Iilannualreport 2012 PDF

In the name of Allah, Most Gracious, Most
I N V I G O R A T I N G G R O W T H
Merciful. This is by the Grace of Allah.
Contents
Page Page
No(s) No(s)
2 Company Profile 36 The Board Committees
3 Company Information 39 Engagement of Directors in other Companies /
4 Vision Entities
4 Mission 41 The Management
5 Strategic Objectives 43 Report of the Board Audit Committee on Adherence
5 Our Values to the Code of Corporate Governance
6 Code of Conduct 45 Statement of Compliance with the Code of
8 Business at a Glance Corporate Governance
10 Key Operating Highlights 48 Review Report to the Members on Statement of
12 Vertical Analysis Compliance with the Best Practices of the Code of
13 Horizontal Analysis Corporate Governance
14 Graphical Presentation 49 Financial Statements of the Company
16 Value addition and Distribution 89 Consolidated Financial Statements
18 Directors’ Profile 138 Stakeholders’ Information
21 From the Chairman’s Desk 140 Pattern of Shareholding
23 Board of Directors’ Report 141 Categories of Shareholders
31 Our Success Story 142 Key Shareholdings and Shares Traded
32 International Certifications 143 Notice of Annual General Meeting
33 Organization Chart Proxy Form
34 Corporate Governance
This annual report includes statements, relating to our future plans, objectives, intentions & expectations. These statements should not be taken as

Company Profile
International Industries Limited (IIL) is a premium producer of steel tubing and galvanized pipes in Pakistan.
IIL was incorporated in Pakistan in 1948 and is quoted on the Karachi, Lahore and Islamabad Stock Exchanges. The
Company has equity of over Rs.5 billion with a turnover of more than Rs. 19 billion and has featured on the Karachi Stock
Exchange’s listing of the top 25 companies consecutively for 9 years (between 2001 to 2010).
IIL's production capacity of steel pipes is the highest in Pakistan. It is the market leader in all segments of pipes within the
country and also has a significant export footprint. In 2012, IIL's gross sales volume was over 195,000 tons out of which
75,923 tons amounting to over Rs. 6.6 billion were exported to various regions including Afghanistan, Sri Lanka,
America, Europe, Middle East and Africa. The Company has been winning FPCCI Export Awards in the category of Best
Export Performance Award on engineering products-Mechincal consecutively for the last 12 years.
IIL is the first local private sector company to install cold rolling facilities. Its eleven cold rolled tube mills and three cold
rolled slitters have a capacity of over 120,000 tons per annum, with sizes ranging from 12.70 ~ 75.90 mm in round, 10 ~
50 mm in square, 10x20 ~ 40x80 mm rectangular and 13x23 mm, 19x42 mm ~ 24x56 in elliptical tubes and 16x40,
30x50 oval tubes, with a thickness range from 0.60 ~2.00 mm.
To cater to the needs of the Galvanized Iron (GI) pipes market, the company has five hot rolled tube mills, three hot rolled
slitters and four fully automatic hot dipped galvanizing plants with a capacity of 150,000 tons per annum. The GI
product range varies from 1/2” ~ 6” with a thickness range from 1.80 mm ~ 6.00 mm.
A sizeable amount of Pakistan's API pipe demand is met by IIL with its 2”, 4” and 6” pipes. All API pipes are produced with
inline seam annealing and hydro-testing and under API License # 5L-0391.
IIL has four extrusion plants for high and medium density Polyethylene pipes for Water, Gas and Duct Pipe with standard
diameters ranging from 12 mm ~ 630 mm. IIL is the pioneer in the manufacturing of PEX (Cross Linked polyethlene) pipe
in Pakistan, with standard diameters ranging from 20 mm ~ 32 mm. The company is also manufacturing MDPE gas pipe
under API license # 15LE-0014.
To conform to the highest quality, health and safety standards, IIL has obtained International Certifications of ISO 9001,
ISO 14001, OHSAS 18001 and CE Mark certification on CR tubing and GI pipe.
International Industries Limited
The company owns 56.335% of the share capital of its listed subsidiary, International Steels Limited (ISL), which is the
largest manufacturer of cold rolled steel and galvanized steel coils with annual production capacities of 250,000 tons
and 150,000 tons respectively.
02
Company Information
Board of Directors
Chairman Mr. Zaffar A. Khan Independent Chairman
Chief Executive Officer Mr. Riyaz T. Chinoy Chief Executive Officer

Mr. Mustapha A. Chinoy Non-Executive Director
Mr. Kamal A. Chinoy Non-Executive Director
Mr. Fuad Azim Hashimi Non- Executive Director
Mr. Javaid Anwar Independent Director
Mr. Azam Faruque Independent Director
Mr. Shahid Aziz Siddiqui * Non-Executive Director
Mr. Tariq Ikram Independent Director
Mr. Abdul Samad Dawood Independent Director
Chief Financial Officer: Mr. Sohail R. Bhojani
Company Secretary: Ms. Neelofar Hameed
External Auditors: KPMG Taseer Hadi & Co
Internal Auditors: Ernst &Young Ford Rhodes Sidat Hyder & Co
Bankers: Bank Al Habib Ltd

Faysal Bank Ltd
Habib Bank Ltd
HSBC Bank Middle East Ltd
MCB Bank Ltd
Meezan Bank Ltd
NIB Bank Ltd
Samba Bank Ltd
Soneri Bank Ltd
Standard Chartered Bank Ltd
United Bank Ltd
Legal Advisor: Mrs. Sana Shaikh Fikri
Registered Office: 101 Beaumont Plaza, 10 Beaumont Road, Karachi-75530

Phone: +9221-35680045-54 / UAN: 021-111-019-109
Annual Report 2012

Fax: +9221-35680373 / E-mail: neelofar.hameed@iil.com.pk
Branch Office: Chinoy House, 6 Bank Square, Lahore-54000

Phone: +9242-37229752-55 / UAN: 042-111-019-019
Fax: +9242-37220348 / E-mail: inquiries@iil.com.pk
Website: www.iil.com.pk
Share Registrar: Central Depository Company of Pakistan Ltd.

CDC House, 99-B, Block "B", S.M.C.H.S,
Shahra-e-Faisal, Karachi
Phone: +9221-111-111-500 Fax: +9221-34326053
Email: info@cdcpak.com
03
* Resigned in August 2012.
Vision
To be an internationally recognized and
preferred pipe manufacturer.
Mission
IIL is a quality conscious company committed to economies of scale. It shall
continually enhance the effectiveness of its quality, environmental, occupational
health and safety management systems. IIL is committed to be an ethical
company and shall conform to all applicable legal requirements, as well as fulfill
and exceed the needs expectations of all stakeholders.
Team work, continual improvement, prevention of pollution, waste reduction,

protection of environment, care for health and safety of people and equipment,
reduction of accidents, improvement in safety practices, a fair return to
shareholders and fulfillment of social responsibility shall be the hallmark of all
activities.
04
Strategic Objectives
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time business information.
Our Values
Ethical:
IIL is honest and ethical in its dealings at all times through compliance with the
applicable laws & regulations.
Excellence:
Annual Report 2012

IIL Endeavour's to exceed the needs of all stakeholders.
Innovation:
IIL encourages its stakeholder to be creative in all of its activities.
Respect:
IIL value the self-esteem of all stakeholders be it employees, suppliers,
customers or shareholders.
05
Fairness:
IIL believes in fairness to all stakeholders.
Responsibility:
IIL considers quality, health, safety and environment an integral part of its
activities and way of life.
Reliable:
IIL has established itself a Reliable and Dependable Supplier.
Code of Conduct
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M/s International Industries Ltd [IIL] - hereby manner and promote preservation of the
termed as the “Company”. environment.
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to directors, executives, officers, and employees of B. CONFLICTS OF INTEREST
the Company.
t 5IF #PBSE BOE .BOBHFNFOU BSF FYQFDUFE UP i. Every employee should conduct his/ her personal
familiarize themselves with laws and regulations and business affairs in a manner such that neither
governing their individual areas of responsibility BDPOøJDU OPSUIFBQQFBSBODFPGBDPOøJDU BSJTFT
and not to transgress them. between those interests and the interests of the
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understand and abide by the spirit as well as the ii. An employee should avoid any situation in which
letter of this Code and that violation of any of the he or she, or a family member, might profit
Code’s provisions could result in disciplinary personally (directly or indirectly), from the
action. company’s facilities, its products, or company’s
relationships with its vendors or customers.
The salient features of the Code of Conduct are as iii. An employee should not permit himself/ herself
follows: (or members of his/ her family) to be obligated
(other than in the course of normal banking
A. BUSINESS ETHICS relationships) to any organization or individual
with whom the company has a business
i. The Company's policy is to conduct its business relationship. However, business lunches, dinners
with honesty and integrity and be ethical in its or social invitations, nominal giveaways and
dealings, showing respect for the interest of all attendance at conferences and seminars would
stakeholders. not be considered a violation of this Code.
ii. The Company is dedicated to providing a safe and iv. In case an employee is offered or receives
non-discriminatory working environment for all something of value which he/she believes may be
employees. impermissible under this Code, he /she should
iii. The Company does not support any political party disclose the matter.
06 or contributes funds to groups whose activities

promote political interests.
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disclosed where they exist and guidance should
iv. The Company is committed to provide products be sought from superiors.
which consistently offer value in terms of price and
quality and are safe for their intended use, to
satisfy customer needs and expectations.
v. The Company is committed to run its business in
C. ACCOUNTING RECORDS, CONTROLS & information”, the same must be held in the
STATEMENTS strictest confidence by the employee involved
until it is publicly released.
i. All books, records, accounts and statements iii. The employees shall abide by the appropriate
should conform to generally accepted and Competition Laws and shall not enter into
applicable accounting principles and to all understandings, arrangements or agreements
applicable laws and regulations and should be with competitors which have the effect of fixing
maintained accurately. or controlling prices, dividing and allocating
ii. Employees are expected to sign only documents markets or territories, or boycotting suppliers or
or records which they believe to be accurate and customers.
truthful.
F. PERSONAL CONDUCT
D. ENVIRONMENT
i. All employees should conduct themselves with
i. The Company is committed to carry its business in the highest degree of integrity and
an environmentally sound and sustainable professionalism in the workplace or any other
manner and promote preservation and location while on company business.
sustainability of the environment. ii. All employees should avoid any kind of bribery,
ii. All employees are required to adhere strictly to all extortion and all other forms of corruption.
applicable environmental laws and regulations iii. Employees should always be cognizant of the
that impact the Company’s operations. need to adhere strictly to all safety policies and
Annual Report 2012

regulations.
E. REGULATORY COMPLiANCE iv. Any legally prohibited or controlled substances if
found in the possession of any employee will be
i. The Company is committed to make prompt confiscated and where appropriate, turned over
public disclosure of “material information” to the authorities.
regarding the Company as prescribed in the
Karachi Stock Exchange Regulations and/ or any
other exchange where the Company is listed.
07
ii. Where an employee is privy to the information,
which is generally referred to as “material inside
Business at a Glance
IIL, a top 25 KSE-listed company; was

incorporated in 1948 as Sultan Chinoy &
Company and is in the business of
manufacturing and marketing of GI Pipe,
CR Tube, Black Pipe, API Line Pipe and
Polyethylene Line Pipe.
Cold Rolled Steel Tube
CR steel tubes are available in round, rectangle, oval, square and elliptical geometry and
are predominantly used for automotive, motorcycle, bicycle, transformer, fans, furniture,
tents and other mechanical and general engineering purposes. IIL premium quality steel
tubes are available in standard manufacturing sizes in outside diameters from 12.70 mm
to 75.90mm and in thicknesses from 0.60 to 2.00mm.The products are certified as
European Conformity Standards–CE.
Galvanized Pipe
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They are also used in fencing, low cost shelters and fabrication industries. IIL’s reliable GI
pipes are available from nominal diameters of 15mm (1/2”) to 150mm (6”) and in
thicknesses from 1.80mm to 6.00mm. The products are certified as European
Conformity Standards –CE.
API Line Pipe
IIL’s trusted welded line pipes are ideal for natural gas and petroleum distribution
systems. These are manufactured as per PSL1 in accordance with API specifications.
08 profile Tubes
Profiles in "L", "T" “D” and "Z" shapes are used in the making of furniture and low cost
housing.
Scaffolding & Black Pipe
IIL also manufactures better quality scaffolding and black pipe which is high in strength
yet light-weight.
HDPE Water Pipe
IIL’s Polyethylene water pipe (HDPE) is used for distribution of water supply, effluent
and water discharge. The range of sizes produced is from 16 mm to 630 mm.
HDPE Duct Pipe
IIL’s Polyethylene duct is used as casing for optic fiber cables and other
telecommunication cables. The standard diameter range is from 12 mm to 630 mm
(without internal solid lubrication and with internal ribs) and 12 mm to 250 mm (with
internal solid lubrication).
Annual Report 2012

MDPE Pipe
IIL’s Polyethylene line pipes are manufactured on state-of-the-art German and Austrian
equipment to meet the performance requirement of British Gas Technical Specification
and American Petroleum Institute Specification for gaseous fuel. It is ideal for natural
gas, liquefied petroleum gas (LPG) and other gaseous fuels. The nominal outside
diameter of IIL polyethylene line pipes ranges from ¾” to 25” and 20 mm to 630mm.
09
PEX
IIL is the pioneer in the manufacturing of PEX (Cross Linked Polyethylene) pipe in
Pakistan. IIL PEX Pipe is one of the most versatile, high-performance and cost efficient
system for transmission of hot and cold water, under elevated pressure and
temperature conditions. PEX pipe is a relatively low cost, technically advanced, easier to
install, food grade and environmentally safe pipe for drinking water available from 16
mm to 50 mm.
Key Operating Highlights
(Rupees in million)
2012 2011 2010 2009 2008 2007 2006 2005
FINANCIAL POSITION
Balance sheet
Property, plant and equipment 2,803 2,678 9,905 5,997 4,172 2,737 1,837 1,658
Investment 2,584 2,584 106 - - - - -
Other non current assets 14 26 18 24 15 9 9 10
Current assets 9,665 8,623 8,709 5,158 6,439 5,854 3,401 3,272
Total assets 15,066 13,911 18,738 11,179 10,626 8,600 5,247 4,940
Share capital 1,199 1,199 999 999 833 569 428 428
Reserves 2,976 3,065 2,305 1,661 1,565 1,257 1,043 741
Total equity 4,175 4,264 3,304 2,660 2,398 1,827 1,471 1,169
Surplus on revaluation of fixed assets 1,003 1,008 1,367 1,379 1,391 515 529 543
Non current liabilities 589 405 5,359 2,302 1,416 1,251 436 473
Current liabilities 9,299 8,234 8,709 4,838 5,421 5,007 2,812 2,754
Total liabilities 9,889 8,639 14,067 7,140 6,837 6,258 3,248 3,228
Total equity & liabilities 15,066 13,911 18,738 11,179 10,626 8,600 5,247 4,940
Net current assets 366 389 1 320 1,018 847 589 517
OPERATING AND FINANCIAL TRENDS
Profit and Loss
Net turnover 16,802 15,851 13,472 12,319 12,068 9,700 7,674 7,102
Gross profit 1,909 1,812 2,222 1,167 1,787 1,423 1,241 869
EBITDA 1,552 2,072 1,830 1,234 1,580 1,334 1,082 753
Operating profit 1,329 1,195 1,703 723 1,362 1,062 903 619
Profit before taxation 391 1,269 1,359 469 904 807 726 503
Profit after taxation 326 1,030 1,007 375 705 613 534 373
Cash dividend 240 600 400 225 201 213 214 160
Bonus share - - 200 - 242 188 141 224
Capital expenditure (addition during the year) 326 926 4,147 2,055 757 1,099 360 400
Cash Flows
Operting activities (249) 689 (3,490) 2,945 (597) (590) 1,072 144
Investing activities (313) 950 (4,222) (2,039) 727 (2,339) (303) (393)
Financial activities (155) (1,371) 2,916 737 141 574 (275) (67)
Cash & cash equivalents at the end of the year (7,543) (6,826) (7,094) (2,298) (3,941) (4,212) (1,858) (2,352)
KEY INDICATORS
Profitability Ratios
Gross profit ratio % 11.4 11.4 16.5 9.5 14.8 14.7 16.2 12.2
Net profit to Sales % 1.9 6.5 7.5 3.0 5.8 6.3 7.0 5.3
EBITDA margin % 9.2 13.1 13.6 10.0 13.1 13.8 14.1 10.6
Operating Leverage % (4.2) 0.7 5.2 (10.5) 0.8 0.9 5.4 0.1
Return on Shareholders' Equity with
10 Surplus on revaluation of fixed assets

