ENGRO TFC Prospectus

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 Rated, Listed and Secured Term Finance Certificates
(Engro Rupiya Certificates)
of PKR 4,000 Million
Inclusive of Green Shoe Option of PKR 2,000 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

October 15, 2010 – January 14, 2011 (Both Days Inclusive)
During Banking Hours
Date of Publication of this Prospectus is October 06, 2010

ENGRO CORPORATION LIMITED TFC PROSPECTUS
GLOSSARY
ECL or Company or Issuer or Engro Engro Corporation Limited
BoD Board of Directors
CDCPL Central Depository Company of Pakistan Limited
CDS Central Depositary System
CEO Chief Executive Officer
CVT Capital Value Tax
Date of Investment The date when investor‟s subscription money is

received by any of the Company‟s Bankers to the
Issue
EPS Earnings per Share
GoP Government of Pakistan
Interim Period The period from the Date of Investment till the Issue
Date
IPO Initial Public Offering
IPP Independent Power Producer
Issue Date February 01, 2011 which will be the first day after the
interim profit payment
Issue Issue of TFCs through this Prospectus
KSE Karachi Stock Exchange (Guarantee) Limited
OUTSTANDING ISSUE PRICE 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)
PACRA Pakistan Credit Rating Agency
Put Option 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 call
option the amount to be redeemed should either be
PkR 5,000/- or in multiples thereof
TFC Term Finance Certificate
TFC Trustee IGI Investment Bank Ltd
2
WHT Withholding Tax
3
TABLE OF CONTENTS
Page Number
PART – I
1. APPROVALS, CONSENTS AND LISTING ON THE STOCK EXCHANGE 7
PART – II
2. TERM FINANCE CERTIFICATES AND RELATED MATTERS 9
PART – III
3. COMMISSIONS, BROKERAGE AND OTHER EXPENSES OF THE ISSUE 17
PART – IV
4. HISTORY AND PROSPECTS 18
PART – V
5. FINANCIAL INFORMATION & CREDIT RATING REPORT 23
PART – VI
6. TRUSTEE AND SECURITY 79
PART – VII
7. MANAGEMENT OF THE COMPANY 83
PART – VIII
8. MISCELLANEOUS INFORMATION 90
PART – IX
9. APPLICATION AND ALLOTMENT INSTRUCTIONS 93
PART – X
10. SIGNATORIES TO THE PROSPECTUS 97
PART – XI
11. MEMORANDUM OF ASSOCIATION 98
PART – XII
12. APPLICATION FORM 104
PART – XIII
13. REDEMPTION NOTICE 106
4
Summary of the Issue
Issuer Engro Corporation Limited (“Engro”)
Purpose of the Issue The proceeds of the Issue will be utilized to finance the cash needs
of Engro Corporation for investments in its subsidiaries (For details
refer to para 2.11)
Issue Amount Upto PkR 4,000 million (inclusive of a Green Shoe Option of PkR
2,000 million)
Tenor 3 years from the Issue Date
Profit Rate 14.5% p.a.
Profit payment frequency Semi Annually
Profit Accrual From the Date of Investment
Minimum Investment Rs. 25,000/-
Denomination of TFC Rs. 5,000/- or in multiples thereof
Subscription Period 3 months
TFC Schedule Date of opening of subscription period October 15, 2010

Date of closing of subscription period January 14, 2011
1
Date of Interim Profit Payment January 31, 2011
Issue Date February 01, 2011
First Profit Payment July 31, 2011
Second Profit Payment January 31, 2012
Third Profit Payment July 31, 2012
Fourth Profit Payment January 31, 2013
Fifth Profit Payment July 31, 2013
Sixth and Final Profit Payment January 31, 2014
Principal Repayment in full January 31, 2014
Maturity Date January 31, 2014
Allotment basis First come first served
Holding of TFCs TFCs may be held either in physical form or in book entry (scrip-
less) form through CDS of CDCPL
Principal Redemption 0.1% of the principal amount in five equal semi-annual installments
in the first thirty (30) months and the remaining 99.9% of the
principal amount in the thirty-sixth (36th) month (For details refer to
1
Please refer to para 2.14.3
5
para 2.14)
Put Option (Early The investors/TFC holders may ask the Company for early
Redemption) 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 2.14.2)
Security The TFC has been secured by way of first ranking 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 ECL and excluding its
shares in Engro Energy Limited and Engro Polymer & Chemicals
Limited (“Charged Assets”) at 125% of the outstanding principal
amount. These charges have 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)
Bankers to the Issue MCB Bank Limited, Standard Chartered Bank (Pakistan) Limited,
Bank Alfalah Limited, NIB Bank Limited, Bank Al Habib Limited,
Allied Bank Limited, Habib Bank Limited, United Bank Limited, JS
Bank Limited, Askari Bank Limited, Citibank N.A. Pakistan
Trustee IGI Investment Bank Limited (“IGI”)
Registrar & Transfer Agent Central Depository Company of Pakistan Limited

(“CDCPLRATING”)
Entity Rating “AA” (Double A) by PACRA (For details refer to para 5.5)
Instrument Rating “AA” (Double A) by PACRA (For details refer to para 5.5)
Risk Factors For details refer to para 4.4
Listing Karachi Stock Exchange (“KSE”)
Pre-IPO None
Underwriting None
6
PART I
1. APPROVALS, CONSENTS AND LISTING ON THE STOCK EXCHANGE
1.1. 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.
It must be distinctly understood that in giving this approval, the Securities and Exchange
Commission of Pakistan does not take any responsibility for the financial soundness of any
scheme or for the correctness of any of the statements made or opinions expressed by
Engro Corporation Limited (“ECL” or „the Company‟ or “the Issuer”) in this Prospectus.
1.2. CLEARANCE OF THE PROSPECTUS BY THE KARACHI STOCK EXCHANGE
This Prospectus for the issue of rated, listed and secured Term Finance Certificates (“TFCs”) has
been cleared by the Karachi Stock Exchange (Guarantee) Limited (“KSE”) in accordance with the
requirements under its Listing Regulations. While clearing the Prospectus, the KSE neither
guarantees the correctness of the Prospectus nor the ability of ECL to redeem the TFCs.
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 070 dated August 2, 2010 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)
b) Copies of contracts mentioned in Part VIII of the Prospectus
c) 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
d) 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
1.4. LISTING ON KARACHI STOCK EXCHANGE
Application has been made to KSE 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 KSE, 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
7
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.
8
PART II
2. TERM FINANCE CERTIFICATES AND RELATED MATTERS
2.1. 1st ISSUE OF LISTED TFCS TO THE GENERAL PUBLIC
The Issue consists of PKR 4,000 million (inclusive of green shoe option of PKR 2,000 million) to be
issued in the form of rated, 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.
This will be the first TFC Issue by Engro Corporation Limited. The Company was formerly known
as Engro Chemical Pakistan Limited and had issued TFCs for the expansion of its fertilizer
business and for its working capital requirements. All previous TFC issues by Engro Chemical
Pakistan Limited are now part of Engro Fertilizers Limited.
The TFCs will be 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”, each set having an aggregate face value of PKR 5,000/- or in multiples thereof. The
minimum amount of application for the subscription of TFCs is PKR 25,000/-. The TFC is
structured to redeem 0.1% of the principal amount in five equal semi-annual installments in the first
thirty (30) months and the balance 99.9% of the principal amount in the thirty-sixth (36th) month.
The redemption value of the TFCs shall be specified on the TFC itself. For more details, please
refer to para 2.14.
There is no pre-IPO placement; 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. However, if the target amount i.e. PKR 4,000 million
(inclusive of the green shoe option) is subscribed before the end of subscription date, subscription
period will be closed immediately. Since there is no minimum subscription requirement, all
subscription amounts up to the target amount (inclusive of the green shoe option) will be listed on
the KSE.
2.2. SECURED TERM FINANCE CERTIFICATES
The TFC has been secured by way of first ranking 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 ECL and excluding its shares in Engro Energy Limited
and Engro Polymer & Chemicals Limited (“Charged Assets”) at 125% of the outstanding principal
amount. These charges have 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. (For details refer to para
6.1)
2.3. OPENING AND CLOSING OF SUBSCRIPTION LIST
THE SUBSCRIPTION LIST WILL OPEN FOR 3 MONTHS AT THE COMMENCEMENT OF

BANKING HOURS ON OCTOBER 15, 2010 AND CLOSE AT THE END OF BANKING HOURS ON
JANUARY 14, 2011 (BOTH DAYS INCLUSIVE)
9
2.4. INVESTOR ELIGIBILITY
Investors include the following:
 Pakistani citizens resident in or outside Pakistan or Persons holding two nationalities

including Pakistani nationality;
 Foreign Nationals whether living in or outside Pakistan;
 Companies, bodies corporate or other legal entities incorporated or established in or outside
Pakistan (to the extent permitted by their constitutive documents and existing regulations, as
the case may be);
 Mutual Funds, Provident/pension/gratuity funds/trusts, (subject to the terms of the Trust
Deed and existing regulations); and
 Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.
ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS
1. In case of foreign investors who are not individuals, applications must be accompanied with a
letter on applicant‟s letterhead stating the legal status of the applicant, place of incorporation and
operations and line of business. A copy of memorandum of association or an equivalent
document should also be enclosed, if available. Where applications are made by virtue of Power
of Attorney, the same must be lodged with the application. Copies of these documents can be
attested by the bank manager/officer in the country of applicant‟s residence.
2. Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out
under the State Bank of Pakistan‟s Foreign Exchange Manual.
2.5. MINIMUM AMOUNT OF APPLICATIONS AND BASIS OF ALLOTMENT OF TFCs
a) The minimum amount of application for subscription of TFCs is PKR 25,000/-
b) Applications for TFCs below the aggregate face value of PKR 25,000/- will not be
entertained.
c) Applications for TFCs by the general public, including institutions and individuals, must be
made for a minimum of the aggregate face value of PKR 25,000/- or in multiples of PKR
5,000/- for amounts above PkR 25,000/-.
d) 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 4,000 million
(inclusive of the green-shoe option) is subscribed. In case Bankers to the Issue on any
given day accept subscriptions which result in the target amount being exceeded,
then all applications in excess of the target amount will be returned to the applicants
along with profit at the rate of 14.5% 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. Therefore, there will be no oversubscription. In order to ensure that allotment of
TFCs is made to the applicants on first come first served basis, the Bankers to the
Issue shall mark each Subscription Application with the date and time of their receipt.
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.
e) Allotment of TFCs shall be subject to scrutiny of applications for subscription.
10
2.6. REFUND OF MONEY TO UNSUCCESSFUL APPLICANTS
Since there will be no oversubscription, there will be no case of refund of money to unsuccessful
applicants except in the case mentioned in para 2.5 (d) above.
2.7. 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 for meeting the cash needs of Engro Corporation Limited for
investments in its subsidiaries and affiliates.
2.8. ISSUE, CREDIT AND DISPATCH OF TFCs
The Company shall credit or dispatch, as the case may be, TFCs within thirty (30) days of closure of
subscription period in compliance with the requirements of KSE Listing Regulations. Consequently,
an investor subscribing to the TFC issue on the first day of subscription will be issued TFCs within a
maximum of one-twenty (120) days from the first day of subscription. 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 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”). The TFCs issued directly for induction
in the CDS, without the issuance of the physical certificates and the TFC scrips (with the terms and
conditions), shall be subject to the terms and conditions for the issuance of the TFCs specified in
Schedule 5 of the Trust Deed dated September 17, 2010 executed between the Company and the
Trustee for the TFC Issue.
The applicants who opt for issuance of TFCs in scripless form in the CDS should fill in the relevant
columns in the Application Form. In order to exercise the scripless option, the applicant must also
have a CDS account at the time of subscription. In case where the CDS account is not mentioned or
is not correct, physical TFC certificates will be issued.
If the Company defaults on complying with the requirements of the Listing Regulations, it will pay to
the KSE a penalty of PKR 5000/- per day for the period during which the default continues. The KSE
may also notify the fact of such default and the name of the Company by notice and also by
publication in the Daily Quotation.
2.9. TRANSFER OF TFCs
2.9.1 Physical Scrips
TFCs shall be transferred in the manner as provided under the Companies Ordinance, 1984.
Transfer of TFCs will be subject to payment of the applicable stamp duty levied by the Provincial
Government. Stamp duty on initial issuance will be borne by the Company, while stamp duty on
subsequent transfer will be on account of the TFC holders.
2.9.2 Transfer under Book Entry System
TFCs will be declared as eligible security through CDS of CDCPL. Stamp duty on initial issuance
will be borne by the Company. TFCs, which are in the CDS, shall subsequently be transferred in
accordance with the Central Depositories Act, 1997 and the Central Depository Company of
Pakistan Limited Regulations. The transfer fee for all subsequent transfers shall be borne by the
TFC holders.
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2.10. TFCs ISSUED IN PRECEDING YEARS
This will be the first TFC Issue by Engro Corporation Limited. The Company was formerly known
as Engro Chemical Pakistan Limited and had issued TFCs for the expansion of its fertilizer
business and for its working capital requirements. On January 01, 2010, the fertilizer operations
were demerged into a new company Engro Fertilizers Limited and all previous TFC Issues were
transferred to Engro Fertilizers Limited by Order of the High Court of Sind dated December 9,
2009, as part of Scheme of Arrangement under sections 284 to 288 of the Companies Ordinance,
1984.
2.11. PRINCIPAL PURPOSE FOR THE USE OF SUBSCRIPTION MONEY
The subscription money, as and when received by the Bankers to the Issue, shall be transferred to
the designated bank account of the Company and will be utilized by the Company. Following is the
tentative investment plan:
Subsidiary Amount in PKR million

Engro Fertilizers Limited 3,000 by way of loans
Engro Foods Limited 1,000 by way of equity
In case the subscription money received is below the target amount, the shortfall will be met
through borrowings either by Engro Corporation Limited or directly by the respective subsidiary.
2.12. REGISTERED INSTRUMENT
TFCs will be in registered form and the Company shall maintain or cause to be maintained a
register of TFC holders.
2.13. INTEREST OF TFC HOLDERS
There is no outstanding TFC issue of the Company as such the question of interest of TFC holders
does not arise.
2.14. REDEMPTION OF TFCs
A register for TFC holders will be maintained or cause to be maintained by the Company. The
register will be closed for a period of 7 days prior to the profit payment date. The company will give
a minimum of 14 days notice to the Exchange prior to the Book Closure for Profit payments.
Investors can redeem TFCs earlier than maturity by exercising Put option (see para 2.14.2) or the
TFCs will redeem as per schedule detailed in para 2.14.1.
All payments will be made either through crossed cheque, pay order or direct bank deposit on the
basis of option exercised by the applicant in the TFCs Subscription Application. In case of cheque
or pay order, the instrument will be dispatched to the mailing address of the registered holder of
the TFC.
2.14.1 TFCs held till Maturity
For TFCs held till maturity, the TFC holders will not need to physically go to the counters of any
specific bank in order to have the TFCs redeemed.
All payments will be made either through crossed cheque, pay order or direct bank deposit on the
basis of option exercised by the applicant in the TFCs Subscription Application. In case of cheque
12
or pay order, the instrument will be dispatched to the mailing address of the registered holder of
the TFC.
The terms of redemption of TFCs held till maturity are as follows:
Tenor 3 years
The TFC is structured to redeem 0.1% of the Principal
Principal Repayment amount in the first 30 months and 99.9% in the 36th
month.
Profit Rate 14.5% per annum
An interim profit payment for the period from the Date of
Investment till the Issue Date will be made before the
dispatch or credit, as the case may be, of the TFCs after
Profit Payment
the close of subscription period. All subsequent profits
will be payable semi-annually in arrears on the
outstanding Principal amount from the Issue Date.
The redemption schedule for TFCs held till Maturity of an aggregate face value of PKR 25,000
based on profit rate of 14.5% per annum is set out in the table below:
Principal Profit @ Zakat @ Withholding Total Principal Principal

