Page 1 of 35
ADVICE FOR GENERAL PUBLIC
THE INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS OFFER
FOR SALE DOCUMENT, ESPECIALLY THE RISK FACTORS GIVEN AT SECTION 4.4, BEFORE MAKING ANY INVESTMENT
DECISION.
SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATIONS BY SAME PERSON) IS
PROHIBITED AND SUCH APPLICATIONS’ MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES AND
EXCHANGE ORDINANCE, 1969.
ADVICE FOR INSTITUTIONAL INVESTORS AND HIGH NETWORTH INDIVIDUAL INVESTORS
A SINGLE INVESTOR CANNOT SUBMIT MORE THAN ONE BIDDING APPLICATION EXCEPT IN THE CASE OF REVISION OF BID. IF
AN INVESTOR SUBMITS MORE THAN ONE BIDDING APPLICATION THEN ALL SUCH APPLICATIONS SHALL BE SUBJECT TO
REJECTION.
THE BOOK BUILDING PORTION COMPRISING OF 61,875,500 ORDINARY SHARES HAS BEEN
SUCCESSFULLY CLOSED. THE PRESENT ISSUE OF 27,506,000 ORDINARY SHARES IS BEING MADE
TO THE GENERAL PUBLIC AT A PRICE OF PKR 14.06/- PER ORDINARY SHARE (I.E. STRIKE PRICE
DETERMINED THROUGH BOOK BUILDING)
INTERNATIONAL STEELS LIMITED
(Incorporated in Pakistan under Companies Ordinance, 1984)
ABRIDGED OFFER FOR SALE DOCUMENT FOR OFFER FOR SALE OF SHARES
Present Offer Consists of 110,008,000 Ordinary Shares (25.29% of the Total Paid Up Capital) of Face Value of
PKR 10.00 each
Book Building Portion of the Offer comprised of 61,875,500 Ordinary Shares (56.25%of the Total Offer) at a
floor price of PKR 12.90 per share
Pre-IPO allocation to foreign investors comprised of20,626,500 Ordinary Shares (18.75% of the Total Offer) at
strike price determined through the Book Building Process
General Public Portion of the Offer comprises of 27,506,000 Ordinary Shares (25% of the Total Offer) at
a price of PKR 14.06/- per share including premium of PKR 4.06/- per share
THIS IS NOT A PROSPECTUS BY INTERNATIONAL STEELS LIMITED BUT AN OFFER FOR SALE DOCUMENT BY
INTERNATIONAL INDUSTRIES LIMITED, THE SPONSOR OUT OF ITS SHAREHOLDING IN THE COMPANY
BIDDING PERIOD DATES: From 12 APRIL 2011 to 14 APRIL 2011
(BOTH DAYS INCLUSIVE) FROM 9:00 A.M. TO 5:00 P.M.
DATE OF PUBLIC SUBSCRIPTION: From 03/05/ 2011 to 04/05/ 2011
(BOTH DAYS INCLUSIVE) DURING BANKING HOURS
FINANCIAL ADVISOR
Habib Bank Limited
LEAD MANAGERS AND ARRANGERS
Habib Bank Limited Cassim Investments (Pvt.) Limited
JOINT BOOK RUNNERS
Cassim Investments (Pvt.) Limited AKD Securities Limited
Book Building Portion Underwritten by:
Cassim Investments (Pvt.) Limited
&
AKD Securities Limited
General Public Portion Underwritten by:
Habib Bank Limited
Cassim Investments (Private) Limited
AKD Securities Limited
Date of Publication of this Abridged Offer for Sale Document: 22.04.2011Page 2 of 35
PART 1
1 APPROVAL AND LISTING ON THE STOCK EXCHANGE
1.1 APPROVAL OF THE SECURITIES & EXCHANGECOMMISSION OF PAKISTAN
Approval of the Securities & Exchange Commission of Pakistan (“SECP” or the “Commission”) as
required under Section 62, read with Section 57 of the Companies Ordinance, 1984 (the
“Ordinance”) has been obtained by the Offererfor the issue, circulation and publication of this Offer
for Sale Document (“OFSD”).
IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES NOT
TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE COMPANY AND ANY
OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE
STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARDS TO THEM. SECP HAS NOT
EVALUATED QUALITY OF THE OFFER AND ITS APPROVAL FOR ISSUE, CIRCULATION AND
PUBLICATION OF OFSD SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE
SAME. THE PUBLIC/INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE
DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE OFFER BEFORE BIDDING /
SUBSCRIBING.
1.2 CLEARANCE OF THE OFFER FOR SALE DOCUMENT BY STOCK EXCHANGE
THE OFSD HAS BEEN CLEARED BY THE KARACHI STOCK EXCHANGE (GUARANTEE)
LIMITED (“KSE”) IN ACCORDANCE WITH THE REQUIREMENTS UNDER ITS LISTING
REGULATIONS. WHILE CLEARING THE OFSD, THE KSE NEITHER GUARANTEES THE
CORRECTNESS OF THE CONTENTS OF THIS OFSD NOR THE VIABILITY OF THE COMPANY.
THE KSE HAS NOT EVALUATED THE QUALITY OF THE OFFER AND ITS CLEARANCE
SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE
PUBLIC/INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE DILIGENCE AND
ANALYSIS REGARDING THE QUALITY OF THE OFFER BEFORE BIDDING / SUBSCRIBING.
1.3 FILING OF OFFER FOR SALE DOCUMENTAND OTHER DOCUMENT WITH THE
REGISTRAR OF COMPANIES
On behalf of the Offerer, the Company has filed with the Registrar of Companies, Companies
Registration Office (“CRO”) Karachi, as required under Sections 57(3) and (4) of the Ordinance, a
copy of this OFSD signed by two directors of International Industries Limited who are also the
directors of the Company, together with the following documents attached thereto:
a) Letter Reference # KA-MU-776 dated 28
th
January 2011from the Auditors of the Company, M/s.
KPMG TaseerHadi& Co.- Chartered Accountants consenting to the publication of their names in
the OFSD, which contains in Part 6certain statements and reports issued by them as experts (for
which consent has not been withdrawn), as required under Section 57(5) of the Companies
Ordinance, 1984.
b) Copies of material contracts and agreements mentioned in Part 8 of this OFSD as required under
Section 57(4) of the Ordinance.
c) Written confirmations of the Legal Advisor to this Offerand Bankers to this Offer, mentioned in this
Prospectus consenting to act in their respective capacities, as required under Section 57(5) of the
Companies Ordinance, 1984.
d) Consents of the Directors, the Chief Executive and the Company Secretary of the Company who
have consented to their respective appointments being made and their having been named or
described as such Directors and Chief Executive in this Prospectus, as required under Section
57(3) of the Ordinance, read with sub-clause (1) of clause (4) of Section 1 of Part 1 of the Second
Schedule to the Ordinance. Page 3 of 35

PART 2
2 SHARE CAPITAL AND RELATED MATTERS
2.1 SHARE CAPITAL
No. of
shares
Face
value
(PKR)
Premium
(PKR)
Total
(PKR)

AUTHORIZED
500,000,000 Ordinary shares of PKR 10/- each 10 – 5,000,000,000

ISSUED, SUBSCRIBED AND PAID UP
CAPITAL

Issued under a scheme of arrangement* –
417,716,700 of PKR 10/= each 10 4,177,167,000

17,283,300 Issued for Cash of PKR 10/= each 10 – 172,833,000

435,000,000 Total 4,350,000,000

The existing issued, subscribed & paid up
capital of the Company is held as follows:

