4.3 Currency options and Forward Exchange Contracts During the first half of the year, the Company purchased currency option contracts having a cost of Rs. 360,485 for tenure of six months to hedge its Euro - Dollar currency exposure of Euros 342,620 representing the anticipated outflows for Urea Expansion Project. On maturity, these contracts were restructured into forward exchange contracts for the remaining balances of commitments in Euros and any realized amounts were netted from the costs of these options included in the balance of hedging reserve. At year end the Company had forward exchange contracts to purchase Euros 297,399 at various maturity dates matching the anticipated payment dates for commitments with respect to Urea Expansion Project. The fair value of these contracts amounted to USD 32,642 at the year end. 5.4.4 Employee Share Option Scheme The Company has announced ownership-based compensation scheme namely “Employee Share Option Scheme (ESOS)” for executives and senior employees of the Company as per the Guidelines contained in the Public Companies (Employees Stock Option Scheme) Rules, 2001. In accordance with the provisions of the Plan, as approved by shareholders at an Extra Ordinary General Meeting held on August 23, 2007, senior employees who are critical to the business operations will be granted options to purchase ordinary shares at an exercise price of Rs. 277 per ordinary share. The total number of options that may be granted are for five million newly issued shares. The number of options granted is calculated in accordance with the criticality of Employee to the business and their ability subject to approval of the Remuneration Committee. No amounts are payable by the recipient on receipt of the option. The option carries neither rights to dividend nor voting rights. Vesting period shall begin from the date when scheme is cleared by SECP and shall end on December 31, 2010, where after the options can be exercised. No amount has been recognized in the current financial statements as clearance from SECP has not been received. 5.4.5 Issue of right shares with premium The Company issued 15% right shares of Rs. 125 per share to the shareholders including premium of Rs. 115 per share. The total issue including share premium amounted to Rs. 3,147,960 net of transaction cost on such issue. 5.5 Financial statements for the year ended December 31, 2006

40

11 12. 2006 to 2009 have been restated to incorporate the effect of issuance of right shares and bonus issue upto December 31. the Company has incorporated a wholly owned subsidiary by the name of Engro Energy (Private) Limited with the objective to undertake energy related businesses including setting up Independent Power Projects.5. 2010.03 11.Basic and Diluted The details of audited earnings per share.The Company 5.09 . basic and diluted.1 EARNINGS PER SHARE . 80 per share to the shareholders including premium of Rs.300 527.5. The Company also acquired 30% shareholding from Asahi Glass Company (AGC) of Japan in December 2006 resulting in the holding of the Company increasing from 50% to 80% in EAPCL which became its subsidiary.190 pertaining to 30% of equity acquired was taken to other income. 5.221. Accordingly.73 15.67 10.FERGUSON & CO.506 out of this amount of Rs. 2010 2009 2008 2007 2006 Rupees per share Earnings per share . The change in accounting policy was necessitated in view of a clarification from the Institute of Chartered Accountants of Pakistan regarding non statutory appropriations to reserves.316 pertaining to 50% of equity already held was taken to equity and Rs. 1.24 14. Chartered Accountants Karachi 41 . 2010. 197.ENGRO CORPORATION LIMITED TFC PROSPECTUS (Amounts in thousand) 5.5. This change in accounting policy did not have any effect on the Company’s total equity. 6.3 Change in accounting policy During 2006 the Company changed its accounting policy relating to appropriations to reserves.The Group 20. 392.2 Issue of right shares with premium The Company issued 10% right shares at Rs. these do not include the effect of bonus shares issued subsequent to December 31. 6. Upto last year appropriations to reserves were recognised in the financial statements of the period to which it related. whereby such appropriations are recognised in the year in which these are approved.1 Investment in Subsidiaries The following investments were made in the subsidiary companies during the year: Name of Subsidiary Engro Energy (Private) Limited Engro Foods Limited Engro Asahi Polymer and Chemical Limited Rupees 98.72 12. Yours truly Sd/_____________________ A.309 net of transaction cost on such issue.98 8.539 During the year. This acquisition resulted in a net fair value adjustment (negative goodwill) of Rs. 70 per share.99 10. of the Company and the Group are as follows: Year e nded December 31. approved post balance sheet date. 5. 195.000 854. The total issue including share premium amounted to Rs.F.99 The earnings per share for the years ended December 31. by a company.

484 142.736.369 Yours truly Sd/_____________________ A. SUBSCRIBED AND PAID-UP SHARE CAPITAL We have verified from the books of account and records of Engro Corporation Limited that the issued. subscribed and paid-up share capital of the Company as at December 31. 10 each issued as fully paid bonus shares Rupees in thousand 1.1 AUDITOR’S CERTIFICATE ON THE ISSUED. Marine Drive. Block 4.423. The Harbour Front Building HC No.354.FERGUSON & CO. of Shares 185.545 1. 3.853.382. subscribed and paid-up share capital to Rs.932.819 Ordinary shares of Rs. 2010 was Rs. SUBSCRIBED AND PAID-UP CAPITAL The Board of Directors Engro Corporation Limited 7th & 8th Floor. 2011 42 . Chartered Accountants Karachi MANAGEMENT NOTE Bonus shares have been issued in the ratio of 1 share for every 5 shares held (i.335 327. Clifton Karachi – 75600.369 thousand comprising of the following: March 15.277.84 thousand as at March 31. 20%) thereby increasing the issued. Pakistan Dear Sirs AUDITORS’ CERTFICATE ON ISSUED.10 each fully paid in cash Ordinary shares of Rs. 3. 2011 D 581 No.F.277.ENGRO CORPORATION LIMITED TFC PROSPECTUS 5.e.824 3. 3.

270 27.429.639 3.36 43 . Clifton Karachi – 75600.061 74.061 162.321.240 12. based on the audited financial statements for the year ended December 31.369 10.277.598. and (ii) the Company and its subsidiaries (the Group).819 (Rupees per share) Break-up value per share (before final dividend) 82.ENGRO CORPORATION LIMITED TFC PROSPECTUS 5.429.722. 10 each of (i) Engro Corporation Limited (the Company). 2010.438) 104.991 (Number of shares) Number of ordinary shares in issue 327. subscribed and paid-up capital Share premium Employee share option compensation reserve Hedging reserve Revaluation reserve on business Maintenance reserve Exchange revaluation reserve General reserve Unappropriated profit 3. 2011 D 582 The Company The Group (Rupees in thousand) Issued.277.577 28.053.883 4.3 AUDITOR’S CERTIFICATE FOR BREAK-UP VALUE OF SHARES The Board of Directors Engro Corporation Limited 7th & 8th Floor. Block 4.698 197.736.55 93. Pakistan Dear Sirs AUDITORS’ CERTIFICATE FOR BREAK-UP VALUE OF SHARES As requested.146 27.776. Marine Drive.240 8.819 327.622 30.455 (927. The Harbour Front Building HC No. are as follows: March 15.550.776.369 10.550.156 23. 3.813 4. we confirm that the break-up values of the ordinary shares of Rs.736.