Months Redemption 14.5% 2.5% Tax @ 10% Payment Payment in % Outstanding
6 5 1,812.50 0.13 181.25 1,636.13 0.02% 24,995
12 5 1,812.14 0.13 181.21 1,635.80 0.02% 24,990
18 5 1,811.78 0.13 181.18 1,635.47 0.02% 24,985
24 5 1,811.41 0.13 181.14 1,635.15 0.02% 24,980
30 5 1,811.05 0.13 181.11 1,634.82 0.02% 24,975
36 24,975 1,810.69 624.38 181.07 25,980.24 99.90% -
Total 25,000 11,926.85 625.00 1,192.69 35,109.17 100.00%
Notes:
 The above redemption schedule includes deduction of Zakat and Withholding Tax. For
applicability of these, please refer to para 2.16 and 2.18 below respectively.
 The above redemption may be subject to Income Tax. For its applicability, please refer to
para 2.17.
2.14.2 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, 15 day prior written
notice, and in case of partial call option the amount to be redeemed should either be PkR
5,000/- or in multiples thereof. The outstanding amount (Outstanding Issue Price) equal to or
less than PkR 5,000/- may be redeemed in full only. Profit will be paid till the date the Company
receives the redemption notice.
In case of TFCs held in physical form, 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
13
 Standard Chartered Bank (Pakistan) Limited
In case of TFCs held in CDS, TFC holders can exercise the Put Option as per the Central
Depository Company of Pakistan Limited Regulations.
TFCs applied for redemption will not be tradable in the secondary market. In case of physical
certificates, the investor will have to surrender the certificates along with the redemption notice.
TFCs held in CDS will be cancelled when the redemption notice is received by the Company.
By way of an example, the redemption schedule for TFCs of an aggregate face value of PkR
25,000 based on profit rate of 14.5% per annum and redeemed at the end of 27th month from the
Issue Date is set out in the table below:
Principal Profit @ Zakat @ Withholding Total Principal Principal

Months Redemption 14.5% 2.5% Tax @ 10% Payment Payment in % Outstanding
6 5 1,812.50 0.13 181.25 1,636.13 0.02% 24,995
12 5 1,812.14 0.13 181.21 1,635.80 0.02% 24,990
18 5 1,811.78 0.13 181.18 1,635.47 0.02% 24,985
24 5 1,811.41 0.13 181.14 1,635.15 0.02% 24,980
27 24,480 905.53 612.01 90.55 24,683.36 97.92% -
Total 24,500 9,210.64 612.51 921.06 32,177.47 98.00%
Notes:
 The above redemption schedule includes deduction of Zakat and Withholding Tax. For
applicability of these, please refer to para 2.16 and 2.18 below, respectively.
 The above redemption may be subject to Income Tax. For its applicability, please refer to
para 2.17.
 The above redemption schedule includes deduction of a service charge of 2% of the
outstanding Issue Price of the TFC.
 Profit will be paid to the TFC holder till the date the Company receives the redemption notice
and will be computed on 365 day year basis.
PLEASE NOTE THAT THE ISSUER HAS NO CALL OPTION.
2.14.3 Profit Payments
Profit will be paid at a fixed rate of 14.5% per annum from the Date of Investment. To bring all
TFCs at par before dispatch or credit, as the case may be, an interim profit payment for the period
from the Date of Investment till the Issue Date will be made before the dispatch or credit, as the
case may be, of the TFCs after the close of subscription period. From the Issue Date, all
subsequent profits will be payable semi-annually in arrears on the outstanding Principal amount.
The following table illustrates profit payment for the interim period and for the three years period
commencing from the Issue Date:
Profit Payment Profit Period Profit Payment Date

Interim Interim Period (Date of Investment till the Issue Date) January 31, 2011
First February 01, 2011 to July 31, 2011 July 31, 2011
Second August 01, 2011 to January 31, 2012 January 31, 2012
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Third February 01, 2012 to July 31, 2012 July 31, 2012
Fourth August 01, 2012 to January 31, 2013 January 31, 2013
Fifth February 01, 2013 to July 31, 2013 July 31, 2013
Sixth & Final August 01, 2013 to January 31, 2014 January 31, 2014
2.15. REDEMPTION RESERVE
In view of the secured nature and good credit rating (“AA”), the Company is expected to have
adequate funds to meet its financial obligations arising from the issue of TFCs. Therefore, no
redemption reserve is being created for the redemption of TFCs.
2.16. DEDUCTION OF ZAKAT
Zakat is deductible in case of TFCs held by Muslim citizens of Pakistan, except where a statutory
declaration of exemption is filed, and in case of certain non-corporate entities such as Trusts,
Funds (subject to being qualified for non-deduction of Zakat in terms of the Zakat and Ushr
Ordinance, 1980) etc. 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,
whichever is lower, at the rate of 2.50% on such dates as the concerned TFC becomes due for
redemption in a Zakat year.
2.17. INCOME TAX
Any income derived from the Term Finance Certificates shall be subject to income tax as per the
Income Tax Ordinance, 2001. According to this Ordinance, the tax shall be deducted @ 10% of
the gross amount of profit paid as per the First Schedule, Part 3, Division 1, Para (a), and shall be
deemed to be the final discharge of tax liability on the profit arising to a tax payer other than a
company, under subsection 3 of Section 151 of the Income Tax Ordinance, 2001.
2.18. DEDUCTION OF WITHHOLDING TAX
ECL is required to withhold tax, currently at the rate of 10%, from profit payments to all investors
except companies and resident individuals whose investment amount is up to PKR 150,000 under
Clause 59, part (IV), Second Schedule of Income Tax Ordinance 2001.
2.19. 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, 2001.
2.20. CAPITAL VALUE TAX & WITHOLDING TAX ON SALE/PURCHASE OF TFCs
Pursuant to the provisions of Section 233A of the Income Tax Ordinance, 2001 & Capital Value
Tax (Finance Act 1989) the following charges are applicable on sale/purchase of securities:
 0.02% Capital Value Tax (“CVT”) will be charged on purchase of all modarba certificates and
instruments of redeemable capital as defined in the Companies Ordinance, 1984
0.01% Withholding Tax (“WHT”) will be charged on sale of all shares, modaraba certificates, and
instruments of redeemable capital as defined in the Companies Ordinance, 1984.
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2.21. MARKET MAKING
The TFCs will be listed on the Karachi Stock Exchange. JS Global Capital Limited (formerly Jahangir
Siddiqui Capital Markets Limited) will act as Market Maker for the issue. The role of the market
maker will be to offer bid & ask quotes for the TFCs at a spread of 0.50% and 1.50% in yield, or
equivalent price terms, for marketable or non-marketable lots respectively. Price will be determined
by market maker in light of prevailing liquidity, interest rates and credit risk on the issuer.
Marketable lots are defined as any amount upto PKR 1 million face value with minimum face value
of PKR 25,000 and Non-Marketable lots are defined as any amount less than PKR 25,000 face
value or more than PKR 1 million face value. Market Maker will trade TFCs which are either
available for transfer with CDS or physically in the form of printed certificates.
2.22. DISCLOSURE OF DEFERRED TAXATION
Deferred tax is recognized using the balance sheet method, providing for all temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to
be applied to the temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date.
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. 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.
The balance of deferred tax liability for Engro Corporation Limited as at June 30, 2010 is PKR 158
thousand. Break up is as follows:
Amounts in „000
Accelerated depreciation PKR (16)
Retirement & other Service benefits PKR 174
PKR 158
16
PART III
3. COMMISSIONS, BROKERAGE AND OTHER EXPENSES TO THE ISSUE
3.1. COMMISSION TO THE BANKERS TO THE ISSUE
A commission at the rate of 0.5% of the amount collected, 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.
3.2. BROKERAGE
For the public offer, the Company will pay brokerage to the members of KSE, LSE and ISE at the
rate of 0.25% of the value of TFCs actually sold through them.
3.3. EXPENSES OF THE ISSUE
The initial expenses of the issue paid or payable by the Company inclusive of all commissions are
estimated to be PKR 249,067,500/-. The details of the expenses of the issue are as follows:
Expenses Category Rate Amount in PKR

Commission to the Bankers to the Issue 0.50% 20,000,000
Promotion by the Bankers to the Issue 20,000,000
Brokerage to the members of Stock Exchanges 0.25% -
Stamp Duty – Sindh 0.05% 2,000,000
Rating Fee – Initial 1,200,000
Initial Listing Fee of the Karachi Stock Exchange 100,000
Processing Fee of the Securities & Exchange Commission of Pakistan 100,000
Annual Listing Fee of the Karachi Stock Exchange 50,000
CDCPL Fee 67,500
Trustee Fee 500,000
Registrar Fee 50,000
Printing & Publication Expenses of Prospectus 1,500,000
Marketing 200,000,000
Legal Expenses 1,000,000
Out of Pocket Expenses 2,500,000
Total 249,067,500
*Represents maximum expenses related to the issue
17
PART IV
4. HISTORY AND PROSPECTS
4.1. BACKGROUND AND HISTORY
Established in 1965 as a fertilizer company and subsequently named Exxon Chemical Pakistan
Limited, the Company was renamed Engro Chemical Pakistan Limited (ECPL) in 1991 when Exxon
decided to divest out of the fertilizer business globally. ECPL was later renamed Engro Corporation
Limited (ECL) on January 01, 2010, and its fertilizer business demerged into a new company Engro
Fertilizers Limited.
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. A significant part
of this change is the demerger and transfer of Engro‟s expanding fertilizer business into a separate
wholly owned subsidiary.
Shareholding Structure
As of June 30, 2010, the shareholding structure of Engro Corporation Limited was as follows:
Shareholding Breakdown
No. of Shares %
Shareholder Category
held Shareholding
Joint Stock Companies 152,208,997

46.44%
 Dawood Hercules Chemical Ltd. 124,982,408
Individuals 79,712,289 24.32%
Financial Institutions 23,168,382 7.07%
Insurance Companies 25,410,471
7.75%
 Central Insurance Co. Ltd. 11,858,251
Modaraba Companies 12,095,784 3.69%

Investment Companies 1,879,321 0.57%
Cooperative Societies 17,600 0.01%
Others 33,243,975 10.14%
Total 327,736,819
As per Annual Audited Accounts 2009, total number of shares issued by ECL were 297,942,563. In
April 2010, there has been a 10% bonus issue which has increased the total shareholding to
327,736,819 shares.
ECL is listed on the Karachi, Lahore and Islamabad stock exchanges and has a total paid-up capital1
of PKR 3,277.37 million where as total market2 capitalization stood at PKR 56,888.56 million. As a
testament to ECL„s blue chip corporate status, 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. Further, ECL‟s corporate and social
responsibility initiatives have been recognized internationally at various forums.
1
Unaudited accounts as of June 30, 2010
2
As of June 30, 2010
18
ECL has diverse business interests in fertilizer, PVC, bulk chemical storage, food processing, power
generation etc. through various subsidiaries and joint ventures.
The following is a summary financial snapshot of Engro Corporation Limited on a consolidated basis:
Year Ended December 1H June 2009* 2008* 2007* 2006* 2005*

(Rs. Million) 30, 2010
Revenue 33,725 58,152 40,973 34,121 20,240 18,757
Profit After Tax 3,197 3,719 4,207 2,834 2,139 2,284
Shareholders‟ Equity 31,942 29,344 23,548 18,278 9,796 7,541

Total Assets 152,700 132,105 80,802 49,236 20,054 14,397
Total Liabilities 120,757 102,761 57,254 30,958 10,258 6,856
Total Paid-up Capital 3,277 2,979 2,128 1,935 1,682 1,529
Net Profit Margin (%) 9.48 6.40 10.27 8.31 10.57 12.18
Return On Equity (ROE) % 10.01 12.67 17.87 15.50 21.84 30.28
Breakup Value per share (PKR) 97.46 98.49 110.65 94.47 58.23 49.31
Earnings Per share (PKR) 10.37 13.54 16.36 15.05 12.02 14.12
Dividend Per share (PKR) 2.00 6.00 6.00 7.00 9.00 11.00
Market value per share (PKR) 173.58 183.27 96.46 265.75 169.00 164.45
Price to Earnings ratio (x) 16.74 13.54 5.90 17.66 14.06 11.65
st
*As of 31 December
4.2. PRINCIPAL PRODUCTS
ECL is a holding company and is responsible for the long term vision and profitable growth of the
Company and its subsidiaries and affiliates. Following are the subsidiaries and affiliates of the
Company as at June 30, 2010:
No. of shares held

Subsidiaries and Affiliates Percentage Holding
by ECL
Engro Polymer & Chemicals Ltd. 372,810,000 56.19%
Engro Eximp (Pvt) Ltd. 10,000 100%
Engro Management Services (Pvt) Ltd. 250,000 100%
Engro Foods Ltd. 542,300,000 100%
Engro PowerGen Ltd. 9,276,000 100%
Avanceon Ltd. 25,066,667 62.67%
Engro Energy Ltd. 304,000,000 95%
Engro Fertilizer Ltd. 298,000,000 100%
Engro Vopak Terminal Ltd. (Joint Venture) 45,000,000 50%
Arabian Sea Country Club (Affiliate) 500,000 N.A.
19
4.3. FINANCIAL OVERVIEW
ECL‟s income comprises of dividends received from its subsidiaries and royalty income from its
fertilizer business.
4.4. RISK FACTORS
Business Risks
i. Diversification
In order to diversify future cash flows of the Company, ECL has been diversifying and
expanding in a number of sectors including foods, power generation, information
technology, PVC manufacturing and bulk chemical handling and storage business. The
Company also aims to capitalize on the synergies between its various subsidiaries and
joint ventures. This exposes the Company to the risks that diversification may pose.
Mitigants
ECL has a successful track record in profitably managing its associated businesses.
Individual companies are run by independent teams of professional and competent
management personnel. Where required, as in Engro Foods Limited, ECL has hired
experienced professionals. Further, 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 Mitsubishi Corporation in Engro Asahi) to provide the
necessary technical expertise. ECL‟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 Energy Limited achieving commercial operations
date in record time.
Instrument Risks
i. Default Risk
Given the secured nature of the instrument, while there is a default risk, the chances of
default are very low as confirmed by the TFC Rating.
Mitigants
Instrument has been secured by first ranking floating charge over the shareholding of
ECL in some of its subsidiary companies and affiliates and certain other assets of the
Company at 125% of the outstanding principal amount.
Furthermore, 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.
ii. 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.
20
Mitigants
The TFC‟s are to be listed on KSE, which will act as provider of liquidity for TFC‟s during
the life of the instrument by facilitating secondary market trades. In addition, the market
makers would also make market for the instrument. Investors can also exercise the Put
Option anytime from the Date of Investment as explained in detail in para 2.14.2.
iii. Interest Rate or Price Risk
Fluctuations in interest rates, and underlying inflation, may adversely affect the yield to
the investors.
Mitigants
The structure of the product is such that the investor can redeem the TFCs anytime after
the Date of Investment.
iv. Capital Market Risk
The TFC issue will be listed on KSE and the TFC holders will be able to sell or buy TFC‟s
through the members of KSE and through market maker subsequent to the listing of the
issue. Price of TFC‟s will depend on the bond market behavior and the performance of
the Company. Hence price may rise or fall and result in increase or decrease in the value
of TFC‟s to any extent.
v. 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.
vi. 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. Any
unforeseen events such as problems arising out of lower than projected production and
sales by subsidiaries and affiliates, and consequent receipt of dividends by the Company
have not been taken into account. The investors assume the risk that due to the
unforeseen events the Company may not be able to maintain consistent growth.
vii. Changes in Tax Regime
Any adverse change in the existing Tax regime for investment in TFCs, may affect the
redemption and profit for the TFC investors.
viii. 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. Exchange Rate Risk
Depreciation of the Rupee may adversely affect the yield to the overseas investors.
21
Note: It is stated that all material risk factors with respect to this issue have been
disclosed to the best of knowledge and belief and that nothing has been
concealed in this respect.
22
PART V
FINANCIAL INFORMATION & CREDIT RATING REPORT
5.1 AUDITOR‟S CERTIFICATE
The Board of Directors August 2, 2010

Engro Corporation Limited
(formerly Engro Chemical Pakistan Limited) D 067
7th & 8th Floor, Harbour Front Building
Plot No. HC-3, Block-4
Scheme No. 5, Clifton
Karachi
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, 1984 FOR THE
PURPOSE OF INCLUSION IN THE PROSPECTUS FOR TERM FINANCE CERTIFICATES BY
ENGRO CORPORATION LIMITED (FORMERLY ENGRO CHEMICAL PAKISTAN LIMITED)
We have, 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, 1984, reviewed the audited unconsolidated
financial statements of Engro Corporation Limited - the Company (formerly Engro Chemical Pakistan
Limited) and the audited consolidated financial statements of the Company and its subsidiaries (the
Group) for the five years ended December 31, 2005 to December 31 2009, for inclusion in the
prospectus for proposed issue of rated, listed and secured Term Finance Certificates by the
Company.
The financial statements of the Company and the Group for the years ended December 31, 2005 to
December 31, 2008 were audited by KPMG Taseer Hadi & Co., Chartered Accountants whereas the
financial statements for the year ended December 31, 2009 were audited by us. The auditors issued
an unqualified opinion on the financial statements for the years ended December 31, 2005 and
2006. Whereas for the years ended December 31, 2007, 2008 and 2009, the auditors‟ opinion was
also unqualified in all respects except that due to a fire at the Company‟s premises on August 19,
2007, certain records, documents and books of accounts of the Company relating to prior years
were destroyed. Records in electronic form remained intact and certain hard copy records relating to
financial years 2005 and 2006 have not been recreated. Further, the auditors report for the years
2007, 2008 and 2009 included an emphasis of matter paragraph that the Company has recognized
the effect of acquisition of taxable losses of subsidiary company, pending designation from the
Securities and Exchange Commission of Pakistan (SECP) as company entitled for Group Relief
under the Income Tax Ordinance, 2001.
The Group comprises of Engro Corporation Limited (formerly Engro Chemical Pakistan Limited) and
eight subsidiary companies. The percentage of shareholding in the subsidiary companies, alongwith
the details of their respective auditors are as follows:
23
Percentage Years
Name of the Subsidiary Companies Auditors
of holding ended
December 31, 2005

to KPMG Taseer Hadi & Co.
Engro Eximp (Private) Limited 100%
December 31,2008
December 31,2009 A. F. Ferguson & Co.
December 31, 2005

Engro Management Services (Private) Limited 100%
December 31,2008
December 31, 2005 KPMG Taseer Hadi & Co.
December 31, 2006

Engro Foods Limited 100%
to A. F. Ferguson & Co.
December 31,2009
December 31, 2006

Engro Energy Limited 95%
December 31,2008
December 31, 2005

Engro Polymer & Chemicals Limited 56.19% to A. F. Ferguson & Co.
December 31,2009
December 31, 2005

to Fakharuddin Yousaf Ali & Co.
December 31,2007
Avanceon Limited 62.67%
December 31, 2008
and A. F. Ferguson & Co.
December 31, 2009
December 31, 2008 KPMG Taseer Hadi & Co.