Return on Shareholders' Equity without
Surplus on revaluation of fixed assets
%
%
6.3
7.8
19.5
24.2
21.6
30.5
9.3
14.1
18.6
29.4
26.2
33.6
26.7
36.3
21.8
31.9
Return on Capital Employed % 23.0 21.1 17.0 11.4 26.2 29.5 37.1 28.3
Return on total assets % 2.2 7.4 5.4 3.4 6.6 7.1 10.2 7.6
2012 2011 2010 2009 2008 2007 2006 2005
Liquidity Ratios
Current ratio (x) 1.04 1.05 1.00 1.07 1.19 1.17 1.21 1.19
Quick/Acid test ratio (x) 0.25 0.47 0.30 0.61 0.34 0.51 0.49 0.25
Cash to Current Liabilities (x) (0.03) 0.08 (0.40) 0.61 (0.11) (0.12) 0.38 0.05
Cash flow from Operations to Sales (x) (1.48) 4.35 (25.9) 23.9 (5.0) (6.1) 14.0 2.0
Activity/Turnover Ratios
Inventory turnover ratio times 2.0 3.0 1.8 5.0 2.2 2.5 3.2 2.4
Inventory turnover in days days 179 124 198 73 163 146 115 151
Debtor turnover ratio times 11.2 9.5 9.9 13.1 9.8 12.1 14.6 15.8
Debtor turnover in days days 33 38 37 28 37 30 25 23
Creditor turnover ratio times 11.0 11.9 13.8 10.0 9.8 15.9 15.9 23.0
Creditor turnover in days days 33 31 26 37 37 23 23 16
Total assets turnover ratio times 1.1 1.1 0.7 1.1 1.1 1.1 1.5 1.4
Fixed assets turnover ratio times 6.0 5.9 1.4 2.1 2.9 3.5 4.2 4.3
Operating cycle in days days 212 162 235 101 201 176 140 174
Capital employed turnover ratio times 2.9 2.8 1.3 1.9 2.3 2.7 3.2 3.2
Investment/Market Ratios
Earnings per share - basic and diluted Rs. 2.7 8.6 8.4 3.8 7.1 7.4 9.4 8.7
Price earning ratio times 10.4 5.8 6.7 12.3 17.1 20.1 12.6 12.0
Dividend Yield ratio % 7.1 10.1 10.7 4.9 4.6 4.8 7.0 14.0
Dividend pay out ratio % 73.6 58.2 59.5 60.0 62.8 65.5 66.6 103.1
Dividend per share - Cash Rs. 2.0 5.0 4.0 2.25 2.50 3.75 5.0 3.75
Bonus shares Rs. - - 2.0 - 3.0 3.30 3.3 11.0
Dividend Cover times 1.4 1.7 2.1 1.7 2.8 2.0 1.9 2.3
Market value per share at the end of the year Rs. 28 50 56 46 121 148 118 105
Market value per share high during the year Rs. 52 71 72 57 173 168 177 380
Market value per share low during the year Rs. 26 44 46 44 107 98 88 99
Break-up value per share with
revaluation of fixed assets Rs. 43 44 47 40 46 41 47 40
Break-up value per share without
Financial Structure Ratios

Financial Leverage ratio (x) 2.4 2.0 4.3 2.7 2.9 3.4 2.2 2.8
Weight avg: cost of debts (x) 8.3 5.6 2.6 9.1 8.0 7.9 6.3 3.7
Annual Report 2012

Total Debt : Equity ratio (x) 70:30 67:33 81:19 64:36 64:36 73:27 62:38 65:35
Interest cover times 1.4 2.0 6.6 1.4 3.0 3.2 5.0 5.9
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Employees as remuneration Rs. in million 583 601 472 374 350 293 254 216
Government as taxes Rs. in million 1,999 3,027 2,900 2,110 1,940 1,775 1,526 1,376
Shareholders as dividends Rs. in million 240 600 600 225 443 401 355 385
Retained within the business Rs. in million 86 430 427 163 275 225 193 4
Financial charges to providers of finance Rs. in million 969 607 257 535 450 332 180 105
11
Vertical Analysis
(Rupees in million)
2012 % 2011 % 2010 % 2009 % 2008 % 2007 %
OPERATING RESULTS
Sales - Net 16,802 100.0 15,851 100.0 13,472 100.0 12,319 100.0 12,068 100.0 9,700 100.0
Cost of sales 14,893 88.6 14,039 88.6 11,250 83.5 11,152 90.5 10,280 85.2 8,277 85.3
Gross profit 1,909 11.4 1,812 11.4 2,222 16.5 1,167 9.5 1,787 14.8 1,423 14.7
Administrative, Selling and
Distribution expenses 580 3.5 617 3.9 519 3.9 427 3.5 410 3.4 346 3.6
Other operating expenses 41 0.2 192 1.2 227 1.7 6 0.0 208 1.7 67 0.7
Other operating income 71 0.4 872 5.5 121 0.9 267 2.2 185 1.5 129 1.3
Profit before finance costs 1,360 8.1 1,876 11.8 1,597 11.9 1,001 8.1 1,354 11.2 1,139 11.7
Finance costs 969 5.8 607 3.8 257 1.9 535 4.3 450 3.7 332 3.4
Profit before taxation 391 2.3 1,269 8.0 1,340 9.9 466 3.8 904 7.5 807 8.3
Taxation 65 0.4 239 1.5 333 2.5 94 0.8 199 1.6 194 2.0
Net income 326 1.9 1,030 6.5 1,007 7.5 372 3.0 705 5.8 613 6.3
BALANCE SHEET
Property, plant and equipment 2,803 18.6 2,678 19.3 9,905 52.9 5,987 53.6 4,172 39.3 2,737 31.8
Investments 2,584 17.1 2,584 18.6 106 0.6 - - - - - -

Other non current assets 14 0.1 26 0.2 18 0.1 24 0.2 15 0.1 9 0.1
Current assets 9,665 64.2 8,623 62.0 8,709 46.5 5,168 46.2 6,439 60.6 5,854 68.1
Total assets 15,066 100.0 13,911 100.0 18,738 100.0 11,179 100.0 10,626 100.0 8,600 100.0
Shareholders' equity 4,175 27.7 4,264 30.7 3,304 17.6 2,660 23.8 2,398 22.6 1,827 21.2
Capital Reserves 1,003 6.7 1,008 7.2 1,367 7.3 1,379 12.3 1,391 13.1 515 6.0
Non current liabilities 589 3.9 405 2.9 5,359 28.6 2,302 20.6 1,416 13.3 1,251 14.5
Current portion of long term financing 321 2.1 238 1.7 600 3.2 408 3.6 421 4.0 213 2.5
Short term borrowings 7,564 50.2 6,839 49.2 7,116 38.0 3,533 31.6 3,969 37.4 4,216 49.0
Other current liabilities 1,414 9.4 1,157 8.3 992 5.3 896 8.0 1,032 9.7 579 6.7
Total equity and liabilities 15,066 100.0 13,911 100.0 18,738 100.0 11,179 100.0 10,626 100.0 8,600 100.0
CASH FLOWS
Net cash generated from/(used in)
operating activities (249) 34.7 689 257.1 (3,490) 72.8 2,945 179.2 (597) (220.3) (590) 25.1
Net cash inflows/(outflows)
12 from investing activities

Net cash (outflows)/inflows
(313) 43.7 950 354.4 (4,222) 88.0 (2,039) (124.1) 727 268.3 (2,339) 99.4
from financing activities (155) 21.6 (1,371) (511.6) 2,915 (60.8) 737 44.9 141 52.0 574 (24.4)
Net increase/(decrease) in cash
and cash equivalents (717) 100.0 268 100.0 (4,797) 100.0 1,643 100.0 271 100.0 (2,354) 100.0
Horizontal Analysis
(Rupees in million)
2012 % 2011 % 2010 % 2009 % 2008 % 2007 %
OPERATING RESULTS
Sales - Net 16,802 6.0 15,851 17.7 13,472 9.4 12,319 2.1 12,068 24.4 9,700 26.4
Cost of sales 14,893 6.1 14,039 24.8 11,250 0.9 11,152 8.5 10,280 24.2 8,277 28.7
Gross profit 1,909 5.4 1,812 (18.5) 2,222 90.4 1,167 (34.7) 1,787 25.6 1,423 14.7
Administrative, Selling
and Distribution expenses 580 (5.9) 617 18.8 519 21.5 427 4.1 410 18.5 346 2.4
Other operating expenses 41 (78.7) 192 (15.5) 227 3683.3 6 (97.1) 208 210.4 67 100.0
Other operating income 71 (91.8) 872 620.9 121 (54.7) 267 44.3 185 43.4 129 4200.0
Operating profit/(loss) before
finance costs 1,360 (27.5) 1,876 17.5 1,597 59.5 1,001 (26.1) 1,354 18.9 1,139 25.8
Finance costs 969 59.7 607 136.1 257 (52.0) 535 18.9 450 35.5 332 84.6
Profit/(loss) before taxation 391 (69.2) 1,269 (5.3) 1,340 187.5 466 (48.5) 904 12.1 807 11.2
Taxation 65 (72.9) 239 (28.2) 333 254.3 94 (52.8) 199 2.6 194 1.1
Net income 326 (68.4) 1,030 2.3 1,007 170.6 372 (47.2) 705 15.1 613 14.8
BALANCE SHEET
Property, plant and equipment 2,803 4.7 2,678 (73.0) 9,905 65.4 5,987 43.5 4,172 52.4 2,737 49.0
Investments 2,584 0.0 2,584 2337.3 106 100.0 - - - - - -
Other non current assets 14 (46.5) 26 43.8 18 (25.0) 24 60.0 15 66.7 9 0.0
Current assets 9,665 12.1 8,623 (1.0) 8,709 68.5 5,168 (19.7) 6,439 10.0 5,854 72.1
Total assets 15,066 8.3 13,911 (25.8) 18,738 67.6 11,179 5.2 10,626 23.6 8,600 63.9
Shareholders' equity 4,175 (2.1) 4,264 29.1 3,304 24.2 2,660 10.9 2,398 31.3 1,827 24.2
Capital Reserves 1,003 (0.4) 1,008 (26.3) 1,367 (0.9) 1,379 (0.9) 1,391 170.1 515 (2.6)
Non current liabilities 589 45.3 405 (92.4) 5,359 132.8 2,302 62.6 1,416 13.1 1,251 186.9
Current portion of long term
financing 321 35.1 238 (60.4) 600 47.1 408 (3.1) 421 97.7 213 36.5
Short term borrowings 7,564 10.6 6,839 (3.9) 7,116 101.4 3,533 (11.0) 3,969 (5.8) 4,216 84.4
Other current liabilities 1,414 22.2 1,157 16.7 992 10.7 896 (13.1) 1,032 78.3 579 56.8
Total equity and liabilities 15,066 8.3 13,911 (25.8) 18,738 67.6 11,179 5.2 10,626 23.6 8,600 63.9
Annual Report 2012

CASH FLOWS
operating activities (249) (136.1) 689 (119.8) (3,490) (218.5) 2,945 (593.3) (597) 1.2 (590) (155.0)
Net cash inflows/(outflows) from
investing activities
Net cash (outflows)/inflows from
(313) (132.9) 950 (122.5) (4,222) 107.1 (2,039) (380.5) 727 (131.1) (2,339) 671.9
13
financing activities (155) (88.7) (1,371) (147.0) 2,915 295.5 737 422.7 141 (75.4) 574 (308.7)
and cash equivalents (717) (367.5) 268 (105.6) (4,797) (392.0) 1,643 506.3 271 (111.5) (2,354) (575.6)
Key Operating Highlights
Sales Breakup Profitabilty
Domestic Export Gross Profit Net Profit

Return On Assets Return On Equity
140,000
20% 60%
120,000
50%
100,000 15%
40%
Metric Tons (000)
80,000
10% 30%
60,000
40,000 20%
5%
20,000 10%
- 0% 0%
2005 2006 2007 2008 2009 2010 2011 2012
2005 2006 2007 2008 2009 2010 2011 2012
Net Sales and Gross Profit Net Sales and Government Revenue
Net Sales Gross Profit Net Profit Govt. Rev
3,500
18,000
16,000 3,000
14,000
2,,500
Rupees In Millions
Rupees In Millions
12,000
2,000
10,000
8,000 1,500
6,000
1,000
4,000
500
2,000
0 -
2005 2006 2007 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 2012
Years Years
Liquidity Ratio .BSLFU7BMVF3BUJP
Current Ratio Quick Ratio Dividend Per Share Book Value per share
Earnings Per Share Price Earing Ratio
1.4
100
21
1.2 90 19
80 17
1.0 70 15
60 13
0.8
Rupees
paerformasnce (%)
11
Ratios
14
50
9
0.6 40
7
30
0.4 5
20 3
0.2 10 1
0.0 0 0
2005 2006 2007 2008 Year 2009 2010 2011 2010 2005 2006 2007 2008 2009 2010 2011 2012
Debt Management Debt and Equity Ratio

Debt/Equity Interest Cover 140% Debt Equity
12 Debt to Assets L.T.Debt / Equity
120%
10 16000
100% 14000
8 12000
80% 10000
6
8000
60%
6000
4
40% 4000
2000
2
20% 0 2005 2006 2007 2008 2009 2010 2011 2012
0 0%
2005 2006 2007 2008 2009 2010 2011 2012
Non Current Assets and Non Current Liabilities Asset Management Ratio
Inventory Turnover Debtors Turnover
Non-currentAssets current Liabilities Operating Cycle TotalAssets Turnover
250 1.6%
12000
1.4%
10000 200
1.2%
8000
Rupees in millions
150 1.0%
Days
6000
0.8%
4000 100
0.6%
2000 0.4%
50
0 0.2%
2005 2006 2007 2008 2009 2010 2011 2012
0 0.0%
Years 2005 2006 2007 2008 2009 2010 2011 2012
Years
Annual Report 2012

Earnings and Distribution Trend
Cash Dividend Interim Earning Per Share
Cash Dividend Final Cash Dividend per share
1000 10
900
800 8
15
700
Rupees Per Share
Rupees in millions
600 6
500
400 4
300
200 2
100
0 0
2005 2006 2007 2008 2009 2010 2011 2012
Years
Value Addition and Distribution
15% 11%
6% 12%
2% 8%
25%
2012 2011 11%
Rs. 3,883 Rs. 5,290

0.5%
million million
51% 0.2% 57%
Rupees in million
2012 2011
Government as taxes 1,999 3,027

Employees as remuneration 583 601
Shareholders as dividends 240 600
Retained within the business 86 430
Financial charges 969 607
Society as donation 6 25
16
Application of Gross Revenue

Dividend and retention 2%
Financial charges 5%
0.03% Society as donation
Trade ad Commission 2%
Factory and other cost 5%
Manpower 3%
2012
Duties and taxes 11% Rs. 18,778
Material 72%
Product Wise Performance

Polyethylene pipes 6% 2% Others
Annual Report 2012

API line pipes 3%
2012
17
Rs. 16,802
million
(Net Revenues)
Precision steel tubes 39%
50% Galvanised steel pipes
Directors’ Profile
Mr. Zaffar A. Khan
Director Since:January 22, 2009
Mr. Zaffar A. Khan graduated as a mechanical engineer in He was previously employed with Pakistan Cables Limited as
1967 and soon thereafter joined Exxon Chemical which, Commercial Projects Manager and prior to that, as Project
following an employee-led buyout became Engro Chemical Engineer.
in Pakistan. He retired from the company in 2004 after serving
for 35 years, the last 6 of which were as President & CEO. He has served as Chairman of the Landhi Association of Trade
During the early years of his career, he served Exxon Chemical and Industry (LATI) and is currently serving as the Chairman
for 10 years in Hong Kong, Singapore and USA in the of the Amir Sultan Chinoy Foundation and a member of
petrochemicals business. He has done an Advanced Pakistan-India CEO’s Business Forum, the Institute of
Management Program from the University of Hawaii and has Industrial Engineers Pakistan and the Pakistan Engineering
attended short courses at INSEAD and the Harvard Business Council.
School.
Mr. Zaffar A. Khan has been a Director on a number of diverse Mr. Kamal A. Chinoy
boards both in the private and public sector. He has served as Director Since:February 06, 1984
$IBJSNBO &OHSP 7PQBL &OHSP 1PMZNFST 1BLJTUBO
Telecommunications Co. (PTCL), the Karachi Stock Exchange
and Pakistan International Airlines (PIA). He has also served as Mr. Kamal A. Chinoy is the C.E.O. of Pakistan Cables. He has a
President of the Overseas Chamber of Commerce and ‘B.Sc. Economics’ degree from The Wharton School, University
Industry (OICCI) and on several committees of the of Pennsylvania, USA. He is the Honorary Consul General of
Government of Pakistan in an advisory capacity. He has been the Republic of Cyprus. Mr. Kamal Chinoy is a member of the
conferred the Sitara-e-Imtiaz. Currently he is also serving on executive committee of the International Chamber of
the Boards of State Bank of Pakistan, Unilever Pakistan, Shell Commerce (ICC), Pakistan and also the President of the
Pakistan, Acumen Fund Pakistan and Pakistan Centre for Management Association of Pakistan.
Philanthropy.
He has served as the Chairman of the Aga Khan Foundation

