Hi-Tech Lubricants Limited (“HTL” or “the Company”) was incorporated in September 2008 under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017), and is listed on the Pakistan Stock Exchange Limited. The Company’s registered office is located in Lahore, Pakistan.

The Company was initially established as an Association of Persons (AOP) in March 1997 with the objective of marketing imported lubricants in Pakistan. The lubricants were sourced from SK Enmove Co., Ltd., South Korea, and imported in sealed cartons. During its early years, the Company developed its own distribution network in Lahore and established a dedicated sales team to promote awareness regarding synthetic lubricants in the local market. After successfully gaining operational experience and market acceptance in Lahore and surrounding areas, the Company expanded its operations nationwide by establishing regional offices in Islamabad and Karachi, supported by dedicated sales teams to manage the Central, Northern, and Southern regions of Pakistan. By the end of 2006, the Company had achieved an estimated 16% share of Pakistan’s premium passenger car lubricants market through a comprehensive nationwide distribution network. In 2007, the Company entered into a tripartite joint venture with SK Enmove Co. Ltd. and Pertamina to market and distribute Pertamina’s Group I mineral base lubricants in Pakistan. In 2016, the Company achieved ISO 9001:2015 certification, reflecting its commitment to internationally recognized quality standards and operational excellence. Over the years, Hi-Tech Lubricants has continued to strengthen its customer engagement, supply chain, and sales infrastructure, supported by a workforce of more than 400 dedicated field and support personnel serving customers across Pakistan.

HTL is engaged in the procurement, blending, marketing, and distribution of lubricants and petroleum products across Pakistan. In 2017, the Company was granted a license by the Oil and Gas Regulatory Authority (OGRA) to establish an Oil Marketing Company (OMC), and in 2019 it received approval to operate a new storage facility in Sahiwal and distribute petroleum products in the Punjab province under the brand name “HTL Fuel Stations.” The Company’s lubricant products are primarily marketed under the “ZIC” brand, with availability across more than 20,000 retail outlets and service stations nationwide. In the same year, HTL diversified into the retail automotive service sector through the establishment of “HTL Express Centers,” offering integrated vehicle maintenance solutions, and subsequently adopted a franchise-based expansion model for these centers. The Company also operates through its wholly owned subsidiary, Hi-Tech Blending (Private) Limited, whose principal activity is lubricating oil blending, along with the manufacturing of plastic products at its plant located in Sundar Industrial Estate, Lahore. Under the Company’s business model, base oils are imported from SK Enmove Co. Ltd., while packaging materials are manufactured locally at the Hi-Tech Blending facility. Lubricants are blended domestically using imported additives before being packaged and distributed. In the petroleum segment, High-Speed Diesel (HSD) and Premier Motor Gasoline (PMG) are either imported or procured locally and marketed through HTL fuel stations. Additionally, in the polymer segment, raw materials are processed into finished products at the blending facility for onward supply to customers.

HTL’s ownership structure remains highly concentrated, with effective control held by the two sponsoring families through various family members, including its Ultimate Beneficial Owners, Mr. Shaukat Hassan and Ms. Uzra Tahir, each holding a 37.83% stake in the Company. Collectively, the sponsors own 75.66% of the total shareholding, providing them with control over the Company’s strategy, operations, and governance-related decisions. The concentrated ownership profile reflects strong sponsor commitment and alignment with the Company’s long-term objectives and performance. The remaining ~24% shareholding comprises free float held by financial institutions, foreign investors, and the general public, contributing to broader market participation and a degree of external oversight.

HTL benefits from a stable and well-established ownership structure, with majority shareholding retained by the founding families. The strong sponsor presence provides continuity in strategic direction, supports consistency in decision-making, and reflects the sponsors’ long-term commitment to the Company’s growth and sustainability. The concentrated ownership structure also facilitates alignment between management and shareholder interests, enabling timely execution of business strategies and operational initiatives. Furthermore, the active involvement of the sponsoring families contributes to institutional stability and strengthens oversight over key strategic and financial matters, which remains supportive of the Company’s overall governance and long-term business outlook.

