hi-tech lubricants limited - arif habib...

ADVICE FOR GENERAL PUBLIC

THE INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS PROSPECTUS, ESPECIALLY THE RISK FACTORS GIVEN AT PARAGRAPH 5.6, BEFORE MAKING ANY INVESTMENT DECISION.

PLEASE NOTE THAT AS PER REGULATION 4(X) OF THE BOOK BUILDING REGULATIONS, 2015, A SUPPLEMENT TO THE PROSPECTUS

SHALL BE PUBLISHED WITHIN FIVE DAYS OF THE CLOSING OF THE BIDDING PERIOD WHICH SHALL CONTAIN INFORMATION

RELATING TO THE FLOOR PRICE, STRIKE PRICE, THE OFFER PRICE, NAMES OF THE UNDERWRITERS OF THE RETAIL PORTION OF THE

ISSUE, UNDERWRITING COMMISSION, CATEGORY WISE BREAKUP OF THE SUCCESSFUL BIDDERS ALONG WITH NUMBER OF SHARES

PROVISIONALLY ALLOCATED TO THEM AND SUCH OTHER INFORMATION AS MAY BE REQUIRED BY THE COMMISSION.

SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS ARE PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE

FOREFIETED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015.

ADVICE FOR ELIGIBLE INVESTORS

UNDER REGULATION 10(i)(v) OF THE BOOK BUILDING REGULATIONSA SINGLE ELIGIBLE INVESTOR SHALL NOT SUBMIT MORE THAN

ONE BIDDING APPLICATION EXCEPT IN THE CASE OF REVISION OF BID. IF AN ELIGIBLE INVESTOR SUBMITS MORE THAN ONE BIDDING APPLICATION THEN ALL SUCH APPLICATIONS SHALL BE SUBJECT TO REJECTION.

SUBMISSION OF CONSOLIDATED BIDS ARE PROHIBITED UNDER REGULATION 10 OF THE BOOK BUILDING REGULATIONS 2015.

VIOLATION OF WHICH MAY ATTRACT PENALTY UP TO RUPEES 10 MILLION UNDER REGULATION 27 THEREOF. A BID

APPLICATION WHICH IS BENEFICIALLY OWNED (FULLY OR PARTIALLY) BY PERSONS OTHER THAN THE ONE NAMED

THEREIN SHALL BE DEEMED TO BE A CONSOLIDATED BID.

Hi-Tech Lubricants Limited

PROSPECTUS

For Issue of 29,001,000 Ordinary Shares (25.0% of Total Post IPO Paid Up Capital) of the Face Value of PKR 10/- each.

Book Building Portion of the Issue comprises of 21,750,500 Ordinary Shares (75% of the Total Issue Size) at a Floor Price of PKR

37.0/- per share including premium of PKR 27.0/-per share

Justification for the premium is given in Paragraph 3.24

General Public Portion of the Issue comprises of 7,250,500 Ordinary Shares (25% of the Total Issue Size) at the Issue Price

REGISTERATION OF ELIGIBLE INVESTORS: The registration of Eligible Investors will commence at 9.00am on December

31, 2015 and will close at 3.00 pm on January 07, 2016

BIDDING PERIOD DATES: From January 06, 2016 TO January 07, 2016

FROM: 9:00 A.M. TO 5:00 P.M.

DATE OF PUBLIC SUBSCRIPTION: From January 25, 2016 to January 27, 2016 (BOTH DAYS INCLUSIVE)

DURING BANKING HOURS

Lead Manager, Arranger & Book Runner

BANKERS TO ISSUE Bank Al Habib Limited Bank of Punjab Habib Metropolitan Bank Meezan Bank Limited Summit Bank Limited*

Bank Alfalah Limited Habib Bank Limited MCB Bank Limited Samba Bank Limited United Bank Limited*

*In order to facilitate investors, United Bank Limited & Summit Bank Limited are providing the facility of electronic submission of

application (e‐IPO) to its account holders. United Bank Limited account holders can use United Bank Limited Net Banking to submit their

application via link http://www.ubldirect.com/corporate/ebank and Summit Bank Limited account holders can use Summit Bank Limited

Net Banking to submit their application via link https://ib.summitbank.com.pk .Further, please note that online applications can be

submitted 24 hours a day during the subscription period which will close at midnight on January 27, 2016.

Book Building Portion Underwritten by:

For investor education, please visit www.jamapunji.com.pk, Jama Punji is an

investor education initiative of the Securities & Exchange Commission of Pakistan.

Date of Publication of this Prospectus: December 28, 2015 Prospectus and Subscription Form can be downloaded from the following websites

http://www.hitechlubricants.com and http://www.arifhabibltd.com.

For further queries you may contact:

Hi-Tech Lubricants Limited- Mr. Sheikh Imran; P: +92 (42) 36311881-3; E: [email protected]

Arif Habib Limited - Mr. Syed Saquib Ali & Mr. Abdul Qadir; P: +92 (21) 32465891; E: [email protected] & [email protected]

http://www.ubldirect.com/corporate/ebank

https://ib.summitbank.com.pk/

http://www.jamapunji.com.pk/

http://www.hitechlubricants.com/

http://www.arifhabibltd.com/

mailto:[email protected]


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SUPPLEMENT TO THE PROSPECTUS

This Supplement is being published pursuant to regulation 4(x) of the Book Building Regulations, 2015.

The Prospectus of Hi-Tech Lubricants Limited earlier published on December 28, 2015.

Hi-Tech Lubricants Limited FLOOR PRICE

STRIKE PRICE

ISSUE PRICE

Underwriters to the retail portion of the Issue

S.no. Names of

Underwriter

No. of shares

Underwritten

Amount

(PKR)

Date of

Underwriting

Agreement

Date of

Due

Diligence

Report

(i) ● ● ●

(ii) ● ● ●

(iii) ● ● ●

TOTAL ● ●

Underwriting Commission (in % age):

Take up Commission (in % age), if any:

Interest of Underwriters, in the Issue and the Issuer other than their role as Underwriters: The Underwriter

is deemed to be interested to the extent of underwriting & take-up commission payable to it by the Issuer

for the amount underwritten. The Underwriter has no other interest in any property or profits of the

Company

Category wise Breakup of Successful Bidders

S.No. Category No. of shares provisionally allocated

1 Commercial Banks ●

2 Individual Investors ●

3 Institutional Investors

- Investment Banks

- Mutual Funds

- Provident/Pension Funds

- Modarabas

- Leasing Companies

- DFIs

- Others

●

4 TREC Holders ●

5 Foreign Investors ●

TOTAL

Note: This Supplement shall be published within 5 working days of the close of Bidding

Period in at least all those newspapers in which the Prospectus of Hi-Tech Lubricants

Limited is published.

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GLOSSARY

AHL Arif Habib Limited

API American Petroleum Institute

API SN American Petroleum Institute Engine oil classification

ATF Automatic Transmission Fuel

B2B Business to business

B2C Business to Consumer

BR Book Runner

CAGR Compound Annual Growth rate

CDCPL The Central Depository Company of Pakistan Limited

CDS Central Depository System

CGT Capital Gain Tax

CNIC Computerized National Identity Card

COI Certificate of Investment

COLLECTION BANK Summit Bank Limited

CRO Companies Registration Office

CVT Capital Value Tax

DPF Diesel Particulate Filter

EBITDA Earnings Before Interest, Tax, Depreciation & Amortization

EDAS Engineering Design Analysis Services (Pvt) Limited

EPS Earnings Per Share

EXCHANGES Karachi Stock Exchange Limited and Lahore Stock Exchange Limited

FMCGs Fast moving consumer goods

FPI Foreign Portfolio Investment

FTR Final Tax Regime

GDP Gross Domestic Product

GOP Government of Pakistan

HDPE High Density Poly Ethylene

ILSAC GF-5 International Lubricant Standardization and Approval Committee

Standard

IPO Initial Public Offering

ISSUER/

COMPANY/HTLL Hi-Tech Lubricants Limited

ITO Income Tax Ordinance, 2001

KL Kilo Liters

KPIs Key performance Indicators

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KSE Karachi Stock Exchange Limited

KST Khyber Pakhtunkhwa Sales Tax

LC Letter of Credit

LM Lead Manager

LSE Lahore Stock Exchange Limited

MN Million

MT Metric Tons

NICOP National Identity Card for Overseas Pakistanis

NLGI National Lubricating grease institute

NTR Normal Tax Regime

ODI Oil drain interval

OEM Original Equipment Manufacturers

ORDINANCE The Companies Ordinance, 1984

PCMO Passenger Car Motor Oil

PFBA Pakistan France Business Alliance

PKR Pakistan Rupee (s)

PLC Programmable logic controller

PST Punjab Sales Tax

QMS Quality Management system

ROA Return on Assets

ROE Return on Equity

SAE Society of Automotive Engineers

SCRA Special Convertible Rupee Accounts

SECP / Commission Securities and Exchange Commission of Pakistan

SHT Sabra Hamida Trust

SKUs Stock keeping units

SST Sindh Sales Tax

TREC Trading Right Entitlement Certificate

USD United State Dollars

VHVI TECH Very high viscosity Index Technology

WHT Withholding Tax

YUBASE Group III base oil with a viscosity of 120 or higher

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DEFINITIONS

Act Securities Act, 2015

Application Money In case of bidding for shares out of the Book Building portion, the

total amount of money payable by a successful Bidder which is

equivalent to the product of the Strike Price and the number of shares

to be allotted.

AND

In case of application for subscription of shares out of the general

public portion, the amount of money paid along with application for

subscription of shares which is equivalent to the product of the Issue

Price per share and the number of shares applied for.

Banker to the Book Building Summit Bank Limited.

Bid An indication to make an offer during the Bidding Period by a Bidder

to subscribe to the Ordinary Shares of Hi-Tech Lubricants Limited

at a price at or above the floor price, including all the revisions

thereto. An Eligible Investor shall not make a bid with price

variation of more than 20% of the prevailing indicative strike

price.

Bid Amount The total amount of the Bid which is equivalent to the product of the

Bid Price and the number of shares bid for.

Bid Collection Centre Designated offices of the Book Runner, specified branches of any of

the scheduled bank and offices of any other institution specified by

the Commission where bids are received and processed. For this

Issue, addresses of the Bid Collection Centers are provided at

paragraph 2.4.

Bid Price The price at which bid is made for a specified number of shares

Bid Revision The Eligible Investors can revise their bids upward and downward

but not below the Floor Price. The bids can be revised with a price

variation of not more than 20% from the prevailing indicative Strike

Price in compliance with Regulation 10(1)(iii) of the Book Building

Regulations, 2015

Bidder An Eligible Investors who make bids for shares in the Book Building

process

Bidding Form The form prepared by the Issuer for the purpose of making bids in

accordance with the format specified by the Commission and in line

with the Regulation 20(1)(ix) of the Regulations.

Bidding Period

The period during which bids for subscription of shares are received

from Eligible Investors. The Bidding Period shall be of two days,

from January 06, 2016 to January 07, 2016 (both days inclusive

(daily from 9:00 a.m. to 5:00 p.m.).

Book Building

A process undertaken to elicit demand for shares offered for issuance

of shares through which bids are collected from the Bidders and a

book is built which depicts demand for the shares at different price

levels

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Book Building Account

An account opened by the Issuer with the Collection Bank(s). The

Bidder will pay the Margin Money/Bid Amount through demand

draft, pay order or online transfer in favor of this account as per the

instructions given in para 2.11and the balance of the Application

Money, if any, shall be paid through this account after successful

allocation of shares under Book Building.

Book Building Portion The part of the total Issue allocated for subscription through the

Book Building

Book Runner Arif Habib Limited.

Commission Securities & Exchange Commission of Pakistan

Company / Issuer Hi-Tech Lubricants Limited.

Company Legal Advisor Lashari Law Associate.

Designated Institution Karachi Stock Exchange Limited will act as the Designated

Institution for this issue and shall provide the System for conducting

Book Building

Dutch Auction Method The method through which Strike Price is determined by arranging

all the Bid Price in descending order along with the number of shares

and the cumulative number of shares bid for at each Bid Price. The

Strike Price is determined by lowering the Bid Price to the extent

that the total number of shares the Issuer intends to issue under the

Book Building Portion are subscribed

e-IPO facility e-IPO is the facility through which investors can make application

for subscription of shares of the company through internet.in order

to facilitate the investors, the issuer has arranged provision of this

facility through United Bank Limited & Summit Bank Limited who

are among the Banker to the Issue.

UBL’s account holders can use UBL’s Net Banking to submit their

application via link http://www.ubldirect.com/corporate/ebank.

Summit Bank account holders can use Summit Bank’s Net Banking

to submit their application via link https://ib.summitbank.com.pk

Account holders of United Bank Limited & Summit Bank Limited

can submit their application through the above mentioned link 24

hours a day during the subscription period which will close at

midnight on January 27, 2016.

Eligible Investor An Individual and Institutional Investor whose Bid Amount is not

less than the minimum bid size of PKR 1,000,000 (One Million

Rupees only).

Floor Price The minimum price set by the Issuer for the issuance of shares which

is PKR 37.00/- per share. A bid placed below the Floor Price will not

be entertained by the book runner.

General Public

All Individual and Institutional Investors including both Pakistani

(residents & non-residents) and foreign investors.

Institutional Investors Institutional investors means any of the following entities:



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(i) A Banking company as defined in the Banking Companies

Ordinance, 1962

(ii) A Financial Institution as referred to in Section 3A of the

Banking Companies Ordinance, 1962

(iii) An Investment Finance Company as defined in the Non-

Banking Companies (Establishment and Regulation) Rules,

2003

(iv) A Company as referred to in Section 503 of the Ordinance

(v) A registered broker

(vi) The Fund established under the Collective Investment Scheme

under the Non- Banking Companies ( Established and

Regulation) Rules, 2003

(vii) A Trust established by a deed under the provisions of the Trust

Act, 1882

Issue Initial Public Offer of 29,001,000 Ordinary Shares representing

25.0% of Total Post IPO Paid Up Capital having a face value of Face

Value of PKR 10.00/- each.

Book Building Portion of the Issue comprises of 21,750,500

Ordinary Shares (75% of the Total Issue) at a floor price of PKR

37.00/- per share (including a premium of PKR 27.00/- per share)

General Public Portion of the Issue comprises of 7,250,500 Ordinary

Shares (25% of the Total Issue) at the Issue Price.

Issue Price

The price at which Ordinary Shares of the Company are issued to the

General Public. The Issue Price is at or below the Strike Price.

Key Employees Chief Executive Officer, Director, Chief Financial Officer and Chief

Operating Officer of the Hi – Tech Lubricants

Lead Manager and Arranger Arif Habib Limited.

Limit Bid The Bid for a specified number of shares at the Limit Price.

Limit Price The maximum price a prospective Bidder is willing to pay for a share

under the Book Building. A Bidder shall not make a bid with price

variation of more than 20% of the prevailing indicative strike

price.

Margin Money The partial or total amount, as the case may be, paid by a Bidder at

the time of registering the Eligible Investor. The Book Runner shall

collect full amount of the bid money as Margin Money in respect of

bids placed by the individual investors and not less than twenty five

percent (25%) of the bid money as Margin Money in respect of bids

placed by the institutional investors.

Minimum Bid Size One Million Rupees (PKR 1,000,000/-)

Ordinary Shares

Ordinary Shares of Hi-Tech Lubricants Limited having face value of

PKR 10.00/- each, unless otherwise specified in the context thereof

Prospectus

The Prospectus containing all the information and disclosures as

required under the Securities Act, 2015, and Book Building

Regulations, 2015, approved by the Commission under section 87(2)

of the Securities Act, 2015, read with section 88(1) thereof and

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circulated amongst the Eligible Investors for participation in the

Book Building Process.

Registration Form The form which is to be submitted by the Eligible Investors for

registration to participate in the Book Building process. The

registration period shall commence four days before the start of the

Bidding Period from December 31, 2015 to January 07, 2016 from

9:00 am to 5:00 pm and shall remain open till 3:00 pm on the last

day of the Bidding Period

Regulations The Book Building Regulations, 2015

Related Employees Such employees of the Issuer, the Book Runner who are directly

involved in the Issue. Please refer to paragraph 2.24 for further

details

Step Bid Step Bid means a series of limit bids at increasing prices.In case of

a step bid, the amount of each step will not be less than Rupees One

Million (PKR 1,000,000/-).

Strike Price

The price of share determined/discovered on the basis of Book

Building process in the manner provided in the Book Building

Regulations, 2015 at which the shares are Issued to the successful

Bidders. The Strike Price will be disseminated after conclusion of

Book Building through widely circulated national newspapers and

also posted on the websites of Stock Exchanges(s), Lead Manager,

Advisor, Book Runner and Issuer.

Supplement to the Prospectus The Supplement to the Prospectus given at page 2 of this Prospectus.

System An online electronic system operated by the Designated Institution

for conducting Book Building.

Interpretation:

ANY CAPITALIZED TERM CONTAINED IN THIS PROSPECTUS, WHICH IS IDENTICAL TO A

CAPITALIZED TERM DEFINED HEREIN, SHALL, UNLESS THE CONTEXT EXPRESSLY

INDICATES OR REQUIRES OTHERWISE AND TO THE EXTENT AS MAY BE APPLICABLE

GIVEN THE CONTEXT, HAVE THE SAME MEANING AS THE CAPITALIZED / DEFINED

TERM PROVIDED HEREIN.

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TABLE OF CONTENTS

Sr. Content Page no.

1 APPROVAL AND LISTING ON THE STOCK EXCHANGES ............................................... 10

2 BOOK BUILDING PROCEDURE ............................................................................................... 13

3 SHARE CAPITAL AND RELATED MATTERS ....................................................................... 32

4 UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES ................ 47

5 HISTORY, PROSPECTS AND RISK FACTORS ...................................................................... 49

6 FINANCIAL INFORMATION ..................................................................................................... 61

7 MANAGEMENT OF THE COMPANY ...................................................................................... 68

8 MISCELLANEOUS INFORMATION ........................................................................................ 77

9 APPLICATION AND ALLOTMENT INSTRUCTIONS .......................................................... 82

10 REGISTRATION FORM &BIDDING FORM OF HI-TECH LUBRICANTS LIMITED .... 86

11 SIGNATORIES TO THE PROSPECTUS ................................................................................... 87

12 MEMORANDUM OF ASSOCIATION ....................................................................................... 88

13 APPLICATION FORM ................................................................................................................. 93

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PART 1

1 APPROVAL AND LISTING ON THE STOCK EXCHANGES

1.1. APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN

Approval of the Securities & Exchange Commission of Pakistan (“SECP” or the “Commission”) as required

under Section 87(2) of the Securities Act, 2015 (the “Act”) read with Section 88(1) of the Securities Act and

clause 4 (viii) of the Book Building Regulations, 2015 thereof has been obtained by Hi – Tech Lubricants

Limited (“Issuer” or the “Company”) for the issue, circulation and publication of this Document (hereinafter

referred to as the “Prospectus”).

DISCLAIMER:

IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES

NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE COMPANY

AND ANY OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE

STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARDS TO THEM BY THE

COMPANY IN THIS PROSPECTUS.

SECP HAS NOT EVALUATED QUALITY OF THE ISSUE AND ITS APPROVAL FOR ISSUE,

CIRCULATION AND PUBLICATION OF PROSPECTUS SHOULD NOT BE CONSTRUED AS

ANY COMMITMENT OF THE SAME. THE PUBLIC/INVESTORS SHOULD CONDUCT THEIR

OWN INDEPENDENT DUE DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE

ISSUE BEFORE BIDDING / SUBSCRIBING.

1.2. CLEARANCE OF THE PROSPECTUSBY THE STOCK EXCHANGES

The Prospectus has been cleared by the Karachi Stock Exchange Limited (“KSE”) and Lahore Stock

Exchange Limited (“LSE”) (KSE and LSE together referred to as “Stock Exchanges”) in accordance with

the requirements of Listing of Companies and Securities Regulations.

DISCLAIMER:

KSE and LSE have not evaluated the quality of the issue and its clearance should not be construed as

any commitment of the same. The public / investors should conduct their own independent investigation

and analysis regarding the quality of the issue before subscribing.

The publication of this document does not represent solicitation by KSE and LSE.

The contents of this document do not constitute an invitation to invest in shares or subscribe for any

securities or other financial instrument by KSE and LSE, nor should it or any part of it form the basis

of, or be relied upon in any connection with any contract or commitment whatsoever of KSE and LSE

It is clarified that information in this prospectus should not be construed as advice on any particular

matter by KSE and LSE and must not be treated as a substitute for specific advice.

KSE and LSE, disclaims any liability whatsoever for any loss however arising from or in reliance upon

this document to any one, arising from any reason, including, but not limited to, inaccuracies,

incompleteness and/or mistakes, for decisions and/or actions taken, based on this document.

KSE and LSE, neither takes responsibility for the correctness of contents of this document nor the

ability of the company to fulfill its obligations there under.

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Advice from a suitably qualified professional should always be sought by investors in relation to any

particular investment.

1.3. LISTING ON KSE AND LSE

Application has been submitted by the Issuer to KSE and LSE for permission to deal in and for quotation of

the shares of the Company.

If for any reason the application for formal listing is not accepted by KSE and LSE the Issuer undertakes that

a notice to that effect will immediately be published in the press and will refund Application Money to the

applicants without surcharge as required under the provisions of Section 72 of the Ordinance. However, and,

if any such money is not repaid within eight (08) days after the company becomes liable to repay it, the

Directors of the company shall be jointly and severally liable to repay that money from the expiration of the

eight day together with surcharge at the rate of one and a half per cent (1.50%) for every month or part thereof

from the expiration of the eight day and, in addition, to a fine not exceeding five thousand rupees and in the

case of a continuing offence to a further fine of one hundred rupees for every day after the said eight day on

which the default continues in accordance with the provisions of Section 72(2) of the Ordinance.

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1.4. CERTIFICATE BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE

ISSUERS

We, being the Chief Executive Officer and Chief Financial Officer of the Issuer accept absolute responsibility

for the disclosures made in the Prospectus. We hereby certify that the Prospectus contains all necessary

information with regards to the Issuer and the Issue, and constitutes full, true and plain disclosure of all

material facts relating to the shares being issued through this Prospectus and that nothing has been concealed.

The information contained in this prospectus is true and correct to the best of our knowledge and the opinions

and intentions expressed herein are honestly held.

The information provided and disclosures made in this Prospectus contain no misleading material.

For and on behalf of the Hi-Tech Lubricants Limited


-sd-

_________________________

-sd-

_______________________

Hassan Tahir Muhammad Imran Chief Executive Officer Chief Financial Officer& Company

Secretary

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PART 2

2 BOOK BUILDING PROCEDURE

2.1. BRIEF ISSUE STRUCTURE

The Present Issue

The Issue comprises of 29,001,000 Ordinary Shares of PKR 10/- each which constitutes 25.0% of the total

post IPO paid-up capital of the Company.

The Issue is being made through the Book Building process at a Floor Price of PKR 37.00/- per share including

premium of PKR 27.00/- per share.

