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Growth Through

Diversification 1

CORPORATE INFORMATION

BOARD OF DIRECTORS
CHAIRMAN BANKERS
Mr. Sikandar Mustafa Khan Bank Alfalah Ltd.
Habib Bank Ltd.
CHIEF EXECUTIVE MCB Bank Ltd.

S M Irfan Aqueel Standard Chartered Bank.


United Bank Ltd.
Allied Bank Ltd.
DIRECTORS
Meezan Bank Ltd.
Mr. Latif Khalid Hashmi
Mr. Sohail Bashir Rana
REGISTERED OFFICE AND PLANT
Mr. Laeeq Uddin Ansari Sheikhupura Road, Distt. Sheikhupura.
Mian Muhammad Saleem Tel: 042-37911021-25, UAN: 111-200-786
Syed Zubair Ahmed Shah Fax: 042-37924166, 37925835
Mr. Saad Iqbal Website: www.millat.com.pk
E-mail: info@millat.com.pk
COMPANY SECRETARY
Muhammad Faisal Azeem
REGIONAL OFFICES
CHIEF FINANCIAL OFFICER
KARACHI
Mr. Sohail A Nisar - FCA
3-A, Faiyaz Centre, Sindhi Muslim
Co-operative Housing Society,
AUDITORS Tel: 021-34553752, UAN: 111-200-786
EY Ford Rhodes Fax: 021-34556321
Chartered Accountants
MULTAN CANTT.
LEGAL ADVISORS Garden Town, (Daulatabad), Shershah Road,
Asjad Saeed and Associates Tel: 061-6537371 - Fax: 061-6539271

Akhtar Ali & Associates


ISLAMABAD
Ch. Law Associates Inn
H. No. 22, St. No. 41, Sector F-6/1,
Tel: 051-2271470, UAN: 111-200-786
COMPANY SHARE REGISTRARS
Fax: 051-2270693
M/s. Hameed Majeed Associates (Pvt.) Ltd.,
1st Floor, H.M. House, 7-Bank Square, Lahore. SUKKUR
Tel: 042-37235081-82 - Fax: 042-37358817 A-3, Professor Housing Society, Shikarpur Road,
shares@hmaconsultants.com Tel: 071-5633042, Fax: 071-5633187
2 Quarter ended September 30, 2017

DIRECTORS’ REVIEW
I am pleased to present the interim financial results of the Company for the quarter ended
30th September, 2017 along with consolidated interim financial results of the Millat Group of
Companies.

During the quarter, the Company’s sales volume reached a historic high level of 10,000 tractors
which is another record in the long list of the Company’s achievements. Sales volume increased
from 5,187 units to 10,000 units representing an increase of 92.8 % compared to the last year.
Similarly revenue generation almost doubled from Rs. 4,660 million to Rs. 8,969 million.

Profit after tax for the quarter jumped to Rs. 1,167 million compared to Rs. 513 million for the
same quarter in previous period, an increase of 127%. This translated into an EPS of Rs. 26.34
against Rs. 11.58 in corresponding period last year.

After a robust performance in fiscal 2016-17, Pakistan’s economy is expected to perform better in
the coming year. This is predicated upon lower global oil prices, investment in China-sponsored
development projects and improvement in energy supplies. GDP growth has maintained its
upward trajectory and increased to 5.3 percent in fiscal year 2017. The revival in agriculture
during 2017 is especially notable. This was supported by favorable policy measures, including
subsidy on fertilizer, reduction in sales tax on tractors, and increased access to finance.

With the increased pace of bookings of high horse power tractors, company is engaged with its
supply chain to increase the capacity and is doing its utmost to meet customer expectations.

I would like to commend and acknowledge, on behalf of the Board, the devotion and hard work
of our employees, supply chain associates, dealers and all other stakeholders in creating MTL
what it is today.

