Internship Report on

Presented to
Prof. Dr Hassan Mobeen Alam
Principal
Hailey College of Commerce
University of the Punjab, Lahore
Presented by
Ahmad Ijaz
Roll no. BC14-219
Semester 8th
B.Com (Hons)
2014-18
Dated
March 26, 2018

Hailey College of commerce University of The Punjab

Millat Tractor limited
 LETTER OF TRANSMITTAL

Supervisor,
Prof. Dr Zulfiqar Ahmed Bowra
Hailey College of Commerce,
University of Punjab, Lahore

Respected Sir,
I am pleased to present you the internship report, work place Millat
Tractor Limited Sheikhupura Road dated July 03,2017 to August 13,2017. The
report has been prepared in accordance with the requirements and the
guidelines approved by the competent authority.
This report includes the, introduction of Millat Tractor Limited. organizational
structure, ratio analysis with bar charts, interpretation of ratio analysis, SWOT
analysis, recommendations to the organization, skills acquired by me, and some
additional data about the working of organization.
Finally, the internship report includes the audited financial statements as per the
requirements, and some additional documents.

Thank you for your time and consideration.

Yours sincerely,
Ahmad Ijaz
BC14-219
Section “C” (Morning)
 Acknowledgment

First, I thank to Allah Almighty that Millat Tractor Limited gave me an

opportunity to work here. This report is all about my internship in all
departments of MTL. I thank to Miss Hana Aslam Assistant Manager
(HR) for my internship at MTL departments for learning all major/important
activities/functions of departments. I am also observed all theoretical
knowledge being converted to practical processes. I thank to Head of
Department of Purchase Mr. Rao Amir, Head of department of Marketing
Mr. Azhar Noor, Head of department of Quality assurance Mr. Raffey
Zaman Durani and Head of Department of Information Technology Mr.
Ayaz Khursheed. who cooperate me with well conversant about
functions/activities of his department. Without their guidance and kind
attitude it was difficult for me to complete my report.
I also want to say great thanks to the staff of Millat Tractors who guided
me and helped me during my Internship over there.
 Table of contents

LETTER OF TRANSMITTAL .......................................................................................................3

ACKNOWLEDGMENT ..............................................................................................................4

LIST OF CHARTS.................................................................................................................... 11

LIST OF CHARTS.................................................................................................................... 12

EXECUTIVE SUMMARY ...........................................................................................................1

INTRODUCTION .....................................................................................................................2

MILLAT TRACTORS LTD ................................................................................................................2

BOLAN CASTING LTD ...................................................................................................................3
MILLAT EQUIPMENT LTD..............................................................................................................3
MILLAT INDUSTRIAL PRODUCT LTD .................................................................................................3

HISTORY ................................................................................................................................4

REGISTERED OFFICES ..............................................................................................................7

HEAD OFFICE ............................................................................................................................7

REGIONAL OFFICES: ....................................................................................................................7

ABOUT THE COMPANY ...........................................................................................................8

VISION MISSION AND CORE VALUED OF MTL ..........................................................................9

VISION ....................................................................................................................................9
MISSION ..................................................................................................................................9
CORE VALUES ............................................................................................................................9

OBJECTIVES AND STRATEGIC PLANNING .................................................................................9

OBJECTIVES ..............................................................................................................................9
STRATEGIC PLANNING................................................................................................................ 10
MAIN SHAREHOLDERS AND THEIR SHARES ........................................................................... 11

ORGANIZATION STRUCTURE................................................................................................. 12

NAMES AND DESIGNATED .................................................................................................... 13

BOARD OF DIRECTOR ........................................................................................................... 14

CHAIN OF COMMAND .......................................................................................................... 14

ACTIVITIES PERFORMED BY INTERNEE .................................................................................. 15

MAJOR HR POLICIES AND PRACTICES .................................................................................... 16

RECRUITMENT AND HIRING ........................................................................................................ 16

PROMOTION ........................................................................................................................... 16
REWARD SYSTEM ..................................................................................................................... 16
TRAINING SYSTEM .................................................................................................................... 17
BENEFITS ............................................................................................................................... 17

PURCHASE DEPARTMENT ..................................................................................................... 17

REVIEW OF PURCHASE PROCEDURE ............................................................................................... 18

2. INVENTORY MANAGEMENT (CENTRAL STORE) .......................................................................... 20

............................................................................................................................................ 21

B. ADMINISTRATION ............................................................................................................ 22

1. POOL VEHICLE MANAGEMENT .............................................................................................. 22

VEHICLE PROCUREMENT ...................................................................................................................... 22
REGISTRATION AND TAXATION .............................................................................................................. 23
VEHICLE ISSUANCE .............................................................................................................................. 23
VEHICLE REFILLING ............................................................................................................................. 24
REPAIR & MAINTENANCE .................................................................................................................... 25
VEHICLE INSURANCE ........................................................................................................................... 26
DISPOSAL OF POOL VEHICLE ................................................................................................................. 26
ROUT PERMITS................................................................................................................................... 27
3. CANTEEN MANAGEMENT .................................................................................................... 29
4. FAIR PRICE SHOP MANAGEMENT .......................................................................................... 29
5. MATERIAL MANAGEMENT ................................................................................................... 30
DIRECT PURCHASES............................................................................................................................. 30
MATERIAL RECEIPTS............................................................................................................................ 31

MARKETING DEPARTMENT .................................................................................................. 35

CUSTOMER SURVEY DETAILS ................................................................................................ 44

PRICE LIST OF THE TRACTORS ............................................................................................... 45

PRACTICES IN MARKETING DEPARTMENT ............................................................................. 48

MARKETING STRATEGIES...................................................................................................... 49

DIFFERENTIATION ..................................................................................................................... 50
MARKET SEGMENTATION ........................................................................................................... 50
TARGET MARKETING ................................................................................................................. 50

COMPETITORS OF MTL ......................................................................................................... 51

MARKET SHARE OF THE COMPANY ....................................................................................... 51

SUCCESS AND FAILURE OF COMPANY PRODUCTS IN THE MARKET......................................... 51

SUCCESS ................................................................................................................................ 51
AVAILABILITY OF PARTS ....................................................................................................................... 51
NETWORK OF DEALERS AND WORKSHOPS .............................................................................................. 51
DIVERSIFICATION ................................................................................................................................ 52
EXPERIENCE ....................................................................................................................................... 52
GOOD WILL ....................................................................................................................................... 52
REPAIR FACILITY ................................................................................................................................. 52
DELIVERY THROUGH DEALERS AND DIRECT CASH BASIS............................................................................. 52
LICENSES AND TECHNOLOGY ................................................................................................................. 52
AFTER SALE SERVICES ......................................................................................................................... 53
USING PROACTIVE APPROACH .............................................................................................................. 53
FAILURE OF PRODUCTS .............................................................................................................. 53
RELATIONSHIP ORIENTED ..................................................................................................................... 53
NO PROPER RESEARCH SURVEY ............................................................................................................ 53
NO CUSTOMER DEALING DEPARTMENT ................................................................................................... 53
POOR MARKETING.............................................................................................................................. 53

PRODUCT MARKETING ......................................................................................................... 54

INFORMATION TECHNOLOGY DEPARTMENT ......................................................................... 55

1. IFS................................................................................................................................. 55
2. INTERNET ........................................................................................................................ 56
3. HARDWARE ...................................................................................................................... 56
4. DATA BASE....................................................................................................................... 56
5. NETWORKING ................................................................................................................... 56

QUALITY ASSURANCE DEPARTMENT..................................................................................... 56

DEPARTMENTS .................................................................................................................... 56
QUALITY CONTROL IN PURCHASING...................................................................................... 57

RATIO ANALYSIS OF THE COMPANY PROFITABILITY RATIOS .................................................. 58

GROSS PROFIT RATIO ................................................................................................................ 58

NET PROFIT RATIOS .................................................................................................................. 59
RETURN ON EQUITY .................................................................................................................. 60
RETURN ON ASSETS .................................................................................................................. 61

LIQUIDITY RATIO .................................................................................................................. 62

CURRENT RATIO ...................................................................................................................... 62

QUICK RATIO .......................................................................................................................... 63
INVENTORY TURNOVER RATIO ..................................................................................................... 64
DAYS SALE IN INVENTORY .......................................................................................................... 65
RATIOS .................................................................................................................................. 65
DEBTOR TURNOVER RATIO ......................................................................................................... 66
DAYS SALE IN RECEIVABLE .......................................................................................................... 67
FIXED ASSET TURNOVER RATIO ................................................................................................... 68
TOTAL ASSET TURNOVER RATIO .................................................................................................. 69

MARKET RATIOS .................................................................................................................. 70

EARNINGS PER SHARE ............................................................................................................... 70

PRICE EARNINGS RATIO ............................................................................................................. 71

DEBT RATIOS ....................................................................................................................... 72

DEBT-EQUITY RATIO ................................................................................................................. 72

RATIO ANALYSIS OF THE COMPANY ...................................................................................... 73

FINANCIAL ANALYSIS............................................................................................................ 75

HORIZONTAL ANALYSIS ........................................................................................................ 76

INTERPRETATION...................................................................................................................... 77

HORIZONTAL ANALYSIS OF PROFIT AND LOSS ....................................................................... 77

VERTICAL ANALYSIS OF BALANCE SHEET ............................................................................... 78

INTERPRETATION...................................................................................................................... 80

VERTICAL ANALYSIS OF PROFIT AND LOSS............................................................................. 80

INTERPRETATION...................................................................................................................... 81

SWOT ANALYSIS................................................................................................................... 81

STRENGTHS ............................................................................................................................ 81
LICENSES AND TECHNOLOGY ................................................................................................................. 81
ISO 9002 CERTIFICATION .................................................................................................................... 82
AFTER SALE SERVICES ......................................................................................................................... 82
GOOD WILL ....................................................................................................................................... 82
MARKET SHARE.................................................................................................................................. 82
REPAIR FACILITY ................................................................................................................................. 82
DELIVERY THROUGH DEALERS AND DIRECT CASH BASIS ............................................................................ 82
NETWORK OF DEALERS AND WORKSHOPS .............................................................................................. 82
DIVERSIFICATION ................................................................................................................................ 83
EXPERIENCE ....................................................................................................................................... 83
WEAKNESSES .......................................................................................................................... 83
DIVESSSRSION OF CONCENTRATION ....................................................................................................... 83
NON-SPECIALIZED PEOPLE AT FRONT DESKS ........................................................................................... 83
LONG PROCEDURES OF DECISION MAKING ..................................................................................... 83
JOB STATICS ...................................................................................................................................... 83
INDISPENSABILITY ............................................................................................................................... 84
LONG DELIVERY PERIOD ...................................................................................................................... 84
OPPORTUNITIES ................................................................................................................... 84
CROP HIGH YIELDS AND RATES ............................................................................................................. 84
E-COMMERCE.................................................................................................................................... 84
THREATS .............................................................................................................................. 84
POLITICAL INSTABILITY ......................................................................................................................... 84
STRONG LOCAL COMPETITION ..................................................................................................... 85

CONCLUSION ....................................................................................................................... 85

RECOMMENDATIONS FOR THE COMPANY ............................................................................ 86

SKILLS ACQUIRED ................................................................................................................. 87

SKILLS ON IFS SOFTWARE ........................................................................................................... 87

EFFECTIVE GROUP COMMUNICATION............................................................................................. 87
TEAMWORK SKILLS (WORK WELL WITH OTHERS) .............................................................................. 87
CAREER FOUNDATION ............................................................................................................... 87
CONNECTION WITH BUSINESS PERSONS .......................................................................................... 87
PROBLEM-SOLVING SKILLS .......................................................................................................... 88
SKILLS ON EXCEL AND WORD ...................................................................................................... 88
SELF-CONFIDENCE .................................................................................................................... 88
CREATIVITY ............................................................................................................................. 88

BIBLIOGRAPHY..................................................................................................................... 89

APPENDIX ............................................................................................................................ 90
 List of charts

