FINANCIAL ADVISORS & ARRANGERS TO THE ISSUE:

Faysal Bank Limited Arif Habib Limited

UNDERWRITTEN BY:

Faysal Bank LimitedArif Habib Securities Limited

SUBSCRIPTION DATES

From 22 October to 23 October, 2007(both days inclusive)

During Banking Hours

PROSPECTUSFor issue of 27,500,000 ordinary shares at par value of Rs. 10 per share to the general public

out of a total capital of Rs. 675 million divided into 67,500,000 Ordinary Shares of Rs. 10/- each.

ADVICE FOR INVESTORSINVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THECONTENTS OF THIS PROSPECTUS, ESPECIALLY THE RISK FACTORS GIVEN AT PARA 4,

BEFORE MAKING ANY INVESTMENT DECISION.

SUBMISSION OF FICTITIOUS AND MULTIPLE (MORE THAN ONE) APPLICATIONS IS PROHIBITEDAND SUCH APPLICATIONS’ MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE

SECURITIES AND EXCHANGE ORDINANCE, 1969.

nd rd

The date of publication of Prospectus 28 September, 2007th

Prospectus

Central Depositories Act, 1997

The Central Depository Company of Pakistan Limited

Central Depository System

Computerized National Identity Card

Securities and Exchange Commission of Pakistan

Dost Steels Limited

Capital Value Tax

Russia, China, Ukraine, India & Turkey

Government of Pakistan

Initial Public Offering

Income Tax Ordinance, 2001

Karachi Inter Bank Offered Rate

Million British Thermal Units

Polyester Cotton

Pakistan Standards Quality Control Authority

Systems, Applications and Products in Data Processing

Steel Bars are high strength deformed concrete reinforced round steel bars animportant component of reinforced concrete and reinforced masonry structures,commonly used in civil structures like columns, beams, walls, floors, and roof decks

Semi-finished steel form in the shape of square sections of low carbon steel that isused for “long” products hot rolling like steel bars, channels and other structures

The Karachi Stock Exchange

Letter of Credit

Lahore Electric Supply Corporation

Companies Ordinance, 1984

Sui Northern Gas Pipelines Limited

Withholding Tax

CDA

CDC

CDS

CNIC

Commission/ SECP

Company

CVT

Exporting Countries

GOP

IPO

ITO

KIBOR

MMBTU

PC

PSQCA

SAP

Steel Bars

Steel Billets

KSE/Stock Exchange

L/C

LESCO

Ordinance

SNGPL

WHT

GLOSSARY OF TECHNICAL TERMS

Prospectus

1. APPROVALS AND LISTING ON THE STOCK EXCHANGE............................................1

2. SHARE CAPITAL AND RELATED MATTERS............................................................3

3. UNDERWRITING, COMMISSIONS, BROKERAGE, AND OTHER EXPENSES.........................8

4. HISTORY AND PROSPECTS....................................................................................10

5. FINANCIAL INFORMATION......................................................................................18

6. MANAGEMENT AND RELATED MATTERS............................................................22

7. MISCELLANEOUS....................................................................................................26

8. APPLICATION AND TRANSFER INSTRUCTIONS..................................................29

9. SIGNATORIES TO THE PROSPECTUS...................................................................32

10. MEMORANDUM OF ASSOCIATION........................................................................33

11. APPLICATION FORM

TABLE OF CONTENTS

(a) A letter dated 5th July 2007 from the Auditors of the Company, Haroon Zakaria & Co., Chartered Accountants, consenting to the publication of their names in the Prospectus, which contains in Part 5 certain statements and reports issued by them as experts (which consent has not been withdrawn), as required under Section 57(5) of the Companies Ordinance, 1984.

(b) Copies of Material Contracts and Agreements mentioned in Part 7 of this Prospectus as required under Section 57(4) of the Ordinance.

(c) Written confirmations of the Auditors of the Company, Legal Advisor to this Issue, and Bankers to this Issue mentioned in this Prospectus consenting to act in their respective capacities, as required under Section 57(5) of the Ordinance.

(d) Consent of the Directors and Chief Executive of the Company who have consented to their respective appointments being made and their having been named or described as such Directors and Managing Director/Chief Executive in this Prospectus, as required under Section 57(3) of the Ordinance, read with sub-clause (1) of clause (4) of Section 1 of Part 1 of the Second Schedule to the Ordinance.

1. APPROVALS AND LISTING ON THE STOCK EXCHANGE

1.1. APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN

Approval of the Securities and Exchange Commission of Pakistan (the “Commission” or the“SECP”) as required under Section 57(1) of the Companies Ordinance, 1984 (the “Ordinance”)has been obtained by Dost Steels Limited (the “Company”) for the issue, circulation and publicationof this Prospectus.

It must be distinctly understood that in giving this approval, the SECP does not take anyresponsibility for the financial soundness of any scheme stated herein or for the correctnessof any of the statements made or opinions expressed with regard to them.

The Commission has not evaluated the quality of the Issue and its approval should not beconstrued as any commitment of the same. The public / investors should conduct theirown independent investigation and analysis regarding the quality of the Issue beforesubscribing.

1.2. CLEARANCE OF THE PROSPECTUS BY THE STOCK EXCHANGE

The Prospectus has been cleared by the Karachi Stock Exchange (Guarantee) Limited (“KSE”)in accordance with the requirements of their Listing Regulations. While clearing this Prospectus,the Karachi Stock Exchange neither guarantees the correctness of the contents of thisProspectus nor the v iabi li ty of Dost Steels Limited (the “Company”).

The Stock Exchange has not evaluated the quality of the issue and its clearance shouldnot be construed as any commitment to the same. The public / investors should conducttheir own independent investigation and analysis regarding the quality of the offer beforesubscribing.

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

The Company has filed with the Registrar, Companies Registration Office, Karachi, as requiredunder Section 57(3) and (4) of the Ordinance, a copy of this Prospectus signed by all the Directorsof the Company, together with the following documents attached hereto:

PART 1

1

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1.4. Listing on The Karachi Stock Exchange

An application has been made to the Stock Exchange for permission to deal in and forquotation of the shares of the Company.

In accordance with the “Regulation for Future Trading in Provisionally Listed Companies”of KSE the Company shall stand provisionally listed for trading and for quotation of its shareson the Karachi Stock Exchange from the date of publication of this Prospectus.

The Company undertakes that if for any reason the application for formal listing is notaccepted by the Stock Exchange, a notice to that effect will immediately be published in thepress, as thereafter to refund application money to the applicants in pursuance of thisProspectus, as required under the provisions of Section 72 of the Ordinance.

1.5. The Company has obtained following necessary permits, licenses, authorizations andapprovals of the governmental authorities and other relevant regulatory bodies which arerelevant to the issue of securities to the general public and other shareholders and operationsof the business of the Company.

I. Environmental Approval from the Environmental Protection Department, Government of Punjab dated 11th July, 2007.II. Clearance of Prospectus from the Karachi Stock Exchange (Guarantee) Ltd dated 12th March, 2007.III. Certificate of Incorporation from the Securities & Exchange Commission of Pakistan date 19th March, 2004.IV. Certificate on Conversion of Private Company into Public Company from Securities and Exchange Commission of Pakistan dated 05-June 2006.V. Sales Tax Registration Certificate from the Central Board of Revenue dated 20th April, 2007.VI. National Tax Number Certificate from the Central Board of Revenue dated 20th April 2007

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Prospectus

PART 2

2. SHARE CAPITAL AND RELATED MATTERS

2.1. SHARE CAPITAL

No. of Shares Amount (PKR)

AUTHORIZED

70,000,000 Ordinary Shares of Rs. 10/- each 700,000,000

ISSUED, SUBSCRIBED & PAID UP CAPITAL

Issued for Cash40,000,000 Ordinary Shares of Rs. 10/- each 700,000,00040,000,000 Total 400,000,000

7,150,961 Mr. Jamal Iftakhar 71,509,610 6,853,203 Mr. Zahid Iftakhar 68,532,030 5,544,688 Mr. Raees Iftakhar 55,446,880 7,416,043 Mrs. Najma Jamal 74,160,430 6,010,221 Mrs. Mona Zahid 60,102,210 3,424,484 Mrs. Naveeda Raees 34,244,840 3,600,000 Mr. Mustafa Jamal 36,000,000 100 Mr. Faisal Zahid 1,000 100 Mr. Bilal Jamal 1,000 100 Mr. Hamza Raees 1,000 100 Mr. Mohammad Serajul Haque 1,000

40,000,000 Total 400,000,000

27,500,000 Ordinary Shares of Rs. 10/- each 275,000,00067,500,000 GRAND TOTAL 675,000,000

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

Sponsors/ Directors

PRESENT ISSUENow offered for subscription to the General Public

Notes:(i) As per rule 3(I)(iv) of the Companies (Issue of Capital) Rules, 1996, the sponsors shall, at all times, retain at least twenty five per cent (25%) of the capital of the Company.(ii) As per Regulation No. 6(A)(7)(i) of the KSE, sponsors’ shareholding in excess of 25% shall not be saleable for a period of six months from the date of public subscription.

2.2. OPENING AND CLOSING OF SUBSCRIPTION LIST

The subscription list will Insh’Allah open at the commencement of banking hours on22-10-2007 and will close on 23-10- 2007 at the close of banking hours.

2.3. INVESTOR ELIGIBILITYEligible investors include Pakistani citizens resident in Pakistan, companies, body corporateor other legal entities incorporated or established in Pakistan (to the extent permitted bytheir constitutive documents and existing regulations as the case may be); Provident/pension/ gratuity funds/ trusts (subject to the terms of their Trust Deed and existing regulations)and branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

MINIMUM AMOUNT OF APPLICATION AND BASIS OF ALLOTTMENT OF SHARES

The basis and conditions of allotment to the general public shall be as follows:

The minimum amount of application for subscription of 500 ordinary shares is Rs. 5,000.

Fictitious and multiple applications (more than one application per applicant) are prohibited and such application money shall be liable to confiscation under Section 18-A of the Securities and Exchange Ordinance, 1969.

Application for shares below the total value of Rs.5,000 shall not be entertained.