SHAREHOLDERS / SPONSORS

435,000,000 International Industries Limited 10 4,350,000,000

435,000,000 Total Paid up Capital – 4,350,000,000
*Issued pursuant to court’s order dated 12 August 2010 passed in Judicial Miscellaneous Application No. 1
of 2010
2.1.1 Divestment
The Board of Directors of IIL, the holding company, has resolved to divest upto195,750,000 ordinary
sharesof PKR 10 each out its holding in the Company. In aggregate the proposed offer is 45% ofthe
issued, subscribed and paid up capital of the Company.
– Firstly upto 61,875,500 shares i.e.14.22% of the issued and paid up capital of the Company
have been offered through the book building process to institutional investors and HNWI
investors at a floor price of PKR 12.90 per share.
On the completion of the Book Building process and discovery of the Strike Price following allocation
ismade:
– 40,458,800 shares i.e. 9.30% of the issued and paid up capital of the Company will be allocated
to the International Finance Corporation at 20% discount to premium obtained in the book
building process. For details please refer to paragraph 3.1.2.
– 39,477,657 shares i.e. 9.08% of the issued and paid up capital of the Company will be allocated
to Sumitomo Corporation at 20% discount to premium obtained in the book building process.
For details please refer to paragraph 3.1.3.
– 20,626,500 ordinary shares i.e. 4.74% of the issued and paid up capital of the Company will be
allocated to Pre-IPO foreign investors at strike price. For detail please refer to paragraph 3.1.4
– 27,506,000 i.e. 6.3% of the issue and paid up capital of the Company are being offered to
general public at Strike Price. Page 4 of 35
The post divestment share holding structure will be as follows:
Number of
Shares
SHAREHOLDERS % Share
245,055,543 1) International Industries Limited (IIL) 56.33%
40,458,800
2) International Finance Corporation (IFC or Pre-IPO Investor) refer
to 3.1.2
9.30%
39,477,657
3) Sumitomo Corporation of Japan (Sumitomo) (Pre-IPO investor)
refer to 3.1.3
9.08%
61,875,500 4) Institutional Investors / HNWI Investors 14.23%
20,626,500 5) Foreign Investors (refer to 3.1.4) 4.74%
27,506,000 6) General Public 6.32%
435,000,000 Total Paid up Capital 100.00%
2.1.2 Pre- IPO Placement – (International Finance Corporation)
IIL intends to divest part of its shareholding in ISL to IFC as per the conditions set out in the Loan
Agreement signed between the Offerer, ISL and IFC dated 27
th
June 2008 amounting PKR
535,998,000/-. The shares will be issued at 20% discount to the premium determined through the
Book Building process. For details please refer paragraph 4.3.3 and paragraph 7.10.7.
Rationale
IFC has invested in ISL since inception and has provided loan amounting to PKR 535,998,000/-
which is convertible in to equity of ISL at the time of listing. Placement of ISL shares to IFC should
give extra comfort to other institutions as well as retail investors as IFC is considered among the
most prestigious equity partners and consider equity participation on strict merit where sponsors are
of high reputation with track record of delivering quality projects.
2.1.3 Pre-IPO Placement (Sumitomo Corporation)
The Offeroralso intends to divest part of its shareholding in ISL to Sumitomo for an amount of PKR
523,000,000/- as Pre-IPO Placement at 20% discount to the premium determined through the Book
Building process. Sumitomo has already signed a share purchase agreement with the Offerer dated
26 January 2011
Rationale
Sumitomo Corporation is one of the largest steel producers of Japan having presence in 66
countries across the world. Sumitomo has been in business since 1919, and considered amongst
the pioneers of steel and allied products. Sumitomo is engaged in multi-faceted businesses
including, Metal Products, Transportation Infrastructure development and Real Estate. Sumitomo’s
inclination to become equity partner validates the technical viability of ISL and provides comfort to
upcoming investors.
Mechanism for Determination of the amount of Discount
Discount is being offered to IFC and Sumitomo on the premium obtained through the Book Building
Process i.e. on PKR 4.06/- per share. Hence, the share price offered to IFC and Sumitomo is PKR
(10 + (4.06 x 80%)) i.e. PKR 13.248/- per share.
2.1.4 SUBSCRIPTION BY PRE-IPO FOREIGN INVESTORS
The pre-IPO foreign investors have been offered the shares allocated to them at the Strike Price.
They will subscribe these shares within seven days of the close of the Bidding Period at the strike
price determined through the book building process and as soon as the custodian/broker confirms
receipt of the remittance through official channel and the order is placed in writing to the Book
Runner.The Book Runner will immediately confirm to the Commission, the Company, the Offeror
and the foreign investor in writing regarding the allocation of shares. The allocation will be based on
first come first serve basis. In case all or a part of the shares allocated to Pre-IPO foreign investors
remain unsubscribed, then, such unsubscribed shares will be added to the Public Portion of the
Offer. Page 5 of 35
These foreign investors shall not come under the purview of regulation 6(7)(ii) of KSE Listing
Regulations and the foreign investor shall not be liable to hold the shares for a period of 6 months
from the last date of public subscription.
JFE Steel Corporation of Japan has subscribed for the complete foreign allocation i.e. 20,626,500
shares at the price for PKR 290,008,590/- at PKR 14.06/- per share.
2.1.5 PRESENT OFFER
The present Offer is being made to the general public.
Notes:
a) As per paragraph 3(I)(iv) of the Companies (Issue of Capital) Rules, 1996, the sponsors shall, at
all times, retain at least twenty five percent (25%) of the capital of the Company;
b) As per Regulation No. 6 (7) (i) of the KSE Listing Regulations, sponsors’ shareholding in excess
of twenty five percent (25%) shall not be saleable for a period of six months from the date of
public subscription.
c) As directed by the Commission vide its letter No. SMD/CO.62/01/2011 dated 1 April 2011,
shares allotted to International Finance Corporation and Sumitomo Corporation as mentioned in
paragraph 2.1.2 and 2.1.3 above shall not be saleable and transferrable for a period of two (2)
years commencing from the last date for public subscription.The Offerer may, however,
approach to the Commission for relaxation of this restriction.
d) The Commission vide letter No. SMD/CIW/CI/01/2011 dated 31 March 2011 has granted
relaxation from the requirements of sub-rule (ii) of rule 9 of the Companies (Issue of Capital)
Rules, 1996 (the CI Rules).
2.2 OPENING AND CLOSING OF THE SUBSCRIPTION LIST
The subscription list will open at the commencement of banking hours on May3,2011 and will close on
May 4,2011 at the close of banking hours
2.3 INVESTOR ELIGIBILITY FOR PUBLIC OFFER
Eligible investors include
a) Pakistani citizens residing 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 respective constitutive documents and existing
regulations as the case may be);
d) Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their respective Trust
Deeds and existing regulations); and
e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.
2.4 FACILITIES AVAILABLE TO NON-RESIDENT PAKISTAN AND FOREIGN
INVESTORS
Non-resident Pakistani investors and foreign investors may subscribe for the shares being offered
through this OFSD by using their SCRA as set out in Chapter 20 of the Foreign Exchange Manual of
the State Banks of Pakistan.
MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF SHARES OUT OF THE
PUBLIC PORTION OF THE OFFER
The basis and conditions of allotment to the general public shall be as follows:
a) Application for shares below the total value of PKR 7,035/- (Offer Price plus PKR 0.01/- per share
transfer fee x 500 Shares) shall not be entertained in case of shares transferred to CDC account. In
case physical shares are desired application for shares below the total value of PKR 7,105/- (Offer
Price plus PKR 0.15/- per share transfer fee x 500 Shares) shall not be entertained. Page 6 of 35
b) The minimum amount of application for subscription of 500 ordinary shares is PKR 7,035/- (Offer Price
plus PKR 0.01/- per share transfer fee x 500 Shares) in case shares are desired to be transferred to
CDC account. In case physical shares are desired minimum amount of application for subscription of
500 ordinary shares is PKR 7,105/- (Offer Price plus PKR 0.15/- per share transfer fee x 500 Shares).
c) Applications for shares must be made for 500 shares or in multiples of 500 shares only. Applications
which are neither for 500 shares nor for multiples of 500 shares shall be rejected.
d) Transfer fee shall be borne by the investors including investors mentioned in sub paragraph 2 of
paragraph 2.6.
e) SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE
APPLICATIONS BY SAME PERSON) IS PROHIBITED AND SUCH APPLICATIONS` MONEY IS
LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES AND EXCHANGE
ORDINANCE, 1969.
f) If the shares offered to the general public are sufficient for the purpose, all applications shall be
accommodated.
g) If the shares applied for are in excess of the shares offered, the distribution shall be made by
computer balloting,in the presence of the representative(s) of KSE in the following manner:
(i) If all the applications for 500 shares can be accommodated, then all such applications shall be
accommodated first. If all applications for 500 shares cannot be accommodated then ballotingwill
be conducted among applications for 500 shares only.
(ii) If all the applications for 500 shares have been accommodated and shares are still available for
allotment, then all applications for 1,000 shares shall be accommodated. If all applications
for1,000 shares cannot be accommodated then balloting will be conducted among applications
for 1,000 shares only.
(iii) If all applications for 500 shares and 1,000 shares have been accommodated and shares are still
available for allotment, then all applications for 1,500 shares shall be accommodated. If all
applications for 1,500 shares cannot be accommodated then balloting will be conducted among
applications for 1,500 shares only.
(iv) If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated and
shares are still available for allotment, then all applications for 2,000 shares shall be
accommodated. If all applications for 2,000 shares cannot be accommodated then balloting will
be conducted among applications for 2,000 shares only.
(v) After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in
the following manner:
(a) If the remaining shares are sufficient to accommodate each application for over 2,000
shares, then 2,000 shares shall be allotted to each applicant and remaining shares
shall be allotted on pro-rata basis.
(b) If the remaining shares are not sufficient to accommodate all the remaining
applications for over 2,000 shares, then balloting shall be conducted for allocation of
2,000 shares each to the successful applicants.
h) If the offer is over subscribed in terms of amount only, then allotment of shares shall be made in the
following manner:
(i) First preference will be given to the applicants who applied for 500 shares;
(ii) Next preference will be given to the applicants who applied for 1,000 shares;
(iii) Next preference will be given to the applicants who applied for 1,500 shares; and then
(iv) Next preference will be given to the applicants who applied for 2,000 shares.
i) After allotment of the above, the balance shares, if any, shall be allotted on pro rata basis to the
applicants who applied for more than 2,000 shares.
j) Allotment of shares will be subject to scrutiny of applications for subscription of shares. Page 7 of 35
k) Applications, which do not meet the above requirements, or applications which are incomplete, will be
rejected.
2.5 REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS
The Company shall take a decision within ten (10) days of the closure of subscription list as to which
applications have been accepted or are successful and refund the money in cases of unaccepted or
unsuccessful applications within ten (10) days of the date of such decision, as required under Section
71 of the Ordinance.
As per sub-section (2) of Section 71 of the Ordinance, if refund as required under Sub-section (1) of
Section 71 of the Ordinance is not made within the time specified therein, the Offerer shall be liable to
repay the money with surcharge at the rate of 1.5%, for every month or part thereof from the
expiration of the 15th day and, in addition, to a fine not exceeding PKR5,000/- and in case of
continuing offense to a further fine not exceeding PKR100/- per day after the said 15th day of which
the default continues. Provided that the Offerer shall not be liable if he/she proves that the default in
making the refund was not due to any misconduct or negligence on his/her part.
2.6 CREDITAND DISPATCH OF SHARE CERTIFICATES
The Company,on behalf of the Offerer, will dispatch share certificates to successful applicants through
their Banker to the Offer or by crediting the respective Central Depository System (“CDS”) accounts of
the successful applicants within thirty (30) days of the close of public subscription, as per Listing
Regulations of the Stock Exchanges.
Shares will be transferred either in scrip-less form in the CDS of CDCPL or in the shape of physical