Engro PowerGen Limited 100%
June 29, 2009, the

date of incorporation,
Engro Fertilizers Limited 100% A. F. Ferguson & Co.
to
December 31, 2009
24
In accordance with section 53(1) read with clause 28 of Section 2 of Part I of the Second
Schedule to the Companies Ordinance, 1984, we report that:
1. ENGRO CORPORATION LIMITED (FORMERLY ENGRO CHEMICAL PAKISTAN LIMITED)

AND THE GROUP
SUMMARY OF ASSETS, LIABILITIES AND SHAREHOLDERS‟ EQUITY
AS AT DECEMBER 31, 2009
1.1 The summary of assets, liabilities and shareholders‟ equity of the Company and the Group as at
December 31, 2009 were as follows:
(Amounts in thousand) The The
Company Group
Rupees
ASSETS
Non-Current Assets
Property, plant and equipment 69,517,512 110,503,710
Biological assets - 438,873
Intangible assets 122,704 585,358
Long term investments 12,988,657 499,780
Deferred employee compensation expense 2,787 2,969
Long term loans and advances 328,907 150,960
82,960,567 112,181,650
Current Assets
Stores, spares and loose tools 961,117 1,451,532
Stock-in-trade 422,607 3,819,971
Trade debts 2,514,425 3,536,533
Deferred expense 87,278 97,492
Loans, advances, deposits and prepayments 1,469,155 1,372,425
Other receivables 275,714 1,136,265
Derivative financial instruments 76,209 76,209
Taxes recoverable 536,167 1,040,636
Short term investments 450,857 512,255
Cash and bank balances 3,955,342 6,880,408
10,748,871 19,923,726
TOTAL ASSETS 93,709,438 132,105,376
25

Company Group
Rupees
EQUITY AND LIABILITIES
Equity
Share Capital
Authorised 350,000,000 ordinary shares of Rs. 10 each 3,500,000 3,500,000
Issued, subscribed and paid-up 2,979,426 2,979,426
Share Premium 10,550,061 10,550,061

Employee share option compensation reserve 288,258 318,242
Hedging reserve (609,719) (617,000)
Revaluation reserve on business combination - 114,900
Exchange revaluation reserve - (43,185)
General reserve 4,429,240 4,429,240
Unappropriated profit 9,250,972 8,387,520
23,908,812 23,139,778
26,888,238 26,119,204
Minority Interest - 3,225,191
Total Equity 26,888,238 29,344,395
Non-Current Liabilities
Borrowings 58,565,354 84,142,153
Obligations under finance lease - 20,587
Deferred taxation 891,864 1,687,298
Employee housing subsidy 211,785 211,785
Deferred liabilities 143,886 96,163
60,425,731 86,790,763
Current Liabilities
Trade and other payables 3,160,852 9,608,000
Accrued interest / mark-up 1,366,022 1,800,428
Current Portion of :
- borrowings 810,100 2,375,675
- obligations under finance lease - 18,246
- deferred liabilities 20,600 22,961
Short-term borrowings 195,753 1,302,766
Unclaimed dividends 102,099 102,099
6,395,469 15,970,218
Total Liabilities 66,821,200 102,760,981
TOTAL EQUITY AND LIABILITIES 93,709,438 132,105,376
26
(Amounts in thousand)
1.2 CONTINGENCIES AND COMMITMENTS
Contingencies and commitments reported in the financial statements as at

December 31, 2009 have been reproduced below:
1.2.1 Guarantees
The The
Company Group
Rupees
Corporate guarantees issued to banks in favour
of subsidiary companies 273,482 2,480,283
Bank guarantees in favour of third parties 1,148,676

1.2.2 Claims including pending lawsuits
Claims including pending lawsuits, not
acknowledged as debts 47,658 47,658
1.2.3 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 Autogen Software
Shipments and to Adamjee Insurance Company Limited as cash margin against insurance
guarantee issued by them in favor of BP Pakistan Exploration and Production Inc., for
performance of contracts amounting to Rs. 10,271.
1.2.4 Undated cheques
Undated cheques issued by the Subsidiary Company (Avanceon Limited) to Adamjee

Insurance Company Limited as insurance guarantee in favor of BP Pakistan Exploration and
Production Inc., amounting to Rs. 14,255 for performance of contract.
1.2.5 Recovery of penalties imposed by the State Bank of Pakistan
The Company is contesting the penalty of Rs. 99,936 paid and expensed in 1997, 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. A partial refund of Rs.
62,618 was, however, recovered in 1999 from SBP and the recovery of the balance amount
is dependent on the Court‟s decision.
1.2.6 Arbitration proceedings for recovery of marketing incidentals
The Company 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. The sole arbitrator in the second case has awarded the
Company Rs. 47,800 whereas the award for the earlier years is awaited. The award for the
second arbitration has not been recognised due to inherent uncertainties arising from its
challenge in the High Court.
27
1.2.7 Project completion support to lenders
The Company has extended project completion support to the lenders of Engro Energy
Limited for US$ 15,400 and a further support to the lenders of Engro Polymer and Chemicals
Limited for US$ 12,200. These project supports are contingent upon occurrence or non-
occurrence of specified future events.
1.2.8 Recovery of custom duty and sales tax
The Collector of Customs had disallowed exemption from custom duty and sales tax
amounting to Rs. 48,236 in prior years in respect of first catalyst and other items being part
and parcel of the expansion plant of the Company on the contention that these items do not
fall under the definition of 'plant and machinery' which is exempt under the relevant SRO.
The Company challenged the Department's contention through a constitutional petition in the
High Court of Sindh which stayed the recovery of the amount claimed and in December 1994
decided that petition in favour of the Company. The Supreme Court of Pakistan dismissed
the Department‟s appeal thereagainst in 2005 and upheld the Sindh High Court judgement in
Company‟s favor. During the year, the Department refunded the payments made by the
Company, aggregating to Rs. 22,207, against the aforementioned disallowances.
1.2.9 Sales tax on import of Mono Ammonium Phosphate (MAP)
During 2008, Model Customs Collectorate raised a sales tax demand of Rs. 57,135 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.
The Company has paid the demand under protest and filed an appeal before the Collector,
Sales Tax and Federal Excise. Further, the Ministry of Food, Agriculture and Livestock had
also recommended through its letter dated June 27, 2008 that the aforementioned grade of
MAP should be assessed at deemed value of import with retrospective effect. The
management therefore is confident that the issue would be decided in the Company‟s favour.
1.2.10 Status of Tax Matters / Assessments
Group Relief
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 Income Tax Ordinance, 2001 (the
Ordinance) on losses acquired for an equivalent cash consideration from
Engro Foods Limited (EFL), a wholly owned subsidiary company, amounting to
Rs. 428,744, Rs. 622,103 and Rs. 450,000 respectively.
The tax department raised a demand of Rs. 476,479 (rectified to Rs. 406,644) and
Rs. 910,845 for financial years 2006 and 2007, on disallowance of mainly Group Relief (in
both years), inter-corporate dividend (in 2007) besides certain other issues. The Company
has paid Rs. 170,000 and Rs. 400,000 respectively thereagainst. Stay by the High Court of
Sindh for payment of balance amount for financial year 2006 has been granted pending
decision of the appeal filed by the Company before the Income Tax Appellate Tribunal
(ITAT). However, for financial year 2007, stay has been granted by the tax department till
April 30, 2010.
28
The main contention for disallowance of Group Relief, among others, being the non-
designation of the Company as well as the subsidiary company as 'companies' entitled to
Group Relief by the Securities & Exchange Commission of Pakistan (SECP), a requirement
of section 59 B of the Ordinance. The Company had applied for such a designation but
remained pending with SECP for want of related regulations not framed then. These
regulations have been framed by SECP subsequently in December 2008 under which the
Company alongwith other subsidiaries have been registered as a Group and a fresh
application for the aforesaid designation will now be filed. The Commissioner Inland
Revenue (Appeals) taking cognizance of the above and other factors has, vide order dated
November 13, 2009, decided the issue of Group relief in Company's favor for the financial
year 2007, while for 2006 it is pending at the ITAT level as stated above.
Others
The Company has filed tax returns up to financial year 2008 of which tax returns from
financial years 2003 – 2008 have been filed under the self assessment scheme. All
assessments for income years 1995 to 2002 have been finalized by the Department and are
in appeal at either the CIT or ITAT level on various issues, the major one being
apportionment of gross profit and expenses between normal income and final tax regime
(FTR) income.
The Company is confident that all the above issues, including the issue of Group Relief, will
be ultimately decided in its favor without any additional tax liability.
1.2.11 Commitments
The The
Company Group
Rupees
(i) Property, plant and equipment 3,999,846 5,504,260
(ii) Letters of credit other than for capital

expenditure - 2,863,584
(iii) Avanceon LP (USA) is obligated under non-cancellable operating leases for computer &
office equipment which expire at various dates through 2011. The future lease
commitments related to non-cancellable operating leases as of
December 31, 2009 are as follows:
Rupees
Not later than one year 1,723,490

Later than one year and not later than five years 799,479
Later than five years 398,603
2,921,572
29
(iv) Avanceon Limited leases its facilities from Cornerstone investments (a related party)
under an operating lease at a monthly rental of Rs. 2,324. The lease shall expire on April
30, 2010 and future commitments in respect thereof amount to
Rs. 9,295 all of which are due not later than one year.
(v) The Subsidiary Company (Engro PowerGen Limited) through its subsidiary, Sindh Engo
Coal Mining Company Limited, has signed various agreements with consultants for
detailed feasibility study and other related studies aggregating to Rs. 271,582, against
which the Subsidiary Company has made an advance payment of Rs. 8,395 as at
December 31, 2009.
30
PROFIT AND LOSS ACCOUNT

FOR THE YEARS ENDED DECEMBER 31, 2005 TO DECEMBER 31, 2009
Year ended December 31,

(Amounts in thousand) 2009 2008 2007 2006 2005
Rupees
Net sales 30,171,520 23,317,198 23,183,222 17,601,783 18,276,277
Cost of sales (23,240,176) (17,120,635) (18,262,793) (13,364,524) (14,332,842)
GROSS PROFIT 6,931,344 6,196,563 4,920,429 4,237,259 3,943,435
Selling and distribution

Expenses (1,945,176) (1,657,815) (1,641,724) (1,481,730) (1,302,149)
4,986,168 4,538,748 3,278,705 2,755,529 2,641,286
Other operating income 1,973,467 2,754,330 1,831,260 1,338,854 1,144,987
Other operating expenses (424,110) (579,556) (339,430) (287,176) (286,652)

Finance cost (1,320,579) (1,508,948) (535,023) (362,551) (280,070)
(1,744,689) (2,088,504) (874,453) (649,727) (566,722)
PROFIT BEFORE TAXATION 5,214,946 5,204,574 4,235,512 3,444,656 3,219,551
Taxation (1,257,696) (964,144) (1,080,929) (897,330) (900,469)
PROFIT AFTER TAXATION 3,957,250 4,240,430 3,154,583 2,547,326 2,319,082
Note:
1. The above figures are as reported in the respective years‟ published financial statements except
certain items that have been rearranged for consistency of classification.
2. For earnings per share, refer section 7 of this report.
31

AND ITS SUBSIDIARY COMPANIES (THE GROUP)
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 2005 TO DECEMBER 31, 2009

(Amounts in thousand) 2009 2008 2007 2006 2005
Rupees
Net sales 58,152,368 40,973,047 34,120,611 20,240,035 18,756,820
Cost of sales (44,658,196) (30,111,348) (26,138,366) (15,097,181) (14,041,386)

GROSS PROFIT 13,494,172 10,861,699 7,982,245 5,142,854 4,715,434
Selling and distribution

expenses (6,215,316) (4,253,652) (3,582,695) (2,320,924) (1,407,224)
7,278,856 6,608,047 4,399,550 2,821,930 3,308,210
Other operating income 390,157 1,038,314 509,829 421,625 166,737
Other operating expenses (843,561) (969,583) (482,558) (297,690) (294,137)

Finance cost (2,221,739) (1,737,953) (717,658) (438,240) (291,249)
(3,065,300) (2,707,536) (1,200,216) (735,930) (585,386)
Share of income from

Joint Venture 458,570 245,193 243,666 409,568 371,159
PROFIT BEFORE TAXATION 5,062,283 5,184,018 3,952,829 2,917,193 3,260,720
Taxation (1,343,481) (977,328) (1,119,041) (778,351) (976,937)
PROFIT AFTER TAXATION 3,718,802 4,206,690 2,833,788 2,138,842 2,283,783
Attributable to:
- Owners of the Company 3,806,918 4,125,754 2,876,520 2,106,891 2,278,980
- Minority interest (88,116) 80,936 (42,732) 31,951 4,803
3,718,802 4,206,690 2,833,788 2,138,842 2,283,783
Note:
1. The above figures are as reported in the respective years‟ published financial statements except
certain items that have been rearranged for consistency of classification.
2. For earnings per share, refer section 7 of this report.
32
4. WE FURTHER REPORT THAT:
4.1 Details of dividend declared by the Company for the years ended December 31, 2005 to
December 31, 2009 are as follows:

