1

Hascol Petroleum Limited

IPO Summit 2014 2

HPL was incorporated in 2001 under the Companies Ordinance, 1984 primarily to take advantage of the petroleum sector deregulation and undertake a program for owning, leasing and renting oil storage facilities as well as importing petroleum products for its own account.

In February 2005 HPL was granted a full marketing license by the Government of Pakistan and since then, HPL has been engaged in developing a retail network and storage facilities under the Hascol brand and by 31st December 2013the Company had commissioned approximately 210retail outlets across Pakistan and this number is expected to reach 291 by the end of 2016.

The Directors and sponsors of the company have decades of Multinational companies experience in Oil Trading, Retail & Marketing & Supply chain management.

HPL management team comprises of well experienced staff from each segment of the oil industry who have worked in local and multinational oil companies for many years and have ability to do things right.

Hascol Petroleum Limited

IPO Summit 2014 3

Company Market Share(%) Listing Status No. of Retail Outlets Market Price*

Pakistan State Oil 63.12 Listed 3,760 PKR 345

Shell Pakistan Limited 9.91 Listed 798 PKR 210

Attock Petroleum Limited 9.10 Listed 362 PKR 508

Chevron Pakistan Limited 4.43 Branch Office 518 -

Total-Parco Pakistan Limited 3.80 Non Listed 260 -

Hascol Petroleum Limited 2.70 Under Listing 210 PKR 20**

Byco Petroleum Limited 1.70 Listed 219 PKR 9

Bakri Trading Co. Pakistan (Private) Limited 1.79 Pvt. Limited 47 -

Askari Oil Services (Private) Limited 0.14 Pvt. Limited 294 -

Overseas Oil Trading Co. (Private) Limited 0.11 Pvt. Limited 109 -

Zoom Petroleum (Private) Limited 0.05 Pvt. Limited 12 -

Admore Gas (Private) Limited 0.05 Pvt. Limited 442 -

Pearl Parco (Private) Limited 3.10 Pvt. Limited (Non OMC) 0 -

(Source: OCAC Oil Report July-Dec- 2013)*Price quoted as at January 16, 2014**Book Building Floor Price

Market Share of Oil Marketing Companies

Hascol Petroleum Limited

IPO Summit 2014 4

Description 2013 2012 2011

Fixed Assets 2,286 1,724 877

Current Assets 6,707 2,595 1,136

Equity (Including Revaluation) 1,444 1,065 460

Current Liabilities 7,630 3,067 1,686

Sales (in Thousand Liters) 619,923 341,738 259,910

Sales 57,441 29,775 19,584

Gross Margin 1,320 996 699

Operating Profit / (Loss) 548 393 257

Finance Cost 110 101 202

Profit Before Tax 438 292 43

Profit After Tax 392 218 82

Earnings per Share 5.97 3.33 1.94

Break-up Value per share (with Revaluation) 22.02 16.24 7.01

Break-up Value per share (w/oRevaluation) 16.55 10.20 6.71

Current Ratio 0.88:1 0.85:1 0.67:1

(Rs in millions)

Phenomenal Growth

Hascol Petroleum Limited

IPO Summit 2014 5

KEY TO SUPERNOVAL PERFORMANCE

Supernova is extremely luminous and cause a burst of radiation that often briefly outshines an entire galaxy

At the Helm of LeadershipHASCOL is navigated by the leadership and guidance of some of the best and most experienced minds in Oil Industry

Supply Chain Management–Game of Supply In PakistanThe business case of HASCOL has been developed with a combination of Game of Supply in Pakistan and Retailing

The Thrust of Success – Products & ServicesHASCOL’s products and services act much like the navigational propeller giving our ship all the essential thrust towards success.

We cater a large network of retail outlets and a wide range of petroleum products and lubricants.

