Hailey College of Commerce, University of The Punjab, Lahore

1|Page
HAILEY COLLEGE OF COMMERCE,
UNIVERSITY OF THE PUNJAB,
LAHORE
Internship Report
Millat Tractors Limited
SUBMITTED TO
PROFESSOR DR. HALEEMA TARIQ
SUBMITTED BY
DABEERA MATEEN
BC19-475
SEMESTER 7TH
BCOM HONORS
(AFTERNOON-B)
SESSION (2019-2023)
2|Page
PREFACE
Being aware of the importance of practical training, Hailey College of Commerce, University of
the Punjab, Lahore requires every Student to go through training for practical purpose as trainee.
The internship program is to broaden the vision of practical experiences with theoretical
knowledge as it increases one’s capabilities to handle problems at various stages and the ability of
decision. I have tried my level’s best to collect the valuable knowledge, information and
experience through this internship program. This report is the result of my Internship with Millat
Tractor Lahore.
3|Page
ACKNOWLEDGEMENT
History of all great work into witness that no great work was ever done without either active or
passive support of a person surrounding and one’s done quarter, this is not hard to conclude how active
assistance from senior could positively impact the execution of a project. I am highly thankful to our
learned faculty PROFESSOR DR. HALEEMA TARIQ for her active guidance throughout the
completion of project [INTERNSHIP]. Last but not least, I would also want to extend my appreciation to
those who could not be mentioned here but have well played their role to inspire me behind the certain.
DABEERA MATEEN (BC19-475)

4|Page
INTERNSHIP REPORT
SUBMITTED TO THE
PRINCIPLE
HAILEY COLLEGE OF COMMERCE
5|Page
Contents
PREFACE.............................................................................................................................................................. 2
ACKNOWLEDGEMENT......................................................................................................................................3
Chapter No. 1.........................................................................................................................................................9
1. Company profile.....................................................................................................................................9
1.1 Company overview................................................................................................................................9
1.2 History....................................................................................................................................................9
1.3 Core values:.........................................................................................................................................10
1.4 Company objectives:............................................................................................................................11
1.5 Strategic planning.................................................................................................................................11
1.6 Safety policy.........................................................................................................................................11
1.7 Environment policy..............................................................................................................................12
1.8 COMPANY MANAGEMENT:...........................................................................................................12
1.9 Banks:..................................................................................................................................................12
1.10 Group structure....................................................................................................................................13
1.10.1. Millat Equipment Limited....................................................................................................................13
1.10.2. TIPEG Intertrade DMCC.....................................................................................................................13
1.10.3. Millat Industrial Products Limited........................................................................................................13
1.10.4. Bolan Castings Limited........................................................................................................................14
1.11 Organogram in term of Command chain..............................................................................................15
1.12 ORGANIZATIONAL STRUCTURE..................................................................................................16
1.13 MAJOR PRODUCTS OF MTL:..........................................................................................................16
1.14 DEPARTMENTS OF MTL.................................................................................................................18
1.15 Major Products Of Millat Tractors.......................................................................................................18
1.15.1. Tractors................................................................................................................................................19
Chapter no. 2........................................................................................................................................................20
2.1 Financial Analysis................................................................................................................................20
2.1.1 Statement of financial position.............................................................................................................20
2.1.2 Statement of profit and loss..................................................................................................................20
2.1.3 Statement of financial position (As at June 2021, 2020, 2019).............................................................21
2.1.4 Statement of profit and loss..................................................................................................................25
2.2 Horizontal Analysis..............................................................................................................................26
2.2.1 Horizontal Analysis of Position Of financial statement........................................................................27
6|Page
2.2.2 Interpretation of horizontal Analysis....................................................................................................30
2.3 Vertical Analysis..................................................................................................................................33
Calculation:......................................................................................................................................................34
2.4 COMMENTARY ON FINANCIAL RESULTS..................................................................................37
2.4.1 PROFITABILITY................................................................................................................................37
2.4.2 LIQUIDITY.........................................................................................................................................37
2.4.3 SOLVENCY........................................................................................................................................37
2.4.4 INVESTOR..........................................................................................................................................38
2.5 Ratio Analysis......................................................................................................................................38
Financial ratios.....................................................................................................................................................38
2.5.1 Liquidity Ratios....................................................................................................................................39
2.5.2 Activity Ratios....................................................................................................................................39
2.5.3 Account Payable Ratios.......................................................................................................................40
2.5.4 Debt Ratios...........................................................................................................................................40
2.5.5 Market Ratios.......................................................................................................................................40
2.5.6 Account Receivable Ratios..................................................................................................................40
2.5.7 Profitability ratios................................................................................................................................41
2.6 DUPONT ANALYSIS.......................................................................................................................42
2.7 PESTLE ANALYSIS...........................................................................................................................43
2.8 SWOT ANALYSIS..............................................................................................................................44
2.9 LIQUIDITY ANALYSIS.....................................................................................................................45
2.10 CORPORATE SOCIAL RESPONSIBILITY REPORT......................................................................47
Chapter no. 3........................................................................................................................................................51
2.1 My internship program.........................................................................................................................51
3.1.1 Purpose of Internship............................................................................................................................51
3.1.2 Reason of Choice.................................................................................................................................51
3.1.3 Personal Objectives..............................................................................................................................51
3.2 My area of learning..............................................................................................................................52
3.3 WEEK 1 &2:........................................................................................................................................52
3.3.1 ADMINISTRATION DEPARTMENT................................................................................................52
3.4 WEEK 3&4:.........................................................................................................................................56
3.4.1 PURCHASE DEPARTMENT.............................................................................................................56
3.5 WEEK 5:..............................................................................................................................................59
3.5.1 MARKETING DEPARTMENT..........................................................................................................59
7|Page
3.6 WEEK 6:..............................................................................................................................................60
3.6.1 FINANCE DEPARTMENT..............................................................................................................60
CONCLUSION....................................................................................................................................................66
8|Page
Chapter No. 1
1. Company profile
Millat Tractors (Urdu: ‫ ) ٹریکٹرز ّلت ِم‬is a Pakistani agricultural machinery

manufacturer based in Lahore, Punjab, Pakistan. Founded in 1964, it is
the manufacturer of Massey Ferguson tractors in Pakistan with a
production capacity of 40,000. It is one of the two major tractor
manufacturers of Pakistan with a 70 percent market share, as compared
to Al-Ghazi Tractors which had 29 perc
1.1 Company overview
Millat Tractors Limited (MTL), an ISO 9001:2008 certified company is Pakistan’s leading
engineering concern in the automobile sector engaged in the manufacturing and marketing of the
world renowned Massey Ferguson (MF) tractors under licensing agreement with AGCO Ltd.
UK; Forklift Trucks under license from Anhui Forklift Trucks, China; Prime Movers; Diesel
Generating Sets and a range of allied agricultural and industrial implements.
Millat Tractors has played a pivotal role in transfer of technology and transformation of fledgling
local light engineering sector into a robust, vibrant, quality conscious Auto Vending Industry.
The Company is regarded as a pioneer in setting up country’s automotive vendor base. Today, a
local content of more than 90% has been achieved in Massey Ferguson tractors. The company
offers eight tractor models in the range of 50 hp -100 hp, diesel gen sets of capacities -12.5kVA
to 150 kVA and a 3 and 4 ton forklift truck.
1.2 History
Millat Tractors was founded as Rana Tractors and Equipment

Limited in Lahore to import and market Massey Ferguson tractors in
1964. In 1965, facilities were created in Karachi to assemble tractors
from semi-knocked-down kits. In 1967, operations were shifted from
Karachi to Lahore. In 1972, under the Zulfiqar Ali Bhutto, the
company was nationalized and started assembling and marketing
tractors on behalf of the Pakistan Tractor Corporation (PTC). In 1980, the Government decided
on indigenization of the tractors and Pakistan Tractor Corporation transferred this role of
indigenization to Millat Tractors Limited. In just one year, the company took a giant step towards
9|Page
self-sufficiency by setting up the first
engine assembly plant in Pakistan. 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 the
engine block, sump, transmission case,
axle housing, hydraulic lift cover, front axle support and center housing are all being machined
successfully in-house, with 95 percent localization, at Millat Tractors from locally sourced
castings. In 1992, the company was privatized, and Millat Tractors plant started its in-house
production. The establishment of this modern plant not only increased production capacity to
16,000 tractors per year on a single-shift basis. In the 2009-2010 financial year, production shot
up to 42,000 tractors, the highest sales of tractors ever in Pakistan for any company at the time.
During the fiscal year 2017-18, Millat Tractors Limited produced and sold over 42,500 tractors.
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 Producer 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.0
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 fledgling 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 in digitization level of 90% is a
testament to the efforts of Millat Group over that last 47 years. Millat tractors Ltd MTL- an ISO
9001 certified company for its assembly & material testing & gauge control laboratory-is
Pakistan's leading engineering concern in automobile sector. It manufactures MF-240, MF-350,
MF-260, MF-375, MF-385, MF-385 4WD, Implements, Prime movers, Forklift Truck & Power
Generation Sets.
1.3 Core values:

 Excellence in everything we do.
10 | P a g e
 Respect for our customers and each other.
 Integrity in all dealing.
 Recognition and reward for the talented and high performing employees.
1.4 Company 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.
 Aim to generate earnings sufficient to ensure a secure future for the company.
 Protect and increase shareholder return.
 Enhance creativity and job satisfaction.
 Provide employees opportunities for personal development.
1.5 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
1.6 Safety policy

 All the employees have been provided appropriate safety equipment during performance of
their duties.
 All the employees are insured under group life insurance scheme.
 Regular safety inspections are carried out to improve the preparedness.