75%of the total Issue size i.e. 21,750,500 Ordinary Shares of PKR 10/- each are being issued through the

Book Building process to Eligible Investors.

25% of the total Issue Size i.e. 7,250,500 Ordinary Shares will be issued to the general public at the Issue

Price, which will be determined through the Book Building Process. Within 5 working days from the close

of Bidding Period, a supplement to the Prospectus will be published in at least all those newspapers in

which the Prospectus of the Company is published. The supplement will contain information relating

to the Strike Price, the Issue Price, names of the underwriters for the retail portion, underwriting and

take-up commission and category wise break-up of the successful bidders. Format of the supplement is

given at page 2 of this Prospectus.

2.2. BOOK BUILDING PROCEDURE

Book Building is a process whereby investors bid for a specific number of shares at various prices. The Issuer

sets a Floor Price, which is the minimum price a Bidder can bid at. An order book of bids from Bidders is

maintained by the Book Runner, which is then used to determine the Strike Price through the “Dutch Auction

Methodology”.

Under the Dutch Auction Methodology, the Strike Price is determined by lowering the bid price to the extent

that the total number of shares offered through the Book Building process are subscribed.

A Bid by a Bidder can be a “Limit Bid” or a “Step Bid”, each of which are explained below.

Limit Bid: Limit Bid is placed at a Limit Price, which is the maximum price investor Bidder is willing to pay

for a specified number of shares.

In such a case, a Bidder explicitly states a price at which he/she/it is willing to subscribe to a specific number

of shares. For instance, a Bidder may bid for 5.0 million shares at PKR 48.00/- per share, then the total

Application Money would amount to PKR 240,000,000/-.The Bid Amount will be PKR 240,000,000/-. Since

the Bidder has placed a Limit Bid of PKR 48.00/- per share, this indicates that he/she/it is willing to subscribe

the shares at a price upto PKR 48.00 /- per share.

Step Bid: A series of Limit Bids at increasing prices. The aggregate amount of Step Bid shall not be less than

PKR 1,000,000/- and the amount of any individual step shall also not be less than PKR 1,000,000/-.

Under this bidding strategy, Bidders place a number of Limit Bids at different increasing price levels. The

Bidders may, for instance, make a Bid for 2.0 million shares at PKR 46.00/- per share, 1.5million shares at

PKR 47.00/- per share and 1.0 million shares at PKR 48.00/- per share, then in essence the investor has placed

one “Step Bid” comprising three Limit Bids at increasing prices. The Bid Amount will be PKR 210,500,000/-

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. In case of Individual Investor, the Margin Money will be 100% i.e. PKR 210,500,000/- whereas in case of

Institutional Investor the Margin Money shall be 25% of the Bid Amount i.e. PKR 52,625,000/-.

AN ELIGIBLE INVESTOR SHALL NOT MAKE A BID WITH A PRICE VARIATION OF MORE

THAN 20% OF THE PREVAILING INDICATIVE STRIKE PRICE.

AN ELIGIBLE INVESTOR SHALL NOT MAKE MORE THAN ONE BID SEVERALLY OR

JOINTLY, HOWEVER, A BID CAN BE REVISED TILL 5.00 PM ON THE LAST OF BIDDING

PERIOD. DOWNWARD REVISION OF BID PRICE SHALL NOT BE ALLOWED AFTER 4:00 P.M.

ON THE LAST DAY OF THE BIDDING; FOR FURTHER DETAILS PLEASE SEE

PARAGRAPH 2.10 (vi)

AN ELIGIBLE INVESTORSHALL NOT PLACE CONSOLIDATED BIDS. A BID APPLICATION

WHICH IS FULLY OR PARTIALLY BENEFICIALLY OWNED BY PERSONS OTHER THAN

THE ONES NAMED THEREIN IS TO BE CONSIDERED AS A CONSOLIDATED BID.

RELATED EMPLOYEES OF THE ISSUER AND THE BOOK RUNNER CANNOT PARTICIPATE

IN THE BIDDING PROCESS.

Once the BiddingPeriod has lapsed and the book has been built, the, Strike Price shall be determined on the

basis of Dutch Auction Methodology.

Successful Bidders shall be intimated, within one (1) working day of the closing of the Bidding Period, about

the Strike Price and the number of shares provisionally allotted to each of them. The successful institutional

Bidders shall, within three (3) working days of the closing of the Bidding Period, deposit the balance amount

as consideration against allotment of shares. Where a successful Bidder defaults in payment of shares

allotted to it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner under

clause 21(12) of the Regulations.

As per regulation 21(14) of the Regulations, the successful bidders shall be issued shares in the form of

book-entry securities to be credited in their CDS accounts. All the eligible investors shall, therefore,

provide their CDC account numbers in the bid application.

The Bidders may fill-in the part of the Bidding Form under the heading, “Dividend Mandate” to enable

the Company to directly credit their cash dividend, if any, in their respective Bank Accounts.

2.3. BOOK RUNNER

Arif Habib Limited (“AHL”) has been appointed as the Book Runner to the Issue. AHL is registered with the

Commission as Book Runner as per the requirements of the Regulations.

2.4. ROLE AND FUNCTIONS OF BOOK RUNNER

a) The Book Runner to the Issue shall:

i. ensure that necessary infrastructure and electronic system is available to accept bids and to undertake the

whole Book Building in a fair, efficient and transparent manner;

ii. ensure that it is financially capable for honoring its commitments arising out of defaults by their client

investors, if any;

iii. collect Margin Money and subscription money from the Bidders in the manner as mentioned in the

Regulations;

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iv. use the software provided by the Designated Institution for the Book Building on such terms and

conditions as may be agreed through an agreement in writing;

v. ensure that the software used for Book Building is based on Dutch Auction Methodology for display of

the order book and determination of the strike price;

vi. ensure that the bidders can access to the System and can revise their bids electronically using the user ID

and the password;

vii. ensure that it has established not less than two Bid Collection Centers in the city where the securities

exchange on which the issuer is to be listed, is located, and in all major cities of the country at least in the

Federal Capital and all the provincial capitals;

viii. enter into an underwriting agreement with the Issuer with respect to underwriting of the Book Building

Portion;

ix. maintain record of all the bids received;

x. ensure that it has obtained list and Unique Identification Numbers of the associated companies and

associated undertakings of the Issuer;

xi. ensure that names and Unique Identification Numbers of the associated companies and associated

undertakings of the Issuer are entered and capped at five per cent (5%) into the system before

commencement of the Bidding Period;

xii. ensure that no bid in aggregate exceeding five per cent (5%) is made by the associated companies and

associated undertakings of the Issuer;

xiii. ensure that it has obtained names and Unique Identification Numbers of the Related Employees of the

Issuer, the Book Runner and that names and Unique Identification Numbers of all such employees are

entered into the system and blocked for participation in the bidding

xiv. Book Runner has established bid collection centers at the following addresses (direct & fax numbers in

all centres):

Karachi

Contact Officer: Abdul Qadir

Direct No.: 021 3246 5891

Mobile No.: 0331 260 4039

PABX No.: 021 111 245 111

Fax No.: 021 3242 9653

Email: [email protected]

Postal Address: Arif Habib Center, 23 MT Khan Road, Karachi

Contact Officer: Muhammad Ali Siddiqui

Direct No.: 021 3677 0144

Mobile No.: 0345 317 1151

PABX No.: 111 511 611 Ext 253

Fax No.: 021 3242 9653


Postal Address: Naya Nazimabad, Manghopir Road, Karachi


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Lahore

Contact Officer: Tahir Abbas

Mobile No.: 0333 213 7736

Fax No.: 021 3242 9653


Postal Address: Room # 220, Arif Habib Ltd, Lahore Stock Exchange, Lahore

Contact Person: Naveed Siddiqui

Mobile No.: 0333 424 1525

Direct: 042 3569 1170

Fax No.: 021 3242 9653


Postal Address: Summit Bank Limited, 13- G, Commercial Area, Phase -I Lahore

Islamabad

Contact Officer: Rao Amir

Mobile No.: 0311 812 2918

Direct: 051 280 6286

Fax No: 021 3242 9653


Postal Address: Summit Bank Limited, Plot # 109, East E-7/G-7, Islamabad Stock

Exchange Branch, Jinnah Avenue, Blue Area, Islamabad

Quetta

Contact Officer: Noman Mansoor

Mobile No.: 0300 398 0444

Direct: 081 286 5594-92

Fax No.: 021 3242 9653


Postal Address: Summit Bank Limited, Ground Floor, Malik Plaza Near Adara-e-

Saqafat, M.A. Jinnah Road, Quetta

Peshawar

Contact Officer: Arbab Zarak Khan

Mobile No.: 0333 913 1466

Direct: 091 226 0373

Fax No.: 021 3242 9653


Postal Address: Summit Bank Limited, Near Fruit Market, GT Road Peshawar

xv. Ensure that all the Bids received by the bid collection centers are entered into the system developed by the

Designated Institution for the purpose of Book Building within the prescribed time.

2.5. INTEREST OF BOOK RUNNERAND LEAD MANAGER& ARRANGER IN THE ISSUE AND THE

ISSUER OTHER THAN ITS ROLE AS A BOOK RUNNER AND LEAD MANAGER & ARRANGER.

The Book Runner, Lead Manager & Arranger is deemed to be interested to the extent of fees payable to it by

the Issuer for the services of Book Runner, Lead Manager & Arranger to the Issue. The Book Runner, Lead

Manager & Arranger has no other interest in any property or profits of the Company.

2.6. OPENING AND CLOSING OF THE BIDDING PERIOD

The Bidding Period will remain open for (02) two working days during business hours i.e. will commence at

09:00 a.m. on January 06, 2016 and will close at 05:00 p.m. on January 07, 2016.


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BIDDING PROCESS STARTS ON January 06, 2016

BIDDING PROCESS ENDS ON January 07, 2016

2.7. ELIGIBILITY TO PARTICIPATE IN BIDDING

Eligible investors, who can place their Bids in the Book Building process includes individual and Institutional

Investor both local and foreign, whose Bid Amount is not less than PKR 1,000,000/- (One million rupees).

2.8. INFORMATION FOR BIDDERS

a) The Prospectus has been duly cleared by KSE and LSE and approved by SECP. The Prospectus, Registration

Form and the Bidding Form can be obtained from the registered office of the Issuer, the Book Runner and the

Bid collection Centers. Prospectus, Registration Form and Bidding Forms can also be downloaded from the

following websites of the Company, KSE, LSE and the Book Runner i.e. http://www.hitechlubricants.com,

http://www.kse.com.pk, http://www.lse.com.pk and http://www.arifhabibltd.com respectively.

b) Eligible investors who are interested in subscribing to the Ordinary Shares should approach the Book Runner

at the addresses provided in paragraph 2.4to register and submit their Bids.

c) THE REGISTRATION FORMS SHOULD BE SUBMITTED ON THE PRESCRIBED FORMAT AT THE

ADDRESSES PROVIDED IN PARAGRAPH 2.4. FOR DETAILS ON THE PROCEDURE OF

REGISTRATION PLEASE REFER PARA 2.9

d) THE BIDS SHOULD BE SUBMITTED ON THE PRESCRIBED BIDDING FORM IN PERSON,

THROUGH FAX NUMBERS GIVEN IN PARAGRAPH 2.4 OR THROUGH THE ONLINE SYSTEM

USING THE USER ID AND PASSWORD ISSUED AT THE TIME OF REGISTERATION OF ELIGIBLE

INVESTOR.

e) REGISTERED INVETORS CAN PLACE, REVISE OR WITHDRAW THEIR BIDS BY ACCESSING THE

DESIGNATED INSTITUTIONS ONLINE PORTAL FOR BOOK BUILDING BY USING THE USER ID

AND PASSWORD COMMUNICATED TO THEM VIA EMAIL BY THE DESIGNATED INSTITUTION

f) EACH ELIGIBLE INVESTOR SHALL ONLY SUBMIT A SINGLE PAY ORDER, DEMAND DRAFT OR

EVIDENCE OF ONLINE TRANSFER OF MONEY ALONG WITH THE REGISTRATION FORM. IT

MAY ALSO BE NOTED THAT ONLY A SINGLE PAY ORDER, DEMAND DRAFT OR EVIDENCE OF

ONLINE TRANSFER OF MONEY SHALL BE ACCEPTED BY THE BOOK RUNNER ALONG WITH

EACH ADDITIONAL PAYMENT FORM.

g) ELIGIBLE INVESTORS WHO ARE ACCOUNT HOLDERS OF SUMMIT BANK LIMITED CAN USE

THE ONLINE TRANSFER FACILITY (PAY ORDER OR DEMAND DRAFT MAY BE DEPOSITED AT

ANY BRANCH OF SUMMIT BANK AND EVIDENCE TO BE SUBMITTED TO THE BOOK RUNNER)

TO DEPOSIT THEIR BID MONEY TO THE BOOK BUILDING ACCOUNT OPENED AT SUMMIT

BANK LIMTIED.

2.9. REGISTRATION FORM AND PROCEDURE FOR REGISTRATION

a) Standardized Registration Form has been prescribed by the Issuer. Registration Form shall be submitted at

the Bid Collection Centers in person on addresses given in paragraph 2.4 on the standard Registration Form

duly filled in. The Registration Form shall be serially numbered at the bid collection centers and date and time

stamped at the time of collection of the same from the Bidders.

b) Upon completion and submission of the Registration Form, the bidders are deemed to have authorized the

Issuer to make necessary changes in the Prospectus as would be required for finalizing and publishing the


http://www.kse.com.pk/

http://www.lse.com.pk/


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supplement to the Prospectus in the newspapers in which Prospectus was published and filing the supplement

with the KSE and the SECP, without prior or subsequent notice of such changes to the bidders.

The Registration procedure under the Book Building process if outlined below:

a) The registration of Eligible Investors shall commence from December 31, 2015 between 9.00 am to 5.00 pm

and will close at 3.00 pm on January 07, 2016.

b) The Registration Form shall be issued in duplicate signed by the Bidder and countersigned by the Book

Runner, with first copy for the Book Runner, and the second copy for the Bidder.

c) The Registration Form shall be submitted through the Bid Collection Centers in person on addresses given in

paragraph 2.4 on the standard Registration Form duly filled in and signed in duplicate.

d) Upon registration of the bidders in the System, the Designated Institution shall assign and communicate User

ID and password to the bidders via email on the email address provided by them in the Registration Form

e) The Book Runner may reject any bid for reasons to be recorded in writing provided the reason of rejection is

disclosed to such bidder. Decision of the Book Runner shall not be challengeable by the bidder or its

associates.

f) Bid Amount / Margin Money shall be deposited along with the Registration Form through demand draft, pay

order and online transfer.

g) The pay order shall be made in favor of “IPO of Hi-Tech Lubricants Limited – Book Building Account”.

For online transfer facility (pay order or demand draft may be deposited at any branch of summit bank

and evidence to be submitted to the book runner), the payment shall be made into Account Number 01-

02-02-20311-714-171861 being maintained in Summit Bank Limited, Clifton Branch with the Account

Title “IPO of Hi-Tech Lubricants Limited – Book Building Account”.

h) Please note that third party instruments will not be accepted for Margin Money

i) The Book Runner shall collect an amount of 100% of the Bid Amount as Margin Money in respect of bids

placed by Individual Investors.

j) The Book Runner shall collect an amount of not less than 25% of the Application Money as Margin Money

in respect of bids placed by Institutional Investors.

k) The Bidder shall provide a valid email address in the Registration Form so that the relevant User ID and

password can be emailed to them upon registration of the bid.

l) The Bidders can use the User ID and password to directly place, revise or withdraw their bids online.

m) The successful bidders shall be issued shares only in the form of book-entry to be credited in their respective

CDS accounts. All the bidders shall, therefore, provide their CDC account numbers in the Registration Form.

2.10. PROCEDURE FOR BIDDING

i. Standardized Bidding Form has been prescribed by the Issuer in accordance with the format and content

specified by the Commission.

ii. Registered Investors can submit their bids in person at the Bid Collection Centers during the bidding dates or

can place their bids online at https://bkb.kse.com.pk using the user ID and password received by them over

email upon registration with the Book Runner.

https://bkb.kse.com.pk/

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iii. The bidding procedure under the Book Building process is outlined below:

i. Bids can be placed at “Limit Price” or “Step Bid”. An Eligible Investor shall not place a bid provided that the

minimum size of a limit bid shall not be less than PKR 1,000,000/- (One Million Rupees) and in case of a

Step Bid, the amount of any step shall also not be less than PKR 1,000,000/- (One Million Rupees).

ii. In addition to the procedure provided in Regulation 13(2) of the Book Building Regulations, 2015, the

investors may place their bids through any of the Bid Collection Centers.

iii. The persons at the Bid Collection Centers shall vet the bid applications and accept only such bid applications

that are duly filled in and supported by pay order, demand draft or a bank receipt evidencing transfer of the

bid money into the Issuer’s designated bank account.

iv. On receipt of bid application in accordance with clause (c), the Book Runner shall enter Bid into the System

and issue to the bidder an electronic receipt bearing name of the book runner, name of the bidding center, date

and time.

v. The bidding shall commence from 09:00 a.m. and close at 05:00 p.m. on all days of the Bidding Period.

The bids shall be collected and entered into the system by the Book-Runner till 05:00 p.m. on the last

day of the bidding period.

vi. The registered investors shall have the right;

a. to withdraw their bids till 04:00 p.m. on last day of the bidding period either manually through

the Bid Collection Centers or electronically through direct access to the system. No withdrawal

shall be allowed after 4:00 p.m. on last day of the bidding period; and

b. subject to the provision of Regulation No. 20(3)(2)(iv), to revise their bids any time either

manually through the Bid Collection Centers or electronically through direct access to the

system till 05:00 p.m. on the last day of the Bidding Period. No downward revision shall be

allowed after 4:00 p.m. on last day of the bidding period.

vii. The Book Runner shall collect full amount of the Bid Amount as Margin Money in respect of bids placed by

the individual investors and not less than twenty five percent (25%) of the Bid Amount as Margin Money in

respect of bids placed by the Institutional Investors.

viii. Payment of Margin Money shall be accepted only through demand draft, pay order or online transfer and third

party payment instruments shall not be accepted.

ix. The Book Runner may on its own discretion accept bid without Margin Money provided Book Building

Portion is fully underwritten at least at the Floor Price by the Book Runner.

x. The Book Runner may reject any bid for reasons to be recorded in writing provided the reason of rejection is

disclosed to such bidder. Decision of the Book Runner shall not be challengeable by the bidder or its

associates.

xi. The Designated Institution shall, through the system, display live throughout the bidding period an order book

in descending order showing demand for shares at various prices and the accumulated number of shares bid

for along with percentage of the total shares offered. The order book should also show the revised bids and

the bids withdrawn. The order book shall be accessible through websites of the Designated Institution, Book

Runner, securities exchanges, clearing house and the central depository.

xii. At the close of the Bidding Period, Strike Price shall be determined on the basis of Dutch Auction

Methodology.

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xiii. Once the Strike Price is determined all those bidders whose bids are found successful shall become entitled

for allotment of shares.

xiv. The bidders who have made bids at prices above the Strike Price shall be allotted shares at the Strike Price

and the differential shall be refunded.

xv. The bidders who have made bids at the Strike Price shall be allotted shares in accordance with the regulation

7(2) of the Regulations. In case all the bids made above the Strike Price are accommodated and shares are still

available for allotment, such available shares will be allotted against the bids made at the Strike Price strictly

on time priority basis. The procedure for allotment of shares to successful bidders is mentioned in sections

2.18 and 2.19 of the Prospectus.

xvi. The bidders who have made bids below the Strike Price shall not qualify for allotment of shares and their

Margin Money will be refunded within five (5) working days of the close of the bidding period.

xvii. Successful bidders shall be intimated, within one (1) working day of the closing of the bidding period, the

Strike Price and the number of shares provisionally allotted to each of them. The successful institutional

bidders shall, within three (3) working days of the closing of the bidding period, deposit the balance amount

as consideration against allotment of shares. Where a successful Bidder defaults in payment of shares

allotted to it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner under

regulation 21(12) of the Regulations.

xviii. Final allotment of shares out of the Book Building Portion shall be made after receipt of full subscription

money from the successful bidders, however, shares to such bidders shall be credited at the time of credit and

dispatch of shares out of the retail portion.

xix. The successful bidders shall be issued shares only in the form of book-entry to be credited in their respective

CDS accounts. All the bidders shall, therefore, provide their CDC account numbers in the Registration Form.

xx. The Designated Institution shall continue to display on its website, the data pertaining to the Book Building

and determination of the Strike Price for a period of at least three working days after closure of the bidding

period

RESTRICTIONS:

Restriction on Related Employees: Related Employees of the Issuer, the Book Runner are not allowed to

participate in the Bidding for shares. Related Employees are those employees who are directly involved in the

Issue.

Restriction on Investors: A registered Eligible Investor shall not make

(i) bid below the floor price;

(ii) a bid for more than 10% of the shares allocated under the Book Building Portion;

(iii) subject to the provision of clause (i) above, a bid with price variation of more than 20% of the prevailing

indicative strike price;

(iv) a consolidated bid; or

(v) more than one bid either severally or jointly.

In case there is any allocation or allotment of shares to investors through Pre-IPO placement, Private

placement or through any other mode during the period of six months preceding the bidding date, at a price

lower than the Strike Price, such shares shall not be saleable for a period of six months from the date of closing

of subscription period for Retail Portion of the Issue.

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Bids from associated companies and associated undertakings of the Issuer, shall not be accepted for

shares in excess of five percent (5%), in aggregate, of the book building portion.

To check this threshold, the Issuer shall provide to the Book Runner and the Book Runner shall obtain

from the Issuer, list of associated companies and associated undertakings of the Issuer before

commencement of the Bidding Period along with their respective Unique Identification Number, to be

entered and capped at five percent (5%) in the System before commencement of the Bidding Period;

and the Book Runner shall make sure that the said list has been provided to the Designation Institution

and the employees deployed at the collection centers for collection of bids and entry thereof in the

system.

xxi. The Book-Runner shall ensure that subscription money received against the bids accepted shall not be released

to the Issuer by the Banker to the Book Building Portion until:

a. credit or dispatch of all shares allocated under the retail portion of the issue; and

b. issuance of NOC by the Stock Exchanges

xxii. In case the Bids received are sufficient to allot the total number of shares offered for sale under the Book

Building Portion, the allotment shall be made on the basis of highest bid priority that is the bid made at the

highest price shall be considered first for allotment of shares.

xxiii. In case all the bids made above the Strike Price are accommodated and shares are still available for

allotment, such available shares will be allotted against the bids made at the Strike Price strictly on

time priority basis.

2.11. BANK ACCOUNT FOR BOOK BUILDING

The Issuer has opened two separate bank accounts for collection of applications’ money, one each for the

Book Building portion and the general public portion of the Issue.