For and on behalf of the Board

Lahore: Sikandar Mustafa Khan


October 25, 2017 Chairman
Growth Through
Diversification 3

Condensed Interim Financial Statements

MILLAT TRACTORS LIMITED


For the Quarter ended September 30, 2017
4 Quarter ended September 30, 2017

Condensed Interim Statement of Financial Position


as at September 30, 2017 (Unaudited)

September 30, June 30,


Note 2017 2017
(Rupees in thousand)

EQUITY AND LIABILITIES


Share capital and reserves
Authorized share capital
50,000,000 (June 30, 2017: 50,000,000)
ordinary shares of Rs. 10 each 500,000 500,000

Issued, subscribed and paid up capital 442,926 442,926


General reserves 2,278,935 2,278,935
Unappropriated profit 4,016,248 2,849,637
Fair value reserve 144,360 178,355
6,882,469 5,749,853
Non-current liabilities
Long term deposits 11,515 11,515
Deferred tax liabilities - net 19,120 19,120
30,635 30,635

Current liabilities
Accumulating compensated absences 94,952 94,952

Trade and other payables 12,996,559 11,255,169


13,091,511 11,350,121

CONTINGENCIES AND COMMITMENTS 5



20,004,615 17,130,609

The annexed notes 1 to 13 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer


Growth Through
Diversification 5

September 30, June 30,


Note 2017 2017
(Rupees in thousand)

ASSETS
Non-current assets
Property, plant and equipment
Operating fixed assets 6 700,638 717,873
Capital work in progress 7 25,314 6,974
Intangible assets 670 897
Investment property 255,708 255,708
Long term investments 8 450,285 484,279
Long term loans 7,145 2,575
Employee’s defined benefit plan 35,804 39,962
1,475,564 1,508,268

Current assets
Stores, spare parts and loose tools 124,241 118,431
Stock-in-trade 3,509,659 3,646,581
Trade debts 179,772 194,311
Loans and advances 69,549 54,488
Trade deposits and short term prepayments 43,098 19,611
Balances with statutory authorities 2,542,659 2,526,588
Other receivables 89,667 97,246
Tax refunds due from the Government 470,032 185,886
Short term investments 9 9,695,830 6,718,196
Cash and bank balances 1,804,544 2,061,003
18,529,051 15,622,341
20,004,615 17,130,609

Chairman
6 Quarter ended September 30, 2017

Condensed Interim Profit and Loss Account


for the quarter ended September 30, 2017 (Unaudited)

Quarter ended September 30


2017 2016
(Rupees in thousand)

Sales - net 8,969,064 4,660,407


Cost of sales 7,020,258 3,660,634
Gross profit 1,948,806 999,773

Distribution and marketing expenses 171,285 120,810
Administrative expenses 138,800 121,708
310,085 242,518
Operating profit 1,638,721 757,255

Other operating income 127,784 29,854


1,766,505 787,109

Other operating expenses 126,210 55,642


Finance cost 307 200
126,517 55,842

Profit before taxation 1,639,988 731,267


Taxation 473,377 218,245

Profit for the period 1,166,611 513,022

Earnings per share - basic and diluted (Rupees) 26.34 11.58

Appropriations have been reflected in the statement of changes in equity.



The annexed notes 1 to 13 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


Growth Through
Diversification 7

Condensed Interim Statement of Comprehensive Income


for the quarter ended September 30, 2017 (Unaudited)

Quarter ended September 30


2017 2016
(Rupees in thousand)

Profit for the period 1,166,611 513,022

Other comprehensive income:


Unrealized (loss) / gain on revaluation of investments (33,995) 79,201

Total other comprehensive (loss) / income (33,995) 79,201

Total comprehensive income for the period 1,132,616 592,223



The annexed notes 1 to 13 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


8 Quarter ended September 30, 2017

Condensed Interim Cash Flow Statement


for the quarter ended September 30, 2017 (Unaudited)

Quarter ended September 30


2017 2016
(Rupees in thousand)

Cash flows from operating activities



Profit before taxation 1,639,988 731,267
Adjustment for:
Depreciation on property, plant & equipment 19,644 15,050
Amortization of intangible assets 226 724
Finance cost 307 200
Provision for pension obligation 4,158 -
Profit on bank deposits (36,482) (2,477)
(12,147) 13,497
Cash flow from operating activities
before working capital changes 1,627,841 744,764

Effect on cash flow due to working capital changes


(Increase) / decrease in current assets:
Stores and spares (5,810) (12,520)
Stock in trade 136,922 (57,125)
Trade debts 14,539 69,233
Loans and advances (15,061) (20,866)
Trade deposits and prepayments (23,487) (17,862)
Other receivables (4,487) (260,691)
102,616 (299,831)