TABLE 1 ............................................................................................................................... 11
TABLE 2 ............................................................................................................................... 13
TABLE 3 ............................................................................................................................... 35
TABLE 4 ............................................................................................................................... 44
TABLE 5 ............................................................................................................................... 45
TABLE 6 ............................................................................................................................... 58
TABLE 7 ............................................................................................................................... 59
TABLE 8 ............................................................................................................................... 60
TABLE 9 ............................................................................................................................... 61
TABLE 10.............................................................................................................................. 62
TABLE 11.............................................................................................................................. 63
TABLE 12.............................................................................................................................. 64
TABLE 13.............................................................................................................................. 65
TABLE 14.............................................................................................................................. 66
TABLE 15.............................................................................................................................. 67
TABLE 16.............................................................................................................................. 68
TABLE 17.............................................................................................................................. 69
TABLE 18.............................................................................................................................. 70
TABLE 19.............................................................................................................................. 71
TABLE 20.............................................................................................................................. 72
TABLE 21.............................................................................................................................. 73
TABLE 22.............................................................................................................................. 76
TABLE 23.............................................................................................................................. 78
 List of charts

CHART 1 ................................................................................................................................................. 58
CHART 2 ................................................................................................................................................. 59
CHART 3 ................................................................................................................................................. 60
CHART 4 ................................................................................................................................................. 61
CHART 5 ................................................................................................................................................. 62
CHART 6 ................................................................................................................................................. 63
CHART 7 ................................................................................................................................................. 64
CHART 8 ................................................................................................................................................. 65
CHART 9 ................................................................................................................................................. 66
CHART 10 ............................................................................................................................................... 67
CHART 11 ............................................................................................................................................... 68
CHART 12 ............................................................................................................................................... 69
CHART 13 ............................................................................................................................................... 70
CHART 14 ............................................................................................................................................... 71
CHART 15............................................................................................................................. 72
 Executive summary

Millat Tractors Limited is one of the leading organizations of tractors

manufacturing industry. MTL Established in 8th June 1964 to introduce Massey
Ferguson tractors in Pakistan. Assembly plant was set up for assembling tractor
in 1967 in SKD (semi knocked down condition).
Nationalized in 1972 under economic reforms order and started assembling
tractors on behalf of Pakistan Tractor Company.
There are three sister companies of MTL Bolan casting Ltd, Millat
Equipment Ltd, Millat industrial Products Ltd TIPEG inter trade DMCC.
Administration department is one of the best departments of MTL it consists of
sub sections. Purchase, Security & Transport, Industrial Relation, Admin,
Finance department.
The report also covers Purchase department, Quality assurance department,
Marketing department and Information technology department. I learnt a lot in
these department interacting with the colleagues and customers was an
evaluative experience for me there. I check out my communication skills there. In
marketing department, I learned how to deal with customers and clients and how
to documentation sales and work related with sales. And, I learned how
purchases are made and what cautions must be kept in mind while purchasing,
and learned to work in IFS.
In Quality assurance department, I learned how quality department check the
quality of products and materials. And measures quality department take when
quality does not match with the company’s requirement. and I also learned the
process of rejection of non-quality products.
In Information Technology department, I learned how company updating their
software’s, and I also learned to store all data on hard and soft form and maintain
accounts of every customers, suppliers, and vendors.

1
Millat Tractors is Brand renowned by Massey Ferguson Tractors and have 472
workshops in across the Pakistan for providing best after sale service as well
training/ service programs in different areas of Pakistan in short intervals. MTL
also have highest market shares (60%) and biggest Assembly line for better and
fast production. MTL also help / motive their Vendor for extensive leadership
network.

Introduction

Millat Group is Pakistan’s leading engineering concern in automobile

sector & has a history that spans almost half a century. Millat Group
encompasses four major companies MILLAT TRACTOR LIMITED,
MILLAT EQUIPMENT LIMITED, MILLAT INDUSTRIAL PRODUCT
LIMITED and BOLAN CASTINGS LIMITED.
Today the group manufacturers: Tractor under licensing agreement
with Massey Ferguson, UK (owned by AGCO, USA), Diesel Engine,
Diesel Generating Sets and Prime Movers, Forklift Trucks under license
from M/s Anhui Heli Co. LTD. China, a range of Agriculture Implements,
Gears, Batteries and Automotive castings. The company is also dedicated
to customize its products as per customer’s requirements
Millat Group has played a pivotal role in transfer of technology &
transformation of the fledging local light engineering sector into a robust,
vibrant, quality conscious Auto Vending Industry. The fact that Millat
Tractor has a market share of more than 50% and indigenization level of
90% is a testament to the efforts of Millat Group over that last 47 years.

Millat Tractors Ltd

Millat tractors Ltd MTL- an ISO 9001 :2008 certified company for its
assembly & material testing & gauge control laboratory-is Pakistan’s
leading engineering concern in automobile sector. It manufactures MF-

2
 240, MF-350, MF-260, MF-375, MF-385, MF-385 4WD, Implements,
Prime movers, Forklift Truck & Power Generation Sets
www.millat.com.pk

Bolan Casting Ltd

In 1993, the Company in collaboration with the employees of Bolan
Casting Limited (BCL) acquired the management control of Bolan Casting
Limited by purchasing 51% of the Company shares offered by the
government as part of the process of privatization. BCL provides major
casting for Automobile Industries and 50% of the Company requirements
are met from it. Since acquisition of the control by MTL, BCL has also
performed very well and has been on a growth pattern.
www.bolancastings.com

Millat Equipment Ltd

Millat Equipment Limited is an associated Company and was incorporated
in 1993 as a private limited Company under the Companies Ordinance,
1984, and was converted in to unquoted Public Limited Company on April
20, 2004. The Company is engaged in the business of manufacturing of
automotive, agricultural and industrial vehicles, parts and components
thereof.
www.millatgears.com

Millat Industrial Product Ltd

Millat Industrial Products is a subsidiary of the Millat Tractors Limited. The
Company is engaged in the business of manufacturing and sales of
vehicular, industrial and domestic batteries.
www.millatbatteries.com

3
 History

Date of incorporation June 08, 1964

Date of commencement of operation June 15, 1964
Date of change of name April 10, 1973
Date of privatization Jan 1992
Company registration no. 0001902
National tax no. 0801437-0
Sales tax no. 1310870700282
.
Millat Tractors Limited (MTL) was established in 1964 to introduce and
market Massey Ferguson (MF) Tractors in Pakistan. An assembly plant was set
up in 1967 to assemble tractors imported in semi-knocked down (SKD) condition.
The company was nationalized under Economic Reforms Order in 1972
and started assembling and marketing tractors on behalf of Pakistan Tractor
Corporation (PTC) which was formed by the Government for import of tractors in
SKD condition. In 1980 the Government decided on indigenization of the tractors
and entrusted this task to PTC (Pakistan Tractor Corporation).
PTC transferred this role of indigenization in 1981 to MTL. This was the
turning point in the Company’s history and it went about the task methodically
and rapidly. The Company undertook this new role with enthusiasm and in the
spirit of national development and proved its engineering capabilities by
surprising the deletion targets set by the Government. Just in one year’s time, the
company took a giant step towards self-reliance by setting up the first engine
assembly plant in Pakistan.
In 1992, the company was privatized. The employees joined hands and
took over the management by winning an open bid.
To maintain its leadership role in tractor manufacturing in the country, MTL
continues to look toward future, to identify and exploit new opportunities and to
consolidate existing ones. The Tractor Assembly Plant is part of this philosophy.
This plant started its production in 1992. The establishment of this modern plant

4
not only increased production capacity to 16000 tractors per year on a single shift
basis, but also provided a quantum jump to the quality of the assembled tractors
and pushed MTL into ranks of the major tractor manufacturing companies of the
World.
The Company made a strategic decision right in the beginning to bring
those manufacturing facilities in-house for which capabilities did not exist in the
country and for parts which required high precision and investment. Therefore, in
1984, sophisticated manufacturing facilities for the machining of intricate
components were set up. These were previously not available in Pakistan.
Currently, critical components like Engine Blocks, Sump, Transmission Case,
Axle Housing, Hydraulic Lift Cover, Front Axle Support and Centre Housing are
all being machined most successfully in-house at MTL from locally sourced
castings.
At MTL, we firmly believe that producing to International quality standards
is the key to our continued success and growth, and our quality control
department converts this belief into reality.
In 1992, the company was privatized. The employees joined hands and
took over the management by winning an open bid. To maintain its leadership
role in tractor manufacturing in the country, MTL continues to look toward future,
to identify and exploit new opportunities and to consolidate existing ones. The
Tractor Assembly Plant is part of this philosophy. This plant started its production
in 1992. The establishment of this modern plant not only increased production
capacity to 16000 tractors per year on a single shift basis, but also provided a
quantum jump to the quality of the assembled tractors and pushed MTL into
ranks of the major tractor manufacturing companies of the World.
After successful takeover, MTL also acquired the management control of
Bolan Castings Limited (a Public Limited Company specializing in intricate
automotive castings) in partnership with employees of the company, in 1993.
In 1992, the production of Millat Tractors was just 8,000 units per annum
with variety of only 2 main products, now the annual production is reached from
8,000 units to 45,000 units with variety of 8-different main models. Moreover, the

5
company looks to the future with optimism and plans to broaden its customer
base. Consequently, the opportunities are being explored in multi-application of
engines and tractors in areas other than farming sectors. Mass Production of
Generating Sets was started in 1994, while a 3-Ton Fork Lift Truck branded as
Millat, based on TCM technology was launched in the year 2002.
In addition, Millat Tractors Limited has been the regular recipient of the
Corporate Excellence Award of Management Association of Pakistan and the
Top Companies Award of Karachi Stock Exchange, since early eighties. MTL’s
Annual Report has been acknowledged as the Best Annual Report by the
Institute of Chartered Secretaries and Admin Association of Pakistan for several
years.
A wide range of Massey Ferguson Tractors from 50 HP to 85 HP is
available to cater to the needs of farmers. These Tractors can be procured
against Cash, as well as through Bank Financing. Brief Specifications of each of
the Tractors are available under Tractors
In Industrial Products, a wide range of Generating Sets 15 KVA to 40 KVA,
Forklift Trucks (3 ton) and Prime Movers (Power packs) from 50 HP to 85 HP.
Also, deals in range of Generating Sets from 27 kVA to 2000 kVA.
A wide range of Agricultural Implements is also available like Chisel, Disc
& Mould Board Plough, Tine Tillers, Offset Disc Harrow, Ridger, Front Blade,
Multi‐purpose Rear Blade, Agricultural Loader, Farm Trailer, Hydraulic Tipping
Trailer, Jib Crane, Post Hole Digger, Lawn Mover, and Pneumatic Pruning Set
etc.
The biggest Spares Network ensures the availability of Genuine Parts, for the
complete range of products throughout the country. Now HOLOGRAM SEAL
backed by one-year warranty ensures its genuineness.
Millat also ensures to provide prompt after‐sales service to its valued
customers through spread network of main and rural workshops throughout the
Country.

6
 Registered Offices

Head Office
Millat Tractors Limited.
Sheikh Pura Road, Shahdara, Lahore

Regional Offices:
Regional Office Multan
Co-operative Housing Society
Multan Cantt.

Regional Office Islamabad

Garden Town, (Daultabad)
Shershah Road,
Islamabad.

Regional Office Sukkur

H No. 22, St. No. 41,
Sector F-6/1 Sukkur

Regional Office Karachi

3-A, Fayyaz Center, Sindhi Muslim Co-Operative Housing Society,
Karachi

7
 About the Company

Millat Tractors Limited is a Pakistan‐based company engaged in the assembly

and manufacturer of agricultural tractors, implements and multi‐application
products. Millat Tractors Limited (MTL) is an ISO 9002 certified company for its
Assembly Plants (Tractor Assembly, Engine Assembly, and Industrial/Agricultural
Products), Material Testing and Gauge Control Laboratory. It is Pakistan’s
leading engineering concern in the automobile sector, that manufactures;

 Tractors, under licensing agreement with Massey Ferguson, UK (AGCO,

USA)
 Diesel Engines
 Diesel Generating Sets and Prime Movers
 Forklift Trucks, under license from Anhui Heli Forklift Trucks China and
 A range of Agricultural Implements.