The Bidders shall draw demand draft or pay order in favor of “IPO of Hi-Tech Lubricants Limited – Book

Building Account”. For online transfer facility (pay order or demand draft may be deposited at any

branch of summit bank and evidence to be submitted to the book runner), the payment shall be made

into Account Number01-02-02-20311-714-171861 which has been opened at Summit Bank Limited,

Clifton Branch. The collection bank shall keep and maintain the bid money in the said account. Once the

Strike Price is determined and list of successful bidders/allottees is finalized, the Lead Manager, after

obtaining NOC from KSE & LSE, may request in writing to the collection bank for transfer of the money of

successful and accepted applications to the Issuers’ account(s).Please note that third party payment

instruments will not be accepted.

2.12. PAYMENT INTO THE BOOK BUILDING ACCOUNT

The Bidders shall draw a demand draft, pay order favoring “IPO of Hi-Tech Lubricants Limited – Book

Building Account” or Online Transfer of the Bid Amount into the respective IPO account of the Issuer A/c

01-02-02-20311-714-171861 submit the demand draft, pay order or bank receipt at the designated Bid

collection center in person or through facsimile along with a duly filled in Registration Form.

For online transfer facility (pay order or demand draft may be deposited at any branch of summit bank and

evidence to be submitted to the book runner), the payment shall be made into A/c 01-02-02-20311-714-

171861 being maintained at Summit Bank Limited, Clifton branch, Karachi with the Account Title “IPO of

Hi-Tech Lubricants Limited – Book Building Account”.

CASH MUST NOT BE SUBMITTED WITH THE BIDDING FORM AT THE BID COLLECTION

CENTER. BID AMOUNT MUST BE PAID THROUGH PAY ORDER, DEMAND DRAFT OR

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ONLINE TRANSFER, DRAWN / TRANSFER IN FAVOR OF “IPO OF HI-TECH LUBRICANTS

LIMITED – BOOK BUILDING ACCOUNT” IN A MANNER ACCEPTABLE TO THE BOOK

RUNNER.

Since the investors can bid for shares through “limit bid” or “step bid”, therefore payment procedure is

explained below for these methods.

a) PAYMENT FOR LIMIT BID

If investors are placing their Bids through “Limit Bid” then they shall deposit the Margin Money based on the

number of shares they are bidding for at their stated Bid Price.

For instance, if an investor is applying for 5.0 million shares at a price of PKR 48.00/- per share, then the total

Bid Amount would amount to PKR 240,000,000. In such a case, (i) individual investor shall deposit PKR

240,000,000 in the Book Building account as the Margin Money which is 100% of PKR 240,000,000; and (ii)

Institutional Investors shall deposit PKR 60,000,000 in the Book Building account as the Margin Money

which is at least 25% of PKR 240,000,000.

b) PAYMENT FOR STEP BIDS

If investors are placing a “Step Bid”, which is a series of limit Bids at increasing prices, then they shall deposit

the Margin Money/ Bid Amount based on the total number of shares they are bidding for at their stated Bid

prices.

For instance, if the investor Bids for 2.0 million shares at PKR 46.00/- per share, 1.5 million shares at PKR

47.00/- per share and 1.0 million shares at PKR 48.00/- per share, then in essence the investor has placed one

“Step Bid” comprising three limit Bids at increasing prices. The Bid Amount would amount to PKR

210,500,000/- which is the sum of the products of the number of shares Bid for and the Bid price of each limit

Bid. In such a case, (i) individual investor shall deposit PKR 210,500,000/-in the Book Building Account as

Bid Amount which is 100% of PKR 210,500,000/- and (ii) Institutional investors shall deposit at least PKR

52,625,000/-in the Book Building Account as Margin Money which is 25% of PKR 210,500,000/-.

2.13. PAYMENT BY FOREIGN INVESTORS

Foreign investors may subscribe using their special convertible rupee accounts (“SCRA”), as set out under

Chapter 20of the State Bank of Pakistan’s Foreign Exchange Manual 2002. Under Section 7(i) of Chapter 20,

companies issuing shares out of new public Issues on repatriable basis, as permitted under sub para (B) (I) of

paragraph 6, may open foreign currency collection accounts with banks abroad or in Pakistan for receiving

the subscription in foreign currency. They may also allow refunds from these accounts to unsuccessful

applicants.

Foreign investors do not require any regulatory approvals to invest in the shares being issued through this

Prospectus. Payment in respect of investment in the shares of the Company has to be made in foreign currency

through an inward remittance or through surplus balances in SCRA. Local currency cash account(s) opened

for the purpose of Foreign Portfolio Investment (FPI) is classified as SCRA. There is no restriction on

repatriation of sale proceeds of and the dividend yield on the shares of the Company. Underlying client

names/beneficial owners are required to be disclosed at depository level.

A. Key Documents required for individual(s):

(i) Account opening request; and

(ii) Passport / ID.

B. General documentations required for opening of SCRA account by institutional investors are:

(i) Account opening request;

(ii) Board Resolution & Signatories list;

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(iii) Passport / ID of Board of Directors;

(iv) Passport/ID of all authorized signatories;

(v) Certificate of Incorporation (COI) or equivalent document (like Trade Registry Certificate,

Business Registration Certificate, and Certificate of Commencement of Business);

(vi) Memorandum & Articles of Association;

(vii) Withholding tax registration certificate / Certificate of country of domicile of client;

(viii) Latest Annual Report;

(ix) List of Board of Directors; and

(x) List of Shareholders (greater than 10% holdings) and key officers.

It is however pertinent to note that the procedure and requirements of each financial institution with respect

to opening of SCRA differs, hence it is advised to request the procedure from respective financial institution.

Payments made by foreign investors shall be supported by proof of receipt of foreign currency through normal

banking channels. Such proof shall be submitted along with the Application by the foreign investors.

2.14. REVISION OF BIDS BY THE BIDDER

The registered investors may revise their Bids any time either manually through the Bid Collection Centers

or electronically through direct access to the system till 05:00 p.m. on the last day of the Bidding Period.

An investor will not be allowed to place or revise a bid with a price variation of more than 20% of the

prevailing indicative strike price. NO DOWNWARD REVISION SHALL BE ALLOWED AFTER 4:00

P.M. ON LAST DAY OF THE BIDDING PERIOD.

2.15. WITHDRAWAL OF BIDS BY THE BIDDER

The registered investors shall have the right to withdraw their bids till 04:00 p.m. on last day of the Bidding

Period either manually through the Bid Collection Centers or electronically through direct access to the

system. NO WITHDRAWAL SHALL BE ALLOWED AFTER 4:00 P.M. ON LAST DAY OF THE

BIDDING PERIOD.

2.16. REJECTION OF BIDS BY THE BOOK RUNNER

In terms of regulation 21(5) of Chapter V of the Book Building Regulations, 2015, the Book Runner may

reject any Bid placed by a Bidder for reasons to be recorded in writing provided the reason of rejection is

disclosed to such bidder. Decision of the Book Runner shall not be challengeable by the Bidder or any of its

associates.

2.17. WITHDRAWAL OF ISSUE BY THE ISSUER

a) According to regulation 5(6) of the Regulations, in case the Issuer does not receive bids for the number of

shares allocated under the Book Building Portion, at the Floor Price, the Issue shall be cancelled and the same

shall be immediately intimated to the Commission, the Stock Exchanges and the Designated Institution and

the Margin Money shall be refunded to the Bidders immediately but not later than two (2) working days of

the closing of the Bidding Period.

b) The Book Building will be considered cancelled if the total number of bids received are less than forty.

2.18. MECHANISM FOR DETERMINATION OF STRIKE PRICE

a) At the close of the Bidding Period, the Strike Price shall be determined on the basis of “Dutch Auction

Methodology”. Under this Methodology, the Strike Price is determined by lowering the price to the extent

that the total number of shares issued is subscribed.

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b) The order book shall display the Bid prices in a descending order along with the quantity for each price level

as well as the cumulative quantity at each price level.

c) Once the Strike Price is determined all those Bidders whose bids have been found successful shall become

entitled for allotment of shares. The Bidders, who have made bids at prices above the Strike Price, will be

issued shares at the Strike Price and the differential, if any, will be refunded. The Bidders, who have made

bids below the Strike Price, shall not qualify for allotment of shares and their Margin Money shall be refunded.

d) In case the bids received are sufficient to allot the total number of shares offered for sale under the Book

Building Portion, the allotment shall be made on the basis of highest bid priority that is the bid made at the

highest price shall be considered first for allotment of shares.

e) In case all the bids made above the Strike Price are accommodated and shares are still available for allotment,

such available shares will be allotted against the bids made at the Strike Price strictly on time priority basis.

The mechanism for determination of Strike Price can be understood by the following illustration.

a) Number of shares being Issued through the Book Building: 21,750,500 Ordinary Shares

b) Floor Price: PKR 37.0 per share

c) Bidding Period: January 06, 2016 to January 07, 2016

d) Bidding Time: 9:00am – 5:00pm

e) Bid Entry Time: 9.00am – 5.00pm

f) Bid Withdrawal Time: Any time till 4.00pm on the last day of Bidding Period

g) Bidding Revision Time: 9:00am – 5:00pm, except for downward revisions which are allowed

only till 4.00pm on the last day of Bidding Period

Bidder Price (PKR

per share)

Bid Quantity

(shares

Millions)

Cumulative

Quantity (Million

Shares)

Category of Order

Institution – A 59.00 3.00 3.00 Limit Price

Institution – E 58.00 1.00 4.00 Limit Price

Institution – B 58.50 4.00 7.00 Limit Price

Foreign Institution – F 58.00 3.50 10.50 Limit Price

Individual Investor– A 57.50 2.50 13.00 Step Bid

Institution – C 57.00 2.75 15.75 Step Bid

Individual Investor– E 56.00 4.00 19.75 Limit Price


Institution – B 55.00 5.00 21.75 Limit Price

Individual Investor– A 54.00 2.00 23.75 Step Bid


On the basis of the figures provided in the above illustration, according to the Dutch Auction Method, the

Strike Price would be set at PKR 55.50 per share to sell the required quantity of 21,750,500 ordinary shares.

At PKR 59.00 per share, investors are willing to buy only 3.00 million shares. Since 18.75 million shares are

still available, therefore the price will set lower.

At PKR 58.50 per share, investors are willing to buy 4.00 million shares. Since 14.75 million shares are still

available; therefore, the price will set lower.

Bid Withdrawn

Bid has been revised and placed at

PKR 58.50 per share Strike Price determined

through Dutch Auction

Method

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At PKR 55.50 per share, investors are willing to buy 2.00 million shares. Since after bidding for 2.00 million

shares at PKR 55.50 per shares no share will be available, therefore, the Strike Price will be set at PKR 55.50

per share for the entire lot of 21.75 million shares.

The Bidders, who have placed bids at prices above the Strike Price (which in this illustration is PKR 55.50

per share), will become entitled for allotment of shares at the Strike Price and the differential amount would

be refunded.

The Bidders, who have placed bids below PKR 55.50 per share, will not qualify for allotment of shares.

After allotment in the aforementioned manner, 2.00 million shares are still available for allotment. These

shares will be allotted to the Bidders who have placed bid(s) at PKR 55.50, however, for the purpose of

allotment of these 2.00 million shares preferences will be given to the Bidder who has placed the bid

earlier.

2.19. BASIS OF ALLOTMENT OF SHARES

Once the Strike Price is determined all those bidders whose bids have been found successful shall become

entitled for allotment of shares. For allocation of shares priority shall be given to the bids placed at the highest

price. The bidders, who have made bids at prices above the Strike Price, will be issued shares at the Strike

Price and the differential, if any, will be refunded. The bidders, who have made bids below the Strike Price,

shall not qualify for allotment of shares and their Margin Money shall be refunded.

For the purpose of allotment of shares, the bid(s) made at the price determined / discovered as Strike Price

through the Book Building process shall be ranked equally and preference will be given to the bidder who has

made the bid earlier.

Incase bids received at the Strike Price exceeds the number of shares allocated under the Book Building, then

preference will be given to the bidders who have made the bid earlier.

Final allotment of shares out of the Book Building portion shall be made after receipt of full subscription

money from the successful bidders; however, shares to such bidders shall be credited at the time of credit and

dispatch of shares out of the retail portion of the issue to successful applicants as per regulation 21(13) of the

Regulations.

2.20. REFUND OF MARGIN MONEY

Investors that place Bids lower than the Strike Price shall not be eligible for allotment of shares. Margin

Money of the unsuccessful Bidders shall be refunded within five (05) working days of the close of the bidding

period as required under Regulation 21(11) of the Regulations.

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The bidders, who have made bids at prices above the Strike Price, will be issued shares at the Strike Price and

the differential will be refunded, where required.

2.21. UNDERWRITING

After determination of the Strike Price the Book Runner shall within two (2) working days of the closing of

the bidding period enter into an Underwriting Agreement with the Issuer indicating the number of shares that

the Book Runner would underwrite at the Strike Price and the Underwriting Commission / Fee to be charged.

2.22. PUBLICATION OF SUPPLEMENT TO THE PROSPECTUS

In accordance with the Regulation 4(x) of the Regulations within five (5) working days of the closing of the

Bidding Period, Supplement to the Prospectus shall be published at least in all those newspapers in which

the Prospectus was earlier published and also disseminated through securities exchange where shares are to

be listed.

Supplement to the Prospectus would contain information relating to the Strike Price, the Offer Price, names

of the Underwriters for the Retail Portion of the Issue, Underwriting Commission, and Category-wise breakup

of the successful bidders along with the number of shares provisionally allocated to them.

Public subscription for the shares shall be held at any date(s) within thirty days (30) of the publication of the

Supplement to the Prospectus but not earlier than seven (7) days of such publication.

2.23. INTEREST OF THE BOOK RUNNER

The Book Runner has no interest in the Issue and Issuer other than its role as a Book Runner to the Issue.

2.24. ASSOCIATED COMPANIES AND UNDERTAKINGS OF THE ISSUER

i. Associated Companies

Name of company Status Registered office address

UINs

(Incorporation /

NTN no.)

HI-TECH BLENDING

(PVT) LIMITED

WHOLLY OWNED

SUBSIDIARY

1-A DANEPUR ROAD GOR-

1, LAHORE

0087364 /

4247720-4

HI-TECH ENERGY (PVT)

LIMITED

ASSOCIATED

COMPANY


1, LAHORE

0066529 /

3222650-7

MAS ASSOCIATES

(PVT) LIMITED

ASSOCIATED

COMPANY


1, LAHORE

L 07610 /

0161292-1

MAS INFOSOFT (PVT)

LIMITED

ASSOCIATED

COMPANY


1, LAHORE

L 10941 /

1412089-5

MAS SERVICES ASSOCIATED FIRM

/ AOP


1, LAHORE NIL / 1325368-9

GULF RUBBER

PRODUCTS (PVT)

LIMITED

ASSOCIATED

UNDERTAKING

44-A MAIN ROAD

GULBERG LAHORE

0091776 /

4377502-5

SYNTHETIC PRODUCTS

ENREPRISE LIMITED

ASSOCIATED

UNDERTAKING

127-S, Q.I.E, TOWNSHIP,

KOTLAKHPAT, LAHORE

0009432 /

0688349-4

MTM SECURITIES (PVT)

LIMITED

ASSOCIATED

UNDERTAKING

101, LAHORE STOCK

EXCHANGE BUILDING,

LAHORE

L 09878 /

1253386-6

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PAK FRANCE

BUSINESS ALLIANCE

ASSOCIATED

UNDERTAKING

D-118/2 KEHKASHAN 5,

CLIFTON, KARACHI

0088332 /

4288492-6

PAK AGRO

PACKAGING (PVT) LTD

ASSOCIATED

UNDERTAKING

2 ND FLOOR 1-A PLAZA,

ISLAMABAD

P-00158/1142661-

6

HILAL MEAT

PROCESSING CO. (PVT)

LTD

ASSOCIATED

UNDERTAKING

FAYYAZ MARKET, STREET

NO. 9 ISLAMABAD

0075357

/3704913-5

CHIP TRAINING AND

CONSULTING (PVT)

LTD

ASSOCIATED

UNDERTAKING

PLOT NO.05, STREET NO.09

OPPOSITE NIH G-8/2,

ISLAMABAD

0063808 /

3092086-8

UJALA EDUCATIONAL

TRUST

ASSOCIATED

UNDERTAKING

130 STREET 48, NEAR

MAJOR ROAD ISLAMABAD

0075019 /

3687334-9

Note: As required in Regulation 5(8) of the Regulations, the Associated Companies and Associated

Undertakings of the Issuer shall not in aggregate make bids for shares in excess of 5% of the Book

Building Portion.

ii. Related Employees

List of Related Employees of the Issuer

S.no Name Designation CNIC

1 Mr. Muhammad Imran CFO / Company Secretary 35202-7974957-1

2 Mr. Ahmad Shuja Country Head Sales 35202-7152979-7

3 Mr. Shahzad Sohail GM Procurement 35200-1145924-9

4 Mr. Shafqat Ali GM Associated Company 35202-2587908-9

5 Mr. Tamur Shah Senior Manager Administration 35202-9463859-5

6 Mr. Ali Khalid Head Planning and Internal Audit 37405-0634742-1

7 Mr. Omer Bajwa Manager Marketing 35202-6278237-3

8 Mr. Muhammad Ashraf Manager I.T. 35201-1247825-3

9 Mr. Qaisar Abbas Manager Sales 31303-5865802-5

10 Mr. Amjad Shahzad Manager Sales Analysis 35202-2487662-5

11 Ms. Shumaila Hameed Manager HR 35202-5378738-6

12 Mr. Omer Aftab Rana Manager Sales 35202-3015302-9

13 Mr. Fawad Nafees Manager Operations 42101-1714261-3

14

Mr. Syed Muhammad

Iftikhar Senior Manager Sales 42101-8881496-7

15 Mr. Rafique Muhammad Manager Sales 17301-5954403-7

16 Mr. Muhammad Ejaz Khattak Manager Sales 61101-1520007-5

17 Mr. Junaid Malik Manager Sales 42301-0923316-5

18 Mr. Hashim Iqbal Deputy Manager Financials 42301-4124367-3

19 Mr. Kashif Pervez Assistant Manager Corporate 35202-9051994-3

20 Mr. Hamza Assistant Manager Internal Audit 35202-3408452-9

21 Ms. Imrana Designer 35201-3583175-4

List of Board of Directors of Hi-Tech Lubricants Limited


1 Mr. Hassan Tahir Chief Executive Officer 35202-0561257-7

2 Mr. Mohammad Basit Hassan Executive Director 35202-2936471-7

3 Mr. Mohammad Ali Hassan Non-Executive Director 35202-8680689-3

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4 Mr. Tahir Azam Non-Executive Director 35202-1586099-7

5 Mr. Shaukat Hassan Chairman Board of Directors 35202-2937890-9

6 Mr. Zalmai Azam Non-Executive Director 35202-8613893-1

7 Mr. Tabassum Munir Independent Director 35201-2475737-5

8 Dr. Safdar Ali Butt Independent Director 61101-1938034-7

9 Mr. Syed Asad Abbas Hussain Independent Director 611017-914566-9

10 Mr. Syed Mujahid Jameel Ghaznavi Non-Executive Director 61101-0907195-1

List of Related Employees of the Book Runner

S.no Name (as per CNIC) Designation UIN/CNIC

1 Mr. Muhammad Shahid Ali Chief Executive Officer 42301-0870728-7

2 Mr. Syed Kashif ul Hassan

Shah

Managing Director, Investment

Banking

42301-2295321-7

3 Mr. Nasim Beg Advisor to Corporate Finance 42301-5558488-3

4 Mr. Zeshan Afzal Executive Director & Head of

Corporate Finance 42501-8031535-3

5 Mr. Rafique Bhundi Sr. Vice President, Corporate

Finance

42201-2497903-1

6 Mr. Ahmed Rajani Vice President, Corporate Finance 42201-4832681-5

7 Mr. Syed Saquib Ali Vice President, Corporate Finance 42201-4292146-1

8 Mr. Abdul Qadir Analyst, Corporate Finance 42301-2989158-1

9 Mr. Muhammad Ali Siddiqui Analyst, Corporate Finance 42501-2740531-7

10 Ms. Shaima Ghani Analyst, Corporate Finance 42201-1517006-6

11 Ms. Amira Aswani Analyst, Corporate Finance 42301-0725240-6

12 Mr. Tahir Abbas Asst. Vice President, Research 42201-9867974-9

13 Mr. Shahbaz Ashraf Head of Research 42201-3317016-7

14 Mr. Sarwar Khan Head of Compliance 54400-1389625-3

15 Mr. Sardar Khan Library Assistant, Research 42501-2640314-3

16 Mr. Saeed Ahmed Officer, Corporate Finance 42201-2425208-1

Note: As required in Regulation 11 of the Regulations, Related Employees of the Issuer and the Book

Runner shall not participate in the bidding for shares.

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2.25. STATEMENT BY ISSUER

June 08, 2015

The Managing Director,

Karachi Stock Exchange Limited,

Stock Exchange Building,

Stock Exchange Road,

Karachi.


Lahore Stock Exchange Limited,

Lahore Stock Exchange Building,

19-Khayaban-e-Aiwan-e-Iqbal

Lahore

On behalf of the Issuer, we here by confirm that all material information as required under the Companies

Ordinance, 1984 and the Listing of Companies and Securities Regulations of the Karachi Stock Exchange

Limited and Listing Regulations of Lahore Stock Exchange Limited has been disclosed in the Prospectus

and that whatever stated in the Prospectus and the supporting documents is true and correct to the best of

our knowledge and belief and that nothing has been concealed.

For and on behalf of Issuer

-sd-

_____________________

Hassan Tahir

Chief Executive Officer


-sd-

____________________

Muhammad Imran

Chief Financial Officer


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2.26. STATEMENT BY LEAD MANAGER

June 15, 2015





Karachi.





Lahore

Being mandated as Advisor and Lead Manager to this Initial Public Offering of Hi-Tech Lubricants Limited

through the Book Building process, we hereby confirm that all material information as required under the

Companies Ordinance, 1984, Securities Act, 2015 and Listing of Companies and Securities Regulations of

the Karachi Stock Exchange Limited and Listing Regulations of Lahore Stock Exchange Limited including

the Book Building Regulations, 2015thereof has been disclosed in this Prospectus and that whatever stated

herein and in the supporting documents is true and correct to the best of our knowledge and belief and that

nothing has been concealed.

On behalf of Arif Habib Limited

-sd-

_____________________

Zeshan Afzal

Executive Director& Head of Corporate Finance

Arif Habib Limited

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2.27. STATEMENT BY BOOK RUNNER

June 15, 2015





Karachi.





Lahore

Being mandated as Book Runner to Initial Public Offering of Hi-Tech Lubricants Limited through the Book

Building process, we hereby confirm that all material information as required under the Companies

Ordinance, 1984, Securities Act, 2015 and the Listing of Companies and Securities Regulations of the

Karachi Stock Exchange Limited and Listing Regulations of Lahore Stock Exchange Limited including the

Book Building Regulations, 2015thereof has been disclosed in this Prospectus and that whatever stated

herein and in the supporting documents is true and correct to the best of our knowledge and belief and that

nothing has been concealed.