284.14 Yours truly Sd/_____________________ A. 655.474 thousand. has approved (i) final cash dividend @ Rs.F. amounting to Rs. Chartered Accountants Karachi 44 .474 thousand. The revised break-up values after taking into consideration the aforementioned effects would be as follows: The Company The Group (Number of shares) Number of ordinary shares in issue (after bonus issue) 393.12 76. 2010. 655.183 (Rupees per share) Break-up value per share (after final dividend and bonus issue) 67. 2011.ENGRO CORPORATION LIMITED TFC PROSPECTUS Final Dividend / Bonus Issue 2010 The Board of Directors of the Company on February 14.FERGUSON & CO. and (ii) bonus issue amounting to Rs. from unappropriated profit for approval of the members at the Annual General Meeting to be held on March 31. 2 per share.183 393. 2011. while approving the financial statements for the year ended December 31.284.

2010 45 .4 AUDITED ACCOUNTS AS AT DECEMBER 31.ENGRO CORPORATION LIMITED TFC PROSPECTUS 5.

ENGRO CORPORATION LIMITED TFC PROSPECTUS 46 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 47 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 48 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 49 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 50 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 51 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 5. 2011 52 .5 UNAUDITED ACCOUNTS AS AT MARCH 31.

ENGRO CORPORATION LIMITED TFC PROSPECTUS 53 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 54 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 55 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 56 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 57 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 58 .

6 CREDIT RATING REPORT 59 .ENGRO CORPORATION LIMITED TFC PROSPECTUS 5.

ENGRO CORPORATION LIMITED TFC PROSPECTUS 60 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 61 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 62 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 63 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 64 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 65 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 66 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 67 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 68 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 69 .

ENGRO CORPORATION LIMITED TFC PROSPECTUS 70 .

Avanceon Ltd. This charge is pari passu with the existing charge for the first TFC Issue (Trust Deed dated September 17. Engro Fertilizer Ltd.010.740.64 5. 2010). create further first ranking pari passu charges.066.000 500.102. as Security backing the TFC.71 N.99 1. Details of shares held by Engro Corporation Limited as on December 31. create further first ranking pari passu charges.000 25.639. if any. 6. the Company shall intimate the Security Trustee.000.667 Percentage Holding 100% 100% 100% 100% 62.476.12 13.A. and excluding its shares in Engro Powergen Qadirpur Limited (formerly known as Engro Energy Limited) and Engro Polymer & Chemicals Limited (“Charged Assets”) at 125% of the outstanding principal amount.67% Breakup Value per share (PkR) 23.A 24. with prior written consent of the Trustee.000 250.000. and excluding its shares in Engro Powergen Qadirpur Limited (formerly known as Engro Energy Limited) and Engro Polymer & Chemicals Limited (“Charged Assets”) in favour of IGI Investment Bank Limited.800.1.02 29.57 10.667 1.928.131. and has been created in favor of IGI Investment Bank Limited (“Security Trustee”) for safeguarding interest of the TFC holders. with prior written consent of the Trustee. as long as the total value of charge in favour of the Trustee after such sale/transfer does not fall below 125% of the outstanding principal amount then secured.000 36. Shares of Rs.71 11. (JV) Arabian Sea Country Club (Affiliate) Total 71 . This charge is pari passu with the existing charge for the first TFC Issue (Trust Deed dated September 17.866.92 105.59 526. However. 10 each 48.34 3. Engro Foods Ltd.000 700. TRUSTEE AND SECURITY THE SECURITY The TFC has been secured by way of first ranking pari passu floating charge over all the present and future movable properties (including investments) of Engro Corporation Limited but excluding present and future trade marks and copyrights of Engro Corp.32 100% 50% N. Engro Management Services (Pvt) Ltd. 2010) and the Company may.A.16 Total Value (PkR Million) 1. 2010 for the purpose of security for this TFC Issue is as under: Subsidiaries and Affiliates Engro Eximp (Pvt) Ltd. (i) Nature of Charge Engro Corporation Limited has created first ranking pari passu floating charge over all the present and future movable properties (including investments) of Engro Corporation Limited but excluding present and future trade marks and copyrights of Engro Corp.000 45. Engro Vopak Terminal Ltd.90 N. Engro PowerGen Ltd. the changes in the assets backing the TFC within seven working days of such changes.000 1.56 7. 12.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART VI 6. (ii) Detail of assets backing the TFC (a) Shares as Security Engro Corporation Limited is the Parent (holding) Company and its main assets are in the form of shares held in its subsidiaries and affiliates.70 2. The Company may.544.072. The Company shall be free to transfer and sell part of Charged Assets without consent or NOC of the Security Trustee or the TFC Holders.

redeem any Coupon on its respective Redemption Date and to pay the Redemption Amount and / or any portion thereof on such Redemption Date. however.178. 6. 72 .3.000/-. EVENTS OF DEFAULT AND SECURITY ENFORCEMENT PROCEDURE The event of default will be governed under Article 8 of the Declaration of Trust executed between the Company and the Trustee to the Issue. 6. THE TRUSTEE In order to safeguard the interests of the TFC holders.2. defaulting on any of its obligations under the terms of the Declaration of Trust. that in the event of default. In the event of Engro Corp. The Obligations shall become immediately due and payable. THE TRUST DEED The Trust Deed dated April 07. The proceeds of any such enforcement shall be distributed to the TFC Holders at the time on a pari passu basis in proportion to the amounts owed to each TFC holder pursuant to the TFCs. the Trustee may enforce Engro Corp’s obligations in accordance with the terms of the Trust Deed. and the Security shall become immediately enforceable by a declaration of the Trustee.1 of the Declaration. and other such assets of values which are minor compared to shareholdings. each of the following events constitute an Event of Default and is reproduced below: a) the failure of the Issuer to: i.4. upon the occurrence of an Event of Default. the TFC holders acting through the Trustee shall be entitled to initiate legal proceedings against the Company for recovery of the outstanding amount payable under the TFCs. 2010. is PkR 136. 2011 (“Declaration of Trust”) executed between the Company and “IGI Investment Bank Limited” specifies the rights and obligations of the Trustee. Under Section 8. and The interests of the TFC holders are safeguarded by taking the actions that it deems necessary (as prescribed by the Declaration of Trust) in the event of any breach of terms and conditions of TFC Instrument and the Declaration of Trust by Engro Corp. computers.1. As per the terms of the Declaration of Trust executed between Engro Corporation Limited and the Trustee. It is clarified. notified to the Issuer. IGI Investment Bank Limited has been appointed to act as Trustee for the issue. The Issuer shall pay to IGI Investment Bank Limited a trustee fee of PKR 500. The fee shall be payable at the beginning of each year commencing from the date of signing of the Trust Deed and on each subsequent anniversary thereof.000 per annum. • 6. The book value of all such other assets as at December 31.ENGRO CORPORATION LIMITED TFC PROSPECTUS (b) other assets These include cars. The bankers to the Issue have been instructed to inform the Trustee on a regular basis of the subscriptions received. the Trustee will ensure the following: • The terms and conditions of the Declaration of Trust and Security Documents are adhered to.