Applications for shares must be made for 500 shares or in multiples of 500 shares only. Applications which are neither for 500 shares nor for multiples of 500 shares shall be rejected.

If the shares to be offered to the general public are sufficient to accommodate all applications, all applications shall be accommodated.

If this Issue is oversubscribed in terms of number of applications, the shares shall be allotted by conducting computer balloting in the presence of representatives of the KSE in the following manner:

2.4.

(a)

(b)

(c)

(d)

(e)

(f)

(i) If all applications for 500 shares can be accommodated, then all suchapplications shall be accommodated first. If all applications for 500 sharescannot be accommodated, then balloting will be held among the applicationsfor 500 shares only.

(ii) If all applications for 500 shares have been accommodated and shares are stillavailable for allotment, then all applications for 1,000 shares will beaccommodated. If all applications for 1,000 shares cannot be accommodated,then balloting will be conducted among applications for 1,000 shares only.

(iii) If all applications for 500 shares and 1,000 shares have been accommodatedand shares are still available for allotment, then all applications for 1,500shares will be accommodated. If all applications for 1,500 shares cannot beaccommodated, then balloting will be conducted among applications for 1,500shares only.

(iv) If all applications for 500 shares, 1,000 shares, and 1,500 shares have beenaccommodated and shares are still available for allotment, then all applicationsfor 2,000 shares will be accommodated. If all applications for 2,000 sharescannot be accommodated, then balloting will be conducted among applications for2,000 sharesonly.

(v) After the allotment in the above mentioned manner, the balance shares, if any,shall be allotted in the following manner:

1. If the remaining shares are sufficient to accommodate each applicationfor over 2,000 shares, then 2,000 shares shall be allotted to eachapplicant and the remaining shares shall be allotted on a prorata basis.

2. If the remaining shares are not sufficient to accommodate all remainingapplications for at least 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares to the successful applicants.

(g) If the Issue is oversubscribed in terms of amount only, then the allotment of shares shall be made on the following basis:

4

Prospectus

(i) First preference will be given to applicants who applied for 500 shares;

(ii) Next preference will be given to applicants who applied for 1,000 shares;

(iii) Next preference will be given to applicants who applied for 1,500 shares; andthen;

(iv) Next preference will be given to applicants who applied for 2,000 shares;

After allotment of the above, the balance shares, if any, shall be allotted on a proratabasis to the applicants who applied for more than 2,000 shares.

(a) Allocation of shares will be subject to scrutiny of the applications for subscription.

(b) Applications, which do not meet with the above requirements, or applications which areincomplete, will be rejected.

2.5. REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS

The Company shall take a decision within 10 days of the closure of the subscription list asto which applications have been accepted or are successful and refund the money in caseof unaccepted or unsuccessful applications within 10 days of the date of such decision, asrequired under Section 71 of the Ordinance.

As per sub-Section (2) of Section 71 of the Ordinance, if the refund as required under sub-Section (1) of Section 71 of the Ordinance is not made within the time specified therein,the Directors of the Company shall be jointly and severally liable to repay the money withsurcharge at the rate of 1.5%, for every month or part thereof from the expiration of the 15th

day and, in addition, to a fine not exceeding Rs. 5,000 and in the case of continuing offenceto a further fine not exceeding Rs. 100 per day after the said 15th day of which defaultcontinues. Provided that a Director shall not be liable if he proves that the default in makingthe refund was not due to misconduct or negligence on his part.

2.6. MINIMUM SUBSCRIPTION FOR ALLOTTMENTThe minimum subscription on which the Directors will proceed to allot shares is the fullamount of the present issue of Rs. 275 million (Rupees Two Hundred and Seventy FiveMillion) which has also been underwritten in full and in the opinion of the Directors, mustbe raised in order to provide the capital required by the Company.

2.7. ISSUE AND DISPATCH OF SHARE CERTIFICATES

The Company will dispatch physical share certificates to the successful applicants throughtheir Bankers to the Issue or by crediting the respective Central Depository System (“CDS”)accounts of the successful applicants within 30 days of the close of public subscription, asper Listing Regulations of the KSE.

Shares will be issued either in scripless form in the CDS or in the shape of physical scripson the basis of option exercised by the successful applicants. Shares in physical form shallbe dispatched to the Bankers to the Issue whereas scripless shares shall be credited throughbook entries in the respective accounts maintained with the Central Depository Companyof Pakistan Limited (“CDC”)

The applicants who opt for receipt of shares in scripless form in the CDS should fill in therelevant columns of the Application Form. In order to exercise the scripless option, theapplicant should have a CDS account at the time of subscription.

If the Company makes default in complying with the requirements of the Listing Regulationsof the Karachi Stock Exchange, it shall pay to the KSE a penalty of Rs. 500 per day or partthereof during which the default continues to the KSE. The Stock Exchanges may alsonotify the fact of such default and the name of the Company by notice and also by publicationin their Ready Board Quotation.

5

Prospectus

2.8. TRANSFER OF SHARES

2.8.1 Physical scripts

The Directors of the Company shall not refuse to transfer any fully paid shares unless thetransfer deed is for any reason defective or invalid under the provisions of Section 77 ofthe Ordinance, provided that the Company shall within 30 days from which the instrumentof transfer was lodged with it, notify the defect or invalidity to the transferee who shall, afterthe removal of such defect or invalidity be entitled to re-lodge the transfer deed with thecompany.

2.8.2 Transfer under book entry system

The shares maintained within the CDS in the book entry form shall be transferred inaccordance with the provisions of the Central Depositories Act, 1997 and the CDC Regulations.

2.9. SHARES ISSUED IN PRECEDING YEARS

The details of the shares issued by the Company in preceding years are as follows:

Other than the above mentioned shares, there has been no other issue of shares since itsincorporation. No shares have been issued or agreed to be issued for consideration otherthan cash.

2.10. PRINCIPAL PURPOSE OF THE PUBLIC ISSUE

The principal purpose of the public issue is to meet the cost of the project as detailed underthe para 4.4 of the prospectus. The Company has already arranged a bridge finance facilityagainst public issue of shares from Faysal Bank Limited to the extent of PKR 275 million,which will be repaid out of the proceeds of the public issue upto the amount availed by theCompany.

2.11. INTEREST OF SHAREHOLDERS

None of the holders of the issued shares of the Company have any special or other interestin the property or profits of the Company other than as holders of the ordinary shares inthe capital of the company.

2.12. DIVIDEND POLICY

The rights in respect of capital and dividends attached to each share are and will be thesame. The Company in general meeting may declare dividends but no dividends shallexceed the amount recommended by the Directors.

The Directors may from time to time pay to the members such interim dividends as appearto the Directors to be justified by the profits of the Company. No dividends shall be paidotherwise than out of the profits of the Company for the year or any other undistributedprofits. No unpaid dividend shall bear interest or mark-up against the Company. The dividendshall be paid within the period laid down in the Ordinance.

40,000,000 400,000,000

No. ofShares

Par Value(Rs.) Amount (Rs.) Consideration Date of Issue

332,499,9977,500,000

101010

30324,999,97075,000,000

CASHCASHCASH

21.10.200327.06.200628.06.2007

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Prospectus

2.13. ELIGIBILITY FOR DIVIDEND

The Company in this matter will follow the provisions of Section 92(2) of the Ordinance,which reads as under:

“The new shares issued by a company shall rank pari passu with the existing sharesof the class to which the new shares belong in all matters, including the right to suchbonus or right issue and dividend as may be declared by the Company subsequentto the issue of such new shares.”

2.14. DEDUCTION OF ZAKAT

Income distribution will be subject to the deduction of Zakat at source pursuant to theprovisions of the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

2.15. WITHHOLDING TAX ON DIVIDENDS

Profit distribution to the shareholders will be subject to withholding tax at source under section150 of the Income Tax Ordinance, 2001 at the rate of 10% as specified in part I, Division IIIof First Schedule to the said Ordinance. In terms of the provision of Section 8 of the saidOrdinance, said deduction at source, shall be deemed to be full and final liability in respectof such profits.

2.16. EXEMPTION FROM CAPITAL GAINS

Capital gains derived from the sale of listed securities are not liable to income tax pursuantto Clause (110) of Part 1 of the Second Schedule of the Income Tax Ordinance, 2001. Thisexemption is presently available up to the income year ending June 30, 2008.

2.17. DEFERRED TAXATION

Deferred tax is provided in full using the balance sheet liability method, on temporarydifferences arising between the tax base of assets and liabilities and their carrying amountsin the financial statements. The amount of deferred tax provided is based on the expectedmanner of realization or settlement of the carrying amount of assets and liabilities, using taxrates enacted or substantially enacted at the balance sheet date.

The carrying amount of all deferred tax assets are reviewed at each balance sheet date andreduced to the extent, if it is no longer probably that sufficient taxable profits will be availableto allow all or part of the deferred tax assets to be utilized.

The Company has made no provision for deferred taxation up till March 31, 2007.

2.18. CAPITAL VALUE TAX (“CVT”) & WITHHOLDING TAX (“WHT”) ON SALE/ PURCHASEOF SHARES

Pursuant to the provision of Section 233(A) of the Income Tax Ordinance, 2001, and CapitalValue Tax (Finance Act 1989), the following charges have been made effective from July 01,2006:

(a) 0.02% CVT will be charged on purchase of all shares, modaraba certificates, andinstruments of redeemable capital as defined in the Ordinance.

(b) 0.01% WHT will be charged on sale of all shares, modaraba certificates, andinstruments of redeemable capital as defined in the Ordinance.

7

Prospectus

PART 3

3. UNDERWRITING, COMMISSIONS, BROKERAGE, AND OTHER EXPENSES

3.1. UNDERWRITING

The present public issue of 27,500,000 ordinary shares of a face value of Rs. 10 each,offered at par, has been fully underwritten as under:

Name of Underwriter No. of Shares Amount (Rs.)Faysal Bank Limited 13,750,000 137,500,000Arif Habib Securities Limited 13,750,000 137,500,000

TOTAL 27,500,000 275,000,000

If, and to the extent, shares hereby offered are not subscribed and paid for in cash and in fullby the closing of the subscription list, the Underwriters shall, within 15 days of being duly calledby the Company to do so, subscribe and pay for, or procure subscribers to subscribe and payfor, in cash and in full, those shares not so subscribed, in proportion to their underwritingcommitments.