(Pakistan), NGO Resource Centre and Aga Khan University
Foundation (Pakistan) and also as a Director of Pakistan
Mr. Riyaz T. Chinoy Centre of Philanthropy. He is a Director of Atlas Battery Ltd.,
Pakistan Security Printing Corp. (Pvt.) Ltd., NBP Fullerton Asset
Director Since:August 30, 2007
Management Ltd., International Industries Ltd. and a
Mr. Riyaz T. Chinoy took over as CEO on August 12, 2011 after member of Board of Governors of Army Burn Hall Institutes.
serving in the company since 1992 and growing through
various positions. A qualified engineer by profession with a
18 B.Sc in Industrial Engineering from Case Western Reserve
University, USA, he is also a certified ISO 9001 Lead Auditor
and a certified Director from the Pakistan Institute of
Corporate Governance (PICG). He has had extensive
experience of production operations, procurement and all
project and development activity at IIL.
Mr. Mustapha A. Chinoy Mr. Javaid Anwar

Director Since: February 23, 1998 Director Since: September 29, 2004
Mr. Mustapha A. Chinoy is a B.Sc in Economics from The Mr. Javaid Anwar has a Master’s degree in Chemical
Wharton School of Finance, University of Pennsylvania, USA Tech. from University of Punjab and extensive
with majors in Industrial Management and Marketing. Upon management experience in senior capacities with
return from USA, he took up the position of Marketing multinational companies in the oil & gas sector. He has
Manager at IIL. He is currently the CEO of Intermark (Pvt) Ltd. served as MD & CEO of BOC Pakistan Limited for 15
He is also on the Board of International Steels Ltd., Pakistan years. During his tenure, BOC won the top-25
Cables Ltd., Security Papers Ltd., Travel Solutions (Pvt) Ltd. and companies award of Karachi Stock Exchange for 13
Global E-Commerce Services (Pvt.) Ltd. years.
He has previously served on the Board of Union Bank Ltd. He was associated with Burshane Pakistan Limited and
until it was acquired by Standard Chartered Bank. He is the played a pioneering role in the development of the LPG
Honorary Consul General of Greece in Pakistan. industry in Pakistan. He is also the director of Atlas
Engineering and Cherat Cement Co. Ltd.
Mr. Fuad Azim Hashimi Mr. Azam Faruque

Director Since: June 22, 2005 Director Since: November 26, 2009
Mr. Fuad Azim Hashimi is a Fellow Member of the Institute of Mr. Azam Faruque is the CEO of Cherat Cement Co. Ltd.,
Chartered Accountants in England and Wales (ICAEW). He has a Ghulam Faruque Group (GFG) company. He
over 40 years of experience in public accounting and graduated in Electrical Engineering and Computer
diversified business and commercial ventures in banking, Science from Princeton University, USA, and also
sales & marketing, information technology and fund possesses an MBA (High Honors) from the University of
Annual Report 2012

management. Chicago Booth School of Business, USA. Apart from the
23 years he has spent in the cement industry and other
He was a partner with A.F. Ferguson & Co., a member firm of GFG businesses, he has served as a member on the
Price Waterhouse & Co. and thereafter served with Middle boards of State Bank of Pakistan, National Bank of
East Bank – Dubai, Bankers Equity Ltd., Gestetner Holdings Pakistan and Oil and Gas Development Corporation
PLC / Ricoh Company, Japan, Jaffer Group of Companies, Ltd (OGDCL).
Dawood Group and National Investment Trust Limited (NIT).
He has served as a non-executive director on the Boards of
Crescent Commercial Bank Ltd., Clariant Pakistan Ltd.,
He has also served as a member of the Board of
Governors of GIK Institute and was a member of the
19
National Refinery Ltd., Pakistan Security Printing Corporation National Commission of Science and Technology. He
and Pakistan Cables Ltd. and is currently on the Board of also served on the board of the Privatization
International Industries Ltd., where he is additionally Commission of the Government of Pakistan. Currently
Chairman of the Audit Committee. He is also a member of the he is also the director of Atlas Insurance Ltd., Faruque
2VBMJUZ "TTVSBODF #PBSE PG UIF *OTUJUVUF PG $IBSUFSFE (Pvt) Ltd. and Madian Hydro Power Ltd.
Accountants of Pakistan (ICAP) and of the Board of Governors
PG*OEVT7BMMFZ4DIPPMPG"SU"SDIJUFDUVSF.S)BTIJNJOPX
heads the Pakistan Institute of Corporate Governance (PICG)
and is a Director on its Board.
Mr. Tariq Ikram
Director Since: September 8, 2011
Mr. Tariq Ikram completed his Masters in English Literature in Presently he is also on the Boards of Habib
1967 from the then Government College Lahore. Metropolitan Bank and Tasha Enterprises Pvt. Ltd. He
Subsequently he qualified the CSS exam in 1969-70 but is also a visiting faculty and speaker at Pakistan
decided not to join government Service and opted for the Institute of Corporate Governance (PICG), Institute of
private sector in 1970 and joined Reckitt & Colman, presently Business Administration Karachi (IBA),Lahore
Reckitt Benckiser Pvt. Ltd., where he rose to the level of CEO University of Management Sciences (LUMS), Lahore
in 1983. Later, he was entrusted with more responsibility as National Management College and Institute of Public
Regional Head and progressed to becoming responsible for Policy, Government of Pakistan.
a wide territory from Pakistan to North Africa, covering 31
countries.
His vast experience also includes directorship on the boards

of Reckitt Benckiser, Reckitt and Colman Nigeria Pvt. Ltd., Mr. Abdul Samad Dawood
Robinsons Foods Pvt. Ltd. - Bangladesh, Atlantis Pvt. Ltd, Director Since: September 8, 2011
Karachi Port Trust (KPT), Karachi Electric Supply Corporation
(KESC) and Pakistan Petroleum Ltd. (PPL). He has also been Mr. Samad Dawood is the Chairman of Central
the Chairman of Reckitt & Colman Egypt Pvt. Ltd. and Insurance Company Limited and Chief Executive of
Chairman & CE of Expo Lahore Pvt. Ltd. Dawood Corporation. He also serves as director on
the Boards of Dawood Hercules Chemicals Limited,
He has also served in prestigious positions as the Federal Engro Corporation Ltd., DH Fertilizers, Dawood
Minister of State , President of the Overseas Chamber of Corporation, Sui Northern Gas Pipeline Company Ltd.
Commerce and Industry, Management Association of (SNGPL), Dawood Lawrencepur Ltd, Tenega Generasi
Pakistan (MAP) and ‘Marketing Association of Pakistan’, Ltd, Inbox Business Technologies, Sach International
Chairman of the then Export Promotion Bureau (EPB), Chief (Pvt.) Ltd. and WWF Pakistan.
Executive of Trade Development Authority of Pakistan

(TDAP), member of the “Economic Co-ordination Mr. Dawood is a graduate in Economics from the
Committee (ECC) of Pakistan and President of the Textile University College London, and a Certified Director of
Institute of Pakistan, a prestigious institute offering five Corporate Governance from the Pakistan Institute of
degree courses in textiles and apparel. Corporate Governance (PICG).
20
From the
Chairman’s Desk
Annual Report 2012
The financial year 2011-12 proved to be company's performance, the Company
challenging for IIL and the earnings of needs to vigorously pursue
the Company did not meet expecta- well-considered strategies to overcome
tions due to the difficult business difficulties to meet the expectations of
environment. Nevertheless, concerted its stakeholders. The Board of Directors’
efforts and new initiatives enabled the Report that follows fully describes the
Company to turn in much improved company's operations and key events
earnings in the second half versus the
break even earnings recorded in the
that impacted business performance in
2011-12.
21
first half of the fiscal year. Your Board is
mindful that, whereas the economic
and security environment of the
country has a significant impact on the
The Board and the management of your Company certain vacant positions and to strengthen the
underwent several changes in the period under management team. It is expected the new leadership
review. The Chairman of the Board, Mr. Kemal Shoaib, will pursue the strategic goals of the company with
and the CEO, Mr. Towfiq H. Chinoy, resigned from the vigor and bring about greater business and financial
Board to take up positions with the company's success. Going forward, the focus areas include fuller
majority-owned subsidiary, International Steels Ltd utilization of the installed manufacturing capacity,
(ISL). I was elected the new Chairman and Mr. Riyaz T. improving the product mix, fully leveraging the
Chinoy was appointed the CEO. At the time of his extensive dealer network, seeking new export
appointment, Mr. Riyaz Chinoy had 18 years of service markets, improving operational safety and continuous
at IIL. The vacancies caused by the resignation of Mr. upgrade of human resource capabilities. All through
Kemal Shoaib and Mr. Towfiq Chinoy were filled by Mr. these thrusts, the Board will aim to uphold highest
Tariq Ikram and Mr. Samad Dawood who joined the standards of corporate governance.
Board as independent directors.
In closing, I wish to acknowledge the contribution of
Mr. Tariq Ikram brings vast private sector and public Mr. Kemal Shoaib and Mr. Towfiq H. Chinoy in the
sector experience. He has been a member of several development of IIL. In particular, I wish to laud the
well-known corporate boards, led several major services of Mr. Towfiq H. Chinoy, who after 47 years of
business associations, served as Minister of State and leadership, retired this year, but continued to provide
Chairman of Export Promotion Bureau and later as critical strategic input into IIL’s operations. I also wish to
Chief Executive of Trade Development Authority of acknowledge the contribution and commitment of
Pakistan. my fellow directors and the employees of the
company for working as a cohesive unit in dealing
Mr. Samad Dawood is graduate from University with the challenges of a difficult year.
College London and is a certified director of corporate
governance from the Pakistan Institute of Corporate On behalf of the Board, I especially thank our
Governance. Mr. Dawood is serving on several shareholders, customers, suppliers, bankers and
well-known corporate boards of Pakistan. The addition business partners for their confidence and support.
of both these gentlemen has enriched the
deliberations of your Board. We look forward to a prosperous year ahead.
To strengthen the working of the Board, three

committees of the Board had been set up in prior
years; namely the Audit Committee, Human Resource

Committee and the Strategic Planning Committee.
However, as the year progressed, the Board decided to
dissolve the Strategic Planning Committee as all
directors desired to be engaged in the important task
of shaping the strategic direction of the company.
Early in the period under review and only a few weeks
22 after his appointment as CEO, Mr. Riyaz Chinoy was

put out of commission for a period of 4 months to the
serious disadvantage of the Company. However,
fortunately he returned safely and once again took
charge of his responsibilities as the CEO. During the Zaffar A. Khan
course of the year, the Company made several new Chairman
appointments in senior management positions to fill August 15, 2012
Board of Directors’ Report
GLOBAL MACROECONOMIC SCENARIO

We are pleased According to official IMF World Economic Outlook
to present the figures, the world economy is expected to grow at a

reduced rate of 3.5% in 2012 after registering a
growth rate of 3.9% in 2011. Economic activity is,
Company’s however, expected to pick up in 2013 on the back of

forecasted GDP growth rate of 4.1%.
performance Economic indicators suggest that the above trend

will be reflected in the economies of both
developed and emerging nations.
review as part of
World GDP Actual 2011 and Forecast
our 64th Annual 2012 & 2013
Advanced economies Emerging economies
6%
Report along with 4%
Annual Report 2012

audited financial 2%
statements for 0%
2011 2012
Source: IMF Economic outlook database, April 2012
GLOBAL STEEL SCENARIO
2013
the year ended The global steel industry has witnessed a marked
23
shift in geographical production and consumption
June 30, 2012. patterns during the past decade. Chinese

production of finished steel products, which
accounted for 20% of world production in 2001,
now stands at 45%. In effect, Asian nations, led by
China, have captured significant market share from
their European, American and Japanese
counterparts.
This shift in production patterns became more in July 2011. It is, however, expected that prices will
pronounced after the financial meltdown of 2008-09 recover in mid to late 2012 as a result of capacity
and the ensuing economic slump. OECD countries and closures around the world.
Euro Zone nations in particular have been the slowest
HRC Steel Benchmarker Price 2011-12
to recover from the crises as a result of fiscal austerity
USD per ton
measures and ballooning public and private debt
1000
levels.
800
With consumption patterns of finished steel products 600
(USD/T)
following a similar trajectory, the developing world 400
now acts as a key driver for sustaining growth in the
200
global steel industry.
0%
Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12
However, systemic risks remain and, in the short run at Source: Metal Bulletin
least, growth in China and other developing nations
will not be spared from any negative developments The World Steel Tube and Pipe Industry
emanating from the Euro Zone.
The steel tube and pipe industry remains an important
Steel consumption & production patterns part of the global steel industry, accounting for 10% of
2001 vs. 2011 the world’s steel consumption.
Producon Use
50% Pipes and
Tubes10%
2001
40%
30%
Long
20%
Flat Products 45%
10%
products
45%
0%
China NAFTA CIS Other EU-27 Other Other Japan
Europe Asia
Source: Metal Bulletin

50%
Producon Use Major pipe and tube consumers include the oil & gas,
automobile, construction and water & sewerage
2011
40%
transmission industries. Consequently, growth in
30%
demand for steel pipes and tubes is directly linked to
20% activity in the aforementioned industries.
10%
DOMESTIC ECONOMY
0%
China NAFTA CIS Other EU-27 Other Other Japan
Source: World Steel Association
Europe Asia Fiscal year 2011-12 saw GDP register a growth rate of
3.7 percent over a growth rate of 3.0 percent last year.
24 Current demand for finished steel products remains

relatively flat as a result of the Chinese central bank’s
Growth in Large Scale Manufacturing (LSM), however,
was marginally above the growth rate registered last
efforts to contain property price inflation throughout year and fell short of its target of 2 percent.
2011 along with growing fears about the fate of the
Euro Zone.
Hot Rolled Steel prices therefore remain at the lower

end of the spectrum after peaking at USD 730 per ton
Relative to FY 2010-11, the domestic economy as a terms of tonnage. To counter this, the company
whole thus showed remarkable resilience in the face of aggressively pursued exports and was successful in
the major structural problems that have become achieving record international sales volume.
increasingly apparent over the course of the past few
years. Chronic electricity and gas shortages, a low tax
to GDP ratio which necessitates heavy government
borrowing and dwindling foreign exchange reserves Domestic vs. International Sales Volume
are only a few of the major factors which have directly 2011 & 2012
and indirectly contributed to economic turmoil and
social unrest in the country. Until these issues are 36% 64%
addressed aggressively through a credible, long-term
strategy, economic growth will remain weak and
intermittent.
Corporate earnings on the other hand continue to

remain strong despite the challenging
2011
macroeconomic environment. This is an encouraging
sign, since it signals optimism on the part of local and
foreign investors with respect to the country’s
long-term prospects.
Market Share
43% 57%
Your Company continues to maintain its position as
the leading tube and pipe manufacturer in the
domestic market for GI Pipes and CR Tubes. In addition,
the management is confident that the Company’s
Plastics segment will make further inroads into the
relatively nascent domestic plastic pipe industry. 2012
COMPANY OPERATIONS
Operating Segments Domestic
Annual Report 2012

These financial statements have been prepared on the International
GI pipe sales in particular saw phenomenal growth on
basis of Steel and Plastic segments in the manner the back of international sales to developed regions.
consistent with the internal reporting structure. The The company remains focused on making further
management monitors the operating results of its inroads into this highly competitive geographical
business units separately for the purpose of making segment.
decisions regarding resource allocation and
performance assessment.
Steel Sales
Sales Volume (tons in ‘000’s) 25
2001-2012
As a result of the protracted slump in LSM, demand
120
from major pipe and tube consuming industries
100
remained weak throughout the year. The oil & gas and
(Tons in '000)
80
engineering industries registered lower growth
60
compared to the same period last year which had a
significant impact on domestic steel pipe sales in 40
20
-
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Consolidated sales volume was marginally higher previous year. Sale of HDPE duct and water pipes,
despite a challenging domestic environment whereas however, registered impressive volume growth of 82%
total sales turnover grew by 2.4% over the previous and 48% respectively over the previous year. These
year, reflective of a pragmatic pricing policy in face of numbers signal an aggressive trend in this segment,
adversity. which validates the company’s strategy of allocating
more resources towards further development of this
Domestic Sales business.
Domestic GI sales were lower by almost 12% due to
budgetary tightening by institutional clients which Gross Sales
resulted in the loss of associated sales. Your Company’s gross sales volume for the year was in
excess of 195,000 tons with turnover at Rs. 18.8 billion,
CR sales volume however recorded an increase of which was 2.4% higher than last year.
more than 5% in tonnage and, as the company
produced over 125,000 km of pipe during the year, PRODUCTION
justifying the recent additions to capacity.
Despite various production-related difficulties, the
Domestic CR Sales Volume (tons in ‘000’s) management rose to the challenge and, as a
2001-2012 consequence, your Company ended the year with
50
relatively higher stocks of finished goods compared to
40
the previous year. The Company is therefore geared to
(Tons in ‘000)
30 take advantage of any shortages that may occur in the

20
year ahead.
10
-
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Steel Product Mix, 2003-2012
GI CR API BLACK
100%
International Sales
The past year has seen international sales break all 80%
previous records with sales volume and turnover 60%
reaching unprecedented levels of approximately

40%
76,000 tons and Rs. 6.6 billion respectively. Volume
was 20% and gross turnover 28% greater than the 20%
previous year. 0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
In line with the strategy of expanding CR tube sales
International Sales Volume & Turnover (tons in ‘000’s) 2006-2012 volume, your Company commissioned two additional
CR Tube Mills this year which will cater to this rapidly
Volume (LHS) Sales Turnover (RHS) expanding segment of the finished steel products
80 7 market.The Company also commissioned an extruder
6 with the ability to manufacture HDPE pipe up to a