scripts on the basis of option exercised by the successful applicants. Shares in the physical scripts
shall be dispatched to the Bankers to the Offer within thirty (30) days from the date of close of
subscription list, whereas scripless shares shall be directly credited through book entries in the
respective accounts maintained with the CDCPL.
The applicants who opt for receipt of shares in scrip-less form in CDS should fill in the relevant
columns of the Application Form. In order to exercise the scrip-less option, the applicant(s) should
have CDS account at the time of subscription. Stamp duty on transfer of shares in the names of
the successful applicants shall not be borne by the Offerer.
If the Company makes a default in complying with the above requirements, it shall pay to the Stock
Exchange a penalty of PKR5,000/- per day for every day during which the default continues. The
Stock Exchange may also notify the fact of such default and the name of the Company by notice and
also by publication in its Ready-Board Quotation of the Stock Exchange.
The name of the Company be notified to the members of the Stock Exchange and placed on the
website of the Stock Exchange.
2.7 TRANSFER OF SHARES
a) Physical Scripts
Under the provisions of Section 77 of the Ordinance, the Directors of the Company shall not
refuse to transfer any fully paid share unless the transfer deed is, for any reason, defective or
invalid or is not accompanied by the relevant share certificate. Provided that the Company shall
within thirty (30) days from the date on which the instrument of transfer was lodged with it, notify
the defect or invalidity to the transferee who shall, after the removal of such defect or invalidity, be
entitled to re-lodge the transfer deed with the Company.
b) Transfer under book entry system
The shares maintained with the CDS in the book entry form shall be transferred in accordance
with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations. Page 8 of 35
2.8 SHARES ISSUED IN PRECEDINGYEARS AT PAR
Date of
Allotment
Number of shares Considerations
03-12-2007 30,000 Cash
22-10-2010
1
417,716,700
Issued pursuant to court’s order dated 12 August 2010
passed in Judicial Miscellaneous Application No. 1 of 2010
30-12-2010 17,253,300 Cash
435,000,000
1
The Board of Directors of IIL in its meeting held on 23 July 2009, approved a scheme of arrangement
(“Scheme”) for the reconstruction of IIL by separation of the steel project (“Project”) and vesting of the
Project in ISL.
Under the Scheme, assets and liabilities of the Project including without limitation, properties of all
kinds and by whatever title held and whether moveable or immovable or tangible or intangible, and
without limiting the generality of the foregoing in particular and related liabilities including loans,
creditors etc. were transferred and vested into ISL in accordance with the Scheme and pursuant to
the court’s order dated 12 August 2010. As of the said date net assets of PKR 4,177,167,000 were
transferred and vested into ISL against which 417,716,700 ordinary shares of PKR 10/- were issued
to IIL.
2.9 PRINCIPAL PURPOSE OF THE PUBLICOFFER
The purpose of this Offer for Sale of Shares is to expand and diversify the capital base, attracting
prestigious foreign equity strategic partners like IFC and Sumitomo, bringing in foreign investment,
improving the governance structure of the Company, improving liquidity and consequent access to
alternatecapital resources.
2.10 INTEREST OF SHAREHOLDERS
None of the holders of the issued shares of the Company have any special or other interest in the
property or profits of the Company other than as holders of the ordinary shares in the capital of the
Company.
2.11 DIVIDEND POLICY
The rights in respect of capital and dividends attached to each share are and will be the same. The
Company in its general meeting may declare dividends but no dividends shall exceed the amount
recommended by the Directors. Dividend, if declared, in the general meeting, shall be paid according
to the terms of the provisions of the Ordinance.
The Directors may from time to time pay to the members such interim dividends as appear to the
Directors to be justified by the profits of the Company. No dividends shall be paid otherwise than out
of the profits of the Company for the year or any other undistributed profits.
No unpaid dividends shall bear interest or mark-up against the Company. The dividends shall be paid
within the period laid down in the Ordinance.
2.12 ELIGIBILITY FOR DIVIDEND
The shares being offered for sale shall rank pari-passu with the existing shares in all matters,
including the right to such bonus or right issue and dividend as may be declared by the Company
subsequent to the offer of such shares.
2.13 DEDUCTION OF ZAKAT
Income distribution will be subject to deduction of Zakat at source, pursuant to the provisions of Zakat
and Ushr Ordinance, 1980. (XVIII of 1980) as may be applicable from time to time.
2.14 CAPITAL GAINS (SECTION 37-A)
The capital gain arising on or after the first day of July 2010, from disposal of securities held for a
period of less than a year, shall be chargeable to tax at the rates specified as follows: Page 9 of 35
S.No Period Tax Year Rate of Tax
1 Where holding period of security is
less than six (6) months
2011
2012
2013
2014
2015
10.0%
10.0%
12.5%
15.0%
17.5%
2 Where holding period of security is
more than six (6) months but less
than twelve (12) months
2011
2012
2013
2014
2015
2016
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
3 Where the holding period of the
security is more than one year
– 0%
Capital Gain Tax is not applicable to a banking company and an insurance company.
The holding period of a security shall be reckoned from the date of acquisition (whether before, on or
after the thirtieth day of June, 2010) to the date of disposal of such security falling after the thirtieth
day of June, 2010.
Where a person sustains a loss on disposal of securities in a tax year, the loss shall be set off only
against the gain of the person from any other securities chargeable to tax and no loss shall be carried
forward to the subsequent tax year.
2.15 WITHHOLDING TAX ON DIVIDENDS
Dividend distribution to the shareholders will be subject to withholding tax under section 150 of the
Income Tax Ordinance, 2001 at the rate of 10% as specified in part I, Division III of First Schedule to
the said Ordinance or any time to time amendments therein. In terms of the provision of Section 8 of
the said Ordinance, said deduction at source, shall be deemed to be full and final liability in respect of
such profits.
2.16 DEFERRED TAXATION
Deferred tax is accounted for using the liability method in respect of all temporary differences at the
balance sheet date between the tax base of assets and liabilities and their carrying amount. Deferred
tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized
for all deductible temporary differences to the extent that it is probable that the temporary difference
will reverse in the future and the taxable profits will be available against which the temporary
differences can be utilized.
The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow deferred tax
asset to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled, based on the tax rates that have been
enacted or subsequently enacted at the balance sheet date.
The Company has booked a deferred tax liability of PKR 120,169,000 as at November 30, 2010.
2.17 FEDERAL EXCISE DUTY& WITHHOLDING TAX ON SALE/PURCHASE OF
SHARES
a) Federal Excise Duty (FED) of 16% is charged on brokerage commission on purchase / sale of
shares on a Stock Exchange.
b) Withholding Tax of 0.01% will be charged on sale/purchase value on the purchase / sale of
shares /Modaraba certificates / instruments of redeemable capital.
2.18 TAX CREDIT FOR INVESTMENT IN IPO
Under section 62 of the Income Tax Ordinance, 2001, tax credit on investment in Initial Public
Offerings (IPOs) up to a maximum investment of PKR 300,000/= is available where investment is
made on July 1, 2006 and onward. Page 10 of 35
2.19 JUSTIFICATION FOR PREMIUM
The Offerer had offered 61,875,500 shares at a floor price of PKR 12.90/- per share to HNWI investors
and Institutional investors through book building process during 12
th
to 14
th
April 2011. The process
has been carried out through the KSE’s designed book building software. All the bidders, on the basis
of their individual assessment, priced the Company and the final price evaluated through this process
was PKR 14.06/- per share (the “Strike Price”).
In addition, rationale for the justification of premium is set out below:
Internationally renowned Partners: International Finance Corporation and Sumitomo Corporation of
Japan have already invested in ISL highlighting the strategic dominance of ISL in the steel industry.
Further, ISL will benefit from Sumitomo’s presence and expertise. Since Sumitomo has been in the
steel industry for more than 60 years, ISL will benefit from its strategic partner in terms of better
pricing, timely delivery establishing relationships with other regional players, access to latent markets,
and inventory management.
Sponsor Profile: Principal Sponsor of International Steels Limited, International Industries Limited is
one of Pakistan’s leading manufacturer and sellers of GI Pipe, Steel Tubes and Pipes, API Line Pipe,
Cold Rolled Coils & Polyethylene Line Pipes. The Sponsor has a track record of building successful
projects in the steel and cable industry and considered as one of the pioneers in cold rolled steel and
pipe industry. ISL will not only capitalize on the market reputation of its sponsors to proliferate its
business through use of existing distribution network and brand equity comfort, but will also benefit
from the astute industry experience of its parent company to manage its operations converging in
financial and operational efficiencies. The earnings per share of IIL was PKR 10.27 during the year
ended June 2010 (Audited financial statements) and PKR 2.75 in the half year ending December 2010
(Unaudited financial statements). Book value as at the same period was PKR 46.75/- and PKR 39.62/-
respectively.
Management Team with Proven Track Record: ISL has a strong emphasis on recruiting and
retaining the best professionals who are central to its business model. The management team boasts
exemplary industrial, educational and professional backgrounds from top tier institutions across the
world as mentioned in paragraph 7.4. Further the Company’s sponsors i.e. IIL have a record of almost
50 years in the steel industry and for the past 20 years has been manufacturing CRC, both for its own
consumption and for supplies in the local market. IIL has transferred certain experienced professionals
to ISL to get maximum advantage from their expertise. Moreover ISL has also hired some Expat
engineers on a long term basis to head the critical cold rolling mill operation and coil galvanizing line.
Deficit Product: Domestic demand for CRC in 2009-10 was estimated at 470,000 tons, which was
primarily met through imports except 110,000 tons which is produced by Pakistan Steel Mills (70,000
tons) and IIL (40,000 tons).Similarly, demand for HDGC during 2009-10 was estimated at 291,000
tons which was met through imports only except 30,000 tons produced by Pakistan Steel Mills.
World Class Infrastructure: A well established plant spread over an area of 32 acres with a capacity
of 250,000 tons of CRC and 150,000 tons of HDGC. Out of the 250,000 CRC produced, ISL intends to
produce and sell c.150,000 tons of HDGC whereas the remainder 100,000 tons will be sold as CRC.
ISL is equipped with a dedicated combined cycle 18MW power plant, Acid regeneration, Hydrogen
and Nitrogen gas generation facilities. The state of the art facility ensures uninterrupted production of
prime quality products with maximum level of efficiencies. The facility is comparable to any top class
steel plant in the region and was built at a much lesser cost as compared to any new plant. Key
advantages of ISL over its competitors:
¾ Since the Project was constructed using in-house expertise, the Company did not incur
significant Engineering, Procurement and Construction costs
¾ Impact of PKR devaluation over the past two years, means that similar project will cost atleast
20% higher in PKR terms
¾ IIL has considerable experience in the steel sector, including domestic and international
relationships, and thus was able to negotiate procurement at better rates for larger volumes.
This benefit may not be available to others
¾ IIL was able to obtain financing at concessional rates under the SBP LTFF facility. Under the
said facility, ISL cost of debt is on average 8.75% as compared to conventional borrowing
rates which may be offered to other entrants into this market
Buyer Benefits / Competitive Advantage: Currently the domestic requirement for CRC and HDGC
is being catered through imports exposing the buyers to inventory management and exchange rate
fluctuations. Similarly, there is a time lag of c.3-4 months between order and delivery which requires
huge amount of cash deployment. With the presence of ISL the buyers will not have to maintain huge
inventories and risk the pricing fluctuations. Similarly the US$ risk will be minimized and reduce the
lead time required to purchase the product.Page 11 of 35