2009 2008 2007 2006 2005
Cash dividend
Rupees in thousand 1,787,655 1,276,896 1,303,815 1,514,106 1,682,340
Rate of dividend (Rupees per share) 6 6 7 9 11
Bonus Issue
Rupees in thousand 297,943 - - - -
4.2 No financial statements have been audited subsequent to the audit of financial statements
for the year ended December 31, 2009. However, we have reviewed the condensed
interim financial information (unaudited) for the half year ended
June 30, 2010, as stated in section 6 of this report.
5. 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, 2005 to December 31, 2009:
5.1 Financial statements for the year ended December 31, 2009
5.1.1 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. In this regard, a wholly owned subsidiary
namely Engro Fertilizers Limited was incorporated on June 29, 2009. The division was to be
effected through a Scheme of Arrangement under Section 284 to 288 of the Companies
Ordinance, 1984 whereby (a) the fertilizer undertaking would be transferred and vested in
Engro Fertilizers Limited against the issuance of ordinary shares of Engro Fertilizers Limited
to the Company; (b) the retention of the retained undertaking in the Company and the
change of the name of the Company to Engro Corporation Limited. Engro Corporation
Limited would then become a holding company and oversee the business of new fertilizer
subsidiary as well as business of its other existing subsidiaries/associates.
The de-merger required the approval of the High Court of Sindh. After obtaining the requisite
approvals from the creditors and the shareholders of the Company, the High Court approved
the Scheme of Arrangement (Scheme) on December 9, 2009. The Scheme came into effect
on January 1, 2010 (Effective Date).
33
In accordance with the Scheme, the fertilizer business, including all assets, liabilities,
agreements, arrangements and other matters were automatically be transferred to Engro
Fertilizers Limited on the Effective Date against the issuance of 9,999,993, in addition to
existing 7, fully paid ordinary shares of Rs. 10 each plus the share premium. Such share
premium is to be based on the net assets so transferred over Rupees 100,000 being the paid
up face value of Engro Fertilizers Limited.
The retained undertaking comprises of specific assets and liabilities as of the
aforementioned effective dates identified in the Scheme, which among other items include
Investments/Shareholdings, Joint Venture Agreements, all reserves including goodwill,
employee share option compensation reserve, share premium, capital & revenue reserves
but excluding Hedging reserve.
5.1.2 Subsidiary Companies
Engro Fertilizers Limited and Engro Eximp (Private) Limited
Consequent to restructuring of its businesses by the Company, effective

January 1, 2010, the entire trading operations of fertilizer business of the Company (i.e
purchase of fertilizers from the Engro Eximp (Private) Limited (EXIMP) and sale to dealers)
has been transferred to EXIMP. Accordingly, the stock in hand of the Company as at
December 31, 2009 of goods purchased from the EXIMP has been returned. Effective
January 01, 2010, Engro Fertilizer Limited, will act as the selling agent of EXIMP.
Engro Polymer & Chemicals Limited
The new PVC plant commenced commercial production on January 1, 2009. Further, on
August 1, 2009, the Subsidiary Company commenced commercial operations of Ethylene Di
Chloride (EDC), Chlor-alkali and Power plants (Gas turbines). The Vinyl Chloride Monomer
(VCM) plant is still in the test production phase. These plants have been set up adjacent to
the Subsidiary Company‟s existing PVC facilities in the Port Qasim Industrial Area.
Furthermore, during the year, the Subsidiary Company has also commenced supply of
surplus power generated from Power plants to Karachi Electric Supply Corporation (KESC),
under an agreement.
Engro Energy limited
The Shareholders in the Extraordinary General Meeting (EOGM) held on

November 27, 2009 have consented to the Company‟s proposed transfer of 304 million
ordinary shares of Rs. 10 each in Engro Energy Limited, to Engro PowerGen Limited (EPGL)
in exchange for the same number of fully paid-up shares of EPGL. Such a transfer, to be
effected upon completion of legal and other formalities, 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.
Engro Foods limited
During the year, Engro Foods Limited has commenced commercial production of ice cream,
which is presently being sold only in selected parts of the country.
34
Further, during the year, Engro Foods Limited incorporated a new wholly owned subsidiary
on November 3, 2009, Engro Foods Supply Chain (Private) Limited (the sub-subsidiary). The
principal activity of this sub - subsidiary is to produce, manufacture and trade all kinds of raw,
processed and prepared food products including agriculture, dairy and farming products. In
this regard, 491 acres of land at Muridke, Baweray Akalian, District Sheikhupura has been
acquired to construct a rice processing plant, the commissioning of which is expected to be
completed in the last quarter of 2010.
35
5.1.3 Employee Share Option Scheme
During the year, due to issue of right shares, the exercise price of employee share option
scheme (refer 5.2.2) was adjusted by the Company to Rs. 205.52 per share and total
entitlements were increased to 7.7 million shares.
Consequent to the demerger (refer 5.1.1), 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 new scheme is finalized and is
awaiting approval by the Board of Directors of Engro Fertilizers Limited and Securities and
Exchange Commission of Pakistan.
5.1.4 Foreign Exchange Forward Contract
During the year, the Company identified that the fair values of foreign exchange forward
contracts as at December 31, 2008 were overstated by Rs. 3,123,787. This has been
adjusted in the current year by restating the comparative figure from Rs. 4,297,960 to
Rs. 1,174,173. This however, has no impact on the profit for the year ended
December 31, 2008, as the fair values were recognised in the hedging reserve.
5.1.5 Issue of right shares with premium
The Company issued 40% right shares of Rs. 50 per share to the shareholders including
premium of Rs. 40 per share. The total issue including share premium amounted to
Rs. 4,248,604 net of transaction cost on such issue.
5.2.1 Investment in subsidiaries
The following investments were made in the subsidiary companies during the year:
Name of Subsidiary Rupees
Engro Energy Limited 1,362,275

Engro Foods Limited 1,950,000
Engro PowerGen Limited 15,100
During the year, percentage of investment in Engro Polymer and Chemicals Limited
decreased from 65.92% to 56.19% while investment in Engro Energy Limited decreased
from 100% to 95%.
During the year, the Company incorporated a wholly owned subsidiary by the name of Engro
PowerGen Limited with the objective to undertake power projects, by investing
Rs. 15,100.
36
Engro Chemical Pakistan Limited
During the year, due to issue of right shares, the exercise price of Employee Share Option
Scheme was adjusted by the Company to Rs. 267. 73 per share and total entitlements were
increased to 5.5 million shares.
Further, the Company proposed certain changes relating to „grant date‟ in the originally
approved scheme. The Securities and Exchange Commission of Pakistan, through their
letter SMD/CIW/ESOS/04/2008 dated July 10, 2008, cleared these changes subject to the
approval of shareholders, which was obtained in the Extra Ordinary General Meeting (EGM)
held on December 22, 2008. The effect of grant of share options has been incorporated in
the financial statements using August 23, 2007 as the grant date, the date when the scheme
was originally approved by the shareholders. Accordingly, equity and assets for the year
ended December 31, 2007 have been restated.
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, 2007. 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. 22 per ordinary share.
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. No
amounts are paid or payable by the recipient on receipt of the option. The options carry
neither right to dividends nor voting rights. Vesting period has started from the date of grant
and shall end on December 31, 2009, where after these options can be exercised within a
period of two years. Future employees who join by October 31, 2008 and those who are
promoted by the same date, may also be granted options, however, the length of vesting
period shall be the same as enjoyed by first recipients of options.
During the year, EPCL proposed certain changes relating to 'grant date' in the originally
approved Scheme. These changes were approved by the shareholders in their EGM held on
June 27, 2008, and subsequently by SECP on September 25, 2008. As per the approved
change to the Scheme the 'grant date' is the date of EGM held on
October 8, 2007, when the Scheme was originally approved. The effect of the change in the
grant date has been recognized in the consolidated financial statements.
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, 2008. 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. The options are exercisable in two years at exercise prices of
Rs. 15 and Rs. 17 per share during the financial years ended December 31, 2011 and 2012
respectively.
37
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. No
amounts are paid or payable by the recipient on receipt of the option. The options carry
neither right to dividends nor voting rights. Vesting period has started from the date of grant
and shall end on December 31, 2010, where after these options can be exercised within a
period of two years. Future employees who join by June 30, 2009 and those who are
promoted by the same date, may also be granted options, however, the length of vesting
period shall be the same as enjoyed by first recipients of options.
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.
5.2.3 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
38
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 semi-annually. 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.
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.
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.
5.2.5 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.
5.3.1 Investment in subsidiaries
39
Engro Energy (Private) Limited 1,579,725

Engro Foods Limited 797,500
Engro Polymer and Chemicals Limited 1,429,661
Engro Innovative Automation (Private) Limited 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%.
5.3.2 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.
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.
5.3.3 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.
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
40
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.
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.
5.4.1 Investment in Subsidiaries
Engro Energy (Private) Limited 98,000

Engro Foods Limited 854,300
Engro Asahi Polymer and Chemical Limited 527,539
During the year, 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.
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. This acquisition resulted in a net fair value adjustment
(negative goodwill) of Rs. 392,506 out of this amount of Rs. 197,316 pertaining to 50% of
equity already held was taken to equity and Rs. 195,190 pertaining to 30% of equity acquired
was taken to other income.
The Company issued 10% right shares at Rs. 80 per share to the shareholders including
premium of Rs. 70 per share. The total issue including share premium amounted to
Rs. 1,221,309 net of transaction cost on such issue.
41
5.4.3 Change in accounting policy
During 2006 the Company changed its accounting policy relating to appropriations to
reserves, whereby such appropriations are recognised in the year in which these are
approved. Upto last year appropriations to reserves were recognised in the financial
statements of the period to which it related. 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, approved post balance sheet date, by a
company. This change in accounting policy did not have any effect on the Company‟s total
equity.
5.5.1 Employee benefit scheme
The Company had set-up a Defined Contribution (DC) Pension Plan. All employees joining
the Company on or after July 1, 2005 became part of the new DC Pension Plan. In addition
all existing employees were given options to move from the old Defined Benefit (DB) Pension
Plan to the new DC Pension Plan. All the existing employees have opted to move to the new
DC Pension Plan.
5.5.2 Incorporation of subsidiary
During the year, the Company incorporated a wholly owned subsidiary by the name of Engro
Foods (Private) Limited with the objective to undertake food business, by investing
Rs. 748,200.
5.5.3 Redemption of Term Finance Certificates
The Company redeemed 2nd Tranche of Term Finance Certificates amounting to

Rupees 1 billion by exercising the call option for early redemption.
5.5.4 Interest rate swap
During the year the Company entered into a matching swap with United Bank Limited,
effective from March 2006 to perfectly offset the earlier swap of Citibank. Under this
agreement, the Company would pay average of last three cut-off yields of six months
Government Treasury Bills on notional amount of Rs. 1 billion and receive fixed at 9.5%
which would be settled semi-annually.
6. CONDENSED INTERIM FINANCIAL INFORMATION (UNAUDITED) FOR THE HALF

YEAR ENDED JUNE 30, 2010
We have reviewed the condensed interim financial information (unaudited) of the

Company and the consolidated condensed interim financial information (unaudited) of
the Group for the half year ended June 30, 2010 in accordance with International
Standard on Review Engagements 2410, „Review of Interim Financial Information
Performed by the Independent Auditor of the Entity‟. We have issued unqualified review
conclusions vide our reports dated July 29, 2010 on the condensed interim financial
information of the Company and the Group. However, we have without qualifying our
42
conclusion added emphasis of matter paragraphs in our review report on the

consolidated condensed interim financial information of the Group, pertaining to: (i) the
Company‟s recognition of the effect of acquisition of taxable losses of a subsidiary
company (as more fully explained in section 6.2.6), and (ii) non-recognition of embedded
derivative pending response from the Institute of Chartered Accountants of Pakistan and
deferment of exchange loss pending final response by the Securities and Exchange
Commission of Pakistan on resubmission of the required detailed analysis (as more fully
explained in section 6.4.8).
A summary of the unaudited assets, liabilities and shareholders‟ equity of the Company
and the Group as at June 30, 2010 and their profit and loss account for the half year
ended June 30, 2010 are given below:
43
6.1 Summary of unaudited assets, liabilities and shareholders‟ equity of the Company
and the Group as at June 30, 2010
(Amounts in thousand) Unaudited
The The
Company Group
Rupees
ASSETS
Non-Current Assets
Property, plant and equipment 86,032 119,778,145
Biological assets - 381,905
Intangible assets - 607,716
Long term investments 25,352,901 578,679
Deferred employee compensation expense - 257
Long term loans and advances 241,864 216,870
25,680,797 121,563,572
Current Assets
Stores, spares and loose tools - 3,395,373
Stock-in-trade - 14,398,102
Trade debts - 3,889,947
Deferred expense 11,564 299,856
Loans, advances, deposits and prepayments 17,403 2,471,179
Other receivables 36,703 581,085
Derivative financial instruments - 3,406
Taxes recoverable - 1,440,916
Short term investments 851,864 2,130,871
Cash and bank balances 754,138 2,525,437
1,671,672 31,136,172
TOTAL ASSETS 27,352,469 152,699,744
44
Unaudited

Company Group
Rupees
EQUITY AND LIABILITIES
Equity
Share Capital 3,277,369 3,277,369
Share Premium 10,550,061 10,550,061

Hedging reserve - (1,057,270)
Maintenance reserve - 68,406
23,799,179 25,043,843
27,076,548 28,321,212
Minority Interest - 3,621,271
Total Equity 27,076,548 31,942,483
Non-Current Liabilities
Borrowings - 89,244,281
Derivative financial instruments - 950,946
Obligations under finance lease - 20,651
Deferred taxation 158 1,075,776
Employee housing subsidy - 282,633
Deferred liabilities 498 89,408
656 91,663,695
Current Liabilities
Trade and other payables 161,441 11,343,028
Accrued interest / mark-up - 2,205,217
Current portion of :
- borrowings - 5,807,903
- obligations under finance lease - 19,088
- deferred liabilities - 26,814
Short-term borrowings - 8,522,003
Derivative financial instruments - 1,095,962
Taxation 40,273 -
Unclaimed dividends 73,551 73,551
275,265 29,093,566
Total Liabilities 275,921 120,757,261
TOTAL EQUITY AND LIABILITIES 27,352,469 152,699,744
45
6.2 CONTINGENCIES AND COMMITMENTS
Contingencies and commitments reported in the condensed interim financial information as

at June 30, 2010 have been reproduced below:
6.2.1 Guarantees
The The
Company Group
Rupees
Corporate guarantees issued to banks in favour
of subsidiary companies 1,076,067 5,377,436
6.2.2 Claims including pending lawsuits

Claims including pending lawsuits, not
acknowledged as debts - 47,610
6.2.3 Recovery of penalties imposed by the State Bank of Pakistan