The company is also dedicated to customize its Diesel Generating Sets and
Prime Movers asper requirement of its Customers. The company has spread its
products throughout the length and breadth of the country. Today the number of
MF tractors made by MTL exceeds 250,000 while the total number of tractors in
the country is approximately 500,000, giving it a market share of above 50%. In
other words, every second tractor in Pakistan is MF. This achievement has been
made possible only through the Company’s commitment to Quality, After Sale
Service, and competitive Prices. During the fiscal year ended June 30, 2010, the
Company delivered 40,140 tractors. In fiscal 2010, it produced 40,178 tractors.
And in this year 2013, their target is to achieve production of about 32,000
tractors.

8
 Vision mission and core values of MTL

Vision
“Millat is to be a global group of companies’ recognize for a range of quality
products with innovative design capabilities.”

Mission
“To be a market leader in agriculture tractors and machinery, building
company’s image through innovation and competitiveness, grow by expanding
market and investing into group companies, ensuring satisfaction to customer
and stakeholders and to fulfill social obligation.”

Core values
 Excellence in everything we do.
 Respect for our customers and each other.
 Integrity in all dealing.
 Recognition and reward for the talented and high performing
employees.
 CSR to enrich the lives of community where we operate.
 Profitability for the prosperity of our stakeholders that allow us to
constantly invest, improve and succeed.

Objectives and strategic planning

Objectives
 Continuously improve efficiency and competitive strength.
 To offer customer quality products and support services at
competitive price and to their satisfaction.
 Continuously increase performance.

9
  Aim to generate earnings sufficient to ensure a secure future for the
company.
 Protect and increase shareholders return.
 Enhance creativity and job satisfaction.
 Provide employees opportunities for personal development.

Strategic planning
 To make optimum use of ancillary industry in Pakistan.
 Ensuring after sale service.
 Ensure customer satisfaction by providing quality products at
competitive prices.
 MTL will maintain a strong research and development department
to provide technical assistance to local manufactures and for
product development.

10
The Type of Ownership of the Company (public/private ltd, main
shareholders and their shares etc.)

Millat Tractors Limited is a Public Limited Company.

Main shareholders and their shares

Table 1

BCL MEL MIPL TIPEG

Sr. Name of No. of No. of No. of No. of

No. Directors Shares Shares Shares Shares
1 Mr. Sikandar 166,369 1,625,001 543,750 100
Mustafa Khan

2 Mr. Latif Khalid 132,270 1,625,001 362,500 100

Hashmi
3 Mr. Sohail Bashir 144,359 1,708,951 362,500 100
Rana
4 Mr. laeeq Uddin 733,120 1,904,001 362,500 100

5 Mr. Mian M. 2,993 600,001 200,000 100

Saleem
6 Syed M. Irfan 100,000
Aqueel
TOTAL 1,179,381 7,562,955 1,831,250 500

PERCENTAGE OF 10.28% 29.088% 20% 25%

SHAREHOLDING

11
 Organization structure

Board of Directors

boards committees chairman company seretary

cheif exceutive

Quality Admin &

Production Engineering Marketing IPD Finance IT HR
assurance purchase

Assembly
Engineering service Admin
plant

Machining
Supply chain sales(South) Purchase
division

Engine
sales(North)
assembly

Maintanance warehouse

distribution

12
 Names and designated
Table 2

Sikandar Mustafa Khan Chairman

Syed Muhammad Irfan Aqeel Chief Executive officer
Sohail Bashir Rana Director
Mr. Saad Iqbal Director
Laeeq Uddin Ansari Director
Mr. Syed zubair Ahmed shah Director
Mian Muhammad Saleem Director/Company Secretary
Mr. Latif Khalid Hashmi Director
Javeed Munir Director Finance/CFO
Ahsan Imran Director Technical
Muhammad Akram GM (Marketing)
M. Athar Zubair GM (QA)
Farogh Iqbal Ahmad GM (engineering and supply chain)
Akber Sheikh DGM (Service)
M Ayaz Khursheed GM(IT)
Nasim A. Sindu GM (A&P)
Mansoor A. Abbasi GM (production)
Syed M. Yaqoob DGM (MM)
Jaffar Hassan Naqvi DGM (Maintenance)
Sohaib Usman Banday Head of Internal Audit

13
 Board of Director

 Chief Executives
 Executive Director
 Company Secretary
 Technical Directors
 Director Finance
 General Manager Purchase
 General Manager Accounts
 Manager Taxation and General Manager Administration.

Chain of Command

 Chairman
 CEO (Chief Executive Officer)
 All General Managers
 All Deputy General Managers
 All Senior Managers
 Managers
 Deputy Managers
 Assistant Managers
 Junior Executive

14
 Work done by Student

I performed many activities in MTL during my internship. I worked in four

departments, first is Purchase Department.

 I collected the quotations from the different supplier

 I prepared comparative statement manually on daily basis.
 I learned how to make Purchase requisition.
 I filled the data of comparative statement after the approval of HOD
 I also checked the previous rates of the items on IFS if available and wrote
it on the C.S
 I Prepared Cash Statement of Purchasers
 I extract the various reports from IFS
 I also learned to prepare gate Pass
 I prepared many purchase orders on daily basis
 I learned how to work in company’s customized software which is IFS
 I learned how to negotiate with the suppliers according to rates and quality
of goods
Marketing Department
 I learned how company deal with their customers
 I learned to deal with warranty claims
 I learned how the company book their orders through cash, loan, dealer
and make cash payment receipt
 I also worked in the department of institutional sales where I have learnt a
lot. In this Department, I have taken the orders of the customers and
provide information about the prices of tractors and made quotations of
their orders and make sure the availability of tractors was on time.
 I have also learnt that Data was necessary to be kept in an arranged
Manner and to be recorded in both; Soft and Hard copy of the Document.

15
Information technology department
 I learnt how they customized their software’s and made updation in their
systems
 I learnt how they build integration between departments.
 I learned in network section that how they maintain exchange server.
Quality Assurance department
 I learned how they inspect the quality of material.
 I learned to made inspection sheets in hard form
 I also learned that what measures company can take corrective actions if
product quality is not up to mark.

Major HR Policies and Practices

Recruitment and Hiring

Recruitment includes internal & external sources while selection may
occur by conducting IQ Test, interview (3 interviews are conducted), and medical
test. Internal sources are mostly used they prefer their employees to be hired.
When any seat is vacant HR Department send a mail about that to all the
employees in different Departments. The interested employees apply for the job
and they select the best one of them.

Promotion
Employees are hired as a Junior Executive. After 3 years, he is promoted
to Assistant Manager, after 3 years he will become Deputy Manager, after 6
years he may have promoted on manager’s post on the basis of his performance.

Reward system
To motivate the employees, they offer reward system just like production
bonus scheme and profit sharing plans.

16
 They offer 2 bonuses in 1 year to their permanent employees on Eid only.
They give other workers 5% bonus of profit annually.

Training system
MTL trains and educates the employees via different training programs.
So, MTL initiates different in-house and
outside the house training programs. MTL also sends employees abroad, Human
Resource Department also conduct seminars regarding Production Department.
Through these seminars labor force is trained to reduce the rejection rate and to
successfully implement the TQM system.

Benefits
At MTL annual function and parties are arranged and employees are given
annual and weekly leaves (2- leaves in a week) to reduce their boredom and
frustration level. Free lunch is provided to them. Free of cost medical facility is
also given to them.

Purchase department

I have given the opportunity to visit/review the process, system and procedure of
“Purchase department” under the supervision of Col (R) Naveed Aslam.
Following are the observations and learning:
1. Purchase requisition is created by department.
2. Authorized by head of concerned department.
3. PR is received in Purchase section.
4. Purchase coordinates with concerned department for clarification, if
required.
5. Requisition is forwarded to Finance in case of CEP.
6. If within in approved budget, then Finance verifies to go ahead.
7. If not approved under budget, then approval is asked from
concerned HOD.

17
 8. Then Concerned HOD forwards the requisition to CEO for approval.
9. If value is more than Rs.500000/= then CEO forwards to corporate
office for Chairman’s approval.
10. Purchase section calls quotations.
11. Comparative statement is prepared.
12. Comparative is not prepared in case of approved single source.
13. In case of CEP item approval is given by authorized committee.
Non-CEP item’s approval is given by sectional head of Purchase.
14. PO is created, authorized by purchase section. Authorized PO is
forwarded to approve supplier.
15. Major purchase is credit based and invoice is received later.
16. In some cases, supplier requests, advance payment with
guarantee.
17. (Bank Guarantee > Rs.500000 > Insurance Guarantee)
18. Approval is given by CEO.
19. In case of cash purchases, advance is issued to Purchase section
on the name of employee (designation based) against authorized
request.
20. Goods are received at gate and gate pass is created.
21. Goods are received by concerned department.
22. After verification/testing GRN is created.
23. In case of rejection items are replaced by supplier.
24. Invoice is received from supplier.
25. Invoice is verified and forwarded to Finance for payment.

Review of purchase procedure

 Purchase requisition (request for purchase)
 Request for quotation (set of quotation)
 Approval of comparative statement (comparison between different
supplier and their prices of product)
 Purchase order

18
  Delivery of material
 Inward gate pass
 Good receipt note (GRN)
 Submission of invoice
 Payment

Purchase section
receives PR after all Approved Items are
required approvals received GP
at gate

On Credit
On Cash
Quotations Committee Items are
Comparative is formed Purchaser buys verified by GRN is
are called is prepared form market
by CEO concerned created
Rejection

Quotations Committee No
Comparative GRN
approves
PO
Approved CEP Yes
Single Source
Yes
Authorized PO is Supplier Invoice is
No
No sent to approved replaces received from
supplier items Supplier
Yes
Sectional
Head of Supplier
Purchase Request with
applies for
approves Guarantee
advance Invoice
Advance
against
requests Is sent Guarantee
to Finance Purchaser Approval is
prepares given by
adjustment CEO
Finance pays report
Cash purchases
Request authorized against Forwarded to
amount advance Finance

19
Process in IFS
1. User creates PR in IFS
2. HOD approves PR in IFS
3. Purchase section user executes daily list of Authorized PRs
4. Printed and forwarded to purchaser for coordination
5. RFQ is forwarded to selected suppliers with all relevant details
6. If any supplier is not registered, then request is forwarded to IT for supplier
creation in IFS
7. Suppliers send Quotations
8. Quotations are entered system and comparative is prepared
9. User RMB and opts for Quotation Approval
10. PO is generated for approved supplier
11. Charges are entered in Charges tab of PO
12. Order is received and receipt (Gate Pass) is entered system
13. GRN is entered system

2. Inventory Management (Central Store)

I have given the opportunity to review and visit the process/ system and
procedure of Central store
1. Department identify the requirement of material and forwards
requisition after approval.
2. Head of department approves the requisition and forwards to Central
Store.
3. In case of store item inventory is issued. Store items include general
supplies (routine items like tea, stationary, adhesives etc.) and utility
items (designation-wise).
4. For non-inventory items purchase requisition is generated, approved
and forwarded to Purchase section.
5. Central store keeps an eye over stock. As soon as inventory reaches
to re-order level, PR is generated.
6. Items are received and GRN is created after verification.

20
 Store Item
HOD Approves Central
Requisition Yes Material
MIR Store
is prepared is issued
receives MIR

HOD Approves
Central store Forwarded to
Yes PR is PR
keeps an eye Purchase
created
over stocks section
No

Stock taking Items are GRN is GRN

is done Stock report received created
during audit

Adjustment Inventory
Adjustment Note Approved records are
Note is issued
by CEO adjusted
by auditors

Process in IFS
1. For material requirement by Central Store, user creates PR in IFS
2. User enters item and its quantity
3. If required user also enters UOM and supplier
4. User enters pre-posting for respective cost center
5. User releases PR in IFS
6. HOD approves PR in IFS
7. Purchase section procures items against PR
8. User enters GRN in system
9. In case of issuance, MR is received from concerned department
10. MR lines are issued into system against physical issuance

21
 B. Administration

I have studied that the major functions of the Admin department are to
administrate the followings
 House keeping
 Security and transport
 Mail sections,
 General contracts
 Fair price shops
 Pool vehicle
 Storage of scrap and sealing.
 Taxation and Registration
 Vehicle issuance
 Vehicle Refilling
 Repair & Maintenance of vehicle
 Vehicle insurance
 Disposal of Pool Vehicle
 Rout Permit

1. Pool Vehicle Management

Vehicle Procurement

1. Admin prepares yearly budget for entitlement of new inductions or

promotions. Budget also includes vehicle additions in pool vehicles.
2. Budget approval is given by management.
3. Purchase requisition is created and forwarded to Purchase section for
procurement.
4. Vehicles are procured.