60
5 diameter of 630mm. This addition will diversify the
(Tons in ‘000)
PKR in Billions
4
40 plastic segments product line and keep it in sync with
3
latest market trends.
20 2
1
-
FINANCIAL REVIEW
2007 2008 2009 2009 2010 2011 2012 -
Contribution from your Company’s international sales The Company’s Results

to the national exchequer in the form of valuable The Company achieved Net Turnover of Rs. 16,802
26 foreign exchange earnings stands at USD 73 Million,
which is 12% higher than last year.
million, its highest ever, which was 6% higher than last
year, earning Gross Profit of Rs. 1,909 million, Profit
Before Tax of Rs. 391 million and Profit After Tax of Rs.
Polyethylene Sales 326 million.
On the whole, the company’s Polyethylene segment
remained under pressure throughout the financial
year. This had an adverse impact on the sale of MDPE
Gas pipe, volume of which fell 44% compared to the
Profit Before Tax for the year was lower than the
previous year. This was mainly due to higher Financial Cash Flow Strategy
Charges (including exchange losses on revaluation of
foreign currency denominated borrowings), a The Company’s cash flows management system
one-time Capital Gain of Rs. 706 million on divestment projects cash inflows and outflows on a regular basis
of shares of International Steels Limited (ISL), a as well as monitoring cash position on a daily basis.
subsidiary company, last year and lower Other Income Keeping in view the saving in financial cost owing to a
(by Rs. 88 million) earned on account of sale of gap between KIBOR and LIBOR based borrowing, the
electricity from ISL’s 18MW power house. Company manages the majority of its working capital
requirements through USD-LIBOR based borrowings
Cost of sales for the year at Rs. 14,893 million was 6% and the balance is arranged through Export Refinance
higher than last year primarily due to higher steel entitlements / Running Finance facilities. Part of
prices (by 27%) and increasing cost of electricity and long-term strategic investments and fixed assets are
gas (by 21%) consumed in manufacturing. maintained out of long term borrowings and the
balance through the company’s own resources.
Selling & Marketing Expenses of Rs.440 million were
5% higher than last year mainly due to increasing cost During the financial year 2011-12, the weighted
of freight & forwarding on account of hikes in average cost of borrowings, including exchange
petroleum prices. losses, was 12.11% per annum as against last year
average borrowing rate of 6.8%.
Administrative Expenses were restricted to Rs. 141
million, 26% lower than previous year, through Capital Structure
leveraging cost reduction opportunities and effective
cost control. The long term debt equity ratio of the Company on 30
June 2012 was 70:30 as against 67:33 as on 30 June
Other Charges also decreased by Rs. 151 million from 2011.
the previous year.
CORPORATE SUSTAINABILITY
Other Income showed a substantial decrease of Rs. 801
million mainly due to the absence of last year’s Energy Conservation
one-time gain on divestment of shares in a subsidiary Continuing its commitment to the efficient use of all
company (Rs. 706 million) and reduction in income available resources, IIL utilizes all its waste hot water to
from sale of electricity to KESC from ISL’s 18 MW power generate chilled water which in turn fulfills the
plant. factory’s entire water-cooling and air-conditioning
requirements. Furthermore, its recently commissioned
Financial Charges during the year increased by Rs. 362 Reverse Osmosis plant caters to all additional water
million (60%) primarily due to exchange losses of Rs. requirements at the factory premises.
Annual Report 2012

282 million on account of the depreciation of the Pak
Rupee, and increased level of borrowings on account Environmental Protection Measures
of delay in receiving sales tax and income tax refunds,
slower collection against trade receivables during the Being an environmentally-responsible Company, IIL is
first half of the year and cost of financing long-term dedicated to reducing the environmental impact of its
strategic investments in subsidiary and associate operations to sustainable levels, in line with acceptable
companies. Significant exchange losses were incurred standards.
on the monthly revaluation of borrowings
denominated in foreign currency in the October – 27
December 2011 and April – June 2012 quarters in line
with the sharp depreciation of the Pak Rupee during
those quarters.
Going forward, the Company has developed an

exchange rate risk mitigation methodology which is
designed to highlight and minimize exchange rate
exposure while still allowing it to leverage its natural
hedge.
It therefore continue to neutralize our emissions prior appraisals. Accident prevention amongst contractual
to discharge by using 100 feet high fume scrubbers. All employees is made a priority by incentivizing
effluent waste is treated at an Effluent Treatment Plant employees through the provision of quarterly safety
prior to discharge, whereas sludge generated from the performance related cash awards and penalties.
Effluent Treatment Plant is disposed off at designated
landfill sites for environmentally-friendly disposal. The Company has also incorporated HSE aspects into
its Human Resource policies which affirm that line
Your Company is certified for Environmental managers are the owners and insurers of safety
Management System Standard ISO14001 since 2001. procedures and practices and authorizes them to stop
The Company is also registered with the Ministry of activities if any unsafe conditions are observed at the
Environment under Self-Monitoring and Report Tool factory.
(SMART) programme.
During the year, 200 HSE related trainings were
During the year two surveillance external audits were imparted to over 2,000 employees. These included
conducted by the company’s official certification safe crane operations, hands safety, fire-fighting
registrar (M/S Lloyds) to assure compliance with ISO operations, industrial hazards, first aid & rescue,
9001, ISO 14001 and OHSAS 18001 global standards. defensive driving, electric safety & working at height.
No major non-conformities were observed during
these audits. Through practical implementation of ISO-14001 &
OHSAS-18001 HSE management system, the
In addition, IIL carried out testing of its effluents, Company was able to achieve a Lost Time Incident
emissions and vehicular emissions through third Frequency Rate (LTIFR) of 2.3 (with zero fatality) which
parties and registered laboratories for compliance with is only marginally higher than the global average of
National Environmental Quality Standards (NEQS); the 2.27.
results were verified at the time of the aforementioned
audits. Human Resource Management
Contribution to the National Exchequer IIL employs a dedicated and diverse workforce which
plays a key role in the continuing success of the
Your Company falls under the jurisdiction of the Large company. It takes pride in hiring, developing and
Taxpayers Unit (LTU) and contributed over Rs. 2.0 retaining the best talent through its transparent
billion towards the national exchequer in the form of succession-planning, career-building and
income tax, sales tax, duties and other taxes. compensation policies. The Company currently has a
workforce of more than 1,000 employees, 26% of
Corporate Social Responsibility and Community which are in the management cadre. The Company
Welfare Schemes has also recently introduced a variable pay plan for its
staff.
IIL continues to bear all operating expenses for two
The Citizens Foundation (TCF) primary schools in The Company inducts apprentices through the
Landhi. The Company also continues to fund the Apprenticeship Training Program of the Government
mosque outside its factory in Landhi as it pays out of Sindh, whereas graduates from IBA, NUST & NED
2.5% of its Profit after Tax for CSR activities. Universities are regularly inducted under internship
programs. Given that the average age of the workforce
Health Safety & Environment is 36 years, the company ensures that employees are
regularly trained and well looked after to secure their
IIL remains committed to its efforts to design and loyalty and performance.
implement HSE policies which place emphasis on
28 prevention rather than treatment. Furthermore,
management systems and processes are
systematically evaluated to ensure benchmarking and
alignment with industry best-practices. Systems are
checked and verified through internal and external
audits carried out on a bi-annual basis.
Relevant management staff is incentivized to achieve
compliance through the allocation of HSE related
criteria to their respective annual performance
Industrial Relations inculcated effective and optimal decision making.
A major concern with respect to the company’s labour BUSINESS RISKS AND CONCERNS
force is to maintain industrial peace in order to ensure
operational continuity. Despite the volatile work Steel and zinc are the two primary raw materials
environment in Karachi, the Company was successful consumed in the company’s manufacturing process.
in preserving and improving upon its relations with In the absence of a reliable domestic supplier, IIL
the unionized workforce. This has been made possible sources all its raw material from international markets
through various initiatives including the Adult Literacy and is therefore sensitive to changes in the
Program and Long Service Awards. international price of steel coils and zinc as well as
exchange rate fluctuation. The key to remain profitable
Gratuity and Provident Funds in the face of volatile raw material prices is effective
inventory management and sales forecasting systems.
The Company maintains plans that provide retirement
benefits to its employees. These include a Cost control, well-managed operations and adequate
non-contributory gratuity scheme for all employees capital expenditure, in line with market trends, will
and a contributory provident fund for all employees therefore act as key strategic drivers given the current
except unionized staff. Both plans are funded schemes uncertainty in international financial markets.
recognized by tax authorities.
The Company has a sizeable investment in its
The value of the recognized provident fund at year end subsidiary (ISL), which is in the business of processing
was Rs. 137.4 million.The value of the approved flat steel products. Any diminution in the fair value of
gratuity scheme at year end was Rs. 168.7 million. the investment will have negative repercussions for IIL.
On the positive side, IIL stands to benefit from an
Employment of Special Persons appreciation in price of ISL shares and dividend
payments by the subsidiary.
A very small subset of the workforce comprises of
special persons due to operational challenges inherent FUTURE OUTLOOK
in the steel industry.
Company Operations
Business Ethics and Anti-corruption Measures Going forward, IIL intends to focus sharply on fuller
utilization of installed manufacturing capacity,
IIL remains an active member of and signatory to the improving product mix, fully leveraging its extensive
United Nations Global Compact and is thereby dealer network, seeking new export markets,
committed to adhere to the principles of human improving operational safety and continuously
rights, labour standards and environmental upgrading human resource capabilities. All through
protection. For the company as a whole, corporate these thrusts, the Company will aim to uphold the
Annual Report 2012

success hinges upon strong and universal ethical and highest standards of corporate governance and
moral standards, professionalism and the fulfillment of protect its reputation of integrity. The Company has
fundamental duties towards current and prospective prepared an aggressive budget for 2012-13, backed by
clients in order to gain durable trust and respect. robust business planning, and is confident of
delivering substantially improved profitability and
The Company has independent and established value to its stakeholders.
internal audit & controls function, outsourced to Ernst
& Young Ford Rhodes Sidat Hyder & Co. The firm
assesses the internal control system on a regular basis 29
and presents its review to the Board Audit Committee.
INFORMATION SYSTEMS AND RE-ENGINEERING
The introduction and implementation of Oracle ERP

Business Suite has brought considerable
improvements in the areas of functional integration,
internal controls, process efficiencies and adoption of
best practices. This facilitates the generation of real
time information for the management and has thus
Investments Zakaullah Khan who, after having built the IIL brand
Your Company continues to maintain a significant name, continues to guide our sales philosophy.
ownership interest in ISL, following the divestment of
part of its shareholding in the newly formed company, Our CBA continued to cooperate with the
as part of an IPO last year. The management believes management during our recent two-year negotiated
that this investment will create strong backward settlement, by responding to the Company’s strategy
linkages, resulting in a diversified and low cost supplier of producing high volumes at low margins and also by
base for IIL in the long-run. Furthermore, IIL shall agreeing to include a variable component as part of
benefit from economies of scale in sourcing raw their remuneration that is dependent upon output.
material in conjunction with ISL and share in the
company’s profitability in the years to come. I would also like to extend our thanks to the
management team, which went the extra mile to
Given that the group has been in the steel business for support me in this very difficult year. I deeply
more than 46 years, ISL enjoys the support of a vast appreciate the extra effort that was put in the second
nationwide dealer network, existing linkages to half of the year, which has helped the Company to turn
regional export markets and a credible market around and achieve a profitable year.
reputation.
The management is pleased to report, that in its first

full year of operations, ISL has managed to post sales
volume in excess of 162,000 tons, net sales of more Riyaz Chinoy
than PKR 13 billion and an operating profit margin of Chief Executive Officer
7%. These results sufficiently justify the continuity of
this investment, especially in the face of sluggish Karachi
growth in domestic large-scale manufacturing and Dated: 15th August 2012
weak economic growth.
Your Company holds an 8.5% ownership interest in

Pakistan Cables Limited (PCL), an associated company.
PCL is in the business of manufacturing copper rods,
wires and cables. In addition to being the country’s
oldest and most recognized manufacturer of copper

cables and wiring, PCL is affiliated with General Cable
Limited, the biggest worldwide manufacturer of
copper cables and a Fortune-500 company.
ACKNOWLEDGEMENT
I would like to take this opportunity to thank Mr.

Towfiq H. Chinoy, who has handed over a company
30 with an impeccable reputation to me Moreover, his
continued guidance and commercial accumen has
been a great asset to me during the year.
I would also especially like to record my thanks to Mr.

Our Success Story

The company through the years:
1948 Established as Sultan Chinoy & Company.

1949 Incorporated as International Industries Limited and sponsored Pak Chemicals Limited.
1953 Sponsored Pakistan Cables Limited in a joint venture with BICC UK.
1965 Manufactured first high quality Electric Resistance Welded Steel Pipe.
1983 Launched Galvanized Pipe.
1984 Converted to a public limited company and quoted on Karachi Stock Exchange.
1990 Set up the country's first Cold Rolling Mill in the private sector.
1992 Turnover crossed Rs.1 Billion.
1995 Entered the international market with export of Galvanized Pipe.
1997 Acquired ISO 9001:1994 certification.
1998 Commemorated 50 years and awarded international credit rating.
2000 Acquired ISO 9001:2000 (first company in Pakistan) and ISO 14001:1996 certifications.
Merit Trophy for Export of Non-Traditional Items (Galvanized Steel Pipes).
2001 Acquired API Q1 & 5L (2000) certification and completed phase 1 of a major expansion enhancing
the pipe and tube manufacturing range. Best Exports Performance Trophy for export of
Engineering Products-Mechanical. Recipient of Top-25 Companies of Pakistan at KSE.
2002 Best Exports Performance Trophy for export of Engineering Products-Mechanical. Recipient of
Top-25 Companies of Pakistan at KSE.
2003 Crossed 100,000 tons in production and sales. Best Exports Performance Trophy for export of
Annual Report 2012

Engineering Products Mechanical. Recipient of Top-25 Companies of Pakistan at KSE.
2004 Best Exports Performance Trophy for export of Engineering Products-Mechanical. Recipient of
Top-25 Companies of Pakistan at KSE.
2005 Completed phase 2 of major expansion with the addition of four tube mills and a slitter.
Crossed 150,000 tons in production and sales. Best Exports Performance Trophy for export of
2006
Engineering Products-Mechanical. Recipient of Top-25 Companies of Pakistan at KSE.
Commissioned 3 MW Co-generation Power Plant. Commenced Manufacture of Polyethylene Line
31
Pipe. Best Corporate Report Award - Second Position in Engineering Sector. Best Exports
Performance Trophy for export of Engineering Products-Mechanical.
Recipient of Top-25 Companies of Pakistan at KSE.
2007 Added 1 MW to the existing 3 MW Co-generation Power Plant. Commissioned the fourth
Galvanizing Plant. Addition of 3 tube mills and a Plastic extruder. Acquired OHSAS 18001:1999
Certification. Received Best Exports Performance Trophy for export of Engineering
Products-Mechanical. Recipient of Top-25 Companies of Pakistan at KSE.
2008 Commenced project to produce Cold Rolled & Galvanized Steel Flat Products. Commissioned 19.2
MW gas fired power plant for the new project. Turnover crossed Rs. 13 billion. Received Annual
Environmental Excellence Award.
2009 Best Export Performance Award – Engineering Products-Mechanical. Annual Environmental
Excellence Award. CSR National Excellence Award.
2010 Received Best Export Performance Award – Engineering Products-Mechanical, Annual
Environmental Excellence Award 2010 by NFEH, Re-Certification of Quality Management System
–ISO 9001:2008, Re-Certification of Environment Management System-ISO 14001:2001,
Re-Certification of OHSAS – ISO 18001:2007, Turnover crossed Rs. 15 billion.
2011 Hive-down of Steel Unit as ISL with 25% Foreign Direct Investment, Gross sales crossed 200,000
tons, Turnover crossed Rs. 18 billion, Talent Triangle Award by Sidat Hyder, Good HR Practices
Award by Sidat Hyder, Annual Environment Excellence Award 2011 by NFEH.
2012 Best Export Performance Award 2010-11 ( Mechanical Engineering Products), Top 25 Companies
Award 9th Position (Karachi Stock Exchange), Best Corporate Report Award 2010 (5th Position),
Certification of recognition from Pakistan Centre of Philanthropy, CE certification of Cold Rolled
Tubes and Galvanized Iron Pipes, Addition of 2 tube mills and 1 Plastic extruder, Turnover crossed
Rs. 18 billion.
International Certifications
IIL has the following Seven International Certifications:
Standard Description Certified by Certified since License #

ISO 9001 Quality Management System Lloyds Register 1997 MEA 4105044
Quality
ISO 14001 Environment Management System 2000 MEA 4205044
Assurance
OHSAS 18001 Occupational Health & Safety
2007 MEA 4306044
Management System
API Manufacturing of Steel Line Pipe
Specification American 2000 5L-0391
Q1 ® & 5L Petroleum
Institute
32 API
Specification
Q1 ® & 15LE
Manufacturing of Polyethylene
Line Pipe 2006 15LE-0014
CE Mark for CE Mark for Hot Dip Galvanized ERW

