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Engro Corporation Limited

Vision To be the premier Pakistani enterprise with a global reach passionately pursuing value creation for all stakeholders

Engro philosophy Not only grow and increase shareholders wealth Work for the betterment of customers, society, employees, partners and government

Corporate structure of Engro

Chairmans message We will continue to implement action consistent with our corporate motto Enabling Excellence in everything that we think and do

Share holding Pattern of Engro

Category of shareholding as at December 31, 2012

Board of directors: Board of directors consists of 5 executive directors 8 non-executive directors Responsibilites: To ensure that affairs of organization are management with full integrity and competently.

Executive & Non-executive directors

Hussain Dawood Muhammad Aliuddin Ansari Shabbir Hashmi Shahzada Dawood Saad Raja Ruhail Mohammed Shahid Hamid Pracha Khawaja Iqbal Hassan Khalid Siraj Subhani Sarfaraz A. Rehman Afnan Ahsan Abdul Samad Dawood Andalib Alavi

(Chairman, Executive director ) (President & CEO, Executive director) ( Non- executive director) ( Non- executive director) ( Non- executive director) (Executive director ) ( Non- executive director) ( Non- executive director) ( Non- executive director) ( Non- executive director) (Executive director) ( Non- executive director) (secretary, Executive director )

Company made the three committee

Compensation committee To review and recommend all elements of the Compensation, Organization and Employee Development policies Relating to the senior executives' remuneration To approve all matters related to the remuneration of the executives of all companies and Members of the management committee and meet at least one every year. Meeting time: At least one every year

CONTD. . . .
Audit committee In reviewing and reporting financial and non-financial information to shareholders, Systems of internal control risk management and the audit process Meeting time: At least once every quarter

CONTD. . .
Investment committee To reviewing the Company's investment transactions Performances, In overseeing the Company's capital financial resources. Committee meets At least three times a year on need basis

Market Model OF Engro Corporation

Shareholder environment Nonexecutive Majority Boards Independence & Performance

Dispersed ownership Institutional Context

Sophisticated institutional ownership

Active equity market Active takeover market

Aligned incentives
High disclosur e

Corporate Context

Shareholder equality

Capital Market Liquidity

Transparency & Accountability

Aligned incentives: Incentives are aligned with the performance of professionals Transparency and accountability: Developed a good system High disclosure: To maintain a high disclosure by audit committee.

Stakeholder Theory

Application: Working for a) Society b) Employees and c) Government etc Focus: o Protecting shareholders interest o Growing their business in order to increase shareholders wealth

Subcontinent Model of Governance

External Environment
Government Regulations, Policies, Guidelines etc. Corporate Culture, Structure Characteristics, Influences

Internal Environment
Vision; Mission, Policies, Norms Companys Act SEC Stock Exchanges Auditors

Company Depositors, Borrowers, Customers and Other Stakeholders

Internal Stakeholders

Board of CORPORATE Directors

Proper Governance Shareholder Value Corporate Governance Outcome / Benefits to Society Transparency Investor Protection Healthy Corporate Sector Development Concern for Customer

Subcontinent Model
Organization they are working for all shareholders like: Shareholders, Customers, Employees, Government, Enduring high disclosure and transparency. Best quality products in reasonable price

Corporate Social Responsibility

They are working for livelihood, education, health, infrastructure and disaster management Providing the : Technical education Khushaal livestock project Dialysis Centre, Eye Care Centre, Mother and Child Care Centre

CONTD. . . . .
Provides: Establishment of thalassemia Centre in Sukkur Health services to 19,725 patients, provided education to 3,635 students and Made 166 model homes in model villages etc.

Role of government in ensuring corporate governance of company in Pakistan

Corporate governance in Pakistan is on developing stage Examples of bad corporate governance in Pakistan like: Taj Company, Mehran Bank Scandal and Efroz chemical scandal

SECP code of conduct

It define the rules to ensure the good corporate governance in the organizations. It includes in this organization: The composition of board No person can act as a director of more than seven listed companies Casual vacancy of director should be filled within 90 days rules for committees The chairman of the committee should be independent

Governance hallmarks/issues
Engro Internal Rift Expansion was planned by the then President and CEO Engro, Asad Umar But the whole corporation came into trouble after he and another board member and CEO of Engro Fertilizers Khaild Mansoor who also resigned from his post recently, was under immense grilling of the fellow board members.

Hallmarks of Engro Corp. Governance

Board has 8 Non-Executive Directors and 5 Executive Directors Engro has made committees These committees mostly include Independent Engro is providing healthy and safe environment In order to resolve the conflict of interest Engro has developed an effective internal control system Engro has also developed policies to stop insider trading

Engro is follow the Mckinseys market model
Applies to Engro is Stakeholders theory The model that applies is the Sub continental model Engro also perform the CSR activities


I. Not to diversify their II. It will reduce the check and balance from the employees and directors