Increase / (decrease) in current liabilities:


Trade and other payables 1,744,718 (137,860)
1,847,334 (437,691)
Growth Through
Diversification 9

Quarter ended September 30


2017 2016
(Rupees in thousand)

Cash used in operations


Income tax paid (757,523) (143,687)
Increase in long term loans to employees (4,570) (347)
Increase in long term security deposits - 400
Mark-up paid (307) (287)
(762,400) (143,921)
Net cash generated from/(used in) operating activities 2,712,775 163,152
Cash flows from investing activities

Purchase of property, plant and equipment (29,906) (66,889)


Short term investments made - net (2,977,634) (1,445,807)
Proceeds from disposal of property, plant and equipment 9,157 8,213
Profit on bank deposits received 32,477 2,027
Net cash used in from investing activities (2,965,906) (1,502,456)

Cash flows from financing activities


Dividend paid (3,328) (10,687)

Net cash used in financing activities (3,328) (10,687)

Net decrease in cash and cash equivalents (256,459) (1,349,991)


Cash and cash equivalents at the beginning of the period 2,061,003 2,562,252

Cash and cash equivalents at the end of the period 1,804,544 1,212,261

The annexed notes 1 to 13 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


10 Quarter ended September 30, 2017

Condensed Interim Statement of Changes In Equity


for the quarter ended September 30, 2017 (Unaudited)

Revenue Reserves

Share General Unappropriated Fair value


capital reserves profit reserve Total
---------- Rupees in thousand ----------

Balance as on July 1, 2016 442,926 2,985,519 622,192 91,123 4,141,760

Net profit for the period - - 513,022 - 513,022

Other comprehensive income for the period - - - 79,201 79,201

Balance as on September 30, 2016 442,926 2,985,519 1,135,214 170,324 4,733,983

Balance as on July 1, 2017 442,926 2,278,935 2,849,637 178,355 5,749,853

Net profit for the period - - 1,166,611 - 1,166,611

Other comprehensive loss for the period - - (33,995) (33,995)

Balance as on September 30, 2017 442,926 2,278,935 4,016,248 144,360 6,882,469

The annexed notes 1 to 13 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


Growth Through
Diversification 11

Selected Notes to the Condensed Interim


Financial Information
for the quarter ended September 30, 2017 (Unaudited)

1. THE COMPANY AND ITS ACTIVITIES

The Company is a public limited Company incorporated in Pakistan in 1964 under the
Companies Act 2017 (repealed Companies Ordinance 1984), and is listed on Pakistan Stock
Exchange Limited. The registered office of the Company is situated at Sheikhupura Road,
District Sheikhupura. It is principally engaged in assembling and manufacturing of agricultural
tractors, implements and multi-application products.

2. STATEMENT OF COMPLIANCE

2.1 This interim financial information of the Company for the quarter ended September 30, 2017
has been prepared in accordance with the requirements of the International Accounting
Standard 34 - Interim Financial Reporting and provisions of and directives issued under the
Companies Act, 2017. In case where requirements differ, the provisions of or directives issued
under the Companies Act 2017 have been followed.

2.2 This interim financial information is un-audited and is being submitted to shareholders, as
required by section 237 of the Companies Act, 2017.

3. BASIS OF PREPARATION

3.1 This interim financial information does not include all the information and disclosures required
in annual financial statements, and should be read in conjunction with the Company’s annual
financial statements as at June 30, 2017.

3.2 The accounting policies adopted for the preparation of this interim financial information
are same as those applied in the preparation of the preceding annual published financial
statements of the Company for the year ended June 30, 2017 except for as disclosed in note
3.3 below.

3.3 The Company has adopted the following amended IFRS and IFRIC interpretation which became
effective during the period:

- IAS 12 - Recognition of Deferred Tax Assets for Unrealized Losses

- IFRS 7 – Disclosure initiative

Improvements to Accounting Standards Issued by the IASB



- IFRS 1 – Exemption clarification

- IFRS 12 – Clarification of disclosure requirements


12 Quarter ended September 30, 2017

- IAS 28 – Clarification of recognition criteria



The adoption of the above amendments did not have any effect on the interim financial
information.

4.
ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of interim financial information requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and reported
amount of assets and liabilities, incomes and expenses. Actual results may differ from these
estimates. The significant judgments made by management in applying the Company’s
accounting policies and the key sources of estimation are the same as those that applied to
the financial statements for the year ended June 30, 2017.