October 2011 CNC/EEC/4112/11
GI Pipe Carbon Steel Pipes
CNC Services
(Germany)
CE Mark for CE Mark for ERW Tubes from Cold Rolled
Carbon Steel October 2011 CNC/EEC/4113/11
CR Tube
Organization Structure
Board of Directors
Board Audit Committee
Board Human Resource Committee
------------------------------------------------------------
Managing Director /
Chief Executive Officer
Management Committee
------------------------------------------------------------
Executive Committee
------------------------------------------------------------
Finance & IT Plant Operations
Annual Report 2012

Human Resource Quality
Management Assurance
Legal & Corporate Sales & Marketing

Secretariat
Quality, Health, Safety,

33
Supply Chain Environment & Internal
Audit
Corporate Governance
The main philosophy of business followed by the sponsors Rhodes Sidat Hyder as internal auditors for the last five
of International Industries Ltd. for the last 64 years has been years.
to create value for all stakeholders through fair and sound f) There are no significant doubts upon the company’s
business practices. This philosophy is translated into policies ability to continue as a going concern.
approved by the Board implemented throughout the g) There is no material departure from the best practices
company to enhance the economic and social values of all of corporate governance as per regulations.
stakeholders of the company. The management believes in
best practices in corporate governance by adopting The Board of Directors
transparency and disclosure as a policy.
The Board of Directors consists of qualified individuals
Compliance Statement possessing knowledge, experience and skills in various
professions, with the leadership and vision to provide
The Board of Directors has complied with the Code of oversight to the company. The Board is headed by an
Corporate Governance, the listing requirements of the Independent Chairman and out of 10 directors, 5 are
Karachi, Lahore and Islamabad Stock Exchanges and the independent directors, including the Chairman. To further
Financial Reporting framework of Securities & Exchange its role of providing oversight and strategic guidelines to the
Commission of Pakistan (SECP). company, the Board has constituted an Audit Committee
and a Human Resources & Remuneration Committee. The
The Directors confirm that that the following has been composition, role and responsibilities of the Committees are
complied: clearly defined in their Terms of References.
a) The financial statements have been prepared which Role and Responsibilities of the Chairman and Chief
fairly represent the state of affairs of the company, the Executive
result of its operations, cash flows and changes in
equity. The Chairman and the Chief Executive have separate and
b) Proper books of accounts of the company have been distinct roles. The Chairman has all the powers vested under
maintained. the Code of Corporate Governance and presides over Board
c) Appropriate accounting policies have been meetings. The Chief Executive performs his duties under the
consistently applied in preparation of financial powers vested by the law and the Board and recommends
statements and accounting estimates are based on and implements the business plans and is responsible for
reasonable and prudent business judgment. overall control and operation of the Company.
d) International Financial Reporting Standards (IFRS), as
applicable in Pakistan, have been followed in
34 preparation of financial statements and

departures therefrom have been adequately disclosed
any
and explained.
e) The system of internal control is sound in design and
has been affectively implemented and monitored. The
Company has engaged services of Ernst &Young Ford
Changes in the Board statements, Board of Directors’ Report, Auditors’ Report and
other statutory statements and information are being
Subsequent to resigning of Mr. Kemal Shoaib and Mr. Towfiq circulated for consideration and approval by the
H. Chinoy from the Board of Directors in August 2011, Mr. shareholders within 45 days from the close of the financial
Riyaz T. Chinoy took over as the CEO and Mr. Zaffar A. Khan year. Additionally all important disclosures, including the
was elected as the new Chairman of the Board of Directors. financial statement, were also made on the company
website to keep the stakeholders duly informed.
Mr. Tariq Ikram and Mr. Abdul Samad Dawood have joined
the Board to fill the two vacancies created by the departure The Board members actively participate in the meetings to
of Mr. Kemal Shoaib and Mr. Towfiq Chinoy. Both Mr. Kemal provide guidance concerning the company’s business
Shoaib and Mr. Towfiq Chinoy are associated with a activities, operational plans, reviewing corporate operations
subsidiary company, International Steels Ltd. [ISL] as the and formulating and reviewing all significant policies. The
Chairman of the Board and the Managing Director Board firmly adheres to the best ethical practices and fully
respectively. recognizes its responsibilities for protection and efficient
utilization of company assets for legitimate business
Recently Mr. Shahid Aziz Siddiqui has also resigned from the objectives and compliance with laws and regulations. The
Board, in compliance of condition of the Code of Corporate Chairman ensures that the discussions held during the
Governance pertaining to the maximum limit of seven board meetings and the consequent decisions arising are
directorships. The casual vacancy, so created, shall be duly duly recorded and circulated to all the directors within 14
filled. days. The CFO and the Company Secretary attended all the
meetings of the Board as required by the Code of Corporate
Best Corporate Practices Governance.
The Board of Directors provides an oversight to the Internal and External Audit:
management in the governance, management and control
of the organization as well as to provide strategic guidance The Company places a high value on transparency, both
Annual Report 2012

for sustainable business. All periodic financial statements internally and externally, in its corporate management. It
and other working papers for the consideration of the focuses consistently on the implementation of efficient
Board/ Committees are circulated to the directors well management practices for the purpose of achieving clear
before the meetings so as to give sufficient time to the and quantifiable commitments. To ensure transparency, the
directors to make decisions on an informed basis. This year company has assigned the internal audit function to Ernst &
the Board has held nine (9) meetings, agendas of which
were duly circulated prior to the meetings.
Young Ford Rhodes Sidat Hyder while the external Auditors
are KPMG Taseer Hadi, both of which are well known firms 35
for their expertise and independence.
The quarterly un-audited financial statements and the
half-yearly financial statements (reviewed by the Auditors)
were duly circulated within one month and two months
respectively along with the Directors’ Report. Annual
financial statements, including consolidated financial
Disclosure and Transparency: Chairman of the Committee is a Fellow Member of the
To bring an accurate understanding of the company’s Institutes of Chartered Accountants of Pakistan (ICAP) and
management policies and business activities to all its England & Wales (ICAEW) as well as the CEO of PICG. The
stakeholders, it strives to make full disclosure of all material Chief Executive Officer, the Chief Financial Officer, the
information to all stakeholders by various announcements External Auditors, the Internal Auditors and the Internal
on its website, to the Stock Exchanges and other sources Audit Coordinator attend the meeting on invitation. The
available to help the investors to make informed decisions. Audit Committee also separately meets the internal and
external auditors at least once in a year without the presence
It encourages full participation of the members in the of the management.
General Meetings by sending corporate results and
sufficient information following the prescribed time line so Meetings of the Audit Committee are held at least once
as to enable the shareholders to participate on an informed every quarter prior to approval of financial results of the
basis. While increasing management transparency, it aims to Company by the Board. The Company Secretary is the
strengthen its relationships of trust with shareholders and Secretary of the Board Audit Committee. The minutes of the
investors. meetings of the Audit Committee are provided to all
members, directors and the Chief Financial Officer. The
Pattern of Shareholding Internal Auditors attend the Audit Committee meetings
A statement on the pattern of shareholding along with a regularly and at least once a year meet the Audit Committee
pattern of shareholding of certain classes of shareholders, without the presence of the management, to point out
where disclosure is required under the reporting framework various risks, their intensity and suggestions for mitigating
and the statement of shares held by the directors and risks and improvement areas.The business risks identified
executives as on June 30, 2012 is placed on Page 140. are then referred to the respective departments and
corrective actions are then implemented.
Board Committees
The Board is assisted by two Committees, namely the Audit Terms of Reference of the Audit Committee
Committee and the Human Resources & Remuneration The Audit Committee is mainly responsible for reviewing the
Committee to support its decision-making in their financial statements, ensuring proper internal controls to
respective domains: align operations in accordance with the mission, vision and
business plans and monitoring compliance with all
Audit Committee applicable laws and regulations and accounting and
financial reporting standards. The salient features of terms of
t .S'VBE")BTIJNJ$IBJSNBO reference of the Audit Committee are as follows:
Non- Executive Director
t .S.VTUBQIB"$IJOPZ.FNCFS
36 t
Non- Executive Director
.S"[BN'BSVRVF.FNCFS
Independent Director
t .T/FFMPGBS)BNFFE 4FDSFUBSZ
Company Secretary
The Audit Committee comprises of three Non-executive
directors, out of which one is independent director. The
i) Recommending to the Board the appointment of xiii) Instituting special projects, value for money studies or
internal and external auditors. other investigations on any matter specified by the
ii) Consideration of questions regarding resignation or Board, in consultation with the Chief Executive and to
removal of external auditors, audit fees and provision consider remittance of any matter to the external
by the external auditors of any services to the auditors or to any other external body.
company in addition to the audit of financial xiv) Determination of compliance with relevant statutory
statements. requirements.
iii) Determination of appropriate measures to safeguard xv) Monitoring compliance with the best practices of
the company’s assets. corporate governance and identification of significant
iv) Review of preliminary announcements of results prior violations thereof.
to publication. xvi) Consideration of any other issue or matter as may be
v) Review of quarterly, half-yearly and annual financial assigned by the Board.
statements of the company, prior to their approval by
the Board, focusing on major judgmental areas, Human Resources & Remuneration Committee
significant adjustments resulting from the audit, any
changes in accounting policies and practices, t .S+BWBJE"OXBSo$IBJSNBO
compliance with applicable accounting standards and Independent Director
compliance with listing regulations and other t .S3JZB[5$IJOPZo.FNCFS
statutory and regulatory requirements. Chief Executive Officer
vi) Facilitating the external audit and discussion with t .S.VTUBQIB"$IJOPZ.FNCFS
external auditors on major observations arising from Non- Executive Director
audit and any matter that the auditors may wish to t .S,IBMJE+VOFKP4FDSFUBSZ
highlight (without the presence of the management, Head of Human Resources
where necessary).
vii) Review of the Management Letter issued by external The Human Resources & Remuneration Committee [HR&RC]
Annual Report 2012

auditors and the management’s response thereto. comprises of three members. The Chairman is an
viii) Ensuring coordination between the internal and independent director whereas the other two members are
external auditors of the company. the Chief Executive Officer and a non-executive director.
ix) Review of the scope and extent of internal audit and Meetings are conducted at least annually or at such other
ensuring that the internal audit function has adequate frequency as the Chairman may determine. Head of Human
x)
resources.
Consideration of major findings of internal
Resources is the Secretary of the HR&RC. The minutes of the
meetings of the HR&RC meetings are provided to all
37
investigations and the management’s response members and directors. The Committee held three (3)
thereto. meetings during the year.
xi) Ascertaining that the internal control system including
financial and operational controls, accounting system
and reporting structure are adequate and effective.
xii) Review of company’s statement on internal control
systems prior to endorsement by the Board.
Terms of Reference of Human Resources & Remuneration part of Committee meetings, if his / her compensation/
Committee performance is being discussed /evaluated.
The Committee defines the HR policy framework and makes 7. Charter of demands and negotiated settlements with
recommendations to the Board in the evaluation and CBA.
approval of employee benefit plans and succession 8. Compensation of the non-executives directors.
planning.
Board & Sub-Committee Meetings
The salient features of the Terms of Reference of HR&RC are Meetings of the Board of Directors and Audit Committee are
as follows: held according to an annual schedule circulated before each
1. Major HR Policy / frameworks including compensation fiscal year to ensure maximum director participation.
2. Overall organizational structure
3. Organization model and periodically seek assessment During the year nine (9) Board meetings were held, while
of the same five (5) Audit Committee meetings and three (3) meetings of
4. Succession planning for key executives, including the Human Resources & Remuneration Committee were held
CEO. during the year. Attendance by each director in the
5. Recruitment, remuneration and evaluation of the CEO meetings of the Board and its Sub-committees is as follows:
and his direct reports, including CFO, Chief Internal
Auditor and the Company Secretary.
6. The CEO, being a member of the HR&RC shall not be a
Human Resources &

Board Meeting Audit Committee Remuneration Committee
Board / Sub Committee
Total number of meetings held during the year/Attendance (2011-12)
9 5 3
.S,FNBM4IPBJC
.S5PXöR)$IJOPZ
Mr. Zaffar A. Khan 9 - -

Mr. Riyaz T. Chinoy 7 - 2
Mr. Kamal A. Chinoy 8 - -
Mr. Mustapha A. Chinoy 8 5 3
Mr. Javaid Anwar 9 - 3
Mr. Fuad Azim Hashimi 9 5 -
Mr. Azam Faruque 6 4 -
38 .S4IBIJE"[J[4JEEJRVJ
Mr. Tariq Ikram

8

-

-
Mr. Abdul Samad Dawood 5 - -
t.S,FNBM4IPBJCBOE.S5PXöR)$IJOPZSFTJHOFEJO"VHVTUUPKPJOUIF#PBSEPG*OUFSOBUJPOBM4UFFMT-UE BTVCTJEJBSZPG**-BOEDPOTFRVFOUMZ.S

Zaffar A. Khan was elected as the Chairman of the Board of Directors. Mr. Tariq Ikram and Mr. Samad Dawood were nominated as Directors to fill these
casual vacancies.
t.S4IBIJE"[J[4JEEJRVJIBTSFTJHOFEGSPNUIF#PBSEJO"VHVTUBOEUIFWBDBODZTIBMMCFöMMFETIPSUMZ
Engagement of Directors in
Other Companies/ Entities
DIRECTORS
Mr. Zaffar A. Khan International Industries Ltd.

Unilever Pakistan Ltd.
Shell Pakistan Ltd.
State Bank of Pakistan
Acumen Fund Pakistan
Pakistan Centre for Philanthropy
Mr. Riyaz T. Chinoy International Industries Ltd.

Amir Sultan Chinoy Foundation
Mr. Mustapha A. Chinoy International Industries Ltd.

Pakistan Cables Ltd.
Security Papers Ltd.
Intermark (Pvt) Ltd.
International Steels Ltd.
Travel Solutions (Pvt) Ltd.
Global e-Commerce Services (Pvt) Ltd.
Mr. Kamal A. Chinoy International Industries Ltd.
Annual Report 2012

International Steels Ltd.
Atlas Battery Ltd.
NBP Fullerton Assets Management Ltd.
Pakistan Security Printing Corp. (Pvt) Ltd.
Mr. Javaid Anwar International Industries Ltd.

Cherat Cement Company Ltd.
39
Atlas Engineering Ltd.
Mr. Fuad Azim Hashimi International Industries Ltd.

Pakistan Institute of Corporate Governance
Indus Valley School of Arts & Architecture
Quality Assurance Board- ICAP
Mr. Azam Faruque International Industries Ltd.
Atlas Insurance Ltd.
Cherat Cement Company Ltd.
Faruque (Pvt) Ltd.
Madian Hydro Power Ltd.
Mr. Tariq Ikram International Industries Ltd.

Habib Metropolitan Bank Ltd.
Tasha Enterprises (Pvt) Ltd.
Mr. Shahid Aziz Siddiqui* International Industries Ltd.

Alpha Insurance Company Ltd.
Fauji Fertilizer Company Ltd.
Orix Leasing Company Ltd.
Packages Ltd.
State Life Insurance Corp. of Pakistan
Sui Northern Gas Pipelines Ltd.
Sui Southern Gas Ltd.
Thatta Cement Co. Ltd.
Abdul Samad Dawood International Industries Ltd.

Central Insurance Company Ltd.
Dawood Corporation
Dawood Hercules Corporation Ltd.
DH Fertilizers Ltd.
Engro Corporation Ltd.
Engro Fertilizers Ltd.

Sui Northern Gas Pipeline Co. Ltd.
Dawood Lawrencepur Ltd.
Tenega Generasi Ltd.
Inbox Business Technologies (Pvt) Ltd.
Pebbles (Pvt) Ltd.
40 Sach International (Pvt) Ltd.

