Thal : Transmission of Annual Report for year ended June 30, 2022

4th Floor, House of Habib,

3 Jinnah cooperative Housing Society, Block-7/8,Shahrah-e-Faisal, Karachi - 75350, Pakistan.

Tel: [phone]

Thal Limited

2022

Annual Report

0

Report Annual 22 2 | Limited Thal

Design & Produced: R-Square

Corporate Information	03
Key Figures	04
Company Profile	05
Company Structure	07
Corporate Governance
Directors' Profile	09
Board Committees And
Their Terms of References	13
Chairman's Review Report	15
Directors' Report
Directors' Report to The Shareholders	17
Overview of Business Segments	18
Statement of Value Addition	28
Financial Performance Six Years at A Glance	29
Graphical Presentation Six Years at A Glance	30
Horizontal Analysis	31
Vertical Analysis	33
Six Years' Ratio Analysis	35
Graphical Presentation of Ratios	36
Shareholder Information
Notice of The Annual General Meeting	37
Combined Pattern of CDC And
Physical Shareholding	42
Financial Statements
Statement of Compliance with
Code of Corporate Governance	47
Review Report to the Members	49
Auditor's Report on
Unconsolidated Financial Statements	52
Unconsolidated Financial Statements	57
Auditor's Report on
Consolidated Financial Statements	110
Consolidated Financial Statements	114

Board of Directors

Rafiq M. Habib	Chairman -
	Non-Executive Director
Muhammad Tayyab Ahmad Tareen	Chief Executive Officer
Aliya Saeeda Khan	Independent Director
Khayam Husain	Independent Director
Mohamedali R. Habib	Non-Executive Director
Imran Ali Habib	Non-Executive Director
Salman Burney	Non-Executive Director

Chief Financial Officer

Shahid Saleem

Company Secretary

Salman Khalid

Audit Committee

Aliya Saeeda Khan	Chairperson - Independent
Mohamedali R. Habib	Member
Imran Ali Habib	Member
Salman Burney	Member

Human Resources &

Remuneration Committee

Aliya Saeeda Khan	Chairperson - Independent
Mohamedali R. Habib	Member
Salman Burney	Member
Muhammad Tayyab Ahmad Tareen	Member

External Auditors

EY Ford Rhodes

Chartered Accountants

Legal Advisors

A. K. Brohi & Co., Karachi

K. A. Wahab & Co., Karachi

Fazle Ghani Advocates, Karachi

03 | Thal Limited

Tax Advisors

EY Ford Rhodes Chartered Accountants

Bankers

Habib Metropolitan Bank Limited

Al Baraka Bank (Pakistan) Limited

Bank Alfalah Limited

Bank Al-Habib Limited

Faysal Bank Limited

Habib Bank Limited

Meezan Bank Limited

National Bank of Pakistan

Standard Chartered Bank (Pakistan) Limited

Telenor Microfinance Bank Limited

United Bank Limited

Registered Office

4th Floor, House of Habib

3-Jinnah Cooperative Housing Society, Block 7/8 Sharah-e-Faisal, Karachi - 75350

PABX: 92(21) 3431-2030,3431-2185

Fax: [phone]

E-mail: [e-mail]

Web: www.thallimited.com 4th Floor, House of Habib

Share Registrar

FAMCO Associates (Private) Limited

8-F, next to Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal, Karachi.

Tel: [phone]

Fax: [phone]

Email: [e-mail]

Web: www.famco.com.pk

Credit Rating

By VIS Credit Rating Company Limited Medium to Long-term rating: AA (Double A) Short-term rating: A-1+(A-One Plus)

Sales Revenue	Profit after tax	Earnings per share
Rs. in million	Rs. in million		Rs.
37,351	36.73%	4,257	22.26%	52.54	22.26%
2021-22	2021-22	2021-22
27,317		3,482		42.97
2020-21		2020-21		2020-21
	Total equity	Total assets
	Rs. in million	Rs. in million
	27,230	13.91%	37,606	27.34%
	2021-22	2021-22
	23,906		29,532
	2020-21		2020-21
Return on equity	Market price	Contribution to
	%	per share	national exchequer
15.63			Rs.	Rs. in million
7.33%	269.62	-36.23%	8,080	31.55%
2021-22		2021-22		2021-22
14.57		422.78		6,142
2020-21		2020-21		2020-21
	Divdend per share	Market capitalization
		Rs.	Rs. in million
	7.50	-25.00%	21,847	-36.23%
	2021-22	2021-22
	10.00		34,258
	2020-21		2020-21
				Annual Report 2022 | 04

Thal Limited has the distinction of being the flagship industrial project of the group. Incorporated in 1966 as Thal Jute Mills Limited the company renamed itself as Thal Limited in 2004 as part of the organization's consolidation strategy. Currently the company manages two distinct businesses: the engineering business and the building material & packaging business.

The Engineering division of Thal Limited owns and operates the Electrical Systems business; the Thermal Systems business and the Engine Components business. The Electrical Systems business is involved in manufacturing of wide range of wiring harness products from simple cable preparation to highly complex wiring harnesses, cable assemblies, and battery cables mainly for Automotive industry. The business came into existence in the year 2000 with the signing of a TAA (Technical Assistance Agreement) with Furukawa Electric Company, Japan. Furrukawa is one of the leading suppliers of automotive wiring harness system in the world. Moreover, during the course of the current year, the Compa- ny's Engineering Segment, laid the foundations for a new plant to cater to expansion in its automotive wire harness business in technical collaboration with Yazaki Corporation, one of the world's largest automotive parts suppliers. The combined synergies of both the companies would enable the business to establish itself in a relatively quick span of time as a premier supplier of car wiring systems to all automobile manufacturers in Pakistan.

