Thal Limited 2020 Annual Report Thal Limited | 2 02 0 Annual Report 4th Floor, House of Habib, 3 Jinnah cooperative Housing Society, Block-7/8, Shahrah-e-Faisal, Karachi - 75350, Pakistan. Tel: 92 (21) 3431 2030 / 3431 2185 Design & Produced: R-Square HONORING A LEGACY, EMPOWERING OUR TOMORROW As we reflect back on the year and draw upon insights for future improvement, the untimely and immeasurable loss of Group Chairman, Mr. Ali Suleman Habib during the unprecedented COVID-19 pandemic was indeed a great hardship for Thal, its subsidiaries and for all who had the great pleasure of knowing him. With the Grace of the Almighty, the institutional foundations and strong systems created by Mr. Ali Habib have enabled us to carry on his legacy of perseverance, passion and excellence in every moment, in every sphere of business and in everything we do. Today, as we embark on a new chapter and year, forging ahead with resilience and armed with wisdom and guidance from past and present leadership, Thal remains committed to delivering on its bottom line and promise of growth no matter how challenging the circumstances. Thus, the Thal Annual Report for 2020 is aptly titled ‘Honoring a Legacy, Empowering our Tomorrow’. And, united, we usher in a new era of business excellence built upon the very values that all our stakeholders have held us to since our inception in 1966. The Thal Management and Company remains poised for the future with roots firmly planted in the soil of our successes. CONTENTS Our Values 04 Our Vision 05 Corporate Information 06 Key Figures 07 Company Profile 08 In Memoriam – Ali Suleman Habib 10 Company Structure 16 Corporate Governance Directors’ Profile 20 Board Committees And Their Terms of References 24 Chairman’s Review Report 2018 26 Directors' Report Directors’ Report to The Shareholders 30 Overview of Business Segments 32 Statement of Value Addition 61 Financial Performance Six Years at A Glance 62 Graphical Presentation Six Years at A Glance 63 Horizontal Analysis 64 Vertical Analysis 66 Six Years' Ratio Analysis 68 Graphical Presentation of Ratios 69 Shareholder Information Notice of The Annual General Meeting 72 Combined Pattern of CDC And Physical Shareholding 77 Financial Statements Statement of Compliance 84 Review Report to the Members 86 Standalone Financial Statements 87 Consolidated Financial Statements 143 OUR VALUES OUR VISION Recognized as the most respected and dynamic group with expanding & diversifying businesses, sustaining competitive returns to stakeholders. An employer of choice, responsibly fulfilling obligations to community, country & environment. HUMILITY & RESPECT TEAM WORK JUSTICE & INTEGRITY Be a good listener Be a good listener Report facts correctly Foster fair play Meaningful participation Transparency in actions Allow open critique Show mutual respect Accept mistakes Encourage communication Own collective decisions Be fair & impartial with subordinates Support inter-dependencies High sense of responsibility Walk the talk Believe in candor Not egotistic “We” not “I” CLEANLINESS ENTREPRENEURSHIP OPTIMUM USE OF RESOURCES Practice personal cleanliness and hygiene Be wired (knowledgeable) Minimize wastage Practice cleanliness and 5S for Be creative Procure at an optimal price all areas & resources: Convert visions into reality Practice 5 R: Seiri (Arrangement) Take calculated risks Recycle Seiton (Orderliness) Re-Use Seiso (Cleanliness) Retrieve Seiketsu (Neatness) Refine Shukan (Habits) Reduce CORPORATE INFORMATION KEY FIGURES Board of Directors Tax Advisors Rafiq M. Habib Chairman - Non-executive EY Ford Rhodes Sales Revenue Market capitalization Muhammad Tayyab Ahmad Tareen Chief Executive Officer Chartered Accountants Rs. in million Rs. in million Asif Qadir Independent Director 2019-20 16,448 2019-20 26,330 Aliya Saeeda Khan Independent Director Bankers Mohamedali R. Habib Non-Executive Director 2018-19 22,374 2018-19 29,500 Imran Ali Habib Non-Executive Director Habib Bank Limited Salman Burney Non-Executive Director Standard Chartered Bank (Pakistan) Limited United Bank Limited National Bank of Pakistan Chief Financial Officer Habib Metropolitan Bank Limited Meezan Bank Limited Profit After Tax Market price per share Shahid Saleem Albaraka Islamic Bank Rs. in million Rs. Bank Al-Habib Limited 2019-20 1,867 2019-20 325 Company Secretary Faysal Bank Limited Industrial & Commercial Bank of China Limited 2018-19 3,155 2018-19 364 Salman Khalid Telenor Microfinance Bank Audit Committee Registered Office Asif Qadir Chairman - Independent 4th Floor, House of Habib Earnings Per Share Dividend per share Mohamedali R. Habib Member 3-Jinnah Cooperative Housing Society, Block 7/8 Rs. Rs. Imran Ali Habib Member Sharae Faisal, Karachi - 75350 Salman Burney Member PABX: 92(21) 3431-2030, 3431-2185 2019-20 23.04 2019-20 5.00 Fax: 92(21) 3431-2318, 3439-0868 2018-19 38.93 2018-19 8.00 Human Resources & E-mail: [email protected] Remuneration Committee Web: www.thallimited.com Asif Qadir Chairman - Independent Salman Burney Member Share Registrar Total Assets Contribution to Muhammad Tayyab Ahmad Tareen Member FAMCO Associates (Private) Limited national exchequer 8-F, next to Hotel Faran, Nursery, Block-6, P.E.C.H.S., Rs. in million Rs. in million Shahra-e-Faisal, Karachi. 