engro rupiya

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FAQs
1. What is a TFC?
2. Why is the profit from TFC higher than banks?
3. How are profit payments made?
4. Who should I contact for queries related to allotment and profit
payments?
5. Can I invest in Engro Rupiya at present?
6. What are the profit payment due dates for Engro Rupiya?
7. What is the maturity period of the Engro Rupiya? When can I redeem it?
8. How can I get quotes / market price of the NCDs on the NSE website?
9. What is the purpose of the subscription letter?
10. Will the interest on Engro Rupiya be taxable and subject to Zakat
deduction?
11. Other information?

1. What is a TFC?
A Term Finance Certificate (TFC) is a corporate debt instrument issued by
companies in Pakistan to generate short and medium-term funds.

Types of TFCs:

• The TFCs issued to date include both fixed and floating rate instruments,
although issuers have lately tended to favor the floating rate variant.
• The coupon rate on floating rate TFCs is set at a risk-free benchmark rate
plus a risk spread to reflect the relative risk of the instrument. The risk-
free benchmark is typically the SBP’s discount rate, or the auction yield on
the Pakistan Investment Bond (PIB) of equivalent maturity.
• Floating rate TFCs may impose caps and floors on the coupon payments.
• Some TFCs may have embedded call and put options.
• A Call option is an option to buy a TFC at a specific price on or before a
certain date. In this way, Call options are like security deposits.
• Put options are options to sell a TFC at a specific price on or before a
certain date. In this way, Put options are like insurance policies
Parties to a TFC

There are three contractually related parties involved in a TFC issue: the
issuer (the borrower), the investors (the lenders), and the trustee. The
trustee, typically a financial institution, is appointed by the issuer to protect
the contractual rights and interests of investors at all times.

2. Why is the profit from TFC higher than banks?

 TFCs allow companies to raise funds at a lower rate compared to banks,
despite paying a higher profit rate to their investors. Companies benefit by
paying a lower cost of borrowing.

3. How are profit payments made?

Profit payments are made semi annually through one of the following modes:

• Direct Bank Account deposit

• Cheque
• Par Order
• Demand Draft
In case of Cheque, Pay Order, Demand Draft the instrument would mailed at
the mailing address provided in the subscription form.

4. Who should I contact for queries related to allotment

and profit payments?
For any queries regarding Engro Rupiya please contact:

Our help desk: 021 111-787-492

Or

Visit our website: www.engrorupiya.com

Or

E-mail us at: rupiya@engro.com

Or

Contact any of Our Partners

5. Can I invest in Engro Rupiya at present?

In order to invest in Engro Rupiya, you should match our eligibility criteria:

• Pakistani citizens resident in or outside Pakistan or Persons holding two

nationalities including Pakistani nationality;
• Foreign Nationals either, 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.

6. What are the profit payment due dates for Engro

Rupiya?

7. What is the maturity period of the Engro Rupiya? When

can I redeem it?
The Maturity period for Engro Rupiya is 3 years. It is a redeemable
instrument and you can easily encash your investment from the date of
purchase, to anytime during its maturity period. In case of redemption a 2
percent penalty will be charged on the investment amount only.

8. How can I get quotes / market price of the NCDs on the

NSE website?
You can log on to KSE website, www.kse.com.pk, where Engro Rupiya is
listed on the cash segment of KSE or log on to our website (web address) and
get quotes on Engro Rupiya.

9. What is the purpose of the subscription letter?

After the completion of every financial year (i.e. a period of 12 months
commencing on April 1 of a year and ending on March 31 of the succeeding
year), Engro will send to the Certificate holders a profit accrual statement
showing computation of profit accruing in the financial year, mainly for the
reference of the certificate holders for tax purpose. Profit on Engro Rupiya
shall be paid on respective due dates as mentioned in Q.2 above, to those
Engro Rupiya holders whose names appear in the register of certificate
holders on the Record Date.