scheme of arrangement or otherwise) of the Issuer other than a solvent liquidation or reorganisation. commences negotiations with one or more of its creditors with a view to rescheduling its Financial Indebtedness or any portion thereof. 73 . dissolution. enforcement of any Security Interest over substantial assets of the Issuer. n) any Financial Indebtedness of the Issuer is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (howsoever described). pay any amounts payable by the Issuer under this Declaration and such failure continues for a period of three (3) consecutive days irrespective of whether or not a demand for the payment of the same has been made upon the Issuer. by reason of actual or anticipated financial difficulties. b) default by the Issuer in the performance or observance of or compliance with any of its other material obligations or undertakings under the Declaration of Trust and Deed of Floating Charge. suspends making payments on any of its Financial Indebtedness or. and / or is unable or admits in writing its inability to pay its debts as they mature. l) the Issuer fails to meet any of its material obligations under this Declaration and the same has a Material Adverse Effect. i) any corporate action. f) the Issuer: i.ENGRO CORPORATION LIMITED TFC PROSPECTUS ii. acquires or expropriates (with or without compensation) any material or all the assets of the Issuer including but not restricted to the Secured Assets. to the Trustee. g) the Issuer is unable or admits its inability to meet its payment obligations in respect of its Financial Indebtedness as the same fall due. c) an event of default (howsoever described and / or defined) occurs under a Transaction Document. voluntarily or involuntarily becomes the subject of bankruptcy or insolvency proceedings except for proceedings which are frivolous in nature. m) any other event or circumstance arising out of the Issuer’s negligence or default which results in a Material Adverse Effect. iii. and / or a receiver or an administrator is appointed for all or any material part of its assets or business. and / or elects to become a party to or is subject to any proceedings or procedure under any law for the relief of financially distressed debtors. winding-up. j) k) any governmental agency nationalizes. administration or reorganisation (by way of voluntary arrangement. iv. e) the Issuer enters into an arrangement for the benefit of its creditors in respect of any Financial Indebtedness. ii. h) a moratorium is declared in respect of any Financial Indebtedness of the Issuer. legal proceedings or other procedure or steps are taken in relation to the suspension of payments. d) any representation or warranty made or deemed to be made or repeated by the Issuer in or pursuant to this Declaration is found to be incorrect and / or misleading in any material respect. except for proceedings which are frivolous in nature.

ENGRO CORPORATION LIMITED TFC PROSPECTUS o) any commitment for any Financial Indebtedness of the Issuer is cancelled or suspended by a creditor of the Issuer. q) any obligation or obligations of the Issuer under this Declaration or any Transaction Document are not. v) the Issuer fails to comply with the covenants set out in this Declaration and such failure continues for a period of thirty (30) days from the date of receipt of a notice by the Issuer from the Trustee in respect of the same or from the date on which the Issuer has knowledge of the same. s) any Security Document ceases to be in full force and effect or is declared to be void or is repudiated and the conditions resulting in the repudiation are not remedied and / or replacement Security Documents are not executed within a period of fifteen (15) days from the date on which the Security Documents become void and /or are repudiated. p) it is or becomes unlawful for the Issuer to perform any of its material obligations under this Declaration. as a result of an event of default (however described). whichever is earlier. w) the Issuer suspends. 74 . against the Issuer and the Issuer fails to effect such payment within thirty (30) days from the date on which the obligation to pay arises. legal. to carry on all or a substantial part of its business or to change the nature of its business from that undertaken at the date of this Declaration. x) any event or series of events (whether related or not) occurs which would have a Material Adverse Effect. u) the Issuer fails to comply with any law or regulation to which it may be subject and the same has a Material Adverse Effect. binding or enforceable and the cessation individually or cumulatively has a Material Adverse Effect. t) any court or arbitrator passes a final non-appealable judgment or arbitral award for payment. or cease to be. ceases. or threatens to suspend or cease. r) the Issuer repudiates this Declaration or evidences an intention to repudiate this Declaration. valid.

The CEO has an overall responsibility to manage the portfolio of businesses of the Company.T. M.T. DAWOOD CENTRE. KARACHI. MARINE DRIVE. Director’s Name HUSSAIN DAWOOD Chairman Address 11th FLOOR. KHAN ROAD. DAWOOD CENTRE. KHAN ROAD. FALCON ENCLAVE AIR FORCE OFFICERS SOCIETY(AFOS) TUFAIL ROAD LAHORE CANTT. PAKISTAN ISAR AHMAD · Engro Polymer & Chemicals Limited · Engro Foods Limited · Dawood Lawrencepur Limited · Dawood Hercules Chemicals Limited · Dawood Hercules Fertilizers Limited · Central Insurance Company Limited · Tenaga Generasi Limited 75 . PAKISTAN Directorships held in other Companies/Organizations · Dawood Hercules Chemicals Limited · Dawood Corporation (Private) Limited · Patek (Private) Limited · Sach International (Private) Limited · Sirius (Private) Limited · Engro Foods Limited · Engro Vopak Terminal Limited · Engro Polymer & Chemicals Limited · Engro Powergen Qadirpur Limited · Avanceon Limited · Engro Powergen Limited · Pakistan Chemical and Energy Sector Skills Development Company · Engro Fertilizers Limited · Engro Eximp (Private) Limited · Pakistan Industrial Development Corporation · Engro Fertilizers Limited ASAD UMAR Chief Executive 8TH FLOOR. which currently consists of the Chief Executive Officer ("CEO") and twelve other Directors. M. MANAGEMENT OF THE COMPANY BOARD OF DIRECTORS OF ENGRO CORPORATION LIMITED The Company's affairs are governed by a Board of Directors.25. KARACHI. PAKISTAN ARSHAD NASAR NO. KARACHI. CLIFTON. PAKISTAN 11TH FLOOR. 7. HC # 3.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART VII 7.1. THE HARBOR FRONT BUILDING. BLOCK 4.

T. KHAYABAN-E-SEHAR DHA. Pakistan 76 . PAKISTAN ABDUL SAMAD DAWOOD 10TH FLOOR. STREET 11.KHAN ROAD KARACHI. M. PAKISTAN · Engro Polymer & Chemicals Limited · LMKR Holdings (Private) Limited · Engro Powergen Limited · Engro Powergen Qadirpur Limited · UBL Fund Managers · Engro Fertilizers Limited · Sindh Engro Coal Mining Company Limited · Avanceon Limited · Dawood Corporation (Private) Limited · Dawood Hercules Chemicals Limited · Dawood Lawrencepur Limited · Engro Foods Limited · Engro Polymer & Chemicals Limited · Engro Vopak Terminal Limited · Sach International (Private) Limited · Engro Powergen Limited · Petek (Private) Limited · Pebbles (Private) Limited · Engro Fertilizers Limited · Tenaga Generasi Limited · DH Fertilizers Limited · Sirius (Private) Limited · Central Insurance Company Limited · Dawood Hercules Chemicals Limited · Dawood Corporation (Private) Limited · Inbox Business Technologies (Private) Limited · Patek (Private) Limited · Sach International (Private) Limited · Sui Northern Gas Pipelines Limited · Pebbles (Private) Limited · Tenaga Generasi Limited · Dawood Lawrencepur Limited · DH Fertilizers Limited · Engro Fertilizers Limited · Modern Industries (Private) Limited · Sirius (Private) Limited SHAHZADA DAWOOD 11th FLOOR. KARACHI. DAWOOD CENTRE. PHASE VI KARACHI. DAWOOD CENTER M.T. KHAN ROAD.ENGRO CORPORATION LIMITED TFC PROSPECTUS SHABBIR HASHMI 90/1.