Hascol Petroleum Limited

IPO Summit 2014 7

Mr. Mumtaz Hasan Khan– Chairman & C.E.O Mr. Mumtaz Hasan Khan has over 50 year of experience within the oil industry. He started his career with Burmah Shell Oil Storage and Distribution Company in May 1963. In January 1976 Mr. Mumtaz resigned from the post of International Sales Manager to join Pakistan Services Limited as Managing Director. Pakistan Services Limited was the owning company of four Intercontinental Hotel (now known as Pearl Continental Hotel) in Pakistan at that time. In 1980 Mr. Mumtaz left Pakistan Services Limited and moved to London. He established Hascombe Limited, which started trading in Crude Oil and Petroleum Products. Hascombe bought petroleum product from Middle Eastern sources and sold to international trading companies like Shell and Elf. Hascombe was also a major supplier of petroleum products to Pakistan during 1991 till 1996.In 2005 Hascol was granted an oil marketing license by the government of Pakistan in Pakistan. Hascol has established a network of 200 Petrol Pumps all across Pakistan including Azad Jamu and Kashmir.Mr. Mumtaz Hasan Khan is currently also serving as Chairman of Sigma Motors (Sole distributor of Land Rover vehicles in Pakistan).He is a Trustee of the Foundation of Museum of Modern Art (FOMMA) located in Karachi and the member of the Expert Energy Group which prepared Pakistan’s first Integrated Energy Plan in 2009.    

Dr. Akhtar Hasan Khan – DirectorDr Akhtar Hasan Khan is a former civil servant.  He retired as Secretary Planning for the Government of Pakistan. Dr. Akhtar holds a Masters in Public Administration from the University of Harvard and a PHD in economics from the TUFFs University in USA. Dr. Akhtar served as Secretary Education, Additional Secretary Finance, Additional Secretary Commerce and additional secretary ministry of production. Dr. Akhtar has served on the board of public organization such as Pakistan International Airline, National Development Finance Corporation, Pakistan Automobile Corporation and Chairman of the Pakistan Ghee Corporation. Dr Akhtar is the author of several publications; his recent book was called “the impact of privatization in Pakistan”. He is a Director of Sigma Motors Limited.

Mr. Najmus Saquib Hameed – Director Mr. Najmus Saquib Hameed is the honorary Vice Chairman and C.E.O of Layton Rehmatullah Benevolent Trust (LRBT). LRBT is one of the largest charitable organizations in Pakistan providing free eye care to over 2 million patients through a network of 17 hospitals annually. He has over 47 year of experience in Senior Management position with multinational organization such as Unilever and Pakistan Tobacco where he retired as Chairman of the Company. Mr. Najmus Saquib holds a Master in International Relations and was a gold medalist at Institute of Business Administration (IBA). He has served as Chairman of the Cigarette Manufacturers Association and past Chairman Board of Governor at the Indus Valley School of Art and Architecture, Karachi. Mr. Najmus Saquib Hameed is currently serving on the board of NIB Bank Limited and Sigma Motors Limited.

At the Helm of LeadershipHASCOL is navigated by the leadership and guidance of some of the best and most experienced minds in Oil Industry

Hascol Petroleum Limited

IPO Summit 2014 8

Mr. Farooq Rahmatullah– DirectorMr. Rahmatullah is law graduate from the University of Peshawar. He joined Burmah Shell and Oil Distribution Company in 1968. Mr. Rahmatullah worked in various capacities with the organization i.e. Chemical, Human Resource, Marketing, Supply, Distribution and Retail. In 1994 Mr. Rahmatullah was transferred to Shell International London as Manager Business Strategy Division. He looked after various portfolios covering 140 countries. In 1998 he was transferred back to Pakistan as Head of Operations Shell Pakistan. Mr. Rahmatullah was also looking after Middle East and South Asia (MESA).In 2001 he was appointed managing director Shell Pakistan Limited a post he retired from in June 2006.Mr. Rahmatullah is credited with being the founding member of PAPCO (Pak Arab Pipeline Company limited). He has also served as the Director General of Civil Aviation Authority, Chairman of the Oil and Gas Development Authority, Chairman of LEADs. Since 2005 he has been chairman of the Pakistan Refinery Limited. He is currently serving on the Board of Director of Faysal Bank Limited, Society of Sustainable Development, and Resource Development Committee for the Agha Khan Hospital. He is also the Group Founding Member of the Pakistan Human Development Fund and a member of National Commission of Government Reform and Member of the Pakistan stone Development Company. He is the Chairman of Pakistan Refinery Limited and Non-Executive Director of Faysal Bank Limited.