In the opinion of the Directors, the resources of the Underwriters are sufficient to dischargetheir underwriting commitments.

3.2. BUY-BACK/REPURCHASE AGREEMENT

THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY-BACK/REPURCHASEAGREEMENT WITH THE COMPANY OR ANY OTHER PERSON IN RESPECT OF THISPUBLIC ISSUE.

3.3. UNDERWRITING COMMISSION

The Underwriters have been paid an Underwriting Commission at the rate of 1.0% (one percent)on the amount of the public issue underwritten by them. In addition, a take up commission atthe rate of 1.5% (one and a half percent) shall be paid to the Underwriters on the number ofshares required to be subscribed by them by virtue of their respective underwriting commitments.

3.4. COMMISSION TO THE BANKERS TO THIS OFFER

A commission at the rate of 0.25% of the amount collected on allotment in respect of successfulapplicants will be paid by the Company to the Bankers to this Issue for services to be renderedby them in connection with this Public Issue, plus out-of-pocket expenses. No commission shallbe paid to the Bankers in respect of shares taken up by the Underwriter by virtue of theirunderwriting commitments.

3.5. BROKERAGE

For this Issue, Brokerage shall be paid to the members of the Stock Exchanges at the rate of1.0% (one percent) of value of the shares actually sold through them. No brokerage shall bepayable in respect of shares taken up by the Underwriters by virtue of their underwritingcommitment.

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3.6. EXPENSES OF THE PUBLIC ISSUE

The expenses of this Issue are estimated not to exceed Rs.16,270,000, which would beborne by the Company.

Expense Rate Amount(Rs.)

Underwriting Commission 1.0% 2,750,000Take-up Commission* 1.5% 4,125,000Bankers to the Issue Commission* 0.25% 687,500Brokerage to Members of the Stock Exchanges* 1.0% 2,750,000Arrangers fee 1.0% 2,750,000Publication and notice Costs 1,000,000Stock Exchange Fees and Charges 640,000CDC Fees and Deposit 392,500SECP Application Fees 50,000Share registrar & computer balloting 850,000Other Costs (i.e. legal, marketing, stamp duty and contingencies 275,000TOTAL 16,270,000

* These amounts represent the maximum possible costs under these heads.

3.7. PRELIMINARY EXPENSES

Preliminary expenses of PKR 1,888,215 have already been paid by the Company.

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PART 4

4. HISTORY AND PROSPECTS

4.1. THE COMPANY

Dost Steels Limited (“DSL” or the “Company”) was incorporated on 19th March, 2004 as aprivate limited company and converted into a public limited company on May 20, 2006. Itis the first private company in Pakistan to use modern European state-of-the-art technologyfor high strength deformed steel bar manufacturing. The registered office of the Companyis located at 101, Chapal Plaza, Hasrat Mohani Road, Karachi. The main objective of theCompany is manufacturing of Steel, Direct Reduced Iron, Sponge Iron, Hot Briquetted Iron,Carbon Steel, Pig Iron and Special Alloy Steel. The other objects of the Company havebeen set out in the Memorandum of Association of the Company.

4.2. THE PROJECT

The Company has setup a modern steel rebar mill based on steel billets with the capacityto produce 350,000 tons of steel rebar per annum. The total cost of the project is estimatedat PKR 1,650 million. The unit has been setup to provide high quality steel rebar that isused for the construction of high rise buildings, dams, highways, bridges and flyovers. Thesponsors have injected PKR 400 million in the equity while PKR 275 million will be raisedthrough the IPO. The Company has already arranged bridge finance to the extent of PKR275 million to meet the cost of the project against public issue of shares.

The plant and machinery for the project has been manufactured, supplied and erected bySiemens Vai Metal Technology srl Italy (formerly Vai Pomini, Italy). The company specializesin providing rolling mills, bar & wire rod mills, section mills, sizing systems, billet weldingsystems, forge-rol l plants and automation services on a global basis.

4.3. PROJECT LOCATION

The project is located over 40 acres of freehold land at 52Km Multan Road near Bhaipheruby-pass, District Kasur, Punjab. The location is ideal with respect to transporting raw materialsand finished products.

4.4. PROJECT COST AND SOURCE OF FINANCING

The total cost of the project is estimated at PKR 1,650 million which has been financedthrough a combination of equity and debt. A debt of PKR 775 million has been raised througha Syndicated Term Finance facility while another debt of PKR 200 million has been raisedthrough Morabaha Financing facility from Faysal Bank Limited. Due to the timing differencesin the IPO and funding requirements, the Company has arranged a bridge finance facilityof PKR 275 million from Faysal Bank Limited. The utilized amount of bridge finance will berepaid out of the proceeds of the public issue.

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The estimated cost of the project and means of financing are as under:All figures in PKR Million

Land and Developments 167.47 - 167.47 168.85Civil works and structure 195.62 30.68 226.30 177.62Plant and machinery bar mill 302.99 725.58 1028.57 882.92Pre-operating Expenses 29.93 - 29.93 18.86Term finance & Public floatation 47.06 - 47.06 35.89Provision for contingencies 6.70 - 6.70 -Interest during construction period 128.97 - 128.97 85.18Working Capital 15.00 - 15.00 5.79Total Project Cost 818.74 756.26 1650.00 1375.11

Mean of FinancingEquitySponsors 400.00 - 400.00 325.00IPO 275.00 - 275.00 -

675.00 - 675.00 325.00DebtSyndicated Term Loan 775.00 - 775.00 737.36Morabaha Finance 200.00 200.00 193.95Bridge Finance Facility - 101.00

Total Financing 1650.00 - 1650.00 1357.31

The actual figures indicated in the last column of the above table are based on audited financials forthe period ended March 31, 2007 and subsequent to these audited financials the sponsors haveraised the paid up capital by PKR 75 million on June 28, 2007. Henceforth the paid up capital standsat PKR 400 million as on June 28, 2007.

Salient features of the project financing are as under:

4.4.1 Equity FinancingThe PKR 675 million equity of the Company comprises of Sponsors contribution of PKR400 million and IPO of PKR 275 million.

4.4.2 Debt FinancingSyndicate Term Finance

Amount PKR 775,000,000 Disbursement as at PKR 737,359,431 March 31, 2007 Tenor 72 months Principal Repayment 9 semi-annual installments of PKR 86.111 million commencing after a two year grace period from the final drawdown date. Mark-up Rate 4% p.a.+ Base Rate (average 6 months KIBOR)

Security

Estimated Project CostDescription

LocalCost

ImportedCost

TotalProject

Cost

Actual Cost(as at March

31,2007)

〈 Mortgage of movable and immovable properties of the Company〈 First pari passu charge over the hypothecated assets of the Company〈 Personal guarantees of the sponsors〈 Demand promissory note in favor of the syndicateNational Bank of Pakistan, PICIC Limited, Bank of Khyber, PakistanKuwait Investment Company (Pvt) Limited,Prime Commercial Bank Limited, Askari Commercial Bank Limited

Syndicate Members

Agent Faysal Bank Limited

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Prospectus

Morabaha Finance

Facility AmountPKR 200,000,000

Amount Disbursed asat March 31, 2007

Arranger Faysal Bank Limited

Tenor 72 months

Outstanding PKR 200 million (Pak Rupees Two Hundred Million Only)

Repayment Schedule 9 semi-annual installments of PKR 22.222 million commencing after a two years grace period from the final drawdown date

Mark-up Rate 4% p.a.+ Base Rate (average 6 months KIBOR)

Security

Bridge Finance Facility:

Facility Amount PKR 275,000,000

Amount Disbursed asat March 31, 2007

Purpose To meet the cost of the project

Arranger Faysal Bank Limited

Tenor 3 months, on a roll over basis till the floatation of IPO

Profit Payment Bullet at Maturity

Profit Rate Floating at 5.00% p.a. + Base Rate (average 3 months KIBOR)

Security 〈 Second charge on all present and future fixed assets of the Company with a 25% margin

PKR 193,948,806

〈 Mortgage of movable and immovable properties of the Company〈 Personal guarantees of the Sponsors〈 Demand promissory note in favor of Faysal Bank Limited

PKR 101,000,000

4.5. PLANT AND MACHINERY

The cost of the total plant and machinery comprising of local and imported machinery isPKR 1028.57 million. The entire plant of 350,000 tons per annum capacity has been procuredthrough Siemens Vai Metal Technologies srl (formerly Vai Pomini Italy). The productionprocess is fully automated and requires only 12 to 15 workers in one shift.

Details of imported and local plant and machinery are given below:〈 IMPORTEDThe imported, brand new, plant & machinery for this project worth PKR 725.58 million hasbeen purchased at the most competitive rates from a number of international suppliers. Themajority of plant & equipment has been imported from Siemens Vai Metal Technologies srl(formerly Vai Pomini srl), Italy.