5.
CONTINGENCIES AND COMMITMENTS

There has been no significant change in the contingencies since the date of preceding
published annual financial statements.

Commitments in respect of outstanding letters of credit are Rs. 992,550 thousand (June 30,
2017: Rs 1,375,790 thousand).
Quarter ended
September 30, June 30,
Note 2017 2017

(Rupees in thousand)

6. OPERATING FIXED ASSETS


Opening book value 717,873 448,130
Add: Additions during the period 6.1 11,566 357,370
729,439 805,500
Less: Disposals / write offs during
the period (at book value) (9,157) (16,589)
Depreciation charged during the period (19,644) (71,038)
(28,801) (87,627)
Closing book value 700,638 717,873
Growth Through
Diversification 13

Quarter ended
September 30, June 30,
2017 2017
(Rupees in thousand)

6.1 Additions during the period


- Buildings - 211,456
- Plant and machinery - 8,579
- Tools and equipments 189 3,679
- Furniture, fixture and office equipment 25 54,276
- Vehicles 10,381 74,685
- Computers 971 4,695
11,566 357,370

7. CAPITAL WORK IN PROGRESS


Plant and machinery - 1,282
Furniture and fixture 4,366 -
Computers 5,115 -
Vehicles 15,833 5,692
25,314 6,974

8. LONG TERM INVESTMENTS
Investment at cost
Subsidiaries
- Millat Industrial Products Limited - unquoted 57,375 57,375
- Tipeg Intertrade DMCC - unquoted 42,795 42,795
- Bolan Castings Limited - quoted 76,610 76,610
- Millat Equipment Limited - unquoted 117,000 117,000
293,780 293,780
Others
Available for sale - quoted
- Baluchistan Wheels Limited 12,145 12,145
Surplus on revaluation of investment 144,360 178,354
156,505 190,499
450,285 484,279
14 Quarter ended September 30, 2017

Quarter ended
September 30, June 30,
2017 2017
(Rupees in thousand)

9. SHORT TERM INVESTMENTS


Financial assets at fair value through
profit and loss - Mutual fund units 7,695,830 5,718,196
Investment in Term Deposit Receipt (TDR) 2,000,000 1,000,000
9,695,830 6,718,196

10. TRANSACTIONS WITH RELATED PARTIES


Purchases from related parties 1,506,474 822,224
Sale to related parties 69,934 75,395
Payable to related parties 316,267 162,171
Receivable from related parties 1,940 34,558
Retirement benefit plans 11,759 22,705

11. EVENTS AFTER BALANCE SHEET DATE


The Board of Directors have declared Nil cash dividend (June 30, 2017: Rs. 60 per share) in their
meeting held on October 25, 2017.

12. DATE OF AUTHORISATION FOR ISSUE
This condensed interim financial information was authorised for issue on October 25, 2017 by
the Board of Directors of the company.

13. CORRESPONDING FIGURES


Corresponding figures have been re-arranged, wherever necessary, for the purpose of
comparison. However, no significant re-arrangements have been made.

Chief Financial Officer Chief Executive Officer Chairman


Growth Through
Diversification 15

Consolidated Condensed Interim Financial Statements

MILLAT TRACTORS LIMITED


For the Quarter ended September 30, 2017
16 Quarter ended September 30, 2017

Consolidated Condensed Interim Statement of


Financial Position as at September 30, 2017 (Unaudited)
September 30, June 30,
Note 2017 2017
(Rupees in thousand)

EQUITY AND LIABILITIES


Share capital and reserves
Authorized share capital
50,000,000 (2017: 50,000,000) ordinary
shares of Rs. 10/- each 500,000 500,000

Issued, subscribed and paid up capital 442,926 442,926


General reserves 2,475,309 2,475,309
Unappropriated profit 4,906,438 3,635,597
Exchange translation reserve 1,223 1,223
Fair value reserve 196,162 233,682
8,022,058 6,788,737