11 | P a g e
1.7 Environment policy
 The company has a separate horticulture department to make the environment pleasant green
and full of flowers.
 The company also participates in various competitions on horticulture arranged by

government and other institutions.
1.8 COMPANY MANAGEMENT:

 Mr. Sikandar M. Khan (Chairman)
 Mr. S M Irfan Aqueel (CEO)
 Mr. Sohail Ahmad Nisar (CFO)
 Mr. Ghulam Mustafa (Dy. Gen. Manager Eng. & Supply Chain)
 Mr. Muhammad Ayaz Khurshid (Gen. Manager IT)
 Mr. Azhar Noor (Gen. Manager Marketing)
 Mr. Mukhtar Ahmad (Sr. Manager Admin & Purchase)
 Mr. Ehsan Ullah (Gen. Manager Production)
 Mr. Waseem Bhatti (Dy. Gen. Manager Maintenance)
1.9 Banks:
 Bank Alfalah Ltd.
 Standard Chartered Bank
 Barclays Bank PLC.
 United Bank Ltd.
 Habib Bank Ltd.
 Allied Bank Ltd.
 MCB Bank Ltd.

12 | P a g e
 Meezan Bank Ltd.
Registered Office and Plant: Sheikhupura Road, Distt. Sheikhupura. Tel: 042-
37911021-25, UAN: 111-200-786
Fax: 042-37924166, 37925835
Website: www.millat.com.pk E-mail: info@millat.com.pk
1.10 Group structure
1.10.1. Millat Equipment Limited

Millat Equipment Limited, was incorporated as a private limited company under the repealed
Companies Ordinance 1984 (Repealed with the enactment of the Companies Act, 2017 on May 30,
2017), and was converted into an unlisted public limited company on April 20, 2004 is a subsidiary of
Millat Tractors Limited which holds 45% of the company’s equity. The Company is engaged in the
business of manufacturing of automotive, agricultural and industrial vehicles, parts and components
thereof. The registered office of the Company is situated at Sheikhupura Road, Lahore and the
manufacturing facility of is situated at 10 km Raiwind Road, Lahore.
1.10.2. TIPEG Intertrade DMCC

TIPEG Intertrade DMCC, a limited liability company registered with Dubai Multi Commodities
Centre (DMCC) Authority, is a subsidiary of Millat Tractors Limited which holds 75% of the
company’s equity. The principal place of business of the company is located at Jumeirah Lake
Towers, Dubai-UAE. The company is formed for trading of machinery and heavy equipment and
registered office of the company is situated at Unit No.705, Fortune Executive Tower, Jumeirah
lake Towers, Dubai. United Arab Emirates.
1.10.3. Millat Industrial Products Limited

Millat Industrial Products Limited (MIPL), an unlisted public company registered under the
Companies Ordinance 1984 (now the Companies Act, 2017), is a subsidiary of Millat Tractors
Limited which holds 64.09% of the company’s equity. MIPL is engaged in the business of
manufacturing of industrial, domestic and vehicular batteries, cells and components. The
geographical location and address of the Company’s business units, including mills/plant is as
under: The registered office of the company is situated at 8.8 km, Lahore- Sheikhupura Road,
Shahdara; Lahore The manufacturing facility of the company is located at 49 km., off Multan
Road, Bhai Pheru, Distt. Kasur.
13 | P a g e
1.10.4. Bolan Castings Limited
Bolan Castings Limited (BCL), a public limited company incorporated in Pakistan under the
repealed Companies Ordinance 1984 (now the Companies Act), and listed on the Pakistan Stock
Exchange, is a subsidiary of Millat Tractors Limited which holds 46.26% of the company’s
equity. BCL is engaged in the business of manufacturing of castings for tractors and automotive
parts thereof. The geographical location and address of the Company’s business unit, including
plant is RCD Highway, Hub Chowki, District Lasbela, Baluchistan, Pakistan.
1.11 Organogram in term of Command chain
Chairman
CEO(Cheif
Executive Officer)
GM(General
Managers)
DGM(Deputy
General Managers)
SM(Senior
Managers
Managers
DM(Deputy
Managers)
AM(Assistant
Managers)
JE(Junior
14 | P a g e Non-Managerial
Employees
1.12 ORGANIZATIONAL STRUCTURE
1.13 MAJOR PRODUCTS OF MTL:

 Tractor.
 Diesel Engines.
 Diesel Generating sets
 Prime movers.
 Forklift trucks.
15 | P a g e
Model Horsepower Engine Type
Massey Ferguson 240 (Millat) 50 HP (37 kW) / 45 HP (34 kW) / 34 HP Perkins
(25 kW)
Massey Ferguson 256 G (Millat) 56 HP (42 kW) Perkins
Massey Ferguson 260 (Millat) 60 HP (45 kW) Perkins
Massey Ferguson 260 Turbo 60 HP (45 kW) Perkins

(Millat)
Massey Ferguson 375 (Millat) 58 HP (43 kW)/62 HP (46 kW)/75 HP (56 kW) Perkins
Massey Ferguson 375E (Millat) 75 HP (56 kW) Perkins
Massey Ferguson 375S (Millat) 75 HP (56 kW) Perkins
Millat Tractors Limited is manufacturing a large variety of agriculture equipment. The major share of its
product is of tractors. Some of the major products of Millat Tractors Limited are as follow:
Tractors
 MF-240
 MF-260
 MF-350
 MF-350+
 MF-375
16 | P a g e
 MF-385
 MF-385 (4WD)
1.14 DEPARTMENTS OF MTL

Sr.# Departments
1 Finance
2 Marketing
3 Production Control
4 Information Technology
5 Internal Audit
6 Maintenance
7 Engineering and Supply Chain
8 Quality Assurance
9 Administration & Purchases
10 Human Resource Management
11 Industrial Product Division
1.15 Major Products Of Millat Tractors
 Tractor.
17 | P a g e
 Diesel Engines.
 Diesel Generating sets
 Prime movers.
 Forklift trucks.
Millat Tractors Limited is manufacturing a large variety of agriculture equipment. The major
share of its product is of tractors. Some of the major products of Millat Tractors Limited are as
follow:
1.15.1. Tractors
 MF-240
 MF-260
 MF-350
 MF-350+
 MF-375
 MF-385
 MF-385 (4WD)
Model Horsepower Engine Type
Massey Ferguson 240 (Millat) 50 HP (37 kW) / 45 HP (34 kW) / 34 HP Perkins

(25 kW)
Massey Ferguson 256 G (Millat) 56 HP (42 kW) Perkins
Massey Ferguson 260 Turbo (Millat) 60 HP (45 kW) Perkins
Massey Ferguson 375 (Millat) 58 HP (43 kW)/62 HP (46 kW)/75 Perkins