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Complete details of imported plant and machinery are given below:

Particulars of machinery Make / Supplier Status

Vai Pomini srl,Italy

Vai Pomini srl,Italy

Vai Pomini srl,Italy

ASI Robicon SPA,Italy

ASI Robicon SPA,Italy

ASI Robicon SPA,Italy

Areva,Germany

EMEK,Turkey

Fornie Combustione srl,Italy

Vai Pomini srl,Italy

Emerson FZE

Compair Druckluftechnik

Avvenente srl

Donaldson Filtration

International Independent,Qatar

Motim Fused Cast Ltd,Hungary

Rolling Mill Plant for production of Rebars

Rolling Mill Plant for production of Rebars

Technical Services and consultancy forrolling mill plant

Rolling Mill Plant for production of Rebars

Rolling Mill Plant for production of Rebars

Technical Services and consultancy forrolling mill plant

01 PCs Circuit Breaker for plant andmachinery

132 KV Sub-station with accessories

Pusher Type 60 tph Billet ReheatingFurnaceSupervision of installation, commissioningof plant and training of personnel for rollingmill plant

AC Drives

L-75G, 10 Bar – I Pc L-75 SR 10 Bar BLSCompressor

Oil Hydraulic system for pusher furnace

01 Unit Boreas Type 815A Dryer

Rolls

Refractory material Korvisit-A

Installed

Installed

Partially Provided

Installed

Installed

Partially Provided

Installed

Installed

Installed

Partially Provided

Installed

Installed

Installed

Installed

Installed

Installed

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〈 LOCALBesides imported machinery, the project also constitutes locally manufactured equipment,all of which is brand new. Details are as follows:

Particulars of machinery Supplier Status

20 / 26 MVA Power Transformer Siemens Pakistan Installed

Distribution Transformers Siemens Pakistan Installed

Overhead Cranes Peoples Steel Mills Installed

Electrical Installation Cables, panels, MCC Installed

Lighting systems Phillips & Various suppliers Installed

Tools & Laboratory equipment Various suppliers Received at Site

Water Treatment Plant Various suppliers Part Installed

Rolling shop machines Various suppliers Installed

Erection Machinery, Equipment Various suppliers Installed

Reheating Furnace Peoples Steel Mills & SNGC Installed

Siemens Pakistan, Rousing Engineering & LESCO Services Included in Machinery Cost

Engineering services To be procured

Sea freight, Inland freight To be procured

All the imported and locally manufactured machinery have arrived at the site and have beeninstalled and erected except the following which are spare parts, and constitute 1.8% ofthe total machinery cost:

Particulars LC # and date Expected shipment Budgeted cost time (PKR million)

Spare parts etc. 110/LC/0105/05 Early August , 2007 18.54 03/05/2005 TOTAL 18.54

4.6. INSTALLATION OF PLANT AND MACHINERY & EXPECTED COMMENCEMENT OF PRODUCTION AND COMMERCIAL OPERATIONS

All plant and machinery except some spare parts have arrived on site and have also beeninstalled. Approximately 98% of the machinery has been installed at site. Cold commissioningof the different systems in the mill are already in progress in July 2007 and will continuefor August 2007. Trial production by way of hot commissioning is expected to take placeby end August 2007, subject to the satisfactory completion of cold commissioning by thattime. Commercial operations are expected to commence by October 2007.

4.7. CIVIL WORKS

Major civil works that includes pre-engineered steel building comprising of 155,800 squarefeet has been completed by Guarantee Engineers and Kanwar Associates. The constructionof boundary walls, grid station, machine foundations, and concrete work for furnace hasalso been completed. Staff housing facilities by way of engineers hostel building and workershousing buildings have also been completed and under use.

132 KVA Grid Station Installed

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4.8. FACILITIES AND UTILITIES

4.8.1 Power

The Company has already been sanctioned an electricity load of 10.7 MW from LESCOwhich is sufficient to meet the energy requirements of the project. The natural gas requirementfor the project is around 1.68 MMBTU per ton of production.

4.8.2 WaterThe project will require 30 cubic meter of water per hour for top up purposes of the indirectand direct water circuits. There will be two ground water tube-wells bored to meet the waterrequirement for the project. No problem is anticipated in fulfilling this volume of waterrequired for the purpose. Water is abundantly available through underground sources. Thiscan be met through tube-wells within the project premises.

Civil works for the Water Treatment Plant have been completed while the erection of pumpsand process piping has also been completed.

4.9. PROJECT IMPLEMENTATION SCHEDULE

Activity Completion Date

Erection of pre engineered bar sheds October 2006

Placement of orders and LC opening December 2006

Completion of civil works December 2006

Erection of Bar Mill January 2007

Trial Operations, cold test and commissioning August 2007

Commercial production October 2007

4.10. RAW MATERIALSThe Company is importing low carbon steel billets from China. However it is expected thatsteel billets from Pakistan Steel Mills Ltd. will also be sourced depending on domesticavailability. These low carbon steel billets are also available from Turkey, Ukraine, Indiaand Russia on competitive terms. With the installation of patented Thermex quenchingwater treatment facility, the Company will have an advantage of being able to use cheaperlow carbon steel billets. At present, no bar mill in Pakistan has this online bar quenchingfacility. The recent Free Trade Agreement between Pakistan and China will facilitate aneasier and cheaper source of steel billets. The import of raw materials will be subjected toan import duty of 5 percent. The Company has arranged a storage facility with mechanicaloverhead cranes of 25 tons capacity within the factory premises to store imported steelbillets.

4.11. TARGET MARKET AND SALES STRATEGYThe Company sees itself as an engine of change in the steel bar industry in pakistan. Itaims to market its products to quality conscious customers for the construction of high risebuildings, dams, highways, bridges and flyovers. In the next three years, the Company alsointends to start a chain of cut-and-bend service centers to provide a one-stop shop for readyto erect rebar. This will facilitate substantial saving of cost and time of over 5-15 percentand improve concreting time by civil construction agencies, thereby reducing the time from20 days per roof to 4 days per roof.The company will also take steps to educate the structural engineers, consultants andbuilders to the advantages of seismic friendly high-strength deformed bars that are standardall over the world This will be achieved by holding regular seminars, workshops andinformation dissemination activities. Further, a revised building code has been drawn upby NESPAK to be enforced all over the country. Partial enforcement of the revised buildingcode has already been achieved in Islamabad and parts of Northern Areas.

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The quality of the produced bar is controlled by an automatic computerized online qualitycontrol system. The quality of the finished bar can be accessed online by the buyer for thepurchased lot. Enterprise Resource Planning (ERP) software has been installed to enablethe buyer to place order and monitor the lot-wise product ion results.

4.12. INFORMATION TECHNOLOGYThe company already has online e-sales ERP software in operation whereby the rebarbuyer can register on the internet, make bar grade selection, place order, raise an invoiceand pay online from any bank in Pakistan. The ordered goods can also be tracked onlinefrom dispatch to delivery. A cash management mandate is being negotiated with three banksto manage the online sale proceeds on a daily basis. This system will be integrated withthe ERP software.

The ERP software enables the company to integrate operations at the mill with themanagement at the Head Office in Karachi and the marketing offices if different locationsof the country. The different modules that are being used to carry out business processesare manufacturing, purchase, sales, payments and human resource management. TheERP software in use within the group has been licensed for a period of six years and hasbeen benchmarked with SAP and Oracle, the two best known global enterprise softwarecompanies.

4.13. SPONSOR PROFILEFollowing are the two affiliates of Dost Steels Limited:

DOSTSONS COTTON MILLS (PVT) LIMITED

Dostsons Cotton Mills (Pvt.) Limited is a producer and exporter of open end Autocoro yarn.They produce more than 100,000 pounds of 100% cotton and PC per day under the brandname “CORO’, CORO-Knit” and “BELCORO”. They manufacture open end yarn in therange of Ne~5 to Ne~ 22.

The company started with a daily production of 20,000 pounds 100% cotton yarn in 1989.The mill is located at Nooriabad on Karachi-Hyderabad super highway, about 80 kilometersfrom Karachi. It is based on latest open end spinning technology.

NTP GELATINE (PVT) LIMITED (NTG)NTP Gelatin (Pvt) Ltd was incorporated in November 1992. Prior to its incorporation, NTPGelatin existed as a Glue section of National Tanneries of Pakistan, located at Lahore. NTPGelatin (Pvt) Ltd offers a wide range of gelatin for the food and pharmaceutical industries.These gelatins are available in all particle sizes from large grains to fine powder. Its clienteleincludes Hilal Confectionery, Candyland, B.P. Industries. Further, the company exports mostof its production to Europe, Far East, Iran, Bangladesh, Malaysia etc.

4.14. RISK FACTORS

The following risk factors which may affect the returns on the investment in the Companyshould be considered carefully before making any investment decision:

(a) Capital Market Risk: All capital market investments are subject to market fluctuationsthat arise due to the demand and supply for scrips. Market dips do not necessarilyimply that the Company is fundamentally unsound, and the long term market trend isan upward one.

(b) Economic Risk: An individual company, operating within an individual sector, may beadversely affected by declining macroeconomic performance of the country. This riskis mitigated by the present bright macroeconomic prospects of the country, with GDPgrowth in excess of 7% expected .

(c) Regulatory Risk: The imposition/ enhancement of duties, taxes and other levies remaina possibility. This risk is mitigated by the GOP’s track record of pro-business policies.

1

State Bank of Pakistan – Monetary Policy Statement FY07 .

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(d) Market competition: The Company may face competition from new market entrants and fromexisting competitors. However, since the re-bar manufacturing plant is being designed, suppliedand the project monitored by SIEMENS VAI Metal Technologies srl.(formerly VAI POMINI s.r.l),one of the most renowned global steel mill suppliers and this bar mill is as modern as any othermodern bar mill being set up in any part of the world. For this reason it is expected that it willhave an edge over its rivals in the country.

(e) Disruption in Supply of Raw Material: The Company is vulnerable to geo-political conditions,foreign exchange fluctuations, and regulatory regime governing Pakistan and exporting countries.This risk is mitigated by the diversity of potential sources of domestic and global sources ofsteel Billets and entry of China as a global surplus producer of steel and a supplier of steelinto the international market.

(f) Foreign Exchange Risk: As the Company intend to source a majority of its raw material fromabroad, the Company could be adversely affected by depreciation of the Pakistani Rupeeagainst the currencies of exporting countries. However this is mitigated by the fact the entiresteel industry in Pakistan is import dependent and no steel making raw material is availablein the country. The company is therefore in level with any other player in the country includingPakistan Steel.

(g) Performance Risk: The success of the Company depends in large part on the ability of themanagement to effectively procure, operate its plant and maintain its capacity utilization througheffective marketing of its products and quality management.

(h) Operational Risk: In case of cost overruns, implementation delays, adverse change in localsteel demand, inability of the Company to grow its sales, this could lead to the Company’sbankruptcy/ liquidation. In case of liquidation, investors would be eligible to receive liquidationproceeds only after obligations to each of the Company’s creditors have been paid in full.