2019-20 24,116 2019-20 4,102 External Auditors Tel: 92(21) 3438-0101-5, 3438-4621-5 EY Ford Rhodes Fax: 92(21) 3438-0106, 3242-8310 2018-19 21,223 2018-19 7,076 Chartered Accountants Email: [email protected] Web: www.famco.com.pk Legal Advisors Total Equity Capital expenditure A. K. Brohi & Co., Karachi Rs. in million Rs. in million K. A. Wahab & Co., Karachi Fazal-e-Ghani Advocates, Karachi 2019-20 20,901 2019-20 1,470 2018-19 18,631 2018-19 1,129 06 | Thal Limited Annual Report 2020 | 07 THAL LIMITED – A LEGACY DRIVEN TO DETERMINATION plants situated in Hub (Baluchistan) and Gadoon Thal Limited has the distinction of being the flagship industrial manufacturing car air conditioners, heater blowers & now (Khyber-Pakhtunkhwa), the Company has an annual project of the group. Incorporated in 1966 as Thal Jute Mills aluminum radiators, enabling the business to continue production capacity of 150 million sacks and provides Limited the company renamed itself as Thal Limited in 2004 as in its growth trajectory. packaging solutions to various industries that include part of the organization’s consolidation strategy. Currently the cement, chemicals and dyes, bonding adhesives, industrial company manages two distinct businesses: the engineering The Engine Components – although a relatively newer salt, calcium, gypsum, carbon black, milk powder and guar business and the building material & packaging business. addition to Thal Engineering Limited – manufactures gum amongst others. With close to five decades of world Starters and Alternators for Toyota vehicles. The business class product leadership, the papersack business not only The Engineering division of Thal Limited owns and operates was established with a clear vision to localize and fulfills local demand but also exports to key international the Electrical Systems business; the Thermal Systems manufacture automobile engine parts and components for markets including Middle East, India, EU and the UK business and the Engine Components business. The different automobile OEMs in Pakistan. The business has the amongst other avenues. Electrical Systems business is involved in manufacturing of unique distinction of being the first and foremost manufacturer wide range of wiring harness products from simple cable of Engine Starters and Alternators for passenger cars in Since our inception we continue to touch and redefine life preparation to highly complex wiring harnesses, cable Pakistan under a foreign collaboration. through the spectrum of our businesses that continue to assemblies, and battery cables mainly for Automotive impact a broad category of stakeholders in innumerable industry. The business came into existence in the year 2000 In addition, Thal Limited also owns and operates the ways. In order to provide further impetus to our growth with the signing of a TAA (Technical Assistance Agreement) building material & packaging business which consists of philosophy we continue to diversify our investments with with Furukawa Electric Company, Japan. Furrukawa is one the Jute business known as Thal Jute. The Company bears an ever-expanding footprint in subsidiaries such as Noble of the leading suppliers of automotive wiring harness system the honor of being the first industrial project that was Computer Services (Private) Limited, Pakistan Industrial Aids in the world. Moreover during the course of the current undertaken by House of Habib. Located in the heart of (Private) Limited, Habib METRO Pakistan (Private) Limited, year, the Company’s Engineering Segment, laid the Punjab, nestled between the banks of River Indus and Thal Boshoku Pakistan (Private) Limited and Thal Power foundations for a new plant to cater to expansion in its Chenab, the Company is involved in manufacture of grain (Private) Limited. In addition the Company also shares automotive wire harness business in technical collaboration sacks in various grades including food grade, and Hessian investments in associates like Indus Motor Company with Yazaki Corporation, one of the world’s largest yarn & twine for domestic and export markets. Limited, Habib Insurance Company Limited, Agriauto automotive parts supplier. The combined synergies of both Industries Limited, Shabbir Tiles and Ceramics Limited. the companies would