10. Will the interest on Engro Rupiya be taxable and

subject to Zakat deduction?
Deduction of Zakat

Zakat is deductible in case of Engro Rupiya Certificate is 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 Engro Rupiya Certificate or on the
market value based on the closing rate on the KSE on the first day of
Ramzan, whichever is lower, at the rate of 2.50% on such dates as the
concerned Engro Rupiya Certificate becomes due for redemption in a Zakat
year. However if you sign a non-deduction certificate the same will be
deducted.

Income Tax

Any income derived from the Engro Rupiya Certificate 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.
 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 Ordinance 2001.

11. Other information?

Since the Engro Rupiya certificate will be a tradable instrument on the
Karachi Stock Exchange for all secondary transactions the following will hold:

Capital Gains Tax

As applicable by law at the time of sale of TFCs

Capital Value Tax & Withholding 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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© copyright engro rupiya 2010. all rights reserved.

abouttheproduct
Key features of the product
• Fixed Profit rate of 14.5% per year payable every 6 months for a tenor of 3 years
• Minimum investment of Rs. 25,000 with increments of Rs. 5,000
• Profit earned from the first day of investment
• Profit deposited directly into your bank account for added convenience
• Rated “AA” which denotes very high credit quality
• Free pickup of application form right from your doorstep
• No minimum holding period so investments can be encashed anytime subject to service charges of
2% on the investment balance for encashments before completion of 3 years
• Available for purchase till January 15, 2011. Multiple applications are allowed
In order to provide you with the convenience you deserve, Engro Rupiya has partnered with all the
leading banks in Pakistan; giving you the ease to invest with us from anywhere in Pakistan or even
abroad!
 Profit Payments
Profit for an investment of Rs. 1,000,000 is illustrated in the table below:

• Zakat is exempted for non-Muslims and for applicants who submit Zakat Affidavit
• Withholding tax is not applicable on investments below Rs. 150,000
Note: To calculate profit payments on your preferred investment amount use our profit calculator

Our Partners
• Standard Chartered
• MCB Bank Ltd.
• NIB Bank
• Bank-Alfalah
• Allied Bank Limited
• Bank Al Habib
• United Bank Limited
• Habib Bank Limited
• JSBL
• Citibank
• Askari Bank
• IGI
• BMA Financials
• UBL Funds Managers
• TCS

How Do I Purchase Engro Rupiya?

To purchase the Engro Rupiya Certificate you need to submit the completed subscription form , with a
copy of your NIC and investment amount in the form of pay order, demand draft or cheque and submit
it to our partner branches. With a minimum amount as low as Rs.25000, you can purchase the
Certificate in denominations of Rs.5000, (Rs.30,000, Rs.35,000 so on)

subscription form:
a) download the following subscription

b) request for the form from any of our partner banks’ branches near you
 to deposit your investment you could either
a) Visit the branches of any of our partners’ and submit the subscription form with your
cheque/demand draft/pay order

or
b) Contact our Call center (Number) return the completed form with your cheque, demand draft or pay
order to our door delivery staff, who will deliver it to Engro.

quick and easy free pick up

At Engro our investors’ convenience is our priority! With the Engro Rupiya Certificate you have the
comfort of investing right from your door step. Call us at our UAN (111-Rupiya) 111-787-492 and we
will collect your subscription form, NIC copy and pay order, demand draft or cheque from your
residence.

how do i receive my profit:

No ques, no wait! It’s your profit and you choose how to receive it!
The profit on your certificate can be transferred to directly to the bank account mentioned in your form
or it can be mail as a cheque at your notified address.

How Do I Encash My Engro Rupiya Certificate?

An Engro we understand saving is a difficult decision hence we offer the early encashment option
through which you can choose to encash your certificate any time.

in case of certificates held with central depository company:

Engro Rupiya Certificates will be listed on KSE thus for investor maintaining their certificates with the
Central Depository Company (CDC), the certificate can be sold on the exchange through their stock
broker.

or
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. Thus the certificates can be encashed from the market maker at their bid
price.

in case of physical certificates:

You can either:
a) Request for the redemption form our designated redemption branches and encash the certificate.
MCB and SCB are our redemption partners.

or

b) Redeem the investment from Engro in case of physical certificates.

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