Mr. Liaquat Ali – Director Mr. Liaquat Ali is a Chartered Accountant by profession and a fellow member of the Institute of Charted Accountants of Pakistan (ICAP). He has over 18 years of experience in leasing and investment banking field and has completed numerous transactions including restructuring of companies, merger and Acquisition. Mr. Liaquat Ali is a member of one of the leading Chartered Accountant firm Avais Hyder Liaquat Nauman Chartered Accountants (AHLN). AHLN is a member of RSM international which is the 7th largest network of accounting and consulting firms in the world[1]. AHLN has offices in Lahore, Karachi, Peshawar, Faislabad, Islamabad, Quetta and Kabul (Afghanistan). He is also a member of the benevolent fund committee of ICAP.

Mr. Sohail Hasan – DirectorMr. Sohail is a Chartered Accountant and a member of the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Pakistan. He was a partner in a leading accounting firm A.F.Ferguson & Co. for over 35 years and has also served as its senior partner. He has served as the member of the Provisional Financial Commission Punjab and is currently a member of the Corporate Law Review Commission of Pakistan. He is a Non-Executive Director of Habib Metropolitan Bank Limited.

Mr. Saleem Butt – Chief Operating Officer& Executive Director Mr. Saleem Butt has achieved a diversified 22 year career in Finance, Corporate Affairs, Supply Chain, Sales, Management, Human Resource, I.T and ERP implementation. Mr.Butt started to work as a Chartered Accountant for a firm which is now a part of Price Waterhouse Coopers. He then worked with various Shell Group of companies in Pakistan and overseas for 14 years. He was then offered a position with Emaar Pakistan a subsidiary of Emaar PJSC, U.A.E as Chief Operating Officer (COO).Mr.Butt is a Chartered Accountant and holds a Bachelor Degree in Commerce from the University of Karachi. He received his fellowship from the Institute of Chartered Accountants of Pakistan in 2004. He also serves as non-executive director on the boards of Pakistan Refinery Limited, TRG Pakistan Limited and Sigma Motors Limited.

At the Helm of LeadershipHASCOL is navigated by the leadership and guidance of some of the best and most experienced minds in Oil Industry

Hascol Petroleum Limited

IPO Summit 2014 9

Storage Facilities

HPL has developed state-of-the-art storage facilities at strategic locations that fully cover its retail network. The existing storage facilities currently operating under the banner of HPL are as follows:

Supply Chain Management–Game of Supply In Pakistan

Serial Facility Ownership Capacity

1 Port Qasim Long-term agreement - VTT Port Qasim (Pvt.) Ltd. 32,400

2 Kemari Long-term agreement - Al-Raheem Trading 12,150

3 Kemari Import Terminal Long Term Lease Agreement with Al-Abbas Group 15,000

4 Shikarpur HPL owned 6,500

5 Machike HPL owned 6,500

6 Amangarh Long-term lease agreement - an option to buy 1,500

In order to further enhance its capacity the Company is in the process of acquiring a land at Mehmood Kot, Punjab adjacent to Pak-Arab Refinery Limited. This will facilitate the Company to cover its supply in the Southern Punjab envelope.

Hascol Petroleum Limited

IPO Summit 2014 10

Supply Chain Management–Game of Supply In Pakistan

Hascol Petroleum Limited

IPO Summit 2014 11

Supply Chain Management–Game of Supply In PakistanEFFICIENT LOGISTICS NETWORK

HPL’s logistics network provides the Company with an efficient value chain that drives the Logistics department is the backbone of an oil marketing and distribution company. Hascol Petroleum Limited does not compromise on quality and quantity of petroleum products.HPL is maintaining its logistics policy wherein we ensure the deliveries of safe and sound condition to the valued customers. Tank Lorries registered with HPL are duly calibrated by weights & measures, and designed as per rules required by 'OGRA' and 'Ministry of Petroleum and Natural Resources'.HPL has got 19 registered contractors maintaining a fleet of 1,300 Tank Lorries for Black Oil and 350 Tank Lorries for White Oil.HPL all the tank lorries are registered in HPL state of the art ERP system JD Edwards to control the logistics data and product movement and time log, as well. The cartage contractors have to provide the tank lorries as per demand of HPL Cartage Agreements.

Hascol Petroleum Limited

IPO Summit 2014 12

The Thrust of Success – Products & ServicesHASCOL’s products and services act much like the navigational propeller giving our ship all the essential thrust towards success.

