CORPORATE INFORMATION

Board of Directors Bankers

Mr. Sikandar Mustafa Khan Bank Alfalah Ltd.
Chairman
Habib Bank Ltd.
MCB Bank Ltd.
Mr. Muhammad Shoaib Pasha
Chief Executive Meezan Bank Ltd.
RBS (formerly ABN Amro Bank)
Mr. Latif Khalid Hashmi Standard Chartered Bank
Mr. Sohail Bashir Rana United Bank Ltd.
Mr. Laeeq Uddin Ansari
Mian Muhammad Saleem
Rana Muhammad Siddique
Registered Office and Plant
Sheikhupura Road, Distt. Sheikhupura
Mr. Manzoor Ahmed
Tel: 042-7911021-25, 111-200-786
Mr. S.M. Tanvir
M.C.B. Nominee Fax: 042-7924166, 7925835
Web Site: www.millat.com.pk
Company Secretary E-mail: info@millat.com.pk
Mian Muhammad Saleem

Regional Offices
Chief Financial Officer Karachi
Mr. Javed Munir 3-A, Faiyaz Centre, Sindhi Muslim
Co-operative Housing Society
Tel: 021-4553752, 111-200-786
Auditors Fax: 021-4556321

M/s. A. F. Ferguson & Co.

Chartered Accountants Multan Cantt
Garden Town, (Daulatabad), Shershah Road
Tel: 061-6537371 Fax: 061-6539271
Legal Advisors
Islamabad
Walker Martineau Saleem
Advocates & Legal Consultants H. No. 22, St. No. 41, Sector F-6/1
Tel: 051-2271470, 111-200-786
Altaf and Altaf Fax: 051-2270693
Advocates
Sukkur
A-3, Professor Housing Society,
Company Registrars Shikarpur Road
M/s. Hameed Majeed Associates Tel: 071-5633042
(Pvt) Ltd. Fax: 071-5633187
1st Floor, H.M. House,
7-Bank Square, Lahore

1
 DIRECTORS’ REVIEW

I feel pleasure to present to you on behalf of the Board of Directors, the un-audited accounts
of Millat Tractors Limited for the 2nd quarter and half year ended December 31, 2008 duly
reviewed by the statuary auditors of the Company as required by the Companies
Ordinance, 1984.

Company achieved a sales volume of 6,411 tractors in this quarter as against 6,322 tractors
for the corresponding quarter of last year, showing an increase of 89 tractors. During the
half year 12,251 tractors were sold as compared to 12,041 tractors during half year ended
on Dec 31, 2007 showing an increase of 210 tractors.

Pre-tax profit for the half year amounts to Rs. 475.29 million as compared to Rs. 413.98
million of the corresponding period of previous year, thus showing an increase of 14.8%.

During this period, the Securities and Exchange Commission of Pakistan imposed certain
restrictions over valuation of debt securities held by mutual funds. As a result income from
investment in mutual funds during this period is considerably low as compared to
corresponding period. However with the stable prices of input ingredient and support of
the Government in shape of Green Tractors Scheme, we have regained our momentum
and Insha-Allah will do better in coming period.

We thank our valued customers for their continued confidence in our products. We are
making all efforts to enhance the quality of our tractors and their production to reduce the
delivery period to a minimum. We also thank vendors, dealers and financial institutions
for their extended co-operation in these difficult times, as well as acknowledge the
co-operation extended to us by our valued principals. Last, but not the least we convey
our gratitude to the employees of the Company for their loyalty, devotion and hard work.

For and on behalf of the Board

Lahore: Sikandar Mustafa Khan

February 20, 2009 Chairman

2
 AUDITORS’ REPORT TO THE MEMBERS ON
REVIEW OF INTERIM FINANCIAL INFORMATION

Introduction
We have reviewed the accompanying condensed interim balance sheet of Millat Tractors
Limited as at December 31, 2008 and the related condensed interim profit and loss account,
condensed interim cash flow statement and condensed interim statement of changes in
equity for the half year then ended (here-in-after referred to as the “interim financial
information”). Management is responsible for the preparation and presentation of this
interim financial information in accordance with approved accounting standards as
applicable in Pakistan. Our responsibility is to express a conclusion on this interim financial
information based on our review. The figures of the condensed interim profit and loss
account for the quarters ended December 31, 2008 and 2007 have not been reviewed,
as we are required to review only the cumulative figures for the half year ended December
31, 2008.

Scope of Review
We conducted our review in accordance with International Standard on Review Engagements
2410, “Review of Interim Financial Information Performed by the Independent Auditor of
the Entity”. A review of interim financial information consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing and consequently does not enable
us to obtain assurance that we would become aware of all significant matters that might
be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion
Based on our review nothing has come to our attention that causes us to believe that the
accompanying interim financial information as of and for the half year ended December
31, 2008 is not prepared, in all material respects, in accordance with approved accounting
standards as applicable in Pakistan.