5TH GIZRI STREET. Pakistan KHALID MANSOOR 77 . DHA. Marine Drive. Block 4. SUBHANI 8TH FLOOR. · Pakistan Poverty Alleviation Fund · Engro Polymer & Chemicals Limited · Engro Vopak Terminal Limited · Engro Fertilizers Limited · Engro Eximp (Private) Limited · Engro Polymer & Chemicals Limited · Engro Powergen Qadirpur Limited · Engro Powergen Limited · Sindh Engro Coal Mining Company Limited KHALID S. BLOCK 4. PAKISTAN · Dewan Drilling Limited · Dewan Petroleum (Private) Limited · National Clearing Company of Pakistan Limited · Al-Meezan Investment Management limited · Sindh Engro Coal Mining Company Limited — SAAD RAJA 31 BELLFIELD AVENUE HARROW. MARINE DRIVE. KARACHI. BAHRIA COMPLEX-I. PAKISTAN ASIF QADIR · Engro Polymer & Chemicals Limited · Engro Polymer Trading (Private) Limited · Inbox Business Technologies (Private) Limited · Unicol Limited · Engro Powergen Limited · Engro Powergen Qadirpur Limited · Engro Fertilizers Limited · Sindh Engro Coal Mining Company Ltd. CLIFTON. The Harbor Front Building. KARACHI. HC # 3. HC # 3. M.ENGRO CORPORATION LIMITED TFC PROSPECTUS MUHAMMAD ALIUDDIN ANSARI 30-G. KARACHI. MIDDLESEX HA3 6ST. UK ENGRO POLYMER & CHEMICALS LTD. PAKISTAN 7th Floor. PHASE IV. Clifton.KHAN ROAD. THE HARBOR FRONT BUILDING. Karachi.T.

UK.4. He is a global charter Member of the Indus Entrepreneurs and the member of the World Economic Forum in Davos. He has worked for many years in various senior positions in Pakistan. HC # 3. Engro Powergen Qadirpur Limited. Mr. Northwestern University. He joined Engro in 1992. Engro Foods Supply Chain (Pvt) Limited. 7. Beacon House National University. A Masters in Business Administration in Finance. Karachi Education Initiative. He is on the honorary council of Italy. Pakistan Institute of Corporate Governance. As part of social responsibilities. PAKISTAN · Engro Management Services (Private) Limited · Avanceon Limited · Engro Foods Limited · Sigma Leasing Corporation Limited · Engro Powergen Qadirpur Limited · Engro Powergen Limited · Engro Fertilizers Limited · Engro Eximp (Private) Limited · National Commodity Exchange Limited 7. State Bank of Pakistan and Trustee of Lahore University of Management Sciences (LUMS). BLOCK 4. PROFILE OF THE CHIEF FINANCIAL OFFICER Ruhail Mohammed is Senior Vice President and Chief Financial Officer of Engro Corporation Limited. A Masters in Business Administration. Chief Executive Officer of Engro Fertilizers Limited and Chairman of all Engro Subsidiaries and joint Ventures. Engro Fertilizers Limited. Avanceon Limited. THE HARBOR FRONT BUILDING. and a graduate in Metallurgy from Sheffield University. He has held key assignments with the company and with Exxon Chemical in Canada. Dawood Hercules Chemicals Limited and the Karachi Education Initiative/Karachi School for Business & Leadership.5.Dawood is an MBA from Kellogg School of Management. Umar is also on the Board of the Pakistan Business Council. 7. CLIFTON. He is on the Boards of Engro Foods Limited. PROFILE OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER Asad Umar is President and Chief Executive of Engro Corporation Limited. In Lahore and was recently conferred the award “Ufficiale Ordine al Merito della Repubblica italiana”. one of the largest World bank-financed social funds across the world. PROFILE OF THE COMPANY SECRETARY Andalib Alavi is Vice President Legal & Company Secretary of Engro Corporation Limited and manages the legal affairs of all the Engro group companies. he Chairs the board of the Pakistan Poverty Alleviation fund. by the Italian government. KARACHI. UAE and Europe. Engro Powergen Limited. Commonwealth business council. Engro Eximp (Pvt) Limited and Sigma Leasing Corporation Limited and Chief Executive of Engro Management Services (Pvt) Limited. He is also a Director on the Board of the Pakistan Centre for Philanthropy.ENGRO CORPORATION LIMITED TFC PROSPECTUS RUHAIL MOHAMMED Chief Financial Officer 7TH FLOOR. 78 . Pakistan Business council. USA. he joined the board in 2000. Hussain Dawood is the Chairman of Engro Corporation Limited. & Asia house London. He joined the board in 2003. PROFILE OF THE CHAIRMAN OF THE BOARD OF DIRECTORS Mr. he joined the Board in 2006. Mr.3.2. MARINE DRIVE. He is Bar-at-Law from Lincolns Inn and holds LLB Hons degree from LSE. University of London. 7. He is also the chairman of Engro Management Services (Private) Limited and a member of the Corporate Governance Committee of the Karachi Stock Exchange.

12. hotel and other expenses.7. NUMBER OF DIRECTORS Pursuant to section 174 of the Companies Ordinance. and the Articles of Association of the Company.10. as his or their representative. 79 . 7. The Directors may also be deemed to be interested to the extent of any shares held by each of them in the Company and/or the TFCs applied for and allotted to them through the public issue. the number of directors of a listed company should not be less than seven (7). At present.at least in his own name and not jointly with any other person or his nomination in writing by a member or members holding shares of the nominal value of Rs. The Directors may also be paid all traveling. provided that a Director who is an executive of the Company shall not be entitled to any remuneration for attending meetings of the Board or a Committee formed by the Board. OVERDUE LOANS There are no overdue loans (local and foreign currency) on the Company. consists of thirteen (13) Directors. 7. the Board of Engro Corp. 7. The Directors performing whole time service to the Company may also be deemed to be interested in the remuneration payable to them by the Company. the terms of remuneration for such office shall be sanctioned by an Ordinary Resolution of the Company. AMOUNT OF BENEFITS TO PROMOTERS AND OFFICERS DURING THE LAST TWO YEARS No benefit has been given or is intended to be given by the Company to the promoters and officers of the Company other than remuneration for services rendered by them as full time executives of the Company. required to be exercised by the Company in the general meeting of the shareholders. 7.25.000/. 1984. 7.000/.ENGRO CORPORATION LIMITED TFC PROSPECTUS 7. except that remuneration of directors who are executives of the Company shall be decided by the Board of Directors. REMUNERATION OF DIRECTORS The remuneration of a Director for attending meetings of the Board or a Committee formed by the Board shall from time to time be determined by the Board of Directors.6. Where a Director or a firm of which such Director is a partner or a private Company of which such Director is a director holds an office of profit under the Company other than the office of Chief Executive or an office as legal or technical adviser or banker.9.or more. POWERS OF DIRECTORS As required under section 196 of the Companies Ordinance. the authority to conduct business of the Company is vested with its Board of Directors and they may exercise all such powers of the Company as are not required by the Companies Ordinance. 1984 or the Articles of Association of the Company or by a special resolution. 7. QUALIFICATION OF DIRECTORS The qualification of a director shall be holding of shares in the Company of nominal value of Rs 25. properly incurred by them in attending and returning from meetings of the Directors or any Committee of the Directors or general meetings of the company or in connection with the business of the Company. 1984.11. INTEREST OF DIRECTORS The Directors may be deemed to be interested to the extent of fees payable to them for attending board meetings.8.