HP
(56 kW)
Massey Ferguson 375E (Millat) 75 HP (56 kW) Perkins

18 | P a g e
Massey Ferguson 375S (Millat) 75 HP (56 kW) Perkins

19 | P a g e
Chapter no. 2
2.1 Financial Analysis
The financial statements of a company record important financial data on every aspect
of a business’s activities. As such, they can be evaluated on the basis of past, current,
and projected performance.
Several techniques are commonly used as part of financial statement analysis. Three of
the most important techniques include horizontal analysis, vertical analysis, and ratio
analysis. Horizontal analysis compares data horizontally, by analyzing values of line
items across two or more years. Vertical analysis looks at the vertical effects line items
have on other parts of the business and also the business’s proportions. Ratio analysis
uses important ratio metrics to calculate statistical relationships.
2.1.1 Statement of financial position
The statement of financial position is another term for the balance sheet. The statement
lists the assets, liabilities, and equity of an organization as of the report date. As such, it
provides a snapshot of the financial condition of a business as of a specific date. It is
one of the financial statements, and so is commonly presented alongside the income
statement and statement of cash flows.
The information on the statement of financial position can be used for a number of
financial analyses, such as comparing debt to equity or comparing current assets to
current liabilities. These analyses are typically presented on a trend line, so that you can
detect any changes in the financial position of the reporting entity over time.
2.1.2 Statement of profit and loss
A profit and loss statement, also known as an income statement or a P and L statement,
is a financial report that shows a business's net income by subtracting total costs and
expenses from total income and revenue.
20 | P a g e
2.1.3 Statement of financial position (As at June 2021, 2020, 2019)
2021 2020 2019
EQUITY AND LIABILITY
SHARE CAPITAL RESERVES
75000000, ordinary shares of Rs. 750000 500000 500000

10/- each
Issued subscribed and paid up 560578 498292 442926

capital
Reserves 8532192 3573784 4390241
9092770 4072076 4833167
LIABILITIES
Non-Current Liabilities
Long term deposit 13433 12643 12731
Deferred tax liabilities-net 962984 77664 -
Employees’ defined against right of 1442 9881 -

21 | P a g e
use assets
Lease liabilities against right of use 1442 9881 -

assets
Long term finance-secured 128815 101991 -
Deferred grant 13485 6558 -
1170415 331766 12731
Current Liabilities
Accumulating compensated 110670 104924 113337

absences
Trade and other payable 3661499 2848238 2498398
Contract liabilities 9919342 3120601 2772987
Current portion of lease liabilities 4386 3706 -

against right of use of assets
Current portion of term 162797 26944 -

finance- secured
Current portion of deferred grant 15602 9240 -
Taxation-net 322770 - -
Unclaimed dividend 271595 277113 310095

22 | P a g e
Unpaid dividend 74403 10004 33496
14543064 6400770 5728286
24806249 10804612 10574184
Assets
Non-current Assets
Property plant and equipment
Operating Fixed Assets 777638 667980 718559
Capital work in Progress 45166 2945 12827
822804 670925 731386
Right of use Assets 4896 12931 -
Intangible Assets 39462 41405 4048
Investment property 255708 255708 255708

23 | P a g e
Long term investment 6199458 2039726 1383879
Long term Loans 2482 2252 2826
Deferred tax asset-net - - 12797
Employees defined benefit plan - - 219519
7324810 3022947 2610163
Current Assets
Stores, spare parts and loose tools 161329 157399 150799
Stock in trade 5372584 3857166 3148589
Trade debt 141234 102044 46637
Loans and advances 56358 51869 113876
Trade deposits and short term 65273 43382 46461

prepayments
Balances with statuary authorities 4592169 1032656 2250219
Other receivables 108253 38710 87023
Tax refunds due from the government - 778977 1268429
Short term investment 6134636 - -

24 | P a g e
Cash and bank balances 849602 1719462 851988
17481439 7781665 7964021
24806249 10804612 10574184
2.1.4 Statement of profit and loss
2021 2020 2019
Revenue from contracts with 43953778 22942275 31144057
customer
Cost of sales 34682684 18696679 25197690
Gross profit 9271094 4245596 5946367
Distribution cost marketing 854630 567838 579004
expenses
Administration expences 579369 448178 446327
Other operating expenses 616066 295803 596605
2050065 1311819 1621936

25 | P a g e
Other income 667309 253694 800474
Operating profit 7888338 3187471 5124905
Finance cost 9264 217836 42044
Profit before tax 7879074 2969635 5082861
taxation 2098147 819087 1444816
Profit after tax for the year 5780927 2150548 3638045
2.2 Horizontal Analysis
Horizontal analysis is used in the review of a company's financial statements over

multiple periods. It is usually depicted as percentage growth over the same line
item in the base year. Horizontal analysis allows financial statement users to easily
spot trends and growth patterns. Horizontal analysis shows a company's growth
and financial position versus competitors. Horizontal analysis can be
manipulated to make the current period look better if specific historical periods of
poor performance are chosen as a comparison..
Formula Used
Horizontal Analysis (%) = [(Amount in Comparison Year – Amount in Base

Year) / Amount in Base Year] * 100
26 | P a g e
2.2.1 Horizontal Analysis of Position Of financial statement
2022 2021
Increase/(decrease) from last

year
% %
Statement of financial position
Property, plant and equipment 16.42 (7.04)
Capital work in progress 1433.65 (77.04)
Right of use assets (62.14) 100.00
Intangible assets (4.60) 922.85
Investment property - -
Long term investment 203.94 47.39
Long term loans 10.21 (20.31)
Deferred tax assets-net - (100)
Employee benefits - (100)
Stores, spare parts and loose tools 2.50 4.38

27 | P a g e
Stock in trade 39.29 22.50
Trade debts 38.42 118.80
Loans and advance 8.66 (54.45)
Trade deposits and prepayments 50.46 (6.63)
Balance with statutory authorities 344.69 (54.11)
Other receivables 179.65 (55.52)
Tax refunds due from Government (100.00) (38.59)
Short term investments 100.00 -
Cash and bank balances (50.59) 101.82
Total Assets 129.59 2.18
Shareholder’s equity 123.30 (15.75)
Non-Current Liabilities 252.78 2,505.97
Current Liabilities 127.21 11.74
Total Liabilities and Equity 129.59 2.18

28 | P a g e
Statement of Profit or Loss
Revenue from contract with customers 91.58 (26.33)
Cost of sales 85.50 (25.80)
Gross profit 118.37 (28.60)
Distribution and marketing expenses 50.51 (1.93)
Administrative expenses 29.27 0.41
Other operating income 163.04 (68.31)
Other operating expenses 108.27 (50.42)
Operating profit 147.48 (37.80)
Finance costs (95.75) 418.11
Profit before tax 165.32 (41.58)
Taxation 156.16 (43.31)
Profit after tax 168.81 (40.89)

29 | P a g e
2.2.2 Interpretation of horizontal Analysis
Horizontal analysis interprets the change in financial statements over two or more
accounting periods based on the historical data. It denotes the percentage change in
the same line item of the next accounting period compared to the value of the
baseline accounting period.
 Property plant and Equipment
Increased in 2021 by 16.42% and decreased in 2020 by 7.04 %. PP&E are assets
that are expected to generate economic benefits and contribute to revenue for many
years. Purchases of PP&E are a signal that management has faith in the long-term
outlook and profitability of its company.
 Capital work in progress
Increased in 2021 by 1433% and decrease in 2020 by 77.04%. capital work in

progress increased because more plant and machinery and more advances for the
vehicles have been paid by the company.
 Right of use Assets
Decreased in 2021 by 62.14% and increase in 2020 by100.00%, the main reason
for this decrease is depreciation charged during the year.
 Intangible Assets
Decreased in 2021 by 4.60% and increased in 2020 by 922%
 Long term investment
Long term investment has increased by 203% in 2021 and increased by 47% in 2020.
 Long term loans
Long term loans has increased by 10% in 2021 and decreased by 20% in 2020.
 Deferred tax Assets-net
For the year 2021 there is no value available for deferred tax and in 2020 decreased by
100%.
 Employee Benefits
30 | P a g e
For the year 2021 there is no value available for Employee Benefits and in 2020
decreased by 100%.
 Stores, Spare Parts and loose tools
Stores, spare parts and Loose tools has increased by 2.5% in 2021 and 4% in 2020.
 Stock in Trade
Stock in trade has been increased by39.29% in 2021 and 22.50% in 2020.
 Trade debts
Trade debts have increased by 38.42% in 2021 and 118.80% in 2020.
 Loans and advance
Loans and advance have been increased by 8.66% in 2021 and decreased by 54.45% in
2020.
 Trade deposits and prepayments
Increased by 50.46% in 2021 and decreased by 6.63% in 2020.
 Balance with statutory authorities
Balance with statutory authorities has increased by 344.69% in 2021 and decreased
by 54.11% in 2020.
 Other receivables
Other receivables have increased by 179.65% in 2021 and decreased by 55.52% in 2020.
 Tax refunds due from Government
Tax refunds due from Government has been decreased by 100.00% and in 2020 by
38.59%.
 Short term investments
Short term investment has been increased by 100% in 2021 and there is no data
available for 2020.
 Cash and bank balances