(i) Liquidity Risk: The investors assume the risk that they will not be able to sell the ordinaryshares in the secondary market without adversely affecting the market price. Ordinary sharesare proposed to be listed on the Karachi Stock Exchange which would enable the investor toundertake secondary market trading.

(j) Inflationary Risk: The Company’s operation in the steel sector could face an inflationary impactas with all other sectors of the economy. Higher inflation rates can affect capital markets, butthis phenomenon is mitigated, to some extent, by the State Bank of Pakistan, as it takes stepsnecessary to curb inflation.

(k) Business Risk: The profitability of the plant is dependent on the demand for Company’sproducts. Robust demand growth can be expected due to the recent developments in thehousing sector and upcoming large-scale infrastructure projects by the Government and thegrowing awareness of the deformed steel bar and the promulgation of the new deformed steelbar standard by the PSQCA throughout the country.

It is stated that all material risk factors with respect to this issue have been disclosed andthat nothing has been concealed.

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b) The company has not commenced any business activity up to March 31, 2007. However, the profit and loss accounts have been made by the company in order to comply with the change in accounting policy as fully explained in para (e) below. The comparative figures for the year ended June 30, 2006 have also been re-stated due to above change in accounting policy.

PART 5

5. FINANCIAL INFORMATION

5.1. AUDITORS’ CERTIFICATE UNDER SECTION 53(1) READ WITH SUB-SECTION 28 (1)OF SECTION 3 OF PART 1 OF THE SECOND SCHEDULE TO THE COMPANIESORDINANCE, 1984

July 5, 2007The Board of DirectorsDost Steels Limited101, Chapal Plaza,Hasrat Mohani Road,Karachi

Dear Sirs,

We have audited financial statements of Dost Steels Limited for the periods ended March31, 2007, The financial statements of the Company for the period ended June 30, 2004 andyears ended June 30, 2005 and June 30, 2006 were audited by another firm of charteredaccountants. In accordance with section 53(1) read with the clause 28 of section 2 of Part1 of the Second Schedule to the Companies Ordinance, 1984, we report that:

a) a summary of the assets, liabilities and shareholders’ equity of Dost Steels Limited as at March 31, 2007 is as follows:

ASSETS Non current assets Property, plant and equipment 1,313,120,218 Long term security deposits 23,530,445

Current Assets Construction Material Stock 24,414,359 Advances,deposits & Other 49,611,320 Receivables Cash and bank balances 5,788,970 Total Assets 1,416,465,312

LIABILITIES Non Current liabilities Long term loans931,308,237

Current liabilities Short term loan 150,013,241 Trade and other payable 16,991,474 Markup on accrued and secured loans 1,791,588 Provision for taxation 584,438 TOTAL LIABILITIES 1,100,688,978

SHAREHOLDERS’ EQUITY 315,776,334

Account Head Amount inRupees

Commitment in respect of capital expenditure amount to Rs. 25.08 million.

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c) a summary of profit and loss of Dost Steels Limited for the periods ended June 30, 2006and March 31, 2007 is as follows:

Administrative expense 4,445,387 4,534,842

Other Income 1,064,149 -

Loss before taxation (3,381,238) (4,534,842)

Taxation – current 584,238 -

Loss after taxation (3,965,676) (4,534,842)

Loss per share – basic and diluted (0.122) (0.14)

d) During the aforementioned periods no dividends have been declared by the company.

e) CHANGE IN ACCOUNTING POLICIES

f) PROVISION FOR TAXATION Provision for taxation for the current year is based on turn over tax.

g) RECLASSIFICATION: The following reclassifications in the accounts for the year ended June 30, 2006 and for the period ended March 31, 2007 have been made:

1. Advances to suppliers and against service amounting to Rs. 159.967 million have beenreclassif ied as capital work-in-progress to achieve better presentation.

2. Construction material amounting to Rs. 112.667 million has been reclassified as capitalwork-in-progress to achieve better presentation.

3. Advance from customers has been aggregated with trade and other payable. Furthermore, markup accrued on secured loans has been segregated from trade and

other payables and show separately on the face of the balance sheet.

For the yearended

June 30, 2006Rupees

Restated

Nine monthsended

March 31, 2007Rupees

Consequent to withdrawal of Technical Release – 20 “Accounting for Expenditure DuringConstruction Period (Reformatted – 2000)” (TR – 20) issued by the Institute of CharteredAccountants in Pakistan, the accounting policy in respect of pre-commencementexpenditure has been changed. Previously, expenditure incurred by a company in prior tocommencement of commercial operations was deferred up till the commencement ofcommercial operations and was being allocated to the cost of land, building and plant andmachinery. Now, the expenditure incurred prior to commencement of commercialproduction is classified into direct cost attributable to the cost of asset or capital work-in-progress and indirect cost. Direct cost is allocated to respective asset’s cost and indirectcost is charged to profit and loss account in the period in which it is incurred. The abovechange has been accounted for in accordance with the requirements of InternationalAccounting Standard – 8 “Accounting Policies, Changes and Accounting Estimates andErrors”. Comparative information has been restated where ever necessary.

Had the policy not been changed, the loss for the year would have reduced by Rs. 3.965million.

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h) SUBSEQUENT CHANGESThe above reporting is based on audited financial statements as on March 31,2007.Subsequent to the audit of financial statements for the period ended March 31, 2007,the paid up capital of the company has been increased to Rs. 400,000,000 by issuing furthershare capital of Rs. 75,000,000 to the sponsors of the company. The effect of increase incapital has not been accounted for in this report.

Yours truly,

Sd.Haroon Zakaria & Co.Chartered Accountants

5.2. SHARE BREAK-UP VALUE CERTIFICATE

July 5, 2007

The Board of DirectorsDost Steels Limited101, Chapal PlazaHasrat Mohani RoadKarachi

Dear Sirs,

AUDITORS’ CERTIFICATE ABOUT BREAK UP VALUE OF SHARES

As requested, we confirm that the breakup value of the ordinary shares of Rs. 10/- eachof Dost Steels Limited based on the audited financial statements for the period ended March31, 2007 is as follows:

Description Rupees

Issued, Subscribed and Paid – up Capital 325,000,000Accumulated loss (9,223,666)Shareholders’ equity 315,776,334

Number of sharesNumber of ordinary shares of Rs. 10 each 32,500,000

Rupees per shareBreak up value per share (Rs. 10 each) 9.71

We further certify that the authorised capital of the Company is Rs. 700,000,000 dividedinto 70,000,000 ordinary shares of Rs. 10 each.

Subsequent to the audit of financial statements for the period ended March 31,2007, the

company has increased sponsors paid up capital by Rs. 75,000,000 making it to Rs.

400,000,000. The break up value after further issue of Rs. 75,000,000 could not be determined

due to activities taking place after March 31,2007.

Yours faithfully,

Sd.

Haroon Zakaria & Co.Chartered Accountants

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5.3. AUDITORS’ CERTIFICATE ON ISSUED, SUBSCRIBED, AND PAID UP CAPITAL

July 5, 2007

The Board of DirectorsDost Steels Limited101 Chapal Plaza,Hasrat Mohani RoadKarachi

Dear Sirs,

Subject: AUDITORS’ CERTIFICATE ON ISSUED, SUBSCRIBED AND PAID-UP SHARECAPITAL

We the Auditors of Dost Steels Limited have examined the books of account and relatedrecords and accordingly certify that the sponsors, their relatives have contributed Rs.400,000,000 (Rupees Four Hundred Million) towards the paid-up capital of the Companytill June 28, 2007. The breakup of paid capital is given as under:

Sponsors/ Directors Mr. Jamal Iftakhar 71,509,610 Mr. Zahid Iftakhar 68,532,030 Mr. Raees Iftakhar 55,446,880 Mrs. Najma Jamal 74,160,430 Mrs. Mona Zahid 60,102,210 Mrs. Naveeda Raees 34,244,840 Mr. Mustafa Jamal 36,000,000 Mr. Mohammad Serajul Haque 1,000 Mr. Faisal Zahid 1,000 Mr. Bilal Jamal 1,000 Mr. Hamza Raees 1,000

Total 400,000,000

Sd.

Haroon Zakaria & Co Chartered Accountants

5.4. FINANCIAL YEAR

The financial year of the Company commences on the 1st day of July and ends on the 30thday of June of each year.

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Dostsons Cotton Mills (Pvt )LtdWeavers Pakistan ( Pvt ) LtdNTP Gelatine ( Pvt ) LtdEllahi Noor Enterprises ( Pvt ). Ltd.Dost Spinners ( Pvt ). Ltd.

Dostsons Cotton Mills ( Pvt ) LtdWeavers Pakistan ( Pvt ) LtdNTP Gelatine ( Pvt ) LtdEllahi Noor Enterprises ( Pvt ). Ltd.Dost Spinners ( Pvt ). Ltd.

Dostsons Cotton Mills ( Pvt ) LtdWeavers Pakistan ( Pvt ) LtdNTP Gelatine ( Pvt ) LtdEllahi Noor Enterprises (Pvt) Ltd.Dost Spinners (Pvt) Ltd.

6. MANAGEMENT AND RELATED MATTERS

6.1. BOARD OF DIRECTORS OF THE COMPANY

Name, Address, Personal Details Designation Directorship in Other Companies

Mr. Jamal Iftakhar Chief Executive22-B, 10th, Central Street Defence Housing AuthorityPhase II, KarachiNationality: PakistaniNIC #: 42301-0932772-31

Mr. Zahid Iftakhar Director22-B, 10th, Central StreetDefence Housing AuthorityPhase II, KarachiNationality: PakistaniNIC #: 42301-0932771-9

Mr. Raees Iftakhar Director11-G, Gulberg IILahoreNationality: PakistaniNIC #: 35202-2674846-1

Mr. Faisal Zahid Director Nil22-B, 10th, Central StreetDefence Housing AuthorityPhase II, KarachiNationality: PakistaniNIC #: 42301-1487012-3

Mr. Bilal Jamal Director Nil22-B, 10th, Central StreetDefence Housing AuthorityPhase II, KarachiNationality: PakistaniNIC #: 42301-5879566-3

Mr. Hamza Raees Director Nil11-G, Gulberg IILahoreNationality: PakistaniNIC #: 35202-3792780-3

Mr. Mohammad Serajul Haque Director NilP-16, Hassan Apartment ExtGulshan-e-IqbalKarachiNationality: PakistaniNIC #: 42201-0550108-1

6.2. DIVIDEND RECORDS OF OTHER LISTED COMPANIES IN WHICH DIRECTORS HOLDDIRECTORSHIPSThe Directors of the Company do not serve as directors in any listed Company.