  India: Second Strike

PART 3
3 UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER
EXPENSES
3.1 UNDERWRITING
Book Building Portion
Cassim Investments Limited and AKD Securities Limited have been mandated to act as the Joint
Book Runners to the Offer. The Joint Book Runners shall underwrite the Book Building Portion of
the offer of 61,875,500 ordinary shares within two (2) working days of the closing of the bidding
period as required under clause 5 of Appendix 4 of the listing regulations of the Karachi Stock
Exchange at the strike price determined through the book building process.
In the opinion of the Directors, the resources of the Underwriter are sufficient to discharge its
underwriting obligations/commitments.
Public Portion
As required under clause 6 of Appendix 4 of the listing regulations of the Karachi Stock
Exchange, the Public Portion of the offer of 27,506,000 ordinary shares will be underwritten within
ten (10) working days after the closing of bidding period.
Names and number of shares underwritten by each of the underwriters shall be disclosed
in the final OFSD.
3.2 UNDERWRITING COMMISSION
As required under clause 6 of Appendix 4 of the listing regulations of the Karachi Stock
Exchange, the Public Portion of the offer of 27,506,000 ordinary shares has been underwritten as
follows:
Name of Underwriter
Number of shares
underwritten
Amount (PKR)
Habib Bank Limited 9,246,000 129,998,760
Cassim Investments (Private) Limited 9,130,000 128,367,800
AKD Securities Limited 9,130,000 128,367,800
Total 27,506,000 386,734,360
3.3 BUY BACK/REPURCHASE AGREEMENT
THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY BACK/RE-PURCHASE
AGREEMENT WITH THE OFFERER OR ANY OTHER PERSON IN RESPECT OF THIS PUBLIC
OFFER.
ALSO, NEITHER THE OFFERER NOR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY
BUY BACK/REPURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ASSOCIATES.
THE OFFERER AND ITS ASSOCIATES SHALL NOT BUYBACK/REPURCHASE SHARES FROM
THE UNDERWRITERS AND THEIR ASSOCIATES.
3.4 COMMISSION TO THE BANKERS TO THE OFFER
A commission at the rate of 0.25% of the amount collected on allotment in respect of successful
applicants will be paid by the Offerer to the Bankers to the Offer for services to be rendered by them
in connection with this offer for sale.
3.5 BROKERAGE
For the public offering, the Offerer will pay brokerage to the Members of all three stock exchanges at
the rate of 1.00% of the value of shares (including premium) actually sold through them. No brokerage Page 12 of 35
shall be paid to the Members in respect of shares taken up by the underwriters by virtue of their
underwriting commitments.
3.6 EXPENSESTO THE OFFER FOR SALE
The expenses of this offer are estimated not to exceed PKR 56.3 millionof which the listing fees and
CDCPL charges shall be borne by the Company while the expenses to the Offer shall be borne by the
Offerer. Details of the expenses are mentioned below:
Expenses Rate Amount (PKR)
Financial Advisor & Lead Arrangers Fee 1.25% 19,333,906.00
Joint Book Runners Fee 0.25% 2,174,923.83
Underwriting Commission – General Public 1.00% 3,867,343.60
Take up Commission 1.50% 5,801,015.40
Bankers to the offer (Book Building) Commission 0.25% 2,899,945.30
Joint Book Runners Commission 1.00% 8,699,695.30
Brokerage to Members of the Stock Exchange – Public
Portion
1.00% 3,867,343.60
Bankers to the offer (Public – portion) Commission 0.25% 966,835.90
Printing, Publication and notice Costs 1,000,000.00
KSE Fees and Listing Charges 2,762,500.00
KSE Software Charges 500,000.00
CDC Annual Fees for Eligible Security 67,500.00
CDC Fresh Issue Fees 1,957,500.00
SECP Application and Processing Fee 150,000.00
Legal & Professional Fees 1,000,000.00
Balloting Agent 250,000.00
Miscellaneous Cost 1,000,000.00
Total 56,298,508.93Page 13 of 35
PART 4
4 HISTORY AND PROSPECTS
4.1 BRIEF HISTORY
Parent Company / Offerer
International Industries Limited (“IIL”)the parent company is in the business of producing and
marketing of various kinds of pipes for more than 45 years, which includes GI Pipe, Steel Tubes and
Pipes, API Line Pipe and Polyethylene Line Pipes throughout the world.
IIL achieved the landmark of gross sales of more than PKR15.5 billion during 2009-10, including
gross profit of more than PKR1 billion, domestic sales of more than PKR11.9 billion while the exports
figures reached more than US$ 43.27 million. In 2009-10 IIL produced more than 2 million tons of
pipes, maintaining its edge as the brand leader in terms of quality in domestic market but also in
exports to 30 countries across 6 continents.
IIL invested in a Steel Project comprising 250,000 tpa cold rolling mill and 150,000 tpa metal coating
steel plant to be located at plot bearing Survey No. 399-405, Deh Sharabi, Landhi Town, Karachi and
an 18MW gas fired power plant.
The Company
International Steels Limited(“ISL”) was incorporated on 3
rd
September 2007 and was registered at
Karachi as a public unlisted company under the name CRGS Limited. On 8
th
November 2007, the
name of the company was changed to its present name International Steels Limited. The certificate
for commencement of business for ISL was issued on 11
th
February 2009.
In March 2009, the Company implemented a Scheme of Arrangement for reconstruction of IIL by hive
down of the Steel project from IIL and vesting of the Steel Project in International Steel Ltd (ISL),
which at present is a public unlisted company.
4.2 COMMERCIAL OPERATIONS
International Steels Limited subsequent to successful trial operations of its production facilities (dated
1
st
January to 19
th
January 2011) has confirmed that the project has achieved the desired
specification and the project has achieved commercial operations from 1
st
January 2011.

4.3 THE STEEL PROJECT
The Steel Project undertaking comprises of a 250,000 tons per annum Cold Rolling Mill and a
150,000 tons per annum Metal Coating Steel Plant on the basis of 100% output. Out of the 250,000
tons Cold Roll Coil (CRC), 150,000 will be used to manufacture Hot Dipped Galvanized Coils (HDGC)
and the balance will be sold as CRC. The Steel Project was audited by Lloyds Register Quality
Assurance (LRQA) and has recently been awarded ISO 9001, ISO 14001 & OHSAS 18001
Certifications
The Steel Project is a fully automated controlled production facility for all product variants of sheet
metal as Rolled, Annealed, Galvanized, Profile, cut to length etc
The complex mainly comprises of:
1) Cold Rolling Mill
2) Sheet Galvanizing Plant
3) Annealing Plant
4) Pickling Line
5) Skin Pass Mill
6) Rewinding Line
7) Slitter Line and
8) Allied utilities, which include 18 MW Captive Gas Fired Power Generation plant, Hydrogen
Nitrogen production, RO Plant, De-mineralizing Water Plant, Sewage Treatment, Effluent
Treatment & steam turbine and boiler.
The Steel Project is designed to add a 2nd Rolling Stand and thereby increase Rolling capacity to
400,000 Metric Tons per Year. Civil work for this has been incorporated and implemented in the
Original Layout. Cost of Capacity Increase at present is € 5,000,000 based on an offer received from
SMS-Siemag. Page 14 of 35
Similarly the Annealing capacity can be increased by a further 50,000 from the Current 100,000
Metric Tons per Year by the addition of 3 bases 1 Furnace and 2 Cooling hoods at an approx. cost of
30% of the original cost of the Annealing equipment.
Process technology, knowledge, license and commissioning supervision is being provided by the
following manufacturers and suppliers;
ƒ Technological Layout by M/s International Industries Limited
ƒ Utilities by M/s International Industries Limited
ƒ Civil Structures & Steel Structure Design by M/s RanjanStructomech Engineering Consultant
ƒ ETP/STP by M/s International Industries Limited
ƒ Services for engineering, construction, fabrication, erection, installation and project
management of this project are being provided by the following;
o M/s Mahmood& Co. and,
o A.H Fabricator
ƒ Civil construction mainly by
o M/s Riaz & Co,
o Pearl Construction, and
o Attaullah
4.3.1 Project Cost
The total cost of project PKR 8.7bn as of November 30, 2010 and is tabulated below:
* An amount of PKR 50 million is estimated to be incurred by the company as highlighted in
paragraph 4.3.2
4.3.2 List of Plant and Machinery
Total Cost of the Machinery and Commissioning Schedule is as follows:
S. No. Description Amount Status
1 Pickling Line 280 Operational
2 4 Hi Reversing Mill 2,000 Operational
3 Rewinding Line 70 Operational
4 Annealing Furnaces 200 Operational
5 4 Hi Skin pass Mill 250 Operational
6 Sheet Galvanizing Line 1,000 Operational
7 Hydrogen and Nitrogen Gas 175 Operational
8 Various miscellaneous
equipment like Roll Grinder,
Roll de-chocking machine,
lathes, shapers, overhead
cranes, coil transfer trolleys
and other ancillary
machinery and equipment
1,265 Operational
Total
5,240
9 Cut to length Line 50 Operational
10 Acid Regeneration Plant 300 Currently under commissioning
phase
11 Slitter Line 50 Commissioning expeceted in May
2011
Total 400
Grand Total 5,640
Other Auxiliary Machinery
Description PKR Mn
Land 860
Buildings 800
Plant & Machinery* 5,640
Power Plant 600
Financial Charges 500
Pre-operating expenses 300
Total 8,700Page 15 of 35
4.3.3 Means of Financing the Project
The above project has been financed through the following means.