22
 Approval
Forwarded
Budget is Budget Approval by PR is PR to Purchase
prepared Management created
section

Registration and Taxation

1. After procurement intimation is received from Purchase section.
2. S&T proceeds with registration of management and pool vehicles.
3. In case of executive’s registration is processed by employee himself.
4. Executive employee either withdraws advance from Finance or claims
reimbursement after registration.
5. On annual basis token tax of management and pool vehicles is paid.
6. Executive employee either withdraws advance from Finance or claims
reimbursement after payment of token.

Executive S&T proceeds

Registration/token Vehicles Employee
Intimation to with
register fee is applied in Registration/t applies re-
No
advance oken payment imbursement
Yes

Advance
Finance pays Employee No
Intimation taken
the fee proceeds with Re-imbursement
amount Registration / claim
token payment

Vehicle Issuance

1. Request is created by concerned department.

2. Vehicle request can be approved only by concerned HOD.
3. Request is received into S&T section.
4. Vehicle is issued, if available.

Approval Availability
Vehicle
Request Approval by Received Vehicle is
request is
HOD into S&T issued
created

23
Vehicle Refilling

1. Refilling slip is generated.

2. Employee is assigned.
3. Vehicle is sent for refilling.
4. Invoice is received.
5. Verified and forwarded to Finance for payment.

Verification
Refilling Refilling Vehicle is Verified and
Invoice is
Slip is Slip sent for Invoice forwarded to
received
prepared refilling Finance

Process in IFS
1. User creates Work Order in IFS
2. Creates PR under WO
3. Enter details of fuel and release
4. DM S&T authorizes the PR
5. User prints PR (Fuel Slip) and hands-over to driver
6. Driver gets the fuel filled
7. On month end invoice is received from supplier
8. S&T verifies the invoice and forwards to Purchase
9. Purchase section prepares PO
10. Sectional head of Purchase authorizes the PO
11. User forwards to S&T
12. S&T enters receipt/gate pass and forwards to Admin for GRN
13. MGR/DM Admin enters GRN
14. Supplier invoice is forwarded to Finance for payment

24
Repair & Maintenance

1. Request for repair or maintenance is received.

2. S&T analyzes and creates a work order (WO).
3. In case of pool vehicles MIR is raised for oil and filters. Approved MIR is
sent to Central Store.
4. Central store issues required material.
5. Vehicle is sent to work shop against WO.
6. In case of additional work during maintenance, new WO is created or
existing one is amended.
7. Bill is received from workshop.
8. Bill is verified by S&T section and forwarded to Finance for payment.

Pool
Request for S&T analyzes
Vehicle No Repair or Bill is
repair / and creates
s Maintenance received
maintenance WO is executed
Yes
Additional No Bill
Request WO Work
MIR to MIR
Central Store
Yes Verified
and sent to
Finance

Process in IFS
1. User creates Work Order in IFS
2. Enters details of routine maintenance in Overview Measurements
3. Enters details of other services in Free Notes
4. Prints Work Order and send car for repair
5. If additional work is identified that is done on telephonic approval, then
new WO is generated in system
6. Car is got repaired and invoice is received against WO
7. S&T verifies the invoice and forwards to Finance for payment

25
Vehicle Insurance

1. After procurement of vehicles agreement is finalized with insurance

company under comprehensive insurance.
2. Details are forwarded to Finance for payment.
3. List is forwarded to Finance for premium deduction and payment to
insurance company.
4. Employee raises insurance claim.
5. Claim is received at S&T section.
6. Insurance company is coordinated for survey.
7. Insurance company representative executes survey of the vehicle either at
MTL premises or workshop.
8. Survey is completed, estimated cost is calculated and negotiations are
done by insurance company’s surveyor.
9. Employee gets vehicle repaired.
10. Workshop claims the bill from insurance company.

Insurance Details are Insurance Vehicle is

Employee company is
agreement is forwarded to repaired and
intimates for
finalized Finance for coordinated bill is received
insurance claim
payment

Workshop claims
List is forwarded Insurance Survey is
Agreement bill from Insurance
to Finance for company is conducted
company
Payment coordinated
Deduction

Disposal of Pool Vehicle

1. S&T identifies depreciated vehicles for disposal and case is prepared.

2. Case is approved for auction by CEO.
3. Auction is advertised in newspapers.
4. Tender form is issued against tender amount. For tender amount
applicant is referred to Finance.
5. Applicants verify the vehicle’s documents with Admin section.
6. Committee is formed by CEO.

26
 7. Committee opens tenders in from of all applicants.
8. Higher bidders are selected.
9. Selected bidders are called for final negotiations.
10. Highest bidder wins.
11. Committee forwards recommendations to CEO for approval.
12. CEO gives final approval.
13. Case is forwarded to Finance for receipt of amount and disposal of vehicle
in fixed asset register.
14. Buyer pays the amount and gets the possession of vehicle.

Higher Final
Vehicles for
Approval Tenders are Committee bidders are approval by
disposal are
by CEO received is formed selected CEO
identified

Highest
Tenders bidder is Forwarded
Auction Auction is Tenders are opened selected after to Finance
case advertised
negotiations

negotiations

Rout Permits

1. Request for rout permit is created.

2. Approved by head of S&T.
3. Submitted to concerned government department for issuance of permit.
4. Rout permit is received.

Approval
Rout permit Permit Approved Submitted to Rout
request is request by S&T concerned permit is Permit
created head department received

27
 C. Security and Transport Department
I have given the opportunity to review the
systems of security and Transport department
1. Security contracts
 Every year contractual relationship is created with a security. Either
contract is renewed with exiting service provided or quotations are called
from different service providers. Currently contract is renewed with Fauji
Securities, a project of Fauji Foundations.
 In case of new contractor, comparative is prepared.
 Price negotiations are done by the committee formed by CEO.
 Final approval on price is given by CEO.
 Chief supervisor or S&T sectional head discuss and finalize the personnel
standing positions for security.

Security
Quotations Quotations Comparative Comparative
contract is
are called is prepared
initiated
Renewal

No Price Positions are

Approved by
negotiation finalized and duties
Yes CEO
are done are assigned

2. Fire Extinguishers Maintenance

 Requirement of new fire extinguisher or refilling of existing is identified.
 PR is created and procurements done through Purchase section.
 Equipment’s are received and placed/refilled.
 Guards identify the operational requirement and extinguishers are operated.

PR is created Equipment’s
Requirement Extinguishers
and PR are placed /
is identified are operated
authorized refilled

28
3. Canteen Management

 Milk is issued to departments on designation basis.

 Hot tea is served on production/manufacturing lines. In case of Paint shop
and EAP shop, cold milk is served
 For Lunch/Dinner menu is decided by Admin on weekly/monthly basis
 Food is cooked by canteen chefs
 Food is served in canteen by canteen staff
 Rs.50 are deducted from permanent employees’ salary on monthly basis
 For any personal guest Rs.35 are charged from employee
 List of employee-wise guests is forwarded to Finance on monthly basis
 Finance deducts the amount from salary
 In case of company’s guest(s) intimation is received from concerned
department
 In case of Dealer representative Rs.35 are charged as sales price per
head

4. Fair Price Shop Management

1. Request is received from permanent employee. Workers can issue up to

Rs.5000 per month
2. Material is issued against request and issuance entered system
3. Issuance is registered on weighted average (WA)
4. A manual receipt is issued with the material issued
5. Duplicate of receipts are received at Admin office
6. Accordingly, details are entered on a manual register for cross verification
purpose
7. A report is generated on monthly basis and forwarded to Finance for
deduction from salary

29
 Workers <= Rs.5000
Report is
Request is Issuance prepared and
received Slip sent to Finance
Copy is received at
Material is Admin office for
Request issued entry in register Deduction Report
against slip

5. Material Management

Direct Purchases

1. There are two types for purchases; Cash and Credit. Most of the credit
purchases are managed through Purchase section
2. In case of cash purchases, advance is issued to Admin section on the
name of authorized employee against authorized manual request.
3. Goods are received at gate and gate pass is created.
4. Goods are received by canteen / fair-price-shop
5. After verification/testing GRN is created.
6. In case of cash purchases, no GRN is entered
7. Invoice is received from supplier.
8. Invoice is verified and forwarded to Finance for payment.

Advance is PO is created Goods GRN is Invoice is

taken for Cash or Credit are created received
Cash Purch Purch received
Verified

Invoice is
Advance Credit forwarded
PO GRN Invoice
Receipt to Finance

30
Material Receipts

1. Administration manages inventory of Fair Price Shop and Canteen.

2. In case of requirement PR is prepared for Canteen or Fair Price-shop.
3. HOD approves PR.
4. Requisition is forwarded to Purchase section.
5. Items are received.
6. User enters GRN.

HOD GRN is
Requisition Forwarded to
is prepared Approves created
Purch Section

Items are
received GRN
PR

Process in IFS
1. User creates PR in IFS.
2. User releases PR in IFS.
3. HOD approves PR in IFS.
4. Purchase section procures items against PR.
5. User enters GRN in system.

Stock Balances

1. Stock report is prepared from system

2. Physical stocks are verified against stock report
3. In case of discrepancies reason is located and stock corrective action is
taken accordingly
4. Annual audit of stocks is also conducted by Internal Audit

Stock Physical
Stock Report Corrective
Report is Stocks are
Action is taken
Prepared verified

31
Administration
1. Scrap / Ply wood is received at scrap yard. Scrap is auctioned in form of
lots and weights.
2. In case of Capital Asset an approval of write off is also received into
Admin
3. Tender notice is prepared and advertised in newspapers on 1st June
4. Tender form is issued against tender amount (Rs.200). For tender
amount applicant is referred to Finance.
5. Applicants deposit the filled tender form with Security Deposit Pay Order
and CNIC in tender box at gate
6. Committee is formed by CEO.
7. Committee opens tenders in front of all applicants on an announced date
8. Higher bidders are selected.
9. Selected bidders are called for final negotiations.
10. Highest/one bidder wins.
11. Committee forwards recommendations to GM A&P.
12. GM A&P forwards to CEO for approval.
13. Finance facilitates in working/calculation of taxes (Advance Tax / Income
Tax / Sales Tax)
14. After approval case is forwarded to Finance for receipt of amount. In case
of lots advance payment is received whereas in case of sales in weight
the payment is received in cash/PO/CDR on per vehicle basis.
15. Gate pass is issued as per vehicle on daily basis.

Tender Higher Committee

Tenders are Committee Recommendations
Notice is bidders are Recommends
advertised received is formed
selected

Tender Forms Tenders Final approval Forwarded

are issued Tenders Negotiations by CEO to Finance
are opened

32
House Keeping
 Admin is responsible for house-keeping.
 Any material required for that matter is procured through Purchase section
Horticulture
 Admin is also responsible for horticulture including seeds production, Plant
Management, Gardening, Flower exhibitions etc
 Any material required for that matter is procured through Purchase section
Fish Farm

 Admin is maintaining a fish farm.

 Any material required for that matter is procured through Purchase section
 In winter fish from these farms is cooked in lunch once or twice every year
Dispensary
 Admin is also maintaining a dispensary wit in MTL premises
 Any material required for that matter is procured through Purchase section
 Doctor in dispensary maintains a manual register for necessary record
keeping
Telephone Exchange
 Admin is responsible for maintenance and complaint handling of
Telephone Exchange
 Any material required for that matter is procured through Purchase section
Postal Mail
 Admin is also responsible for incoming and outgoing postal mails including
TCS, OCS and DHL
 Admin enters annual agreement with the respective courier company
Annual Dinner
Arrangement of annual dinner for employees is also within the domain of
administration department
Target setting at MTL
Millat Tractor Limited held monthly and annual based meetings to set the
targets. There are different types of targets just like, production related, import

33
related, supply related, quality maintenance, delivery, finance, manpower related
targets. Proper budget is allocated to achieve these targets. There are some
factors which considered at the time of setting targets.
 What is the current sale level and what it was in past?
 What is company’s current profit level and what it was in past?
 What is the company’s current growth and what it was?
 Business success and failure?
 How many complaints company receive and among these how much it
accepts?
 Also, consider how much time and cost it will take?
There is two-way communication to set the targets. In this communication
session two parties are involving. Top level management and middle level
management. These targets are split in different targets and spread them to
make these targets operationalize. Again, monthly meetings are held in order to
check the performance of the employees towards the achievement of these
targets. There is incentive scheme to motivate the employees to achieve these
targets. There are production bonuses and cash rewards.
i. Cash Reward / Profit Sharing Plan
22% of the company’s profits are shared among the employees.
ii. Production Bounces
Production standards are set, i.e. 28000 tractors / annum. On meeting and
exceeding these targets they are given production bonuses. To meet the sales
targets, MTL also give the incentives to dealers but considering these tractors
that factors are
 That past performance (Low, medium and high performers).
 Financial cost of incentives scheme
 What was the result/output of the last incentive schemes?
After that MTL done the cost benefit analysis. If the targets are not achieved,
then they held the brain storming session. In this session front line field officer
(regional officers) give the monthly reports, share the problems with the market
executives.