Engro Fertilizers Limited (the Subsidiary Company) is contesting the penalty of
Rs. 99,936 paid and expensed in 1997, 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. A partial refund of Rs. 62,618 was, however, recovered in
1999 from SBP and the recovery of the balance amount is dependent on the Court‟s
decision.
6.2.4 Arbitration proceedings for recovery of marketing incidentals
Engro Fertilizers Limited (the Subsidiary Company) 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. The sole arbitrator in the second
case has awarded the Subsidiary Company Rs. 47,800 whereas the award for the earlier
years is awaited. The award for the second arbitration has not been recognised due to
inherent uncertainties arising from its challenge in the High Court of Sindh.
6.2.5 Project completion support to lenders
The Company has extended project completion support to the lenders of Engro Energy
Limited for US $ 15,400.
6.2.6 Status of Tax Matters / Assessments
Engro Fertilizers Limited (the Subsidiary Company)
(i) Group Relief
As a result of demerger referred to in section 6.4.1, all pending tax issues of the Fertilizer
Undertaking of the Company have been transferred to Engro Fertilizers Limited. Major issues
pending before the tax authorities are described below.
46
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 59 B of the Income Tax Ordinance, 2001
(the Ordinance) on losses acquired for an equivalent cash consideration from its wholly
owned subsidiary, Engro Foods Limited, amounting to Rs. 428,744,
Rs 622,103 and Rs 450,000 respectively.
The tax department raised a demand of Rs. 476,479 (rectified to Rs. 406,644),
Rs. 910,845 and Rs. 1,670,814 for financial years 2006, 2007 and 2008 respectively, mainly
on account of disallowance of Group Relief (in all three years), inter corporate dividend (in
2007 and 2008) and write down of inventories to net realisable value (in 2008) besides
certain other issues. Uptil last year, the Company had paid
Rs. 170,000 and Rs. 400,000 for 2006 and 2007 respectively. 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). However, for financial year 2007 the issue of Group Relief has been decided
by the Commissioner Inland Revenue (Appeals I) in the Company's favor against which the
tax department has filed an appeal with ITAT. During the current period, the Subsidiary
Company has paid Rs. 600,000 for financial year 2008, while stay for payment for the
balance amount has been granted by the tax department till December 31, 2010. Appeal has
also been filed by the Subsidiary Company with the Commissioner Inland Revenue (Appeals
I).
The main contention for disallowance of Group Relief, among others, being the non-
designation of the Company as well as the subsidiary company as 'companies' entitled to
Group Relief by the Securities & Exchange Commission of Pakistan (SECP), a requirement
of section 59 B of the Ordinance. The Company had applied for such a designation but
remained pending with SECP for want of related regulations not framed then. These
regulations were framed by SECP subsequently in December 2008 and on resubmission of
application the Company along with other subsidiaries have been registered as a Group.
Designation has also been granted for Group Relief and Group Taxation during the current
period.
(ii) Others
All the assessments of the Company, for income years 1995 to 2002 have been finalized by
the Department and are in appeal at either the CIT or ITAT level on various issues, the
major one being apportionment of gross profit and expenses between normal income and
Final Tax Regime (FTR) income.
The Subsidiary Company is confident that all pending issues will be ultimately resolved
without any additional liability.
Engro Polymer and Chemicals Limited (the Subsidiary Company)
During the period, the Subsidiary Company received a Notice of Demand of Rs. 213,172 in
respect of Tax Year 2008. The Deputy Commissioner Inland Revenue has made various
additions to the returned income amounting to Rs. 207,370 and has not considered the
brought forward losses amounting to Rs. 974,770 resulting in the aforementioned tax
demand. The additions to income are mainly on account of trading liabilities and financial
costs in relation to the expansion Project.
47
The Subsidiary Company has filed an appeal against the aforementioned demand with the
Commissioner Inland Revenue (Appeals), which is currently pending. While the appeal
proceedings were pending, the Officer Inland Revenue (OIR) adjusted a sum of Rs. 125,072
in the above demand against the Subsidiary Company‟s assessed refunds. Although the
Subsidiary Company has sufficient tax refunds and recoupable minimum taxes to have the
remaining demand of Rs. 88,100 adjusted, the OIR only gave a further credit, subject to
further verification, of Rs. 55,696. Consequently, the Subsidiary Company has paid the
balance amount of Rs. 32,404 „under protest‟. The Subsidiary Company also applied for a
stay order to the Commissioner Inland Revenue (Appeals) for the remaining outstanding
demand as the credit of Rs. 55,696 has also been given by the OIR subject to verification of
taxes paid, which was granted up to June 26, 2010. Application for extension in stay order
has also been filed and the management is confident that the stay will be extended.
The management of the Subsidiary Company is confident that the ultimate outcome of the
aforementioned matter would be favourable and consequently has not recognized the effects
for the same in the consolidated condensed interim financial information.
While finalizing the assessment for the assessment year 2000-2001, the Taxation Officer
had disallowed a claim of First Year Allowance (FYA) by the Subsidiary Company on the
grounds that it had not met the criteria for claiming this allowance as required under the
repealed Income Tax Ordinance, 1979. The Subsidiary Company had filed an appeal against
this disallowance which was pending with the Income Tax Appellate Tribunal (ITAT). A
similar disallowance had also been made for the assessment year 2001-2002 by the
Taxation Officer in 2003. However, upon appeal this matter was ultimately decided in
Subsidiary Company‟s favour in 2005 by the Income Tax Appellate Tribunal (ITAT).
During the period, the ITAT for assessment year 2000-2001, decided the matter against the
Subsidiary Company by departing from its previous order of ITAT for the assessment year
2001-2002. The disallowance of FYA amounts to Rs. 1,884,359.
This disallowance results in a tax deductible timing differences, the effects of which have
been recognized in the consolidated condensed interim financial information after taking into
account the consequential effects of the ITAT Order in the years subsequent to
2000 - 2001.
Engro Foods Limited (the Subsidiary Company)
During the period, the Tax Department has issued a notice for amendment of assessment
under section 122 of the Ordinance for the tax year 2008 and has selected the Subsidiary
Company‟s tax return for Tax year 2009 for tax audit u/s 177 of the Ordinance, which is
currently in progress.
48
6.2.7 Commitments
The The
Company Group
Rupees
Plant and machinery - 3,191,174
Letter of credits other than for capital expenditure - 642,325
The Avanceon Limited Partnership (USA) is obligated under non-cancellable operating

leases for computer & office equipment which expire at various dates. The future lease
commitments related to non-cancellable operating leases as of June 30, 2010 are as follows:
Rupees
Not later than one year 2,420

Later than one year and not later than five years 1,024
Later than five years 907
4,351
49
6.3 Unaudited condensed interim profit and loss account of the Company and the Group
for the half year ended June 30, 2010
Unaudited
The The
Company Group
Rupees
Net sales - 33,724,526

Cost of sales - (24,441,441)
GROSS PROFIT - 9,283,085
Dividend income 180,000 -

Royalty income 127,739 -
307,739 -
307,739 -
Selling and distribution expenses - (3,728,928)
Administrative expenses (80,390) -
227,349 5,554,157
Other operating income 251,576 616,116

478,925 6,170,273
Other operating charges (10,617) (567,865)

Finance cost (1,599) (1,876,866)
(12,216) (2,444,731)
Share of income from joint venture - 258,884
PROFIT BEFORE TAXATION 466,709 3,984,426
Taxation
- Current (81,834) (1,158,571)
- Deferred 741 371,354
(81,093) (787,217)
PROFIT AFTER TAXATION 385,616 3,197,209
Note: For earnings per share, refer section 7 of this

report.
6.4 Significant disclosures made in the notes to the condensed interim financial
information (unaudited) of the Company and the Group for the half year ended June
30, 2010.
We give below the significant disclosures made in the notes to the condensed interim
financial information (unaudited) for the half year ended June 30, 2010:
50
6.4.1 Scheme of Arrangement
The Board of Directors 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
was to be retained in the Company. In this regard, a wholly owned subsidiary namely Engro
Fertilizers Limited was incorporated on June 29, 2009. The division was effected on January
1, 2010 (the Effective Date) through a Scheme of Arrangement (the Scheme) under Section
284 to 288 of the Companies Ordinance, 1984 whereby (a) 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; and (b) the retention of the retained
undertaking in the Company and the change of the name of the Company to Engro
Corporation Limited. Engro Corporation Limited hence became a Holding Company to
oversee the business of new fertilizer subsidiary as well as business of its other existing
subsidiaries/associates.
In accordance with the Scheme, the fertilizer business, including all assets, liabilities,
agreements, arrangements and other matters have been transferred to Engro Fertilizers
Limited on the Effective Date against the issuance of 9,999,993, in addition to existing 7, fully
paid ordinary shares of Rs. 10 each plus the share premium. Such share premium is based
on the net assets transferred over Rupees 100,000 being the paid up face value of Engro
The Retained Undertaking comprises of specific assets and liabilities as of the

aforementioned Effective date identified in the Scheme, which among other items include
Investments/Shareholdings, Joint Venture Agreements, all reserves including goodwill,
employee share option compensation reserve, share premium, capital & revenue reserves
but excluding hedging reserve.
6.4.2 Bifurcated Balance Sheet as at January 1, 2010
In order to determine the net assets of the Retained Undertaking and the Fertilizer
Undertaking for the aforementioned transfer / demerger of the Company, the assets and
liabilities of the Company as at January 1, 2010 were bifurcated, as per the Scheme,
between the Fertilizer Undertaking and Retained Undertaking. The bifurcated balance sheet
as at January 1, 2010, duly audited by the external auditors, is summarised below:
51
Retained Fertilizer
Total
(Amounts in thousand) Undertaking Undertaking
Rupees
Assets
Property, plant and equipment

- Operating assets, at net book value 54,639 6,102,330 6,156,969
- Capital work-in-progress - 63,233,217 63,233,217
- Capital spares - 127,326 127,326
54,639 69,462,873 69,517,512
Intangible assets - 122,704 122,704
Long term investments 12,988,657 - 12,988,657
Deferred employee compensation expense
including current portion 90,065 - 90,065
Long term loans, advances, deposits and
prepayments including current portion 245,594 1,552,468 1,798,062
Stores, spares and loose tools - 961,117 961,117
Stock-in-trade - 422,607 422,607
Trade debts - 2,514,425 2,514,425
Other receivables 134,103 141,611 275,714
Derivative financial instruments - 76,209 76,209
Taxes recoverable - 536,167 536,167
Short term investments - 450,857 450,857
Cash and bank balances 3,501,216 454,126 3,955,342
TOTAL ASSETS 17,014,274 76,695,164 93,709,438
Equity
Share capital 2,979,426 - 2,979,426
Share premium 10,550,061 - 10,550,061

Employee share option compensation
reserve 288,258 - 288,258
Hedging reserve - (609,719) (609,719)
General reserve 4,429,240 - 4,429,240
Unappropriated profit 9,250,972 - 9,250,972
24,518,531 (609,719) 23,908,812
Total Equity 27,497,957 (609,719) 26,888,238
Liabilities
Borrowings including current portion - 59,375,454 59,375,454
Derivative financial instruments including
current portion - 1,352,885 1,352,885
Deferred liabilities 899 987,270 988,169
Employee housing subsidy - 211,785 211,785
Retirement and other service benefits
obligations including current portion 936 67,245 68,181
Trade and other payables 151,527 3,009,325 3,160,852
Accrued interest / mark-up - 1,366,022 1,366,022
Short term borrowings - 195,753 195,753
Unclaimed dividends 102,099 - 102,099
255,461 66,565,739 66,821,200
Adjustment pertaining to transfer of
Fertilizer Undertaking (section 6.4.3) (10,739,144) 10,739,144 -
TOTAL EQUITY AND LIABILITIES 17,014,274 76,695,164 93,709,438
52
6.4.3 Transfer of Fertilizer Undertaking
The net assets of the Fertilizer Undertaking transferred to Engro Fertilizers Limited as at
January 1, 2010 amounted to Rs. 10,739,144, as summarized below:
Rupees
Total assets (section 6.4.2) 76,695,164

Less: Total liabilities (section 6.4.2) 66,565,739
Net assets transferred to Engro Fertilizers Limited 10,129,425
Add: Hedging reserve (negative) - refer note below 609,719
Adjustment pertaining to transfer of Fertilizer Undertaking 10,739,144
Engro Fertilizers Limited in return issued 9,999,993, in addition to existing 7, fully paid
ordinary shares of Rs. 10 each plus share premium to the Company as follows:
Rupees
9,999,993 ordinary shares issued to the Company by

Engro Fertilizers Limited
- cost 100,000
- share premium 10,639,144
10,739,144
Hedging Reserve
As per the Scheme of Arrangement, the hedging reserve and revaluation surplus/reserves as
at January 1, 2010 is to be transferred to Engro Fertilizers Limited, 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. 100,000 share capital. Such omission of hedging reserve created a difference
of an equivalent amount in the balance sheet. Therefore, this being an inadvertent omission
in the Scheme of Arrangement, the management has also included the hedging reserve
(negative) in the determination of share premium to eliminate the aforementioned difference.
Further, in the opinion of the Company‟s management, supported by the legal advisor, 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.
6.4.4 Commencement of operations of Engro Energy Limited
During the period, Engro Energy Limited completed construction and testing of its 217.3 MW
combine cycle power plant (the Power Plant) and has commenced commercial operations on
March 27, 2010. The electricity generated through the Power Plant is transmitted to the
National Transmission and Despatch Company (NTDC) under the Power Purchase
Agreement (PPA) dated October 26, 2007, valid for a period of 25 years.
53
Investment in subsidiaries
During the period:
 the Company has subscribed to the right shares issued by Engro Polymer and
Chemicals Limited, amounting to Rs. 804,100;
 Engro Fertilizers Limited, in addition to issuance of shares on transfer of Fertilizer

Undertaking, as referred to in section 6.4.3, has issued bonus shares to the Company in
the ratio of 2,880 shares for every 100 shares held i.e. 288,000,000 shares; and
 Engro PowerGen Limited has issued 3,266,000 ordinary shares of Rs. 10 each at a
premium of Rs. 90 per share.
Further, the Company is in the process of transferring part of its holding of 304 million
ordinary shares of Rs. 10 each in Engro Energy Limited (EEL) to Engro PowerGen Limited
(EPGL), a wholly owned subsidiary of the Company, 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. Initially, the Company was planning to obtain in
exchange of the aforementioned transfer an equivalent number of shares of EPGL. However,
due to significant cost of issuance of shares, it has now decided that EPGL will issue fewer
number of shares to the Company.
6.4.5 Employee share option scheme
Consequent to the demerger, as referred to in section 6.4.1, the employees transferred from
the Company to Engro Fertilizers Limited have surrendered their existing share options
against which new share options have been granted to them under a new scheme of Engro
Further, consequent to the bonus issue in the current period, the entitlements were
increased to 1,983,520 shares from 1,803,200 shares respectively and the exercise price
was adjusted to Rs. 186.84 from Rs. 205.52 respectively. These changes have been duly
approved by the Securities and Exchange Commission of Pakistan (SECP).
Engro Fertilizers Limited
As stated above, the employees transferred to Engro Fertilizers Limited and holding share
options of the Company have been, on surrender thereof, granted share options under a new
Employee Share Option Scheme (the Scheme) of Engro Fertilizers Limited. Under the
Scheme, employees have been granted options to purchase 4,937,100 ordinary shares of
Engro Fertilizers Limited at an exercise price of Rs. 98 per ordinary share. As per the
Scheme, the entitlements and exercise price are subject to adjustments because of issue of
right shares and bonus shares. The number of options granted to an employee is the same
as the number of options of the Company surrendered by them. No amounts are paid or
payable by the recipient on receipt of the option. The options carry neither right to dividends
nor voting rights. Vesting period for employees who were initially granted options on or
before June 30, 2008 in the Company, have started from January 1, 2010 and shall end on
54
December 31, 2010, where after these options can be exercised within a period of two years
ending December 31, 2012.
For options which were initially granted by the Company after June 30, 2008, the vesting
period will end such number of days after December 31, 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. However, the later options can also only be exercised up to
December 31, 2012.
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,
whereas the formal approval was granted during the current period. As the vesting period
has started from January 1, 2010 and the Scheme being considered a continuation of the old
Scheme announced by the Company, a charge based on fair value of share options i.e. Rs.
11.94 per share, calculated as on January 1, 2010, has been recognised in consolidated
condensed interim financial information.
Engro Fertilizers Limited used Black Scholes pricing model to calculate the fair value of
share options at the grant date. 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 Rs. 11.94

Share price at grant date Rs. 87.61
Exercise price Rs. 98.00
Annual volatility 41.64%
Risk free rate used 12.21%
Dividend yield 5.71%
6.4.6 Maintenance Reserve – Engro Energy Limited (the Subsidiary Company)
In accordance with the Power Purchase Agreement (PPA), Engro Energy Limited (the
Subsidiary Company) is required to establish and maintain a separate reserve fund (the
Fund) with a depository institution for payment of major maintenance expenses. Any interest
income resulting from the depository arrangements of the Fund shall remain in the Fund.
Under the PPA, 1/24th of the annual operating and maintenance budget of the Power Plant
less fuel expenses is to be deposited into the Fund on each capacity payment date until such
reserve equals to nine such deposits. After the second Agreement year and thereafter the
Fund may be re-established at such other level that the Subsidiary Company and NTDC
mutually agree.
6.4.7 Non-recognition of embedded derivative / exchange loss by Engro Energy Limited (the
Subsidiary Company)
Sales for the current period included Rs. 2,007,185 in respect of sales made by Engro
Energy Limited (the Subsidiary Company) to National Transmission and Despatch Company
55
(NTDC), on commencing commercial operations. Sales invoices are raised by the Subsidiary
Company based on the tariffs provided/approved under the PPA.
The Subsidiary Company‟s tariff, like other power companies, comprises of various price
components with indexations falling within the ambit of embedded derivatives. Such
embedded derivative as per International Accounting Standard 39, '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. The economic characteristics and risks of most of the Subsidiary Company's Tariff
indexations are closely related to the economic characteristics and risks of the Power
Purchase Agreement (the Host Contract). Hence have not been separated and accounted
for under IAS 39 as a derivative. Further, as per practice generally accepted in the power
industry, other indexations of (i) USD/PKR exchange rate (applicable to Company‟s price
components of debt, return on equity, return on equity during construction); and (ii) US CPI &
USD/PKR exchange rate (applicable to the Subsidiary Company‟s price components of fixed
and variable operations and maintenance – foreign) are not separated and accounted for as
derivatives. The Institute of Chartered Accountants of Pakistan (ICAP) had concluded in
2006, in the case of a listed power company, that the economic characteristics and risks of
foreign currency indexations are closely related to the economic characteristics and risks of
the Host Contract. The Subsidiary Company, however, has sought clarification from ICAP
whether its conclusion covers both the aforementioned indexations (i.e. USD/PKR exchange
rate and US CPI and USD/PKR exchange rate). Pending response from ICAP, the Group on
prudence has not recognized such indexations in the consolidated condensed interim
financial information as derivatives.
Further, as indexation of USD/PKR exchange rate related to debt component has not been
recognized separately as embedded derivative, the Subsidiary Company taking cognizance
of the 'matching principle' requested the Securities Exchange Commission of Pakistan
(SECP) on June 30, 2010 to allow deferment of recognizing exchange loss on translation of
borrowings in the profit and loss account till the clarification sought on the recognition of the
foreign currency indexations from ICAP has been received. Such recognition, if required,
would result in a credit to the profit and loss account which would more than offset the
exchange loss. The SECP in response has regretted, vide letter
July 9, 2010, to allow such deferment in the present form and advised the Subsidiary
Company to resubmit the matter with detailed reasons and impact analysis for its fresh
consideration. The Subsidiary Company's management, therefore, has resubmitted such
detailed analysis on July 13, 2010 and is very confident that the SECP based thereon would
concur with their viewpoint in allowing the requested temporary deferment, which
is being sought to avoid distortion of results. Hence pending final response from the SECP,
such exchange loss amounting to Rs 252,000, being the excess of exchange gain realized
through tariff indexations upto June 30, 2010, has not been charged to the profit and loss
account by the Group and has preferred to disclose it as deferred expense. However, had
the exchange loss been recognized in the consolidated condensed interim profit and loss
account, the profit for the period would have been lower by the aforementioned amount.
6.4.8 Non-adjusting event after balance sheet date
The Board of Directors in its meeting held on July 28, 2010 has approved an interim cash
dividend of Rs. 2 per share for the year ending December 31, 2010
(December 31, 2009: Rs. 2 per share final cash dividend and bonus issue in the ratio of 1
56
share for every 10 shares held i.e. 10% bonus). The condensed interim financial information
(unaudited) does not reflect the dividend payable.
7. EARNINGS PER SHARE
7.1 The details of audited earnings per share, basic and diluted, of the Company and the Group
are as follows:

2009 2008 2007 2006 2005
Rupees per share
Earnings per share

- The Company 14.08 16.81 13.53 11.45 10.64
- The Group 13.54 16.36 12.33 9.47 10.44
The earnings per share for the years ended December 31, 2005 to 2008 have been restated
to incorporate the effect of issuance of right shares upto December 31, 2009. Accordingly,
these do not include the effect of bonus shares issued subsequent to December 31, 2009, as
referred to in section 7.2.
7.2 The unaudited earnings per share, basic and diluted, of the Company and the Group
for the half year ended June 30, 2010 was Rs. 1.18 and Rs. 10.37 respectively,
calculated after taking the effect of the bonus shares issued by the Company during
the half year ended June 30, 2010.
Yours truly
Sd/-
_____________________
A.F.FERGUSON & CO.
Chartered Accountants
Karachi
57
5.2 AUDITOR‟S CERTIFICATE ON THE ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

7th & 8th Floor, The Harbour Front Building,
HC No. 3, Marine Drive, Block 4, Clifton,
Karachi – 75600, Pakistan
Dear Sirs
AUDITORS‟ CERTFICATE ON ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL
We have verified from the books of account and records of Engro Corporation Limited (formerly
Engro Chemical Pakistan Limited) that the issued, subscribed and paid-up share capital of the
Company as at December 31, 2009 was Rs. 2,979,426 thousand comprising of the following:
No. of Rupees in
Shares thousand
185,354,484 Ordinary shares of Rs.10 each fully paid in cash 1,853,545
112,588,079 Ordinary shares of Rs. 10 each issued as fully paid 1,125,881

bonus shares
297,942,563 2,979,426
Yours truly
Sd/-
_____________________
A.F.FERGUSON & CO.
Karachi
MANAGEMENT NOTE
As per the unaudited accounts of the Company as at June 30, 2010, the issued, subscribed and
paid-up share capital was Rs. 3,277,369 thousand.
58
5.3 AUDITOR‟S CERTIFICATE FOR BREAK-UP VALUE OF SHARES

7th & 8th Floor, Harbour Front Building
Plot No. HC-3, Block-4
Scheme No. 5, Clifton
Karachi
Dear Sirs
AUDITORS‟ CERTIFICATE FOR BREAK-UP VALUE OF SHARES
As requested, we confirm that the break-up values of the ordinary shares of Rs. 10 each of (i) Engro
Corporation Limited – the Company (formerly Engro Chemical Pakistan Limited); and (ii) the
Company and its subsidiaries (the Group), based on the audited financial statements for the year
ended December 31, 2009, are as follows:
The The
Company Group
Rupees in thousand
Issued, subscribed and paid-up capital 2,979,426 2,979,426
Share premium 10,550,061 10,550,061

Hedging reserve (609,719) (617,000)
23,908,812 23,139,778
26,888,238 26,119,204
Number of shares
Number of ordinary shares in issue 297,942,563 297,942,563
Rupees per share

Break-up value per share (before final dividend) 90.25 87.67
59
Final Dividend / Bonus Issue 2009
The Board of Directors of the Company on January 22, 2010, while approving the financial
statements for the year ended December 31, 2009, declared final cash dividend @ Rs. 2 per share,
amounting to Rs. 595,885 thousand, and issue of bonus shares amounting to Rs. 297,943 thousand,
from unappropriated profit. The aforementioned break-up values after taking into consideration the
effect thereof, would be as follows:
The The
Company Group
Number of shares
Number of ordinary shares in issue (after bonus issue) 327,736,819 327,736,819
Rupees per share
Break-up value per share (after final dividend and bonus

issue) 80.22 77.88
Yours truly
Sd/-
_____________________
A.F.FERGUSON & CO.
Karachi
MANAGEMENT NOTE
As per the unaudited accounts of the Company as at June 30, 2010, the break-up values of the
ordinary shares of Rs. 10 each of (i) Engro Corporation Limited – the Company (formerly Engro
Chemical Pakistan Limited) was 82.62; and (ii) the Company and its subsidiaries (the Group) was
86.41.
60
5.4 UNAUDITED ACCOUNTS AS AT JUNE 30, 2010
61
62
63
64
65
66
67
68
5.5 CREDIT RATING REPORT
69
70
71
72
73
74
75
76
77
78
PART VI
6. TRUSTEE AND SECURITY
6.1. THE SECURITY
The TFC has been secured by way of first ranking 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 ECL and excluding its shares
in Engro Energy Limited and Engro Polymer & Chemicals Limited (“Charged Assets”) at
125% of the outstanding principal amount. These charges have 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.
(i) Nature of Charge
Engro Corporation Limited has created first ranking 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 ECL and excluding its shares
in Engro Energy Limited and Engro Polymer & Chemicals Limited (“Charged Assets”) in
favour of IGI Investment Bank Limited, as Security backing the TFC. 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, 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. However, the Company shall intimate the Security Trustee,
the changes in the assets backing the TFC within seven working days of such
changes, if any. The Company may, with prior written consent of the Trustee, create
further first ranking pari passu charges.
(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. Details of shares held by Engro
Corporation Limited as on June 30, 2010 for the purpose of security for this TFC Issue is
as under:
Breakup
Shares of Percentage Total Value
Subsidiaries and Affiliates Value per
Rs. 10 each Holding (PkR Million)
share (PkR)
Engro Eximp (Pvt) Ltd. 10,000 100% 147,256.80 1,472.57
Engro Management Services (Pvt) Ltd. 250,000 100% 10.21 2.55
Engro Foods Ltd. 542,300,000 100% 7.64 4,141.44
Engro PowerGen Ltd. 9,276,000 100% 55.69 516.55
Avanceon Ltd. 25,066,667 62.67% 0.76 19.04
Engro Fertilizer Ltd. 298,000,000 100% 39.58 11,795.11
Engro Vopak Terminal Ltd. (JV) 45,000,000 50% 13.13 591.06
79
Arabian Sea Country Club (Affiliate) 500,000 N.A. N.A. N.A

Total 920,402,667 18,538.33
(b) other assets
These include cars, computers, and other such assets of values which are minor
compared to shareholdings. The book value of all such other assets as at June 30, 2010,
is PkR 86,032,000/-.
Presently, there are no charges on the above mentioned assets backing the TFC.
6.2. THE TRUSTEE
In order to safeguard the interests of the TFC holders, 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 500,000 per annum. 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. The bankers to the Issue have been instructed to inform the Trustee on a
regular basis of the subscriptions received.
As per the terms of the Declaration of Trust executed between ECL and the Trustee, the
Trustee will ensure the following:
 The terms and conditions of the Declaration of Trust and Security Documents are adhered
to; 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 ECL.
6.3. THE TRUST DEED
The Trust Deed dated September 17, 2010 (“Declaration of Trust”) executed between the
Company and “IGI Investment Bank Limited” specifies the rights and obligations of the
Trustee. In the event of ECL defaulting on any of its obligations under the terms of the
Declaration of Trust, the Trustee may enforce ECL‟s obligations in accordance with the terms
of the Trust Deed. 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.
6.4. 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. It is clarified, however, that in the 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.
The Obligations shall become immediately due and payable, and the Security shall become
immediately enforceable by a declaration of the Trustee, notified to the Issuer, upon the
occurrence of an Event of Default.
80
Under Section 8.1.1 of the Declaration, each of the following events constitute an Event of
Default and is reproduced below:
a) the failure of the Issuer to:
i. redeem any Coupon on its respective Redemption Date and to pay the Redemption
Amount and / or any portion thereof on such Redemption Date;
ii. 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;
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;
c) an event of default (howsoever described and / or defined) occurs under a Transaction

Document;
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;
e) the Issuer enters into an arrangement for the benefit of its creditors in respect of any
Financial Indebtedness;
f) the Issuer:
i. voluntarily or involuntarily becomes the subject of bankruptcy or insolvency

proceedings except for proceedings which are frivolous in nature; and / or
ii. elects to become a party to or is subject to any proceedings or procedure under any
law for the relief of financially distressed debtors, except for proceedings which are
frivolous in nature; and / or
iii. is unable or admits in writing its inability to pay its debts as they mature, to the
Trustee; and / or
iv. a receiver or an administrator is appointed for all or any material part of its assets or
business;
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, suspends making payments on any of its
Financial Indebtedness or, by reason of actual or anticipated financial difficulties,
commences negotiations with one or more of its creditors with a view to rescheduling its
Financial Indebtedness or any portion thereof;
h) a moratorium is declared in respect of any Financial Indebtedness of the Issuer;
i) any corporate action, legal proceedings or other procedure or steps are taken in relation to
the suspension of payments, winding-up, dissolution, administration or reorganisation (by
81
way of voluntary arrangement, scheme of arrangement or otherwise) of the Issuer other than
a solvent liquidation or reorganisation;
j) enforcement of any Security Interest over substantial assets of the Issuer;
k) any governmental agency nationalizes, acquires or expropriates (with or without compensation)

any material or all the assets of the Issuer including but not restricted to the Secured Assets;
l) the Issuer fails to meet any of its material obligations under this Declaration and the same
has a Material Adverse Effect;
m) any other event or circumstance arising out of the Issuer‟s negligence or default which
results in a Material Adverse Effect;
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);
o) any commitment for any Financial Indebtedness of the Issuer is cancelled or suspended by a
creditor of the Issuer, as a result of an event of default (however described);
p) it is or becomes unlawful for the Issuer to perform any of its material obligations under this
Declaration;
q) any obligation or obligations of the Issuer under this Declaration or any Transaction
Document are not, or cease to be, legal, valid, binding or enforceable and the cessation
individually or cumulatively has a Material Adverse Effect;
r) the Issuer repudiates this Declaration or evidences an intention to repudiate this Declaration;
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;
t) any court or arbitrator passes a final non-appealable judgment or arbitral award for payment,
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;
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;
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, whichever is earlier;
w) the Issuer suspends, ceases, or threatens to suspend or cease, 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.
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PART VII
7. MANAGEMENT OF THE COMPANY
7.1. BOARD OF DIRECTORS OF ENGRO CORPORATION LIMITED
The Company‟s affairs are governed by a Board of Directors, which currently consists of the Chief
Executive Officer (“CEO”) and twelve other Directors. The CEO has an overall responsibility to
manage the portfolio of businesses of the Company.
Directorships held in other

Director‟s Name Address
Companies/Organizations
HUSSAIN DAWOOD 11th FLOOR, DAWOOD  Dawood Hercules
Chairman CENTRE, M.T. KHAN Chemicals Limited
ROAD,  Pakistan Business
KARACHI. PAKISTAN Council
 Pakistan Poverty
Alleviation Fund
 Beaconhouse National
University
 Pakistan Center for
Philanthrophy
 Karachi Education
Initiative/Karachi School
for Business &
Leadership
Initiative (UK)
 Asia House, London
 Dawood Corporation
(Private) Limited
 Patek (Private) Limited
 Sach International
(Private) Limited
 The Dawood Foundation
ASAD UMAR 8TH FLOOR, THE HARBOR  Engro Foods Limited

Chief Executive FRONT BUILDING, HC # 3,  Engro Vopak Terminal
MARINE DRIVE, BLOCK 4, Limited
CLIFTON, KARACHI,  Engro Polymer &
PAKISTAN Chemicals Limited
 The Pakistan Business
Council
 Lahore University of
Management Sciences
 Avanceon Limited
 Advanced Automation LP
Initiative/Karachi School
for Business &
Leadership
 Pakistan Institute of
83
Corporate Governance
 Engro Powergen Limited
 Pakistan Chemical and
Energy Sector Skills
Development Company
 Engro Fertilizers Limited
 State Bank of Pakistan
 Engro Eximp (Private)
Limited
 Open Society Institute of
Pakistan
ARSHAD NASAR NO.25, FALCON ENCLAVE  Pakistan Industrial
AIR FORCE OFFICERS Development Corporation
SOCIETY(AFOS)  Foundation for
TUFAIL ROAD Advancement of Sciences
LAHORE CANTT. & Technology (FAST)
PAKISTAN  Funds for Inclusion of
People with Disabilities
(FIPD)
 National University
ISAR AHMAD 11th FLOOR, DAWOOD  Engro Polymer &

CENTRE, M.T. KHAN Chemicals Limited
ROAD,  Engro Foods Limited
KARACHI. PAKISTAN  Dawood Lawrencepur
Limited
 Dawood Hercules
Chemicals Limited
 Central Insurance
Company Limited
 Tenaga Generasi Limited
SHABBIR HASHMI 90/1, STREET 11,  Engro Polymer &

KHAYABAN-E-SEHAR Chemicals Limited
DHA,PHASE VI  LMKR Holdings (Private)
KARACHI. Limited
PAKISTAN  Engro Powergen Limited
 UBL Fund Managers
 Sindh Engro Coal Mining
Company Limited
SHAHZADA DAWOOD 11th FLOOR, DAWOOD  Avanceon Limited

CENTER  Dawood Corporation
M.T.KHAN ROAD (Private) Limited
KARACHI.  Dawood Hercules
 Dawood Lawrencepur
Limited
 Engro Foods Limited
84
 Engro Polymer &

Chemicals Limited
 Engro Vopak Terminal
Limited
 National Management
Foundation - Lums
(Private) Limited
 Petek (Private) Limited
 Pebbles (Private) Limited
ABDUL SAMAD 10TH FLOOR, DAWOOD  Central Insurance

DAWOOD CENTRE, M.T. KHAN Company Limited
ROAD, KARACHI,  Dawood Hercules
 Dawood Corporation
(Private) Limited
 Inbox Business
Technologies (Private)
Limited
 Patek (Private) Limited
(Private) Limited
 Sui Northern Gas
Pipelines Limited
 Pebbles (Private) Limited
 Dawood Lawrencepur
Limited
MUHAMMAD 30-G, 5TH GIZRI STREET,  Dewan Drilling Limited

ALIUDDIN ANSARI PHASE IV, DHA,  Dewan Petroleum
KARACHI, PAKISTAN (Private) Limited
 National Clearing
Company of Pakistan
Limited
 Al-Meezan Investment
Management limited
Company Limited
SAAD RAJA 31 BELLFIELD AVENUE

HARROW, MIDDLESEX _
HA3 6ST, UK
ASIF QADIR ENGRO POLYMER &  Engro Polymer &
CHEMICALS LTD. Chemicals Limited
85
BAHRIA COMPLEX-I,  Engro Polymer Trading