  Altaf Hussain demand a separate country

Description PKR Mn
Equity 4,350
SBP Financing at fixed interest average rate of 8.75% p.a. for 10 years* 4,000
Commercial Borrowing** 350
Total 8,700
* Agreement with a syndicate of banks comprising Habib Bank Limited, United Bank Limited,
Bank Al-Habib Limited and Standard Chartered Bank of Pakistan Limited (collectively
referred to as “Syndicate”) for PKR 4.0 billion under the Long Term Financing Facility of the
State Bank of Pakistan. 8.75% is the average rate of financing.
(PKR Millions) Facility Amount Drawdown
Habib Bank Limited 1,212 1,212
United Bank Limited 1,091 1,091
Bank Al-Habib Limited 606 606
Standard Chartered Bank of Pakistan Limited 1,091 1,091
The syndicated term finance facility is obtained for plant and machinery of the Steel Project
and is secured by way of mortgage of land located at Survey No. 399-405, Landhi Town
Karachi. Further, corporate guarantee is issued by IIL to the Syndicate to cover for any cost
overruns which may be incurred by the Steel Project.
** Financing of PKR 350 million has not been obtained as of yet. This financing will be
obtained once payment for auxiliary equipments will be made.
It is further clarified that IIL has obtained financing from International Finance Corporation amounting
to PKR 535.998 million (USD 6.4 million) which is convertible into ordinary shares of ISL once strike
price is determined through the book building process. This loan is and shall remain in the books of
IIL unless converted into ordinary shares of ISL and does not form part of means through which the
Project was financed. For further clarification refer to paragraph 7.10.7 below.
4.3.4 Plant Location
The Plant is located at plot measuring 32 acres bearing survey No. 399-405, Rehri Road, Deh
Sehrabi, Landhi Town, Karachi.

4.3.5 Project Implementation Schedule
Date Event
25.11.2006
Plot measuring 32 acres purchased by IIL at Deh Sharabi, Survey 399-405, Landhi
Town, Karachi
06.07.2007
IIL BOD approves the downstream steel project for manufacture of 250,000 tons
Cold Rolled Coils per annum plus Galvanizing plant of capacity of 150,000 tons p.a
27.06.2008
IFC enters into agreement with IIL & ISL [Co-borrowers] for two loans; Loan- C for
USD 6.4mn was drawn down by IIL (in April 2010)and the outstanding amount of
this loan shall be converted into equity of ISL @ 80% of the premium of the share
value of ISL shares at the time of public offer for sale. Loan- A for USD 12 mn has
not yet been utilized by IIL/ISL.
11.02.2009 Certificate for Commencement of Business of ISL
12.08. 2010
Sindh High Court sanctions the Scheme of Arrangement under section 284-287 of
CO 1984
22.12.2010
IIL ‘s Board of Directors approved to divest 45% shareholding in ISL , partly to
strategic investors IFC & Sumitomo Corporation, partly to institutional investors
and high net worth individuals through Bookbuilding and partly to the general
public at the price determined through Bookbuilding. The Board’s Divestment
Committee was authorized to make the necessary decisions for the divestment.
31.12.2010
ISO 9001, ISO 14001 and OHSAS 18001 Certification awarded by Lloyds Register
Quality Assurance Ltd.
01.01.2011 ISL Commercial Operations started. Page 16 of 35
4.3.6 Plant Implementation Schedule
S. No. Description Commissioning Date
1 Pickling Line 15-Oct-10
2 4 Hi Reversing Mill 30-Nov-10
3 Rewinding Line 30-Nov-10
4 Annealing Furnaces 15-Dec-10
5 4 Hi Skin pass Mill 1-Jan-11
6 Sheet Galvanizing Line Sep-10
7 Hydrogen and Nitrogen Gas Generation Plant Aug-10
8 Various miscellaneous equipment like Roll Grinder, Roll dechocking machine, lathes, shapers, overhead cranes, coil transfer
trolleys and other ancillary machinery and equipment
Dec-10
9 Cut to length Line Mar-11
10 Acid Regeneration Plant Apr-11
11 Slitter Line May-11
Other Auxiliary Machinery
4.3.7 Other Equipments
a) 18 MW Power Plant
The Project includes an 18 MW gas fired power plant. The power plant has been in operation
since 2008. Before the commencement of the Steel Project, entire generation from the power
plant is being supplied to KESC. However, post commercial operations, only the available excess
capacity is provided to KESC as per the agreement with KESC dated 31
st
August 2007. The profit
from supply of power to KESC during this period is PKR 333 million.
The excess capacity is approximately 10MW. This sale will continue till phase 2 i.e. expansion of
the Steel Project capacity to c.400,000 tons after which the units supplied to KESC will further
decline.
The cost of the power plant is approximately PKR 600 million. The cost is based on a dollar /
rupee parity of PKR 62/-. The current replacement cost of a similar power plant would be
approximately PKR 900 million.
The current cost per unit generated is approximately PKR 4.52 per unit whereas the current cost
of unit supplied by KESC is PKR 10.70. There will be a saving of PKR6.18 per unit.
b) Effluent Treatment Plant
ISL has set up an Effluent Treatment Plant to support the project activities. This plant will ensure
collection, neutralization and filtration of the entire solvent based wastages generated during the
process and will make them re-usable or discharge them in conformity with National
Environmental Standards.
c) Water Treatment Plant
ISL will use reverse osmosis to generate over 100m3/hr of water to meet its industrial
requirements and thus will not rely on the already over loaded water system within the vicinity.
This investment will help ISL to:
ƒ Reduce the water usage for industrial purposes
ƒ Reduce industrial waste going to the drains
ƒ Improve water availability for local residents by re using the industrial water
d) Hydrogen & Nitrogen Plants
The factory is equipped with a 375 nm³ Nitrogen Plant and 50 nm³ Hydrogen plant to provide gas
for the Annealing of Cold rolled and also of Galvanized Coils. Gases are produced by the
Pressure Swing Adsorption process. Page 17 of 35
4.3.8 Other Auxiliary Equipments
a) Acid Regeneration Plant
The used hydrochloric acid from the strip pickling line is re-generated so that 98% is re-used and
only 2% neutralized and discharged
b) Cut to Length Line
The Cold Rolled/ Galvanized Coils are required to be cut into specific lengths as per market
requirements. This equipmentis to be used for cutting the Rolls into specific lengths.
c) Slitter Line
The Cold Rolled Coils/ Galvanized Coils are manufactured in standard widths. This line is to be
used to Slit the width of the Coil into smaller width as per requirements of the market e.g. pipes
would need a relatively smaller width coil, which is slitted accordingly and marketed..
4.3.9 Civil Works
Civil Work pertaining to plant, building and machinery at site is 100% complete. Further, civil work
for the increased rolling capacity has been completed and is in place.
4.3.10 Availability of raw material
Hot rolled coils will be imported from JFE Steel Mills Japan, MMK Russia, Saldanha South Africa, or
any other International source that produces the required quality of Hot rolled Coils. Zinc will be
imported from Glencore, China and Sumitomo Corporation, Japan.
4.3.11 Demand Outlook
Currently the demand for CRC exceeds 400,000 tons. Out of this demand approximately 110,000
tons is being met through domestic production (40,000 tons IIL and 70,000 tons by PSML) whereas
the remainder is being met through imports.
Similarly demand for HDG Coils approximates 300,000 tons which is in part catered through
domestic production (30,000 tons by Pakistan Steel Mills Limited) whereas primary demand is being
met through imports.
ISL is in a position to take advantage of the existing gap between domestic demand and supply thus
replacing imports with good produced locally, with the current demand sufficient to out run ISL’s
production capacity.
4.3.12 Off-take
IIL, the sponsor company of ISL, produces 80,000 tons of CR based tubing. Out of this, 40,000 tons
CR is produced through in-house production and 40,000 tons from imports. It is expected that
approximately 30-40 thousand tons will be purchased by IIL.
4.3.13 Expected GroupSynergies
Post IPO, IIL will hold atleast 55% of the equity in ISL. Being the market leader in the steel pipe
industry and enjoying good market reputation will give an edge to ISL in the marketing of its
products. Quality is associated with IIL’s name. ISL’s products will be readily accepted in the market
because of IIL’s association.
ISL will benefit from the technical expertise of IIL in the field of Cold Rolling. IIL has the experience
of operating a cold rolling mill for the past 20 years. IIL will provide technical assistance in operation
and maintenance of the cold rolling mill.
During the construction and implementation phase, since the Project was part of IIL all Engineering,
Procurement and Constructionservices were provided on no charge basis. Pre-operating expenses
werePKR 300 million which mainly constitute direct salaries of site personnel.
The raw material for both IIL and ISL is HR coils. IIL being in the industry for more than 45 years
enjoys good contacts with international suppliers which can be used effectively to achieve Page 18 of 35
economies of scale while procuring HR coils for both IIL and ISL. Buying in bulk will enable both IIL
and ISL to avail quantity discounts. Similarly, in the procurement of local supplies, ISL can utilize
the expertise of IIL. IIL has well defined HR and IT policies. These can be adopted by ISL.
4.3.14 Foreign Experts
ISL has acquired the services of two foreign experts who will advise and train the staff for two years.
One of the foreign experts bring with them extensive experience of working in major steel units in
UK, Libya, Mexico, Iran and Vietnam while the other expert has vast experience of working in
Galvanizing plants at Port Kambla Works, Australia, Sumitomo Wakayama Plant, Japan, Federal
Iron Works, Malaysia and other units in Indonesia, Vietnam, Philippines and Thailand. This will
ensure that the smooth operations, optimal utilization of the plants and development of indigenous
expertise in the work force.
4.3.15 Major Clients
The Bulk of Galvanized sheets will be used for roofing and sold through the existing wholesale
channels.
Cold Rolled Coils will mainly be used for the manufacture of tubing and the bicycle and motorcycle
industries and for multifarious uses including the manufacture of steel drums.It is expected that IIL
will purchase approximately 30-40,000 tons of Cold Rolled Coil from ISL for its business purpose.
However, transaction between IIL and ISL will take place at arm’s length thus ensuring
implementation of best corporate governance practices.
4.4 RISK FACTORS
4.4.1 Raw Material Supply / Price Risk
Adverse price movement or non-availability of raw materials may hinder smooth production
Mitigant