WWF Pakistan
Dawood Foundation
.S4IBIJE"[J[4JEEJRVJIBTTJODFSFTJHOFEBOEUIFDBTVBMWBDBODZTIBMMCFöMMFETIPSUMZ
Board Evaluation Criteria approved by the Board of Directors. MC meetings are

conducted on a monthly basis or more frequently as
The Board of Directors has formulated a policy to evaluate its circumstances dictate. The Committee reviews all
own performance, the salient features of which are as operational and financial aspects, advises improvements to
follows: operational policies / procedures and monitors
implementation of the same.
1. The Board Evaluation Methodology to be adopted as
self-evaluation of the Board as a whole through an Role of the Managnent Committee
agreed questionnaire.
2. The evaluation exercise to be carried out at least once The Committee is responsible for the following:
in three years.
3. The evaluation system to address areas of critical a) Routine operational matters arising out of day-to-day
importance and should include, but not be limited to, business.
the following: b) Review results of monthly operations, sales,
a) Appraising the basic organization of the Board of production, expenses and comparison of same with
Directors; the approved budgeted targets and analysis of
b) The effectiveness and efficiency of the operation observed variances.
of the Board and its committees; c) Review of raw material prices with special reference to
c) Assess the Board’s overall scope of international markets.
responsibilities; d) Review of selling prices in view of changing market
d) Evaluate the flow of information; and scenarios.
e) Validate the support and information provided e) Review and finalization of budget for presentation to
by management. and approval by the Board.
4. The Board would review the results and suggest f) Exploring new prospects for sustainable growth.
measures to improve the areas so identified for g) Review and set the objective for the organization in
improvement. compliance with the approved strategy.
h) Accident prevention.
The Management i) Set training needs.
j) Monitor Speak-up policy.
Management Committee
Annual Report 2012

The mission of the Management Committee [MC] is to
support the Chief Executive Officer to determine and
implement the business policies within the strategy
Designation Attendance
Management Committee members:
Mr. Riyaz T. Chinoy Chairman Chief Executive Officer 10/15

41
Mr. Sohail R. Bhojani/Mr. Asad A. Siddiqui Member Chief Financial Officer 15/15
Mr. Mohsin Safdar Member Head of Factory 15/15
.S,IBXBS#BSJ .FNCFS )FBEPG.BSLFUJOH4BMFT
Mr. Khalid Junejo/ Mr. Waseem Sufi Member Head of Human Resources 12/15
Ms. Neelofar Hameed Member Company Secretary 12/15
Mr. Riaz Moazzam Secretary Divisional Manager CR Oprations
.FNCFSTVCTFRVFOUMZBEEFEUPUIF.BOBHFNFOU$PNNJUUFFEVSJOHUIFZFBS
Executive Committee b) Review of Annual budget and recommending the
same to the MC.
c) Review the training needs / plans and implementation
The mission of the Executive Committee (EC) is to support
thereof.
the MC in implementing the business policies within the
d) Review of recruitment and organization resource
strategy approved by the Board of Directors. EC meetings requirements.
are conducted on a monthly basis or more frequently if e) Review and monitoring of accidents.
needed. f) Review and monitoring of raw material prices and
trends and recommend the need for any price review
Role of the Executive Committee g) Review of credit limits to customers.
h) Review and monitoring of product yield and
The Committee is responsible for the following: identification of means for improving the same.
a) Review results of monthly operations, sales, i) Review and monitoring of raw material,
production, expenses and comparison of same with work-in-process and finished goods inventory and
the approved budgeted targets and provide variance taking timely action on controlling the same.
reports to the MC.
Executive Committee Member Designation Attendance
1. Mr. Perwaiz Ibrahim Chairman G.M. Operations 12/12

2. Mr. Mazhar Qayyum Member G.M. Sales (S&IS) 9/12
3. Mr. Tariq Hafeez Member G.M. Sales (N) 10/12
.S.,BTIJG3BTPPM .FNCFS )FBEPG1&%JWJTJPO
5. Mr. Owais Ahmed Member Head of IT 10/12
6. Mr. Imran Siddiqui Member Head of Supply Chain 12/12
7. Mr. Riaz Moazzam Member Head of CR Operations 12/12

8. Mr. Samiuddin Khan Member Head of Industrial Relations 11/12
.S.BTILPPS"INFE .FNCFS 'JOBODJBM$POUSPMMFS
.S(IB[BOGBS"MJ4IBI 4FDSFUBSZ 4S.HS2VBMJUZ"TTVSBODF
.FNCFSTTVCTFRVFOUMZBEEFEUPUIF&YFDVUJWF$PNNJUUFFEVSJOHUIFZFBS
42
Report of Audit Committee

on adherence of Code of Corporate Governance
The Board Audit Committee has concluded its annual review accounting records have been maintained by the
of the conduct and operations of the company for company in accordance with the Companies
the year ended 30 June 2012 and reports that: Ordinance, 1984.
t 5IF öOBODJBM TUBUFNFOUT DPNQMZ XJUI UIF
t 5IF$PNQBOZIBTBEIFSFEJOGVMM XJUIPVUBOZNBUFSJBM requirements of the Fourth Schedule to the
departure, with both the mandatory and voluntary Companies Ordinance, 1984, and applicable
provisions of the listing regulations of the Karachi, International Accounting Standards and International
Lahore and Islamabad Stock Exchanges of Pakistan, Financial Reporting Standards notified by the SECP.
Code of Corporate Governance, Company’s Code of t "MMEJSFDUBOEJOEJSFDUUSBEJOHJOBOEIPMEJOHTPGUIF
Conduct and Values and the international best company’s shares by Directors and executives or their
practices of governance throughout the year. spouses were notified in writing to the Company
t $PNQMJBODFIBTCFFODPOöSNFEGSPNUIFNFNCFSTPG Secretary along with the price, number of shares, form
the Board, the Management and employees of the of share certificates and nature of transaction. All such
company. Equitable treatment of shareholders has holdings have been disclosed.
also been ensured.
t 5IF$PNQBOZIBTJTTVFEBi4UBUFNFOUPG$PNQMJBODF INTERNAL AUDIT FUNCTION
with the Code of Corporate Governance” which has t 5IF JOUFSOBM DPOUSPM GSBNFXPSL IBT CFFO FòFDUJWFMZ
also been reviewed and certified by the auditors of the implemented through outsourcing the internal audit
company. function to Ernst & Young Ford Rhodes Sidat Hyder,
t "QQSPQSJBUF BDDPVOUJOH QPMJDJFT IBWF CFFO Chartered Accountants, for the last 5 years. The
consistently applied. Applicable accounting standards Company’s system of internal control is sound in
were followed in preparation of the financial design and has been continually evaluated for
statements of the company on a going concern basis effectiveness and control.
for the financial year ended 30 June 2012, which t 5IF #PBSE "VEJU $PNNJUUFF IBT FOTVSFE UIF
Annual Report 2012

present fairly the state of affairs, results of operations, achievement of operational, compliance and financial
profits, cash flows and changes in equity of the reporting objectives, safeguarding of the assets of the
company for the year under review. company and the shareholders wealth through
t 5IF $IJFG &YFDVUJWF 0óDFS BOE UIF $IJFG 'JOBODJBM effective financial, operational and compliance
Officer have reviewed the financial statements of the controls and risk management at all levels within the
company and the Chairman and Board of Directors
Report. They acknowledge their responsibility for true t
company.
5IF *OUFSOBM "VEJUPST IBWF EJSFDU BDDFTT UP UIF
43
and fair presentation of the financial statements, Chairman of the Board Audit Committee.
accuracy of reporting, compliance with regulations
and applicable accounting standards and
establishment and maintenance of internal controls
and systems of the company.
t "DDPVOUJOH FTUJNBUFT BSF CBTFE PO SFBTPOBCMF BOE
prudent judgment. Proper, accurate and adequate
t $PPSEJOBUJPO CFUXFFO UIF &YUFSOBM BOE *OUFSOBM t 5IF "VEJU 'JSN IBT CFFO HJWFO B TBUJTGBDUPSZ SBUJOH
Auditors was facilitated to ensure efficiency and under the Quality Control Review Programme of the
contribution to the company’s objectives, including a Institute of Chartered Accountants of Pakistan (ICAP)
reliable financial reporting system and compliance and the firm is fully compliant with the International
with laws and regulations. Federation of Accountants (IFAC) Guidelines on Code
of Ethics, as adopted by ICAP. The auditors have
EXTERNAL AUDITORS indicated their willingness to continue as auditors.
t 5IF4UBUVUPSZ"VEJUPSTPGUIF$PNQBOZ ,1.(5BTFFS t #FJOH FMJHJCMF GPS SFBQQPJOUNFOU VOEFS UIF MJTUJOH
Hadi & Co., Chartered Accountants, have completed regulations, the Board Audit Committee recommends
their audit assignment of the Company’s financial their reappointment for the financial year ending 30
statements and the Statement of Compliance with the June 2013 on remuneration negotiated by the Chief
Code of Corporate Governance for the financial year Executive Officer.
ended 30 June 2012 and shall retire on the conclusion
of the 64th Annual General Meeting.
t 5IF #PBSE "VEJU $PNNJUUFF IBT SFWJFXFE BOE
discussed audit observations with the external
auditors. The final Management Letter is required to be
submitted within 45 days of the date of the Auditors’
Report on the financial statements under the listing
regulations and shall therefore accordingly be
discussed in the next Board Audit Committee meeting.
Fuad Azim Hashimi

Chairman
44 Karachi:
Dated: 15 August 2012
Statement of Compliance
with the Code of Corporate Governance
INTERNATIONAL INDUSTRIES LIMITED 2. The Directors have confirmed that none of them is
30 June 2012 serving as a director on more than seven listed
companies, including this company (excluding the
This statement is being presented to comply with the Code listed subsidiaries of listed holding companies where
of Corporate Governance (CCG) contained in Regulations of applicable).
3. All the resident directors of the Company are
listing regulations of the Karachi, Lahore and Islamabad
registered as taxpayers and none of them has
Stock Exchanges for the purpose of establishing a
defaulted in payment of any loan to a banking
framework of good governance, whereby a listed company
company, a DFI or an NBFI or, being a member of a
is managed in compliance with the best practices of
stock exchange, has been declared as a defaulter by
corporate governance.
that stock exchange.
4. The two casual vacancies occurring on the Board on
The Company has applied the principles contained in the August 11, 2012, due to retirement of the Chairman
CCG in the following manner: and Managing Director were filled up by the induction
of new directors immediately. The casual vacancy
1. The Company encourages representation of created by the resignation of Mr. Shahid A. Siddiqui
independent non-executive directors and directors shall be filled shortly.
representing minority interests on its Board of 5. The Company has prepared a Code of Conduct and
Directors. At present the Board constitutes the has ensured that appropriate steps have been taken to
following Directors: disseminate it throughout the company along with its
supporting policies and procedures.
Independent Directors
6. The Board has developed a vision/mission statement,
t.S;BòBS",IBO overall corporate strategy and significant policies of
Annual Report 2012

t.S+BWBJE"OXBS the company. A complete record of particulars of
t.S"[BN'BSVRVF significant policies along with the dates on which they
t.S5BSJR*LSBN were approved or amended has been maintained.
t.S"CEVM4BNBE%BXPPE
Executive Director
t.S3JZB[5$IJOPZ 45
Non-Executive Directors
t.S,BNBM"$IJOPZ
t.S.VTUBQIB"$IJOPZ
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7. All the powers of the Board have been duly exercised Governance due to security reasons. The Company
and decisions regarding material transactions, has applied for relaxation before Securities and
including appointment and determination of Exchange Commission of Pakistan for the above on
remuneration and terms and conditions of May 22, 2012. However, reply is yet to be received.
employment of the CEO, other executive and 12. The financial statements of the Company were duly
non-executive directors have been taken by the endorsed by CEO and CFO before approval of the
Board/shareholders. Board.
8. All the meetings of the Board were presided over by 13. The Directors, CEO and executives do not hold any
the Chairman who is an independent Non-Executive interest in the shares of the company other than that
Director. The Board met nine (9) times this year and disclosed in the pattern of shareholding.
normally at least once in every quarter. Written notices 14. The Board has formed an Audit Committee. It
of Board meetings, along with agenda and working comprises 3 members, out of which two are
papers, were circulated at least seven days before the non-executive directors, and one is independent
meetings. The minutes of the meetings were director.
appropriately recorded and circulated. 15. The meetings of the Audit Committee were held at
9. The Board arranged 2 orientation programs for its least once every quarter prior to approval of interim
directors, who joined in August 2011. The directors and final results of the company as required by the
have been provided with copies of Listing Regulations, CCG. The terms of reference of the Committee have
Memorandum and Articles of Association of the been formed and advised to the Committee for
Company and Code of Corporate Governance. Six (06) compliance.
directors have the required certificate of Directors 16. The Board has formed a Human Resources &
Training course from Pakistan Institute of Corporate Remuneration Committee. It comprises of 3 members,
Governance. of whom one is a non-executive director, one is an
10. The Board has approved the appointment of the CFO, executive director while the Chairman of the
the Company Secretary, including their remuneration Committee is an independent director.
and terms and conditions of employment. 17. The Board has outsourced the Internal Audit function
11. The Board of Directors’ Report for this year has been to Ernst & Young Ford Rhodes Sidat Hyder, Chartered
prepared in compliance with the requirements of the Accountants, who are considered suitably qualified
CCG and fully describes the salient matters requiring and experienced for the purpose and are conversant
disclosure. The Company has complied with all the with the policies and procedures of the company. The
corporate and financial reporting requirements of the Comapny has appointed a full time employee to act as
CCG except disclosing the information about coordinator between Internal Auditor and
46 name-wise details of directors and their spouse(s) and
minor children, and shareholders holding five percent
Managment of the Company. However, the Company
will appoint Head of Internal Audit shortly.
or more voting rights in the Company and trades in
the shares of the listed company, carried out by its
directors, executives and their spouses and minor
children as mentioned in the Code of Corporate
18. The Statutory Auditors of the Company have t 1PMJDZGPS4UBUFNFOUPG&UIJDTBOE#VTJOFTT1SBDUJDFT

confirmed that they have been given a satisfactory t 7JTJPO4UBUFNFOU
rating under the Quality Control Review Program of t .JTTJPO4UBUFNFOU2VBMJUZ &OWJSPONFOUBM )FBMUI
ICAP, that they or any of the partners of the firm, their Safety Policy
spouses and minor children do not hold shares of the t )VNBO3FTPVSDFT1PMJDJFT
company and that the firm and all its partners are in t 1PMJDZGPS"DRVJTJUJPO%JTQPTBMPG'JYFE"TTFUT
compliance with International Federation of t 1PMJDZGPS%POBUJPOTBOE$IBSJUBCMF$POUSJCVUJPOT
Accountants (IFAC) Guidelines on Code of Ethics as t 1PMJDZGPS4UPSFT4QBSFT
adopted by ICAP. t 1PMJDZGPS8SJUFPò#BE%FCUT "EWBODFT3FDFJWBCMFT
19. The Statutory Auditors or persons associated with t *OWFTUNFOU1PMJDZ
them have not been appointed to provide other t #VEHFUBSZ$POUSPM1PMJDZ
services except in accordance with the listing t %FMFHBUJPOPG'JOBODJBM1PXFST
regulations and the auditors have confirmed that they t #PSSPXJOH1PMJDZ
have observed IFAC guidelines in this regard. t 3FMBUFEQBSUZ5SBOTBDUJPOT5SBOTGFS1SJDJOH1PMJDZ
20. The closed period, prior to the announcement of t 1PMJDZGPS%FUFSNJOBUJPOPG5FSNTGPS$SFEJU%JTDPVOU
interim/final results, and business decisions which may to Customer
materially affect the market price of company’s t 1PMJDZGPS1SPDVSFNFOUPG(PPET4FSWJDFT
securities, was determined and intimated to Directors, t 3JTL.BOBHFNFOU1PMJDZ
employees and stock exchanges. t 1PMJDZGPS1SPöU"QQSPQSJBUJPO
21. Material/price sensitive information has been t 3PMFT 3FTQPOTJCJMJUJFT PG 5IF $IBJSNBO $IJFG
disseminated among all market participants at once Executive Officer
through stock exchanges. t 1PMJDZGPS-FWFMPG.BUFSJBMJUZ
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in the CCG have been complied with. t 1PMJDZPO$IJFG&YFDVUJWF0óDFS&WBMVBUJPO
23. The Company has documented the following policies t 1PMJDZGPS#PBSE&WBMVBUJPO
Annual Report 2012

and statements in compliance with the Code of
Corporate Governance:
47
FUAD AZIM HASHIMI RIYAZ T. CHINOY
Chairman Chief Executive Officer
Review Report
Review Report to the Members on Statement of Compliance

With Best Practices of Code of Corporate Governance
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance
prepared by the Board of Directors of International Industries Limited (“the Company”) to comply with the Listing Regulations
of Karachi, Lahore and Islamabad Stock Exchanges where the company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company.
Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of
Compliance reflects the status of the Company’s compliance with the provisions of the Code of Corporate Governance and
report if it does not. A review is limited primarily to inquiries of the Company personnel and review of various documents
prepared by the Company to comply with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal
control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider
whether the Board’s statement on internal control covers all risks and controls, or to form an opinion on the effectiveness of
such internal controls, the Company’s corporate governance procedures and risks.
Further, Listing Regulations of the Karachi, Lahore and Islamabad Stock Exchanges require the company to place before the
Board of Directors for their consideration and approval related party transactions distinguishing between transactions
carried out on terms equivalent to those that prevail in arm’s length transactions and transactions which are not executed at
arm’s length price recording proper justification for using such alternate pricing mechanism. Further, all such transactions
are also required to be separately placed before the audit committee. We are only required and have ensured compliance of
requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transac-
tions before the audit committee. We have not carried out any procedures to determine whether the related party transac-
tions were under taken at arm’s length price or not.
As more fully explained in paragraph 11 which describes the non-compliance in respect of requirements relating to Direc-
tors’ report for disclosure of pattern of shareholding held by certain persons respectively. The Company has applied to
Securities and Exchange Commission of Pakistan seeking relaxation from such compliance and currently awaiting for their
response in this regard.
48 Based on our review, except for the matter as explained in the above paragraph, nothing has come to our attention which
causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance, in all
material respects, with the best practices contained in the Code of Corporate Governance as applicable to the Company for
the year ended 30 June 2012.
Date: 15 Aug. 2012 KPMG Taseer Hadi & Co.