31 | P a g e
It has been decreased by 50.59% in 2021 and increased by 101.82% in 2020.
 Total Assets
It has been increased by 129.59% in 2021 and by 2.18% in 2020.
 Shareholder’s equity
Shareholder’s equity has been increased by 123.30% in 2021 and decreased by 15.75% in
2020.
 Non-current liabilities
It has been increased by 252.78 % in 2021 and by 2,505.97% in 2020.
 Current liabilities
 Total liabilities and Equity
Statement of profit and loss
 Revenue from contract with customers
It has increased by 91.58% in 2021 and decreased by 26.33% in 2020.
 Cost of sales
It has increased by 85.50% in 2021 and decreased by 25.80% in 2020
 Gross profit
 Distribution and marketing expenses
 Administration Expenses
It has increased by 29.27% in 2021 and increased by 0.41% in 2020
 Other operating expenses

32 | P a g e
 Other operating incomes
 Operating profit
 Finance cost
It has decreased by 95.75% in 2021 and increased by 418.11% in 2020.
 Profit before tax
 Taxation
 Profit after tax
2.3 Vertical Analysis
Vertical analysis is a method of financial statement analysis in which each line item
is listed as a percentage of a base figure within the statement. Thus, line items on
an income statement can be stated as a percentage of gross sales, while line items
on a balance sheet can be stated as a percentage of total assets or liabilities.
Vertical analysis makes it much easier to compare the financial statements of one
company with another, and across industries. This is because one can see the
relative proportions of account balances. It also makes it easier to compare
previous periods for time series analysis, in which quarterly and annual figures are
compared over a number of years, in order to gain a picture of whether
performance metrics are improving or deteriorating.
For example, by showing the various expense line items in the income statement as
a percentage of sales, one can see how these are contributing to profit margins and
33 | P a g e
whether profitability is improving over time. It thus becomes easier to compare the
profitability of a company with its peers.
Calculation:
Vertical Analysis Formula (Balance Sheet) = Balance Sheet Item / Total Assets
(Liabilities) *
100. Vertical Analysis Formula (Income Statement) = Income Statement Item / Total
Sales * 100.
2022 2021
% %
Statement of financial position
Property, plant and equipment 3.1 6.2
Capital work in progress 0.2 0.0
Right of use assets 0.0 0.1
Intangible assets 0.2 0.4
Investment property 1.0 2.4
Long term investment 25.0 18.9
Long term loans 0.0 0.0

34 | P a g e
Deferred tax assets-net - -
Employee benefits - -
Stores, spare parts and loose tools 0.7 1.5
Stock in trade 21.7 35.7
Trade debts 0.6 0.9
Loans and advance 0.2 0.5
Trade deposits and prepayments 0.3 0.4
Balance with statutory authorities 18.5 9.6
Other receivables 0.4 0.4
Tax refunds due from Government - 7.2
Short term investments 24.7 -
Cash and bank balances 3.4 15.9
Total Assets 100 100
Shareholder’s equity 36.7 37.7

35 | P a g e
Non-Current Liabilities 4.7 3.1
Current Liabilities 58.7 3.1
Total Liabilities and Equity 100 100
Statement of Profit or Loss
Revenue from contract with customers 100 100
Cost of sales 78.9 81.5
Gross profit 21.1 18.5
Distribution and marketing expenses 1.9 2.5
Administrative expenses 1.3 2.0
Other operating income 1.4 1.3
Other operating expenses 1.5 1.1
Operating profit 17.9 13.9
Finance costs 0.0 0.9
Profit before tax 17.9 12.9
Taxation 4.8 3.6

36 | P a g e
Profit after tax 13.2 9.4
2.4 COMMENTARY ON FINANCIAL RESULTS
2.4.1 PROFITABILITY
Gross profit margin has increased by 258 basis points owing to increase in sales volume,
higher HHP model sales and effective management of the production costs.
Increase in operating profit is due to increase in sales volumes and income from short term
investments and dividend income.
Resultantly, profit before tax was higher as compared to last year. Finance cost has decreased
due to significant increase in liquidity. During the year the Company had surplus funds and
did not require any short term borrowing to meet its working capital requirements.
2.4.2 LIQUIDITY
The company’s short-term liquidity remained healthy as current ratio remained above one
which is a healthy sign. Net operating cycle has decreased by 17 days due to the effective
inventory management despite higher activity level. However, Sales tax refunds due from
Government has increased during the year and stands at Rs. 4.5 billion at year end due to
delay in sales tax refunds. With higher activity level, accumulation of sales tax may create
hurdles in the operations of the Company in future.
Overall, the balance sheet remains healthy and no short term or long-term issues are
envisaged.
2.4.3 SOLVENCY
The company relied completely on equity to finance its operations and does not hold any
long-term loans except for State Bank of Pakistan (SBP) long term financing facilities of
 Refinance Scheme for Payment of Wages and Salaries to Workers and Employees of
Business Concerns and;
 renewable energy finance scheme
These loans carry nominal interest rate which will not impact profitability significantly.
37 | P a g e
2.4.4 INVESTOR
EPS increased because of increase in net profits. The Company has already disbursed interim
payout of Rs.50 per share cash dividend and 12.5% bonus shares. The market price of the
share took a hit last year due to the COVID-19 but has recovered quickly after that which
showed strong confidence of investors in the Company’s Fundamentals.
2.5 Ratio Analysis
Ratio analysis is a quantitative method of gaining insight into a company's liquidity,

operational efficiency, and profitability by studying its financial statements such as the
balance sheet and income statement.
Investors and analysts employ ratio analysis to evaluate the financial health of
companies by scrutinizing past and current financial statements. Comparative data can
demonstrate how a company is performing over time and can be used to estimate likely
future performance. This data can also compare a company's financial standing with
industry averages while measuring how a company stacks up against others within the
same sector. Investors can use ratio analysis easily, and every figure needed to calculate
the ratios is found on a company's financial statements.
Ratios are comparison points for companies. They evaluate stocks within an industry.
Likewise, they measure a company today against its historical numbers. In most cases,
it is also important to understand the variables driving ratios as management has the
flexibility to, at times, alter its strategy to make its stock and company ratios more
attractive. Generally, ratios are typically not used in isolation but rather in combination
with other ratios. Having a good idea of the ratios in each of the four previously
mentioned categories will give you a comprehensive view of the company from
different angles and help you spot potential red flags.
Financial ratios
Financial ratios are created with the usage of numerical values taken from financial
statements to benefit meaningful statistics about a company. The numbers determined
on a company’s financial statements – balance sheet, income statement, and cash
flow statement – are used to perform quantitative analysis and examine a company’s
liquidity, leverage, growth, margins, profitability, rates of return, valuation, and
38 | P a g e
more.
Financial ratios are grouped into the following categories:
2.5.1 Liquidity Ratios
Current Ratio 1.20:1

Quick ratio 0.82:1
Comments:
According to the analysis of the financial statements discussed above of the year 2020 to 2021, when
we calculate the current ratio, it shows that the liquidity of the firm is favorable and there is ability in
the current assets of the firm to coverts into cash within one year. But by deep analysis and
calculating Quick Ratio, we conclude that it was favorable in current ratio due to a large portion of
inventory. In a conclusion, liquidity of firm is unfavorable for the year 2021. We will further check
the favorability by comparing it with the previous years in Horizontal and Vertical Analysis.
2.5.2 Activity Ratios
Inventory Turnover 6.62

Average Age of Inventory(AAI) 55 days
Comments:
According to the analysis of the financial statements discussed above of the year 2020 to 2021, when we
calculate the inventory turnover , it seems to be favorable showing that inventory is renewed 6.62 times
a year.. It is not too high and not too low turnover because too high would led to bear stock-out cost and
too low would led to bear carrying cost. AAI is 55 days which means that inventory stays with the firm
for 55 days. AAI is favorable too. We will further check the favorability by comparing it with the
previous years in Horizontal and Vertical Analysis.
2.5.3 Account Payable Ratios
A/P or Creditor Turnover 14.74

Average Payment Period (APP) 25 day
Comments:
According to the analysis of the financial statements discussed above of the year 2020 to 2021, when
we calculate the A/P turnover, it is high. This states favorability of the firm. We will further check
39 | P a g e
the favorability by comparing it with the previous years in Horizontal and Vertical Analysis.
2.5.4 Debt Ratios
Debt to Equity Ratios 0.03:100

Financial charge coverage 1.943
Comments:
According to the analysis of the financial statements discussed above of the year 2020 to 2021, we get
above listed ratios. This states favorability of the firm. We will further check the favorability by
comparing it with the previous years in Horizontal and Vertical Analysis.
2.5.5 Market Ratios
Earnings per share 103.12