The IIL Group has been in the steel industry for more than 45 years and has a credible market
reputation. Post IPO, IIL will continue to own majority stake i.e. 55% of the total shareholding of ISL
thus making ISL part of the same group.ISL is expected to capitalize on the expertise of
management to procure raw material and enjoy established contacts with key suppliers. This
combination will assist ISL to effectively plan and manage inventory levels, which is the key to
success in the steel sector.
4.4.2 Operational Risk
ISL is first of its kind project in Pakistan. The Company does not have sufficient expertise to operate
the project.
Mitigant
The Company’s management has adequate experience to manage the operations as is detailed in
paragraph 6.4. Further, the Company has procured services of two foreign experts, one to manage
the operations of the Cold Rolling Mill and the other to manage the operations of the Sheet
Galvanizing Plant of the Company for a period of two years. During this time, they will train local
engineers thus ensuring preparation of indigenous resource for the Company.
4.4.3 Gas SupplyRisk
Unavailability of Gas may hinder the power generation process thus resulting in loss of operations.
Mitigant
The current generation capacity of the power plant is 18MW. ISL’s power requirement is c.40% of
the total generation capacity. As per the contract entered into with SSGCL, ISL may suffer low flow
of gas during the months of November to January. It is expected that even during the low flow period
the power generated will be sufficient to cater to ISL’s operational requirement. However, in case
generation requirement cannot be met, ISL will resort to use of electricity supplied by KESC to meet
its operational requirement, which may result in increase in cost of production. Page 19 of 35
4.4.4 Business Risk
Decrease in demand for products may have an adverse impact on the business
Mitigant
Currently the demand for CR and HDGC exceed their domestic production (c. 400,000 and 300,000
tons demand against estimated domestic production of 110,000 and 30,000 tons). Bulk of the
domestic requirement is being imported. ISL will primarily substitute imports through domestic
production.
4.4.5 Foreign Exchange Risk
Adverse foreign exchange movement might affect imports and operational profitability, thereby
negatively impacting the sales revenue and value of the Company.
Mitigant
The Foreign exchange risk is contained to a minimum level as the product is import substitute.
Prices of finished goods, namely CRC and HDGC, are linked to prices in the international market,
which are quoted in USD, thus protecting the Company from any adverse fluctuations in foreign
exchange risk. However, time lag in transfer of price may have an impact on profitability.
4.4.6 Capital Market Risk
The risk relates to the price performance of the share after getting listed on at the Karachi Stock
Exchange
Mitigant
The IIL Group has a good track record of providing higher returns to its shareholders as is witnessed
from average performance for the last 10 years of IIL.Return for investors in case of ILL, has been
c.48.3% against a 27% return for KSE 100 Index, which is reflective of the group’s capabilities.
However, past performance is not a guarantee for future performance.
4.4.7 Liquidity Risk
The risk that the investors might face difficulty in selling the shares in the secondary market
Mitigant
After the OFS, a sizeable portion, approximately 45% of the total paid up capital of the Company,
would be owned by outside investors. Since the free float of the Company will be high therefore the
liquidity risk will be minimized.
4.4.8 Competition Risk
Competition from other new organized and unorganized market players may result in business loss
for the Company
Mitigant
Currently the domestic requirement for CRC and HDGC is being catered through imports exposing
the buyers to inventory management and exchange rate fluctuations. Similarly, there is a time lag of
c.3-4 months between order and delivery requiring importers to maintain buffer stock thus increasing
their working capital requirements. With the presence of ISL the buyers will not have to maintain
huge inventories and risk the pricing fluctuations similarly the US$ risk will be minimized and reduce
the lead time required to purchase the product.
Further, the Project is capital intensive which requires above average technical knowledge to
procure high quality equipment at a comparatively low cost.
Note: It is stated that all material risk factors have been disclosed and that nothing has been
intentionally concealed in this respect.Page 20 of 35
PART 5
5 FINANCIAL INFORMATION
5.1 AUDITORS’ REPORT UNDER SECTION 53(I) 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 OFFER FOR
SALE DOCUMENT Page 21 of 35Page 22 of 35Page 23 of 35Page 24 of 35
5.2 SHARE BREAK-UP VALUE CERTIFICATE Page 25 of 35
Management Note
The breakup value of shares of ISL based on the audited accounts for period from 1st July 2010 to 30th
November 2010 is PKR 9.83.
However, the breakup value of ISL on the basis of the total paid up capital of PKR 4.35 billion is given as
follows:
Total Issued subscribed and paid up capital (‘000s) 4,350,000
Accumulated profit as on December 31, 2010 (‘000s) (105,835)
Total Shareholder’s Equity Rupees (‘000s) 4,244,165
Number of Ordinary Shares 435,000,000
Break-up value per share Rupees 9.76
5.3 SUMMARY FINANCIAL HIGHLIGHTS
PKR in 000
Page 26 of 35
30 Nov ‘10 23 Aug ‘10 30 Jun ‘10 30 Jun ‘09 30 Jun ‘08
Equity 4,107,616 4,177,167 (12,484) 260 300
Fixed Assets 8,425,770 7,951,454 – – –
Current Assets 2,792,413 1,548,115 371 295 305
Total Assets 11,218,183 9,499,569 371 295 305
Current Liabilities 3,257,051 1,491,299 12,855 35 5
Non-current Liabilities 3,853,516 3,831,103 – – –
Total Liabilities 7,110,567 5,322,402 112,855 35 5
5.4 FINANCIAL RATIOS

PKR 30 Nov ‘10 23 Aug ‘10 30 Jun ‘10 30 Jun ‘09 30 Jun ‘08
Earnings per share (0.14) n/a (424.8) (1.35) n/a
Breakup value per share 9.83 9.97 (416.14) 9.82 10

The Company has commenced commercial operations from 1 January 2011 hence return on assets and
return on equity ratios have been deemed irrelevant. Page 27 of 35