34
 Marketing Department

I have given the opportunity to visit/review the process, system and procedure of
“Marketing department” under the supervision of HOD (Azhar Noor).
I have studied in Marketing Department that Marketing Department play
the important role in creating MTL image, brand recognition. MTL sale 7 types of
tractors which consist of 50hp to 85hp tractors and imported 105hp tractors and
agriculture implements.
Table 3

Marketing networks

Regional offices 5

Sales region 13

Main dealers 74

Authorized workshop 458

Parts Dealers 45

Marketing department has following branches:

 Tractor sales
 Area development
 Institutional sales and export
 Sales support
 Service department
 Distribution department
 Parts
1. Tractor Sales
 Through cash
 Through loans (ZTBL and commercial banks)

35
 2. Area Development
 Dealers
 Branches

2.1 Dealers development

Dealers develop the area and for this purpose they need the followings:

 Ability of the parts

 Daily report of the staff
 List of interested people
 List of new cases in agricultural bank and commercial banks
 Meetings with the people of area
 To meet those people who are interested in other than MF tractors
 Advertisement and exhibition (banners, posters and hand bills)
 Discount packages, new scheme and facility advertisement
3. Institutional sales and export

Institutional sales department deals with two categories

 Institutions
 Export

3.1- Institutional department

Institutional department deals with different institutions to fulfill their demand for
tractors.

Institutions with which institutional department deals are:

 Banks
 Private institution
 Public institution
 Industries

50% priority is given to institutions for the delivery of tractors.

36
3.2- Export department

This department deals with the export of tractors to other countries. Before doing
any work the National Tax Number (NTN) and Sales Tax Number (STN) is
verified by this department.at the time of delivery consumer is called for the
inspection of the purchased product. Export of tractors and parts are also
monitored by this department.

4. Sales Support

Sales support department supports the sale of the products of the company.in
this regard the department do following efforts:

 Advertisement
 Electronic Media
 Printing
 Exhibition
 Sponsorships
 Seminars
 Free service program
 Tractors scheme arrangements

5- Service department

This department deals with the warranty provided by the company and claims
and the free services provided by the company against its products. The
company offers one year of 1200 hours of warranty agricultural tractors and
generator sets Fork Lifter Truck and Prime Mover.

Pakistan Army is the special customer of company providing 18 months’ warranty

on its products. After the purchase of the above products the company offers
following three free services:

 1st service after 30 hours (one free oil and fuel filter is given by the
company)

37
  2nd service after 200 hours (one free oil and fuel filter is given by the
company)
 3rd service after 600 hours (two free fuel filter and one free oil is given by
the company)

Service department advice their customers to do the following steps to increase

the performance and life of their products.

 Used 75% load when an agricultural tractor is delivered from the

company.
 Do not remove the thermostat value from tractor.
 Change the engine oil after 100 hours.
 Change hydraulic oil after600 hours.
 Regularly check transmission, engine and hydraulic oil.
 Clean the air and fuel filter and oil or diesel filter regularly.
 Always use radiator pressure cap installed by the company.
 Regularly check the water in the radiator.
 Regularly grease all the grease points.
 Weekly check the air pressure in tier and water in the battery.
 After 5000 to 6000 hours’ piston, piston rings and cylinder liner must be
changed.
 Always use company manufactured parts.

5.1-Warranty claims

If a product is out of order but is in warranty it can be repaired through warranty

claims. If a complaint is received it is registered in service department and given
to complain number. If the complaint is for tractor, then it is brought to near
company registered and authorized workshop for checkup.

If it falls in warranty claims, then company send it to staff to check the problem
and warranty claim forum filled to proceed the claim. After the completion of the
documentation the customer is facilitated with the replacement of faulted parts

38
free of cost in minimum possible time.in case of major manufacturing fault the
company facilitate the owner with the replacement of whole engine.

Such products like generator and prime mover the company sends its staff to
place the installation to facilitate the free service and warranty claims.

Other than warranty the company offers two type of contract after the end of
warranty.

 Annual maintenance contract

 Per visit chargers

5.1.1- Annual maintenance contract

 Up to 25kva generator PKR. 30,000/Year

 More than 25kva generator PKR. 35000/Year

5.1.2- Per visit charger

 In Lahore per visit charges are PKR. 2000

 Out of Lahore PKR. 15/KM is charged in addition of the above amount.

All the parts used in repair of the product are arranged by the customer either
from market or from the warehouse of the company.

6- Distribution department

It consists of two sub departments

6.1- Booking

In this section booking of tractors take place through IFS system. There are
some types of booking first is walk in customer come to purchase the tractor or
any implements Booking section book their tractor and gave him a booking
number. Second is MTL dealer book through telephone or online IFS system or
walk in.

Booking of MTL products are done by the following ways.

39
6.1.1- Booking through Cash

Requirements for booking through cash are as under:

 Check the price of the tractor/ equipment with the dealer.

 Copy of CNIC
 Payment through demand draft, pay order or transfer in MTL’s account.

6.1.2-Dealer booking

Dealer booking is done through following ways.

a) Telephone booking
 Call to the booking department.
 Customer, payment, tractor model details and booking is done.
 Telephone sheets are printed at the end of the day.
 Payment instruments and payment receipt is provided by the dealer along
with the booking documents.
 Creation of advance invoice of payment.
 If payment is in shape of cash or bank draft submit it in finance after entry
in peon book.
 Finance receipt the entry in IFS and receipt entered by the person who
enters the receipt.
 Printing of provisional book receipt.
 Attachment of booking receipt with documents.
 Checking and signing of booking documents.
 As per delivery seniority bills send to delivery section after entry in the
register.
 Booking documents are placed serial wise with booking section.

40
b) Counter booking

If booking is in dealer’s name dealer’s letter is essential.

 Customer ID creation if booking is through dealer.

 Tractor booking and allocation of booking number.
 Creation of advance invoice of payment.
 If payment is in shape of cash or bank draft submit it in finance
after entry in peon book.
 Finance receipt the entry in IFS and receipt entered by the
person who enters the receipt.
 Printing of provisional book receipt.
 Attachment of booking receipt with documents.
 Checking and signing of booking documents.
 As per delivery seniority bills send to delivery section after entry
in the register.
 Booking documents are placed serial wise with booking section.
c) Booking through Loan
 ZTBL
 Commercial banks
Booking through ZTBL is done through following process.
 Supply order from ZTBL.
 Two copies of CNIC attested be the respective branch manager.
 Two passport size photographs of customer attested by the
respective branch manager.
 Booking form duly signed by the customer.
 Stamp paper valued PKR. 100/- for agreement between MTL and
ZTBL through its client.
 Intimation letter issued as per due turn for delivery is issued
indicating tractor delivery date for the release of the payment
through demand draft.

41
 d) Delivery

After booking delivery check the availability of tractor and then issue the
tractor to customer or Dealer otherwise check the availability date and tell
the customer.

 Delivery is based on the seniority basis.

 Power of attorney is required if delivery is done through dealer.
 Comprehensive insurance is compulsory and paid in cash to the company
authorized company exclusively present at MTL head office and is valid
for one month.
 In case of booking through banks IBS-144 form (3 copies) is required for
physical delivery of tractor.
 Farm F for registration is required.
 Supply order from bank/leasing company is required.

e) Freight chargers

All the priced are Ex-factory Lahore. However, if the delivery is detailed
thorough the dealer at any other desired destination other than Lahore the
freight charges will be paid to the dealer by the customer as mutually agreed.

If anyone is facing difficulty in the booking process by the dealer, he will not
hesitate to order directly to MTL.

6. Parts

The warehouse of the company provides spare part of the products being
manufactured in the company. These parts are of two types.

 Imported parts
 Locally manufactured

All these parts are given specific code according to their specification. These are
of following types.

42
  General code (e.g. tractor).
 Individual part code.
 Implement code.
 Generator set codes.

All the spare parts in the company’s ware house have to cover the following
checkup and quality routes.

 Vendors
 Material management department
 Material transfer route
 Accessory module
 Sensor module
 Quality checkup
 Ware house

The company ware house has the following function.

 Receiving of spare parts

 Stocking of spare parts
 Issuance of spare parts

The company provides spare parts through all over the Pakistan through its
dealers.

Discount is given only to authorized dealer of the company.

If any customer or dealer wanted to buy spare parts from the company, then he
has to follow the following routes.

 Getting the slips from the parts section (ware house)

 Submission of slip in the bank
 Entry in the finance department of the company
 Generation of slip

43
The company assures the delivery of quality parts to its valued customers.
Anyhow if any spare part is faulted or having manufacturing fault then company
replaces the part with the old faulted part. Replacement of any spare part is done
through following ways.

It should be kept in mind that there is no replacement of electric parts. All the
spare parts are claimed under the company’s policy.

 Submission of part along with its invoice.

 Material review board.
 Quality control decision.
 Material replacement note.

Customer Survey details

Table 4

Name Locati Cont.# Model Area Remarks Suggesti

on ons

M.Hanif Noshe 0344- MF- 8 Fiat Engine is better Improve

hra 6084451 240 Acre than Massey. fuel
consumpti
MF-
on
375

M. Raza Ziarat 0333- MF- 5 Easy starting in cold Sheet

Khan 7914614 240 Acre weather, brand trust metal
and after sales should be
services are good. of good
quality
problem of hydraulic
pump.

44
Muzafar Shamk 0307- MF- 50 2nd gear fault, no Improve
Rahim ay 4444274 240 Acre quality of tractor, overall
s paint, seals and nut quality
GT
bolts are not of good rather
Road,
quality. than
Lahore
focusing
on
quantity.