Price earning 10.47
Comments:
According to the analysis of the financial statements discussed above of the year 2020 to 2021,
This states favorability of the firm. We will further check the favorability by comparing it with
the previous years in Horizontal and Vertical Analysis.
2.5.6 Account Receivable Ratios
A/R or Debtor Turnover 361.35

Average Collection Period (ACP) 1 day
Comments:
According to the analysis of the financial statements discussed above of the year 2020 to 2021, when we
calculate the debtor turnover, it is high. This is both favorable and unfavorable. In all, as the each unit of
inventory is of high cost, we believe that these ratios show favorability.
2.5.7 Profitability ratios
Gross Profit 21.09%

Operating Profit(EBIT) 17.95%
40 | P a g e
Profit before tax 17.93%

Profit after tax 13.15%
Return on assets(ROA) 31.76%
Return on Equity(ROE) 63.58%
Comments:
Analyzing the profitability ratios of the year 20210-2021, we came to conclusion that these ratios show
favorability of the firm. The highest return on equity than assets defines that the most of the return gained
by the firm is by its equity that seems to be favorable. Overall, the firm is profitable and these ratios are
favorable. We will further check the favorability by comparing it with the previous years in Horizontal
and Vertical Analysis.
41 | P a g e
2.6 DUPONT ANALYSIS

42 | P a g e
2.7 PESTLE ANALYSIS
Political
 Political situation and its stability effect other factors which in turn effect your
company
 Political situation has somewhat stabilized during the year but uncertainty still persists
for this Government which results in lack of long term planning
 Periodical review of the situation to assess impact, If any and adjust its business
policies to address these risks.
Economical
 Inflation, Currency devaluation, Economic growth and economic stability directly

affect purchasing power of customers which can impact supply / demand factors
 Overall recovery in the economy -Increase in Minimum support price of agricultural

products
 Increase of agricultural output of major crops Increased the production of tractors to

cope with the increased demand and increase its market share and also place its
footprint in global market as well.
Social
 A change in brand perception, loyalty or how a customer sees a certain product can
greatly affect performance of a company
 Emphasis on quality and greater value for money
 Free service campaigns and emphasis on “Right-FirstTime” analogy to deliver quality

products
Technological
 Rapid change in technological landscape requires constant upkeep otherwise

43 | P a g e
product(s) may become obsolete or outdated
 No significant change as farmers are usually content with proven technology
 Continuous research and development coupled with launch of new products
Legal
 Tax and regulatory measures can have a significant impact on how a company
operates and presents its financial and legal information
 Significant updates in tax and regulatory laws like; -Taxation laws
 Labour related laws -SBP regulations Continuous review of compliance with legal,
regulatory and reporting requirements
Ecological
 Global warming, availability of water and shift in seasons are impacting agriculture
significantly which can have a significant impact on the company’s performance
 Crop yield has increased due to favorable conditions for the major crops and more
focus of regulators towards environmental protection such as plantation drives.
 Focus on sustainable and ecofriendly measures to reduce environmental impact and

reduce its carbon footprint by installing 998 KW solar energy system
2.8 SWOT ANALYSIS
Strengths:
 Market leader
 Comprehensive 3S and 2S dealer network throughout the country
 Partnership with AGCO for technology and expertise sharing
 A vast vendor-ship network for procurement of supplies
Weaknesses:
44 | P a g e
 Limited Diversification
 Quality and reliability of the Supply Chain
Opportunities
 Expand export market by increasing presence in Africa and Middle East
 Increase market share by expanding spare parts sales
 Farm mechanization
Threats
 Global warming
 Inflation and currency devaluation
2.9 LIQUIDITY ANALYSIS
Given the current situation under global pandemic of COVID-19, it is important to discuss
and assure our stakeholders of the company’s liquidity position. During the year, sales of the
Company has increased significantly which resulted in favorable cash flows to the Company.
The Company has managed to effectively use these funds and also provide support to fellow
vendors industry in these testing times. However, during the year Sales tax refunds of the
Company have ballooned up-to Rs 4.59 Billion which is creating problems for the Company
with the increased activity level. Management of the Company is actively pursuing this
matter at every possible forum so that operations of your Company are not disturbed.
Risks:
COVID-19 :
COVID-19 has caused havoc on local and global economy since the beginning of calendar
year 2020. The Government of Pakistan has managed to curtail the adverse effects of the
ongoing pandemic on overall economy through different support measures. However, there is
a significant risk that business performance and operations will be affected and result in
declining sales / profitability.
45 | P a g e
Liquidity Risk
The Company is in net sales tax refund due to lower output tax rate on its products. Delay in
the release of sales tax refunds may create liquidity issues for the Company which will
hamper its operations.
Deterioration in quality of products Quality plays an important role in product image, market
share and customer perception. Quality of MTL products may deteriorate due to following
factors:
• Supply of low quality products by a single source vendor
• Decrease in Right-First-Time assembly due to untrained staff
• Failure to detect procurement of low quality components
This may result in loss of sales and reputation among prospective customers as well as
reduction in market share.
Increase in costs due to currency devaluation and Inflation
Inflation and devaluation of PKR against USD which will MTL directly as well as indirectly.
Bill of imports is expected to increase for MTL; on the other hand, local vendors are likely to
push for price increase as majority of their raw material is also imported which will impact
profitability of MTL.
Information system / Enterprise Resource System failure
ERP system in place may malfunction or stop working causing delays in operations and / or
loss of sensitive information. Although there is a disaster recovery site in place, restoring of
ERP database takes considerable time.
High turnover of key employees resulting in loss of expertise
There is a risk that employees at key position may leave the company for better opportunity
elsewhere. This may result in diminishing of competitive manpower
Opportunities:
46 | P a g e
Export markets
The company has increased its efforts in global markets, especially Africa, Middle East and
Afghanistan to increase its global market share
Diversification:
The company had setup a retail outlet in Badami Bagh Lahore to expand its spare parts sales.
Based on performance of this venture there is a large potential in establishing more retail
outlets all over Pakistan to capture this market as well. Moreover, there is also huge potential
for agricultural related accessories as customer awareness for new technology is enhancing.
2.10 CORPORATE SOCIAL RESPONSIBILITY REPORT

CORPORATE SUSTAINABILITY
MTL strongly believes in discharging its responsibilities as a corporate citizen of Pakistan

and acts as a contributory member of the society. MTL recognizes the importance of its
employees, their work life balances, safety & security, reducing carbon footprints for better
atmosphere, community uplift programs for the underprivileged, customers & products,
ethical behavior, contribution to the national exchequer and community welfare programs.
MTL fulfills its Corporate Social Responsibilities (CSR) in a manner that positively impacts
its customers, employees, shareholders, community, and the environment. The company
demonstrates active corporate citizenship by promoting and patronizing various activities
under its philanthropic and nonphilanthropic CSR programs.
EDUCATIONAL PATRONAGE
MTL promotes and patronizes multiple activities in the field of education under its CSR
program. Children Education Award Scheme is one of such activities where the Company
recognizes better educational performance of Employees’ Children and awards scholarships.
The Company also recognises the significance of continuous learning and its importance in
career development of its employees which eventually lead to benefit the society. Therefore,
the Company provides assistance in improvement of educational qualification that outlines
the relaxation in working hours to support educational initiatives of its employees.
47 | P a g e
The Company has donated Rs. 250,000/- to Government High School, Nizampura Lahore.
MTL also provided sponsorship to 4 students of Tehzib-ul-Ihlas Schools worth Rs. 900,000/-.
Besides, that sponsorship of Rs. 200,000/- was given to a student named Shamsa Riaz for
higher studies to Malaysia. Additionally, educational/skill development and training activities
were also supported by offering Internship opportunity to 200 students of various disciplines,
imparting practical knowledge related to their studies.
ENVIRONMENTAL PROTECTION MEASURES
To combat the looming threat of global warming and its effects on the environment, a tree
plantation drive was organized during the year whereby employees of the Company were
facilitated to plant a tree within factory premises and nurture it to sustainable growth. The
Company also maintains in-house nurseries and vegetable farms to cultivate organic
agricultural products and has also participated in various flower exhibitions throughout the
year.
COMMUNITY WELFARE SCHEMES
MTL’s CSR program patronizes several measures to protect the environment. One of these
measures is active participation in flower shows.
Various sports activities were encouraged by the Company to bring the people together from
various communities. A sum of Rs. 1,032,198 has been spent to sponsor Governor Cup Golf
and Polo Tournament. Contribution of Rs. 500,000 a Computer and Printer worth Rs. 43,115
granted to Lahore Hospital Welfare Society.
MTL also sponsored Rs.393,665 in Junior National Tennis Championship organized by