Non-controlling interests 1,331,438 1,222,266



Non-current liabilities
Long term deposits 25,079 23,530
Deferred tax liabilities - net 89,731 92,247
Employee’s defined benefit plan 28,354 23,979
143,164 139,756
Current liabilities
Accumulating compensated absences 113,641 112,386
Trade and other payables 13,203,202 11,571,982
Current portion of long term deposits 393 1,013
Short term borrowings 125,207 125,501
Accrued mark-up on short term borrowings 3,052 1,126
13,445,495 11,812,008
CONTINGENCIES AND COMMITMENTS 5
22,942,155 19,962,767

The annexed notes 1 to 14 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer


Growth Through
Diversification 17

September 30, June 30,


Note 2017 2017
(Rupees in thousand)

ASSETS

Non-current assets
Property, plant and equipment
Operating fixed assets 6 1,557,062 1,581,995
Capital work in progress 7 142,856 145,508
Intangible asset 856 1,099
Goodwill 18,572 18,572
Investment property 255,708 255,708
Long term investments 8 191,580 233,193
Long term loans 8,727 3,429
Long term deposits 7,411 7,412
2,182,772 2,246,916


Current assets
Stores and spares 400,929 380,937
Stock in trade 4,377,171 4,438,217
Trade debts 364,264 285,300
Loans and advances 174,802 136,376
Trade deposits and short term prepayments 63,396 29,457
Other receivables 89,765 97,434
Balances with statutory authorities 2,542,659 2,550,041
Tax refunds due from the Government 585,140 302,766
Short term investments 9 9,939,233 7,281,640
Cash and bank balances 2,222,024 2,213,683
20,759,383 17,715,851

22,942,155 19,962,767

Chairman
18 Quarter ended September 30, 2017

Consolidated Condensed Interim Profit and Loss Account


for the quarter ended September 30, 2017 (Unaudited)

Quarter ended September 30


2017 2016
(Rupees in thousand)

Sales - net 9,350,122 4,900,018


Cost of sales 6,995,350 3,688,300
Gross profit 2,354,772 1,211,718

Distribution and marketing expenses 203,870 137,358
Administrative expenses 195,691 161,568
399,561 298,926
Operating profit 1,955,211 912,792

Other operating income 138,032 38,149


2,093,243 950,941

Other operating expenses 147,633 66,379
Finance cost 4,327 5,383
151,960 71,762

Profit before taxation 1,941,283 879,179

Taxation 557,176 264,106


Profit for the period 1,384,107 615,073

Attributable to:
- Equity holders of the holding Company 1,270,841 563,973
- Non-controlling interests 113,266 51,100
1,384,107 615,073

Earnings per share - basic and diluted (Rupees) 31.25 13.89

Appropriations have been reflected in the statement of changes in equity.

The annexed notes 1 to 14 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


Growth Through
Diversification 19

Consolidated Condensed Interim Statement of


Comprehensive Income
for the quarter ended September 30, 2017 (Unaudited)

Quarter ended September 30


2017 2016
(Rupees in thousand)

Profit for the period 1,384,107 615,073



Other comprehensive income:
Other comprehensive income to be
reclassified to profit or loss in subsequent periods:
Unrealized (loss) / gain on revaluation of available
for sale investments (41,614) 96,808

Total other comprehensive (loss) / income, net of tax (41,614) 96,808

Total comprehensive income for the year 1,342,493 711,881

Attributable to:
- Equity holders of the holding Company 1,233,321 660,781
- Non-controlling interest 109,172 51,100
1,342,493 711,881

The annexed notes 1 to 14 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


20 Quarter ended September 30, 2017

Consolidated Condensed Interim Cash Flow Statement


for the quarter ended September 30, 2017 (Unaudited)

Quarter ended September 30


2017 2016
(Rupees in thousand)

Cash flows from operating activities



Profit before taxation 1,941,283 879,179
Adjustment for:
Depreciation on property, plant & equipment 42,547 34,031
Amortization of intangible assets 243 749
Provision for accumulated compensated absences 5,630 (9,025)
Finance cost 4,327 5,383
Profit on bank deposits (36,482) (5,978)
16,265 25,160
Cash flow from operating activities before
working capital changes 1,957,548 904,339

Effect on cash flow due to working capital changes


(Increase) / decrease in current assets:
Stores and spares (19,992) (13,198)
Stock in trade 61,046 (121,056)
Trade debts (78,964) 124,620
Loans and advances (38,426) (60,279)
Trade deposits and prepayments (33,939) (24,785)
Other receivables 15,051 (281,093)
(95,224) (375,791)