On behalf of Arif Habib Limited

-sd-

_____________________

Zeshan Afzal

Executive Director& Head of Corporate Finance

Arif Habib Limited

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PART 3

3 SHARE CAPITAL AND RELATED MATTERS

3.1. SHARE CAPITAL

No. of

shares

Face value Premium Total (including

premium)

(PKR) (PKR) (PKR)

AUTHORIZED CAPITAL

150,000,000 Ordinary shares of PKR 10/- each 1,500,000,000 - 1,500,000,000

ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL

12,001,000 Issued for Cash 120,010,000 - 120,010,000

25,000,000 Issued for consideration other than

Cash (refer to note “3.1-f”) 250,000,000 - 250,000,000

50,002,000 Issued as fully paid bonus shares 500,020,000 - 500,020,000

87,003,000 Total Existing Paid up Capital 870,030,000 - 870,030,000

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

SHARES HELD BY SPONSORS & DIRECTORS

28,498,900 Mrs. Uzra Tahir 284,989,000 - 284,989,000

24,748,750 Mrs. Arifa Shaukat 247,487,500 - 247,487,500

7,500,300 Mr. Hassan Tahir (CEO & Executive

Director) 75,003,000 - 75,003,000

7,500,300 Mr. Muhammad Ali Hassan (Non-

Executive Director) 75,003,000 - 75,003,000

7,500,300 Mr. Muhammad Basit Hassan

(Executive Director) 75,003,000 - 75,003,000

3,750,150 Mrs. Mavira Tahir 37,501,500 - 37,501,500

3,750,150 Mrs. Mehvish Khan 37,501,500 - 37,501,500

3,750,150 Mrs. Amna Zaidi 37,501,500 - 37,501,500

500 Mr. Shaukat Hassan (Chairman Board

of Directors) 5,000 - 5,000

500 Mr. Tahir Azam (Non – Executive

Director) 5,000 - 5,000

500 Mr. Zalmai Azam (Non – Executive

Director) 5,000 - 5,000

SHARES HELD BY INDEPENDENT DIRECTOR

500 Mr. Muhammad Tabassum Munir 5,000 - 5,000

500 Dr. Safdar Ali Butt 5,000 - 5,000

500 Mr. Syed Asad Abbas Hussain 5,000 - 5,000

500 Mr. Syed Mujahid Jameel Ghaznavi 5,000 - 5,000

OTHER SHAREHOLDER

500 Mr. Syed Sikandar Abbas 5,000 - 5,000

87,003,000 Total Existing Paid up Capital 870,030,000 - 870,030,000

PRESENT ISSUE

21,750,500

Allocation to Eligible Investors

through book building process at a

strike price

217,505,000 587,263,500 804,768,500

7,250,500 General Public 72,505,000 195,763,500 268,268,500

29,001,000 Total Present Issue Paid Up Capital 290,010,000 783,027,000 1,073,037,000

116,004,000 Total Post Issue Paid Up Capital 1,160,040,000 783,027,000 1,943,067,000

* The premium in the capital structure is on the basis of Floor Price of PKR 37.00/- per share.

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Notes:

a) As per rule 3 (II) (i) of The Companies (Issue of Capital) Rules, 1996, the fixed capital expenditure

related to investment in retail outlets and additional filling lines shall be entirely financed by equity.

b) The rules 3 (II) (ii) and 3 (II) (iii) of The Companies (Issue of Capital) Rules, 1996 are not applicable

to the Company as the expansion plan being implemented by the Company is a brownfield project

and not a green field project.

c) In case the Issuer does not receive bids for the number of shares allocated under the Book Building

Portion, at the Floor Price, the offer shall be cancelled and the same shall be immediately intimated

to the Commission, all the securities exchanges and the Designated Institution and the Margin Money

shall be refunded to the bidders immediately but not later than two working days of the closing of the

Bidding Period.

d) As per rule 3 (II) (v) of The Companies (Issue of Capital) Rules, 1996, the sponsors shall retain at

least 25% of the capital of the Company for a period of five years from the date of public subscription.

Consequently, the sponsors have undertaken to retain 25% shares collectively from their existing

shareholding.

e) As per regulation 5.4.5(a) of the Listing of Companies and Securities Regulations of KSE and

regulation 6(A) 7 of the Listing Regulations of LSE, sponsors shareholding in excess of 25% of the

capital of the Company is not saleable for a period of six (06) months from the date of public

subscription.

f) On 01 July 2011, the Company entered into an agreement for takeover with the partners of Hi-Tech

Lubricants, a registered partnership firm (the “Firm”) and took over all the business, assets and

liabilities of the Firm against consideration of issuance of shares of the Company amounting to PKR

250,000,000 divided into 2,500,000 ordinary shares of PKR 100 each.:

g) Auditor in its certificate dated August 01, 2011 has confirmed compliance of rule 8 of the Companies

(Issue of Capital) Rule, 1996 for issue of shares for consideration other than cash

h) Quarterly progress reports related to the implementation of expansion plan shall be submitted to KSE,

LSE and SECP.

3.2. OPENING AND CLOSING OF THE SUBSCRIPTION LIST

The subscription list will open for 04 days at the commencement of banking hours on January 25, 2016

and will close on January 27, 2016 at the close of banking hours*. Please note that online applications

can be submitted 24 hours a day during the subscription period which will close at midnight on January

27, 2016.

*In order to facilitate investors, United Bank Limited (UBL) & Summit Bank Limited are providing

facility of electronic submission of application (e‐IPO) to its account holders. United Bank Limited

account holders can use United Bank Limited Net Banking to submit their application via link

http://www.ubldirect.com/corporate/ebank. and Summit Bank Limited account holders can use Net

Banking to submit their application via link https://ib.summitbank.com.pk

3.3. INVESTOR ELIGIBILITY FOR PUBLIC ISSUE

Eligible investors include:

a) Pakistani citizens residing in or outside Pakistan or persons holding two nationalities including

Pakistani nationality;

b) Foreign nationals whether living in or outside Pakistan;


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c) Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan

(to the extent permitted by their respective constitutive documents and existing regulations as the case

may be);

d) Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their respective trust

deeds and existing regulations); and

e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

3.4. FACILITIES AVAILABLE TO NON-RESIDENT PAKISTANI AND FOREIGN

INVESTORS

Non-resident Pakistani investors and foreign investors may subscribe for the shares being issued through this

Prospectus by using their SCRA. For details please see Chapter 20 of the Foreign Exchange Manual of the

State Bank of Pakistan. Under Section 7(i) of Chapter 20 of the said Manual, Companies issuing shares out

of new public Issues on repatriable basis, as permitted under sub para (B) (I) of paragraph 6, may open foreign

currency collection accounts with banks abroad or in Pakistan for receiving the subscription in foreign

currency. They may also allow refunds from these accounts to unsuccessful applicants.

Foreign investors do not require any regulatory approvals to invest in the shares being issued through this

Prospectus. Payment in respect of investment in the shares of the Company has to be made in foreign currency

through an inward remittance or through surplus balances in SCRA. Local currency cash account(s) opened

for the purpose of Foreign Portfolio Investment (FPI) is classified as SCRA. There is no restriction on

repatriation of sale proceeds and dividend payouts on shares. Underlying client names/beneficial owners are

required to be disclosed at depository level.

A. Key Documents required for individual(s):

(i) Account opening request; and

(iii) Passport / ID.

B. General documentations required for opening of SCRA account by institutional investors are:

(i) Account opening request;

(ii) Board Resolution & Signatories list;

(iii) Passport / ID of Board of Directors;

(iv) Passport/ID of all authorized signatories;

(v) Certificate of Incorporation (COI) or equivalent document (like Trade Registry Certificate,

Business Registration Certificate, and Certificate of Commencement of Business);

(vi) Memorandum & Articles of Association;

(vii) Withholding tax registration certificate / Certificate of country of domicile of client;

(viii) Latest Annual Report;

(ix) List of Board of Directors; and

(x) List of Shareholders (greater than 10% holdings) and key officers.

It is however pertinent to note that the procedure and requirements of each financial institution with respect

to opening of SCRA differs, hence it is advised to make a prior request for the procedure from concerned

financial institution.

Payments made by foreign investors must be supported by proof of receipt of foreign currency through normal

banking channels. Such proof must be submitted along with the Application by the foreign investors.

3.5. MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF SHARES

OUT OF THE PUBLIC PORTION OF THE ISSUE

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

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(a) Application for shares must be made for 500 shares or in multiple of 500 shares only. Applications which

are neither for 500 shares nor for multiples of 500 shares shall be rejected.

(b) The minimum amount of application for subscription of 500 shares in case of physical transfer is Issue

Price x 500 shares and in case of transfer under the book entry system is Issue Price x 500 shares-.

(c) Application for shares below the total value of Issue Price x 500 shares-in case of shares in physical form

and Issue Price x 500 shares in case of shares in the book entry form shall not be entertained.

(d) SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS ARE PROHIBITED AND

SUCH APPLICATIONS’ MONEY MAY BE FOREFIETED UNDER SECTION 87(8) OF THE

SECURITIES ACT, 2015.

(e) If the shares issued to the general public are sufficient to accommodate all applications, all applications

shall be accommodated.

(f) If the shares applied for by the general public are in excess of the shares being issued to them, the

distribution shall be made by computer balloting, in the presence of the representative(s) of the KSE and

LSE 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 shares cannot be accommodated, then balloting will

be conducted among applications for 500 shares only.

(ii) If all applications for 500 shares have been accommodated and shares are still available for allotment,

then all applications for 1,000 shares shall be accommodated. If all applications 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 accommodated and shares are still

available for allotment, then all applications for 1,500 shares shall be accommodated. If all

applications for 1,500 shares cannot be accommodated, then balloting will be conducted among

applications for 1,500 shares only.

(iv) If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated and shares

are still available for allotment, then all applications for 2,000 shares shall be accommodated. If all

applications for 2,000 shares cannot be accommodated, then balloting will be conducted among

applications for 2,000 shares only.

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

following manner:

If the remaining shares are sufficient to accommodate each application for over 2,000 shares, then

2,000 shares shall be allotted to each applicant and remaining shares shall be allotted on pro-rata

basis.

If the remaining shares are not sufficient to accommodate all the remaining applications for over

2,000 shares, then balloting shall be conducted for allocation of 2,000 shares each to the

successful applicants

(g) If the Issue is over-subscribed in terms of amount only, then allotment of shares shall be made in the

following manner:

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

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

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

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

(v) After allotment of the above, the balance shares, if any, shall be allotted on pro rata basis to the

applicants who applied for more than 2,000 shares.

(h) Allotment of shares will be subject to scrutiny of applications for subscription of shares.

(i) Applications, which do not meet the above requirements, or applications which are incomplete, will be

rejected.

3.6. REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS

The Company shall take a decision within ten (10) days of the closure of subscription list as to which

applications have been accepted or are successful and refund the money in cases of unaccepted or unsuccessful

applications within ten (10) days of the date of such decision, as required under Section 71 of the Ordinance.

As per sub-section (2) of Section 71 of the Ordinance, if refund as required under Sub-section (1) of Section

71 of the Ordinance is not made within the time specified therein, the Issuer shall be liable to repay the money

with surcharge at the rate of 1.5%, for every month or part thereof from the expiration of the 15th day and in

addition to a fine not exceeding PKR 5,000/- and in case of continuing offense to a further fine not exceeding

PKR 100/- per day after the 15th day of which the default continues. Provided that the Issuer shall not be

liable if it proves that the default in making the refund was not on its own account and was not due to any

misconduct or negligence on its part.

3.7. CREDIT AND DISPATCH OF SHARE CERTIFICATES

The Company, will dispatch share certificates to successful applicants through their Bankers to the Issue or

by crediting the respective Central Depository System (“CDS”) accounts of the successful applicants within

thirty (30) days of the close of public subscription, as per Listing of Companies and Securities Regulations of

the KSE and Listing Regulations of the LSE.

Shares will be issued either in scrip-less form in the CDS of CDCPL or in the shape of physical scripts on the

basis of option exercised by the successful applicants. Shares in the physical scripts shall be dispatched to the

Bankers to the Issue within thirty (30) days from the date of close of subscription list, whereas scrip-less

shares shall be directly credited through book entries in the respective accounts maintained with the CDCPL.

The applicants who opt for receipt of shares in scrip-less form in CDS should fill in the relevant columns of

the Application Form. In order to exercise the scrip-less option, the applicant(s) should have CDS account at

the time of subscription.

If the Issuer makes a default in complying with the above requirements, they shall pay to the KSE and LSE a

penalty of PKR 5,000/- per day for every day during which the default continues. The KSE and LSE may also

notify the fact of such default and the name of the Company by notice and also by publication in its ready-

board quotation of the KSE and LSE.

The name of the Company be notified to the members of the KSE and LSE and placed on the website of the

KSE and LSE.

3.8. TRANSFER OF SHARES

a) Physical Scrips

Under the provisions of Section 77 of the Ordinance, the Directors of the Company shall not refuse to transfer

any fully paid share unless the transfer deed is, for any reason, defective or invalid or is not accompanied by

the relevant share certificate. Provided that the Company shall within thirty (30) days from the date on which

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the instrument of transfer was lodged with it, notify the defect or invalidity to the transferee who shall, after

the removal of such defect or invalidity, be entitled to re-lodge the transfer deed with the Company.

b) Transfer under book entry system

The shares maintained with the CDS in the book entry form shall be transferred in accordance with the

provisions of the Central Depositories Act, 1997 and the CDCPL Regulations.

3.9. SHARES ISSUED IN PRECEDING YEARS

Date of Allotment Number of

shares Par Value

Amount

(Par Value) Considerations

September 01, 2008 6 100.00 600 Initial subscription for Cash

May 01, 2011 94 100.00 9,400 For consideration in Cash

August 06, 2011 2,500,000 100.00 250,000,000 *For Consideration other than Cash

June 29, 2014 5,000,200 100.00 500,020,000 Bonus Issue

7,500,300 100.00 750,030,000 Sub Total before splitting

April 01,2015 75,003,000 10.00 750,030,000 10:1 Split of Shares

April 25, 2015 12,000,000 10.00 120,000,000 For Cash

TOTAL 87,003,000 10.00 870,030,000

Note: There has been no other issue of shares otherwise than in cash other than those mentioned above.

Furthermore, the Company has not so far issued any shares against goodwill and other intangible assets. For

further details, please refer to above para.

*Shares issued against takeover of Hi-Tec Lubricants, a partnership firm. Net assets of the firm as of June 30,

2011, were as follows.

Net Assets PKR

Assets

Property & equipment 71,516,676

Long germ security deposits 13,484,194

Investments 13,057,785

Stock-in-trade 152,824,383

Trade debt 127,861,218

Other receivables 2,542,998

Loans, advances, accrued interest 92,732,264

Short term deposits and prepayments 3,630,616

Cash and bank balance 84,317,164

TOTAL ASSETS 561,967,298

Liabilities

Loans from partners 41,687,073

Liabilities against subject to finance lease 11,464,208

Current portion of non-current liabilities 12,854,176

Long term deposits 580,000

Trade & other payables 238,297,755

Provision for taxation 7,084,086

TOTAL LIABILITIES 311,967,298

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Net Assets PKR

NET ASSETS 250,000,000

3.10. PRINCIPAL PURPOSE OF THE PUBLIC ISSUE

At present, the Company is in the business of distribution of lubricants under the brand name of ‘ZIC’. The

Company is an exclusive distributor and Commission agent of SK Lubricants in Pakistan. The Company has

entered into a Sales and Distributor Agreement with SK Lubricants. The Company plans to offer state of the

art retail outlets across Pakistan with multitude of unique services and also plans to install additional filling

lines at the blending plant of its subsidiary.

HTLL’s forward integration, expansion into retail service centers, will enable its products to be sold directly

to the end customer with loyalty programs to benefit end users. This investment & business expansion plan

offers multitude of opportunities to strengthen the local business line in Pakistan. HTLL envisages a total

estimated investment requirement of PKR 1,250 million, break-down of which is as follows:

Proceeds Utilization PKR Million

Investment in Company

Land 470

Building 128

Plant, Machinery & Equipment 139

Pre-operating costs 33

Working Capital 280

Sub-total (funds required by HTLL) 1,050

Investment in 100% owned subsidiary

Additional Filling Lines for Blending Plant, Hi-Tech Blending (Pvt.) Limited 200

Total Requirement 1,250

IPO Proceeds 1,073

Internally generated resources, if required 177

Tentative Plan and Current Status for Retail Outlets and Additional Filing Lines:

HTLL plans of 2015-16 covers 37 grand outlet openings in 11 major cities of Pakistan out of which 29 outlet

will be rented and 8 outlet will be owned. Area surveys are being conducted by HTLL. Proceeds from IPO

will be invested in Hi-Tech Service centers that includes launch of 8 owned outlets in Lahore (3), Gujranwala

(1), Faisalabad (1), Islamabad (1) and Karachi (2) during 2015-16. Over a period of 5 years, HTLL plans to

open 75 retail outlets (including 67 rented) across 16 major cities of Pakistan. For further details of service

centers & roll out plan please refer section 5.5.

The following table shows the categories of equipment that will be installed at the service centers along with

the estimated cost during the year 2015 – 16:

Components (PKR) Silver Gold Platinum

Oil Change Equipment 65,000 130,000 130,000

Car Wash/ Service Equipment 750,000 750,000 900,000

Auto Mechanic Equipment 312,000 312,000 312,000

Other Machinery and equipment - 1,830,000 6,395,000

Electricity equipment 95,000 170,000 960,000

IT/Display Others 430,000 715,000 1,410,000

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Total 1,652,000 3,907,000 10,107,000

NO. OF ZIC SERVICE CENTERS 20 11 6

Servers 200,000 1,000,000 800,000

TOTAL COST OF ZIC SERVICE CENTERS 33,240,000 43,977,000 61,442,000

GRAND TOTAL 138,659,000

Roll Out Plan of Service Centers for the Year 2015-16:

Following the possession of land either through acquisition or rent, the following indicative timelines are

required to bring a service center online:

Milestone Time Horizon

Layout / Designing 3-4 Weeks

Civil Construction 9- 12 Weeks

Machinery Installation 3 Weeks

Furniture and Fixtures 2 Weeks

Pre-Launch Marketing 1-2 Weeks

HTLL has incorporated a 100% wholly owned subsidiary named Hi-Tech Blending (Pvt.) Limited with a total

investment of PKR 776 million as of June 30, 2015. The upcoming Plant is an integrated unit Producing

International Standard Specifications Lubricants in HDPE bottles, filling, capping & labeling of finished

products on an automated high accuracy filling line. As per the agreement between HTLL and SK Lubricant,

HTLL is allowed to invest in a blending plant.

The project cost for setting up blending plant was 1.7 billion. Now, HTLL also plans to invest further in the

HTBL (a wholly owned subsidiary) to introduce Jerry Can and Drum filling lines from the proceeds of the

IPO. HTLL envisages an estimated cost of additional filling lines to PKR 200 million

8 Owned Centers Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

Land Identification

Land Acquisition

Documentation

Layout

Site Development

Opening

29 Rented Centers Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

Area Identification

Rental Agreement

Layout

Site Development

Opening

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The company plans to procure machinery & equipment from the following vendors for the additional fling

lines, breakdown of which is as follows.

Component Vendor Origin Currency FOB

Freight,

Duty &

Taxes

21%

Total PKR in

Millions

Drum Filling Packon South

Korea US$ 68,800 14,448 83,248 8.7

Drum

Manufacturing

Full Shine

engineering Taiwan US$ 433,600 91,056 524,656 55.0

Jerry Can

Filling Packon

South

Korea US$ 132,500 27,825 160,325 16.8

Jerry Can

Manufacturing

ACE

Corporation

South

Korea US$ 320,000 67,200 387,200 40.7

Transformer

Oil

Meier-

Group Germany EURO 198,650 41,717 240,367 27.9

Master Batch Torninova Italy EURO 199,950 41,990 241,940 28.1

Local

Components 23

Total 200

The implementation schedule for the additional filing line is mentioned below. For further details please refer

section 5.5.

Implementation schedule for the Additional Filing lines:

Milestone Schedule

Identification of supplier & quotation July 2014 - March 2015

Final negotiation November 2015

LC opening December 2015

Pre-shipment March 2016

Shipment April 2016

Installation June 2016

Test run July 2016

Commercial run August 2016

3.11. INTEREST OF SHAREHOLDERS

None of the subscribers of the issued shares of the Company have any special or other interest in the property

or profits of the Company other than as shareholders of the Ordinary Shares in the capital of the Company.

3.12. DIVIDEND POLICY

The Company has paid dividends from the Financial Year 2012 to date and going forward the Company

intends to follow a consistent profit distribution policy for members, subject to the profitability, availability

of adequate cash flows and shareholder approval. Detail of dividends history for the last five years is presented

below.

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S.no Year ended 30th

June

Cash dividend

(Rs. Per share) Bonus Issue

1 2011 - -

2 2012 1.83 -

3 2013 2.90 -

4 2014 2.50 200%

5 2015* 1.81 -

Note: dividends are adjusted to the face value of PKR 10/share

*Dividends are up to period ended June 30th, 2015.

The rights in respect of capital and dividends attached to each share are and will be the same. The Company

in its general meeting may declare final dividends but no dividends shall exceed the amount recommended by

the Directors. Dividend, if so declared, shall be paid according to the terms of the provisions of the Ordinance.

The Directors may from time to time pay to the members such interim dividends as appear to the Directors to

be justified by the profits of the Company. No dividends shall be paid otherwise than out of the profits of the

Company.

No unpaid dividends shall bear interest or mark-up against the Company. The dividends shall be paid

within the period prescribed under the Ordinance.

Those investors who intend that their cash dividend, if any, is directly credited in their Bank Account,

may fill-in the relevant part of the shares subscription Form under the heading, “Dividend Mandate

Option”.

The Bidders may fill-in the part of the Bidding Form under the heading, “Dividend Mandate” to enable

the Company to directly credit their cash dividend, if any, in their respective Bank Accounts.

3.13. ELIGIBILITY FOR DIVIDEND

The shares being issued shall rank paripassu with the existing shares in all matters, including the right to such

bonus or right issue and dividend as may be declared by the Company subsequent to the Issue of such shares.

3.14. DEDUCTION OF ZAKAT

Income distribution will be subject to deduction of Zakat at source, pursuant to the provisions of Zakat and

Ushr Ordinance, 1980 (XVIII of 1980) as may be applicable from time to time (except where the Ordinance

does not apply to any shareholder or where such shareholder is otherwise exempt or has claimed exemption

from payment/deduction of Zakat in terms of and as provided in that Ordinance).

3.15. CAPITAL GAINS (SECTION 37-A)

Capital gains derived from the sale of listed securities are taxable in the following manner under Section 37A

of the Income Tax Ordinance, 2001.