14. ELECTION OF DIRECTORS The Directors shall comply with the provisions of section 174 to 178. perpetual or redeemable debentures or debenture stock or any mortgage. 7.16. 180 and 184 of the Ordinance relating to the election of Directors and matters ancillary thereto. 80 . charge or other security on the undertaking or the whole or any part of the property of the Company (both present and future) but no such charge shall be created on unpaid capital of the Company. The Director may raise or secure the payment of such sum or sums or financial arrangement in such manner and upon such terms and conditions in all respects as they think fit and in particular by making. drawing. VOTING RIGHTS The TFCs shall not carry any voting rights in relation to the Company.15. 7.13. 7. The present Directors of the Company were elected effective April 22. accepting or endorsing on behalf of the Company any promissory notes or bills of exchange or by issuing bonds. 2009. BORROWING POWERS The Directors may from time to time raise or borrow any sum or sums of money or make any arrangement for finance for the purpose of the Company. INTEREST OF DIRECTORS IN PROPERTY ACQUIRED BY THE COMPANY None of the Directors of the Company had or has any interest in any property acquired by the Company within the last two years.ENGRO CORPORATION LIMITED TFC PROSPECTUS 7.

LEGAL ADVISOR OF THE COMPANY 8. 1-C I. 8. Clifton. 2011 by PACRA.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART VIII 8..6.7.3 Credit Rating Report dated April 08.I. Pakistan Faysal Bank Limited Samba Bank Limited Standard Chartered Bank (Pakistan) Limited MCB Bank Limited 8. Karachi-74400. Karachi Tel: 111 211 211 Fax: 35636741 Website: www.Ferguson & Co.7. 8.5. MATERIAL CONTRACTS / DOCUMENTS 8.2 Declaration of Trust Agreement dated April 07.C.Chundrigar Road. 2011 between the Company and IGI Investment Bank Limited.S.3. 2011 between the Company and IGI Investment Bank Limited.A. Block ‘B’.com A.F.2. 99-B.7.1 Deed of Floating Charge dated April 07. REDEMPTION BANKS (TO EXERCISE PUT OPTION) 8. Main Shahra-e-Faisal. 8.4.M. 81 .7. Chartered Accountants State Life Building No. Pakistan i ii iii iv v vi vii viii ix x xi xii xiii i ii MCB Bank Limited Standard Chartered Bank (Pakistan) Limited Bank Alfalah Limited NIB Bank Limited United Bank Limited Habib Bank Limited Bank Al Habib Limited Allied Bank Limited JS Bank Limited Askari Bank Limited Citibank N. AUDITORS 8. MISCELLANEOUS INFORMATION REGISTERED OFFICE / HEAD OFFICE Engro Corporation Limited 7th & 8th Floor. Harbor Front Building Marine Drive. REGISTRAR / TRANSFER AGENT 8. Karachi Andalib Alavi Vice President Legal & Company Secretary Central Depository Company of Pakistan Limited CDC House. BANKERS TO THE ISSUE 8.engrorupiya.1. Block 4.H. S.

inter alia. 2011 from Karachi Stock Exchange. MEMORANDUM OF ASSOCIATION The Memorandum of Association.9. 8. officer or Auditor in defending any proceedings. INDEMNITY As per the Article 123 of Company’s Articles of Association.903. the Auditor’s Certificates.547. of Shares 2010 20% 65. A copy of the Memorandum of Association annexed to this Prospectus is being published with all issues hereof except those released as newspaper advertisement.ENGRO CORPORATION LIMITED TFC PROSPECTUS 8. 8.14. or in which he is acquitted. 8. the Clearance letter from KSE and LSE.8. whether civil or criminal. 813. the Deed of Floating Charge. 2011 from Securities & Exchange Commission of Pakistan. contains the objects for which the Company was incorporated and the business that the Company is authorized to undertake. CAPITALIZATION OF RESERVES Year Stock Dividend No.644 The Stock Dividends appearing in 2009 & 2010 were announced with the full year results but were capitalized in the following years. 8. or in connection with any application under Section 488 of the Ordinance in which relief is granted to him by the Court. every Director or officer of the Company and every person employed by the Company as auditor shall be indemnified out of the funds of the Company against all liability incurred by him as such Director. 2011 from Lahore Stock Exchange.794.10.364 2009 10% 29.12.11. LEGAL PROCEEDINGS There are no cases by or against the Company. VENDORS The Company has no Vendors in terms of Clause 12 of section 1 Part 1 of the Second Schedule of the Ordinance. 82 .7.4 Clearance letter dated May 06. 8. INSPECTION OF DOCUMENTS AND CONTRACTS All the Balance Sheets and Profit & Loss Accounts. in which judgment is given in his favor. 8.256 2008 Nil Nil 2007 Nil Nil 2006 Nil Nil 2005 Nil Nil 2004 Nil Nil 2003 Nil Nil 2002 10% 13. and the approval letters from Securities & Exchange Commission of Pakistan may be inspected during usual business hours on any working day at the registered office of the Company from the date of publication of this Prospectus until the closing of the subscription List. Copies of the Memorandum and the Articles of Association. Trust Deed. 8.7.7.6 Approval letter dated May 20. REVALUATION OF FIXED ASSETS The Company has not reflected any revaluation of fixed assets in their Financial Statements.5 Clearance letter dated May 10. 8. the Credit Rating Report.

476.ENGRO CORPORATION LIMITED TFC PROSPECTUS 8.636 83 .810.740.000 48. Avanceon Ltd. Engro PowerGen Ltd.653 5.686 104.051 11. Engro Fertilizers Ltd. Engro Management Services (Pvt) Ltd. Engro Foods Ltd. Engro PowerGen Ltd.000 Shareholding of Engro Corp.072.A. Shareholding 100% 100% 100% 100% 56% 63% 100% 10% 8. Engro Fertilizers Ltd. Engro Management Services (Pvt) Ltd. ‘000) 3.667 32.000.264.695.000. Engro Foods Ltd. Avanceon Ltd.000 1. Total Amount (Rs. 2010.000 25. of Shares 372.16. INVESTMENT IN ASSOCIATED COMPANIES Investments in associated undertakings as per the audited accounts of December 31. Arabian Sea Country Club No.800.000 500.311. SUBSIDIARY COMPANIES Extent of the interest of Engro Corporation Limited (the holding company) in the equity of its subsidiaries as at December 31.536 12.066. Engro Fertilizers Ltd.850 128. 2010. Engro Vopak Terminal Ltd.865. 8. 2010. Engro Foods Ltd.15.000 250. Engro Polymer & Chemicals Ltd. Engro Powergen Qadirpur Ltd. is as follows: Subsidiary companies Engro Eximp (Pvt) Ltd. Engro PowerGen Ltd.000 700. Engro Eximp (Pvt) Ltd. Engro Powergen Qadirpur Ltd.860 71.010. LONG TERM BORROWINGS OF THE COMPANY AND ITS SUBSIDIARIES Long Term borrowings of the Company and its subsidiaries as per the audited accounts of December 31. Avanceon Ltd.67% 10% 100% 50% N.000 45. are as follows: Company Engro Corporation Limited Engro Polymer & Chemicals Ltd.000 36.19% 100% 100% 100% 100% 62.384. 56. are as follows: Company Engro Polymer & Chemicals Ltd.000.17.