Lahore: A. F. Ferguson & Co.

February 20, 2009 Chartered Accountants

3
 CONDENSED INTERIM BALANCE SHEET

December 31, June 30,

2008 2008

Note (Rupees in thousand)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized capital
30,000,000 (June 30, 2008: 20,000,000)
ordinary shares of Rs. 10/- each 300,000 200,000

Issued, subscribed and paid up capital 234,275 187,420

General reserve 2,366,000 2,211,000
Unappropriated profit 323,549 576,917
Unrealized gain on revaluation of investments 58,090 63,542

2,981,914 3,038,879

NON-CURRENT LIABILITIES

Security deposits 9,485 9,485

Deferred revenue 30,783 32,729
Deferred taxation 34,713 12,355
Accumulating compensated absences 29,529 28,344

104,510 82,913
CURRENT LIABILITIES

Current portion of deferred revenue 191,473 218,127

Trade and other payables 3,502,792 3,925,019
Mark-up accrued on short term borrowings 9,805 2,858
Short term borrowings 362,653 -

4,066,723 4,146,004

7,153,147 7,267,796

The annexed notes 1 to 16 form an integral part of the condensed interim financial information.

4
AS AT DECEMBER 31, 2008 (UN AUDITED)

December 31, June 30,

2008 2008

Note (Rupees in thousand)

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 8 415,581 298,219

Capital work-in-progress 9 87,321 179,955
Intangible assets 23,815 17,028
Investment property 273,203 273,203
Long term investments 10 309,974 315,425
Long term loans - considered good 4,088 4,385

1,113,982 1,088,215

CURRENT ASSETS

Stores and spares 78,624 78,292

Stock-in-trade 2,375,055 1,636,153
Trade debts 281,375 102,660
Loans and advances 270,454 98,082
Trade deposits and prepayments 20,825 7,782
Other receivables 1,022,474 1,167,286
Taxation - net 96,285 8,198
Short - term Investments 11 1,338,445 2,831,770
Cash and bank balances 555,628 249,358

6,039,165 6,179,581

7,153,147 7,267,796

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive

5
 CONDENSED INTERIM
PROFIT AND LOSS ACCOUNT (UN-AUDITED)
for the half year ended December 31, 2008
Half year ended Quarter ended
Note December 31, December 31,
2008 2007 2008 2007

(Rupees in thousand)

Sales - net 6,093,366 4,725,671 3,220,761 2,426,887

Cost of sales 5,350,569 4,136,172 2,751,094 2,111,000

Gross profit 742,797 589,499 469,667 315,887

Distribution and marketing expenses 172,804 168,622 78,675 90,538

Administrative expenses 102,241 99,048 50,826 50,711

275,045 267,670 129,501 141,249

Operating profit 467,752 321,829 340,166 174,638

Other operating income 62,869 134,279 (19,414) 68,534

530,621 456,108 320,752 243,172

Other operating expenses 35,487 26,687 17,583 8,783

Finance cost 19,839 15,442 14,995 10,598

55,326 42,129 32,578 19,381

Profit before taxation 475,295 413,979 288,174 223,791

Taxation 151,969 102,179 106,145 56,355

Profit for the period 323,326 311,800 182,029 167,436

Earnings per share - basic

and diluted (Rupees) 13.80 13.31 7.77 7.15

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

The annexed notes 1 to 16 form an integral part of the condensed interim financial information.

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive
6
 CONDENSED INTERIM
CASH FLOW STATEMENT (UN-AUDITED)
for the half year ended December 31, 2008
Six months to Six months to
Dec. 31, 2008 Dec. 31, 2007
Note (Rupees in thousand)

Cash flows from operating activities

Cash generated from operations 12 (900,003) 375,511

Interest and mark-up paid (12,892) (9,798)
Net decrease/(increase) in long term loans to employees 297 (669)
Income tax paid (217,698) (130,697)
Net decrease in deferred revenue (28,600) (24,272)

Net cash (used in)/generated from operating activities (1,158,896) 210,075

Cash flows from investing activities

Purchase of property, plant & equipment (52,449) (116,115)

Purchase of intangible assets (6,787) -
Purchase of short term investments (1,453,883) (300,000)
Proceeds from sale of property, plant and equipment 3,385 3,966
Profit on bank deposits 3,905 775
Proceeds from sale of short term investments 2,959,172 316,386
Dividend received 19,154 7,677

Net cash generated from/(used in) investing activities 1,472,497 (87,311)

Cash flows from financing activities

Dividend paid (369,984) (221,646)

Net cash used in financing activities (369,984) (221,646)

Net decrease in cash and cash equivalents (56,383) (98,882)

Cash and cash equivalents at the

beginning of the period 249,358 101,736

Cash and cash equivalents at

the end of the period 12.2 192,975 2,854

The annexed notes 1 to 16 form an integral part of the condensed interim financial information.

