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FIRST GRINDLAYS MODARABA    

  1. WHERE TO INVEST YOUR MONEY?

  2. SOME OPTIONS FOR THE INVESTMENT

  3. FIRST GRINDLAYS MODARABA                     

Certificates of Musharika (COMs)

Oct 22 - 28, 2001

Major features of the COM Scheme are given below:

Registered

A unique registration number shall be assigned to each certificate upon issue.

Maturity

Available in tenors of three months, six months, one year, two years, three years, four years and five years.

Currency:

Pakistan Rupees only.

Denominations

Minimum denominations of Rs. 5,000

Investment Limit

A minimum investment of Rs. 10,000

Expected returns*

3 months

7.00% per annum

 

6 months

8.00% per annum

 

1 year

10.00% per annum

 

2 years

11.00% per annum

 

3 years

12.50% per annum

 

4 years

12.75% per annum

 

5 years

13.00% per annum

* subject to change.

Profit payments are made on a quarterly basis.

Profit Calculation

Profit rates to be computed on a 365 days basis and paid for the actual number of days the certificate remains outstanding within the relevant profit payment quarter.

Premature Encashment

Permitted at any time. A redemption reserve fund equal to 5% of the face value of COMs outstanding has to be maintained by FGM to cater to premature encashments.

Penalty

1 % of encashment value.

Transferable

Yes.

Taxation/Zakat/Stamp duty

Subject to 2.5% Zakat and withholding tax 10% wherever applicable. Stamp duty 0.15% of face value on issue and 0.10% on transfers.

Profit Payment Mode

By crossed cheque/ direct account transfer for SCGB/SCB account holders.

Standard Chartered Group and First Grindlays Modaraba (FGM)

The Standard Chartered Group is a London based international bank, focused on emerging markets of Asia, the Middle East, Africa and Latin America, with a network of over 600 offices in more than 56 countries and assets of approximately USD 90 billion. In Pakistan, the Group comprises of Standard Chartered Bank and Standard Chartered Grindlays Bank, the largest foreign banking group of the country, with a total 21 branches nationwide. The Standard Chartered Group has 100% management control of FGM which is one of the largest leasing entities in the country with gross leased assets of over Rs. 3.5 billion. FGM maintains the highest entity rating in the modaraba sector of A2 which signifies a modaraba in outstanding financial condition with a consistent record of above average performance.

COM scheme of FGM has been formulated within parameters laid down by the Religious Board and has been specifically approved by the Securities and Exchange Commission of Pakistan. These certificates are similar to certificates of investments of leasing companies with maturities ranging from 3 months to 5 years. For only Rs.10,000 you can invest in COMs directly from FGM or across 21 Standard Chartered Bank (SCB) or Standard Chartered Grindlays Bank (SCGB) branches without even opening an account. COMs pay profits quarterly and the certificate is transferable and encashable at any time. These transfer and encashable features are similar to those found in shares of a company and make COMs extremely liquid.

A certain percentage of total profits (stated on the face of each certificate) is shared by FGM's certificate holders (shareholders) and the COM holders. The profit (and also the encashed/matured principle) can be credited to any SCB or SCGB account on a quarterly basis or if the investor does not have an account with these banks the profit cheque is delivered to the investor's address.

The COM scheme affords many safeguards to its investors like, disclosure of credit rating on all offer for sale and advertising materials, publication of quarterly profit and loss account in two national dailies for the information of COM holders, premature encashment at any time, appointment of a Trustee (A.F.Fergusons & Co.) to oversee the use of a Redemption Reserve Fund created for premature encashment and strict reporting requirement of the SECP.

FGM's web site (www.grindlays modaraba.com) contains inter-alia, full terms and conditions of the COM scheme.