Karachi Chartered Accountants
Financial Statements
of the Company
50 Auditors’ Report to the Members
52 Balance Sheet
53 Profit & Loss Account
54 Statement of Comprehensive Income
Annual Report 2012

55 Cash Flow Statement
56 Statement of Changes in Equity
57 Notes to the Finanical Statements
49
Auditor’s Report To The Member
We have audited the annexed balance sheet of International Industries Limited (“the Company”) as at 30 June 2012
and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of
changes in equity together with the notes forming part thereof, for the year then ended and we state that we have
obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the
purposes of our audit.
It is the responsibility of the Company’s management to establish and maintain a system of internal control, and
prepare and present the above said statements in conformity with the approved accounting standards and the
requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free
of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the above said statements. An audit also includes assessing the accounting policies and significant
estimates made by management, as well as, evaluating the overall presentation of the above said statements. We
believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:
a) In our opinion, proper books of account have been kept by the Company as required by the Companies
Ordinance, 1984;
b) in our opinion:
50
i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in
conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are
further in accordance with accounting policies consistently applied;
ii) the expenditure incurred during the year was for the purpose of the Company’s business; and
iii) the business conducted, investments made and the expenditure incurred during the year were in accor-
dance with the objects of the Company;
c) in our opinion and to the best of our information and according to the explanations given to us, the balance
sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of
changes in equity together with the notes forming part thereof conform with approved accounting standards
as applicable in Pakistan and give the information required by the Companies Ordinance, 1984, in the manner
so required and respectively give a true and fair view of the state of the Company’s affairs as at 30 June 2012 and
of the profits, its cash flows and changes in equity for the year then ended; and
d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980, was deducted by the
Annual Report 2012

Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
51

Chartered Accountants
Karachi Moneeza Usman Butt
Notes to the Financial Statements
For the year ended 30 June 2012
34. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

Chief Executive Director Executives Total
2012 2011 2012 2011 2012 2011 2012 2011
------------------------- -------------------------------------------(Rupees in ‘000)---------------------------------------------------------------------

Managerial
remuneration 18,216 23,333 - 9,487 118,997 60,450 137,213 93,270
Retirement benefits 1,297 - - 2,080 8,393 12,649 9,690 14,729
Ex-gratia 40,104 - - - - 40,104
Rent, utilities, leave
encashment etc. 7,241 18,181 - 7,906 45,813 49,995 53,054 76,082
26,754 81,618 - 19,473 173,203 123,094 199,957 224,185
Number of persons 1 1 - 1 106 46 107 48
34.1 In addition to the above, the Chief Executive, Directors and certain Executives are provided with free use of
Company maintained vehicles in accordance with the Company’s policy.
34.2 Fee paid to non-executive directors is Rs. 4.421 million (2011: Rs. 1.990 million) on account of meetings attended
by the directors.
35. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
Financial risk management
The Board of Directors of the Company has overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Company has exposure to the following risks from its use of
financial instruments:

- Credit risk
- Liquidity risk
- Market risk

Risk management framework
The Board meets frequently throughout the year for developing and monitoring the Company’s risk management
policies.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company,
to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The
Company, through its training and management standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Audit Committee oversees how management monitors compliance with the Company’s risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks
faced by the Company.

The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular
International Industries limtied
and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit
Committee.
35.1 Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
without considering fair value of collateral or other credit instrument. It principally arises from long term deposits,
trade debtors, trade deposits, bank balances and other receivables comprising receivable from Karachi Electric
Supply Company.
80
Consolidated
Financial Statements
of the Company
90 Consolidated Key Operating Highlights
92 Consolidated Vertical Analysis
93 Consolidated Horizontal Analysis
94 Graphical Presentation
95 Consolidated Value addition and distribution
Annual Report 2012

96 Auditors’ Report to the Members
98 Consolidated Balance Sheet
99 Consolldated Profit & Loss Accounts

100 Consolldated Statement of Comprehensive Income
101 Consolldated Cash Flow Statement 89

102 Consolldated Statements of Changes in Equity
103 Notes to the Consolldated Financial Statements
Consolidated Key Operating
Highlights
FINANCIAL POSITION 2012 2011 2010 2009 2008 2007 2006 2005
Balance sheet
Property, plant and equipment 11,701 11,467 9,905 5,997 4,172 2,737 1,837 1,658
Other non current assets 27 41 18 24 15 9 9 10
Current assets 6,526 14,056 8,709 5,158 6,439 5,854 3,401 3,272
Investment in equity accounted investee 169 164 126
Total assets 28,423 25,728 18,758 11,179 10,626 8,600 5,247 4,940
Share capital 1,199 1,199 999 999 833 569 428 428
Reserves 2,483 2,627 2,324 1,661 1,565 1,257 1,043 741
Non-controlling interest 1,814 1,859 -
Total equity 5,496 5,685 3,324 2,660 2,398 1,827 1,471 1,169
Surplus on revaluation of fixed assets 1,358 1,362 1,367 1,379 1,391 515 529 543
Non current liabilities 4,504 4,838 5,359 2,302 1,416 1,251 436 473
Current liabilities 17,065 13,843 8,709 4,838 5,421 5,007 2,812 2,754
Total liabilities 21,569 18,680 14,067 7,140 6,837 6,258 3,248 3,228
Total equity & liabilities 28,423 25,728 18,758 11,179 10,626 8,600 5,247 4,940
OPERATING AND FINANCIAL TRENDS
Profit and Loss
Net turnover 28,801 15,992 13,472 12,319 12,068 9,700 7,674 7,102
Gross profit 3,158 2,162 2,222 1,167 1,787 1,423 1,241 869
EBITDA 3,067 1,897 1,850 1,234 1,580 1,334 1,082 753
Operating profit 2,435 1,441 1,703 723 1,362 1,062 903 619
Profit before taxation 274 580 1,359 469 904 807 726 503
Profit after taxation 226 316 1,026 375 705 613 534 373
Profit atributable to owners of the Holding Company 271 282 1,026 375 705 613 534 373
Profit atributable to Non-controling intrest (46) 34 - - - - - -
Cash dividend 240 600 400 225 201 213 214 160
Bonus share 0 - 200 - 242 188 141 224
Capital expenditure (addition during the year) 806 1,935 4,147 2,055 757 1,099 360 400
Cash Flows
Operting activities (1,312) (4,033) (3,490) 2,945 (597) (590) 1,072 144
Investing activities (785) 37 (4,222) (2,039) 727 (2,339) (303) (393)
Financial activities (268) (532) 2,916 737 141 574 (275) (67)
Cash & cash equivalents at the end of the year (13,987) (11,622) (7,094) (2,298) (3,941) (4,212) (1,858) (2,352)
KEY INDICATORS
Profitability Ratio
Gross profit ratio % 11.0 13.5 16.5 9.5 14.8 14.7 16.2 12.2
Net profit ratio % 0.8 2.0 7.6 3.0 5.8 6.3 7.0 5.3
EBITDA Margin to sales % 11.4 11.4 13.7 10.0 13.1 13.8 14.1 10.6
90 Operating Leverage
Return on Shareholders' Equity with
Surplus on revaluation of fixed assets
%
%
0.8
4.5
0.1
6.1
5.3
21.9
(10.5)
9.3
0.8
18.6
0.9
26.2
5.4
26.7
0.1
21.8
Return on Shareholders' Equity without
Surplus on revaluation of fixed assets % 6.1 8.3 30.9 14.1 29.4 33.6 36.3 31.9
Return on Capital Employed % 21.4 12.1 16.9 11.4 26.2 29.5 37.1 28.3
Return on total assets % 0.8 1.2 5.5 3.4 6.6 7.1 10.2 7.6
2012 2011 2010 2009 2008 2007 2006 2005

Liquidity Ratios
Current ratio (x) 0.97 1.02 1.00 1.07 1.19 1.17 1.21 1.19
Quick ratio / Acid test ratio (x) 0.23 0.40 0.30 0.61 0.34 0.51 0.49 0.25
Cash to Current liabilities (x) (0.24) (0.29) (0.40) 0.61 (0.11) (0.12) 0.38 0.05
Cash flow form operation (x) (14.0) (25.2) (25.9) 23.9 (5.0) (6.1) 14.0 2.0
Activity / Turnover Ratios

Inventory turnover Ratio times 2.0 1.6 1.8 5.0 2.2 2.5 3.2 2.4
Inventory turnover in days days 179 226 198 73 163 146 115 151
Debtor turnover Ratio times 16.9 10.0 9.9 13.1 9.8 12.1 14.6 15.8
Debtor turnover in days days 22 36 37 28 37 30 25 23
Creditor turnover Ratio times 12.3 11.8 13.8 10.0 9.8 15.9 15.9 23.0
Creditor turnover in days days 30 31 26 37 37 23 23 16
Total assets turnover Ratio times 1.0 0.6 0.7 1.1 1.1 1.1 1.5 1.4
Fixed assets turnover Ratio times 2.5 1.4 1.4 2.0 2.9 3.5 4.2 4.3
Operating cycle in days days 201 263 235 101 201 176 140 174
Capital employed turnover Ratio times 2.5 1.3 1.3 1.9 2.3 2.7 3.2 3.2
Investment / Market Ratios

Earnings per share - basic and diluted Rs. 2.3 2.4 8.4 3.8 7.1 7.4 9.4 8.7
Price earning ratio times 12.5 21.1 6.7 12.3 17.1 20.1 12.6 12.0
Dividend Yield ratio % 7.1 10.1 10.7 4.9 4.6 4.8 7.0 14.0
Dividend pay out ratio % 100.6 182.5 57.7 58.0 61.7 64.0 64.8 99.0
Dividend per share - Cash Rs. 2.00 5.00 4.00 2.25 2.50 3.75 5.00 3.75
Bonus shares Rs. - - 2.00 - 3.00 3.30 3.30 11.00
Dividend Cover times 1.1 0.5 2.1 1.7 2.8 2.0 1.9 2.3
Market value per share at the end of the year Rs. 28 50 56 46 121 148 118 105
Market value per share high during the year Rs. 52 71 72 57 173 168 177 380
Market value per share low during the year Rs. 26 44 46 44 107 98 88 99
Break-up value per share with Surplus on
Revaluation of fixed assets Rs. 42 43 47 40 46 41 47 40
Break-up value per share without Surplus on
Capital Structure Ratios
Financial leverage Ratio (x) 3.9 3.3 4.2 2.7 2.9 3.4 2.2 2.8
Weighted avg. : cost of debts (x) 9.2 5.8 2.6 9.1 8.0 7.9 6.3 3.7
Total Debt : Equity ratio (x) 80:20 77:23 75:25 64:36 64:36 73:27 62:38 65:35
Annual Report 2012

Interest cover times 1.1 1.5 6.6 1.4 3.0 3.2 5.0 5.9
Value Addition
Employees as remuneration Rs. in million 891 737 472 374 350 293 254 216
Government as taxes Rs. in million 5,091 4,459 2,900 2,110 1,940 1,775 1,526 1,376
Shareholders as dividends Rs. in million 240 600 600 225 443 401 355 385
Retained within the business Rs. in million 31 - 427 163 275 225 193 4
Financial charges to providers of finance Rs. in million 2,242 949 257 535 450 332 180 105
91
Consolidated Vertical Analysis
(Rupees in million)
2012 % 2011 % 2010 % 2009 % 2008 % 2007 %
OPERATING RESULTS
Sales - Net 28,801 100 15,992 100 13,472 100.0 12,319 100.0 12,068 100.0 9,700 100.0
Cost of sales 25,643 89.0 13,830 86.5 11,250 83.5 11,152 90.5 10,280 85.2 8,277 85.3
Gross profit 3,158 11.0 2,162 13.5 2,222 16.5 1,167 9.5 1,787 14.8 1,423 14.7
Other operating expenses 44 0.2 125 0.8 227 1.7 6 0.0 208 1.7 67 0.7
Share of profit in equity
accounted investee 10 0.0 2 0.0 5 0.0 - - - - - -
Other operating income 115 0.4 212 1.3 135 1.0 267 2.2 185 1.5 129 1.3
Profit before finance costs 2,516 8.7 1,529 9.6 1,616 12.0 1,001 8.1 1,354 11.2 1,139 11.7
Finance costs 2,242 7.8 949 5.9 257 1.9 535 4.3 450 3.7 332 3.4
Profit before taxation 274 1.0 580 3.6 1,359 10.1 466 3.8 904 7.5 807 8.3
Taxation 49 0.2 265 1.7 333 2.5 94 0.8 199 1.6 194 2.0
Net income 226 0.8 316 2.0 1,026 7.6 372 3.0 705 5.8 613 6.3
BALANCE SHEET
Investments 169 0.6 164 0.6 126 0.7 - - - - - -
Other non current assets 27 0.1 41 0.2 18 0.1 24 0.2 15 0.1 9 0.1
Current assets 16,526 58.1 14,056 54.6 8,709 46.4 5,168 46.2 6,439 60.6 5,854 68.1
Total assets 28,423 100 25,728 100 18,758 100 11,179 100 10,626 100 8,600 100
Shareholders' equity 5,496 19.3 5,685 22.1 3,323 17.7 2,660 23.8 2,398 22.6 1,827 21.2
Capital Reserves 1,358 4.8 1,362 5.3 1,367 7.3 1,379 12.3 1,391 13.1 515 6.0
Non current liabilities 4,504 15.8 4,838 18.8 5,359 28.6 2,302 20.6 1,416 13.3 1,251 14.5
Current portion of long term financing 960 3.4 501 1.9 600 3.2 408 3.6 421 4.0 213 2.5
Short term borrowings 14,012 49.3 11,897 46.2 7,116 37.9 3,533 31.6 3,969 37.4 4,216 49.0
Other current liabilities 2,093 7.4 1,445 5.6 992 5.3 896 8.0 1,032 9.7 579 6.7
Total equity and liabilities 28,423 100 25,728 100 18,758 100 11,179 100 10,626 100 8,600 100
CASH FLOWS
operating activities (1,312) 55.5 (4,033) 89.1 (3,490) 72.8 2,945 179.2 (597) (220.3) (590) 25.1
92 Net cash inflows/(outflows)
from investing activities (785) 33.2 37 (0.8) (4,222) 88.0 (2,039) (124.1) 727 268.3 (2,339) 99.4
Net cash (outflows)/inflows
from financing activities (268) 11.3 (532) 11.7 2,916 (60.8) 737 44.9 141 52.0 574 (24.4)
and cash equivalents (2,365) 100 (4,528) 100 (4,797) 100 1,643 100 271 100 (2,354) 100
Consolidated Horizontal Analysis

(Rupees in million)
2012 % 2011 % 2010 % 2009 % 2008 % 2007 %
OPERATING RESULTS
Sales - Net 28,801 80.1 15,992 18.7 13,472 9.4 12,319 2.1 12,068 24.4 9,700 26.4
Cost of sales 25,643 85.4 13,830 22.9 11,250 0.9 11,152 8.5 10,280 24.2 8,277 28.7
Gross profit 3,158 46.0 2,162 (2.7) 2,222 90.4 1,167 (34.7) 1,787 25.6 1,423 14.7
Other operating expenses 44 (64.6) 125 (45.0) 227 3683.3 6 (97.1) 208 210.4 67 100.0
Share of profit in equity
accounted investee 10 419.2 2 (59.0) 5 100.0 - - - - - -
Other operating income 115 (45.4) 212 56.7 135 (49.4) 267 44.3 185 43.4 129 4200.0
Profit before finance costs 2,516 64.6 1,529 (5.4) 1,616 61.4 1,001 (26.1) 1,354 18.9 1,139 25.8
Finance costs 2,242 136.3 949 269.2 257 (52.0) 535 18.9 450 35.5 332 84.4
Profit before taxation 274 (52.7) 580 (57.3) 1,359 191.5 466 (48.5) 904 12.1 807 11.2
Taxation 49 (81.6) 265 (20.5) 333 254.3 94 (52.8) 199 2.6 194 1.0
Net income 226 (28.5) 316 (69.2) 1,026 175.6 372 (47.2) 705 15.1 613 14.9
BALANCE SHEET
Investments 169 3.1 164 30.2 126 100.0 - - - - - -
Other non current assets 27 (33.3) 41 127.8 18 (25.0) 24 60.0 15 66.7 9 0.0
Current assets 16,526 17.6 14,056 61.4 8,709 68.5 5,168 (19.7) 6,439 10.0 5,854 72.1
Total assets 28,423 10.5 25,728 37.2 18,758 67.8 11,179 5.2 10,626 23.6 8,600 63.9
Shareholders' equity 5,496 (3.3) 5,685 71.1 3,323 24.9 2,660 10.9 2,398 31.3 1,827 24.2
Capital Reserves 1,358 (0.3) 1,362 (0.4) 1,367 (0.8) 1,379 (0.9) 1,391 170.1 515 (2.6)
Non current liabilities 4,504 (6.9) 4,838 (9.7) 5,359 132.8 2,302 62.6 1,416 13.1 1,251 186.9
Annual Report 2012