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive 7
 CONDENSED INTERIM
STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)
for the half year ended December 31, 2008
(Rupees in thousand)

Revenue reserves
Share General Unapprop- Fair Value
capital reserves riated Reserve Total
profit

Balance as on Ju l y 01, 2007 187,420 1,986,000 450,638 72,552 2,696,580

Final dividend for the year ended

June 30, 2007 @ Rs 12 per share - - (224,904) - (224,904)

Thransferred from profit and loss account - 225,000 (225,000) - -

Profit for the half year ended

December 31, 2007 - - 311,800 - 311,800

Unrealized gain on
revaluation of investments - - - 26,169 26,169

Balance as on December 31, 2007 187,420 2,211,000 312,534 98,691 2,809,645

Interim dividend @ Rs 12.5 per share - - (234,275) - (234,275)

Profit for the half year ended

June 30, 2008 - - 498,658 - 698,658

Unrealized loss on
revaluation of investments - - - (35,149) (35,149)

Balance as on June 30, 2008 187,420 2,211,000 576,917 63,542 3,038,879

Final dividend for the year ended

June 30, 2008 @ Rs 20 per share - - (374,839) - (374,839)

Issue of ordinary shares of Rs. 10

each as fully paid bonus shares 46,855 - (46,855) - -

Transferred from profit

and loss account - 155,000 (155,000) - -

Profit for the half year ended

December 31, 2008 - - 323,326 - 323,326

Unrealised loss on
revaluation of investments - - - (5,452) (5,452)

Balance as on December 31, 2008 234,275 2,366,000 323,549 58,090 2,981,914

The annexed notes 1 to 16 form an integral part of the condensed interim financial information.

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive
8
 SELECTED NOTES TO THE CONDENSED
INTERIM FINANCIAL INFORMATION (UN-AUDITED)
for the half year ended December 31, 2008
1. The Company is public limited Company incorporated in Pakistan under the Companies
Ordinance, 1984, and is listed on Karachi, Islamabad and Lahore Stock Exchanges. The
registered office of the Company is situated at Sheikhupura Road, District Sheikhupura.
It is engaged in assembly and manufacture of agricultural tractors, implements and
equipments.

2. This condensed interim financial information is un-audited and is being submitted to

shareholders, as required by section 245 of the Companies ordinance, 1984.

3. The accounting policies adopted for the preparation of this condensed interim financial
information are the same as those applied in the preparation of preceding annual published
financial statements of the Company for the year ended June 30, 2008.

4. This condensed interim financial information has been prepared in accordance with the
requirements of International Accounting Standard (IAS) 34 " Interim Financial Reporting"
and have been reviewed by the auditors of the Company under the Code of Corporate
Governance.

5. Judgments and estimates made by the management in the preparation of the condensed
interim financial information are the same as those applied in preparation of preceding
annual published financial statements of the Company for the year ended June 30, 2008.

6. Income tax expense is recognized based on management’s best estimate of the weighted
average annual income tax rate expected for the full financial year.

7. 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 1,032,427 thousand (June

30, 2008 : Rs 447,199 thousand).
Dec. 31, 2008 June 30, 2008

(Rupees in thousand)

8. Property, plant and equipment

Opening book value 298,219 230,474
Add: Additions during the period - note 8.1 145,083 127,776

443,302 358,250

Less: Disposals during the period (at book value) (3,386) (8,413)
Transferred to investment property - (17,495)
Depreciation charged during the period (24,335) (34,123)

(27,721) (60,031)

Closing book value 415,581 298,219

9
 December 31, June 30,
2008 2008
(Rupees in thousand)

8.1 Additions during the period

- Land - 44,633
- Building on freehold land 992 4,124
- Plant and machinery 118,491 10,463
- Tools and equipments 2,079 16,099
- Furniture, fixture and equipments 2,012 9,695
- Vehicles 21,449 37,021
- Computers 60 5,741

145,083 127,776

9. Capital work-in-progress
Plant & Machinery 13,335 111,145
Advance for purchase of office space 68,197 64,064
Others 5,789 4,746

87,321 179,955

10. Long term investments-equities

Related parties
Investment at cost

- Subsidiary - unquoted 57,375 57,375

- Associates - quoted 65,364 65,364
- Associates - unquoted 117,000 117,000

239,739 239,739

Others
Available for sale - quoted

Cost 12,145 12,145

Surplus on revaluation of investment 58,090 63,541

70,235 75,686

309,974 315,425

11. Short term investments

Financial assets at fair value through profit
and loss - Mutual Fund units at cost 1,348,201 2,507,379
(Deficit)/Surplus on revaluation of investments (9,756) 324,391

11.1 1,338,445 2,831,770

1,338,445 2,831,770

10
 11.1 These include 4,535 thousand units in an open end mutual fund amounting
Rs 402,778 thousand which have been valued at the offer price as at December
31, 2008 instead of the redemption price since at the balance sheet date the
redemption of these units was suspended.