Tax Rate

Holding period of securities

S. No. Tax Year less than

twelve months

more than twelve months and

less than twenty four months

more than twenty four

months but less than 4

years

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1 2015-16 15.00% 12.50% 7.50%

3.16. WITHHOLDING TAX ON DIVIDENDS

Dividend distribution to shareholders will be subject to withholding tax under section 150 of the Income Tax

Ordinance, 2001 specified in Part 1 Division III of the First Schedule of the said Ordinance or any time to

time amendments therein. In terms of the provision of Section 8 of the said Ordinance, said deduction at

source, shall be deemed to be full and final liability in respect of such profits in case of individuals only. The

following are the rates:

(a) For filer of Income Tax Returns: 12.50%

(b) For non‐filer of Income Tax Return: 17.50%

3.17. TAX ON BONUS SHARES

As per section 236M of the Income Tax Ordinance 2001, tax at the rate of 5% of the value of “bonus shares”

determined on the basis of the day end price on the first day of book closure shall be collected by the company

issuing the “bonus shares”, which will be the final tax liability on such income of the shareholder.

3.18. INCOME TAX

The income of the company is subject to Income Tax under the Income Tax Ordinance, 2001.

3.19. DEFERRED TAXATION

Deferred tax is accounted for using the balance sheet approach providing for temporary differences between

the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax

purposes. In this regard, the effect on deferred taxation of the portion of income that is subject to final tax

regime is also considered in accordance with the treatment prescribed by the Institute of Chartered

Accountants of Pakistan. Deferred tax is measured at rates that are expected to be applied to the temporary

differences when they reverse, based on laws that have been enacted or substantively enacted by the reporting

date. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is

recognized for deductible temporary differences to the extent that future taxable profits will be available

against which temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date

and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

The Company has deferred tax liability balance of PKR 8.7 Million as at June 30, 2015.

3.20. SALES TAX ON SALE/PURCHASE OF SHARES

Under the Constitution of Pakistan and Articles 49 of the 7th NFC Award the Government of Sindh,

Government of Punjab and the Government of Khyber Pakhtunkhwa have promulgated the Sindh Sales Tax

through Services Act, 2011, Punjab Sales Tax through Services Act, 2012 and the Khyber Pakhtunkhwa Sales

Tax through Khyber Pakhtunkhwa Finance Act, 2013 respectively. The Sindh Revenue Board, the Punjab

Revenue Authority and the Khyber Pakhtunkhwa Revenue Authority administer and regulate the levy and

collection of the Sindh Sales Tax (“SST”), Punjab Sales Tax (“PST”) and Khyber Pakhtunkhwa Sales Tax

(“KST”) respectively on the taxable services provided or rendered in Sindh, Punjab or Khyber Pakhtunkhwa

respectively.

The value of taxable services for the purpose of levy of sales tax is the gross commission charged from clients

in respect of purchase or sale of shares in a Stock Exchange. The above mentioned Acts levy a sales tax on

Brokerage at the rate of 14% in Sindh and in Punjab the tax rate is 16%.Sales tax charged under the

aforementioned Acts is withheld at source under statutory requirements.

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3.21. CAPITAL VALUE TAX (CVT) ON PURCHASE OF SHARES

Pursuant to amendments made in the Finance Act, 1989 through Finance (Amendments) Ordinance, 2012

promulgated on April 24, 2012, 0.01% Capital Value Tax will be applicable on the purchase value of shares.

3.22. TAX CREDIT FOR INVESTMENT IN IPO

Under Section 62 of the Income Tax Ordinance, 2001, a resident person other than a Company, shall be

entitled to a tax credit for a tax year, as per the prescribed formula under the law, in respect of the cost of

acquiring in the year, new shares offered to the public by a public company listed on a stock exchange in

Pakistan, provided the resident person is the original allottee of the shares or the shares are acquired from the

Privatization Commission of Pakistan.

As per section 62(3) (b) of the Income Tax Ordinance, 2001, the time Limit for holding shares has been

designated as 24 months to avail tax credit.

3.23. TAX CREDIT FOR ENLISTMENT

Tax credit for enlistment Under Section 65C of the Income Tax Ordinance, 2001, tax credit at 20% of the tax

payable shall be allowed for the tax year in which a Company is listed on a Stock Exchange in Pakistan

3.24. JUSTIFICATION FOR THE PREMIUM

Commanding Market Position in High End Lubricant Segment

HTLL’s salient feature has been to offer high-end synthetic products in price savvy market with a vision to

attract and retain the customers based on quality. The availability of imported lubricants in the market with a

wide-spread channel and high reliability of the end user has helped HTLL to gain competitive edge with the

leading position in the market.

The overall market share of HTLL has increased significantly in the last 3 years to around 7%. In the Passenger

Car Motor Oil (“PCMO”)”) segment, HTLL commands a market share of around 16% and the future forecast

to lead the competition is quite promising. One of the many reasons to achieve such a phenomenal growth

trend has been the product quality and import of finished lubricants from SK Lubricants of South Korea which

owns of world’s largest petrochemical complex.

Stellar Growth

As a result of HTLL’s experience in grass root marketing, the strong and motivated field staff with extensive

network of distributors all over the country, sales have increased by 2.4x from PKR 2,250mn in FY10 to PKR

5,467mn in FY015.

*In 2010 and 2011, the business carried by the partnership firm which was taken over by HTLL in 2011 (refer to note 3.1(f))

2,250

3,316

4,265 4,597 5,274 5,467

2010* 2011* 2012 2013 2014 2015

Sales (PKR mn)

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Strong Distribution Network

For the retail automotive sector, the Company has a network of more than 150 distributors across

all major cities of Pakistan spanning from Karachi to Peshawar including Gilgit Baltistan and Azad Jammu

and Kashmir.

Profitability& Stable Margins

Sales growth successfully translated into Company’s profitability with gross margin averaging at

24.7%.EBITDA increased from PKR 319 million in FY10 to PKR 555 million in FY15 (margin of 10.2%)

and net profit increased from PKR 250 million in FY10 to PKR 338 million in FY15 (margin of 6.2%).

*In 2010 and 2011, the business carried by the partnership firm which was taken over by HTLL in 2011 (refer to note 3.1(f))

319

399 433 445

514 555

250 300

264 270 302

338

2010* 2011* 2012 2013 2014 2015

EBITDA (PKR mn) Net Income (PKR mn)

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World Renowned Manufacturer & Supplier - SK Lubricants of South Korea

As the exclusive distributor and commission agent in Pakistan, HTLL imports lubricants from the world

renowned SK Corporation of South Korea, which has the single largest Petrochemical Chemical Complex in

the world, having the state of the art upstream and downstream manufacturing facilities.SK Lubricants has

the highest market share in the South Korean lubricant automotive market and widespread distribution

channel. SK Group is the 3rd largest conglomerate in South Korea and ranked 70th on the world “Forbes”

list.

SK’s global presence is shown below:

Certifications

HTLL is operating under the following certifications:

ISO 9001 Quality Standards

EMS 14001 Environment Standards

API Certification

Promising Future Outlook

HTLL continues to invest in future growth and plans to enter into the retail service center market. In backward

integration, blending plant will ensure right product to be delivered in time with enough storage to facilitate

future growth. The investment in blending plant will open new avenues to market HTLL’s products and will

help to penetrate in industrial / OEM segment. Further, the state of the art production plant will also enable

HTLL to supply lubricants to the government sector.

Within the blending plant, HTLL is also expanding into bottle manufacturing by adding 10 Liters / 20 liters

Jerry Can and 200 Liters Plastic Drum production facility. Simultaneously new filling lines will be added to

support these packaging. Quality has to be checked at each and every stage of storage and filling. Therefore a

full fledge lab of international standard is going to be established which will ensure product quality to meet

API/SAE Standards.

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HTLL’s forward integration, expansion into retail service centers, will enable its products to be sold directly

to the end customer with loyalty programs to benefit end users. A three tier model will be introduced based

on retail outlets across Pakistan. This one stop shop model will enhance HTLL’s reach and provide a wide

variety of products available to its valued customers

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PART 4

4 UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES

4.1. UNDERWRITING

Book Building Portion

Arif Habib Limited has been mandated to act as the Book Runner to the Issue. The Book Runner shall

underwrite the Book Building Portion of the Issue of 21,750,500 ordinary shares as required under

Regulation 20(2)(viii) of the Regulations with limitations (in effect that the Book Runner shall only

underwrite the default portion of the Book Building, if any) to Regulation 20(2)(ii) of the Regulations at

the Strike Price determined through the Book Building process.

In the opinion of the Directors, the resources of the Underwriter are sufficient to discharge its

underwriting obligations/commitments.

Public Portion

As required under Rule 4(iii) of the Companies (Issue of Capital) Rules, 1996, the General Public Portion of

the Issue of 7,250,500 ordinary shares will be underwritten and within five (05) working days from the

close of Bidding Period, the names of the Underwriters will be published in the supplement to the

Prospectus in at least in all those newspapers in which the Prospectus was earlier published and also

disseminated through securities exchange where shares are to be listed.

4.2. UNDERWRITING COMMISSION

No underwriting commission will be paid for the amount of Book Building portion underwritten by the

Book Runner. Amount of security deposited by the defaulting Bidder shall however, be forfeited to the

Book Runner.

For general public portion, the underwriters will be paid an underwriting commission at the rate of 1.50%

of the amount of Issue underwritten by them. In addition, a take up commission at the rate of 1.50% shall

be paid to the underwriters on the value of shares required to be subscribed by them by virtue of their

respective underwriting commitments.

4.3. BUY BACK/REPURCHASE AGREEMENT

The underwriters have not entered into any buy back/re-purchase agreement with the issuer or any other

person in respect of this public issue.

Also, neither the issuer nor any of their associates have entered into any buy back/repurchase agreement with

the underwriters or their associates. The issuers and their associates shall not buyback/repurchase shares from

the underwriters and their associates.

4.4. COMMISSION TO THE BANKERS TO THE ISSUE

A commission at the rate of 0.50% of the amount collected on allotment in respect of successful applicants

will be paid by the Issuer to the Bankers for services to be rendered by them in connection with this Issue plus

Out of Pocket expenses, if any.

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4.5. BROKERAGE

For this issue, the Issuer will pay brokerage to the TREC holder of KSE, LSE and ISE at the rate of 1% of the

value of shares (including premium if any) on successful applicants. No brokerage shall be paid to the TREC

holders in respect of shares taken up by the underwriters by virtue of their underwriting commitments.

4.6. EXPENSES TO THE ISSUE

The expenses of this Issue are estimated around PKR 48.182 million. All such expenses are to be borne by

the Issuer. Details of the approximate expenses are mentioned below:

Expenses Rate Amount (PKR)

Financial Advisors and Lead Managers 1.10% 11,803,407

Underwriting Arrangement (For Public Portion only) 0.25% 670,648

Book Runner Fee (For Book Building Portion only) 0.50% 4,023,889

Underwriting Commission*(For Public Portion only) 1.50% 4,023,889

Take up Commission*(For Public Portion only) 1.50% 4,023,889

Brokerage to Members of the Stock Exchange (for public offering

including book building portion)*

1.00% 10,730,370

Bankers to the Offer Commission* 0.25%~0.5% 3,353,241

Marketing, Printing, Publication, and Miscellaneous, (tentative) 4,000,000

Stock Exchanges Initial Listing Fee, Annual Listing Fee, Service

Charges and Software Charges

2,142,344

SECP Application and Processing Fee 200,000

CDC Charges 960,000

Registrar/Balloting Agent 250,000

Legal Advisory and Documentation 1,000,000

Miscellaneous 1,000,000

Total 48,181,676

*Represent maximum amount that is expected to be paid based on the Floor Price of PKR 37.0 per share

**These amounts do not include Sindh Sales Tax, as mentioned in section 3.20, wherever applicable

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PART 5

5 HISTORY, PROSPECTS AND RISK FACTORS

5.1. BRIEF HISTORY – HI-TECH LUBRICANTS LIMITED

HTLL is in the business of, as an exclusive distributor and commission agent of SK Lubricants, sale of

lubricants under the brand name of ZIC in Pakistan. The business was established as a partnership firm in

1997 which was taken over by Hi-Tech Lubricants (Pvt.) Limited in 2011. HTLL was incorporated in

September 01, 2008 as a Private Limited Company.

The Company was converted from Private Company into Public Unlisted Company on December 12, 2011.

1997: Business Established

Hi-Tech Lubricants (“Hi-Tech”) was formed as an Association of Persons (“AOP”) in March, 1997 to market

lubricants, imported from YU Kong Ltd (Now known as SK Lubricants Ltd.), South Korea in sealed cartons,

in Pakistan. During the early days Hi-Tech established its own distribution in Lahore and created a sales team

to educate the local market on the use of synthetic lubricants.

2000: Expansion Year

With 3 years of local marketing experience, the business was ready to expand its footprint to other cities of

Pakistan. In 2000, Hi-Tech established its regional offices in Islamabad and Karachi with a dedicated sales

force to handle local operations of those regions.

It was a big ask to an unknown brand and a young company to compete against the industry giants. Hi-Tech’s

management with focus and hard work achieved its challenges / milestones with effective controls. New door-

to-door delivery systems were introduced to lubricant retailers and they were offered credit on product

deliveries. Education was given to the resellers and end customers on lubricant grade/applications. All

mediums were used to educate the user and seller of lubricants. Their sales team played a pivotal role in

creating “ZIC” as a premium lubricant household name in Pakistan.

1997

• Commenced business as a partnership firm and established its distribution network in Lahore

2000

• Expanding the distribution network other cities and established regional offices in Karachi & Islamabad

2013

• Backward integration, set-up a blending plant

2014

• Implemented oracle financials to improve MIS and performance and online sales via internet

2015

• Revenues have crossed PKR 5.4bn mark with a PCMO and total market share of 16%. and 7% respectively.

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2010: ISO Certification

HTLL became an ISO certified Company and they delivered as per as per 9001:2008 quality standards with

excellent quality management system in place. They followed the principles to engage with the customers,

sell products and retained sustainability. Their channels for supply chain and sales became risk free with more

than 400 dedicated field force & support teams offering satisfaction at the doorstep of customers.

2011: Takeover of AOP by Private Limited Company

In 2011, the AOP was bought over by Hi-Tech Lubricants (Pvt.) Limited which in the same year was

converted into a public unlisted company, now known as Hi-Tech Lubricants Limited (“HTLL”).

2013: Investment in Blending Plant

In 2013, HTLL diversified from trading to manufacturing and decided to invest in a wholly owned subsidiary,

Hi-Tech Blending (Pvt.) Limited, to set up a state of the art blending plant in Bhai Kot adjacent to Sunder

Industrial Estate, Lahore.

The investment in blending will give HTLL the benefits of importing in bulk as compared to sealed cartons,

hence reducing cost of lubricants and savings in other overheads. The new plant will also produce its own

HDPE bottle/Cap and filling lines for lubricant bulk imports.

The local filling and bottle manufacturing will open new avenues for HTLL sales to not only OEMs and

institutions but also in Plastic related products manufacturing /trading. The Company will have the ability to

market lubricants to different automotive and industrial brands. Moreover, filling and packaging can be done

on different Shop Keeping Units (SKUs). Government sector clients will be another addition to HTLL

portfolio due to indigenous status.

The details of the plant are as follows:

Ownership 100% wholly owned subsidiary of HTLL

Land 29Acres

Blending Capacity 30,000 MT per annum

Tankage 3,600 (KL)/ 3,200 MT per annum

Blow Moulding 4,000 MT per annum

Injection Moulding 1,500 MT per annum

Total project cost PKR 1.7 Billion*

Debt: Equity 38:62

Estimated Completion 4Q 2015

Commercial Run 1Q 2016 *This excludes the project cost of additional filling lines i.e. PKR 200 million.

2014: Oracle Financial and Business Intelligence Implementation

In order to follow the best practices of the industry and standards adopted by leading organization of the

world, HTLL implemented oracle financials to its core business operations. This resulted in enhanced

performance and helped HTLL to become a major player in Pakistan’s lubricant industry. This

implementation was completed in a record time of 6 month in partnership of Company’s financial department

and dedicated team of A. F. Ferguson & Co. (PWC). All operations of the Company were automated including

payroll and provident fund.

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Online Sales www.zicoil.pk

In 2014 HTLL became the first lubricant Company to market its products to end consumers via internet. The

products were sold cash on delivery basis with zero delivery charges and on every purchase of ZIC products

a loyalty point system was introduced. Now with the help of points, customers can redeem and benefit at any

particular purchase. This online platform was highly appreciated by the loyal ZIC customers and it generated

well-off revenues for HTLL.

2015: Taking HTLL to Capital Markets

HTLL is now on the edge of taking the Company to the domestic capital markets via an Initial Public Offering

(“IPO”). The blending plant is expected to come online in first quarter of the calendar year 2016 to produce

HDPE packaging and filling.

5.2.SALES & DISTRIBUTION AGREEMENT WITH SK LUBRICANTS

Salient features of the agreement between SK Lubricants (”SKL”) and HTLL are as below:

Exclusivity HTLL will act as an exclusive distributor and commission agent for the sale of

SKL’s products.

Territory for Distributor

HTLL shall engage in distribution activities only within the territory and

cannot permit any of its sub-distributor, agents or buyer to engage in any of

the activities of the products outside the Territory. The territory includes

geographical areas within the national border line of Pakistan and

Afghanistan.

Restriction on

Distributor’s Activities

HTLL must not engage in activities like import, sell, promote, distribute,

display for its own or third-party product within the Territory.

Trade Names

HTLL, during the term and after expiration of the agreement, will never

contest the validity of the registration of the trade name, trademarks including

licensed trademark, designs, copyrights and/or patents of SKL.

Appointment of sub-

distributor

Distributor can appoint sub-distributor or agents subject to the approval of

SKL.

Sales Target HTLL shall meet the sales target to be agreed with SKL from time to time.

Obligation Of SK

Lubricants

SK Lubricants will sell its products to HTLL and provide advisory service

including technical data, specification, codes and work plans for achieving

optimum production.

Incentive Plan HTLL and SK Lubricants will enter into certain incentive bonus agreement or

scheme on or around the start of the year and set targets to be met by HTLL.

Blending Plant SKL and HTLL to engage in discussion with regards to construction, owning

and operating a lubricant oil and greasing plant, i.e. blending plant.

Termination Of The

Agreement

The agreement is terminated if any of the parties is in breach of the terms and

conditions of the agreement. If HTLL fails to meet the sales target, SK

Lubricants may terminate the agreement unless both parties reach to a

resolution.

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License

SKL has granted HTLL the non-exclusive license to use the Licensed

Trademark only for carrying out the activities of the products in accordance

with the agreement.

5.3.PRODUCT PORTFOLIO

HTLL provides a wide range of lubricants to automotive and industrial sectors in Pakistan. Their principal

supplier, SK lubricant’s base oil plant is the largest API Group III base oil plant in the world. SK API Group

III production meets more than 50% of world's demand for similar base oils. ZIC Lubricants are ISO 9001,

EMS14001certified ensuring highest quality with maximum engine protection and machine wear. ZIC is

produced by using (VHVI TECH) Synthetic base oil formulation in a fully automated computerized PLC

controlled plant. In result, ZIC products deliver more power, less fuel consumption, low noise, quick starting

& extended engine life.

Core Product Line:

ZIC Synthetic and Semi Synthetic Lubricant Range (Gasoline)

ZIC Synthetic Oil based on VHVI technology is Very High Viscosity Index Engine Oil that offers

various Grades in Fully Synthetic Oil, providing superior Engine Protection and Advanced Fuel

Savings. The enhanced viscosity improver used in ZIC provides ultimate long term protection for

both types of Gasoline and Diesel engines vehicle.

ZIC 0W30 & 5W40 are both API SN & ILSAC GF-5 Grades that provide better ODI, Engine

Protection and fuel savings without losing its viscosity under all types of driving conditions(extreme

temperature and heavy load),at the same time extending engine service life by keeping the running

engine cleaner. Its typical properties provide improved fuel saving benefits up to 10 % compared to

conventional motor oils and delivers better performance.

ZIC fully Synthetic series consists of following:

- Gasoline Synthetic Engine Oil :

- X7 FE, X7, X9, X7 FE

- Gasoline Semi Synthetic Engine Oil : ZIC X5X5 & ZIC X3X3

X7 FEX7 X9X7 FE 5W-20 10W-40 5W-40 0W-30

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ZIC Semi Synthetic Range (Diesel Engine Oils):

The biggest strength of ZIC lies in the fact that it uses YUBASE (Group III base oil with a viscosity

index of 120 or higher). The use of YUBASE guarantees that ZIC maintains viscosity better than any

other engine oils of which viscosity index is artificially enhanced by viscosity index-enhancing agents

mixed with low-quality base oil. By using ZIC fine ability to maintain viscosity brings you the

following benefits: Exceptional Engine Protection, Longer Oil Change Intervals. ZIC Semi Synthetic

series consists of the following:

Industrial Oils, Greases, Hydraulics, ATF, Gear Oils, Brake Fluids and Coolants

• ZIC Coolants have high quality long life for radiators that (ethylene glycol based) that provides

outstanding performance in all cooling systems. ZIC coolants are pre-diluted for customer’s

convenience mixed (50: 50) with water and ethylene glycol.

• ZIC Vega series is a high quality hydraulic oil providing semi anti-wear performance coupled with

excellent oxidation stability. It has great low temperature performance by applying SK’s proprietary

technology, VHVI Tech and holds its viscosity under high temperature operating conditions.

• ZIC Dexron is fully synthetic ATF engineered with SK’s proprietary VHVI Tech and advanced

additive technology. It meets all the stringent requirements of all kind of automotive transmission

requirements and is fully backward / serviceable.

• ZIC Super Gear EP Series is premium quality extreme pressure gear oils. They contain Sulfur /

Phosphorous extreme pressure additive system giving load carrying ability and protection against

wear. In addition these oils provide excellent protection against corrosion of steel and copper

containing alloys.

• SK Super Freeze refrigeration oil series is made from high quality naphthenic base stock and high

quality additive package which is intended to be used in refrigeration compressors.

M5 20W-40 M7 10W-40 X5 X3

JASO MA 2 JASO MA 2 20W-50 15W-40

X7000 X7000 X5000 X3000 15W-40 \ CI-4 10W-40\ CI-4 15W-40 CH-4 20W-50 CF-4

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• SK Super Compressor oil series is formulated from premium quality, high viscosity index base stock

combined with selective additives to satisfy the lubrication requirements of all kind of rotary screw /

rotary vane compressors used in industrial applications.

• SK Super Therm 300 is formulated from high quality base stock with advance additive package

system which provides high stability when heated for heat transfer applications.

• SK Super Brake Fluid is a high quality brake fluid providing outstanding performance for all

hydraulics brake systems.

• ZIC Royal Grease series is multipurpose lithium soap-thickened grease available in NLGI grades 0,

1, 2, and 3, formulated with paraffinic mineral oil base oils, and also containing additives to control

oxidation and rust formation. ZIC Greases can be used in a wide range of industrial and automotive

applications, where there is no requirement for load-carrying properties.