In accordance with provisions of the Central Depositories Act. Oath Commissioner or Head Master of High School or bank manager in the country of applicant’s residence Original CNIC/Passport. an attested photocopy of CNIC (in case of RPs)//Passport (in case of NRPs and FIs) as the case may be.com] The applicants opting for scripless form of TFCs are required to complete the relevant sections of the application. and Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. and the registered office of Engro Corporation Limited. after verification. In case of difference of signature with the Computerized National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP) or Passport. 3) 4) 5) 6) 7) (ii) 84 . bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations. the Company reserves the right to issue TFCs in physical form. 1997 and the CDC Regulations. Name (s) and address (es) must be written in full block letters. in English and should not be abbreviated. be retained by the bank branch along with the application. both the signatures should be affixed on the application form. Mutual Funds.engrorupiya. Copies of Prospectus and application forms can be obtained from the members of Karachi Stock Exchange (Guarantee) Limited. Provident/pension/gratuity funds/trusts. Councilor. All applications must bear the name and signature of the applicant. Copy of these documents can be attested by any Federal/Provincial Government Gazetted Officer. Foreign Nationals whether living in or outside Pakistan Companies. APPLICATIONS MADE BY INDIVIDUAL INVESTORS (i) In case of individual investors. APPLICATION AND ALLOTMENT INSTRUCTIONS GENERAL INSTRUCTIONS 1) Eligible investors includes: a) b) c) Pakistani citizens resident in or outside Pakistan or Persons holding two nationalities including Pakistani nationality. along with one attested photocopy. must be produced for verification to the banker to the issue at the time of presenting the application. d) e) 2) APPLICATION MUST BE MADE ON THE COMMISSION’S APPROVED APPLICATION FORM OR A LEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING ATLEAST 62 GM. In case of discrepancy between the information provided in the application form and the information already held by CDS. credit of such TFCs is allowed ONLY in the applicant’s own CDC Account. The attested photocopy will. should be enclosed and the number of CNIC/Passport should be written against the name of the applicant. (subject to the terms of the Trust Deed and existing regulations). as the case may be). the Bankers to the Issue and their branches.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART IX 9. Lahore Stock Exchange (Guarantee) Limited. The Prospectus and the application forms can also be downloaded from the website:[https://www.

will after verification. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of TFCs for which the application has been made. namely. Subscription money must be paid by cheque drawn on applicant’s own bank account or pay order/bank draft payable to one of the Bankers to the Issue “Engro Rupiya Certificate” and crossed “A/C PAYEE ONLY”. Applicants should retain the bottom portion of their application forms as provisional acknowledgement of submission of their applications. The attested copies. The applicant should have at least one bank account with any of the commercial banks but not necessarily with the Bankers to the Issue. Any Federal/Provincial Government Gazetted Officer. In case of joint application. Oath Commissioner and Head Master of High School or bank manager in the country of applicant’s residence can attest copies of such documents Attested photocopies of the documents mentioned in 8(i) must be produced for verification to the banker to the issue at the time of presenting the application. or through the bank where the application was submitted.ENGRO CORPORATION LIMITED TFC PROSPECTUS 8) APPLICATIONS MADE BY INSTITUTIONAL INVESTORS (i) Applications made by companies. the same will be refunded by cheque or other means by post. Please note that joint application will be considered as a single application for the purpose of allotment of TFCs. while in case of CDS. brother. The person to be nominated shall not be a person other than the following relatives of the member. to the principal holder. mutual funds. including a step or adopted child. be retained by the bank branch along with the application (ii) 9) Joint application in the name of more than two persons will not be accepted. it will be credited to the CDS account mentioned on the face of the form and where any amount is refundable. provident/pension/gratuity funds/trusts and other legal entities must be accompanied by an attested photocopy of their Memorandum and Articles of Association or equivalent instrument / document. the same should also be submitted along with the application. The nominee must sign the application form and submit attested copies of their CNICs/Passport. Applicants should ensure that the bank branch. 10) 11) 12) 13) 14) 15) 16) 17) 18) 85 . For the applications made through pay order/bank draft. father. The applicants not having a bank account at all (nonaccount holders) are not allowed to submit application for subscription of TFCs. it would be permissible for a banker to the issue to deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay order/bank draft individually for each application. each applicant must sign the application form and submit attested copies of their CNICs/Passport. corporate bodies. Where applications are made by virtue of Power of Attorney. Applications are not to be made by minors and/or persons of unsound mind. mother. Councilor. a spouse. in whole or in part. completes the relevant portion of the application form. Bankers to the Issue are prohibited to recover any charges from the subscribers for collecting subscription applications. Hence. the applicants are advised not to pay any extra charges to the bankers to the issue. Bank Manager. to which the application is submitted. Making of any false statements in the application or willfully embodying incorrect information therein shall make the application fictitious and the applicant or the bank shall be liable for legal action. sister and son or daughter. The TFCs will be dispatched to the Principal Holder.

shall be rejected. ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS 20) In case of foreign investors who are not individuals.25. required to fill in all data fields in the Application Form. 86 . Pakistan Faysal Bank Limited Samba Bank Limited 3. therefore. not fail to give their bank account numbers.000/.000/. 2. Application for TFCs below the total value of Rs. 6. or in multiples of PKR 5. therefore.for amounts above PKR 25. Applicants should.000/. applications must be accompanied with a letter on applicant’s letterhead stating the legal status of the applicant. Copies of these documents can be attested by the bank manager in the country of applicant’s residence. or applications which are incomplete will not be accepted. place of incorporation and operations and line of business. 5. 4. if any. Allotment/Transfer of TFCs to applicants shall be made in accordance with the allotment criteria/ instructions disclosed in the Prospectus.000/. Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the State Bank of Pakistan’s Foreign Exchange Manual. 7. which are neither for Rs 25. the same must be lodged with the application. A copy of memorandum of association or an equivalent document should also be enclosed.nor in multiples of PKR 5.000/. 25. applicants are advised to fill in accurate mailing address and CDS account details. Where applications are made by virtue of Power of Attorney. The applicants are.for amounts above PKR 25.000/-. The minimum amount of application for subscription of TFCs is Rs. which do not meet the above requirements. BANKERS TO THE ISSUE Code 01 02 03 04 05 06 07 Name of Banks MCB Bank Limited Standard Chartered Bank (Pakistan) Limited Bank Alfalah Limited NIB Bank Limited United Bank Limited Habib Bank Limited Bank Al Habib Lim ited Code 08 09 10 11 12 13 Name of Banks Allied Bank Limited JS Bank Limited Askari Bank Limited Citibank N.shall not be entertained. Therefore. 21) BASIS OF ALLOTMENT 1.000/-. The Registrar will dispatch TFCs to successful applicants or credit the respective CDS accounts of the successful applicants (as the case maybe). if available. Applications. Allotment of TFCs shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and/or the instructions by the Securities & Exchange Commission of Pakistan. Application for TFCs must be made for a minimum of the aggregate face value of PKR 25.A.000/.ENGRO CORPORATION LIMITED TFC PROSPECTUS 19) It would be permissible for a Banker to the Issue to refund subscription money to unsuccessful applicants having an account in its bank by crediting such account instead of remitting the same by cheque. Applications. pay order or bank draft.

K U. Occupation Code Code 01 02 03 04 05 Occupation Business Business Executive Service Housewife Household Code 06 07 08 09 10 Occupation Professional Student Agriculturist Industrialist Other 10. OVERSEAS BANKERS TO THE ISSUE Code 01 02 03 04 Name of Banks Code 05 06 07 08 Name of Banks 9.ENGRO CORPORATION LIMITED TFC PROSPECTUS 8. Nationality Code Code 001 002 003 004 005 Name of Banks U.S.A U.E K.A.S.A Oman Code 006 007 008 009 010 Name of Banks Iran Bangladesh China Bahrain Other 87 .