PART 6

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6.3. OVERDUE LOANS

There are no overdue loans (local or foreign currency) of the Company or its Directors.

6.4. MANAGEMENT PROFILE

6.4.1 Mr. Jamal Iftakhar

Mr. Jamal Iftakhar is the Chief Executive Officer of Dost Steels Limited. He is also servingas a Director of other group companies including Dostsons Cotton Mills (Pvt.) Ltd. He hasover twenty-five years of experience of managing the spinning and gelatin business. Hegraduated from City University, London with a Bachelors’ degree in Finance in 1981.After conducting extensive research, Mr. Jamal Iftakhar decided to venture into the steelbusiness.

6.4.2 Mr. Zahid IftakharMr. Zahid Iftakhar serves the Company in the capacity of Company Secretary. In additionto that, he is on the Board of Directors of Dostsons Cotton Mills (Pvt.) Limited. He has beenassociated with the family business for the past two decades.

6.4.3 Mr. Raees Iftakhar

Mr. Raees Iftakhar is Director of the Company. He is also in-charge of all the managementaffairs at NTP Gelatin (Pvt.) Ltd., Lahore. He has a Bachelors of Science (BSc) degree fromBhopal, India.

6.4.4 Mr. Mohammad Serajul HaqueMr. Mohammad Serajul Haque is a Chartered Accountant with over thirty six years ofexperience working as Director Finance, Vice President Finance and Controller of Financein multinational and national companies. He has remained involved in increase of capital,floatation of bonds and formation of new companies while working abroad in multinationalcompany.

6.5. NUMBER OF DIRECTORS

Pursuant to Section 178 of the Ordinance, the number of directors of the company shallnot be less than seven. At present, the Company’s Board of Directors consists of sevendirectors.

6.6. QUALIFICATION OF DIRECTORS

The qualification of a Director, as per section 187(h) of the Company’s Ordinance 1984,shall be a member of the Company holding shares of a nominal value of Rs.10 in his ownname.

6.7. REMUNERATION OF THE DIRECTORS

Pursuant to clause 57 of the Articles of Association of the Company, the remuneration ofa Director for performing extra services, including holding the office of Chairman, and theremuneration paid to any Director for attending meetings of the Directors or a committeeof Directors shall from time to time be determined by the Board of Directors in accordancewith law.

6.8. BENEFITS TO THE PROMOTERS AND OFFICERS

No amount of benefits has been paid or given during the last two years or is intended tobe paid or given to any promoter or to any officer of the Company other than as remunerationfor services rendered as whole-time executives of the Company and the remuneration forservices shall be borne by the Company.

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6.9. INTEREST OF DIRECTORS

The directors may be deemed to be interested to the extent of fees payable to them forattending Board meetings. The Directors performing whole time service to the Companymay also be deemed interested in the remuneration payable to them from the Company.The Directors may also be deemed to be interested, to the extent of any shares held byeach of them in the Company, the dividends to be declared on their shareholding in theCompany.

6.10. INTEREST OF DIRECTORS IN PROPERTY ACQUIRED BY THE COMPANY

None of the Directors of the Company have or had any interest in any property acquiredby the Company.

6.11. ELECTION OF DIRECTORS

The present Directors of the Company were elected on 25th October 2004 for a period of three years. The next election of Directors will be due on 25th October 2007.

6.12. VOTING RIGHTS

On a show of hands, every member present in person shall have one vote except for electionof Directors in which case the provisions of Section 178 of the Ordinance shall apply. Ona poll, every member shall have voting rights as laid down in Section 160 of the Ordinance.

6.13. AUDIT COMMITTEE/ CONSTITUTION OF AUDIT COMMITTEEAudit committee of the board has been formed to comply with the Code of CorporateGovernance, which comprises of the following three non-executive/ executive directors:i. Raees Iftakhar (Chairman of Committee)ii. Zahid Iftakhariii. Muhammad Serajul Haque

The audit committee meeting shall be held after the Company is listed on the Stock Exchange,as per provisions of the Code of Corporate Governance.

The Committee has its terms of reference which were determined by the Board of Directorsin accordance with the guidelines provided in the Listing Regulations.

6.14. INTERNAL AUDITThe board has setup an effective internal audit function managed by suitable qualified andexperienced personnel who are conversant with the policies and procedures of the Companyand are involved in the internal audit function on a full time basis.

The internal audit has its terms of reference which were determined by the Board of Directorsin accordance with the guidelines provided in the Listing Regulations.

6.15. BORROWING POWERS

Subject to the provisions of the Ordinance the Board of Directors may from time to timeborrow any money for the purposes of the Company from its members or from any otherperson, firms, companies, corporations, Government Agencies, institutions or the Directorsmay themselves lend moneys to the Company.

6.16. POWERS OF DIRECTORS

The business of the Company shall be managed by the Directors, who may pay all expensesincurred in promoting and registering the Company, and may exercise all such powers ofthe Company as are not by the Ordinance or any statutory modification thereof for timebeing in force, or by the Articles of Association, required to be exercised by the Companyin General Meeting.

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6.17. INDEMNITY

Section 130 of the Company’s Articles of Association reads as follows:“Every officer or agent for the time being of the company may be indemnified out of theassets of the company against any liability incurred by him in defending any proceedings,whether civil or criminal, arising out of his dealings in relation to the affairs of the company,except those brought by the company against him, in which judgment is given in his favouror in which he is acquitted, or in connection any application under Section 488 in whichrelief is granted by the Court.”

6.18. INVESTMENTS IN ASSOCIATED COMPANIES

The Company has not made any investment in any of associated companies nor has anyresolution been passed for investment in associated companies under Section 208 of theOrdinance.

6.19. INVESTMENTS IN SUBSIDIARIES

The Company has not sponsored nor acquired any subsidiaries nor has any resolutionbeen passed for sponsoring or acquiring any subsidiaries under Section 208 of the Ordinance.

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PART 7

7. MISCELLENAEOUS

7.1. REGISTERED OFFICE/ HEAD OFFICE

101 Chapal Plaza,Hasrat Mohani Road,Karachi 74000PakistanTel: 021 – 242 9336Fax: 021 – 2423252URL:

7.2. FACTORY ADDRESSBhai Pheru, 52 KmLahore - Multan RoadDistrict KasurPunjabTel: 049 – 400 5575

049 – 400 5576Fax: 094 – 400 5577

7.3. BANKER TO THE COMPANYFaysal Bank LimitedFaysal HouseST- 02, Shahrah-e-FaisalKarachi

7.4. AUDITORS OF THE COMPANY

Haroon Zakaria & Co.Chartered Accountants211 Progressive Plaza5CL10, Civil Lines QuarterBeaumont RoadNear Dawood CenterKarachi 75530

7.5. LEGAL ADVISOR TO THE ISSUEMohsin Tayebaly & Co.Advocates and Legal Consultants2nd Floor, Dime Centre, BC4Block 9 KDA Scheme 5Clifton, Karachi

7.6. BANKERS TO THE ISSUEAllied Bank LimitedMCB Bank LimitedBank Alfalah LimitedHabib Metropolitan Bank LimitedFaysal Bank LimitedUnited Bank LimitedBank Al-Habib Limited

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7.7. JOINT LEAD MANAGERS AND ADVISORS TO THE ISSUE

Faysal Bank LimitedFaysal HouseST-02, Shahrah-e-FaisalKarachiTel: 111 – 747 – 747Fax: 021 – 279 3131www.faysalbank.com

Arif Habib Limited60-63 Karachi Stock Exchange BuildingStock exchange RoadKarachiTel: 021 – 246 0717Fax: 021 – 242 9653www.arifhabibltd.com

7.10 COMPUTER BALLOTER & SHARE REGISTRARNoble Computers Services Pvt Ltd2nd Floor, Sohni Center, BS 5 & 6Block 4 F.B Area Karachi -75950Tel: 021 – 680 1880-2 (3 lines)Fax: 021 – 680 1129Email: ncsl@noble-computers.comURL: www.noble-computers.com

7.11 MATERIAL CONTRACTS

7.11.1 Supply of Plant, Machinery and Ancillary Services:

a) Agreement dated 21 January, 2006 with Forni e Combustione srl, Italy to supply a complete design of a Pusher Type Furnace having a capacity of 60 tons per hour, plus supply of the components and services of Euro 419,000.b) Agreement dated 19 April, 2005 with Vai Pomini S.R.L. to supply essential equipment, components and material, provision of engineering and other services for purposes of establishing and setting up the plant of Euro 4,020,000.c) Agreement dated 29 June, 2005 with Asirobicon Spa to supply essential electrical and automation equipment, provision of engineering and other services for purposes of establishing and setting up the plan at a price of Euro 1,100,000.

7.11.2 Technical Services Agreement:

a) Consultancy services agreement dated 15 February, 2006 with A. A. Associates to provide Civil Engineering Consultancy Services for the proposed Bar Steel Mill at Lahore-Multan Road, Pakistan.

7.11.3 Underwriting Agreements:

No. Name of Institution Amount (Rs.) Date 1. Arif Habib Securities Limited 137,500,000 30.11.2006 2. Faysal Bank Limited 137,500,000 30.11.2006 Total 275,000,000

7.11.4 Financing Agreements:a) Syndicate Term Finance agreement dated October 28, 2005 for PKR 775 million with National Bank of Pakistan, PICIC Limited, Bank of Khyber, Pakistan Kuwait Investment Company (Pvt) Limited, Prime Commercial Bank Limited and Askari Commercial Bank Limited.b) Morabaha Finance agreement dated October 28, 2005 for PKR 200 million with Faysal Bank Limited

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a) Bridge Finance Facility agreement dated February 6, 2007 for 275 million with Faysal Bank Limited.