Current portion of long term financing 960 91.5 501 (16.5) 600 47.1 408 (3.1) 421 97.7 213 36.5
Short term borrowings 14,012 17.8 11,897 67.2 7,116 101.4 3,533 (11.0) 3,969 (5.8) 4,216 84.4
Other current liabilities 2,093 44.9 1,445 45.7 992 10.7 896 (13.1) 1,032 78.3 579 56.8
Total equity and liabilities 28,423 10.5 25,728 37.2 18,758 67.8 11,179 5.2 10,626 23.6 8,600 63.9
CASH FLOWS
operating activities (1,312) (67.5) (4,033) 15.6 (3,490) (218.5) 2,945 (593.3) (597) 1.2 (590) (155.0)
93
Net cash inflows/(outflows) from
investing activities (785) (2222.7) 37 (100.9) (4,222) 107.1 (2,039) (380.5) 727 (131.1) (2,339) 671.9
Net cash (outflows)/inflows from
financing activities (268) (49.6) (532) (118.2) 2,916 295.7 737 422.7 141 (75.4) 574 (308.7)
and cash equivalents (2,365) (47.8) (4,528) (5.6) (4,797) (392.0) 1,643 506.3 271 (111.5) (2,354) (575.6)
Consolidated Key Operating
Highlights
Sales Break up Net Profit and Government Revenues
Domestic Export Net Profit Govt. Rev
240,000 6000
220,000
200,000 5000
180,000
Metric Tons (000)
4000
160,000
Rupees in Million
140,000
3000
120,000
100,000
2000
80,000
60,000 1000
40,000
20,000 0
2005 2006 2007 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 2012
year year
Net Sales and Gross Profit Liquidity Ratio
Net Sales Gross Profit Current Ratio Quick Ratio
18,000 1.4
16,000
1.2
14,000
12,000 1.0
Rupees in Million
10,000 0.8
Ratios
8,000
0.6
6,000
0.4
4,000
0.2
2,000
0 0.0
2005 2006 2007 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 2012
year year
Debt Management Non Current Assets and Non Current Liabilities
Debt/Equity Interest Cover Debt to Assets L.T. Debt/Equity Non curent Assets Non curent Liabilities
7 140% 14000
94 6 120% 12000
5 100% 10000
Rupees in Million
4 80% 8000
3 60% 6000
2 40% 4000
1 20% 2000
0 0 0
2005 2006 2007 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 2012
year year
CONSOLIDATED VALUE ADDITION

AND DISTRIBUTION
0.07%
26%
2012
0.4% 2012
Rs.2012
8,501
8,501
Rs.million
3% million
11%
60%
Rupees In million Annual Report 2012

Government as taxes 5,091
Employees as remuneration 891
Shareholders as dividends 240 95

Retained within the business 31
Financial charges 2,242
Society as donation 6
Auditor’s Report To The Member
We have audited the annexed consolidated financial statements of
International Industries Limited (“the Holding Company”) and its subsidiary
company International Steels Limited (together referred as “the Group”)
comprising consolidated balance sheet as at 30 June 2012 and the
related consolidated profit and loss account, consolidated statement of
comprehensive income, consolidated cash flow statement and
consolidated statement of changes in equity together with the notes
forming part thereof, for the year then ended. We have also expressed
separate opinions on the financial statements of the Holding Company
and its subsidiary company.
These financial statements are the responsibility of the Holding Company’s
management. Our responsibility is to express an opinion on these financial

statements based on our audit.
96
Our audit was conducted in accordance with the International Standards

on Auditing and accordingly included such tests of accounting records and
such other auditing procedures as we considered necessary in the
circumstances.
In our opinion the consolidated financial statements present fairly the

financial position of the Holding Company and its subsidiary company as at
30 June 2012 and the results of their operations, changes in equity and
cash flows for the year then ended in accordance with approved
accounting standards as applicable in Pakistan.
Annual Report 2012
97

Chartered Accountants
Karachi Moneeza Usman Butt
Notes to the Consolidated Financial Statements
For the year ended 30 June 2012
34. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Chief Executive Director Executives Total

2012 2011 2012 2011 2012 2011 2012 2011
------------------------ -------------------------------------------(Rupees in ‘000)-----------------------------------------------------------------

Managerial
remuneration 35,958 23,333 - 12,059 215,465 107,872 251,423 143,264
Retirement benefits 1,297 - - 2,080 11,898 14,655 13,195 16,735
Ex-gratia - 40,104 - - - 40,104
Rent, utilities, leave
encashment etc. 16,112 18,181 - 9,192 85,961 68,161 102,073 95,534
53,367 81,618 - 23,331 313,324 190,688 366,691 295,637

Number of persons 2 1 - 2 138 67 140 70

34.1 In addition to the above, the Chief Executive, Directors and certain Executives are provided with free use of
Company maintained vehicles in accordance with the Company’s policy .

34.2 Fee paid to non-executive directors is Rs. 6.461 million (2011: Rs. 2.740 million).

35. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
Financial risk management

The Board of Directors of the Group have overall responsibility for the establishment and oversight of the
Group risk management framework. The Group has exposure to the following risks from its use of financial
instruments:

- Credit risk
- Liquidity risk
- Market risk

Risk management framework

The Board meets frequently throughout the year for developing and monitoring the Group’s risk management
policies. The Group’s risk management policies are established to identify and analyse the risks faced by
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Group’s activities. The Group, through its training and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all employees understand their roles and obligations.

The Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group.

The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular
Annual Report 2012
and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit
Committee.
129
Stakeholders Information
OWNERSHIP
On 30 June 2012 there were 3,074 members on the record of the Company’s ordinary shares.
Dividend Payment
The Board of Directors of the Company has recommended 20% final dividend for the year as per the Profit Appropriation
Policy. The proposal shall be placed before the shareholders of the Company in the Annual General Meeting for their
consideration and approval on 25th September 2012. The dividend warrants, if approved by the shareholders, shall be
dispatched to the shareholders listed in the Company's share register at the close of business on 14th September 2012 and
shall be subject to the Zakat and Tax deductions as per law.
Financial Calendar
RESULTS
Year ended 30 June 2011 Announced on 11-Aug-11

First quarter ended 30 September 2011 Announced on 28-Oct-11
Half year ended 31 December 2011 Announced on 1-Feb-12
Third quarter ended 31 March 2012 Announced on 27-Apr-12
Year Ended 30 June 2012 Announced on 15-Aug-12
DIVIDENDS
Interim – Cash (2011) Announced on 25-Jan-11

Entitlement date 16-Feb-11
Statutory limit upto which payable 17-Mar-11
Paid on 1-Mar-11
138 Final – Cash (2011) Announced on 11-Aug-11

Entitlement date 6-Sep-11
Statutory limit upto which payable 14-Oct-11
Paid on 10-Oct-11
ANNUAL REPORT ISSUED ON 03-Sep-12
64TH ANNUAL GENERAL MEETING ON 25-Sep-12

TENTATIVE DATES OF FINANCIAL RESULTS
Period To be
Announced on
1st Quarter 19-10-2012
2nd Quarter 01-02-2013
3rd Quarter 26-04-2013
Annual Accounts August 2013
Investor Relations Contact

Mr. M. Irfan Bhatti (Assistant Company Secretray)
Email: irfan.bhatti@iil.com.pk
UAN: +9221 111 019 019 Fax: +9221 568 0373
Enquiries concerning lost share certificates, dividend payments, changes of address, verification of transfer deeds and
share transfers should be directed to the Shares Registrar at the following address:
Central Depository Company of Pakistan Limited

CDC House, 99-B, Block "B", S.M.C.H.S,
Shahra-e-Faisal, Karachi
Phone: +9221-111-111-500 Fax: +9221-34326053
Email: info@cdcpak.com
Annual Report 2012
139
Pattern of Shareholding
As of June 30, 2012
No. of Having Shares

Shareholders Shares Held Percentage
From To
841 1 100 18,509 0.0154

538 101 500 149,753 0.1249
361 501 1,000 283,878 0.2368
750 1,001 5,000 1,823,036 1.5206
203 5,001 10,000 1,458,792 1.2167
88 10,001 15,000 1,087,737 0.9073
55 15,001 20,000 981,084 0.8183
31 20,001 25,000 700,333 0.5841
18 25,001 30,000 485,679 0.4051
32 30,001 40,000 1,114,251 0.9294
21 40,001 50,000 958,633 0.7996
36 50,001 75,000 2,170,032 1.8100
24 75,001 100,000 2,084,680 1.7388
13 100,001 125,000 1,450,115 1.2095
5 125,001 150,000 704,857 0.5879
4 155,001 170,000 651,096 0.5431
3 175,001 200,000 561,407 0.4683
8 200,001 300,000 2,042,317 1.7035
2 305,001 315,000 622,736 0.5194
3 415,001 440,000 1,292,904 1.0784
6 450,001 500,000 2,891,229 2.4115
5 540,001 600,000 2,839,987 2.3688
3 655,001 750,000 2,151,484 1.7945
2 805,001 820,000 1,624,651 1.3551
1 1,095,001 1,100,000 1,100,000 0.9175
1 1,160,001 1,165,000 1,161,990 0.9692
1 1,240,001 1,245,000 1,242,240 1.0361
1 1,345,001 1,350,000 1,350,000 1.1260
1 1,370,001 1,375,000 1,370,080 1.1428
1 1,435,001 1,440,000 1,438,567 1.1999
1 1,440,001 1,445,000 1,441,776 1.2026
2 1,445,001 1,450,000 2,891,749 2.4119
1 1,565,001 1,570,000 1,568,650 1.3084

1 2,080,001 2,085,000 2,083,529 1.7378
1 2,425,001 2,430,000 2,425,191 2.0228
1 2,910,001 2,915,000 2,912,706 2.4294
1 3,320,001 3,325,000 3,321,435 2.7703
1 3,570,001 3,575,000 3,571,354 2.9788
1 5,375,001 5,380,000 5,379,347 4.4868
1 5,540,001 5,545,000 5,542,017 4.6225
1 6,265,001 6,270,000 6,265,792 5.2262
1 6,645,001 6,650,000 6,649,473 5.5462
140 1
1
1
11,245,001
12,615,001
14,160,001
11,250,000
12,620,000
14,165,000
11,249,078
12,618,133
14,160,332
9.3826
10.5245
11.8108
3,074 119,892,619 100.0000

Categories of Shareholders
As of June 30, 2012
PARTICULARS NO. OF NO. OF PERCENTAGE

SHAREHOLDER SHARES HELD
Directors, CEO, Sponsors and Family Members 26 60,441,362 50.4129

Associated Companies 3 1,353,325 1.1288
Govt. Financial Institutions 6 13,752,133 11.4704
Banks, DFIs & NBFIs 8 12,047,399 10.0485
Insurance Companies 8 6,878,785 5.7375
Modarabas & Mutual Funds 5 1,901,864 1.5863
Foreign Companies 5 590,120 0.4922
Welfare Trusts / Provident Funds/Others 67 4,078,594 3.4019
General Public 2,946 18,849,037 15.7216
TOTAL 3,074 119,892,619 100.0000
Shareholder Composition
As of June 30, 2012
Annual Report 2012

100%
80% 50.41 50.41 54.90 55.98 56.41

60%
40% 15.72 15.28 12.29 12.24 11.85

10.25 10.20
20% 22.40
11.47
22.84
11.47
21.51
11.30 21.53 21.53
141
0%
2011 - 12 2010 - 11 2009 - 10 2008 - 09 2007 - 08
Sponsors / Directors Corporate Shareholders

Individuals Govt. Fin. Institutions
IIL Share Prices
TREND VS. VOLUME TRADED FY-2011-12
60.00 700,000
HIGH & CLOSING PRICE / SHARE
600,000
50.00
VOLUME TARDED
500,000
40.00
400,000
30.00
300,000
20.00
200,000
10.00 100,000
0.00 -
3/5/2012
10/5/2012
01/07/2011
19/07/2011
26/07/2011
02/08/2011
09/08/2011
16/08/2011
23/08/2011
05/09/2011
12/09/2011
19/09/2011
03/10/2011
10/10/2011
17/10/2011
25/10/2011
01/11/2011
11/11/2011
18/11/2011
25/11/2011
02/12/2011
13/12/2011
20/12/2011
27/12/2011
03/01/2012
10/01/2012
17/01/2012
24/01/2012
31/01/2012
07/02/2012
14/02/2012
21/02/2012
28/02/2012
06/03/2012
13/03/2012
20/03/2012
28/03/2012
04/04/2012
11/04/2012
18/04/2012
25/04/2012
17/05/2012
24/05/2012
31/05/2012
07/06/2012
14/06/2012
21/06/2012
28/06/2012
No. of Shares Max Closing
Key Shareholding And Shares Traded

As of June 30, 2012
Information on shareholding required under reporting framework is as follows:
No. of Shares Percentage
Directors, Spouses and Sponsors holding 5% or more 39,763,830 33.166

Executives 164,952 0.138
Associated Companies
Pakistan Cables Ltd. 576,000 0.480
Pakistan Cables Limited Employees Provident Fund 544,725 0.454
Trustees Pakistan Cables Limited Management Staff Pension Fund 232,600 0.194
Government Institutions
National Bank of Pakistan-Trustee Department NI(U)T Fund 12,618,133 10.525
State Life Insurance Corp. of Pakistan 656,019 0.547
National Investment Trust Limited 314,344 0.262
National Investment Trust Limited - Administration Fund 160,023 0.133
142 IDBP (ICP Unit) 3,194 0.003
Investment Corp. of Pakistan 420 0.000
Corporate member holding 5% or more

National Bank of Pakistan 6,265,792 5.2262
Shares Traded
By Directors, their spouses and executives 4,998,521
This report may be viewed on our website: www.iil.com.pk
Proxy Form
I / We
of
being a member of INTERNATIONAL INDUSTRIES LIMITED and holder of
ordinary shares as per Share Register Folio No. and / or CDC Participant I.D.
No. and Sub Account No.
hereby appoint of
or failing him
of
as my proxy to vote for me and on my behalf at the annual general meeting of the Company to be held on September 25, 2012 and at
any adjournment thereof.
Signed this day of 2012
WITNESS:
1 Signature
Name
Address Signature Revenue
Stamp Rs.5/-
NIC or
Passport No.
2 Signature
Name (Signature should agree with the
Address specimen signature registered with the
Company)
NIC or
Passport No.
Note: Proxies in order to be effective must be received by the Company not less than 48 hours before the meeting. A proxy
must a member of the Company.
CDC Shareholders and their proxies are each requested to attach an attested photocopy of their National Identity Card
or Passport with this proxy form before submission to the Company.

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In the name of Allah, Most Gracious, Most

Chief Executive Officer Mr. Riyaz T. Chinoy Chief Executive Officer

Chief Financial Officer: Mr. Sohail R. Bhojani

Company Secretary: Ms. Neelofar Hameed

External Auditors: KPMG Taseer Hadi & Co

Internal Auditors: Ernst &Young Ford Rhodes Sidat Hyder & Co

Bankers: Bank Al Habib Ltd

Legal Advisor: Mrs. Sana Shaikh Fikri

Registered Office: 101 Beaumont Plaza, 10 Beaumont Road, Karachi-75530

Annual Report 2012

Branch Office: Chinoy House, 6 Bank Square, Lahore-54000

Share Registrar: Central Depository Company of Pakistan Ltd.

Team work, continual improvement, prevention of pollution, waste reduction,

Annual Report 2012

06 or contributes funds to groups whose activities

Annual Report 2012

IIL, a top 25 KSE-listed company; was

Cold Rolled Steel Tube

(*QJQFTBSFJEFBMGPSUIFUSBOTNJTTJPOPGQPUBCMFXBUFS OBUVSBMHBT PJMBOEPUIFSøVJET

API Line Pipe

Scaffolding & Black Pipe

HDPE Water Pipe

HDPE Duct Pipe

Annual Report 2012

OPERATING AND FINANCIAL TRENDS

Profit and Loss

10 Surplus on revaluation of fixed assets

2012 2011 2010 2009 2008 2007 2006 2005

Financial Structure Ratios

Annual Report 2012

Investments 2,584 17.1 2,584 18.6 106 0.6 - - - - - -

Net cash inflows/(outflows)

12 from investing activities

Annual Report 2012

Domestic Export Gross Profit Net Profit

Net Sales Gross Profit Net Profit Govt. Rev

Liquidity Ratio .BSLFU7BMVF3BUJP

Debt Management Debt and Equity Ratio

Annual Report 2012

Cash Dividend Final Cash Dividend per share

Rs. 3,883 Rs. 5,290

51% 0.2% 57%

Government as taxes 1,999 3,027

Employees as remuneration 583 601

Shareholders as dividends 240 600

Retained within the business 86 430

Financial charges 969 607

Application of Gross Revenue

Factory and other cost 5%

Product Wise Performance

Annual Report 2012

He has served as the Chairman of the Aga Khan Foundation

Mr. Mustapha A. Chinoy Mr. Javaid Anwar

Mr. Fuad Azim Hashimi Mr. Azam Faruque

Annual Report 2012

His vast experience also includes directorship on the boards

Executive of Trade Development Authority of Pakistan

To strengthen the working of the Board, three

years; namely the Audit Committee, Human Resource

Early in the period under review and only a few weeks

22 after his appointment as CEO, Mr. Riyaz Chinoy was

Board of Directors’ Report

GLOBAL MACROECONOMIC SCENARIO

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