PART 7
6 MANAGEMENT OF THE COMPANY
6.1 POLICY MATTERS
All policy-related matters are managed by the Board of Directors, headed by the Chairman of the
Board. At present, the Board comprises of 9 Directors including the CEO. The Directors are elected
by the shareholders in accordance with the relevant provisions of the Ordinance.
BOARD OF DIRECTORS OF THE COMPANY
Name Address Designation Directorship in other Companies
Mr. Kemal Shoaib 142, 29
th
Street, Off;
Kh. Muhafiz, DHA
Phase6, Karachi
NIC: 42301-1126596-5
Chairman Al-Aman Holdings (Pvt) Ltd.
Century Paper & Board Ltd
International Industries Ltd
International Advertising (Pvt) Ltd.
Premier Box (Pvt) Ltd.
Safeway Fund Ltd.
ZIL Ltd.
Mr. Towfiq H. Chinoy 45-B, Circular Street,
DHA, Karachi
NIC: 42301-2608847-9
MD & CEO BOC Pakistan Ltd
HBL Asset Management Ltd
IGI Investment Bank Ltd
International Industries Ltd
Mohatta Palace Gallery Trust
New Jubilee Insurance Co
New Jubilee Life Ins Co ltd
Packages Ltd
Pakistan Cables Ltd
Pakistan Centre for Philanthropy
Mr. Mustapha
Chinoy
Grey House, 30,
Clifton, Karachi
NIC: 42301-2866622-5
Director Gallileo Pak. (Pvt) Ltd.
Global e-Commerce Services (Pvt)
Ltd.
Intermark (Pvt) Ltd.
International Industries Ltd
Pakistan Cables Ltd
Security Papers Ltd
Mr. Kamal Chinoy Grey House, 30,
Clifton, Karachi
NIC: 42301-1401852-5
Director Atlas Insurance Ltd
International Industries Ltd
National Fullerton Asset Management
Ltd
Pakistan Cables Ltd
Pakistan Security Printing Corp. (Pvt)
Ltd.
Syed Salim Raza 64/1 , 15
th
Street,
Phase V, DHA, Karachi
NIC: 42301-8289235-1
Director n/a
Mr. Tariq Iqbal Khan House 33, Street 23,
Sector F-10/2,
Islamabad
NIC: 61101-1856569-1
Director Attock Refinery Limited
Fauji Energy Limited
Interstate Gas System Limited
Pakistan Electric Agency (Pvt) Limited
Sanofi Aventis Pakistan Limited
Silkbank Limited
Sui Northern Gas Pipeline Company
Ltd
Mr. Kamran Mirza H # 79, 4th Street,
Off: Khayaban-eSehar,
Phase-VI, D.H.A.,
Karachi.
NIC: 42301-1126838-3
Director Abbott Laboratories
Board of Investment
Competitive Support Fund
National Commodity Exchange Ltd
Pakistan Business Council
State Bank of Pakistan Page 28 of 35
Syed Hyder Ali 70, F.C.C. Gulberg,
Lahore
NIC: 35201-1655225-1
Director Packages Limited
Packages Lanka (Pvt) Limited
Ali Institute of Education
Babar Ali Foundation
Bulleh Shah Paper Mill (Pvt) Ltd
IGI Insurance Limited
Pakistan Business Council
Pakistan Centre for Philanthropy
National Management Foundation
Nestle Pakistan Limited
Sanofi Aventis Pakistan Limited
Tetra Pak Pakistan Limited
Tri-Pack Films Limited
WWF- Pakistan
Mr. M. Ateequllah D-104, Block-5,Clifton,
Karachi
NIC: 42301-0959883-3
Director Pakistan Wire Industries
6.2 OVER DUE LOANS
There are no overdue loans (local or foreign currency) on the Company or its Directors.
6.3 DIVIDEND PAYOUT BY LISTED COMPANIES
ISL is a company which has only recently gone into operations; however its sponsoring affiliate
company IIL has had a long history of dividend payout since 1980’s. The Dividend payout of IIL during
the last three (3) years is as below:
2008 2009 2010
Cash dividend 25% 22.5% 40%
Bonus 25% 0 20%
6.4 PROFILE OF DIRECTORS
Mr. Kemal Shoaib
Mr. Kemal Shoaib holds a M.S. degree in Chemical Engineering from M.I.T., Cambridge,
Massachusetts. He is currently a consultant on the capital market and serves on the Board of several
companies including mentioned in paragraph 6.1 above.
He has been associated with such prestigious organizations such as Wyeth Laboratories (Pakistan)
Ltd., Bank of Credit and Commerce Intl., S.A. London, Independence Bank, California Commerce
Bank Limited, Karachi, Indus Bank Ltd. and Sana Industries Ltd.
Mr. Towfiq H. Chinoy
Mr. Towfiq Habib Chinoy has been associated with International Industries Limited since 1964. He is
presently holding the charge asCEO of IIL &ISL;The non- executive Chairman of New Jubilee
Insurance Company Ltd., Packages Ltd. and Pakistan Cables Ltd. He holds directorship of a number
of companies as mentioned in paragraph 6.1 above. He is also the Trustee of Mohatta Palace Gallery
Trust and Director of Pakistan Centre of Philanthropy. Mr. Chinoy has served as the Member of the
Engineering Development Board, Government of Pakistan, the Advisory Board of Ports and Shipping
Sector, Ministry of Communications, Director on Board of Port Qasim Authority, National Refinery Ltd
and Pakistan Business Council. He has held various appointments at the Aga Khan Economic
Planning Board.
Mr. Kamal A. Chinoy
Mr. Kamal A. Chinoy has a ‘B.Sc. Economics’ degree from The Wharton School, University of
Pennsylvania, USA. After an internship with Banque Rothschild in Paris he worked in London and
UAE, returning to Pakistan in 1980. He is Honorary Consul General of Cyprus. Mr. Kamal Chinoy is a
member of the executive committee of the International Chamber of Commerce (ICC), Pakistan and
also the Management Association of Pakistan. He has served as the Chairman of the Aga Khan
Foundation (Pakistan), NGO Resource Centre and Aga Khan University Foundation (Pakistan) and Page 29 of 35
also as a Director of Pakistan Centre of Philanthropy – an institution engaged in promotion of
indigenous philanthropy in Pakistan.
Mr. Mustapha A. Chinoy
Mr. Mustapha A. Chinoy is a B.Sc in Economics from Wharton School of Finance, University of
Pennsylvania, USA with majors in Industrial Management and Marketing. Upon return from United
States he took up the position of Marketing Manager at International Industries Ltd. He has previously
served on the Board of Union Bank Ltd. until it was acquired by Standard Chartered Bank. He is the
Honorary Consul General of Greece in Pakistan.
Mr. Tariq Iqbal Khan
Mr. Khan is a fellow of Institute of Chartered Accountants, Pakistan, with diversified experience of
more than 40 years. He was pivotal in founding Islamabad Stock Exchange where he subsequently
served as President as well. He has also served as the Member Tax Policy & Co-ordination in the
Central Board of Revenue, followed by being appointed as Commissioner SECP, where he was
instrumental in restructuring the SECP. He also held the charge of Chairman SECP (acting) for a brief
period. He served on prominent national level committees like Committee for formulation of Take Over
law. CLA Committee for review of Security and Exchange Ordinance 1969, Committee for formulation
of CDC law and regulations and Prime Minister’s Committee for Revival of Stock Market.
He served as the Chairman and MD of NIT for more than 8 years, which played the role of a catalyst
in establishing, strengthening and stabilizing the capital markets. Additionally, during this period, he
held the charge of Chairman & MD of ICP, for almost 5 years. He has served on Boards of the top
companies like CDC, Faysal Bank, Bank Al Habib, GSK, ICI, Siemens, and Packages etc.
Mr. Kamran Y. Mirza
Mr. Mirza is a fellow Chartered Accountant of the Institute of Chartered Accountants in England &
Wales. After serving at A.F.Ferguson & Co for 2 years, he joined Abbott Laboratories, where he rose
to CEO in 1977, and remained in that post for 29 years. Presently he is the CEO of Pakistan Business
Council. He is also the Chairman of the Task Force for the Pharmaceutical Industry set up by
Planning Commission.
Previously he served as Chairman KSE, Chairman EPZA, President OICCI, American Business
Council and as a director on the Boards of PSO, NBP, Pakistan Textile City and NAVTEC etc. He has
also remained on Economic Advisory Board of Federal Govt. and Sindh Wild Life Board.
Mr. Salim Raza
He served as Governor of the State Bank of Pakistan from January, 2009 to June, 2010. From
February, 2006 to January 2009, Mr. Raza has been the Chief Executive Officer of Pakistan Business
Council (PBC)which is an organization established by some of Pakistan’s largest business houses
focusing on expanding the capacity of Pakistan’s businesses through development of Corporate
Laws, Capital Markets and Business Practice Infrastructure.
Previously Mr. Raza had spent 36 years with Citibank in positions that included Country and Regional
Management, across the Middle East, Africa and the UK, Central and Eastern Europe, based in
London from 1989 to 2006. His business experience covers Credit and Corporate Finance, Real
Estate and Global Asset (Bonds & Equities) Management. Mr. Raza was Country Head for Citibank in
Pakistan from 1983 – 1987.
Mr. Muhammad Ateequllah
Mr. Ateequllah is a graduate in Mechanical and Electrical Engineering and has a vast experience of
more than 50 years. He has served a Head of Machine Tool Shop at Karachi Ship Yard &
Engineering Works, followed by serving as the Managing Director in Metropolitan Steel Corporation
and Hashoo Steel Industries. Subsequently he had been associated with International Industries Ltd
for the last 16 years, while he has recently joined International Steel as Executive Director.
Syed Hyder Ali
Mr. Hyder Ali is a Chemical Engineer from University of Michigan, after which he has done his M.S in
Paper Technology from The Institute of Paper Chemistry, Appleton, Wisconsin, USA; and
subsequently also attended the Program for Management Development from Harvard Business
School, Boston, MA, USA. Page 30 of 35
He started his career as a Research Engineer at Weyerhaeuser Company, Federal Way, Washington,
U.S.A. and then worked as a Management Trainee at Tetra Pak, Denton, U.S.A. Subsequently he
worked as Manager Projects, Packages Limited, Lahore and then served at Tetra Pak, USA. In 1995
he joined IGI Insurance as MD where he served for 10 years, after which he joined Packages Limited,
Lahoreas Managing Director and CEO, a position which is held by himtill date.
He is also a Co-author of two USA patents for recycling of milk cartons and drink boxes as well
asbeing the Honorary Consul-General of Sweden in Lahore since 1998.
6.5 NUMBER OF DIRECTORS
Pursuant to Section 174 of the Ordinance, the number of directors of the Company shall not be less
than Seven (7). The Board consists of nine (9) Directors as detailed in paragraph 6.1 above.
6.6 QUALIFICATION OF DIRECTORS
A director must be a member unless he is a person representing the Government or an institution or
authority that is a member, or is a whole time working director who is an employee of the Company, or
a Chief Executive or a person representing a creditor. In case of directors representing special
interests holding shares of the requisite value, no such share qualification shall be required provided
intimation in writing as to such representation is lodged with the Company within two months of the
appointment of such directors.
6.7 APPOINTMENT/ ELECTION OF DIRECTORS
The Directors shall comply with the provisions of Sections 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 duly elected on November 22, 2010for a term of three years.
6.8 BENEFITS OF PROMOTERS AND OFFICERS DURING THE LAST TWO YEARS
No amount or benefit has been paid or given within the last two years or is intended to be given to any
promoter/ or officer of the Company otherwise than as remuneration for services rendered as
wholetime executives of the Company.
6.9 REMUNERATION OF THE DIRECTORS
The remuneration to be paid to the Directors for attending the meetings of the Directors or a
committee of Directors shall be determined by the Board from time to time.