The Thermal Systems - which commenced operations in 1996 - manufactures Auto Air Conditioners for Toyota and Suzuki vehicles manufactured and assembled in Pakistan. Ever since its establishment, Thal Engineering's Thermal Systems division has remained progressive with addition of multiple capabilities unto its fold. To deliver a product range of excellent quality, the Company entered into a Technical Assistance Agreement with Denso Japan in 1996 - the second largest auto parts maker in the world - listed on the Fortune 500 and the largest in Japan. The strategic alliance has acquired and obtained world class assistance in manufacturing car air conditioners, heater blowers & now aluminum radiators, enabling the business to continue in its growth trajectory.

The Engine Components - although a relatively newer addition to Thal Engineering Limited - manufactures Starters and Alternators for Toyota vehicles. The business was established with a clear vision to localize and manufacture

automobile engine parts and components for different automobile OEMs in Pakistan. The business has the unique distinction of being the first and foremost manufacturer of Engine Starters and Alternators for passenger cars in Pakistan under a foreign collaboration.

Thal Limited also owns and operates the building material and packaging businesses which comprises of laminates, Jute, Papersack and Woven Polypropylene packaging.

The Laminates business was established in 1980 as the first of its kind manufacturing unit for the production of high-pressure decorative laminates in Pakistan under the brand name of FORMITE. Today, the Company remains a market leader for its range of decorative and electrical grade compact laminates. Over the years, the business has successfully integrated upstream and downstream facilities to maintain its competitive edge and remain a partner of choice for a wide variety of stakeholders both locally and abroad.

The Jute business bears the honor of being the first industrial project that was undertaken by House of Habib. Located in the heart of Punjab, nestled between the banks of River Indus and Chenab, the Company is involved in manufacturing of grain sacks in various grades including food grade and Hessian yarn & twine for domestic and export markets.

The Papersack business has been in operation since the 1970s, is the pioneering multi-ply manufacturing unit in Pakistan and has remained a market leader in the business since its inception. With strategic locations of its plants situated in Hub (Baluchistan) and Gadoon (Khyber-Pakhtunkh- wa), the Company has an annual production capacity of 150 million sacks. With close to five decades of world class product leadership, the papersack business not only fulfills local demand but also exports to key international markets including Middle East, India, EU and the UK amongst other avenues.

In 2022, the Packaging business expanded by starting a commercial operation with the state-of-the-art Woven Polypropylene ("WPP") line on European based technology on integrated machines which was procured from Windmöller & Hölscher. This latest technology has an annual production capacity of 90 million bags and has the ability to provide highest quality of printing, with one of its kind high gloss finishes having high quality imprints.

Both the packaging solutions cater to various industries that include cement, chemicals and dyes, bonding adhesives, industrial salt, calcium, gypsum, carbon black, milk powder and guar gum amongst others.

Since our inception we continue to touch and redefine life through the spectrum of our businesses that continue to impact a broad category of stakeholders in innumerable ways. In order to provide further impetus to our growth.

philosophy we continue to diversify our investments with an ever-expanding footprint in subsidiaries such as Noble Computer Services (Private) Limited, Pakistan Industrial Aids (Private) Limited, Habib METRO Pakistan (Private) Limited, Thal Boshoku Pakistan (Private) Limited and Thal Power (Private) Limited. In addition, the Company also shares investments in associates like Indus Motor Company Limited, Habib Insurance Company Limited, Agriauto Industries Limited, Shabbir Tiles and Ceramics Limited.

Cognizant of our responsibility to the country and mapping our investments with solving the critical issues the economy faces, our recent most investment has been in Sindh Engro Coal Mining Company (SECMC) - a landmark project to fuel the growth of Pakistan's economy and develop indigenous energy resources. To bolster this investment Thal Limited has also entered into a Joint Venture Agreement with Novatex Limited to develop a 330 MW coal-fired power plant at Thar - an investment we feel will curtail the energy crisis and help bring positive impact to the communities around us. In October 2018 Hubco joined ThalNova as a 38.3% shareholder.

Since our inception we continue to touch and redefine life through the spectrum of our businesses that continue to impact a broad category of stakeholders in innumerable ways

05 | Thal Limited

Annual Report 2022 | 06

Operating

Businesses

Thal Limited

Associates

Thermal

Systems &

Engine

Components

Systems

Subsidiaries

Indus Motor

Company

Limited

Electric

Systems

Makro-Habib

Pakistan

Limited

Habib

Insurance

Company

Limited

Jute Papersack

Habib Noble

METRO Computer

Pakistan Services

(Private) (Private)

Limited Limited

Agriauto	Shabbir Tiles
Industries	& Ceramics
Limited	Limited

Laminates

Pakistan Industrial Aids (Private) Limited

ThalNova

Power Thar

(Private)

Limited

Thal Boshoku	Thal	Thal
Pakistan	Power	Electrical
(Private)	(Private)	(Private)
Limited	Limited	Limited

Sindh Engro

Coal Mining

Company

Limited

07 | Thal Limited

Annual Report 2022 | 08