Arshad Nasar Mr. Subhani Mr. Isar Ahmad Mr. SIGNATORIES TO THE PROSPECTUS Names of Directors Mr. Khalid Mansoor Mr. Ruhail Mohammed Mr. Saad Raja Mr. Shabbir Hashmi Mr. Hussain Dawood Mr. Abdul Samad Dawood Signature -Sd-Sd-Sd-Sd-Sd-Sd-Sd-Sd-Sd-Sd-Sd-Sd-Sd- Witness 1: Name: Place: Karachi Witness 2: Name: Place: Karachi Signature: _________-Sd-_____________ Signature: _________-Sd-_____________ 88 . Muhammad Aliuddin Ansari Mr. Shahzada Dawood Mr.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART X 10. Asif Qadir Mr. Asad Umar Mr. Khalid S.

and generally deal in fertilizers and chemical products. 1984 COMPANY LIMITED BY SHARES Memorandum of Association OF ENGRO CORPORATION PAKISTAN LIMITED 1. compounded. 3. transport. refining. develop or carry on any business or activity related with any form of energy. marketing and provision of facilities and services subject to any prior approvals required under the law. prepared. transporting. use. agricultural products and equipment including but not limited to farming including without limitation corporate farming. produce. transmitted. To undertake. export. developed. sounds. chemicals and minerals and any products and by-products which may be derived. petroleum. MEMORANDUM OF ASSOCIATION THE COMPANIES ORDINANCE. exchange or otherwise dispose of. 2. distribute. The objects for which the Company is established are: (1) To manufacture. gas and power including electric power. The name of the Company is ENGRO CORPORATION LIMITED The Registered Office of the Company will be situated in the Province of Sind. gas and power related service and facilities subject to any prior approval required under the law. market. images. made or manufactured therefrom and any substance obtained by mixing any of the foregoing with other substances (hereinafter all referred to as “fertilizers and chemical products”) and to purchase or otherwise acquire. store. trade. reduce and process all kinds of artificial manures and fertilizers. experiment with. cellular. signals and data and materials in all forms. producing. seeds. treat. refine. sell. generating. import. including. To undertake. supply. package. at all stages of exploration. develop and/or carry on all or any business or activity relating to Information Technology and to do all or such things as are incidental or conducive to the carrying on of Information Technology related manufacturing. handle. (2) (3) (4) (5) 89 . develop or carry on any business or activity relating to telecommunications including fixed and wireless and including telephone. produced. received or processed and to do all or such things as are incidental or conducive to the carrying on of telecommunication related businesses including without limitation manufacturing. pesticides and other plant remedies and the food business at each and every stage of production and distribution and to do all such things as are incidental or conductive to the carrying on of such businesses. distributing and supply and to do all or such things as are incidental or conducive to the carrying on of energy. without limitation petroleum. To undertake. cable or satellite communication and including of speech. hold. To undertake and carry on all type of business related to all aspects of agriculture. howsoever produced. selling.ENGRO CORPORATION LIMITED TFC PROSPECTUS PART XI 11. services and facilities subject to any prior approvals required under the law.

purchase. operate. water courses. irrigate and otherwise work or use any lands over which the Company has any rights and to dispose of or otherwise deal with any farm or other products. refineries.ENGRO CORPORATION LIMITED TFC PROSPECTUS (6) to own. alleys. seeds-men. to clear. power houses. electric lighting and power works. lighters. any lands and to lay out. airplanes. any roads. hay and straw. tank cars. garages. maintenance and improvement or working of. or for chartering and affreightment and otherwise to obtain the possession of. ways. paths and walks. to own. storage installation. airplanes. tugs. workshops. and use. improve and landscape grounds. motor trucks and tractors. repair. lodging houses. sell. operate and dispose off. construct. streets. to sell. storage. hangars. acquire. refining. build. take on lease or in exchange. charter. work. establish. warehouses. hire and let out for hire. railways. management. nurserymen. clubs. machinery and other appliances. farm. helicopters. works and conveniences which may be calculated. piers. dealers in agricultural equipment. hospitals. gas works. gardens. to own. factories. maintain. fit up and improve buildings to lay out. sell and trade in any goods usually traded in any of the above businesses and to carry on any other businesses which may be advantageously carried on by the Company in connection therewith. telegraphs. tenants and others and to advance money to them. contribute or subscribe to the constructions. hydroelectric plants. machine shops. milk contractors. of or on any such lands. animal feeds and provisions of all kinds and to buy. minerals and chemical and other substances of all kinds and to pipe. dairymen. pull down. automobiles. subsidies or otherwise assist or take part in. laboratories. acquire. directly. shops. maintenance working. construct and pave roads. exchange or otherwise acquire and to construct. carrying out of control thereof. and otherwise to provide for any employ the same in the conveyance of property and merchandise of all kinds and the transportation of personnel. parks. build. to buy. manage. boats and vessels of all kinds. to drain. pipelines. guard towers. barges. to purchase. wharves. or aid in. viaducts. decorate. launches. alter. airplanes. manage and maintain plants. process. employees. license. stores. tanks. and to take any lease or enter into any working agreement in respect thereof. minerals and chemical and other substances. lay out. improvement. dredging facilities. lease. vessels. furnish. baths. jetties. and develop gas. and purveyours and vendors of dairy products. and enter into contracts and arrangements of all kinds with builders. breakwaters. dwelling houses. erection. docks. lease. work. store. telephones. tramways. supply and deal in all such substances. motor transportation or in any companies possessed of or interested in any ships. and other facilities for the manufacture. conveyors. boilers. lay. manage. millers. places of amusement. pleasure grounds. install. transport. dairy farmers. pipes. to purchase. improve. equipment. restaurants. maintain and operate pipelines and other conveyors for the transportation of gases. processing. refine. moorings. lease. sale and distribution of fertilizers and chemical products. aqueducts canals. (7) (8) (9) (10) (11) (12) 90 . bridges. helicopters. the construction. purchase of otherwise acquire. get in. animal or vegetable. mortgage or let the same. aerodromes and landing fields. steam works. hotels. affreight. poultry. property owners. reading rooms. locomotives. improve and prepare the same for building or commercial purposes. wells. maintain. lorries. growers of and dealers in grain. treat. harbour abutment. install. apparatus. gather. wagons. railways and motor transportation. to construct. to advance the Company’s interests and to contribute to. and to lay out sites for and establish temporary or permanent camps. cultivate. operate carry out control. maintain. dispensaries. helicopters. wireless. liquids. and other forms of transport and rolling stock. customers and visitors and to purchase or otherwise to acquire any shares or interest in any ships or vessels. establish. office and other buildings. places of worships. or otherwise acquire. mills. erect. foundries. laboratories. fuel stores. and employ or turn to account ships. towns and villages on any such lands and to carry on all or any of the businesses of farmers. or indirectly.