Hascol Petroleum Limited

IPO Summit 2014 13

FUTURE GAME PLANHPL has doubled its sales volume and profitability on year to year basis. During the last three years this growth has resulted in a market share from 1% to 2.6% up to October 2013 (Source OCAC Report), from 2014 and onwards within 02 years the company has a target to achieve a volumes of 1,000,000 MT with a market share of 5%. This growth will be achieved through:

1. Completion of its Machike Installation

2. Development of an Installation at Mehmood Kot

3. Depots at Sahiwal and Shershah

4. Increase in its retail outlets from 210 to 291 by the end of 2016

5. Development of Aircraft Refueling Station (JET-A1) at Karachi Airport. After PSO, HPL is the only OMC which has got a TSA from an International Operator to sell Jet A-1 to airlines.

6. Development of a Lubricants and Grease Plant by end of 2016.

Hascol Petroleum Limited

IPO Summit 2014 14

FUTURE GAME PLAN

Description 2014 (E) 2015 (E) 2016 (E) 2017 (E) 2018 (E)

Sales - Gross 76,823,122 97,504,087 118,562,926 128,846,213 151,455,929

Sales - Net of Sales Tax 66,597,535 84,525,748 102,781,537 111,696,061 131,296,298

Cost of Sales (65,032,134) (82,566,407) (100,446,724) (109,148,115) (128,555,807)

Gross Profit 1,565,401 1,959,341 2,334,814 2,547,946 2,740,492

Selling & Distribution Expenses (621,784) (639,705) (705,548) (763,697) (797,313)

Administrative Expenses (229,706) (249,201) (275,858) (306,121) (340,398)

Operating Profit 713,910 1,070,435 1,353,407 1,478,128 1,602,781

Finance Cost (106,795) (101,692) (125,652) (154,395) (132,036)

Other Income 94,631 101,756 107,621 114,792 123,481

Profit Before Taxation 701,747 1,070,499 1,335,377 1,438,525 1,594,226

Taxation 89,053 113,027 137,438 149,358 175,568

Profit After Taxation 612,693 957,473 1,197,939 1,289,167 1,418,659

EPS 6.76 10.57 13.22 14.23 15.66

Profit & Loss Accounts

Amount in PKR '000

HASCOL PETROLEUM LIMITED

PROJECTED PROFIT & LOSS ACCOUNTS

GP Margin 2.35% 2.32% 2.27% 2.28% 2.09%

NP Margin 0.80% 0.98% 1.01% 1.00% 0.94%

Current Ratio 1.00 1.06 1.13 1.24 1.30

Breakup Value with Revlauation 28.19 38.73 51.93 66.14 81.77

Breakup Value w/o Revlauation 24.26 34.83 48.05 62.28 77.94

Risk Free Rate 11.50% 5 - Year PIB Rate

Market Risk Premium 6.00% Standard Convention by Consensus Analyst

Beta 1.07 Average OMC Beta (PSO & SHELL)

Cost of Equity 17.92% Ke = Rf + (Rm-Rf)Beta

Terminal Growth Rate 2.00% Sustainable Growth Rate

Tax Rate 35.00% Corporate Tax Rate

Cost of Debt 13.50% 1 - Year KIBOR + 3.00%

Debt to Equity 21.67% Debt to Equity Ratio

WACC 15.94% Weighted Average Cost of Capital

Weighted Average Cost of Capital

Terminal Value:

Terminal Growth Rate 2.00%

Terminal WACC 15.94%

Estimated Terminal Free Cash Flow (PKR) 626,296

Terminal Value (FY2018) (PKR) 4,493,335

Terminal Value (Current) (PKR) 2,145,032

DCF Valuation:

NPV of Forecasts (PKR) 1,615,652

NPV of Terminal Value (PKR) 2,145,032

Enterprise Value / Cashflow Generated 3,760,684

Less: Net Debt (Net Cash) (157,642)

Equity Value (PKR) 3,603,042

Total Valuation (PKR) 3,603,042

No of Shares 90,600,000

Per Share Equity Value (PKR) 39.77

Hascol Petroleum Limited

IPO Summit 2014 15

Right Partner For Your Business – Year 2013 under review

Hascol Petroleum Limited

IPO Summit 2014 16

Hascol Petroleum Limited

Right Partner For Your Business