M.T.KHAN ROAD, (Private) Limited
KARACHI, PAKISTAN  Inbox Business
Technologies (Private)
Limited
 Unicol Limited
Company Ltd.
 Pakistan Poverty
Alleviation Fund
KHALID S. SUBHANI 8TH FLOOR, THE HARBOR  Engro Polymer &

FRONT BUILDING, HC # 3, Chemicals Limited
MARINE DRIVE, BLOCK 4,  Engro Vopak Terminal
CLIFTON, KARACHI, Limited
PAKISTAN  Engro Fertilizers Limited
Limited
KHALID MANSOOR 7TH FLOOR, THE HARBOR  Engro Polymer &

FRONT BUILDING, HC # 3, Chemicals Limited
MARINE DRIVE, BLOCK 4,  Engro Energy Limited
CLIFTON, KARACHI,  Engro Powergen Limited
PAKISTAN  Sindh Engro Coal Mining
Company Limited
RUHAIL MOHAMMAD 7TH FLOOR, THE HARBOR  Engro Management

Chief Financial Officer FRONT BUILDING, HC # 3, Services (Private) Limited
MARINE DRIVE, BLOCK 4,  Avanceon Limited
CLIFTON, KARACHI,  Engro Foods Limited
PAKISTAN  Sigma Leasing
Corporation Limited
 Engro Energy Limited
Limited
7.2. PROFILE OF THE CHAIRMAN OF THE BOARD OF DIRECTORS
Mr. Hussain Dawood is the Chairman of Engro Corporation Limited, Dawood Hercules Chemicals
Limited and the Karachi Education Initiative/Karachi School for Business & Leadership. He is also a
Director on the Board of the Pakistan Centre for Philanthropy. Pakistan Business council,
Commonwealth business council, Beacon House National University, & Asia house London. He is a
global charter Member of the Indus Entrepreneurs and the member of the World Economic Forum in
Davos. He is on the honorary council of Italy, In Lahore and was recently conferred the award
“Ufficiale Ordine al Merito della Repubblica italiana”, by the Italian government. As part of social
responsibilities, he Chairs the board of the Pakistan Poverty Alleviation fund, one of the largest
World bank-financed social funds across the world. Mr.Dawood is an MBA from Kellogg School of
86
Management, Northwestern University, USA, and a graduate in Metallurgy from Sheffield University,
UK. He joined the board in 2003.
7.3. PROFILE OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
Asad Umar is President and Chief Executive of Engro Corporation Limited, Chief Executive Officer
of Engro Fertilizers Limited and Chairman of all Engro Subsidiaries and joint Ventures. He has held
key assignments with the company and with Exxon Chemical in Canada. Mr. Umar is also on the
Board of the Pakistan Business Council, Karachi Education Initiative, Pakistan Institute of Corporate
Governance, State Bank of Pakistan and Trustee of Lahore University of Management Sciences
(LUMS). A Masters in Business Administration, he joined the board in 2000.
7.4. PROFILE OF THE COMPANY SECRETARY
Andalib Alavi is General Manager Legal & Company Secretary of Engro Corporation Limited
(formerly Engro Chemicals Pakistan Limited) and manages the legal affairs of all the Engro group
companies. He is also the chairman of Engro Management Services (Private) Limited and a member
of the Corporate Governance Committee of the Karachi Stock Exchange. He is Bar-at-Law from
Lincolns Inn and holds LLB Hons degree from LSE, University of London. He joined Engro in 1992.
7.5. PROFILE OF THE CHIEF FINANCIAL OFFICER
Ruhail Mohammed is Senior Vice President and Chief Financial Officer of Engro Corporation
Limited (Formerly Engro Chemical Pakistan Limited). He has worked for many years in various
senior positions in Pakistan, UAE and Europe. He is on the Boards of Engro Foods Limited, Engro
Energy Limited, Avanceon Limited, Engro Powergen Limited, Engro Fertilizers Limited, Engro
Foods Supply Chain (Pvt) Limited, Engro Eximp (Pvt) Limited and Sigma Leasing Corporation
Limited and Chief Executive of Engro Management Services (Pvt) Limited. A Masters in Business
Administration in Finance, he joined the Board in 2006.
7.6. OVERDUE LOANS
There are no overdue loans (local and foreign currency) on the Company.
7.7. POWERS OF DIRECTORS
As required under section 196 of the Companies Ordinance, 1984, and the Articles of Association
of the Company, 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, required to be exercised by the Company in the general meeting of the shareholders.
7.8. NUMBER OF DIRECTORS
Pursuant to section 174 of the Companies Ordinance, 1984, the number of directors of a listed
company should not be less than seven (7). At present, the Board of ECL consists of thirteen (13)
Directors.
7.9. QUALIFICATION OF DIRECTORS
The qualification of a director shall be holding of shares in the Company of nominal value of Rs
25,000/- at least in his own name and not jointly with any other person or his nomination in writing
87
by a member or members holding shares of the nominal value of Rs.25,000/- or more, as his or
their representative.
7.10. 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, 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. The Directors may also be paid all
traveling, hotel and other expenses, 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. 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, the terms of remuneration for such office shall be sanctioned by an Ordinary
Resolution of the Company, except that remuneration of directors who are executives of the
Company shall be decided by the Board of Directors.
7.11. 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.
7.12. INTEREST OF DIRECTORS
The Directors may be deemed to be interested to the extent of fees payable to them for attending
board meetings. 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 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.
7.13. 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.
7.14. ELECTION OF DIRECTORS
The Directors shall comply with the provisions of section 174 to 178, 180 and 184 of the Ordinance
relating to the election of Directors and matters ancillary thereto. The present Directors of the
Company were elected effective April 22, 2009.
7.15. 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. 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, accepting or
endorsing on behalf of the Company any promissory notes or bills of exchange or by issuing
bonds, perpetual or redeemable debentures or debenture stock or any mortgage, charge or other
88
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.
7.16. VOTING RIGHTS
The TFCs shall not carry any voting rights in relation to the Company.
89
PART VIII
8. MISCELLANEOUS INFORMATION
8.1. REGISTERED OFFICE / HEAD Engro Corporation Limited

th th
OFFICE 7 & 8 Floor, Harbor Front Building
Marine Drive, Block 4, Clifton, Karachi
Tel: 111 211 211
Fax: 35636741
Website: www.engro.com
8.2. AUDITORS A.F.Ferguson & Co.
State Life Building No. 1-C
I.I.Chundrigar Road, Karachi
8.3. LEGAL ADVISOR OF THE Andalib Alavi
COMPANY General Manager Legal & Company Secretary
8.4. REGISTRAR / TRANSFER AGENT Central Depository Company of Pakistan
Limited
CDC House, 99-B, Block „B‟,
S.M.C.H.S., Main Shahra-e-Faisal,
Karachi-74400, Pakistan
8.5. BANKERS TO THE ISSUE 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.A. Pakistan
8.6. REDEMPTION BANKS Standard Chartered Bank (Pakistan) Limited
(TO EXERCISE PUT OPTION) MCB Bank Limited
8.7. MATERIAL CONTRACTS / DOCUMENTS
8.7.1 Deed of Floating Charge dated September 17, 2010 between the Company and IGI
Investment Bank Limited;
8.7.2 Declaration of Trust Agreement dated September 17, 2010 between the Company and IGI
Investment Bank Limited;
8.7.3 Credit Rating Report dated August 02, 2010 by PACRA;
8.7.4 Clearance letter dated August 18, 2010 from Karachi Stock Exchange;
90
8.7.5 Approval letter dated September 22, 2010 from Securities & Exchange Commission of
Pakistan.
8.8. INSPECTION OF DOCUMENTS AND CONTRACTS
All the Balance Sheets and Profit & Loss Accounts, Copies of the Memorandum and the Articles of
Association, the Auditor‟s Certificates, Trust Deed, the Deed of Floating Charge, the Credit Rating
Report, the Clearance letter from Karachi Stock Exchange, 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.
8.9. LEGAL PROCEEDINGS
There are no cases by or against the Company.
8.10. INDEMNITY
As per the Article 123 of Company‟s Articles of Association, 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, officer or Auditor in
defending any proceedings, whether civil or criminal, in which judgment is given in his favor, or in
which he is acquitted, or in connection with any application under Section 488 of the Ordinance in
which relief is granted to him by the Court.
8.11. CAPITALIZATION OF RESERVES
Year 1H 2010 2009 2008 2007 2006 2005 2004 2003 2002
Stock Dividend Nil 10% Nil Nil Nil Nil Nil Nil 10%
No. of Shares Nil 29,794,256 Nil Nil Nil Nil Nil Nil 13,903,644
The 10% Stock Dividend appearing in 2009 was announced by the Board of Directors on January
22, 2010, for the year ended December 31, 2009, and was capitalized in 2010.
8.12. REVALUATION OF FIXED ASSETS
The Company has not reflected any revaluation of fixed assets in their Financial Statements.
813. MEMORANDUM OF ASSOCIATION
The Memorandum of Association, inter alia, contains the objects for which the Company was
incorporated and the business that the Company is authorized to undertake. A copy of the
Memorandum of Association annexed to this Prospectus is being published with all issues hereof
except those released as newspaper advertisement.
8.14. VENDORS
The Company has no Vendors in terms of Clause 12 of section 1 Part 1 of the Second Schedule of
the Ordinance.
91
8.15. SUBSIDIARY COMPANIES
Extent of the interest of Engro Corporation Limited (the holding company) in the equity of its
subsidiaries as at June 30, 2010, is as follows:
Subsidiary companies Shareholding

Engro Eximp (Pvt) Ltd. 100%
Engro Management Services (Pvt) Ltd. 100%
Engro Foods Ltd. 100%
Engro PowerGen Ltd. 100%
Engro Polymer & Chemicals Ltd. 56%
Avanceon Ltd. 63%
Engro Fertilizer Ltd. 100%
Engro Energy Ltd. 95%
8.16. INVESTMENT IN ASSOCIATED COMPANIES
Investments in associated undertakings as per the unaudited accounts of June 30, 2010, are as
follows:
Company No. of Shares Shareholding of ECL

Engro Polymer & Chemicals Ltd. 292,400,000 56.19%
Engro Eximp (Pvt) Ltd. 10,000 100%
Engro Management Services (Pvt) Ltd. 250,000 100%
Engro Foods Ltd. 542,300,000 100%
Engro PowerGen Ltd. 6,010,000 100%
Avanceon Ltd. 25,066,667 62.67%
Engro Energy Ltd. 304,000,000 95%
Engro Fertilizer Ltd. 10,000,000 100%
Engro Vopak Terminal Ltd. 45,000,000 50%
Arabian Sea Country Club 500,000 N.A.
92
PART IX
9. APPLICATION AND ALLOTMENT INSTRUCTIONS
GENERAL INSTRUCTIONS
1) Eligible investors includes:
a) Pakistani citizens resident in or outside Pakistan or Persons holding two nationalities

including Pakistani nationality;
b) Foreign Nationals whether living in or outside Pakistan
c) Companies, bodies corporate or other legal entities incorporated or established in or outside
Pakistan (to the extent permitted by their constitutive documents and existing regulations, as
the case may be);
d) Mutual Funds, Provident/pension/gratuity funds/trusts, (subject to the terms of the Trust
Deed and existing regulations); and
e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.
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.
3) Copies of Prospectus and application forms can be obtained from the members of
Karachi Stock Exchange (Guarantee) Limited, the Bankers to the Issue and their
branches, Engro Corporation‟s website, and the registered office of Engro Corporation
Limited.
4) The applicants opting for scripless form of TFCs are required to complete the relevant sections
of the application. In accordance with provisions of the Central Depositories Act, 1997 and the
CDC Regulations, credit of such TFCs is allowed ONLY in the applicant‟s own CDC Account
after the close of subscription. In case of discrepancy between the information provided in the
application form and the information already held by CDS, the Company reserves the right to
issue TFCs in physical form.
5) Name (s) and address (es) must be written in full block letters, in English and should not be
abbreviated.
6) All applications must bear the name and signature of the applicant. In case of difference of
signature with the Computerized National Identity Card (CNIC) or National Identity Card for
Overseas Pakistanis (NICOP) or Passport, both the signatures should be affixed on the
application form.
7) APPLICATIONS MADE BY INDIVIDUAL INVESTORS
(i) In case of individual investors, an attested photocopy of CNIC (in case of RPs)//Passport (in
case of NRPs and FIs) as the case may be, should be enclosed and the number of
CNIC/Passport should be written against the name of the applicant. Copy of these documents
can be attested by any Federal/Provincial Government Gazetted Officer, Councilor, Oath
Commissioner or Head Master of High School or bank manager in the country of applicant‟s
residence
(ii) Original CNIC/Passport, along with one attested photocopy, must be produced for
verification to the banker to the issue at the time of presenting the application. The attested
photocopy will, after verification, be retained by the bank branch along with the application.
8) APPLICATIONS MADE BY INSTITUTIONAL INVESTORS
(i) Applications made by companies, corporate bodies, mutual funds, provident/pension/gratuity
funds/trusts and other legal entities must be accompanied by an attested photocopy of their
93
Memorandum and Articles of Association or equivalent instrument / document. Where

applications are made by virtue of Power of Attorney, the same should also be submitted along
with the application. Any Federal/Provincial Government Gazetted Officer, Councilor, Bank
Manager, Oath Commissioner and Head Master of High School or bank manager in the country
of applicant‟s residence can attest copies of such documents
(ii) 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. The attested copies, will after
verification, be retained by the bank branch along with the application
9) In case of joint application, each applicant must sign the application form and submit attested
copies of their CNICs/Passport. The TFCs will be dispatched to the person whose name appears
first on the application form while in case of CDS, it will be credited to the CDS account
mentioned on the face of the form and where any amount is refundable, in whole or in part, the
same will be refunded by cheque or other means by post, or through the bank where the
application was submitted, to the person named first on the application form, without interest,
profit or return. Please note that joint application will be considered as a single application for the
purpose of allotment of TFCs.
10) 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 Corporation Limited
Rupiya Certificate” and crossed “A/C PAYEE ONLY”.
11) Applications are not to be made by minors and/or persons of unsound mind.
12) Applicants should ensure that the bank branch, to which the application is submitted, completes
the relevant portion of the application form.
13) Applicants should retain the bottom portion of their application forms as provisional
acknowledgement of submission of their applications. 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.
14) 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.
15) 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.
ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS
16) In case of foreign investors who are not individuals, applications must be accompanied with a
letter on applicant‟s letterhead stating the legal status of the applicant, place of incorporation and
operations and line of business. A copy of memorandum of association or an equivalent
document should also be enclosed, if available. Where applications are made by virtue of Power
of Attorney, the same must be lodged with the application. Copies of these documents can be
attested by the bank manager in the country of applicant‟s residence.
17) Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out
under the State Bank of Pakistan‟s Foreign Exchange Manual.
94
BASIS OF ALLOTMENT
1. The minimum amount of application for subscription of TFCs is Rs. 25,000/-. Application for
TFCs below the total value of Rs.25,000/- shall not be entertained.
2. Application for TFCs must be made for a minimum of the aggregate face value of PKR 25,000/-,
or in multiples of PKR 5,000/- for amounts above PKR 25,000/-. Applications, which are neither
for Rs 25,000/- nor in multiples of PKR 5,000/- for amounts above PKR 25,000/- shall be
rejected.
3. Allotment/Transfer of TFCs to applicants shall be made in accordance with the allotment criteria/
instructions disclosed in the Prospectus.
4. 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.
5. Applications, which do not meet the above requirements, or applications which are
incomplete will not be accepted. The applicants are, therefore, required to fill in all data
fields in the Application Form.
6. The Registrar will dispatch TFCs to successful applicants or credit the respective CDS accounts
of the successful applicants (as the case maybe). Therefore, applicants are advised to fill in
accurate mailing address and CDS account details, if any.
7. BANKERS TO THE ISSUE
Code Name of Banks Code Name of Banks

01 MCB Bank Limited 07 Bank AlHabib Limited
02 Standard Chartered Bank 08 Allied Bank Limited
(Pakistan) Limited
03 Bank Alfalah Limited 09 JS Bank Limited
04 NIB Bank Limited 10 Askari Bank Limited
05 United Bank Limited 11 Citibank N.A. Pakistan
06 Habib Bank Limited
8. OVERSEAS BANKERS TO THE ISSUE