firms or persons. to establish or promote or concur in establishing or promoting any company or companies for the purpose of acquiring all or any of the property. to act as Managers. charge or lien to secure and guarantee the performance by the Company or any other person or company of any obligation undertaken by the Company or any other person or company as the case may be. lease mortgage. to receive money on deposit or loan and borrow or raise money in such manner as the Company shall think fit. reissue. Registrars. and protect and renew in any part of the world any patents. firm or person. either in whole or in part. associations. sell dispose of. joint adventure. or otherwise acquire. firms or persons. mortgage or let any estate or interest in and to take and acquire options over any property. Treasurers. conferring any exclusive or non-exclusive or limited right to their use. take. (14) (15) (16) (17) (18) (19) (20) 91 . association. Secretaries. and also by a similar mortgage. and to purchase. deal with. firm or person carrying on or engaged in. underwrite. any business or transaction which this Company is authorized to carry on or engage in. or the acquisition of which may seem calculated directly or indirectly to benefit the Company. trade marks. charge or lien upon all or any of the property or assets of the Company (both present and future). or otherwise turn to account the property. Agents. process or thing which may seem capable of being used for any of the purposes of the Company. to lend and advance money or give credit to such persons or companies and on such terms as may seem expedient. association. improve. subscribe for or otherwise acquire all or any part of the shares. or any secret or other information as to any invention. immoveable and moveable. to enter into partnership or any arrangement for sharing profits. and to guarantee the performance of any contract or obligation and the payment of money of or by any such persons or companies and generally to give guarantees and indemnities. or otherwise assist any such company. rights and liabilities of the Company or for any other purpose which may seem directly or indirectly calculated to benefit the Company to amalgamate or consolidate or merge with a view to effecting a union of interests. patent rights. or any business or transaction capable of being conducted so as directly or indirectly to benefit the Company. testing or improving any such patents. co-operation.ENGRO CORPORATION LIMITED TFC PROSPECTUS (13) to purchase. including its uncalled capital. Consultants or Managing Agents of and to provide services to any business or concern that the Company may find convenient or advantageous. and to place or guarantee the placing of. exercise. or rights of any kind. take on lease or tenancy. or otherwise with any company. or which can be carried on in conjunction therewith or which is capable of being conducted so as directly or indirectly to benefit the Company. purchase. and to develop. licences. inventions or rights. with or without guarantee. hold. brevets d’invention. and to expend money in experimenting upon. firm or person. reciprocal concessions. and to use. to acquire and undertake the whole or any part of the business. rights or information so acquired. turn to account. or otherwise deal with the same. union of interest. acquire. or about to carry on or engage in. association. property and liabilities of any person or company carrying on or proposing to carry on any business which the Company is authorised to carry on. and to lend money to. to apply for. with or into any other companies. develop. sell or otherwise dispose of the same in such manner as may be thought expedient. or grant licenses in respect of. guarantee the contracts of. designs. by mortgage. and to sell. concessions and the like. debentures or other securities of any such other companies. or otherwise acquire. shares and securities of any such company or association. and in particular by the issue of debentures or debenture stock (perpetual or otherwise) and to secure the repayment of any money borrowed raised or owing. or possessed of property suitable for the purposes of the Company.

or the dependents or connections of such persons. turn to account or otherwise deal with all or any part of the property and assets. warrants. to manage. exchange. amenities and conveniences of all kinds and to make payments towards insurance and to subscribe or guarantee money for charitable or benevolent objects or for any exhibition or for any public. whether secured or unsecured. discount. (22) (23) (24) (25) (26) (27) (28) 92 . hypothecate. title and interest of the Company therein. concessions and licences. annuity or other obligations of any other company. supreme. corporate or governmental body. judicial. directly or indirectly. municipal or otherwise. rights. assign. stocks. lease. mortgage or otherwise dispose of the property. to obtain any legislative. person or company. and to carry out. and any right. bonds. transfer. or for any other purpose which may seem expedient. debenture stocks. placing or underwriting or procuring the underwriting of shares. municipal. promotion and registration of the Company or the issue of its capital. exercise or comply with any such arrangements. buy. agents. including rights. trusts and conveniences. lease. person. improve. or other securities or obligations of any institution. including brokerage and commissions for obtaining applications for or taking. underwrite. bills of lading. association. whether or not having objects altogether or in part similar to those of the Company. mortgage. concessions and licences and to procure the Company to be registered or recognized in any part of the world. to enter into any arrangements and contracts with any government or authority supreme. endorse. institutions. to prejudice the interests of the Company or its Members. calculated to benefit employees or ex-employees of the Company. corporeal or incorporeal. negotiate. privileges. actions or steps taken by any Governmental authority or body. local or otherwise. local. tangible or intangible. trainees and servants. dispose of and deal in shares.ENGRO CORPORATION LIMITED TFC PROSPECTUS (21) to draw. national. agents. employees. deal in. which may seem calculated. gratuities and allowances and to provide houses. dispose of. assets or undertaking or the Company or any part thereof for shares. applications. concessions and franchises as may seem expedient. debentures. and to grant pensions. stock. general or useful purpose and for the purpose of this paragraph the words “employees” and “ex-employees” shall include. pledge. debentures and other negotiable or transferable instruments. of any place in which the Company may have interests. to pay out of the funds of Company all expenses which the Company may lawfully pay with respect to the formation. options. immovable and movable. employees and servants of the Company and others and to establish and support or aid in the establishment and support of associations. debentures or other securities of the Company. respectively. execute and issue promissory notes. firm or person. institution or corporate or governmental body. privileges. to subscribe for. to take all necessary or proper steps with the authorities. officials. agreements. bills of exchange. administrative or other acts or authorisations of any government or authority competent in that behalf for enabling the Company to carry any of its objects into effect and for effecting any modification of the Company’s constitution. funds. that may seem conducive to the Company’s objects or any one of them and to obtain from such government or authority any rights. to remunerate Directors. to sell. purchase or otherwise acquire and to hold. and to carry on any negotiations or operations for the purpose of directly or indirectly carrying out the objects of the Company or furthering the interests of its Members and to oppose any proceedings. present and former directors and other officers. or any company. develop. sell. or for any other consideration. debentures. make accept. licences. sell. privileges. deliver.

to undertake. subcontractors.000. trustees or otherwise. to do all such other things as may be deemed incidental or conducive to the attainment of the above objects or any of them. The Share Capital of the Company is Rs. trustees. and either alone or in conjunction with others. either as principals. shall in no way be limited or restricted (except when the context expressly requires) by reference to or inference from the terms of any other sub clauses or the name of the Company but may be carried out in as full and ample a manner and construed in as wide a sense as if each of the said sub clause defined the object of a separate and distinct Company and the Company shall have full power to exercise all or any of the powers conferred by any part of this clause in any part of the world. rewards and donations. but so that no distribution amounting to a reduction of capital be made except with the sanction (if any) for the time being required by law. except where used in reference to this Company. The liability of the Members is limited.000 Ordinary Shares of Rs. and accordingly. training and demonstration programmes and by advertising in the press. agents. 10/. or otherwise. assist and participate in financial. 4.000. and both singly and in connection with other persons. firms.(Rupees ten) each. debentures or other securities of the Company credited as paid up in full or in part. to adopt such means of making known the products of the Company as may seem expedient and in particular by undertaking educational.000 (Rupees Four billion and five hundred million) divided into 450.ENGRO CORPORATION LIMITED TFC PROSPECTUS (29) to pay for any rights or property acquired by the Company and to remunerate any person or company whether by cash payment or by the allotment of shares. by circulars and exhibition of works of art or interest. or otherwise. 5. to do all or any of the above things.500. or any proceeds of sale or disposal of any property of the Company. and whether domiciled in Pakistan or elsewhere. commercial and industrial operations and undertakings in any part of the world. shall be deemed to include any partnership or body of persons. associations and companies and corporations. And it is hereby declared that the word “company” in this clause. and either alone or in conjunction with others. (30) (31) (32) (33) (34) (35) 93 . and either by or through agents. to distribute among the Members in specie any property of the Company. 4. contractors. whether corporate or unincorporate. The objects specified in each of the sub clauses of the main clause 3 shall be regarded as independent objects. by publication of books and periodicals and by granting prizes.

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