7.11.5 Construction agreement with Guarantee Engineers and Kunwar Associates for entire civilworks and supervision at a price of PKR 220,608,030.

7.11.6 Land Registration documents:Registration of property situated in the “Hadbast” mauza Purna Tehsil Pattoki, District Kasurmeasuring 251K – 12M in the name of the Company dated 11August 2005.

7.12 INSPECTION OF DOCUMENTS AND CONTRACTS

Copies of the Memorandum and Articles of Association, Audited Financial Statements,Material Contracts, and Auditors’ Certificates referred to in this Prospectus may be inspectedduring the usual business hours on any working day at the Registered Office of the Companyfrom the date of publication of this Prospectus until the closing date of the subscription list.

7.13 LEGAL PROCEEDINGS

There are no legal proceedings pending against the Company and the Company has notinitiated any legal proceedings against any party or person.

7.14 VENDORS

There are no vendors in terms of Clause 12 of Part 1 of the Second Schedule of theCompanies Ordinance, 1984.

7.15 MEMORANDUM OF ASSOCIATION

The Memorandum of Association, ineralia, contains the objects for which the Company wasincorporated and the business, which the Company is authorized to undertake. A copy ofthe Memorandum of Association is annexed to this Prospectus and with every issue of thisProspectus except the one that is released in newspapers as advertisement.

7.16 CAPITALIZATION OF PROFITS

The Company has not capitalized any profits till the date of publication.

7.17 REVALUATION OF ASSETS

The Company has not carried out any revaluation of assets in terms of Clause 22(2) of Section 1 of Part I of the Second Schedule to the Ordinance.

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PART 8

8 APPLICATION AND TRANSFER INSTRUCTIONS

8.1 Eligible investors include Pakistani citizens resident in Pakistan, companies, bodies corporateor other legal entities incorporated or established in Pakistan (to the extent permitted bytheir constitutive documents and existing regulations as the case may be); Provident/pension/ gratuity funds/ trusts (subject to the terms of their Trust Deed and existing regulations)and branches in Pakistan of companies and body corporate incorporated outside Pakistan.

8.2 Copies of this Prospectus and applications forms can be obtained from members of theKarachi Stock Exchange, the Bankers to the Issue and their Branches, the Lead Manager,and the registered office of the Company.

8.3 APPLICATION MUST BE MADE IN THE OFFERORS’ APPLICATION FORM OR ALEGIBLE COPY THEREOF.

8.4 Applicants opting for scripless form of security are required to complete the relevant sectionsof the application. In accordance with the provisions of the Central Depositories Act, 1997and the CDC regulations, credit of such securities in book entry form is allowed ONLY inthe applicant’s own CDC account. In case of discrepancy between the information providedin the Application Form and the information already held by the CDC, the Company reservesthe right to issue share certificates in physical form.

8.5 Names and Addresses must be written in block letters, in English, and should not beabbreviated.

8.6 (i) An attested copy of the computerized NIC (“CNIC”) should be enclosed and theCNIC number indicated against the name of the applicant. Copies of CNIC can beattested by any Federal/Provincial Government gazetted officer, Councilor, BankManager, Oath Commissioner, or Head Master of High School etc.

(ii) Original CNIC, along with one attested copy, must be produced for verification tothe branch at the time of presenting an application. The attested photocopy shall,after verification, be retained by the bank branch along with the application

(iii) Only one application will be accepted against each account. In case of joint accounts,one application will be accepted in the name of each of the joint account holders.

(iv) Joint applications by more than four persons shall not be accepted. In case of jointapplication, early party must sign the application form and submit copies of theirattested National Identity Cards. The shares Certificates will be dispatched tp theperson whose name appears first on the application form while in case of CDS, itwill be credited to the respective CDS account and where any amount is refundable,in whole or in part, the same will be refunded by cheque by post, or through thebank where application was lodged, to the person named first on the applicationform, without interest profit or return.

(v) Applications by Companies etc.:

(a) Applications made by companies, corporate bodies, provident/ pension/ gratuity funds/ trusts and other legal entities must be accompanied by a copy of their Memorandum and Articles of Association or equivalent constitutive document. Where applications are made by virtue of a Power of Attorney, the Power of Attorney must be attached to the Application Form. Copies of documents can be attested by any Federal/ Provincial Government gazette officer, Councilor, Bank Manager, Oath Commissioner, or Head Master of High School etc.

(b) Attested copies of the documents mentioned in this section must be produced along with originals for verification to the branch at the time of presenting an application. The attested copies shall, after verification, be retained by the bank branch along with the application.

8.7 Subscription money must be paid by cheque drawn on the applicants own account payableto one of the Bankers to the Issue “A/C PUBLIC ISSUE OF SHARES OF DOST STEELSLIMITED” and crossed “A/C PAYEE ONLY” and must be drawn on a bank in the same townas the bank through which the application has been made.

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8.8 Applications are not to be made by minors or persons of unsound mind.

8.9 Applicants should ensure that the bank branch, on which their application is drawn, completesthe relevant portion of the application form.

8.10 Applicants should retain the bottom portion of their application as provisional acknowledgmentof submission of their application. This may be made available at the time of submissionof the Application Form, or may be collected at a later time from the bank branch throughwhich application was made. This should not be construed as acceptance of the applicationor a guarantee that the applicant will be allotted the number of shares for which the applicanthas subscribed.

8.11 No receipt will be issued for payment made with an application but an acknowledgementwill be forwarded in due course by issuance of share certificate in whole or in part or byrefund of the money in case of unaccepted or unsuccessful applications. No interest orprofit shall be payable in respect of the refund amount.

8.12 It would be permissible for a Banker to the Issue to refund subscription money to unsuccessfulapplicants having a bank account in that bank by crediting such account instead of throughcheque, pay order or bank draft. Applicants should therefore not fail to give their bankaccount numbers.

8.13 The transfer of shares to successful applicants shall be made in accordance with the criteriadisclosed in this Prospectus subject to the rules of the Securities and Exchange Commissionof Pakistan.

8.14 Making of any false statement in the application or willfully embodying incorrect informationtherein will make the applicant or the bank liable to legal action.

8.15 The basis of the Public Issue of shares is as follows:

(a) This offer is being made at a face value of Rs. 10/- per ordinary share.

(b) Applications for shares must be made for 500 shares or in multiples of 500 shares.Applications which are neither for 500 shares nor for multiples of 500 shares shallbe rejected.

(c) The minimum amount of application for subscription of 500 shares is Rs. 5,000/-.

(d) Applications for shares below the value of Rs. 5,000/- shall not be entertained.

(e) Fictitious and multiple applications (more than one application per applicant)are prohibited and such application money shall be liable to confiscation under Section 18-A of the Securities and Exchange Ordinance, 1969.

(f) If the shares to be offered to the general public are sufficient to accommodate all applications, all applications shall be accommodated.

(g) If this Issue is oversubscribed the shares shall be allotted by conducting computerballoting in the presence of representatives of the Karachi Stock Exchange in the following manner:(i) If all applications for 500 shares can be accommodated, then all such

applications shall be accommodated first. If all applications for 500 sharescannot be accommodated, then balloting will be held among the applicationsfor 500 shares only.

(ii) If all applications for 500 shares have been accommodated and shares arestill available for allotment, then all applications for 1000 shares will be accommodated. If all applications for 1000 shares cannot be accommodated,then balloting will be conducted among applications for 1000 shares only.

(iii) If all applications for 500 shares and 1000 shares have been accommodatedand shares are still available for allotment, then all applications for 1500 shares will be accommodated. If all applications for 1500 shares cannot be accommodated, then balloting will be conducted among applications for 1000 shares only.

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(iv) If all applications for 500 shares, 1000 shares, and 1500 shares have beenaccommodated and shares are still available for allotment, then all applications for 2000 shares will be accommodated. If all applications for 2000 shares cannot be accommodated, then balloting will be conducted among applications for 2000 shares only.

(v) After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in the following manner:

1. If the remaining shares are sufficient to accommodate eachapplication for over 2000 shares, then 2000 shares shall be allotted to each applicant and the remaining shares shall be allotted on a prorata basis.

2. If the remaining shares are not sufficient to accommodateall remaining applications for at least 2000 shares, then balloting shall be conducted for allocation of 2000 sharesto the successful applicants.

(h) If the Issue is oversubscribed in terms of amount only, then the allotment of sharesshall be made on the following basis:

(i) First preference will be given to applicants who applied for 500 shares;

(ii) Next preference will be given to applicants who applied for 1000 shares;

(iii) Next preference will be given to applicants who applied for 1500 shares; and then;

(iv) Next preference will be given to applicants who applied for 2000 shares;

After allotment of the above, the balance shares, if any, shall be allotted on a proratabasis to the applicants who applied for more than 2000 shares.

(i) Allocation of shares will be subject to scrutiny of the applications for subscription.

(j) Applications, which do not meet with the above requirements, or applications which are incomplete, will be rejected.

8.16 Bankers to the IssueCode No. Bank01. Allied Bank Limited02. MCB Bank Limited03. Bank Alfalah Limited04. Habib Metropolitan Bank Limited05. Faysal Bank Limited06. United Bank Limited07. Bank AL-Habib Limited

8.17 Code of Occupation

Code No. Occupation Code No. Occupation01. Business 06. Professional02. Business Executive 07. Student03. Service 08. Agriculturist04. Housewife 09. Industrialist05. Household 10. Other

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PART 9

9 SIGNATORIES TO THE PROSPECTUS

Signed, as required by Section 57 of the Companies Ordinance, 1984, by

1. Sd.Mr. Jamal Iftakhar

2. Sd.Mr. Zahid Iftakhar

3. Sd.Mr. Raees Iftakhar

4. Sd.Mr. Faisal Zahid

5. Sd.Mr. Bilal Jamal

6. Sd.Mr. Hamza Raees

7. Sd.Mr. Mohammad Serajul Haque

Singed by the above in the presence of witnesses:

1. SdMr. Izhar Siddiqui79/2 Khayaban-e-Nishat,Phase 6, DHAKarachiNIC #: 42301-0883659-3

Date:Place: Karachi

2. SdMr. Zahid Iftakhar22-B, 10th, Central StreetDefence Housing AuthorityPhase II, KarachiNIC #: 42301-0932771-9

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10 MEMORANDUM OF ASSOCIATION

The Companies Ordinance 1984-------------

(Public Company limited by shares)-------------

Memorandum of Associationof

I. The name of the company is “ ”.

II. The Registered Office of the company will be situated in the province of Sindh.

III. The objects for which the Company is established are:

1 a. To carry on the business of manufacturing Steel, Direct Reduced Iron, Sponge Iron, Hot Briquette Iron, Carbon Steel, Pig Iron, Specialty Alloy Steel, in different forms shapes and sizes and any otherproduct that can be manufactured with existing facilities.

b. To establish and carry on the business of trading, stockist, manufacturing, purchase, sale, import, export, indenting agent, retailers, wholesalers of items manufactured, chemicals, machines, electricaland electronic equipments etc.