Increase / (decrease) in current liabilities:
Trade and other payables 1,764,383 (112,921)
1,669,159 (488,712)
Growth Through
Diversification 21

Quarter ended September 30


2017 2016
(Rupees in thousand)

Cash used in operations


Income tax paid (842,066) (194,726)
Increase in long term loans to employees (5,298) (1,010)
Increase in long term security deposits 929 676
Mark-up paid (2,401) (4,925)
(848,836) (199,985)
Net cash generated from / (used in)
operating activities 2,777,871 215,642

Cash flows from investing activities

Purchase of property, plant and equipment (25,229) (99,526)


Purchase of short term investments (2,657,593) (1,366,234)
Proceeds from sale of property, plant and equipment 10,267 9,387
Profit on bank deposits 32,477 5,528
Net cash (used in) / generated from investing activities (2,640,078) (1,450,845)

Cash flows from financing activities


Dividend paid (3,951) (12,272)
Net cash used in financing activities (3,951) (12,272)
Net increase / (decrease) in cash and cash equivalents 133,842 (1,247,475)
Cash and cash equivalents at the beginning of the period 2,213,683 2,734,452
Short term borrowings (125,501) (274,159)
Cash and cash equivalents at the end of the period 2,222,024 1,212,818

The annexed notes 1 to 14 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


22 Quarter ended September 30, 2017

Consolidated Condensed Interim Statement of Changes in Equity


for the quarter ended September 30, 2017 (Unaudited)

Revenue reserves Exchange Fair value Non-


Share Controlling
capital General Unapprop- translation
reserve reserve interest
Total
reserves riated profit
....................(Rupees in thousand)....................

Balance as on
30 June 2016 442,926 3,181,893 1,105,960 1,029 146,450 1,118,359 5,996,617

Net profit for the period - - 563,973 - - 51,100 615,073

Other comprehensive
income for the period - - - - 96,808 - 96,808
- - 563,973 - 96,808 51,100 711,881

Balance as on
30 September 2016 442,926 3,181,893 1,669,933 1,029 243,258 1,169,459 6,708,498

Balance as on
30 June 2017 442,926 2,475,309 3,635,597 1,223 233,682 1,222,266 8,011,003

Net profit for the period - - 1,270,841 - - 113,266 1,384,107

Other comprehensive
income for the period - - - - (37,520) (4,094) (41,614)
- - 1,270,841 - (37,520) 109,172 1,342,493

Balance as on
30 September 2017 442,926 2,475,309 4,906,438 1,223 196,162 1,331,438 9,353,496

The annexed notes 1 to 14 form an integral part of the condensed interim financial information.

Chief Financial Officer Chief Executive Officer Chairman


Growth Through
Diversification 23

Selected Notes to the Consolidated Condensed Interim


Financial Information
for the quarter ended September 30, 2017 (Unaudited)

1. THE GROUP AND ITS ACTIVITIES

The Company is a public limited Company incorporated in Pakistan in 1964 under the
Companies Act 2017 (repealed Companies Ordinance 1984), and is listed on Pakistan Stock
Exchange Limited. The registered office of the Company is situated at Sheikhupura Road,
District Sheikhupura. It is principally engaged in assembling and manufacturing of agricultural
tractors, implements and multi-application products.

Millat Industrial Products Limited (MIPL), an unlisted public company registered under the
Companies Act 2017 (repealed Companies Ordinance 1984), is a subsidiary of Millat Tractors
Limited which holds 64.09% equity. MIPL is engaged in the business of manufacturing of
industrial, domestic and vehicular batteries, cells and components.

Tipeg Intertrade DMCC, Dubai, a limited liability company registered with Dubai Multi
Commodities Centre Authority, is a subsidiary of Millat Tractors Limited which holds 75% 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 company has
recently started its operations.

Millat Equipment Limited (MEL), an unlisted public company registered under the Companies
Act 2017 (repealed Companies Ordinance 1984), is a subsidiary of Millat Tractors Limited which
holds 45% equity. MEL is engaged in the business of manufacturing of automotive, agricultural
and industrial vehicles parts and components thereof.