Price List of the Tractors

Table 5

Price List of Tractors

Sr. Tractors Model Base Price Sales Tax @ Price with
No. 10% 17% GST

1 MF-240 650,000 65,000 715,000

2 MF-260 692,000 69,200 794,000
3 MF-350 Plus 722,000 72,200 761,200
4 MF-360 745,000 74,500 819,500
5 MF-375 945,000 94,500 1,039,500
6 MF-385 1,055,000 105,500 1,160,500
7 MF-385, 4wd 1,600,000 160,000 1,760,000
8 MF-455, 4wd 4,000,000 400,000 4,400,000
Price of Agriculture Implements (w.e.f. 15th April 2015)

Sr.No Name of Implements Base Sales Price

. Price Tax @ with 17%
17% GST

45
1 Forage Harvester JF92Z10 (Maize 590,000 100,30 690,300
Head) 0

2 Grass Head JF-1300 (Attachment for 555,000 94,350 649,350

above)

3 Forage Chopper JF-60 Maximum 362,069 61,552 423,621

S3(Tractor PTO Driven)

4 Forage Chopper JF-60 Maximum S3 245,000 41,650 286,650

(with base for electric motor or peter
Engine)

5 Lawn Mower Model (Jolly-150) 158,000 26,860 184,860

6 Post Hole Digger 96,552 16,414 112,966

7 Jib Crane 25,000 4,250 29,250

8 Hydraulic Tipping Trolley (8- Ton) 423,500 71,995 495,495

9 Pintle Hook (for MF-240/375/385) 12,500 2,125 14,625

10 Hydraulic Tipping Trolley (5- Ton) 327,000 55,590 382,950

11 Pintle Hook (for MF-240) 11,638 1,987 13,616

12 Swinging Draw Bar (for Pulling & towing) 12,931 2,198 15,129

13 Front End Loader (for MF-385, 4wd) 212,500 36,125 248,625

14 Commercial Front End Loader (for MF- 469,000 79,730 548,730

375 & MF-385)

15 Front End Loader (for MF-385) 201,724 34,293 236,017

16 Front End Loader (for MF-375) 201,724 34,293 236,017

17 Front End Loader (for MF-350) 182,328 30,996 213,324

46
18 Front End Loader (for MF-260) 178,017 30,263 208,280

19 Front End Loader (for MF-240) 178,017 30,263 208,280

20 Front Blade (for MF-385, 4wd) 71,552 12,164 83,716

21 Front Blade (for MF-385) 70,690 12,017 82,707

22 Front Blade (for MF-375) 70,690 12,017 82,707

23 Front Blade (for MF-350) 69,397 11,797 81,194

24 Front Blade (for MF-260) 65,948 11,211 77,159

25 Front Blade (for MF-240) 65,948 11,211 77,159

26 Rear Blade (Multi- Purpose) 47,500 8,075 55,575

27 Disc Harrow (16 Nos.) 155,603 26,453 182,056

28 Disc Harrow (14 Nos.) 137,069 23,302 160,371

29 Mould Board Plough (for MF- 375/385) 68,534 11,651 80,185

30 Disc Harrow (for MF- 240/260) 53,448 9,086 62,534

31 Disc Plough 72,845 12,384 85,229

32 Chisel Plough 54,741 9,306 64,047

33 Cultivator (13 - Tines) 63,000 10,710 73,710

34 Cultivator (11 - Tines) 51,724 8,793 60,517

35 Cultivator (09 - Tines) 50,431 8,573 59,004

36 Cultivator (07 - Tines) 31,034 5,276 36,310

37 Ridger (Tool Bar Type) 57,672 9,804 67,476

38 Ridger (FMA Type) 49,138 8,353 57,491

47
 Practices in Marketing department

 In MTL I was introduced by the Sub Departments of marketing like

Marketing research, Institutional sales, and Field Marketing, Sales
Support, After Sales Services and Distribution departments. A project
related to marketing research was given to me by the Mr. Azhar Noor
(DGM).
 For this I have prepared marketing research questionnaire to analyze the
Availability Vs demand of tractors. I have visited Sheikhupura dealers
shop where I asked the questions and collected information related to the
topic from customers. Some customers visited MTL dealers shop for
purchasing new tractors while some for replacing the tractors because the
old one is not meeting their requirements. The information collected by
interviewing the customers is:

Recently the Company is not fulfilling the demand of the customers because
of shortage of tractors. And tractors are not available at dealerships. The
reason of non-availability of tractors is the reduction in general sales tax
(GST). The prices of the tractors decrease due to reduction in GST and the
demand of tractors increases. But the company is not fulfilling the demands of
the customers because of limited production capacity.

60% of the customers are satisfy with the 40% of the customers are not
satisfied with the delivery procedure due to following reasons:

 It took days for having actual delivery after booking of tractor from
dealer.
 Dealer charges high commissions.
 Dealer did not provide them actual information on when tractor
would be available to them.
 Some of the dealers do not respond to their after-sale service
queries.

48
  I also worked in the department of institutional sales where I have learnt a
lot. In this department, I have taken the orders of the customers and
provide information about the prices of tractors and implements and made
quotations of their orders and make sure the availability of tractors on
time.
 I have also learnt that Data was necessary to be kept in an arranged
Manner and to be recorded in both; Soft and Hard copy of the Document.
 Documentation is necessary regarding each matter or Issue in the
Company whereas in Classroom it was not as such compulsory.

Marketing Strategies

Millat Tractors Limited used different marketing strategies for increasing the sale
of their products and for positioning in the minds of the customers. For the
customer satisfaction and fulfilment and for a good and profitable customer
relationship is the centre of all the marketing operations of MTL. MTL just
because of this today is the largest retailers and authorized dealership In
Pakistan. The marketing strategies which are used by the MTL are given below

 Positioning

 Differentiation

 Market Segmentation

 Target Marketing

The marketing department of Millat Tractors Limited for marketing their products
MTL using the positioning strategies to make a product image in the minds of the
customers. Low prices, after sale services and availability of parts are the main
point of positioning in the minds of customer. The positioning of MTL’s products
is very strong in the minds of the customers so that the thousands of the farmers
are using its products.

49
Differentiation
Today in time of recession when all things in this country are getting far out of
reach of people because MTL has always tried to take an extra mile in terms of
customer driven business. MTL has started delivering tractors at 10 to 12 percent
lower prices that others and before. This is what that made this organization of
international standards.

Market segmentation
The market is too vast spread throughout the country. MTL has segmented their
market to be in rural areas of the country. Because the customers of the MTLs
products are living in the rural areas of Pakistan. The market segmentation is a
very effective for the MTL.

Target Marketing

MTL is providing quality products to their target market and serving to their
customers by providing them quality and satisfaction. The segmented market is
always targeted so the segmented market of the MTL is rural area and individual
and farmers living in the rural areas. MTL believes that if the former is
prosperous then the whole country is prosperous.3-Major competitors of the
Company

Al ghazi tractor is the main competitor of the Millat Tractors. Millat Tractors
uses proactive approach when It is going to launch a new model or after sale
services. And in stock market
MTL share price is high than competitors

50
 Competitors of MTL

 AL ghazi Tractors Limited

 IMT
 Belarus

Market Share of the Company

Millat tractor limited has both types of ownership, private and public limited but
does not mentioned with full title. Currently MTL is facing only one major
competitor in the market for its products. Al Ghazi is the second major company
in the market. The Market share of the Millat Tractors Limited is 64% to 67%
percent. The excess demand of Millat tractors depends upon its quality,
technology, availability of spare parts and after sale services clearly make them
the ruler of the market.

Success and Failure of Company Products in the Market

Success

Availability of Parts
Millat tractors parts are readily available all over Pakistan which is strength
of MTL.

Network of Dealers and Workshops

There are 74 tractor dealers, 50 spare parts dealers and 458 workshops all

over Pakistan.

51
Diversification
Millat tractors limited has diversified its business by producing agricultural
implements, generating sets, fork lifters, REX barren batteries and now
working on the automobiles business as well.

Experience
Another point for the success of MTL’s products is that it has been
established since 1964 so it has experience labor force.

Good Will
MTL has an excellent goodwill in the market and in stock exchange.

Repair Facility
The major reason for the success of MTL’s product is that MF tractors can be
repair from any workshop located in any area of Pakistan. There is no
specification, regarding repair maintenance of tractors such as if the customer
has purchased tractor from Lahore, and he can repair it from D.G. Khan or Mallis
workshop as well.

Delivery through Dealers and Direct Cash Basis

MTL has strength over their competitors. It delivers tractors through dealers and
direct cash basis delivery is also made. But Al-Ghazi tractor makes delivery just
through dealers. So, it is the strong reason for the success of the MTL’s
Products.

Licenses and Technology

Licenses and technology from Massey Ferguson, UK gives Millat Tractors
limited an extra edge.

52
After Sale Services
A good package of after sales service by Millat Tractor is another reason of
success of its products.

Using Proactive Approach

Sati Millat Tractors uses proactive approach when it is going to launch a new
model or after sale service.

Failure of products

Relationship oriented
Millat tractors limited are more relationship oriented than customer
oriented. It shows the biasness and discriminatory behaviour with their
customers.

No Proper Research Survey

There is no proper procedure being followed by MTL to find out the
problems relating to the customer dissatisfaction and product failure

No customer dealing department

It is the reason for the product failure of MTL that There is no customer
dealing department to deal with the customers face by face. Every client
or a new customer to come to the office for obtaining the information or for
purchase of any MTL products must meet the marketing personnel.

Poor Marketing
Marketing personnel have a view in their minds that when any customer
comes to the market to buy tractors knowing already what they must buy
either Fiat or MF, so there is no need of marketing. They do not realize
that changing the minds of the customers is essential to survive in a
market. Due to poor marketing, there is

53
  Lack of interaction with the customers

 Incompetent marketing personnel

 Poor and unsatisfied delivery procedure

Product Marketing

Product marketing is the process of promoting and selling a product to

an audience. Product marketing, as opposed to product management, deals with
more outbound marketing or customer-facing tasks (in the older sense of the
phrase). For example, product management deals with the basics of product
development within a firm, whereas product marketing deals with marketing the
product to prospects, customers, and others. Product marketing, as a job
function within a firm, also differs from other marketing jobs such as marketing
communications ("marcom"), online marketing, advertising, marketing strategy,
and public relations, although product marketers may use channels such as
online for outbound marketing for their product.
A product market is something that is referred to when pitching a new
product to the public.
At the beginning of the product development phase, Product Marketing
conducts analyses on the various market and customer requirements. In
cooperation with Development and other specialist departments, it accompanies
new products during the entire development process. Based on the market
research results, product characteristics are defined, equipment and price
components are established and continuously developed and finalized
throughout the development process until the market launch.

Before a product launch, product marketers typically own positioning,

messaging, gathering customer feedback, and the overall go-to-market strategy
for a product.

54
 After a product launch, product marketers help with sales enablement
and focus on driving demand, adoption and the overall success of the product.

After Sales:
After Sales is responsible for helping dealers in matters regarding service,
which means ensuring high quality for advice and repairs. Together with the
importers, Sales - Genuine Parts guarantees the worldwide supply of Genuine
parts.
But it is also the task of After Sales to provide optimal support to Millat Tractor
limited dealerships in carrying out these services, to prepare them for the
demands of the technology as well as the wishes of the customers. The scope of
topics has many layers, and ranges from training service personnel to service
marketing and certification.

Information Technology Department

Information technology
I have given the opportunity to visit IT department and learn about their basic
functions. The basic function is to provide support. For further detail, it is divided
into 5 sections.
1. IFS international financial system is software of ERP. This plays an
important role in connecting department through IFS. Basically, in
55
 IFS all major works are done in IFS like anything in and out in MTL
is record and all finance related works is done in IFS almost every
department have application in IFS and IFS play a vital role in
progressing MTL.
2. Internet this section provides support to all networks related
issues. Their duties are high speed internet connectivity without any
distortion
3. Hardware related issues and problems are solved in this
department.
4. Data base all the MTL data are store in IFS and have record of
everything and can check it any time.
5. Networking all the departments are connecting with each other
through networking and all networking relate issues are solved in
this section.

Quality Assurance Department

In MTL quality is a dynamic state associated with the products, services, people,
processes and environment that meets or exceeds the expectations of their
customers and it is a strong edge based on quality against the competitors.
There is well-established Quality Control department in the company that
assures quality by incorporating other departments.

DEPARTMENTS
There is well-established setup to ensure quality in the company. The following
departments are directly concerned with quality assurance in the company.
 Quality Control department.
 Purchasing department.
 Inspection department.
 Production department.

56
  Vendor development department.
There is a strong integration of all the departments to make assurance of quality
at every stage of whole the process starting from purchasing to final inspection of
finished products.

QUALITY CONTROL IN PURCHASING

About 85% parts of 480 model and 75% of 640 model are obtained from local
vendors while the remaining parts are imported from Italy. For local parts the
Vendor department gives drawing and material specification to Vendors.
Samples are obtained from them and are sent to well establish Material &
metallurgical Laboratory, which is situated in the plant for calibration of, required
specification of the part and strength of the material. If the results are up to mark,
then ordered are placed to them. Otherwise engineers of the company assist
them in solving the problems relating to strength and specification of the part.
The purchased parts are inspected in the company and Karachi where
companies headquarter is situated, by taking sample among them on the
following criteria.
13 out of 100 items.
32 out of 200 items.
The specification of the items, quality and the strength of material of materials
used in parts are checked by material and metallurgical engineers in the
laboratory. If the items are 2% of the total sample are defective than the whole lot
is not accepted. Then all the items are checked and cost of checking and
inspection of these items is beard by the vendors and all defective items are
replaced and repaired by the vendors. If defective items are less than 2% than all
defective are replaced and repaired by the vendors.