Power Generation/ Gen-Set Oils

• ZIC is composed of YUBASE (Group III base oil with a viscosity index of 120 or higher).The use of

YUBASE guarantees that ZIC will maintain viscosity better than any other Oil of which viscosity

index is artificially enhanced by viscosity index-enhancing agents mixed with low-quality base oil.

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• ZIC Diesel Generator Engine oils provide excellent wear protection along with advance fuel

economy. ZIC 5000 Power and SD 5000 are synthetic Formula lubricants which provide long drain

capability, low emission with exhaust treatments for equipment like catalytic converters and DPF.

5.4.HTLL DISTRIBUTION NETWORK

HTLL has a strong channel of over 150 distributors nationwide which ensures presence and product

availability in the far reaching areas of the country in meeting customer requirements.

HTLL sales cycle comprises of key elements including sales planning with periodic reviews, systematic

channel development, engaging distributors through targeted revenue generation and range trade reward

schemes, retention of key players in the market. Their audit and control measures are in place to avoid major

risks prevalent in the markets. This systematic process is not achievable without the support of highly mature

and capable sales team which is spread across Pakistan. Presently HTLL has a head count of more than 300

dedicated sales professionals nationwide engaged in attracting, engaging and retaining the distributors,

corporate and industrial clients.

5.5.EXPANSION PLAN

HTLL envisages a total estimated investment requirement of PKR 1,250 million, break-down of which is as

follows:

Proceeds Utilization PKR Million

Investment in Company

Land 470

Building 128

Plant, Machinery & Equipment 139

Pre-operating costs 33

Working Capital 280

Sub-total (funds required by HTLL) 1,050

Investment in 100% owned subsidiary

Additional Filling Lines for Blending Plant, Hi-Tech Blending (Pvt.) Limited 200

Total Requirement 1,250

IPO Proceeds 1,073

Internally generated resources, if required 177

At a floor price of PKR 37 per share, HTLL expects to raise PKR 1,073 million from the IPO. Balance money,

if any, will be financed by HTTL’s internal sources. Excess funds, in case of a higher strike price, will be first

utilized to cover the investment requirement of PKR 1,250 million and then meeting Company’s current and

future working capital requirements.

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Investment in Company: Retail Outlets - Service Delivery Categorization/Plan

Under this expansion HTLL plans to offer state of the art retail outlets across Pakistan with multitude of

unique services and technical support for our customers. This business expansion plan is the part of HTLL’s

forward integration strategy.

• Oil Change

• Car Care accessories

• Polishes

• Air Fresheners

• Mats

• Decorations

• Viper Blades

• Vehicle Accessories

• Car Stereo

• Amplifiers

• Speakers

• Coolants

• Exhaust Systems

• Ignition Switch

• Fan Belt

• Central Locking System

• Spark Plugs

• Tires (Multi Range)

• Rims (Multi Range)

• Batteries

• Battery Water

• Car Wash

• Full Car Service

• Fully Trained Auto mechanic

Services

• Wheel Alignment

• Wheel Balancing

• Car Foaming

• Auto Wheel Changer

• Car Polishing

• Compound Polish

• Tire Change & Punctures

• Tuck shops for FMCGs

With this expansion, the Company expects to generate over PKR 6.0 billion in incremental revenues during

the span of 5 years.

The Retail outlets plan will be executed initially based on 3-Tier Business Model:

The plan of 2015-16 covers 37 grand outlet openings in 11 major cities of Pakistan including Lahore,

Gujranwala, Sialkot, Faisalabad, Multan, Islamabad, Rawalpindi, Karachi & Hyderabad. The concept of retail

service centers is to provide hassle free service by technically trained staff with a wide range of products to

choose as per their automotive consumption and requirements. HTLL would provide services which will cater

to all types of vehicle users. These retail outlets will be established under the ownership of HTLL as well as

having the option of franchise ownership.

The following table shows the categories of equipment that will be installed at the service centers along with

the estimated cost during the year 2015 – 16:

Components (PKR) Silver Gold Platinum

Oil Change Equipment 65,000 130,000 130,000

Car Wash/ Service Equipment 750,000 750,000 900,000

Auto Mechanic Equipment 312,000 312,000 312,000

Other Machinery and equipment - 1,830,000 6,395,000

Electricity equipment 95,000 170,000 960,000

Silver

•Retail Outlet /franchise covering the area upto 2,500 sq.ft.

Gold


Platinum


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IT/Display Others 430,000 715,000 1,410,000

Total 1,652,000 3,907,000 10,107,000

NO. OF ZIC SERVICE CENTERS 20 11 6

Servers 200,000 1,000,000 800,000

TOTAL COST OF ZIC SERVICE CENTERS 33,240,000 43,977,000 61,442,000

GRAND TOTAL 138,659,000

Tentative Timelines / Roll-Out Strategy

Area surveys are being conducted by HTLL. Proceeds from IPO will be invested in Hi-Tec Service centers

that includes launch of 8 owned outlets in Lahore (3), Gujranwala (1), Faisalabad (1), Islamabad (1) and

Karachi (2) during 2015-16. Over a period of 5 years, HTLL plans to open 75 retail outlets (including 67

rented) across 16 major cities of Pakistan.

Roll Out for Service Centers to be opened during the year 2015 –16:

Following the possession of land either through acquisition or rent, the following indicative timelines are

required to bring a service center online:

Milestone Time Horizon

Layout / Designing 3 - 4 Weeks

Civil Construction 9 - 12 Weeks

Machinery Installation 3 Weeks

Furniture and Fixtures 2 Weeks

Pre-Launch Marketing 1-2 Weeks

Investment in Hi-Tech Blending (Pvt.) Limited (“HTBL”) – 100% owned Subsidiary of HTLL

Most recently HTLL has ventured into Blending Facility that has been located outside Sundar Industrial

Estate, at Bahikot Raiwand Road, Lahore. HTLL has incorporated a 100% wholly owned subsidiary named

8 Owned Centers Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

Land Identification

Land Acquisition

Documentation

Layout

Site Development

Opening

29 Rented Centers Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

Area Identification

Rental Agreement

Layout

Site Development

Opening

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Hi-Tech Blending (Pvt.) Limited with a total investment of PKR 776 million as of June 30, 2015. The

upcoming Plant is an integrated unit Producing International Standard Specifications Lubricants in HDPE

bottles, filling, capping & labeling of finished products on an automated high accuracy filling line. As per the

agreement between HTLL and SK Lubricant, HTLL is allowed to invest in a blending plant.

The following table shows component wise project cost of blending plant:

Cost Component Expected Cost (Rs. '000')

Land 180,186

Additional development on land 40,358

Buildings & Admin Block 392,682

Plant, machinery and equipment 709,024

Tanks 116,359

Instrumentation 20,000

Vehicles 31,088

Furniture and fixture 1,291

Office and other equipment 17,306

Computers and Software 13,759

Pre-operating & Contingencies 80,947

Total capital cost 1,603,000

Working Capital 110,000

Original Project Cost 1,713,000

Expansion through Additional Lines 200,000

Total Project Cost 1,913,000

Details of source of funding of the project cost and status of the project:

Source of funding Rs. '000' % of Total

Equity 1,000,000 52%

IPO proceeds 200,000 10%

Total Equity 1,200,000 62%

Director loan 88,000 5%

Bank loan & lease 625,000 33%

Total Debt 713,000 38%

Total 1,913,000 100%

Status as of 30th June 2015 Rs. ‘000’ % of Total

Capital expenditure incurred 1,216,865

Through Equity 776,410 64%

Through Debt 440,455 36%

This investment & business expansion plan offers multitude of opportunities to strengthen the local business

line in Pakistan. HTLL’s prime focus is to offer customized product range with diversified business line in

the automotive & retail sector with unique selling propositions. No doubt the long sighted vision is the initial

step, however; HTLL is determined to capitalize this plan with business knowledge and customized facility

by carefully addressing the risk factors. The salient objectives include the following:

Cost effectiveness / Competitiveness

Effective Supply Chain Management

Investing for the Sustainability and Support of Local Business Growth especially in Motorcycle (MCO)

& Heavy duty Diesel oils (HDDO)

Introducing the Indigenous Product Line with International Blending & Packaging Standards with

Capturing the Local & Government Mainstream Institutions

OEM supplies

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Exports to Afghanistan & CIS Countries

Enhanced Product Portfolio (Industrial & process Oils)

Diversification in Plastic products & trading

Further Investment in the Addition of New Filling Lines

HTLL now plans to invest further in the HTBL to introduce Jerry Can and Drum filling lines. Details of the

investment requirement is as follows:

Component Vendor Origin Currency FOB

Freight,

Duty &

Taxes

21%

Total PKR in

Millions

Drum Filling Packon South

Korea US$ 68,800 14,448 83,248 8.7

Drum

Manufacturing

Full Shine

engineering Taiwan US$ 433,600 91,056 524,656 55.0

Jerry Can

Filling Packon

South

Korea US$ 132,500 27,825 160,325 16.8

Jerry Can

Manufacturing

ACE

Corporation

South

Korea US$ 320,000 67,200 387,200 40.7

Transformer

Oil

Meier-

Group Germany EURO 198,650 41,717 240,367 27.9

Master Batch Torninova Italy EURO 199,950 41,990 241,940 28.1

Local

Components 23

Total 200

Implementation schedule for the additional filling lines:

Milestone Schedule

Identification of supplier & quotation July 2014 - March 2015

Final negotiation November 2015

LC opening December 2015

Pre-shipment March 2016

Shipment April 2016

Installation June 2016

Test run July 2016

Commercial run August 2016

Benefits of installing additional filling line

Bulk Product Selling

Packaging and sales of Industrial Products and Process Oils

Selling of Drums and Jerry Cans to other user, e.g. Chemicals , Paints etc

Tapping huge potential of bulk sales in Export in Afghanistan

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5.6.RISK FACTORS

a) Regulatory Risk

Imposition/enhancement of duties, taxes, levies and other conditions may adversely affect the operations

of HTLL (e.g. change in duty and tax structure).

b) Political Risk

Political instability coupled with law and order situation may cause interruption or halt Company sales.

c) Competition Risk

Competition from other players can potentially squeeze margins and can affect Company revenues.

d) Human Resource Risk

Competition for skilled human resources may lead to high employee turnover.

e) Foreign Exchange Risk

The Company is exposed to foreign exchange risk on account of product imports.

f) Product Supply Risk

The sales & distribution agreement between HTLL and SK Lubricants is the most critical part of the

business as it governs the terms & conditions for supply and distribution of SK Lubricant’s product by

HTLL in Pakistan. The Company may suffer significant loss of revenue in case the agreement between the

parties is terminated or SK Lubricants is unable to supply the products to HTLL.

g) Bad Debt Risk

The Company’s customers may default in paying their dues.

Note: IT IS STATED THAT ALL MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND

THAT NOTHING HAS BEEN INTENTIONALLY CONCEALED IN THIS RESPECT.

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PART 6

6 FINANCIAL INFORMATION

6.1. AUDITORS’ REPORT UNDER CLAUSE 28 OF SECTION 2 OF PART I OF THE SECOND

SCHEDULE TO THE COMPANIES ORDINANCE, 1984, FOR THE PURPOSE OF

INCLUSION IN THE PROSPECTUS

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6.2. SHARE BREAK-UP VALUE CERTIFICATE

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6.3. AUDITOR’S CERTIFICATE ON ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

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6.4. SUMMARY FINANCIAL HIGHLIGHTS


(Amount in PKR 'mn') 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15

Income Statement

Sales - net 4,264.7 4,597.3 5,273.8 5,466.9

Cost of Goods Sold 3,290.6 3,451.6 3,968.9 4,129.2

Gross Profit 974.1 1,145.8 1,305.0 1,337.8

EBITDA 432.5 445.5 514.1 555.3

Operating Profit 391.4 414.2 462.2 526.3

Financial Charges 28.3 26.7 25.4 24.5

Profit Before Tax 363.1 387.5 436.8 501.8

Profit After Tax 264.3 270.1 302.1 337.6

Balance Sheet

Non Currents Assets 101.5 219.1 511.8 1,014.6

Current Assets 887.7 1,073.8 1,374.2 1,001.1

Total Assets 989.2 1,292.9 1,886.0 2,015.7

Share Capital 250.0 250.0 750.0 870.0

Total Equity 471.1 668.6 908.6 1,237.5

Long Term Liabilities 14.5 32.2 39.3 37.2

Current Liabilities 503.6 592.1 938.0 741.0

Total Equity and Liabilities 989.2 1,292.9 1,886.0 2,015.7

Financial Ratios

Gross Margin % 22.8% 24.9% 24.7% 24.5%

Operating Profit Margin 9.2% 9.0% 8.8% 9.6%

Net Margin 6.2% 5.9% 5.7% 6.2%

Reported EPS (PKR) 11.7 10.8 4.0 4.4

EPS -restated (PKR)* 3.0 3.1 3.5 3.9

Current Ratio 1.8 1.8 1.5 1.4

Breakup Value Per Share 18.8 26.7 12.1 14.2

Debt to Equity Ratio % 39.9% 29.2% 25.7% 4.2%

Return on Assets 26.7% 20.9% 16.0% 16.7%

Return on Equity 56.1% 40.4% 33.2% 27.8%

* Using 87 million shares

1) On April 25, 2015 shares were issued at par against the share deposit money of PKR 120mn, as a result

the paid-up capital increased to PKR 870mn.

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PART 7

7 MANAGEMENT OF THE COMPANY

7.1. POLICY MATTERS

All policy-related matters are managed by the board of Directors of the Company (the “Board”), headed by

the Chairman of the Board. At present, the Board comprises of ten (10) Directors including the CEO. The

Directors are elected by the shareholders in accordance with the relevant provisions of the Ordinance.

BOARD OF DIRECTORS OF THE COMPANY

Name Designation Other Directorships

Mr. Shaukat Hassan Chairman Mas Associates (Pvt) Limited

Mas Infosoft (Pvt) Limited

Pakistan-France Business Alliance

Mr. Hassan Tahir Chief executive Hi- Tech Blending (Pvt.) Limited

Hi-Tech Energy (Pvt) Limited

Mr. Muhammad Basit Hassan Director Hi- Tech Blending (Pvt.) Limited

Hi-Tech Energy (Pvt.) Limited

Gulf Rubber Products (Pvt) Limited

Mr. Tahir Azam Director MAS associates (Pvt) Limited

MAS Infosoft (Pvt) Limited

Mr. Muhammad Ali Hassan Director Hi- Tech Blending (Pvt.) Limited

Hi-Tech Energy (Pvt) Limited

Mr. Zalmai Azam Director None

Mr. Muhammad Tabassum

Munir Director

Synthetic Products Enterprise Limited

MTM Securities (Pvt) Limited

Dr. Safdar Ali Butt Director

Pak Agro Packaging (Pvt.) Ltd

Hilal Meat Processing Co. (Pvt.) Ltd

Chip Training And Consulting (Pvt.)

Ltd

Ujala Educational Trust

Mr. Syed Asad Abbas Hussain Director None in Pakistan

Mr. Syed Mujahid Jameel

Ghaznavi Director None

7.2. OVER DUE LOANS

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

7.3. DIVIDEND RECORD OF ASSOCIATED COMPANIES – LISTED ON STOCK

EXCHANGE(S)

Associated Undertaking Dividend Period

Synthetic Enterprises Products Limited 10% June 30, 2015

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7.4. PROFILE OF DIRECTORS

Mr. Shaukat Hassan – Chairman Board of Directors

Mr. Shaukat Hassan holds a master’s degree in economics from Punjab University Lahore and is the chairman

of Board of Directors. Having more than 4 decades of financial and entrepreneurial expertise, he is an

enthusiast and wise individual. Mr. Shaukat has a proven track record for his excellent business

professionalism and he is one of the core partners since the inception of business operations for the Group

starting 1976.

He has actively lead and created a strong foundation of financial systems for HTLL. Apart from financials,

his core areas of interests include human resources, employee training and talent retention. His diversified

skills also include the business development and sales of Industrial equipment to leading E&P Companies

Internationally. Mr. Shaukat is actively involved for joint business collaborations with organizations having

multi-national presence.

He has been an active member of various profit & non-profit based organization including LCCI, EDAS and

currently serving as Vice President and Director of PFBA in Pakistan. He is a choicest mentor and coach for

many leading entrepreneurs from the recent times.

Apart from his business interests, Mr. Shaukat is keenly involved in CSR & SHT activities mainly focused at

minimizing the life challenges of financially underprivileged sector of the community.

Mr. Hassan Tahir – Chief Executive Officer

Mr. Hassan Tahir holds an MBA degree in banking / finance from Lahore School of Economics (LSE) and is

the CEO of HTLL. Mr. Hassan is a working professional since 2001 and believes that a satisfied customer

brings in not just more business but also increases the goodwill of the Company.

His drive for excellent interpersonal skills and highest customer satisfaction led him to set up IT operations

with back office processing (BOP) and IT infrastructure for major clients in UK/ Europe.

With his motivational experience and hard work he helped the Company in launching mid-tier lubricant range

in Pakistani Market in partnership with world’s two major oil companies. Mr. Hassan went on to launch

another semi-synthetic range in Pakistan and was an even a bigger success. Rewarding achievements and

motivating employees, that is how he turned HTLL into a strong family.

Mr. Muhammad Basit Hassan – Director

Mr. Muhammad Basit Hassan holds an MBA degree in banking / finance from Lahore School of Economics

(LSE) and is working as an Executive Director for HTLL. He is leading the Sales, Finance, Accounts and

Supply Chain functions of the Company. His worthy experience spans for more than a decade and he has

managed this Company with his outstanding leadership qualities and interpersonal skills.

His expertise and qualification has inclined sales team towards greater output both quantitative and

qualitative. Backed up with Mr. Muhammad Basit’s entrepreneurial abilities, HTLL has risen to newer heights

of success and will continue to do so.

Mr. Tahir Azam - Director

Mr. Tahir Azam holds a master’s degree in economics from Punjab University Lahore and is working as a

Non-Executive Director for the Company. He has over 4 decade of experience in research, management and

consultancy of setting up successful businesses. Mr. Tahir has also led various US AID funded

entrepreneurship programs and training programs across Pakistan.

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He is one of the founder member of the Company who led the sales and marketing of HTLL during the first

10 years of business. Establishing distribution networks and creating sale teams was his milestone

achievements on which HTLL stands today.

Being an entrepreneur and managing Director of associated business companies, Mr. Tahir Azam has

inculcated his excellent standard in sales department into producing exceptional results. He has proved with

his entrepreneurial abilities that business opportunities are not given rather they are created.

Mr. Muhammad Ali Hassan - Director

Mr. Muhammad Ali Hassan holds a bachelor degree in Marketing and HR from Sydney University, Australia.

Mr. Ali apart from sales he was also leading the HR and Administrative Functions at HTLL. Mr. Muhammad

Ali Hassan using his theoretical knowledge converted in to creating best practices across the Company.

Mr. Ali has built outstanding business partnerships and strategic alliances with clients which is a true reflection

of his abilities to lead this corporate world. He is a true leader who believes in quantitative output and skillful

organizational culture.

Mr. Zalmai Azam – Director

Mr. Zalmai Azam holds a Bachelor in Arts from Government College, Lahore. He is an experienced banker

by profession offers more than 4 decades of sound knowledge and exposure to business while being associated

with highly credible institutions locally as well internationally.

Mr. Zalmai has started his career back in 1971 with Standard Bank Ltd. Based on his dedicated commitment

and knowledge base he was assigned various projects to work with different banks internationally, a few to

be mentioned include his role as Country Manager in “Sierra Leaon’ West Africa and in Kenya as Bank

Manager from 1985-86. His last assignment was with The Bank of Punjab as General Manager in 2009.

Mr. Zalmai known for his effective planning coupled with excellent people’s management skills, has

significantly contributed in inventory planning and control processes for HTLL.

Mr. Muhammad Tabassum Munir – Director

Mr. M. Tabassum Munir has worked for more than three decades, as Member Lahore Stock Exchange, till

January 15, 2014. He had served as its Vice President, too. He was also Member Pakistan Mercantile

Exchange. He has worked as Director of Annoor Textile Mills Ltd from 1987 to 1989. He is currently the

member of the Board of Directors at M/s Synthetic Products Enterprises Limited (SPEL).

His skills of working, managing and participating in all-inclusive Capital Market and its infrastructural

development matters, were widely acknowledged. He has participated in numerous seminars, roundtables,

conferences, workshops, etc. and has gained useful domain knowledge and experience. It has strengthened

his dedicated role and capacity, in the management of finance and delivering advisory services.

Dr. Safdar Ali Butt – Director

Dr. Safdar Ali Butt represents as a financial expert, a trainer, an academician and a literary person. Dr. Safdar

Ali butt holds a master degree in commerce from Karachi and PHD in financial management from Canada.

He is a member of several professional bodies in Accounting, Finance and Management fields.

Dr. Safdar Ali butt worked at notable positions overseas like Chief Accountant with Johnson & Johnson,

Group Chief Accountant with Caltex Oil and Group Financial Controller with Simba Colt Motors in Kenya.

He has worked as CFO with Army Welfare Trust, was a director of Askari Bank, Askari Leasing, Askari

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General Insurance and several other companies. He also served in a position of director Bank of Azad Jammu

& Kashmir, as a nominee of AJK Government.

Dr. Safdar Ali butt spent 24 years in academics working as dean of faculty and at senior lecturer positions of

various institutions locally and internationally. He is currently on the board of several companies working in

the fields of food processing, packaging and consulting. He is also a serving professor at Emeritus of Finance

& Corporate Governance at Mohammad Ali Jinnah University, Islamabad.

Apart from his professional work he is author of 34 text books on various business related subjects of which

8 published from UK, 19 from Kenya and 7 from Pakistan and also author of over 100 articles and papers on

various finance and management related issues.

Mr. Syed Asad Hussain – Director

A highly innovative, creative, and self-motivated Entrepreneur with over 25 years of proven experience in

senior roles within the Consumer Electronics, Technology and IT Industries. Has developed multiple routes

to market and solid business relationships with Global vendors such as Microsoft, Intel, Hewlett Packard,

Toshiba, Lenovo and Asus, as well as the leading distributers of consumer goods in the UK.

After completing his education in London, Asad successfully pursued his career within the retail sector before

founding his own companies which grew into multi-million pound turnover businesses and between 1995 to

2005 his companies exceeded turnover of £100 million. He is a marketing director of 5 leading retail sector

companies in UK.

Asad is also a trustee of Al Mudassar Trust, a UK-based educational charity, which supports a state-of-the-art

school in Pakistan for children with disabilities and special needs.

Mr. Syed Mujahid Jameel Ghaznavi – Director

Mr. Syed Mujahid Jameel Ghaznavi holds a master’s degree in economics from Punjab University Lahore.

He has almost 30 years of experience of sales, marketing and commercial banking. With profound knowledge

and exposure he has served multi billion multinational and local organizations.

Mr. Syed Mujahid Jameel Ghaznavi started his career back in 1974 with Habib Bank Limited. After leaving

HBL, he served in FMCGs like EBM and National foods leading sales and marketing. With his brilliance,

market understanding, foresight and dedication, the sales of both entities grew at a healthier pace and

multiplied to many times. He was also engaged in sea food business supplying huge quantities to international

hotel chains and retail side.