Bolan Castings Limited (BCL), a public limited company incorporated in Pakistan under the
Companies Act 2017 (repealed Companies Ordinance 1984), and is listed on Pakistan Stock
Exchange, is a subsidiary of Millat Tractors Limited which holds 46.26% equity. BCL is engaged
in the business of manufacturing of castings for tractors and automotive parts thereof.

2. STATEMENT OF COMPLIANCE

2.1 This interim financial information of the Group for the quarter ended September 30, 2017 has
been prepared in accordance with the requirements of the International Accounting Standard
34 - Interim Financial Reporting and provisions of and directives issued under the Companies
Act, 2017. In case where requirements differ, the provisions of or directives issued under the
Companies Act, 2017 have been followed.

2.2 This interim financial information is un-audited and is being submitted to shareholders, as
required by section 228 of the Companies Act, 2017.

3. BASIS OF PREPARATION

3.1 This interim financial information does not include all the information and disclosures required
24 Quarter ended September 30, 2017

in annual financial statements, and should be read in conjunction with the Group’s annual
financial statements as at June 30, 2017.

3.2 The accounting policies adopted for the preparation of this interim financial information
are same as those applied in the preparation of the preceding annual published financial
statements of the Group for the year ended June 30, 2017 except for as disclosed in note 3.3
below.

3.3 The Group has adopted the following amended IFRS and IFRIC interpretation which became
effective during the period:

- IAS 12 - Recognition of Deferred Tax Assets for Unrealized Losses

- IFRS 7 – Disclosure initiative

Improvements to Accounting Standards Issued by the IASB

- IFRS 1 – Exemption clarification

- IFRS 12 – Clarification of disclosure requirements

- IAS 28 – Clarification of recognition criteria

The adoption of the above amendments did not have any effect on the interim financial
information.

4. ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of interim financial information requires management to make judgments,


estimates and assumptions that affect the application of accounting policies and reported
amount of assets and liabilities, incomes and expenses. Actual results may differ from these
estimates. The significant judgments made by management in applying the Group’s accounting
policies and the key sources of estimation are the same as those that applied to the financial
statements for the year ended June 30, 2017.

5. CONTINGENCIES AND COMMITMENTS

There has been no significant change in the contingencies since the date of preceding pub-
lished annual financial statements.

Commitments in respect of outstanding letters of credit are Rs. 1,175,350 thousand (June 30,
2017: Rs 1,434,718 thousand).
Growth Through
Diversification 25

September 30, June 30,


2017 2017
(Rupees in thousand)
6. OPERATING FIXED ASSETS
Opening book value 1,581,995 1,237,431
Stores, spares & loose tools 978 978
Add: Additions during the period 6.1 26,903 522,084
1,609,876 1,760,493
Less: Disposals / write offs during the period (at book value) (10,267) (20,546)
Depreciation charged during the period (42,547) (157,952)
(52,814) (178,498)
Closing book value 1,557,062 1,581,995

6.1 Additions during the period


- Buildings on freehold land 1,345 265,656
- Plant and machinery ` 2,242 66,910
- Tools and equipment 5,329 15,431
- Furniture, fixture and office equipment 64 59,495
- Vehicles 15,780 108,961
- Computers 2,143 5,631
26,903 522,084

7. CAPITAL WORK IN PROGRESS


Plant and machinery 111,395 132,549
Furniture and fixture 4,366 -
Computers 5,115 -
Advance for office building - 1,166
Advance for vehicles 21,980 11,793
142,856 145,508

8. LONG TERM INVESTMENTS


Available for sale - quoted
- Baluchistan Wheels Limited 24,364 24,364
Surplus on revaluation of investment 167,216 208,829
191,580 233,193
191,580 233,193

9. SHORT TERM INVESTMENTS


Financial assets at fair value through
profit and loss - Mutual fund units 7,695,830 5,718,196
Held for trading investments 243,403 400,527
Investment in Term Deposit Receipts (TDR) 2,000,000 1,162,917
9,939,233 7,281,640

10. TRANSACTIONS WITH RELATED PARTIES


Retirement benefit plans 22,214 25,559
11. OPERATING SEGMENT INFORMATION
26

Business segments

For management purposes, the Group is organized into business units based on their nature of business and has three reportable operating segments as follows:

Tractors
Tractor components
Castings

No other operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its operating segments separately for the purpose of performance assessment. Segment performance is evaluated based on operating profit or loss and is measured
consistently with operating profit or loss in the consolidated financial statements.