57
 Ratio Analysis of the company
PROFITABILITY RATIOS

Gross Profit Ratio

Table 6

Year Formula 2014 2015

Gross Profit Gross 17.94 19.16

Ratio profit/sale % %

Gross profit
19.40%
19.20%
19.00%
18.80%
18.60%
18.40%
18.20% Gross profit
18.00%
17.80%
17.60%
17.40%
17.20%
2014 2015

Chart 1

58
Analysis & Interpretation:

High Gross Profit is beneficial for any organization. The gross margin is not an
exact estimate of the company's pricing strategy but it does give a good
indication of financial health. Without an adequate gross margin, a company will
be unable to pay its operating and other expenses and build for the future.

Net Profit Ratios

Table 7

Year Formula 2014 2015

Net Profit Net income/Sale 8.93% 10.39%

Ratio

Net profit
12.00%

10.00%

8.00%

6.00%
Net profit

4.00%

2.00%

0.00%
2014 2015

Chart 2

59
Analysis & Interpretation:

A company's sales could increase, but if costs also rise, that leads to a lower
profit margin than what the company had when it had lower profits. This is an
indication that the company needs to better control its costs

Return on Equity
Table 8

Ratio Formula 2014 2015

Return on Net income/Total 33.02 50.57

Equity Equity % %

Return on equity
60.00%

50.00%

40.00%

30.00%
Return on equity

20.00%

10.00%

0.00%
2014 2015

Chart 3

60
Analysis & Interpretation:

This ratio indicates how profitable a company is by comparing its net income to
its average shareholders' equity. The return on equity ratio (ROE) measures how
much the shareholders earned for their investment in the company. The higher
the ratio percentage, the more efficient management is in utilizing its equity base
and the better return is to investor.

Table 9

Return on Assets

Ratio Formula 2014 2015

Return on Net income before 31.11% 44.60%

Asset tax/total asset

Return on assets
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
Return on assets
20.00%
15.00%
10.00%
5.00%
0.00%
2014 2015

Chart 4

61
Analysis & Interpretation:

A higher asset turnover ratio shows that the company has been more effective in
using the investment in fixed assets to generate revenues.

LIQUIDITY RATIO

Current Ratio
Table 10

Ratio Formula 2014 2015

Current Current 2.1:1 2.17:1

Ratio Assets/Current
Liabilities

current ratio
2.18

2.16

2.14

2.12
current ratio

2.1

2.08

2.06
2014 2015

Chart 5

62
Analysis & Interpretation:

The ratio is mainly used to give an idea of the company's ability to pay back its
short-term liabilities (debt and payables) with its short-term assets (cash,
inventory, receivables). The higher the current ratio, the more capable the
company is of paying its obligations. A ratio under 1 suggests that the company
would be unable to pay off its obligations if they came due at that point.

Quick Ratio

Table 11

Ratio Formula 2014 2015

Quick Current Assets- 1.15:1 1.24:1

Ratio Inventory/Current
Liabilities

Quick ratio
1.26

1.24

1.22

1.2

1.18
Quick ratio
1.16

1.14

1.12

1.1
2014 2105

Chart 6

63
Analysis & Interpretation:

An indicator of a company’s short-term liquidity. The quick ratio measures a

company’s ability to meet its short-term obligations with its most liquid assets.
For this reason, the ratio excludes inventories from current assets. The quick
ratio measures the dollar amount of liquid assets available for each dollar of
current liabilities.

Inventory Turnover Ratio

Table 12

Ratios Formulae 2014 2015

Inventory Cost of Goods 5.15 7.18

Turnover Sold/Inventory times times
Ratio

Inventory turnover ratio

8

4
Inventory turnover ratio
3

0
2014 2015

Chart 7

64
Analysis & Interpretation:

A ratio showing how many times a company's inventory is sold and replaced over
a period. This ratio should be compared against industry averages. A low
turnover implies poor sales and, therefore, excess inventory

Days Sale in Inventory

Table 13

Formulae 2014 2015

2. Ratios
Days Sale in 365/Inventory 71 50 Days
Inventory Turnover Ratio

Day sale inventory

80

70

60

50

40
Day sale inventory
30

20

10

0
2014 2015

Chart 8

65
Analysis & Interpretation:

A financial measure of a company's performance that gives investors an idea of

how long it takes a company to turn its inventory (including goods that are work
in progress, if applicable) into sales. Generally, the lower (shorter) the DSI the
better, but it is important to note that the average DSI varies from one industry to
another.

Debtor Turnover Ratio

Table 14

Ratios Formulae 2014 2015

Debtor Sales/Accounts 30.28 149.87

Turnover Receivable times
Ratio

Debtor turnover ratio

160

140

120

100

80
Debtor turnover ratio
60

40

20

0
2014 2015

Chart 9

66
Analysis & Interpretation:

A high ratio implies either that a company operates on a cash basis or that its
extension of credit and collection of accounts receivable is efficient. A low ratio
implies the company should re-assess its credit policies in order to ensure the
timely collection of imparted credit that is not earning interest for the firm.

Days Sale in Receivable

Table 15

Ratios Formulae 2014 2015

Days Sale in 365/Debtor 12 2

Receivable Turnover Ratio

Day sale in receivable

14

12

10

Day sale in receivable

6

0
2014 2015

Chart 10

67
Analysis & Interpretation:

Lower average collection period is seen as optimal, because this means that it
does not take a company very long to turn its receivables into cash. Ultimately,
every business needs cash to pay off its own expenses.

Fixed Asset Turnover Ratio

Table 16

Ratios Formula 2014 2015

Fixed Asset Sales/Net 23.91 32.99

Turnover Fixed Assets times
Ratio

Fixed assets turnover ratio

35

30

25

20

Fixed assets turnover ratio

15

10

0
2014 2015

Chart 11

68
Analysis & Interpretation:

A higher asset turnover ratio shows that the company has been more effective in
using the investment in fixed assets to generate revenues.

Total Asset Turnover Ratio

Table 17

Ratios Formulae 2014 2015

Total Asset Sales/Total 2.36 2.98

Turnover Ratio Assets times

Total asset ratio

3.5

2.5

Total asset ratio

1.5

0.5

0
2014 2015

Chart 12

Analysis & Interpretation:

The amount of sales or revenues generated per dollar of assets. The Asset
Turnover ratio is an indicator of the efficiency with which a company is deploying
its assets.

69
 MARKET RATIOS

Earnings Per Share

Table 18

Ratios Formula 2014 2015

Earnings Net 33.46 53.79
Per Share Income/Outstanding Rs.
Shares

Earning per share

60

50

40

30
Earning per share

20

10

0
2014 2015

Chart 13

Analysis & Interpretation:

A reduction in dividends paid is looked poorly upon by investors, and the stock
price usually depreciates as investors seek other dividend-paying stocks. A
stable dividend payout ratio indicates a solid dividend policy by the company's
board of directors.

70
Price Earnings Ratio
Table 19

Ratios Formulae 2014 2015

Price Price Per 14.92 12.75
Earnings Share/Earning Per times
Ratio Share

Price earning ratio

15.5

15

14.5

14

13.5
Price earning ratio
13

12.5

12

11.5
Category 1 Category 2

Chart 14

Analysis & Interpretation:

A valuation ratio of a company's current share price compared to its per-share

earnings. EPS is usually from the last four quarters (trailing P/E), but sometimes
it can be taken from the estimates of earnings expected in the next four quarters
(projected or forward P/E). A third variation uses the sum of the last two actual
quarters and the estimates of the next two quarters.

71
 DEBT RATIOS

Debt-Equity Ratio

Table 20

Ratios Formulae 2014 2015

Debt-Equity Total Debt/Total 0:100 0:100

Ratio Equity times

Debt equity ratio

0.08

0.07

0.06

0.05

0.04
Debt equity ratio
0.03

0.02

0.01

0
2014 2015

Chart 15

Analysis & Interpretation:

A measure of a company's financial leverage calculated by dividing its total

liabilities by stockholders' equity. It indicates what proportion of equity and debt
the company is using to finance its assets

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 Ratio Analysis of the company
Table 21

Ratios Formulae 2014 2015

Profitability Ratio
Gross Profit Ratio Gross profit/sale 17.94% 19.17
%
Net Profit Ratio Net income/Sale 8.93% 10.39
%
Return on Equity Net income/Total 33.02% 50.57
Equity %
Return on Asset Net income before 31.11% 46.60
tax/total asset %
Liquidity Ratio
Current Ratio Current 2.17:1 2.1:1
Assets/Current
Liabilities
Quick Ratio Current Assets- 1.15:1 1.24:1
Inventory/Current
Liabilities
Asset Activity
Inventory Turnover Cost of Goods 5.15 7.28
Ratio Sold/Inventory
Days Sale in 365/Inventory 71 50
Inventory Turnover Ratio
Debtor Turnover Sales/Accounts 30.28 149.87
Ratio Receivable

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Days Sale in 365/Debtor 12 days 2
Receivable Turnover Ratio
Fixed Asset Sales/Net Fixed 23.91 34
Turnover Ratio Assets
Total Asset Sales/Total Assets 2.36 32.99
Turnover Ratio
Market Ratio
Earnings Per Net 33.46 53.79
Share(Rs.) Income/Outstanding
Shares
Price Earnings Ratio Price Per 14.92 12.75
Share/Earning Per
Share
Debt Ratios
Debt-Equity Ratio Total Debt/Total 0:100 0:100
Equity

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 Financial Analysis

 MTL has highest dollars in current assets for every 1 dollar in current
liabilities in 2011.

 MTL has highest dollars in quick assets for every 1 dollar in current
liabilities in 2011.

 There is more cash to pay liabilities in 2015.

 Generated highest profit for every dollar in 2015.

 For every dollar in equity MTL generated highest profit in 2015.

 For every dollar in asset MTL generated highest profit in 2015.

 MTL generated highest gross profit for every dollar in 2015

 In 2015 sales recovery day are optimal than others year.

 Cash coverage ratio is high in 2012.

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 Horizontal analysis
Table 22

2015 2014

Increase / (decrease) Increase / (Decrease)

Rs. (000) Rs. (000)
% %

Balance sheet items

Property plant and equipment 485,721 0.9 481,293 7.3

Capital work in progress 209,660 (1.3) 212,431 4.1

Intangible Assets 3,867 (34.3) 5,888 600.1

Investment property 255,708 - 255,708 -

Long term investment 369,543 6.9 345,750 (2.4)

Long Term loans 1,911 (1.5) 1,941 (6.0)

Employee benefits 143,512 (51.2) 293,800 22.7

Stores and spares 107,141 (11.4) 120,951 (9.4)

Stock in trade 2,429,982 (0.2) 2,433,690 (6.5)

Trade debts 184,377 51.5 121,047 (87.5)

Loans and advances 68,683 (43.7) 122,047 70.7

Trade deposits and prepayment 22,748 (6.0) 24,198 (11.6)

Balance with statutory authority 767,295 141.4 317,853 (83.3)

Other receivables 61,506 (48.6) 119,679 38.4

Taxation-net 815,198 (13.5) 942,966 221.7

Short term investment 700,203 600.2 100,000 (81.9)

Cash and bank balances 1,082,170 (3.2) 1,118,174 (46.4)

Total Assets 7,709,225 9.8 7,018,100 (31.4)

Share Holders Equity 4,711,443 5.0 4,487,858 (7.9)

Non-current liability 20,809 (29.3) 29,437 (2.4)

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Current liability 2,976,225 19.0 2,500,805 (53.1)

Total liabilities and equity 7,709,225 9.8 7,018,100 (31.4)

Interpretation

Total plants and equipment are decreased as compared to 2014.

And working capital is also decreased because company pay its
payables before time. Companies trade loans are decreased as
compared to 2014.and companies loan & advances are increased as
compared to 2014 because company take loans and done investment.
Account receivables of company are increased because company’s
credit sales are increase. Cash and bank balances has negative
amount in 2014 and in 2015. But in 2015 the negative amount is less
than 2014 this change is due to company paid its liabilities. Share-
holder’s equity of MTL is increased and it is a good sign for company.