01 Habib Bank Limited 05 -
02 - 06 -
03 - 07 -
04 - 08 -
95
9. Occupation Code
Code Occupation Code Occupation

01 Business 06 Professional
02 Business Executive 07 Student
03 Service 08 Agriculturist
04 Housewife 09 Industrialist
05 Household 10 Other
10. Nationality Code

001 U.S.A 006 Iran
002 U.K 007 Bangladesh
003 U.A.E 008 China
004 K.S.A 009 Bahrain
005 Oman 010 Other
96
PART X
10. SIGNATORIES TO THE PROSPECTUS
Names of Directors Signature
Mr. Asad Umar -Sd-
Mr. Isar Ahmad -Sd-
Mr. Shahzada Dawood -Sd-
Mr. Shabbir Hashmi -Sd-
Mr. Khalid Mansoor -Sd-
Mr. Ruhail Mohammed -Sd-
Mr. Arshad Nasar -Sd-
Mr. Saad Raja -Sd-
Mr. Asif Qadir -Sd-
Mr. Khalid S. Subhani -Sd-
Mr. Hussain Dawood -Sd-
Mr. Muhammad Aliuddin Ansari -Sd-
Mr. Abdul Samad Dawood -Sd-
Witness 1:
Name: Signature: _________-Sd-_____________
Place: Karachi
Witness 2:
Name: Signature: _________-Sd-_____________
Place: Karachi
97
PART XI
11. MEMORANDUM OF ASSOCIATION
THE COMPANIES ORDINANCE, 1984
COMPANY LIMITED BY SHARES
Memorandum of Association
OF
ENGRO CORPORATION LIMITED
1. The name of the Company is ENGRO CORPORATION LIMITED
2. The Registered Office of the Company will be situated in the Province of Sind.
3. The objects for which the Company is established are:
(1) To manufacture, produce, treat, refine, reduce and process all kinds of
artificial manures and fertilizers, chemicals and minerals and any products
and by-products which may be derived, produced, prepared, developed,
compounded, 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, sell, supply, market, distribute, exchange or otherwise dispose of,
import, export, store, hold, package, transport, use, experiment with, handle,
trade, and generally deal in fertilizers and chemical products.
(2) To undertake and carry on all type of business related to all aspects of
agriculture, agricultural products and equipment including but not limited to
farming including without limitation corporate farming, seeds, 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.
(3) To undertake, develop or carry on any business or activity relating to

telecommunications including fixed and wireless and including telephone,
cellular, cable or satellite communication and including of speech, sounds,
images, signals and data and materials in all forms, howsoever produced,
transmitted, 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, marketing and
provision of facilities and services subject to any prior approvals required
under the law.
(4) To undertake, develop or carry on any business or activity related with any
form of energy, including, without limitation petroleum, gas and power
including electric power, at all stages of exploration, refining, generating,
transporting, producing, selling, distributing and supply and to do all or such
things as are incidental or conducive to the carrying on of energy, petroleum,
98
gas and power related service and facilities subject to any prior approval
required under the law.
(5) To undertake, 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, services and facilities subject to any prior approvals required
under the law.
(6) to own, lease, license, purchase of otherwise acquire, maintain, work, gather,
get in, and develop gas, minerals and chemical and other substances of all
kinds and to pipe, transport, store, process, refine, treat, supply and deal in
all such substances;
(7) to own, purchase, acquire, lease, build, erect, install, establish, operate,
manage and maintain plants, laboratories, equipment, apparatus, and other
facilities for the manufacture, refining, processing, storage, sale and
distribution of fertilizers and chemical products;
(8) to buy, lease, sell, exchange or otherwise acquire and to construct, lay,
maintain and operate pipelines and other conveyors for the transportation of
gases, liquids, minerals and chemical and other substances;
(9) to purchase, take on lease or in exchange, or otherwise acquire, any lands

and to lay out, improve and prepare the same for building or commercial
purposes; to sell, mortgage or let the same; to construct, alter, repair, pull
down, decorate, maintain, furnish, fit up and improve buildings to lay out,
construct and pave roads, streets, alleys, paths and walks, to drain, improve
and landscape grounds, and enter into contracts and arrangements of all
kinds with builders, property owners, tenants and others and to advance
money to them;
(10) to clear, manage, farm, cultivate, 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, animal or vegetable, of or on any such
lands, and to lay out sites for and establish temporary or permanent camps,
towns and villages on any such lands and to carry on all or any of the
businesses of farmers, dairymen, milk contractors, dairy farmers, millers,
seeds-men, nurserymen, dealers in agricultural equipment, growers of and
dealers in grain, hay and straw, and purveyours and vendors of dairy
products, poultry, animal feeds and provisions of all kinds and to buy, 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;
(11) to own, acquire, construct, establish, install, lay out, improve, maintain, work,
manage, operate carry out control, or aid in, contribute or subscribe to the
constructions, erection, maintenance and improvement or working of, any
roads, ways, tramways, aerodromes and landing fields, docks, wharves,
piers, bridges, jetties, breakwaters, dredging facilities, moorings, harbour
abutment, viaducts, aqueducts canals, water courses, wells, tanks, storage
installation, refineries, pipes, pipelines, conveyors, telegraphs, telephones,
wireless, gas works, steam works, electric lighting and power works, power
houses, hydroelectric plants, laboratories, factories, mills, foundries,
workshops, boilers, machine shops, warehouses, shops, stores, fuel stores,
99
hangars, garages, guard towers, machinery and other appliances, hotels,

clubs, restaurants, lodging houses, baths, places of worships, hospitals,
dispensaries, places of amusement, pleasure grounds, parks, gardens,
reading rooms, dwelling houses, office and other buildings, works and
conveniences which may be calculated, directly, or indirectly, to advance the
Company‟s interests and to contribute to, subsidies or otherwise assist or
take part in, the construction, improvement, maintenance working,
management, carrying out of control thereof, and to take any lease or enter
into any working agreement in respect thereof;
(12) to purchase, build, charter, affreight, hire and let out for hire, or for chartering
and affreightment and otherwise to obtain the possession of, and use,
operate and dispose off, and employ or turn to account ships, lighters,
barges, tugs, launches, boats and vessels of all kinds, automobiles, lorries,
motor trucks and tractors, airplanes, helicopters, locomotives, wagons, tank
cars, and other forms of transport and rolling stock, and otherwise to provide
for any employ the same in the conveyance of property and merchandise of
all kinds and the transportation of personnel, employees, customers and
visitors and to purchase or otherwise to acquire any shares or interest in any
ships or vessels, airplanes, helicopters, railways, motor transportation or in
any companies possessed of or interested in any ships, vessels, airplanes,
helicopters, railways and motor transportation;
(13) to purchase, acquire, take on lease or tenancy, sell dispose of, mortgage or
let any estate or interest in and to take and acquire options over any
property, immoveable and moveable, or rights of any kind, and to develop,
improve, turn to account, deal with, lease mortgage, sell or otherwise dispose
of the same in such manner as may be thought expedient;
(14) to apply for, purchase, or otherwise acquire, and protect and renew in
any part of the world any patents, patent rights, brevets d‟invention,
trade marks, designs, licences, concessions and the like, conferring any
exclusive or non-exclusive or limited right to their use, or any secret or
other information as to any invention, process or thing which may seem
capable of being used for any of the purposes of the Company, or the
acquisition of which may seem calculated directly or indirectly to benefit
the Company, and to use, exercise, develop, or grant licenses in respect
of, or otherwise turn to account the property, rights or information so
acquired, and to expend money in experimenting upon, testing or
improving any such patents, inventions or rights;
(15) to act as Managers, Agents, Registrars, Secretaries, Treasurers,

Consultants or Managing Agents of and to provide services to any
business or concern that the Company may find convenient or
advantageous;
(16) to enter into partnership or any arrangement for sharing profits, union of
interest, co-operation, joint adventure, reciprocal concessions, or
otherwise with any company, association, firm or person carrying on or
engaged in, or about to carry on or engage in, any business or
transaction which this Company is authorized to carry on or engage in, or
any business or transaction capable of being conducted so as directly or
indirectly to benefit the Company, and to lend money to, guarantee the
contracts of, or otherwise assist any such company, association, firm or
person, and to purchase, take, or otherwise acquire, shares and
100
securities of any such company or association, firm or person, and to

sell, hold, reissue, with or without guarantee, or otherwise deal with the
same;
(17) to acquire and undertake the whole or any part of the business, 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, or
possessed of property suitable for the purposes of the 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;
(18) 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, 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, either in whole or in part, with or into any other companies,
associations, firms or persons, and to place or guarantee the placing of,
underwrite, subscribe for or otherwise acquire all or any part of the
shares, debentures or other securities of any such other companies,
association, firms or persons;
(19) to lend and advance money or give credit to such persons or companies
and on such terms as may seem expedient, 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;
(20) to receive money on deposit or loan and borrow or raise money in such
manner as the Company shall think fit, 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, by mortgage,
charge or lien upon all or any of the property or assets of the Company
(both present and future), including its uncalled capital, and also by a
similar mortgage, 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;
(21) to draw, make accept, endorse, negotiate, buy, sell, deal in, discount,
execute and issue promissory notes, bills of exchange, bills of lading,
warrants, debentures and other negotiable or transferable instruments;
(22) to subscribe for, underwrite, purchase or otherwise acquire and to hold,

dispose of and deal in shares, stocks, bonds, debentures, debenture
stocks, annuity or other obligations of any other company, person,
institution or corporate or governmental body, whether secured or
unsecured;
(23) to sell, lease, mortgage or otherwise dispose of the property, assets or

undertaking or the Company or any part thereof for shares, stock,
debentures, or other securities or obligations of any institution, corporate
or governmental body, person or company, whether or not having objects
altogether or in part similar to those of the Company, or for any other
consideration;
101
(24) to obtain any legislative, judicial, 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, or for any other
purpose which may seem expedient, to take all necessary or proper
steps with the authorities, supreme, national, local, municipal or
otherwise, of any place in which the Company may have interests, 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, applications,
actions or steps taken by any Governmental authority or body, or any
company, association, firm or person, which may seem calculated,
directly or indirectly, to prejudice the interests of the Company or it s
Members;
(25) to enter into any arrangements and contracts with any government or
authority supreme, municipal, local or otherwise, that may seem
conducive to the Company‟s objects or any one of them and to obtain
from such government or authority any rights, privileges, options,
concessions and licences, and to carry out, exercise or comply with any
such arrangements, agreements, rights, privileges, concessions and
licences and to procure the Company to be registered or recognized in
any part of the world;
(26) to remunerate Directors, officials, agents, employees and servants of

the Company and others and to establish and support or aid in the
establishment and support of associations, institutions, funds, trusts
and conveniences, calculated to benefit employees or ex-employees of
the Company, or the dependents or connections of such persons, and
to grant pensions, gratuities and allowances and to provide houses,
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, general or
useful purpose and for the purpose of this paragraph the words
“employees” and “ex-employees” shall include, respectively, present
and former directors and other officers, agents, employees, trainees
and servants;
(27) to manage, improve, develop, sell, exchange, lease, mortgage, pledge,

hypothecate, assign, transfer, deliver, dispose of, turn to account or
otherwise deal with all or any part of the property and assets, immovable
and movable, corporeal or incorporeal, tangible or intangible, and any
right, title and interest of the Company therein, including rights, licences,
privileges, concessions and franchises as may seem expedient;
(28) to pay out of the funds of Company all expenses which the Company
may lawfully pay with respect to the formation, promotion and registration
of the Company or the issue of its capital, including brokerage and
commissions for obtaining applications for or taking, placing or
underwriting or procuring the underwriting of shares, debentures or other
securities of the Company;
(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
102
allotment of shares, debentures or other securities of the Company

credited as paid up in full or in part, or otherwise;
(30) to adopt such means of making known the products of the Company as
may seem expedient and in particular by undertaking educationa l,
training and demonstration programmes and by advertising in the press,
by circulars and exhibition of works of art or interest, by publication of
books and periodicals and by granting prizes, rewards and donations;
(31) to undertake, assist and participate in financial, commercial and

industrial operations and undertakings in any part of the world, and both
singly and in connection with other persons, firms, associations and
companies and corporations;
(32) to do all or any of the above things, either as principals, agents, trustees,
contractors, or otherwise, and either alone or in conjunction with others,
and either by or through agents, sub-contractors, trustees or otherwise,
and either alone or in conjunction with others;
(33) to distribute among the Members in specie any property of the Company,
or any proceeds of sale or disposal of any property of the Company, 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 l aw;
(34) to do all such other things as may be deemed incidental or conducive to

the attainment of the above objects or any of them.
(35) The objects specified in each of the sub clauses of the main clause 3 shall
be regarded as independent objects, and accordingly, 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.
And it is hereby declared that the word “company” in this clause, except where used
in reference to this Company, shall be deemed to include any partnership or body of
persons, whether corporate or unincorporate, and whether domiciled in Pakistan or
elsewhere.
4. The liability of the Members is limited.
5. The Share Capital of the Company is Rs. 3,500,000,000 (Rupees Three billion and five
hundred million) divided into 350,000,000 Ordinary Shares of Rs. 10/- (Rupees ten) each.
103

ENGRO TFC Prospectus

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ADVICE FOR INVESTORS

THE INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO

ENGRO CORPORATION LIMITED

3-YEAR FIXED RATE INSTRUMENT

PROFIT @ 14.5% PER ANNUM (FIXED)

Instrument Rating “AA” (Double A)

Public Subscription between

Date of Publication of this Prospectus is October 06, 2010

ECL or Company or Issuer or Engro Engro Corporation Limited

BoD Board of Directors

CDCPL Central Depository Company of Pakistan Limited

CDS Central Depositary System

CEO Chief Executive Officer

CVT Capital Value Tax

Date of Investment The date when investor‟s subscription money is

EPS Earnings per Share

GoP Government of Pakistan

IPO Initial Public Offering

IPP Independent Power Producer

Issue Issue of TFCs through this Prospectus

KSE Karachi Stock Exchange (Guarantee) Limited

PACRA Pakistan Credit Rating Agency

Put Option The option to redeem, in full or in part, the

TFC Term Finance Certificate

TFC Trustee IGI Investment Bank Ltd

WHT Withholding Tax

Summary of the Issue

Issuer Engro Corporation Limited (“Engro”)

Tenor 3 years from the Issue Date

Profit Rate 14.5% p.a.

Profit payment frequency Semi Annually

Profit Accrual From the Date of Investment

Minimum Investment Rs. 25,000/-

Denomination of TFC Rs. 5,000/- or in multiples thereof

Subscription Period 3 months

TFC Schedule Date of opening of subscription period October 15, 2010

Allotment basis First come first served

Trustee IGI Investment Bank Limited (“IGI”)

Registrar & Transfer Agent Central Depository Company of Pakistan Limited

Risk Factors For details refer to para 4.4

Listing Karachi Stock Exchange (“KSE”)

1. APPROVALS, CONSENTS AND LISTING ON THE STOCK EXCHANGE

1.1. APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

1.2. CLEARANCE OF THE PROSPECTUS BY THE KARACHI STOCK EXCHANGE

1.3. FILING OF PROSPECTUS AND OTHER DOCUMENTS WITH THE REGISTRAR OF

b) Copies of contracts mentioned in Part VIII of the Prospectus

1.4. LISTING ON KARACHI STOCK EXCHANGE

2. TERM FINANCE CERTIFICATES AND RELATED MATTERS

2.1. 1st ISSUE OF LISTED TFCS TO THE GENERAL PUBLIC

2.2. SECURED TERM FINANCE CERTIFICATES

2.3. OPENING AND CLOSING OF SUBSCRIPTION LIST

THE SUBSCRIPTION LIST WILL OPEN FOR 3 MONTHS AT THE COMMENCEMENT OF

2.4. INVESTOR ELIGIBILITY

Investors include the following:

 Pakistani citizens resident in or outside Pakistan or Persons holding two nationalities

2.5. MINIMUM AMOUNT OF APPLICATIONS AND BASIS OF ALLOTMENT OF TFCs

a) The minimum amount of application for subscription of TFCs is PKR 25,000/-

e) Allotment of TFCs shall be subject to scrutiny of applications for subscription.

2.6. REFUND OF MONEY TO UNSUCCESSFUL APPLICANTS

2.7. MINIMUM SUBSCRIPTION

2.8. ISSUE, CREDIT AND DISPATCH OF TFCs

2.9. TRANSFER OF TFCs