Tractors Tractor components Castings Other segments Inter segment eliminations Total
September September September September September September September September September September September September
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
----------------------------------------------------------------------------Rupees in thousands--------------------------------------------------------------------------
Sales 8,969,064 4,660,407 914,749 503,713 488,233 313,637 462,402 244,485 (1,484,326) (822,224) 9,350,122 4,900,018
Cost of sales 7,020,258 3,660,634 640,714 391,206 415,054 270,458 403,650 188,226 (1,484,326) (822,224) 6,995,350 3,688,300
Gross profit 1,948,806 999,773 274,035 112,507 73,179 43,179 58,752 56,259 - - 2,354,772 1,211,718
Distribution cost 171,285 120,810 611 413 14,770 8,694 17,204 7,441 - - 203,870 137,358
Administrative
expenses 138,800 121,708 25,224 14,961 16,217 10,387 15,450 14,512 - - 195,691 161,568
310,085 242,518 25,835 15,374 30,987 19,081 32,654 21,953 - - 399,561 298,926
Operating profit 1,638,721 757,255 248,200 97,133 42,192 24,098 26,098 34,306 - - 1,955,211 912,792
Finance costs 307 200 236 104 3,360 4,983 424 96 - 4,327 5,383
Other operating
expenses 126,210 55,642 17,644 7,054 2,794 1,368 988 2,315 - - 147,636 66,379
126,517 55,842 17,880 7,158 6,154 6,351 1,412 2,411 - - 151,963 71,762
Other income 127,784 29,854 7,754 5,204 1,095 706 1,399 2,385 138,032 38,149
Profit before
taxation 1,639,988 731,267 238,074 95,179 37,133 18,453 26,085 34,280 - - 1,941,280 879,179
Taxation 473,377 218,245 71,422 30,218 9,727 5,178 2,650 10,465 - - 557,176 264,106

Profit for the year 1,166,611 513,022 166,652 64,961 27,406 13,275 23,435 23,815 - - 1,384,104 615,073
Quarter ended September 30, 2017

11.1 Inter segment sales and purchases have been eliminated.


11.2 Allocation of assets and liabilities

Elimination of
Tractors Tractor components Castings Others Inter-segment Total
transactions
September September September September September September
2017 June 2017 2017 June 2017 2017 June 2017 2017 June 2017 2017 June 2017 2017 June 2017
--------------------------------------------------------------------------- (Rupees in thousands) -------------------------------------------------------------------------

Segment operating assets


Non- Current assets 1,475,564 1,508,268 607,681 627,627 244,149 253,656 189,032 167,351 (293,780) (293,780) 2,222,646 2,263,122
Goodwill - - - - - 18,572 18,572 18,572 18,572
Current Assets 18,529,051 15,622,341 1,237,778 963,302 657,841 641,461 672,390 500,641 (295,575) (187,117) 20,801,485 17,540,628
Total Assets 20,004,615 17,130,609 1,845,459 1,590,929 901,990 895,117 861,422 667,992 (570,783) (462,325) 23,042,703 19,822,322

Segment operating liabilities

Non-current liabilities 30,635 30,635 69,798 68,474 87,223 86,855 13,955 15,024 - - 201,611 200,988
Current liabilities 13,091,511 11,350,121 371,320 284,766 220,833 234,113 99,507 80,306 (295,575) (187,117) 13,487,596 11,762,189
Total operating assets 13,122,146 11,380,756 441,118 353,240 308,056 320,968 113,462 95,330 (295,575) (187,117) 13,689,207 11,963,177
Growth Through
Diversification
27
28 Quarter ended September 30, 2017

12. EVENTS AFTER BALANCE SHEET DATE


The Board of Directors have declared Nil cash dividend (June 30, 2017: Rs. 60 per share) in their
meeting held on October 25, 2017.

13. DATE OF AUTHORISATION FOR ISSUE


This condensed interim financial information was authorised for issue on October 25, 2017 by
the Board of Directors of the Group.

14. CORRESPONDING FIGURES
Corresponding figures have been re-arranged, wherever necessary, for the purpose of
comparison. However, no significant re-arrangements have been made.

Chief Financial Officer Chief Executive Officer Chairman


Growth Through
Diversification 29