Horizontal analysis of profit and loss

2015 2014

Increase / Increase /
(Decrease) (Decrease)
Profit and loss items Rs. (000) % Rs. (000) %

Net sales 22,937,917 38.3 16,589,996 (26.9

Cost of sales 18,541,448 36.2 13,613,305 (27.2)

Gross profit 4,396,469 47.7 2,976,691 (25.8)

Distribution and marketing 515,007 5.7 487,292 (1.4)

expense

Administrative expense 419,320 14.5 366,191 7.7

Operating profit 3,462,142 63.1 2,123,208 (33.1)

Other operating income 404,157 35.0 299,483 (0.6)

Other operating expenses 264,550 65.3 160,003 (33.2)

Finance cost 9,360 (88.2) 79,208 22.7

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Profit before tax 3,592,389 64.5 2,183,480 (31.2)

Taxation 1,209,968 72.5 701,616 (32.2)

Profit after tax 2,382,421 60.8 1,481,864 (30.7)

Interpretation:

Total sales of MTL in increased as compared to 2014. Cost of goods sold

percentage is increased which is not good sign for the company as it will
decrease the profit of company.as cost increases but also sales increase which
increase the gross profit in 2015.operating profit of company is increased which
means administrative expenses is less than last year. Profit after tax is greater
than profit before tax in which tax is deducted from profit. Profit after tax of MTL
is increased in 2015.

Vertical Analysis of balance sheet

Table 23

2015 2014

Increase / (decrease) Increase / (Decrease)

Rs. (000) Rs. (000)

% %

Balance sheet items

Property plant and equipment 485,721 6.3 481,293 6.9

Capital work in progress 209,660 2.7 212,431 3.0

Intangible Assets 3,867 0.1 5,888 1.0

Investment property 255,708 3.3 255,708 3.6

Long term investment 369,543 4.8 345,750 4.9

Long Term loans 1,911 0.0 1,941 0.0

Employee benefits 143,512 1.9 293,800 4.2

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Stores and spares 107,141 1.4 120,951 1.7

Stock in trade 2,429,982 31.5 2,433,690 34.7

Trade debts 184,377 2.4 121,047 1.7

Loans and advances 68,683 0.9 122,047 1.7

Trade deposits and prepayment 22,748 0.3 24,198 0.3

Balance with statutory authority 767,295 10.0 317,853 4.5

Other receivables 61,506 0.8 119,679 1.7

Taxation-net 815,198 10.6 942,966 13.4

Short term investment 700,203 9.1 100,000 1.4

Cash and bank balances 1,082,170 14.0 1,118,174 15.9

Total Assets 7,709,225 100.0 7,018,100 100.0

Share Holders Equity 4,711,443 61.1 4,487,858 63.9

Non-current liability 20,809 0.3 29,437 0.4

Current liability 2,976,225 38.6 2,500,805 35.6

Total liabilities and equity 7,709,225 100.0 7,018,100 100.0

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Interpretation

Total plants and equipment are decreased as compared to 2014.

And working capital is also decreased because company pay its
payables before time. Companies trade loans are increased as
compared to 2014.and companies loan & advances are increased as
compared to 2014 because company take loans and done investment.
Account receivables of company are decreased because company’s
credit sales are decreased. Cash and bank balances has negative
amount in 2014 and in 2015.total assets are same in both years. But in
2015 the negative amount is less than 2014 this change is due to
company paid its liabilities. Share-holder’s equity of MTL is increased
and it is a good sign for company. Total liabilities and equity is
increased as compare to last year.

Vertical analysis of profit and loss

Profit and loss items

Increase / Increase / Increase / Increase /

(decrease) (Decrease) (decrease) (Decrease)

Rs. (000) % Rs. (000) %

Net sales 22,937,917 100.0 16,589,996 100.0

Cost of sales 18,541,448 80.8 13,613,305 82.1

Gross profit 4,396,469 19.2 2,976,691 17.9

Distribution and marketing expense 515,007 2.2 487,292 2.9

Administrative expense 419,320 1.8 366,191 2.2

Operating profit 3,462,142 15.1 2,123,208 12.8

Other operating income 404,157 1.8 299,483 1.8

Other operating expenses 264,550 1.2 160,003 1.0

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 Finance cost 9,360 0.0 79,208 0.5

Profit before tax 3,592,389 15.7 2,183,480 13.2

Taxation 1,209,968 5.3 701,616 4.2

Profit after tax 2,382,421 10.4 1,481,864 8.9

Interpretation
Total sales of MTL in increased as compared to 2014. Cost of goods sold
percentage is decreased which is good sign for the company as it will increase
the profit of company as cost decreases but also sales increase which increase
the gross profit in 2015. Operating profit of company is increased which means
administrative expenses is less than last year. Profit after tax is greater than
profit before tax in which tax is deducted from profit. Profit after tax of MTL is
increased in 2015.

SWOT Analysis

Here is the SWOT analysis of Millat Tractors Limited.

Strengths
Millat tractors limited is strong organization as for as its competitor is concerned.
Basically, the activities the firm does well or the resources it has or it controls are
referred to as its strength. Following are the strengths of MTL.

Licenses and Technology

Licenses and technology from Massey Ferguson, UK gives Millat Tractors
limited an extra edge.

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 ISO 9002 Certification
Another, solid strength of Millat Tractors Limited is ISO 9002 certification for its
engine
an Assembly, tractor assembly and laboratory.

After Sale Services

A good package of after sales service by Millat Tractor is also the strength of MTL
on its competitor and provides the customer satisfaction.

Good Will
MTL has an excellent goodwill in the market and in stock exchange.

Market Share
A market shares of 64%-67% proves to be a demanding strength of the Millat
Tractors Limited.

Repair Facility
MF tractors can be repair from any workshop located in any area of Pakistan.
There is no specification, regarding repair maintenance of tractors such as if the
customer has purchased tractor from Lahore, and he can repair it from D.G. Khan
or Mallis workshop as well.

Delivery Through Dealers and Direct Cash Basis

MTL has strength over their competitors. It delivers tractors through dealers and
direct cash basis delivery is also made. But Al-Ghazi tractor makes delivery just
through dealers. Millat tractors parts are readily available all over Pakistan that is
another strength.

Network of Dealers and Workshops

There are 74 tractor dealers, 50 spare parts dealers and 458 workshops all
over Pakistan.

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 Diversification
Millat tractors limited has diversified its business by producing agricultural
implements,

generating sets, fork lifters, rex barren batteries and now working on the
automobiles business as well.

Experience
Another strength of MTL is that it has been established since 1964 so it has
experience labor force.

Weaknesses
Millat Tractors Limited is a successful organization but it has following
weaknesses.

Divesssrsion of Concentration
Due to diversified work at MTL, it might not able to fully concentrate on its primary
operations.

Non-Specialized People at Front Desks

The marketing department has good workers but they are not good at public
dealing and less interaction with the customers.

Long Procedures of Decision Making

There is long decision making procedure. Not quick decision is taken so these
long procedures are time consuming.

Job Statics
There is lack of job rotation in MTL which has created the statics and reduce the
productivity and efficiency of the employees.

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 Indispensability
High market share is another strength of MTL that has mad Millat Tractors to think
that they are leaders so they do not put its efforts to those areas which are weak
and need its attention.

Long Delivery Period

As compare to its competitors, the delivery time period of MTL tractors is long.

OPPORTUNITIES
Expansion in Automobiles, Implements, Fork Lifts Trucks and Generating Sets,
REX barren batteries & Bolan casting. Due to changing needs of country, MTL can
make power machine along with manufacturing tractors and diversifying its
business.

Crop High Yields and Rates

If the crop yield is high and the farmers are going to get good price for it so this
wills increase the demand of the tractors.

E-Commerce
MTL can establish B2B e-commerce application with its dealers, spare parts and
workshops. This will help them to make true “MANAGEMENT INFORMATION
SYSTEM.

THREATS
Threats are negative external environmental factors. The external factors, which
can be prove negative for Millat Tractors are as following:

Political Instability
The major threat which is faced by MTL is the instable political environment. A
policy being carried out by one government is changed by next coming up
government. Such as “Awami Tractor Scheme” and “Green Tractors Loaning

84
Scheme”. Every government shows biasness and makes policies by considering
their favorites.

Strong Local Competition

MTL is facing a very intense competition not only in tractors but in agriculture
implements as well. In tractors, the major competitor is Al-Ghazi Tractors
Limited and in agricultural implements all the local manufacturers are its
competitors. AGTL has achieved a major portion of the market share so rapidly
by reducing per unit cost of tractor by switching from Italy (FIAT) technology to
Turkish technology (TUMOSAN) and by managing its delivery period.

CONCLUSION

I did my internship at Millat Tractor Limited. Millat is a manufacturer of high class

tractors. During the period of my internship, I visited to each and every
department of Millat (Private) Limited and I found working in every department
quite professional. The environment of the factory is very much conducive to
work. The operations of the company are very safe and there is a proper concern
for every employee. I had learned many things in this 2 months of internship and
I completely believe that this experience will help me a lot when I will start my
professional career. MILLAT TRACTORS provides high quality products to its
customers. The entire product is produced according to the needs of the
customers; this is the one reason for the success of the company. The
production process is very secure and safe and complete precautions are
ensured to avoid any unfavorable incident. All the departments work under the
direct supervision of the senior management. Production machines are regularly
inspected by the professionals who make the production much safe. The higher-
level management of MILLAT TRACTORS (Private) Limited is very active all the
time and provide happy and safe environment to the employees which will help
the company to increase its quality of products. This is one thing which gives
competitive edge to the MILLAT TRACTORS. MILLAT TRACTORS (Private)
85
Limited is providing training to its staff but it should take initiative by starting the
extensive training programs in each area of operations as per the current
situation and needs of the business. It should provide training to staff, which
develop the clear vision/understanding about their work as well as bring the
efficiency in personal skills. MILLAT TRACTORS (Private) Limited can get more
success in future if it puts more stress in the technological advancement in its
operations. In short, I conclude that MILLAT TRACTORS (Private) Limited is
better and very safe place to work and learn and it provides high quality products
according to the needs of the customers. As I have learned a lot from this
prestigious company I wish great growth, prosperity and good luck for MILLAT
TRACTORS (Private) Limited and its concerns in times to come.

Recommendations for the Company

 There is some need to change the working environment of organization. HR

should be the most valuable person in the marketing department.
 There is a need of rotating personal between different departments at early
stages rather than at the early stages; it helps in finding the right person for
the right job.
 Organization should take care about the work going on, and about the wages
of the workers.
 I have observed during my period of internship in MTL, that there was lack of
competition with foreign tractor industries.
 There are almost about 2000 workers in MTL, from which 420‐435 are
permanent and others are temporary, there is need to increase the number of
permanent workers.
 Do not just use newspaper or conferences for advertisement but there should
be proper publicity of the product so that people should be aware of Millat.
 Although production in MTL is high but is still not meeting the demands of the
nation.

86
 Prices are also getting higher, which is not basically the requirement of the
farmer.
 Greater demand than the supply is not only creating problem but causing the
late delivery which irritates the costumer.

Skills acquired

internship I acquired the following skills and qualification during my internship

with the help of my supervisors.

Skills on IFS Software

In Purchase Department, all the procedure is executed on IFS software so I got
maximum skills on IFS because I maximum worked on it.

Effective group communication

Working in MTL as an intern I gained communication skills that how to
communicate in group, how to communicate with other employees and officers.

Teamwork Skills (work well with others)

I gained valuable teamwork skills from internship. I learnt to work in team in MTL.

Career Foundation
Internships provided me with the building blocks I needed for my future. Many
internship opportunities help set the foundation for your career.

Connection with business persons

I also connected with business people during internship and made many
references.

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Problem-solving Skills
During internship, I gained problem solving skills, that how to solve problems
when there is no one to help or guide.

Skills on Excel and Word

I learnt to work in Excel and word during internship. I prepared all employee’s
Job Description and Job Specification.

Self-confidence
During internship because I dealt with different type of people so I got much
confidence from internship.

Creativity
I gained the ability of creativity during.

88
 Bibliography

Annual Report . Sheikhupura road, Lahore- Pakistan: Millat Tractor Limited, 2015.

http://www.millatgroup.net/?page_id=652. n.d. 4 April 2017.

www.millat.com.pk. n.d. document. 4 April 2017.

89
 Appendix

 Letter of authorization
 Copy of all latest annual financial statement
 Balance sheet
 Income statement /profit and loss statement
 Cash flow statement
 Statement of change in equity

90