Punjab Lawn Tennis Association.
CONSUMER PROTECTION
The company has modern production facility with a manufacturing capacity to meet the local
as well as export requirements. The company continuously strives to provide a wide range of
products built on global standards and powerful after sales support to its customers.
MTL also conducts multiple awareness programs and carries out surveys to obtain feedback
from the market to improve its products. There are defined rules for customers’ convenience,
48 | P a g e
to directly contact the company in case of dissatisfaction.
Additionally, the Company has partnered with its principal M/s AGCO for product
improvement plans to exceed customers’ expectations.
INDUSTRIAL RELATIONS
The Company is an equal opportunity employer and maintains a cordial relationship between
the management and workforce. The management holds regular meetings with the labor
union leaders to ensure all their needs are fulfilled and to provide a safe and friendly work
environment. The Company also facilitates education of employees’ children and also
provides financial assistance to employees to fulfill their religious obligations like; Hajj under
Company’s Hajj Scheme.
In order to improve employee satisfaction and boost their morale, the company organizes
various activities such as ‘Annual Dinner’ and ‘Annual Gift Scheme’.
EMPLOYMENT OF PEOPLE WITH SPECIAL NEEDS
Since the company is an equal opportunity employer, it guarantees that its staffing process
stays fair to physical disabilities subject to work requirements. Personnel with special
physical needs are working in various capacities in Millat Tractors.
OCCUPATIONAL SAFETY AND HEALTH
MTL urges its workers to be vigilant and careful to ensure the wellbeing and safety of
themselves and fellow workers. All employees are urged to follow strict health and safety
protocols. All of the personnel employed at factory premises are provided with appropriate
PPEs and necessary safety apparatuses to ensure safe and secure working conditions. In order
to combat with the COVID-19, pandemic, MTL has taken vigorous precautionary steps to
protect its employees from COVID-19 and spreading the disease. Around PKR 7.3 Million
has been spent on the purchase of PPE’s, Masks, Disinfection Spray, and Sanitizers.
ETHICS AND ANTICORRUPTION
MTL strongly believes in ethical business operation and condemns all sorts of unethical
practices while doing business. The company actively discourages all forms of corruption and
any form of conduct that violates principles of business ethics. The company is fully
49 | P a g e
committed to be compliant with all principles of fairness, transparency and integrity. To

ensure compliance with professional, ethical and moral code as well as legal measures, the
company has a formal Code of Conduct. It is an integral part of the formal governance
regime in the company and is the key element in the Millat’s way of doing business. The way
company wants to achieve its ambitious goals, is elaborated in the Code which forms its
ethical foundation, values for guiding the right behavior and leadership attitudes for driving
corporate culture in the desired direction. The code defines the core principles and ethical
standards that form the basis to create value in the company. The defined principles and
standards are further incorporated in other governing documents as appropriate. The purpose
of the code is to highlight the standards of behavior and conduct of employees while dealing
with customers, suppliers, clients, co-workers, management and the general public. The code
highlights expected behavior as well as punitive measures against violations.
CORPORATE PHILANTHROPY
Beyond commercial activities, company has also contributed to spread awareness and
knowledge in agriculture sector by sponsoring and participating exhibitions including;
Farmer’s Expo arranged by Bayer.
50 | P a g e
Chapter no. 3
2.1 My internship program
I started my internship in Finance Department and Administration department of Millat

Tractor on 18th July, 2022. I was given the opportunity to visit/review the process,
system and procedure of Finance Department and admin and purchase department
under the supervision of Mr. Sikandar Mustafa Khan (CFO) and Col (R) Mukhtar
Ahmed Bhatti HOD (A&P). During my internship I worked in finance Department and
P&A department. I completely learnt the Procedure, performed all activities which
enhanced my knowledge and experience, and ability.
3.1.1 Purpose of Internship
Internship is the capstone experience that provides me with hands–on, real-world

experience in a work setting. Ideally, internship enables intern to:
 Integrate and use their skills and knowledge from the classroom.
 Discover where further competence needed.
 Take steps to gain that competence under educational supervision.
 Become better acquainted with the types of work settings in which such
competence can be applied
3.1.2 Reason of Choice
 To develop skills and competencies that will advance our employ-ability.
 Internships help us learn and add to our experience.
 We can generally adjust our timings to suit our-self.
 We learn how to deal with
3.1.3 Personal Objectives

51 | P a g e
 To get some professional experience by working in a well- reputed organization.
 To gain knowledge about the professional environment of the finance department

and admin & purchase department.
 To deal and manage in a situation of stress.
 To effectively utilize and develop my skills and contribute positively to the
 Growth of the organization.
 To learn about private sector’s financing.
3.2 My area of learning
During my six week of internship Started from 10th July 2020 to 15th August 2020
I mainly worked in finance And Admin & Purchase department.
3.3 WEEK 1 &2:

3.3.1 ADMINISTRATION DEPARTMENT
Administration is defined as the act of managing duties, responsibilities, or rules.

Administration is the range of activities connected with organizing and supervising the way
that an organization or institution functions.
Followings are sections of administration:
 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
52 | P a g e
 Disposal of Pool Vehicle

 Route permit
With respect to many directions in admin department, Sir Noman guides us about the
scraping. Scrapping is basically a process of selling recyclable materials such as metal from
product manufacturing and consumption such as parts of vehicles building supplies and
surplus material. In MTL, the packaging of product is sold to contractors through scrapping
process. In this process, there is a contract made between individuals and MTL with a
specific contractual amount. In the following process, random is issued in order to sale the
products such as wood etc for scraping. In this process, many people outside apply for the
contract. A bidding is made and tender is secured. A contract with a specific advanced
contractual amount as security is made with the selected individual. In that way, a contract of
selling of scraping material is made. Furthermore, a memo, a gate pass and, memo showing
the daily loaded quantity is printed, along with a receipt from finance department, in order to
allow contractor to let that particular contracted product out of the factory.
IFS (Industrial & Financing System):
IFS AB (Industrial and Financial Systems) is a multinational enterprise software company

headquartered in Linköping, Sweden. The company develops and delivers enterprise software
for customers around the world who manufacture and distribute goods, maintain assets, and
manage service-focused operations. IFS had over 4,000 employees that support more than
10,000 customers worldwide from a network of local offices and a growing ecosystem of
partners.
 Material Requisition:
This is a section of IFS AB where entries related to inventory parts and items are created.
Inventory items are the ones that do not need any gate pass because they are available within
the boundary of MTL. There are items which are allotted a specific code number. Out of
many items, there are some tagged as inventory items. Material Requisition helps to place
purchase order for acquiring products from the inventory part of industry. MR items are
available within the factory.
 Purchase Requisition:
53 | P a g e
Purchase Requisition is basically a request of purchasing of goods and services that are no-
inventory. Purchase requisition can be created by any department. In MTL, Purchase
Requisition is created by other departments and to be issued to Purchase Department.
Purchase section user executes daily list of Authorized PRs. In Purchase Department,
purchase orders are made out of purchase requisitions that are authorized.
 Instant invoice:
It is the section in IFS AB where daily financial transactions are recorded. Transactions
related to contractual amount and contractual reimbursements of contractors and many more
are recorded on daily basis in instant invoice.
 Human resources:
It is the section where entries related to attendance of permanent employees and executives is
recorded. Leave application entries are also recorded in this section.
Transport Section:
In transport section, a long process is carried out on IFS AB in order to place a work order
and release it. Transport requisition is made in which mileage of the particular vehicle is
written which has to move out of the company. Each department sends its transport
requisition to transport section for the approval with respect to priority. We have also learnt
about the work order placement in transport section using IFS AB. The hierarchy of the
whole process is as follows.
54 | P a g e
Admin
Department
Hierarchy of
purchase
order/work
order
Finance Purchase
Department Department
Security Section:
There are four layers of security in MTL:
 Physical such as bodyguards

 CCTV Cameras
 Electric Fence
 Intelligence Security
Canteen Section:
We also get to know about IFS software and purchases of Canteen Products on daily basis
(products having lower shelf-life) through it. There are two kinds of administrative expenses
that are entered in different sections of IFS AB. One is the purchase requisition and the other
is material requisition. Items that are related to the inventory part of factory are ordered in
material requisition and the one related with the non-inventory part were ordered under
purchase requisition.
55 | P a g e
Inventory items are the one which are in the stocks of the factory.
Non-inventory items are the ones that are not available in the stocks of the company and has
to purchase from outside the company.
Inventory Management (Central Store):
The process of the Central store:
 Department identify the requirement of material and forwards requisition after

approval.
 Head of department approves the requisition and forwards to Central Store.
 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).
 For non-inventory items purchase requisition is generated, approved and forwarded to
Purchase section.
 Central store keeps an eye over stock. As soon as inventory reaches to re-order level,
PR is generated.
 Items are received and GRN is created after verification.
Human Resource Management (HRM):
HR plays an integral role in recruitment, training and development essentials skills in

employees at every level. They also play distinctive attention towards placement of
employees for respective job-roles for instance selection of candidates with the right skills,
proficiency attitude.
Environment Health Safety (EHS):
Environment Health Safety is any important part of HR in which EHS ensure all safety health
policies.
3.4 WEEK 3&4:

3.4.1 PURCHASE DEPARTMENT
We were given the opportunity to visit/review the process, system and procedure of
Purchase Department under the supervision of Col (R) Mukhtar Ahmed Bhatti HOD
(A&P).. During my internship I worked in Purchase Department. We completely learnt the
56 | P a g e
Purchase Procedure, performed all activities related to Purchase which enhanced my

knowledge and experience, and ability.
Technology used:
In Purchase Department IFS software is used for all the Purchase Procedure. IFS stands for
Industrial Financial System, all transactions and all data related to purchase is kept in this
software.
Purchase Procedure
Our second week of internship began in purchase department that deals with the
administrative costs. In MTL, there are two sections of basic departments. There is another
purchase department which deals with the direct expenses while our purchase department
dealt with indirect costs. Purchase department deals with local purchases i.e. Repair &
Maintenance, Nut & Bolts, Tools & Equipment, Fabrications, Oil & Paint, Chemicals, etc.
Following are the kinds of purchase orders we learnt to make in purchase Department:
POL (Petrol and Oil Lubricants):
This purchase order is made against the toll tax and transport section service charges. In this
we have to follow the following SOPs:
 Search the indent no.

 Check the tech coordinator, Order Proc Type, and supplier ID.
 After the first step, select all the items and right click. From the options, click on
request to order.
 Add credit-POL in the coordinator section and then click create new. Make sure to
check buyer ID too.
 Enter price, check tax, receive case, inspect code and cost cent.
 After checking everything, remove notes of each item.
 Remove notes of PO too.
 Release the order.
PO (Previous Order):
It is an order of items to the previous suppliers at the previous rate.

57 | P a g e
 Search the indent no.

 Check the tech coordinator and supplier ID in Purchase Requisition.
 After the first step, select all the items and right click. From the options, click on
request to order.
 Add credit-GP in the coordinator section and then click create new. Make sure to
check buyer ID too.
 Search previous order and match the price and supplier of the previous order.
 Enter price, check tax, receive case, inspect code and cost cent of previous order.
 After checking everything, add previous order numbers in notes of each item.
 Remove notes of PO too.
 Release the order.
CS (Comparative Statement):
When previous suppliers change their rate then we make a CS. In CS, we make a quotation of
three or more suppliers for the respective items. We select one or more supplier out of three
for the purchase of respective items and then make a CS. Comparative Statement basically
shows a comparison between the prices of items from different suppliers.
 After receipt of quotations, Comparative Statement is prepared to make comparison

among suppliers to select the best one after negotiation regarding price, quality,
warranty, delivery. After preparation, C.S is approved by HOD (A&P).
 Comparative Statement
 Purchase Order
 Gate Pass
 Goods Received Note (GRN)
 Invoice
Purchase department deals with local purchases i.e. Repair & Maintenance, Nut & Bolts,
Tools & Equipment, Fabrications, Oil & Paint, Chemicals, etc. Purchases department deals
If the supplier is the single source C.S is not prepared. As per our observation following SOP
is in order:
 Purchase Requisition
 Calling Quotations
58 | P a g e
There are two major Purchases:
General Purchases
General Purchases include Fair Price Shop, Canteen, Horticulture, Central Store, Computer
Accessories, Stationary items, Paints, Office Equipment etc.
Technical Purchases
Technical Purchases include Lubrications, Nut & Bolts, Hardware, Fabrication jobs, Repair
& Maintenance of Machines, Pipes & seals, Electric Motors.
Purchase Department works on following SOP
Purchase Requisition
Purchase Requisition is basically a request of purchasing of goods and services that are no-
inventory. Purchase requisition can be created by any department. In MTL, Purchase
Requisition is created by other departments and to be issued to Purchase Department.
Purchase section user executes daily list of Authorized PRs. In Purchase Department,
purchase orders are made out ofv purchase requisitions that are authorized.
Calling Quotation
After the receipt of authorized PR they check the previous rate of suppliers. If previous rate is
found order is placed to supplier. If the previous rate is not found quotations are called from
different suppliers via telephone & Email.
Purchase Order
After the approval of C.S purchase order is issued to the selective supplier on agreed rate
TOR.
After the issuance of P.O material is received on agreed rate.
Gate Pass
After receipt of material, Gate Pass is issued against delivery voucher.
Goods Received Note (GRN)

59 | P a g e
After the issuance of Gate Pass the concerned department inspect / checks the quality of
material and issue the Good receipt note (GRN)
Invoice
After receipt of GRN invoice is forwarded to finance for onward payment to concern
supplier.
3.5 WEEK 5:
3.5.1 MARKETING DEPARTMENT
Marketing Department plays an 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 also agriculture implements.
Marketing Department consists of 5 major sections.
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.
2. 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.
3. Services
This department deals with the warranty provided by the company and their claims and the
free services provided by the company on their products.
The company offers one year warranty on agriculture tractors, generator sets, Fork Lifter
trucks.
After the purchase of product, the company provides three free services to their customers as
under.
60 | P a g e
 1st service after 30 hr. (one free oil and fuel filter is given by the company)
 2nd
service after 200 hr. (one free oil and fuel filter is given by the company)
 3rd service after 600 hr. (two free oil filter and fuel filter is given by the company)
4. Marketing sales, Advertisement
The important function of this department is to enhance the sale of tractors and agriculture
implements. For this they forecast the sales plan for increasing sale and implement it. They
also interlink the production department and forecast the sale and send production plan.
Electronic and print media advertisement is also taking place.
5. Parts and IPD
In parts department Tractor parts and some implements parts are sale. & the important
functions of industrial and production department are sealing Genets, Prime mover Fork lift
trucks sales. They mostly deal in institutional sales.
3.6 WEEK 6:
3.6.1 FINANCE DEPARTMENT
Finance is one of the major pillars of any organization and an essential ingredient to a
successful business. Nowadays, a finance department has a broad range of roles to
carry out within or outside an organization. The performance and success of any
company greatly depend on how well the finance is handled. Keeping a close watch on
the financing function is very important for the smooth operation of a company. In this
internship report, I will be explaining the roles and responsibilities of finance
department I have learned during the internship in Millat Tractors.
“Finance may be defined as that administrative area or set of administrative functions

in an organization which relates with the arrangement of cash and credit so that the
organization may have the means of carrying out its objectives as satisfactorily as
possible”.
A finance department is the unit of a business responsible for obtaining and handling
any monies on behalf of the organization. The department controls the income and
expenditure in addition to ensuring effective business running with minimum
disruptions. Besides the traditional roles of handling the payroll, income and expenses,
finance department responsibilities also include economic analysis to improve key
61 | P a g e
business strategies.
 Technology used
IFS AB (Industrial and Financial Systems) is a multinational enterprise software

company headquartered in Linköping, Sweden. The company develops and delivers
enterprise software for customers around the world who manufacture and distribute
goods, maintain assets, and manage service-focused operations. IFS had over 4,000
employees that support more than 10,000 customers worldwide from a network of local
offices and a growing ecosystem of partners.
Finance department of Millat Tractor Ltd. has following sections
 Payroll
 General suppliers and Vendors payment
 Treasury section
 Import and export payment
 Sales tax and income tax
 Final Accounts
 Payroll section
Payroll is the process of paying a company's employees, which includes tracking hours
worked, calculating employees' pay, and distributing payments via direct deposit to
employee bank accounts or by check. However, companies must also perform
accounting functions to record payroll, taxes withheld, bonuses, overtime pay, sick
time, and vacation pay. Companies must put aside and record the amount to be paid to
the government for Medicare, Social Security, and unemployment taxes.
Payroll can also refer to the list of a company's employees and the amount of
compensation due to each of them. Payroll is a major expense for most businesses and
is almost always deductible, meaning the expense can be deducted from gross income
lowering the company's taxable income. Payroll can differ from one pay period to
another because of overtime, sick pay, and other variables.
62 | P a g e
 General Suppliers and Vendors Payment
A vendor payment–or supplier payment–is the last step in the purchase to pay cycle,
when a company pays an outside vendor for purchased goods or services. Supplier
payments can be done automatically through IFS software that helps streamline and
secure the process of making a supplier payment.
When the company initially orders goods or services from this external provider, a
purchase order is created. Once the goods or services have been delivered, the company
will receive an invoice form the external provider and will then pay this invoice in the
form of a supplier payment.
 Treasury section
The role of a treasury section is to manage the company's financial resources in