The sponsors possess extensive business and industry experience, particularly in the sourcing, distribution, and marketing of lubricants and petroleum products, which has supported the Company’s operational development and market positioning over time. Leveraging their industry knowledge and established commercial relationships, the sponsors have successfully expanded their business interests into the manufacturing segment through the establishment of Hi-Tech Blending (Pvt.) Limited, strengthening vertical integration and enhancing operational capabilities within the lubricant value chain. In addition to their presence in the energy and lubricant sector, the sponsoring MAS Group maintains a diversified business portfolio with a long-standing presence in trading and services-oriented businesses. The sponsors’ diversified business background, industry expertise, and entrepreneurial track record remain supportive of the Company’s strategic direction, business expansion initiatives, and overall operational stability.

The Company derives additional financial strength and stability from the broader MAS Group, which maintains diversified business interests across multiple entities operating in trading and services. This diversified group structure enhances the sponsors’ overall financial capacity and provides an indirect source of support, reflecting a relatively stable and well-established business base. The Group’s presence across multiple revenue-generating segments also contributes to financial resilience, reducing concentration risk and strengthening the overall backing available to the Company.

HTL’s Board of Directors comprises ten members, including two female directors, in line with best practices under the SECP’s Code of Corporate Governance for listed companies. The Board consists of two executive directors and eight non-executive directors, of whom three are independent directors. This structure demonstrates a clear emphasis on board independence and non-executive oversight, supporting a governance framework that promotes balanced and well-informed decision-making. The inclusion of independent directors enhances objectivity in the evaluation of strategic, operational, and financial matters, while the presence of female representation further strengthens diversity at the board level. Overall, the Board composition reflects a governance structure designed to improve accountability, transparency, and effective oversight of the Company’s affairs.

The Company’s leadership comprises seasoned professionals with strong academic credentials and diverse expertise spanning finance, energy, investment banking, technology, retail, and corporate governance. Mr. Shaukat Hassan serves as Chairman and brings over four decades of entrepreneurial and financial experience. Mr. Hassan Tahir is the Chief Executive Officer and has more than 20 years of experience driving the Company’s growth and market expansion. Other members of the Board include Mr. Muhammad Ali Hassan, Executive Director responsible for Sales, HR, and Administration; Ms. Mavira Tahir, Non-Executive Director with expertise in healthcare administration and project management; Mr. Faraz Akhtar Zaidi, Non-Executive Director with international investment banking experience; Ms. Mehvish Khan, Non-Executive Director and entrepreneur with experience in the retail sector; Mr. DongHyun Kim, Non-Executive Director representing SK Enmove Co., Ltd.; Mr. Shafiq ur Rehman, Independent Director and senior chartered accountant; Mr. Mahmood Akhtar, Independent Director with extensive experience across multiple industries; and Mr. Muntizer Abbas Hussain, Independent Director and seasoned technology and retail business executive with international exposure.

HTL maintains a well-defined governance framework supported by six Board-level committees, namely the Audit Committee (four members), HR and Remuneration Committee (five members), Risk and Sustainability Committee (three members), Investment Committee (four members), CSR Committee (five members), and Nomination Committee (four members), which together enable effective delegation of responsibilities and focused oversight across key strategic, operational, and governance areas. The Risk and Sustainability Committee is responsible for overseeing risk management and sustainability-related matters, while the Audit Committee, operating under the Listed Companies Code of Corporate Governance Regulations and Board-approved Terms of Reference, provides critical oversight of financial reporting, internal controls, compliance, and internal and external audit functions, thereby strengthening transparency, accountability, and control environment robustness. The HR and Remuneration Committee oversees human resource and governance-related matters, including performance evaluation and remuneration frameworks, and submits recommendations to the Board to enhance overall governance effectiveness. Collectively, these committees contribute to a structured and disciplined governance system that supports stronger oversight, improved risk management, and enhanced Board effectiveness.

As a listed company, HTL is subject to enhanced regulatory compliance and disclosure requirements, including corporate briefings and timely public disclosures, which support transparency and informed stakeholder decision-making. The Company’s financial statements for fiscal year 2025 were audited by Riaz Ahmad & Co. Chartered Accountants, who issued an unqualified audit opinion, confirming that the statements present a true and fair view in line with applicable standards. The auditor is QCR-rated and included in Category A of the State Bank of Pakistan’s panel, reflecting strong professional credibility. Together, these factors reinforce the reliability of financial reporting and strengthen overall stakeholder confidence.