Mr. Syed Mujahid Jameel Ghaznavi is known for his entrepreneurial abilities coupled with effective sales

planning and management skills.

7.5. KEY MANAGEMENT PROFILE

Mr. Muhammad Imran - CFO & Company Secretary

By profession a Chartered Accountant and have acquired four years mandatory completion with A. F.

Ferguson & Co. a member firm of Price Water House Coopers - PWC, a world renowned consultancy firm.

With over 10 years of professional experience Mr. Imran has gained substantial knowledge and experience of

Audit, Finance, Corporate Laws, Taxation, Financial and Management Reporting including implementation

of Enterprise resource Planning Oracle financial. He had the opportunity to work with organizations across

the broad spectrum including banks and financial institutions, manufacturing concerns and service

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organizations. Such experience helped him acquire in-depth knowledge of industry wide operations, processes

and practices and has improved his planning and managerial skills and decision- making capabilities.

Mr. Imran is currently managing financials department that includes treasury and finance, accounts, Taxation

department and Secretarial law division.

Mr. Tamur Shah – Head of Administration

Mr. Tamur Shah joined as first employee of the Group and has over 3 decade of working experience at

different position from sales, marketing, taxation, HR and administration including people management.

Mr. Tamur has been an exceptional performer in different areas of managerial and operational controls. He is

currently working as Head of Administration function for HTLL. His expertise in operations, fleet, asset

management and other operational areas of administration proves him as a seasoned professional.

He is one of the core employees since inception and has contributed as an integral part towards growth and

prosperity of the Company.

Mr. Shahzad Sohail - Head of Supply Chain & Procurement

Mr. Shahzad holds a Master Degree in Business Administration and finance. Mr. Shahzad is currently working

with HTLL as head of Supply Chain & Procurement. He has been associated with HTLL for last 18 years and

is offering significant services in the areas of finance, Supply Chain management, Import management and

warehousing and other functions related to Procurement.

He also has an educational qualification in accountancy. His detailed orientation in similar field and team

management expertise make him an exceptional part of HTLL management team.

Mr. Ahmed Shuja – Country Head Sales

Mr. Ahmed Shuja holds a Master’s Degree in Business Administration and currently working as country head

sales for ZIC synthetic lubricants. He joined HTLL, in 2001 as Assistant Manager Sales and earned

experience / expertise dealing with B2B / B2C customers. He has diversified exposure for different markets

across Pakistan and with his hard work he uplifted himself to a driving force in HTLL.

Before joining HTLL, he had working experience with ORASCOM Telecom (Mobilink) 1994, Prime Dairies

Ltd. 1996 and “WAVES Pakistan” in 1998.

He transformed his prior experience to HTLL vision for delivering “Best Quality Lubricants” to the end users.

He has participated in various workshops and seminars in successfully delivering company’s message across

wide range of channel partners/ customers.

Mr. Muhammad Ashraf – Head of IT

Mr. Muhammad Ashraf holds a Master’s Degree in Computer Sciences and has worked as a keynote speaker

in security seminars at the launch of VistaWiz / SafeNet within the Middle East region.

Mr. Ashraf is a Technology leader with 14 years of proven IT Management experience and Analytical IT

Skills. He is an expert for Linux/Windows Security roles with extensive background in security architecture

designing, data security and deploying mission critical applications within enterprise environments. He holds

extensive knowledge for conducting the IT security audits and is also a certified engineer for two factor

authentication/ content security.

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His areas of expertise include Oracle E- Business Suite, Oracle Database, network performance monitoring

and other areas of information security management.

He has also worked closely with U.A.E. financial regulators on two-factor authentication guidelines and

conducted vulnerability / risk assessments along with penetration testing for financial institutions in

compliance with “regulators” certification. His expertise makes him the integral part of state of the art

technological infrastructure of HTLL.

Mr. Amjad Shahzad – Head of Sales Analysis

Mr. Amjad Shahzad holds Masters in Computer Sciences from Hamdard University and MBA from

University of Management and Technology. He is the Head of Sales Analysis function, concerned with the

strategic development at HTLL.

With more than 10 years of experience and his expertise include sales team transformation, devising sales

action plans based on analysis, statistical territory potential, penetration, determine key metrics to identify

gaps and improve sales planning.

He always enjoys himself while enlightening human capital and by enhancing intellectual capabilities of

human resource. He conducts workshops on different areas of functional & professional competence with a

local flavor but strategically global perspective. He is an inspirational speaker, corporate trainer and teacher

as well. He is a change agent specializing in unleashing human genius through transformation of Human

Perception. Mr. Amjad has also served in various software houses at key posts and currently serving as visiting

professor at number of prestigious universities / business schools. He has also earned several local and

international certifications.

Ms. Shumaila Hameed – Head of Human Resource

Ms. Shumaila Hameed holds a degree in Masters of Public Administration on scholarship from University of

the Punjab and she is also a core team member for Pakistan Human Capital Forum – PHCF.

Ms. Shumaila is currently performing the role of HR Head for HTLL and offers an in depth practical exposure

over the span of 10 progressive years in the Human Resource Management Fields. Having provided

exceptional HR Services to various sectors including globally recognized FMCG Brand in Retail,

Distribution, Sales and Banking sectors.

As a certified HR Professional from Pakistan Institute of Quality Control, her core areas of HR Services

include facilitation for Rewards, Employee Engagement, Training / development and Policy Development.

She works as a lead resource for Employee Coaching Programs for HTLL, Internationally and Locally.

She is a key resource for quarterly publication for HTLL. Her professional background encompasses superior

work ethics and commitment to organization's objectives. A proactive professional, enthused to work in teams

and challenging assignments. Deliberating a strong ability to attract and secure significant Employee

Relations.

Mr. Omer Farooq – Head of Marketing

Mr. Omer Farooq holds a Master in Business Administration and joined HTLL with an experience of more

than a decade that is a compilation of Product and Brand management.

Mr. Omer is working as Head of Marketing and has been part of Hi- Tech Lubricants Limited for almost 4

years. His diversified experience in consumer marketing along with a blend of research and advertisement has

given HTLL various successful trade and consumer campaigns.

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Mr. Omer was recently asked by LUMS Rausing Institute to judge a display of work on Advertisement

campaigns by fresh-men nationwide. His aggressive planning and positive attitude has been the success

mantra of HTLL. He is also a visiting faculty member in Business Management of some prominent

Universities of Lahore.

Mr. Qaisar Abbas Rana – Manager Sales ZIC Mid-Tier

Mr. Qaisar Abbas holds MBA degree in Marketing Management and started his professional career at Yamaha

in January, 2000 and worked till 2011 at various managerial positions. In June 2011 he joined HTLL as head

of Central region ZIC mid-tier sales head.

At HTLL he is responsible for overall sales function to achieve budgeted targets for revenue, profitability,

sales growth and market share. He is currently leading sales team, managing distribution network, retail

channel, maintaining focus on the company’s strategic goals, establishing and monitoring performance goals

of team on a continual basis with effective execution of Trade Schemes. Mr. Qaiser has more than 15 years

of combined result oriented career in sales / marketing at Yamaha and HTLL. During his stay in HTLL he

refined his skills in team management, sales management, channel management, relationship management,

new product introduction, resource management and leadership qualities.

Mr. Muhammad Ali Khalid - Head of Internal Audit & Planning

An Associate Member of the Institute of Forensic Accountants of Pakistan and CA background having around

five years of practical work experience in the field of auditing, accounting and reporting across Oil & Gas,

Telecom, INGO, Hospitality and other different industries.

He had 3 years’ experience in the field of Strategic Planning, Budgeting, Financial Forecasting and Group

Financial Reporting in the Manufacturing industry. Mr. Ali Khalid has been associated with HTLL since

January 2014 and currently leading the Internal Audit, Risk Advisory, Budgeting and ISO quality compliance

division as Functional Head and reporting directly to the Audit Committee of the Board of Directors.

7.6. NNUMBER OF DIRECTORS

Pursuant to Section 174 of Ordinance, the Company shall not have less than seven (7) Directors. At present

the Board consists of ten (10) Directors including the CEO.

7.7. QUALIFICATION OF DIRECTORS

No person shall be appointed as a Director of the Company who is ineligible to be appointed as Director on

any one or more of the grounds enumerated in Section 187 of the Ordinance or any other law for the time

being in force.

7.8. REMUNERATION OF THE DIRECTORS

As per Article 49 of the Articles of Association of the Company, the remuneration of the Directors shall from

time to time be determined by the Board of Directors. The remuneration of a Director for performing extra

services, including holding of the office of Chairman, and the remuneration to be paid to any Directors for

attending the meetings of the Directors or a Committee of Directors shall from time to time be determined by

the Board of Directors.

7.9. BENEFITS TO THE PROMOTERS AND OFFICERS

No amount of benefits have been paid or given during the last year or is intended to be paid or given to any

promoter or to any officer of the Company other than as remuneration for services rendered to the Company.

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7.10. INTEREST OF DIRECTORS IN THE COMPANY

The Directors may be deemed to be interested to the extent of fees payable to them for attending Board and

Committee meetings. The Directors performing whole time service to the Company may also be deemed

interested in the remuneration payable to them from the Company. The Directors may also be deemed to be

interested, to the extent of any shares held by them in the Company and the dividends to be declared on their

shareholding in the Company.

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

7.11. APPOINTMENT/ ELECTION OF DIRECTORS

The Directors of the Company are elected for a term of three years in accordance with the procedure laid

down in section 178 of the Ordinance. The Directors shall comply with the provisions of Sections 174 to 178

and Sections 180 and 184 relating to the election of Directors and matters ancillary thereto.

Subject to the provisions of the Ordinance, the Company may from time to time increase or decrease the

number of Directors.

Any casual vacancy occurring on the Board of Directors may be filled up by the Directors, but the person so

appointed shall be subject to retirement at the same time as if he / she had become a Director on the day on

which the Director in whose place he / she is chosen was last elected as Director. The Company may remove

a Director in accordance with the provisions of the Ordinance. The present Directors of the Company were

elected on October 31, 2015 for the period of three years.

7.12. VOTING RIGHTS

The rights and privileges, including voting rights, attached to the Ordinary Shares of the Company are equal.

In the case of any equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at

which the show of hands takes place, or at which the poll is demanded, shall have and exercise a second or

casting vote.

7.13. AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE

Auditors of the Company are appointed and their duties are regulated in accordance with Section 252 to

Section 260 of the Ordinance. Accordingly, the Audit Committee of the Board has been formed to comply

with the Code of Corporate Governance, which comprises of following Directors:

1. Mr. Muhammad Tabassum Munir as Chairman / Independent Director

2. Mr. Shaukat Hassan as Member

3. Mr. Tahir Azam as Member

4. Mr. Muhammad Ali Hassan as Member

7.14. HUMAN RESOURCE AND REMUNERATION COMMITTEE

The Board of Directors has formed Human Resource and Remuneration Committee comprising of the

following members:

1. Mr. Tahir Azam as Chairman

2. Mr. Shaukat Hassan as Member

3. Mr. Muhammad Ali Hassan as Member

4. Mr. Zalmai Azam as Member

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7.15. INTERNAL AUDIT

The Board has setup an effective internal audit function outsourced to a firm of Chartered Accountants Ernest

Young Ford Rhodes Sidat Hyder directly reporting to Audit Committee. The in house internal audit

department is equipped with suitable and experienced personnel who are conversant with the policies and

procedures of the Company and are working in liaison with internal audit firm on a full time basis.

7.16. BORROWING POWERS OF DIRECTORS

Subject to the provisions of the Ordinance the Directors may from time to time at their discretion borrow or

raise money and secure the payment of any sum or sums of money for the purposes of the Company on such

terms and conditions as they may consider fit.

7.17. POWERS OF DIRECTORS

The business of the Company shall be managed by the Directors, who may pay all expenses incurred in

promoting and registering the Company, and may exercise all such powers of the Company as are not by the

Ordinance or any statutory modification thereof for time being in force, or by the articles of association,

required to be exercised by the Company in general meeting.

7.18. INDEMNITY

Pursuant to Article 104 of the Company’s Articles of Association, every member of the Company and of the

Board, the Chairman, Chief Executive Officer or any other officer or employee shall be indemnified by the

Company against all costs, losses which they may incur or become liable to pay by reason of any contract

entered into or act or deed done by them in discharge of their duties in good faith and any loss occasioned by

any error of judgment, damage or misfortune which may happen in execution of their duties in connection

with affairs of the Company.

7.19. INVESTMENTS IN ASSOCIATED COMPANIES

The Company has no investment in associates.

7.20. INVESTMENT IN SUBSIDIARIES

The Company has one 100.00% owned subsidiary namely Hi-Tech Blending (Pvt.) Limited which has a paid-

up capital of PKR 100,000,500/-. In addition, the Company has also paid share deposit money of PKR

676,409,500 for purchase of shares in Hi-Tech Blending (Pvt.) Limited as at June 30, 2015. Therefore, the

total cost of investment stands at PKR 776,410,000.

Hi-Tech Blending (Pvt.) Limited was incorporated on 13 March 2014 to construct, own and operate state of

the art lubricating oil blending plant and is expected to commence trial operations in the last quarter of calendar

year 2015.

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PART 8

8 MISCELLANEOUS INFORMATION

REGISTERED OFFICE 1-A Danepur Road, GOR-1, Lahore

LEAD MANAGER AND ARRANGER

Arif Habib Limited

Arif Habib Center,

23, MT Khan Road, Karachi

Tel: 021-32468117

Fax: 021-32429653


Website: www.arifhabibltd.com

BOOK RUNNER

Arif Habib Limited

Arif Habib Center,

23, MT Khan Road, Karachi

Tel: 021-32468117

Fax: 021-32429653


Website: www.arifhabibltd.com

BANKER TO ISSUE (BOOK BUILDING PORTION) Summit Bank Limited

BANKERS TO ISSUE (GENERAL PUBLIC PORTION) Bank Al Habib Limited

Bank Alfalah Limited

Bank of Punjab

Habib Bank Limited

Habib Metropolitan Bank

MCB Bank Limited

Meezan Bank Limited

Samba Bank Limited

Summit Bank Limited

United Bank Limited

BANKERS TO THE COMPANY

Bank Alfalah Limited

Bank Al Habib Limited

Askari Bank limited

Habib Bank Limited

Habib Metropolitan Bank Limited

MCB Bank Limited

National Bank of Pakistan Limited

Standard Chartered Bank Limited

Bank of Punjab

United Bank Limited

AUDITORS

Riaz Ahmad& Co.,

Chartered Accountants

10,B, Saint Mary Park, Main Boulevard,

Gulberg III, Lahore

T +92 42 35718137-9

F +92 42 35718136





tel:%2B92%20%2842%29%203585%200477

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8.1 UNDERWRITING AGREEMENTS*

S.no Underwriters No. of Shares Date of Agreement

8.2 DUE DILIGENCE REPORTS*

S.no Underwriters Date of Due Diligence Report

*Detail of underwriting and due diligence will be issued through a supplement in a newspaper within five

working days of the close of Bidding Period.

8.3 MATERIAL CONTRACTS / DOCUMENTS

Date of

Contract

Party to the Agreement Nature of the Agreement

Feb 01, 2014 SK Lubricants Co., Ltd Distributor agreement pursuant to which HTLL acts as an

exclusive distributor and commission agent for the sale of SK

Lubricants Co. Ltd’s products in Pakistan.

LEGAL ADVISOR TO THE COMPANY

Lashari Law Associate

2 Munawar Chambers, 1 Mozang Road,

Lahore Pakistan

T +92 42 37359287 37224639

F +92 42 37321471

COMPUTER BALLOTER AND SHARES REGISTRAR

Central Depository Company of

Pakistan.

99-B, Block ‘B’, S.M.C.H.S. Main

Shahra-e-Faisal, Karachi

tel:%2B92%20%2842%29%203585%200477

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8.4 DETAILS OF ASSOCIATED COMPANIES AND ASSOCIATED UNDERTAKINGS OF

THE ISSUER

Name of company Status Registered office

address

UINs

(Incorporation / NTN no.)

HI-TECH

BLENDING (PVT)

LIMITED

WHOLLY

OWNED

SUBSIDIARY

1-A DANEPUR ROAD

GOR-1, LAHORE 0087364 / 4247720-4

HI-TECH ENERGY

(PVT) LIMITED

ASSOCIATED

COMPANY

1-A DANEPUR ROAD

GOR-1, LAHORE 0066529 / 3222650-7

MAS ASSOCIATES

(PVT) LIMITED

ASSOCIATED

COMPANY

1-A DANEPUR ROAD

GOR-1, LAHORE L 07610 / 0161292-1

MAS INFOSOFT

(PVT) LIMITED

ASSOCIATED

COMPANY

1-A DANEPUR ROAD

GOR-1, LAHORE L 10941 / 1412089-5

MAS SERVICES ASSOCIATED

FIRM / AOP

1-A DANEPUR ROAD

GOR-1, LAHORE NIL / 1325368-9

GULF RUBBER

PRODUCTS (PVT)

LIMITED

ASSOCIATED

UNDERTAKING

44-A MAIN ROAD

GULBERG LAHORE 0091776 / 4377502-5

SYNTHETIC

PRODUCTS

ENREPRISE

LIMITED

ASSOCIATED

UNDERTAKING

127-S, Q.I.E,

TOWNSHIP,

KOTLAKHPAT,

LAHORE

0009432 / 0688349-4

MTM SECURITIES

(PVT) LIMITED

ASSOCIATED

UNDERTAKING

101, LAHORE STOCK

EXCHANGE

BUILDING, LAHORE

L 09878 / 1253386-6

PAK FRANCE

BUSINESS

ALLIANCE

ASSOCIATED

UNDERTAKING

D-118/2 KEHKASHAN

5, CLIFTON, KARACHI 0088332 / 4288492-6

PAK AGRO

PACKAGING (PVT)

LTD

ASSOCIATED

UNDERTAKING

2 ND FLOOR 1-A

PLAZA, ISLAMABAD P-00158/1142661-6

HILAL MEAT

PROCESSING CO.

(PVT) LTD

ASSOCIATED

UNDERTAKING

FAYYAZ MARKET,

STREET NO. 9

ISLAMABAD

0075357 /3704913-5

CHIP TRAINING

AND CONSULTING

(PVT) LTD

ASSOCIATED

UNDERTAKING

PLOT NO.05, STREET

NO.09 OPPOSITE NIH

G-8/2, ISLAMABAD

0063808 / 3092086-8

UJALA

EDUCATIONAL

TRUST

ASSOCIATED

UNDERTAKING

130 STREET 48, NEAR

MAJOR ROAD

ISLAMABAD

0075019 /3687334-9

8.5 RESTRICED EMPLOYEES

LIST OF RESTRICTED EMPLOYEES OF HI-TECH LUBRICANTS LIMITED


1 Mr. Muhammad Imran CFO / Company Secretary 35202-7974957-1

2 Mr. Ahmad Shuja Country Head Sales 35202-7152979-7

3 Mr. Shahzad Sohail GM Procurement 35200-1145924-9

4 Mr. Shafqat Ali GM Associated Company 35202-2587908-9

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5 Mr. Tamur Shah Senior Manager Administration 35202-9463859-5

6 Mr. Ali Khalid Head Planning and Internal Audit 37405-0634742-1

7 Mr. Omer Bajwa Manager Marketing 35202-6278237-3

8 Mr. Muhammad Ashraf Manager I.T. 35201-1247825-3

9 Mr. Qaisar Abbas Manager Sales 31303-5865802-5

10 Mr. Amjad Shahzad Manager Sales Analysis 35202-2487662-5

11 Ms. Shumaila Hameed Manager HR 35202-5378738-6

12 Mr. Omer Aftab Rana Manager Sales 35202-3015302-9

13 Mr. Fawad Nafees Manager Operations 42101-1714261-3

14

Mr. Syed Muhammad

Iftikhar Senior Manager Sales 42101-8881496-7

15 Mr. Rafique Muhammad Manager Sales 17301-5954403-7

16 Mr. Muhammad Ejaz Khattak Manager Sales 61101-1520007-5

17 Mr. Hashim Iqbal Deputy Manager Financials 42301-4124367-3

18 Mr. Junaid Malik Manager Sales 42301-0923316-5

19 Mr. Kashif Pervez Assistant Manager Corporate 35202-9051994-3

20 Mr. Hamza Assistant Manager Internal Audit 35202-3408452-9

21 Ms. Imrana Designer 35201-3583175-4

LIST OF BOARD OF DIRECTORS OF HI-TECH LUBRICANTS LIMITED


1 Mr. Hassan Tahir Chief Executive Officer 35202-0561257-7

2 Mr. Mohammad Basit Hassan Executive Director 35202-2936471-7

3 Mr. Mohammad Ali Hassan Non-Executive Director 35202-8680689-3

4 Mr. Tahir Azam Non-Executive Director 35202-1586099-7

5 Mr. Shaukat Hassan Chairman Board of Directors 35202-2937890-9

6 Mr. Zalmai Azam Non-Executive Director 35202-8613893-1

7 Mr. Tabassum Munir Independent Director 35201-2475737-5

8 Dr. Safdar Ali Butt Independent Director 61101-1938034-7

9 Mr. Syed Asad Abbas Hussain Independent Director 611017-914566-9

10 Mr. Syed Mujahid Jameel Ghaznavi Non-Executive Director 61101-0907195-1

LIST OF RESTRICTED EMPLOYEES OF THE BOOK RUNNER

S.no Name (as per CNIC) Designation UIN/CNIC

1 Mr. Muhammad Shahid Ali Chief Executive Officer 42301-0870728-7

2 Mr. Syed Kashif ul Hassan

Shah

Managing Director, Investment Banking 42301-2295321-7

3 Mr. Nasim Beg Advisor to Corporate Finance 42301-5558488-3

4 Mr. Zeshan Afzal Executive Director & Head of Corporate

Finance 42501-8031535-3

5 Mr. Rafique Bhundi Sr. Vice President, Corporate Finance 42201-2497903-1

6 Mr. Ahmed Rajani Vice President, Corporate Finance 42201-4832681-5

7 Mr. Syed Saquib Ali Vice President, Corporate Finance 42201-4292146-1

8 Mr. Abdul Qadir Analyst, Corporate Finance 42301-2989158-1

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9 Mr. Muhammad Ali Siddiqui Analyst, Corporate Finance 42501-2740531-7

10 Ms. Shaima Ghani Analyst, Corporate Finance 42201-1517006-6

11 Ms. Amira Aswani Analyst, Corporate Finance 42301-0725240-6

12 Mr. Tahir Abbas Asst. Vice President, Research 42201-9867974-9

13 Mr. Shahbaz Ashraf Head of Research 42201-3317016-7

14 Mr. Sarwar Khan Head of Compliance 54400-1389625-3

15 Mr. Sardar Khan Library Assistant, Research 42501-2640314-3

16 Mr. Saeed Ahmed Officer, Corporate Finance 42201-2425208-1

8.6 INSPECTION OF DOCUMENTS AND CONTRACTS

Copies of the memorandum and articles of association, the audited financial statements, the Auditor’s

certificates, information memorandum and copies of agreements referred to in this Prospectus may be

inspected during usual business hours on any working day at the registered office of the Company from the

date of publication of this Prospectus until the closing of the subscription list.