2. In order to carry out and fulfill the above object the company shall be authorized.

(a) To own, purchase, acquire, hire, take on lease, build, erect, install establish, operate, use, repair, maintain and dispose of factories, machineries, plants laboratories, equipments, apparatus and otherfacilities, for the manufacturing, formulating, processing, refining, storage, sale and distribution ofthe products in which the company is authorized for conducting business as specified in Object Clause III – 1 (a) & (b).

(b) To purchase, take on lease or in exchange, or otherwise acquire, any land to sell, mortgage, construct,alter, repair, pull down, decorate, maintain, furnish, fit up and improve building, and enter into contracts and arrangements of all kinds with builders, property owners, and others, for conducting business as specified in Object Clause III – 1 (a) & (b).

(c) To purchase, acquire, take on lease or tenancy, sell dispose off, mortgage and acquire options over any property, immovable and movable, or rights of any kind, and develop, improve, turn to account,deal with, mortgage, sell or otherwise dispose of the same in such manner as may be thought expedientfor conducting business as specified in Object Clause III – 1 (a) & (b).

(d) To enter into an agreement or any arrangement for sharing profits, union of interest, co-operation, joint ventures, reciprocal concessions, or other wise with any company, association, firm or personcarrying or engaged in, or about to carry on or engage in, for conducting business a specified in Object Clause III – 1 (a) & (b).

(e) To open any current, overdraft, cash credit account or fixed account with any bank, and to pay moneyinto and draw money from any such account for conducting business as specified in object clause III – 1 (a) & (b).

(f) To borrow and secure payment of money by (i) issue of perpetual or redeemable and convertible ornon-convertible PTC’s TFC’s, debentures and their stocks, bonds, promissory notes, bill of exchange,and such other securities; (ii) furnishing guarantees and undertakings; depositing securities, shares and documents of title; (iii) hypothecating, charging and mortgaging properties and assets (both present and future) of the Company and creating pledge on such properties and (iv) appointing attorneys, giving them powers of executing documents, having them registered, selling and managingthe properties, undertaking, any business of the Company and furnishing and creating such other securities as may be considered expedient; and for all the purpose aforesaid or otherwise execute, complete and deliver agreements and such other documents as may be required, for conductingbusiness as specified in Object Clause III – 1 (a) & (b).

(g) To guarantee the payment of the company and money and the performance of contracts or engagementsof the company and to secure the payment of money and the performance of any contracts or engagements entered into by this company and to discharges nay debt or any obligations of or bindingupon this company by a mortgage or charge upon all or any part of the undertaking, property and rights of the company (either present or future or both), or by the creating or issue of bonds, debenturestock, or any other securities or by any other means, for conducting business as specified in ObjectiveClause III – 1 (a) & (b).

(h) To guarantee the payment of money unsecured or secured by or payable under or in respect of promissory notes, bonds, debenture, debenture stock, contracts, mortgages, charges, obligations, instruments and securities of the company and generally to guarantee or become sureties for the performance of nay contracts or obligations concerning the business of this Company for conductingbusiness as specified in Object Clause III – 1 (a) &(b).

(i) To draw, make, accept, endorse, seal, execute, negotiate, purchase hold and dispose of cheques, promissory notes, bills of exchange, drafts, charter parties, bill of lading, warrants and other negotiabledocuments and contracts, deeds and other instruments and to cancel and vary such instrument, relatingto the business of the company for conducting business as specified in object Clause III – 1 (a) &(b).

(j) To apply for, purchase or other wise acquire any patents, brevet d’ invention, licenses, concessions,and the like conferring any exclusive or non-exclusive or limited right to use or any secret or otherinformation as to any invention which may seem capable of being used for the purpose of the companyor the acquisition of which may seem calculated, directly or develop or grant licenses in respect ofor otherwise turn to account the property, rights or information so acquire, for conducting businessas specifies in Object Clause III – 1 (a) & (b).

(k) To remunerate directors, officials, agents, employees and servants of the Company and others and to benefit employees or ex-employees of the company, and to grant pensions, gratuities and allowancesand to provide houses, amenities and conveniences of all kinds and for the purpose of this paragraphthe words “employees” and “ex-employees” shall include respective, present and former directors and other officers, agents, employees, trainees and servants, for conducting business as specified inObject Clause III – 1 (a) & (b).

(l) To improve, develop, sell, exchange, take on lease, mortgage, pledge, hypothetic, assign, transfer, or with all or any part of the property and assets, immovable and movable corporal or incorporate, tangible or intangible, and any right, title and interest therein of the Company, including rights, licenses, privileges, concessions any franchises as may seem expedient, for conducting business asspecified in Object Clause III – 1 (a) & (b).

(m) To pay out of the fund of the Company all expense which the Company may lawfully pay with respect to the formation, promotion and registration of the company or the issue of its capital, including brokerage and commissions for obtaining applications for or taking, placing or underwritingor procuring the underwriting of shares, debentures or other securities of the Company, for conductingbusiness as specified in object Clause III – 1 (a) & (b).

(n) To pay for rights or property acquired by the Company and to remunerate any person or company whether by cash payment or by the allotment of shares, debentures or other securities of the Companyas fully paid up, specified in Object Clause III – 1 (a) & (b).

(o) To adopt such means of making known the services and products of the Company as may seem expedient and in particular by undertaking, education, training and demonstration programmes andby advertising in the press, by circular an exhibition of works of art or interest, by publication of books and periodicals and by granting prizes, rewards and donations for conducting business as specified in Object Clause III – 1 (a) & (b).

(p) To sell, improve, develop, exchange, take on lease, mortgage, dispose of turn to account or otherwisedeal with all or any part of the property and rights of the Company, for conducting business as specified in Object Clause III – 1 (a) & (b).

(q) To distribute among the Members in specific any property of the Company or any proceeds of saleor disposal of any property of the Company, but so that no distribution amounting to a reduction ofcapital be made except with the sanction (if any) for the time being required by law for conductingbusiness as specified in Object Clauses III – 1 (a) & (b).

(r) To sell or dispose of the undertaking of the Company or any part thereof for such consideration as the Company may think fit, for conducting business as specified in Object Clause III – 1 (a) & (b).

(s) To do all or any above things, either as principals, agents, contractors, or otherwise and either aloneor in conjunction with others, and either by or through agents, sub-contractors, or otherwise, and either alone or in conjunction with others, and to do all such things as are incidental or conductive to the attainment of the objects specified in Object Clause III – 1 (a) & (b).

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(t) To invest and deal with surplus moneys of the Company not immediately required in such manner as may from time to time be determined.

(u) To receive money on deposits or loans upon such terms as the Company may approve. (v) To arrange for local currency and foreign currency loan from scheduled banks, industrial banks and

financial institutions for the purpose of purchases and import of machinery, construction of factorybuilding and for the purpose of working capital or for any other purpose which the Directors deemfit for conducting business as specified in Object Clause III – 1 (a) & (b).

(w) To do all such other things as are incidental are as the Company may think conducive to the attainmentof the above objects or any of them.

(x) The Company shall not engage in either banking business, an investment company, insurance or leasing or any unlawful business and that nothing in object clause shall be construed to entitle it toengage in such business, directly or indirectly. The Company shall not launch mutil level marketing,pyramid and ponzi schemes.

(y) Notwithstanding anything stated in any object clause, the company shall obtain such other approvalor license from the competent authority as may be required under any law for the time being in forceto undertake any particular businesses.

(V) The Liability of the Members is limited.

(vi ) The Authorized share Capital of the company is Rs. 700,000,000/- (Rupees Seven Hundred MillionOnly) divided into 70,000,000 (Seventy Million) Ordinary Share of Rs. 10/- each. The Company shall have the power to increase, reduce or reorganize the Capital of the Company, subdivide the Share Capital of the Company, into different classes in accordance with the provisions of the Companies Ordinance, 1984.

We, the several persons whose names and addresses are subscribed below, are desirous of being formed intoa Company, in pursuance of this Memorandum of Association, and we respectively agree to take the numberof share in the Capital of the Company as set opposite to our respective names.

Karachi dated this 21st day of October, 2003.

Witness to Above Signatures: Nationality: PakistaniFull Name: Mansoor Ahmed Khan,

B.Com., F.C.A Occupation: Chartered AcountantFull Address: Mansoor Seraj Saleem & Co.

Father’s Name: Mr. Manzoor Ahmed Khan Chartered Accountants, A-4 Amir Chambers, University Road Gulshan-e-Iqbal, Karachi

Signature: Sd.

Name and Surname(Present & Former)

in Full(in Block letters)

Father’s Name(in Full)

Nationality withany formerNationality

OccupationResidential

Address(in Full)

Number ofshares taken byeach subscriber

Signature

JAMAL IFTAKHAR Iftakhar Ahmad Pakistani Industrialist22-B 10th Central

street Phase IIDHA Karachi

1 Sd/-

ZAHID IFTAKHAR Iftakhar Ahmad Pakistani Industrialist22-B 10th Central

street Phase IIDHA Karachi

1 Sd/-

RAEES IFTAKHAR Iftakhar Ahmad Pakistani Industrialist11 G Gulburg II

Lahore 1 Sd/-

Total Number of Shares 3