The Company's day-to-day operations are entrusted to the Chief Executive Officer (CEO) and the Executive Director, both of whom report directly to the Board of Directors. The CEO leads three distinct business units: HTL Express, overseeing the Express Centers network; HTL Station, responsible for oil marketing operations; and ZIC Lubricants, managing lubricant sales and distribution. Six corporate functions, namely Internal Audit, Corporate Compliance, Finance, Marketing, Business Intelligence, and Strategy Development, provide the analytical, financial, and governance infrastructure required to support sound decision-making across the organization. Operational effectiveness is further sustained through four dedicated support functions, Supply Chain & Warehouse, Administration, Information Technology, and Human Resource, all reporting to the Executive Director. This layered management framework establishes clear lines of authority and accountability, enabling functional specialization and cohesive execution across the Company's diverse business activities.

Mr. Hassan Tahir, Chief Executive Officer, holds an MBA and brings over 20 years of professional experience, including expertise in launching multiple lubricant product ranges in Pakistan as well as establishing IT operations and back-office service functions for various clients. Mr. Muhammad Ali Hassan, a graduate in Marketing and Human Resources from the University of Sydney, Australia, leads the Sales, Human Resources, and Administration functions at HTL. Mr. Saeed Khan Niazi, Group Chief Financial Officer, has over 27 years of extensive local and international experience in corporate finance and investments. Mr. Umar Aftab Rana, Country Head Sales, brings 20 years of experience in the FMCG and lubricants sectors and oversees nationwide sales operations. Mr. Salman Saeed, Country Head Fuel Stations, has been serving since 2023 and leads the company’s OMC portfolio, including corporate affairs, retail development, network expansion, downstream operations, and commercial strategy.

Management meetings are convened on a need basis to review operational performance, address emerging business issues, and monitor progress against strategic and operational priorities. This flexible governance mechanism enables timely decision-making and allows management to respond effectively to changing business requirements while maintaining oversight of day-to-day operations. It also strengthens coordination across functional areas and supports the efficient execution of approved plans and initiatives. HTL does not operate through formally constituted management committees; instead, it relies on this adaptive meeting structure to ensure ongoing management oversight and effective implementation of decisions across the organization.

HTL has implemented Oracle ERP, integrating key functions including finance, HR, supply chain, sales, and inventory to ensure data consistency, real-time reporting, and improved decision-making. The system is continuously enhanced through new modules, upgrades, and process improvements to align with evolving business needs. Strong security measures, including multi-factor authentication, role-based access controls, segregation of duties, and regular audits, ensure data protection and restrict access to authorized personnel only, reducing risks of fraud and error.

HTL maintains a strong control environment underpinned by Board-level oversight and a structured governance framework, ensuring that financial prudence, operational discipline, and compliance remain integral to its risk management approach. The Board, supported by the Audit Committee, regularly evaluates the adequacy and effectiveness of internal control systems and enterprise risk management practices to ensure they remain robust and aligned with the Company’s evolving risk profile. This oversight is complemented by an independent internal audit function, which provides ongoing assurance over financial reporting integrity, operational controls, and regulatory compliance. Collectively, these mechanisms reinforce a disciplined control environment, supporting transparency, accountability, and the reliable execution of business processes.

Pakistan’s Oil Marketing Companies (OMCs) operate within a regulated market structure in which a limited number of large firms account for the majority of fuel volumes, despite the presence of multiple licensed participants. The industry is predominantly volume driven, with demand closely linked to transportation, industrial activity, and power generation, while profitability remains constrained due to administratively regulated pricing and fixed dealer and OMC margins rather than market-based price determination. Competitive dynamics are therefore primarily influenced by network coverage, storage and logistics infrastructure, supply chain efficiency, and brand credibility, resulting in significant scale advantages for established operators. The sector continues to face structural challenges, including circular debt accumulation, delayed receivables from government entities, and rising working capital requirements, all of which place disproportionate pressure on smaller market participants. In the current geopolitical environment, these constraints are further exacerbated by heightened volatility in global crude oil markets driven by geopolitical tensions in the Middle East, sanctions on key oil producing economies, and uncertainty surrounding critical maritime trade routes such as the Strait of Hormuz, all of which contribute to supply chain risk and import cost instability for Pakistan’s energy system. Overall, geopolitical uncertainty amplifies existing structural inefficiencies, contributing to gradual market consolidation as financially stronger OMCs expand their retail and operational footprint while weaker entities face sustainability pressures, with long term sector performance remaining closely tied to macroeconomic stability, regulatory consistency, and global geopolitical developments.