Any Director appointed to any executive office including for the purpose of Article 63 of the Articles of
Association of the Company the office of Chief Executive or Chairman, or to serve in any Committee
or to devote special attention to the business of the Company or who otherwise performs extra
services, which in the opinion of the Directors are outside the scope of the ordinary duties of the
Directors, may be paid such extra remuneration by way of salary, fees, percentage of profits or
otherwise as shall from time to time be determined by the Board of Directors.
6.10 INTEREST OF DIRECTORS IN THE COMPANY
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
interested in the remuneration payable to them from 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 the dividends
to be declared on their shareholding in the Company.
6.11 INTEREST OF DIRECTORS IN PROPERTY ACQUIRED BY THE COMPANY
None of the Directors of the Company had or have any interest in any property acquired by the
Company within the last two years or now proposed to be acquired by the Company.
6.12 VOTING RIGHTS
The rights and privileges, including voting rights, attached to the ordinary shares of the Company are
equal. Page 31 of 35
6.13 AUDIT COMMITTEE/CONSTRUCTION OF AUDIT COMMITTEE
Audit Committee of the Board has been formed to comply with the Code of Corporate Governance,
which comprises of the following non – executive directors:
1- Mr. Tariq Iqbal Khan
2- Mr. Kamran Y. Mirza
3- Mr. Kamal A. Chinoy
The audit committee meeting shall be held on quarterly basisafter the Company is listed on the Stock
Exchange, as per provisions of the Code of Corporate Governance.The Committee has its terms of
reference which were determined by the Board of Directors in accordance with the guidelines
provided in the Listing Regulations.
6.14 INTERNAL AUDIT
The Sponsor of the Company has a history of appointing professional consultants for its internal audit
function. The same approach is expected to be adopted by the Company. However, formal
appointment of a consultant is yet to be made
6.15 POWERS OF DIRECTORS
The business of the Company shall be managed by the Directors who may pay all expenses incurred
in setting up and registering the Company and may exercise all such powers of the Company as are
not by the Ordinance or by any other law or the Articles of Association of the Company, required to be
exercised by the Company in General Meeting subject nevertheless to any regulations of the Articles
of Association of the Company, to the provisions of the Ordinance and to such regulations being not
inconsistent with the aforesaid regulations or provisions, as may be prescribed by the Company in
General Meeting but no regulation made by the Company in General Meeting shall invalidate any
prior act of the Directors which would have been valid if that regulation had not been made.
6.16 BORROWING POWERS OF DIRECTORS
Subject to the provisions contained in the Articles of Association of the Company, the Directors may
exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking
property and uncalled capital, or any part thereof, and to issue securities and debentures whether
outright or as security for any debt, liability or obligation of the Company or of any third party.
6.17 INDEMNITY
Subject to the provisions of the Ordinance every Director, Chief Executive, Managing Agents,
Manager or other Officer or Servant of the Company shall be indemnified by the Company and it shall
be the duty of the Directors to pay out of the funds of the Company all costs, losses and expenses
which any such Director, Chief Executive, Managing Agents, Manager, Officer or Servant may incur or
become liable to by reason of any contract entered into or act or thing done by him as such Director,
Chief Executive, Managing Agents, Manager, Officer, or Servant or in any way in discharge of his
duties including travelling expenses, and the amount for which such indemnity is provided shall
immediately attach as lien to the property of the Company and have priority as between the members
over all other claims.
.
6.18 INVESTMENT IN ASSOCIATED COMPANIES
The Company has not made any investment in any of associated companies nor has any resolution
been passed for investment in associated companies under Section 208 of the Ordinance.
6.19 INVESTMENT IN SUBSIDIARIES
The Company has not sponsored nor acquired any subsidiaries nor has any resolution beenpassed
for sponsoring or acquiring any subsidiaries under Section 208 of the Ordinance except for its
investment in ISL.Page 32 of 35
PART 7
7 MISCELLANEOUS INFORMATION
7.1 REGISTERED OFFICE
101 Beaumont Plaza, 10 Beaumont Road,
Karachi
7.2 BANKER TO OFFER (BOOK BUILDING PORTION) Habib Bank Limited
7.3 BANKERS TO OFFER (GENERAL PUBLIC PORTION) Bank Al-Falah Limited
Bank Al-Habib Limited
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank Limited
MCB Bank Limited
NIB Bank Limited
Samba Bank Limited
Soneri Bank Limited
United Bank Limited
7.4 BANKERS TO THE COMPANY
Bank Al-Habib Limited
Dubai Islamic Bank
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank Limited
MCB Bank Limited
Meezan Bank Limited
United Bank Limited
7.5 AUDITORS
M/S. KPMG TaseerHadi& Co.
1st Floor, Sheikh Sultan Trust Bldg. No. 2
Beaumont Road
Karachi
7.6 LEGAL ADVISOR TO THE COMPANY & THE OFFER
Vellani & Vellani Associates
148, 18
th
East Street, Phase I
Defence Officers’ Housing Authority
Karachi
7.7 COMPUTER BALLOTER AND SHARES REGISTRAR THK Associates
7.8 LEAD MANAGERS
Habib Bank Limited
01-HBL Plaza,
I.I. Chundrigar Road
Karachi
Cassim Investments (Pvt.) Limited
Rooms 26-28, Karachi Stock Exchange
Building
Stock Exchange Road,
Karachi
7.9 JOINT BOOK RUNNERS
Cassim Investments (Pvt.) Limited
Rooms 26-28, Karachi Stock Exchange
Building
Stock Exchange Road,
Karachi
AKD Securities Limited
602, Continental Trade Centre,
Block 8, Clifton,
Karachi Page 33 of 35
7.10 MATERIAL CONTRACTS / DOCUMENTS
7.10.1 Underwriting Agreements
S. No. Name of Underwriter Date of Agreement No. of Shares Amount (PKR)
1 Habib Bank Limited 16 April 2011 9,246,000 129,998,760
2 Cassim Investments (Private) Limited 16 April 2011 9,130,000 128,367,800
3 AKD Securities Limited 16 April 2011 9,130,000 128,367,800
7.10.2 Due Diligence Reports of the Underwriters
S. No. Name of the Underwriter Date of Report
1 Habib Bank Limited 15 April 2011
2 Cassim Investments (Private) Limited 15 April 2011
2 AKD Securities Limited 15 April 2011
7.10.3 Private Placement Agreements
S. No. Name of the Investor Date of Agreement
1 Sumitomo Corporation 26 January 2011
7.10.4 Project Related Agreements
The Company has signed a Power Acquisition Contract with The Karachi Electric Supply
Corporation Limited dated 31 August 2007 for the supply of electricity from its Power Plant for a
period of 20 years Initially, the entire generation of 18 MW will be supplied. Upon the
commencement of Cold Rolling Mill and the Galvanizing Sheet Plant the company will supply
approximately 10 MW to KESC. In addition to the above, agreements have been entered into with
the following parties for the purchase of plant and machinery:
Name Purpose
SMS SIEMAG 4-Hi (Quarto) Reversing Mill Supply and Servicing
HB ESMECH Pull Push Pickling Line
HB ESMECH Rewinding Line
HB ESMECH 4-Hi Skin Pass Mill
HB ESMECH Metal coating line
HYPERTHERM Furnaces for Metal Coating Line
AJAX TOCCO Ceramic Zinc Pot for Metal Coating Line
EBNER Batch type Hydrogen based annealing bases and furnaces
MHE DEMAG Heavy Duty overhead and gantry cranes
ANDRITZ AG Acid Regeneration Plant
NUBERG PSA Nitrogen and Hydrogen Gas Plant
7.10.5 Gas Supply Arrangement
Supplier Agreement # Nature of Agreement
Sui Southern Gas Co. Ltd. 930/1412/0/1 Supply of Gas for Power Plant
Sui Southern Gas Co. Ltd. 930/1585/0/4
Supply of Gas for Cold Rolling Mill and Galvanized
Sheet Plant
7.10.6 Project Related Financing Agreements
The total cost of the Steel Project is estimated at PKR 8.7 billion. 50% of the Steel Project cost is
funded by equity and 50% by debt. Following agreements have been entered into with respect to
the finances required for the Steel Project.
• Agreement with a syndicate of banks comprising Habib Bank Limited, United Bank Limited,
Bank Al-Habib Limited and Standard Chartered Bank of Pakistan Limited for PKR 4.0 billion
under the Long Term Financing Facility of the State Bank of Pakistan.
(PKR Millions) Facility Amount Drawdown
Habib Bank Limited 1,212 1,212
United Bank Limited 1,091 1,091
Bank Al-Habib Limited 606 606Page 34 of 35
Standard Chartered Bank of Pakistan Limited 1,091 1,091
7.10.7 Share Purchase Agreement
• IIL has entered into an agreement with International Finance Corporation (IFC) on 27 June 2008
for USD 18.4 million. This comprises of a “C” Loan of USD 6.4 million and an “A” Loan of USD
12 million. As per the terms of the loan agreement, the “A” loan of USD 12 million will be
transferred to ISL when received by IIL or will be directly credited to ISL’s bank account,
whereas the “C” loan of USD 6.4 million will be retained by IIL which will be converted into
equity by IIL by offering shares of ISL to IFC in accordance with the terms and subject to such
conditions as acceptable to IIL and IFC. The “A” Loan of USD 12 million has not been drawn by
IIL or ISL and neither intends to draw down the “A” Loan of USD 12 million. The “C” Loan shall
be converted into ordinary shares of ISL as per the mechanism referred to in paragraph 2.1.2
7.11 INSPECTION OF DOCUMENTS AND CONTRACTS
Copies of the Memorandum and Articles of Association, the audited financial statements, the Auditor’s
Certificates, Information Memorandum and copies of agreements referred to in this OFSD 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 OFSD until the closing of the subscription list.
7.12 LEGAL PROCEEDINGS
There are no legal proceeding pending against the Company involving financial implications and the
Company has not initiated any legal proceedings against any party or person.
7.13 MEMORANDUM OF ASSOCIATION
The Memorandum of Association, inter alia, contains the objects for which the Company was
incorporated and the business which the Company is authorized to undertake. A copy of the
Memorandum of Association is annexed to this OFSD and with every issue of the OFSD except the
one that is released in newspapers as advertisement.
7.14 VALUATION OF ASSETS
The Company has not carried out any revaluation of assets in terms of assets in terms of clause 22(2)
of Section 1 of part I of the second Schedule to the Ordinance.
7.15 CAPITALIZATION
The Company has not capitalized any profits till the date of publication. Page 35 of 35
PART 8
8 SIGNATORIES TO THE OFFER FOR SALE DOCUMENT
1.
-Sd-
________________________
Kemal Shoaib
Designation: Chairman
CNIC No.: 42301-1126596-5
International Industries Limited
2.
-Sd-
________________________
Towfiq H. Chinoy
Designation: Chief Executive Officer
CNIC No.: 42301-2608847-9
International Industries Limited
Signed by the above in presence of witnesses:
1. _-Sd-_____________________ 2. __ -Sd-____________________
Name: Irfan Bhatti Name: Neelofar Hameed
Address: c/o IIL Address: c/o IIL
CNIC # 42201-0621960-3 CNIC # 42101-1443183-6
Date: 22.04.2011
Place: Karachi

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