8.7 LEGAL PROCEEDINGS

There are no litigations or proceedings by or against the Company pending before any court of law or

authority.

8.8 MEMORANDUM OF ASSOCIATION

The memorandum of association of the Company (“MOA”), inter alia, contains the objects for which the

Company was incorporated and the business that the Company is authorized to undertake. A copy of the MOA

is annexed to this Prospectus and with every issue of the Prospectus except the one that is released in

newspapers as advertisement.

8.9 FINANCIAL YEAR OF THE COMPANY

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

8.10 REVALUATION OF FIXED ASSETS

Assets are reported at cost less accumulated depreciation and no revaluation has been conducted.

8.11 CAPITALIZATION Bonus Shares of PKR 500,020,000/- were issued during the financial year 2014 details of which are as

follows:

Sr # SHAREHOLDER Number of Shares Rupees

1. Mrs. Arifa Shaukat 1,500,060 150,006,000

2. Mrs. Uzra Tahir 2,000,080 200,008,000

3. Mr. Muhammad Basit Hassan 500,020 50,002,000

4. Mr. Hassan Tahir 500,020 50,002,000

5. Mr. Muhammad Ali Hassan 500,020 50,002,000

5,000,200 500,020,000

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PART 9

9 APPLICATION AND ALLOTMENT INSTRUCTIONS

9.1 GENERAL INSTRUCTIONS

9.1.1 Eligible investors include:

a. Pakistani citizens resident in or outside Pakistan or persons holding two nationalities including Pakistani

nationality;

b. Foreign Nationals whether living in or outside Pakistan;

c. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to

the extent permitted by their constitutive documents and existing regulations, as the case may be);

d. Mutual funds, provident/pension/gratuity funds/trusts, (subject to the terms of the trust deed and existing

regulations); and

e. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

9.1.2 APPLICATION MUST BE MADE ON THE COMMISSION’S APPROVED APPLICATION FORM

OR A LEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING AT LEAST 62

GM.

9.1.3 Copies of this Prospectus and applications forms can be obtained from members of KSE& LSE, the Bankers

to the Issue and their Branches, the Lead Managers and the Book Runner, and the registered office of the

Company. The Prospectus and the Bidding Form can also be downloaded from the following websites:

http://www.hitechlubricants.com and http://www.arifhabibltd.com.

9.1.4 The applicants opting for scrip less form of shares are required to complete the relevant sections of the

application. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL

Regulations, credit of such shares is allowed ONLY in the applicant’s own CDC account. In case of

discrepancy between the information provided in the application form and the information already held by

CDS, the Company reserves the right to issue shares in physical form.

9.1.5 Name(s) and address(s) must be written in full block letters, in English and should not be abbreviated.

9.1.6 All applications must bear the name and signatures corresponding with that recorded with the applicant's

banker. In case of difference of signatures with the bank and computerized national identity card (CNIC) or

national identity card for overseas Pakistanis (NICOP) or passport both the signatures should be affixed on

the application form.

9.1.7 APPLICATIONS MADE BY INDIVIDUAL INVESTORS

(i) In case of individual investors, an attested photocopy of CNIC (in case of resident Pakistanis)/passport (in

case of non-resident Pakistanis) as the case may be, should be enclosed and the number of CNIC/passport

should be written against the name of the applicant. Copy of these documents can be attested by any

federal/provincial government gazette officer, councilor, oath commissioner or head master of high school

or bank manager in the country of applicant's residence.

(ii) Original CNIC/passport, along with one attested photocopy, must be produced for verification to the Banker

to the Issue and the applicant's banker (if different from the Banker to the Issue) at the time of presenting the



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application. The attested photocopy will, after verification, be retained by the bank branch along with the

application.

9.1.8 APPLICATIONS MADE BY INSTITUTIONAL INVESTORS

(i) Applications made by companies, corporate bodies, mutual funds, provident/pension/gratuity funds/trusts and

other legal entities must be accompanied by an attested photocopy of their memorandum and articles of

association or equivalent instrument/document. Where applications are made by virtue of power of attorney,

the same should also be submitted along with the application. Any federal/provincial government gazette

officer, councilor, bank manager, oath Commissioner and head master of high school in the country of

applicant's residence can attest copies of such documents.

(ii) Attested photocopies of the documents mentioned in paragraph 9.1.8 (i) must be produced for verification to

the Banker to the Issue and the applicant's banker (if different from the banker to the Issue) at the time of

presenting the application. The attested copies, will after verification, be retained by the bank branch along

with the application.

9.1.9 Only one application will be accepted against each applicant, however, in case of joint account, one

application may be submitted in the name of each joint account holder.

9.1.10 Joint application in the name of more than two persons will not be accepted. In case of joint application each

applicant must sign the application form and submit attested copies of their CNICs/passport. The shares will

be dispatched to the person whose name appears first on the application form while in case of CDS, it will be

credited to the CDS account mentioned on the face of the form and where any amount is refundable, in whole

or in part, the same will be refunded by cheque or other means by post, or through the bank where the

application was submitted, to the person named first on the application form, without interest, profit or return.

Please note that joint application will be considered as a single application for the purpose of allotment of

shares

9.1.11 Subscription money must be paid by cheque drawn on applicant's own bank account or pay order/bank draft

payable to one of the Bankers to the Issue in favor of account “IPO of Hi-Tech Lubricants Limited –

General Public Account” and crossed “A/C PAYEE ONLY”.

9.1.12 For the applications made through pay order/bank draft, it would be permissible for a Banker to the Issue to

deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay

order/bank draft individually for each application.

9.1.13 The applicant should have at least one bank account with any of the commercial banks. The applicants not

having a bank account at all (non-account holders) are not allowed to submit application for subscription of

Shares.

9.1.14 Applications are not to be made by minors and/or persons of unsound mind.

9.1.15 Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant

portion of the application form.

9.1.16 Applicants should retain the bottom portion of their application forms as provisional acknowledgement of

submission of their applications. This should not be construed as an acceptance of the application or a

guarantee that the applicant will be allotted the number of Shares for which the application has been made.

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9.1.17 Making of any false statements in the application or willfully embodying incorrect information therein shall

make the application fictitious and the applicant or the bank shall be liable for legal action.

9.1.18 Bankers to the Issue are prohibited to recover any charges from the subscribers for collecting subscription

applications. Hence, the applicants are advised not to pay any extra charges to the Bankers to the Issue.

9.1.19 It would be permissible for a Banker to the Issue to refund subscription money to unsuccessful applicants

having an account in its bank by crediting such account instead of remitting the same by cheque, pay order or

bank draft. Applicants should, therefore, not fail to give their bank account numbers.

9.1.20 Submission of Fictitious and multiple applications (more than one application by same person) is prohibited

and such Application Money may be forfeited under section 87(8) of the Securities Act, 2015.

ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS

9.1.21 In case of foreign investors that are not individuals, applications must be accompanied with a letter on the

applicant's letterhead stating the legal status of the applicant, place of incorporation and operations and line

of business. A copy of memorandum of association or an equivalent document should also be enclosed, if

available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the

application. Copies of these documents can be attested by the bank manager in the country of applicant's

residence.

9.1.22 Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the

State Bank of Pakistan's Foreign Exchange Manual.

BASIS OF ALLOTMENT

9.1.23 The basis and conditions of transfer of shares to the General Public shall be as follows:

a) The minimum amount of application for subscription of 500 ordinary shares is Issue Price x

500Shares.Application for Shares below the respective amounts mentioned in this paragraph shall not be

entertained.

b) Application for Shares must be made for 500 Shares or in multiple thereof only. Applications, which are neither

500 Shares nor for multiple thereof, shall be rejected.

c) Allotment/Transfer of Shares to successful applicants shall be made in accordance with the allotment

criteria/instructions disclosed in the Prospectus.

d) Allotment of Shares shall be subject to scrutiny of applications in accordance with the criteria disclosed in the

Prospectus and / or the instructions by the Securities and Exchange Commission of Pakistan.

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

The applicants are, therefore, required to fill in all the data fields in the Application Form.

f) The Company will dispatch shares to successful applicants through their Bankers to the Issue or credit the

respective CDS accounts of the successful applicants (as the case may be).

9.2 BANKERS TO THE ISSUE

Code No. Bank Code No. Bank

01 Bank Al Habib Limited 06 MCB Bank Limited

02 Bank Alfalah Limited 07 Meezan Bank Limited

03 Bank of Punjab 08 Samba Bank Limited

04 Habib Bank Limited 09 Summit Bank Limited*

05 Habib Metropolitan Bank 10 United Bank Limited*

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9.3 E-IPO FACILITIES*

In order to facilitate the investors, the Issuer has arranged provision of e-IPO facility through United

Bank Limited (UBL) and Summit Bank Limited that are among the Bankers to the Issue. The

accountholders of United Bank Limited can use UBL’s net-banking to submit their applications online

via link http://www.ubldirect.com/corporate/ebank and the accountholders of Summit Bank Limited

can use Summit Bank Limited’s net-banking to submit their application via

https://ib.summitbank.com.pk. The accountholders of United Bank Limited & Summit Bank can submit

their applications through this links 24 hours a day during the subscription period which will close at

12:00 midnight on January 27, 2016.

9.4 DIVIDEND MANDATE OPTION:

Investors are encouraged to fill in the column under the heading, “Dividend Mandate Option” given in the

Shares Subscription Form to enable the Company to directly credit the future cash dividends, if any, into the

shareholders respective bank accounts.

9.5 CODE OF OCCUPATION

Code No. Occupation Code No. Occupation

01 Business 06 Professional

02 Business Executive 07 Student

03 Service 08 Agriculturist

04 Housewife 09 Industrialist

05 Household 10 Others

9.6 NATIONALITY CODE

Code No. Name of country Code No. Name of country

001 U.S.A 006 Bangladesh

002 U.K 007 China

003 U.A.E 008 Bahrain

004 K.S.A 009 Other

005 Oman



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PART 10

10 REGISTRATION FORM & BIDDING FORM OF HI-TECH LUBRICANTS LIMITED

Registration and Bidding Forms will be included in the printed version of the Prospectus

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PART 11

11 SIGNATORIES TO THE PROSPECTUS

-sd-

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Mr. Shaukat Hassan

Chairman

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Mr. Muhammad Ali Hassan

Director

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Mr. Hassan Tahir

CEO

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Mr. Zalmai Azam

Director

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Mr. Muhammad Basit Hassan

Director

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Mr. Muhammad Tabassum Munir

Director

-sd-

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Mr. Tahir Azam

Director

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Dr. Safdar Ali Butt

Director

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Mr. Syed Asad Abbas Hussain

Director

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Mr. Syed Mujahid Jameel Ghaznavi

Director

Signed by the above in presence of witnesses:

Witness 1 Witness 2

-sd- -sd-

__________________ __________________

Mr. Muhammad Imran Mr. Ahmad Shuja

CFO and Company Secretary Country Manager Sales

Dated: November 02, 2015

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PART 12

12 MEMORANDUM OF ASSOCIATION

THE COMPANIES ORDINANCE, 1984

(COMPANY LIMITED BY SHARES)

MEMORANDUM OF ASSOCIATION

OF

HI-TECH LUBRICANTS LIMITED

I) The name of the Company is “HI-TECH LUBRICANTS LIMITED”.

II) The Registered Office of the Company will be situated in the Province of Punjab.

III) The objects for which the Company is established are all or any of the following:-

1) To carryon business in oil, petroleum and gas sector of purchase and sale, import and export

of products, to act as dealers and distributors, to fabricate, construct, erect, lay, and

manufacture plant and machinery and apparatus for oil and petroleum, gas and chemical

installations and to purchase or otherwise acquire, produce, manufacture, refine, treat, purify,

blend, reduce, distill, store, transport, market, distribute, supply, sell and otherwise dispose

off and generally trade in any and all kinds of oil, petroleum and gas and their products,

providing consultancy services, preparation of feasibilities, projections, surveys, due

diligence reports, assistance in enhanced oil methodology and technology, specific technical

solutions, facilitation assistance and participation in studies and workings in oil and gas sector

by own or through entering into contracts with National, International and multinational

organizations.

2) To construct, own and operate oil refineries, blending plant for lubricant and for grease petrol

pumps, service stations, workshops, and other facilities, and to purchase or otherwise acquire,

produce, manufacture, refine, treat, purify, reduce, distil, store, transport, market, distribute,

supply sell and otherwise dispose of and generally trade in any and all kinds of petroleum and

petroleum products, oils, gas, hydrocarbons, petrochemicals, asphalt, bituminous substances

and the products and byproducts which may be derived, produced, repaired, developed,

compounded, made or manufactured there from and or acquire and take over the running or

like to be running business of alike nature with or without assets, liabilities, rights, privileges,

goodwill, registration, trade mark, import and export registration, or any other facilities.

3) To setup, install, erect, establish, run, control, manage and operate an industrial undertaking

for the manufacture, production, formulation and blending of lubricating oils anywhere in

Pakistan.

4) To import, export and sell or otherwise deal in oil, petroleum and gas products and to own,

purchase or otherwise acquire or hire services for introduction and promotion of sale of oil,

petroleum and gas products either under the brand name or otherwise.

5) To refine, process, formulate, produce, buy, sell, export, import, indenting or otherwise deal

in all types of chemicals, petro-chemicals and petroleum industry or any nature, used or

capable of being used in the petro-chemical industry, industrial chemicals or any mixtures,

derivatives and compounds thereof.

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6) To carry on the business of running petrol pumps, diesel pumps, CNG pumps, sale of Mobil

oil, filters, blending and re-processing of all kinds of lubricants, greases and other related

products and to acquire, lease, rights, privileges, license, patents from government, semi-

government and private organizations for Liquid Petroleum Gas and to manufacture, pressure

vessels, metal containers and their parts LPG Cylinders of different capacities and sizes.

7) To establish mechanical workshops, units for wheel alignments & balancing, Lube Oils and

Grease processing, blending & reclamation plant and white oil production unit and to market

the above mentioned products through dealers, stockiest and other sales organizations all over

Pakistan.

8) To carry on the business of importers and exporters of all kinds of goods, articles and things

either manufactured semi-manufactured or raw materials.

9) To carryon and undertake legally permissible trading business of all sorts and to act as

indenters, importers, exporters, traders, suppliers manufacturers and commission agents and

retailers of products, commodities and materials in any farm or shape manufactured or

supplied by any company, firm, association of persons, body, whether incorporation or not,

individuals Government, Semi-Government or any Local authority.

10) To carry on the business of general order suppliers including Government, Semi-Government

Agencies, Armed Forces, Army, Military or Defence and commission agents, indenters,

traders and as general merchant wholesalers, retailers, dealers, distributors, stockiest agents,

sub-agents in any goods or products or within the scope of the object of the Company and

subject to any permission required under the law.

11) To apply for, tender, offer and accept purchase or otherwise acquire any contracts and

concession for in relation to the projection, execution carrying out improvements,

management, administration or control of works and conveniences and undertake, execute,

carry out, dispose of or otherwise turn to account the same.

12) To carry on in or outside Pakistan the business of manufacturers, importers, exporters,

indenters, transporters, dealers in all articles and commodities akin to or connected with any

off the business of the Company capable of being conveniently carried on or necessary for

the promotion of the objects herein contained, as permissible, under law.

13) To carry on business and obtain licenses for shipping agents, clearing and forwarding agents,

purchasing and indenting agents, selling agents, (except managing agent) on such terms and

conditions as the Company may think proper subject to any permission as required under the

law:

14) To carry on agency business (except managing agency) and to acquire and hold selling

agencies and to act as selling agents, commission agents, manufacturers’ representatives and

distributing agents of and for the distribution of all kinds of merchandise, goods,

commodities, products, materials, substances, articles and thinks whether finished, semi-

finished, raw, under process, refined, treated or otherwise pertaining to trade and commerce

and for that purpose to remunerate them and to open and maintain depots and branches as

allowed under the law.

15) To purchase, take on Lease or in exchange, hire, apply for or otherwise acquire and hold for

any interest, any rights, privileges, easements, trademarks, patents, patent, right, copyrights,

licenses, machinery, plants, stock-in-trade, and any movable and immovable property of any

kind necessary or convenient for the purposes of or in connection with the Company's

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business or any branch or department thereof and to use, exercise, rights, and information so

acquired, subject to any permission required under the law.

16) To acquire by concession, grant, purchase, barter, licence either absolutely or conditionally

and either solely or jointly with others any machinery, plants, equipments, privileges, rights,

licenses, trade, marks, patents, and other movable and immovable property of any description

which the Company may deem necessary or which may seem to the Company capable of

being subject to any permission as required under the law.

17) To act as representatives, for any person, firm or company and to undertake and perform sub-

contracts, and also act in the business of the Company through or by means of agents, sub-

contractors and to do all or any things mentioned herein in any part of the world and either

alone or in collaboration with others and by or through agents, sub-contractors, or otherwise.

18) To go in for, buy otherwise acquire and use any patent design, copy right, license, concession,

convenience, innovation invention, trademarks, or process, rights, or privileges, plants, tools

or machinery and the like in Pakistan or elsewhere, which may for the time being appear to

be useful or valuable for adding to the efficiency or productivity of the Company's work or

business, as permissible under the law.

19) To acquire and carry on all or any part of the business or property of any person, firm,

association or company suitable for any of the purposes of the Company or carrying on any

business which this Company is authorized to carryon and in consideration for the same, to

pay cash or to issue shares of the Company.

20) To enter into arrangements with the government or authority (supreme, municipal, local or

otherwise) or any corporation, company, or persons that may seem conducive to the

Company's objects or any of them and to obtain from any such government, authority,

corporation, company or person any charters, contracts, rights, privileges and commission

which the Company may think desirable and to carryon exercise and comply with any such

charters, contracts, decrees, rights, privileges and concessions.

21) To enter into partnership, to amalgamate, or merge and/or to buy on all interests, asset,

liabilities, stocks, or to make any arrangement for sharing profits, union of interests, co-

operation, joint-venture reciprocal concession or otherwise with any person, firm or company

carrying on or proposing to carry on any business which this Company is authorized to carry

on or which is capable of being conducted so as directly or indirectly to benefit this Company

and to have foreign collaborations and to pay royalties / technical fees to collaborators subject

to the provisions of the Companies Ordinance, 1984.

22) To establish, promote or assist in establishing or promoting and subscribe to or become a

member of any other company, association or club whose objects are similar or Part similar

to the objects of this Company or the establishment or promotion of which may be beneficial

to the Company, as permissible under the law.

23) To open accounts with any Bank or Banks and to draw, make, accept, endorse, execute, issue,

negotiate and discount cheques, promissory notes, bills of exchange, bills of lading, warrants,

deposit notes, debentures, letter of credit and other negotiable instruments and securities.

24) To arrange local and foreign currency Loans from scheduled banks, industrial banks and

financial institutions for the purpose of purchase, manufacture, market, supply, export and

import of machinery, construction of factory, building and for the purpose of working capital

or for any other purpose.

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25) To sell or otherwise dispose of the whole or any part of the undertaking of the Company,

either together or in portions for such consideration as the Company may think fit and in

particular, for shares, debenture-stock or securities of any Company purchasing the same.

26) To borrow or raise money by means of loans or other legal arrangements from banks, or other

financial institutions, or Directors in such manner as the Company may think fit and in

particular by issue of debentures, debenture stock, perpetual or otherwise convertible into

shares and to mortgage, or charge the whole-or any part of the property assets of the

Company, present or future, by special assignment or to transfer or convey the same

absolutely or in trust as may seem expedient and to purchase, redeem or payoff any such

securities.

27) To pay all costs, charges, and expenses preliminary or incidental, incurred in formation or

about the promotion and establishment of the Company and to remunerate any person, firm

or company for services rendered or to be rendered in or about the formation or promotion of

the Company or the conduct of its business.

28) To give any servant or employee of the Company commission in the profits of the Company's

business or any branch thereof and for the purpose to enter into any agreement or scheme of

arrangement as the Company may deem fit and to procure any servants or employees of the

Company to be insured against risk of accident in the course of their employment by the

Company.

29) To establish and support or aid in the establishment and Support of associations, institutions,

funds and conveniences calculated to benefit persons who are or have been Directors of or

who have been employed by or who are serving or have served the Company or any other

Company which is a subsidiary or associate of the Company or the dependents or connection

of such persons and to grant pensions, gratuities, allowances, relief’s and payments in any

other manner calculated to benefit the persons described herein.

30) To distribute any of the Company's property and assets among the members in specie or in

any manner whatsoever in case of winding up of the company.

31) “To issue/accept guarantees for the performance of the contracts, agreements, obligations or

discharge of any debt of the company or on behalf of any associated company/undertaking

in relation to the payment of any financial facility including but not limited to loans, advances,

letters of credit or other obligations through creation of any or all types of mortgages, charges,

hypothecations, on execution of the usual banking documents or instruments or otherwise

encumbrance on any or all of the moveable or immovable properties of the Company either

present or future or both and issuance of any other securities or sureties by any other means

in favor of any banks, non-banking finance companies, or any finance institutions and to

borrow money for the purpose of the company or any associated company/undertaking on

such terms and conditions as may be considered appropriate by the Company.".

32) To carry out joint venture agreements with other companies or countries within the scope of

the objects of the Company.

33) To cause the Company to be registered or recognized in any foreign country.

34) To do and perform all other legally permissible acts and things as are incidental or conducive

to the attainment of the above objects or any of them.

35) To apply for and obtain necessary consents, permissions and licenses from any Government,

State, Local and other Authorities for enabling the Company to carry on any of its objects

into effect as and when required by law.

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36) To take over the running business now carried on by the partnership firm, M/S HI-TECH

LUBRICANTS, Lahore with all its assets, liabilities, stocks, contracts, right, privileges,

properties, both movable and immovable with the exclusive right to use its name.

37) It is declared that notwithstanding anything contained in the foregoing object clauses of this

Memorandum of Association nothing contained therein shall be construed as empowering the

Company to undertake or to indulge in business of banking company, banking, leasing,

investment, managing agency or insurance business directly or indirectly as restricted under

the law or any unlawful application.

38) It is further declared that notwithstanding anything stated in any object clause, the Company

shall obtain such other approval or licence from the competent authority, as may be required

under any law for the time being in force, to undertake a particular business.

IV) The liability of the members is limited.

V) The Authorized Capital of the Company is Rs. 1,500,000,000/- (Rupees One Billion Five Hundred

Million only) divided into 150,000,000 (One Hundred Fifty Million) ordinary shares of Rs. 10/-

(Rupees Ten only) each with powers to increase and reduce the Capital of the Company and to divide

the shares in the Capital for the time being into several classes in accordance with the provisions of

the Companies Ordinance, 1984.

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PART 13

13 APPLICATION FORM

Application Form will be included in the printed version of the Prospectus