The Company maintains a relatively small presence in the Oil Marketing Company (OMC) segment, with an estimated market share of ~0.4%, reflecting its strategic focus on the lubricants business. Its positioning is comparatively stronger in lubricants, where it has emerged as a market leader in the synthetic lubricants category. This underscores its stronger competitive positioning and product strength in higher-value, performance-oriented lubricant segments.

During 9MFY26, HTL reported revenue growth across both key segments, with lubricant sales increasing to ~PKR 7.6 billion from ~PKR 7.1 billion in 9MFY25, while petroleum product sales rose to ~PKR 18.3 billion compared to ~PKR 16.8 billion in the same period last year, taking total revenue to ~PKR 25.9 billion versus ~PKR 23.9 billion in the prior year period. The growth during the nine-month period was primarily driven by higher sales volumes, supported by an expanding retail footprint, as the increasing number of fuel stations enhanced market reach and contributed to stronger OMC segment sales, along with a favourable inventory effect, which further strengthened revenue realization. Petroleum throughput reflects strong underlying momentum, with Motor Gasoline (PMG) volumes increasing to 50,983 MT in FY25 from 31,423 MT in FY24, while High-Speed Diesel (HSD) volumes rose to 21,146 MT from 14,464 MT over the same period, underscoring sustained demand strength across key petroleum products.

During 9MFY26, the Company recorded an improvement in margins across all levels, supported by higher revenues driven by improved selling prices and a relatively lower cost of sales, benefitting from inventory procured at earlier price levels. This favourable pricing-cost dynamic translated into a meaningful expansion in profitability across the income statement. As a result, gross profit margin improved significantly to ~8.5% compared to ~6.2% in 9MFY25, reflecting stronger trading spreads. Operating profitability also turned positive, with operating profit margin rising to ~2.2% from a negative ~0.3% in the corresponding period last year, indicating improved operating leverage and better absorption of fixed costs. Similarly, net profit margin strengthened to ~1.0% versus a negative ~1.2% in 9MFY25, highlighting a clear recovery in bottom-line performance and overall margin resilience.

During FY25, the group significantly enhanced its local blending capabilities, with approximately 95% of its lubricant portfolio now produced domestically in collaboration with SK Enmove’s technical support. This strategic shift from importing finished lubricants in bulk for local packing to importing base oil and undertaking full-scale local blending with specialized additives has reduced exposure to customs duties, improved operational efficiency, and strengthened cost competitiveness, while maintaining international quality standards for customers. The polymer business continued its growth momentum, reflecting steady progress toward achieving profitability and establishing a sustainable footprint in the sector. The petroleum segment also delivered a notable milestone, achieving both revenue growth and profitability for the first time. In parallel, the retail network expanded to 61 fuel stations across Punjab & Khyber Pakhtunkhwa further strengthening the Company’s downstream presence and market reach.

During 9MFY26, HTL demonstrated overall stable working capital management with selective efficiency improvements, as average inventory days improved to ~13 from ~18 in 9MFY25 due to better inventory turnover and stock control, while trade receivable days increased moderately to ~17 from ~13 reflecting a slight elongation in collections. Gross working capital days remained broadly stable at ~30 versus ~31 in the prior year, supported by consistent trade payable days of ~27, while net working capital days improved marginally to ~3 from ~4. Notably, the company’s working capital requirement is also structurally driven by the need to maintain sufficient inventory and liquidity to capture early payment and volume-based discounts from refineries, which makes a certain level of working capital deployment strategically necessary rather than purely efficiency-led.

The Company’s coverage metrics improved significantly in 9MFY26, supported by stronger EBITDA growth and a meaningful reduction in finance costs following policy rate cuts. This combination strengthened debt servicing ability across key coverage indicators, reflecting improved operating performance alongside a lower cost of borrowing environment. In particular, the free cash flow from operations to finance cost ratio improved sharply to ~4.7x from ~0.6x in the prior year period, underscoring a substantial enhancement in cash generation relative to interest obligations and indicating a materially stronger and more comfortable debt service profile.

During 9MFY26, the Company’s leverage position improved to ~34.4% compared to ~36.6% in the corresponding period last year, reflecting a moderate reduction in overall gearing. Short-term borrowings continued to dominate the debt profile, though their share declined slightly to ~73.3% from ~74.6% in 9MFY25. Meanwhile, interest payable days increased to ~45.5 days from ~33.2 days, indicating a relatively longer settlement cycle for finance costs during the period.