order to help meet the company's business objectives. This includes making
effective use of cash and other financial instruments, and ensuring enough cash is
available for upcoming obligations.
Treasury involves the management of money and financial risks in a business. Its
priority is to ensure the business has the money it needs to manage its day-to-day
business obligations, while also helping develop its long term financial strategy and
policies.
 Import and export payments Imports payment
Payment for imports may be made either through letters of credit, CAD, or advance payments
 Letter Of Credit
A letter of credit is essentially a financial contract between a bank, a bank's customer

and a beneficiary. Generally issued by an importer's bank, the letter of credit guarantees
the beneficiary will be paid once the conditions of the letter of credit have been met.
An LC is a commitment by a bank on behalf of the buyer that payment will be made to

the exporter, provided that the terms and conditions stated in the LC have been met, as
verified through the presentation of all required documents. The buyer establishes
credit and pays his or her bank to render this service.
63 | P a g e
 CAD
It is the type of Payment which is used in bank collections that require the drawee to
pay before receiving certain documents. Typically, the drawer will send these
documents to the drawee´s bank with instructions that it secure payment before
releasing them. Also called payment at sight
 Advance Payment
A pre-payment method in which, an importer makes the payment for the items to be
imported in advance prior to the shipment of goods. This method is not very commonly
used in Pakistan as per Policy by State Bank of Pakistan. But it can be used with the
limitation of payment i.e. 10000$ and goods delivery within 15 days.
 Sales Tax:
A sales tax is a consumption tax imposed by the government on the sale of goods and
services. A conventional sales tax is levied at the point of sale, collected by the retailer,
and passed on to the government. A business is liable for sales taxes in a given
jurisdiction if it has a nexus there, which can be a brick-and-mortar location, an
employee, an affiliate, or some other presence, depending on the laws in that
jurisdiction.
Following are some tax rate that are used in Pakistan at the time of sales
R Supplies
a
t
e
1 GST
7
%
1 Services
6
64 | P a g e
0 Exempt products
%
 Sales tax on incentives for dealers
Dealer’s commission, free services and Warranty claim
 Punjab registered dealer..............................................................PRA 16%
 Sindh registered dealer…............................................................SRA 13%
 Baluchistan and KPK registered dealer….............................................15%
 Non registered dealer….........................................................................16%
 Income tax
Type of tax that government impose on income generated by businesses and individuals
within their jurisdiction, by law, taxpayers must file an income tax return annually to
determine their tax obligations. Income taxes are a source of revenue for governments.
Following are some income tax rate on incentives for dealer
 Dealer’s commission
 Filer dealer..................................................................................12% of commission
 Non-filer dealer...........................................................................24% of commission
 Free services and warranty
Dealer registered as company
 Filer…...........................................................................................8%
65 | P a g e
 Non-filer........................................................................................16%
Dealer as an Individual
 Filer…............................................................................................10%
 Non-filer.........................................................................................20%
 Final Accounts section
Final Accounts section refer to the division that looks after the preparation of financial
statements, maintenance of general ledger, Profit and Loss Accounts and statement of
financial position. Final account gives an idea about the profitability and financial
position of a business to its management, owners, and other interested parties.
All business transactions are first recorded in a journal. They are then transferred to a
ledger and balanced. These final tallies are prepared for a specific period. The
preparation of a final accounting is the last stage of the accounting cycle. It determines
the financial position of the business. Under this, it is compulsory to make a trading
account, the profit and loss account, and balance sheet.
 Trading account
A trading account shows the results of the buying and selling of goods. This sheet is
prepared to demonstrate the difference between the selling price and the cost price. The
trading account is prepared to show the trading results of the business, example. gross
profit earned or gross loss sustained by the business. It records the direct expenses of a
business firm.
 Profit and loss account
This account is prepared to ascertain the net profit/loss and expenses of a business
during an accounting year. It records the indirect expenses of a business firm, like rent,
salaries, and advertising expenses. Profit and loss a/c includes expenses and losses as
well as income and gains, which have occurred in business other than the production of
goods and services.
 Balance sheet
The balance statement demonstrates the financial position of a business on a specific

66 | P a g e
date. The financial position of a business is found by tabulating its assets and liabilities
on a particular date. The excess of assets over liabilities represents the capital sunk
into the business and reflects the financial soundness of a company. Now it is known as
the statement of financial position of the company.
CONCLUSION
In review this internship has been excellent and rewarding experience. I

have been able to meet and network with so many people that I am sure will
be able to help me with opportunity in the future.
Not only did I gain practical skills but we also had the opportunity to meet
many fantastic people. The atmosphere of office was always welcoming
which made me feel right at home. Additionally, I felt like I was able to
contribute to the company by assisting and working on projects throughout
my internship. One main thing that I have learned through this internship is
time management skills as well as self-motivation.
Overall, my internship at MTL has been a success. I am able to gain

practical skills, work in a fantastic environment, and make connections that
will last a lifetime. I could not be more thankful.

Hailey College of Commerce, University of The Punjab, Lahore

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Hailey College of Commerce, University of The Punjab, Lahore

Uploaded by

Copyright:

Available Formats

1|Page

HAILEY COLLEGE OF COMMERCE,

UNIVERSITY OF THE PUNJAB,

PROFESSOR DR. HALEEMA TARIQ

DABEERA MATEEN (BC19-475)

Millat Tractors (Urdu: ‫ ) ٹریکٹرز ّلت ِم‬is a Pakistani agricultural machinery

1.1 Company overview

Millat Tractors was founded as Rana Tractors and Equipment

1.3 Core values:

 Integrity in all dealing.

1.4 Company objectives:

 Continuously increase performance.

 Protect and increase shareholder return.

 Enhance creativity and job satisfaction.

 Provide employees opportunities for personal development.

1.5 Strategic planning

 Ensuring after sale service.

 Ensure customer satisfaction by providing quality products at competitive prices.

1.6 Safety policy

 Regular safety inspections are carried out to improve the preparedness.

 The company also participates in various competitions on horticulture arranged by

1.8 COMPANY MANAGEMENT:

 Mr. S M Irfan Aqueel (CEO)

 Mr. Sohail Ahmad Nisar (CFO)

 Mr. Muhammad Ayaz Khurshid (Gen. Manager IT)

 Mr. Azhar Noor (Gen. Manager Marketing)

 Mr. Mukhtar Ahmad (Sr. Manager Admin & Purchase)

 Mr. Ehsan Ullah (Gen. Manager Production)

 Mr. Waseem Bhatti (Dy. Gen. Manager Maintenance)

 Standard Chartered Bank

 Barclays Bank PLC.

 United Bank Ltd.

 Habib Bank Ltd.

 Allied Bank Ltd.

 MCB Bank Ltd.

Fax: 042-37924166, 37925835

Website: www.millat.com.pk E-mail: info@millat.com.pk

1.10 Group structure

1.10.1. Millat Equipment Limited

1.10.2. TIPEG Intertrade DMCC

1.10.3. Millat Industrial Products Limited

1.11 Organogram in term of Command chain

1.12 ORGANIZATIONAL STRUCTURE

1.13 MAJOR PRODUCTS OF MTL:

Model Horsepower Engine Type

Massey Ferguson 256 G (Millat) 56 HP (42 kW) Perkins

Massey Ferguson 260 (Millat) 60 HP (45 kW) Perkins

Massey Ferguson 260 Turbo 60 HP (45 kW) Perkins

Massey Ferguson 350 (Millat) 47 HP (35 kW) Perkins

Massey Ferguson 375 (Millat) 58 HP (43 kW)/62 HP (46 kW)/75 HP (56 kW) Perkins

Massey Ferguson 375E (Millat) 75 HP (56 kW) Perkins

Massey Ferguson 375S (Millat) 75 HP (56 kW) Perkins

Massey Ferguson 385 (Millat) 85 HP (63 kW) Perkins

1.14 DEPARTMENTS OF MTL

7 Engineering and Supply Chain

9 Administration & Purchases

10 Human Resource Management

11 Industrial Product Division

1.15 Major Products Of Millat Tractors

 Diesel Generating sets

Model Horsepower Engine Type

Massey Ferguson 240 (Millat) 50 HP (37 kW) / 45 HP (34 kW) / 34 HP Perkins