Half year ended

December 31
2008 2007
(Rupees in thousand)

12. Cash (used in)/generated from operations

Profit before taxation 475,295 413,979
Adjustment for:
- Depreciation on property, plant and equipment 24,335 15,122
- Bad debts written off 2,221 -
- Provision for accumulating compensated absences 1,185 2,610
- Unrealized (gain) on investment at fair value
through profit and loss (11,964) (117,941)
- Profit on bank deposits (9,577) (365)
- Dividend (19,154) (7,677)
- Finance cost 19,839 15,442
- Working capital changes - note 12.1 (1,382,183) 54,341

(900,003) 375,511

12.1 Working capital changes

(Increase)/decrease in current assets

- Stores and spares (332) (22,118)
- Stock in trade (738,902) 146,353
- Trade debts (180,936) 113,806
- Loan and advances (172,372) (43,105)
- Trade deposits and prepayments (13,043) (170,539)
- Other receivables 150,484 3,315

Increase/(decrease) in current liabilities

- Trade and other payables (427,082) 26,629

(1,382,183) 54,341

11
 Half year ended
December 31,
2008 2007
(Rupees in thousand)

12.2 Cash and cash equivalents

Cash and bank balances 555,628 327,101
Short term running finance (362,653) (324,247)

192,975 2,854

13. Transactions with related parties

Purchases from related parties 1,030,180 650,960
Dividend Income 19,154 7,677
Payable to related parties 148,597 46,341
Receivable from related parties 63,058 820

Payments to funds:
- Pension 4,767 4,849
- Gratuity 4,353 4,683
- Benevolent 267 254

14. Events after balance sheet date

The Board of Directors have declared an interim dividend of Rs. 20 per share (June 30,
2008: Rs 20 per share) at their meeting held on February 20, 2009, while appropriation to
general reserve made after the balance sheet date amounts to Rs. Nil thousand
(2008: Rs. 155,000 thousand). This condensed interim financial information does not
include the effect of the above interim dividend which will be accounted for in the period
in which it is declared.

15. Date of authorisation for issue

These financial statements were authorized for issue on February 20, 2009 by the Board
of Directors of the Comapny.

16. Corresponding figures

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

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive
12
 CONSOLIDATED CONDENSED INTERIM BALANCE SHEET

December 31, June 30,

2008 2008
Note
(Rupees in thousand)
EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized capital
30,000,000 (June 30, 2008: 20,000,000)
ordinary shares of Rs. 10/- each 300,000 200,000

Issued, subscribed and paid up capital 234,275 187,420

General reserves 2,366,000 2,211,000
Unappropriated profit 436,484 682,216
Unrealized gain on revaluation of investments 44,753 50,205

Equity attributable to equity holders of the parent 3,081,512 3,130,841

Minority Interest 19,882 17,211

3,101,394 3,148,052

NON-CURRENT LIABILITIES

Security deposits 9,485 9,485

Deferred revenue 30,783 32,729
Deferred tax liability 34,713 12,355
Accumulating compensated absences 29,844 28,344

104,825 82,913

CURRENT LIABILITIES

Current portion of deferred revenue 191,473 218,127

Trade and other payables 3,503,373 3,936,330
Mark-up accrued on short term borrowings 11,264 4,504
Short term borrowings 392,424 56,203

4,098,534 4,215,164

7,304,753 7,446,129

The annexed notes 1 to 16 form an integral part of the consolidated condensed interim financial
information.

14
AS AT DECEMBER 31, 2008 (UN AUDITED)

December 31, June 30,

2008 2008
Note
(Rupees in thousand)
ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 8 446,135 329,151

Capital work in progress 9 87,321 179,955
Intangible assets - in progress 23,815 17,028
Investment property 273,203 273,203
Long term investments 10 367,172 369,753
Long term loans-considered good 4,088 4,385
Deferred cost 516 1,032

1,202,250 1,174,507

CURRENT ASSETS

Stores and spares 80,088 79,334

Stock in trade 2,222,563 1,670,618
Trade debts 300,525 118,809
Loans and advances 459,967 100,185
Trade deposits and prepayments 22,059 9,543
Other receivables 1,022,474 1,168,935
Taxation - net 98,211 8,198
Short - term Investments 11 1,338,445 2,831,770
Cash and bank balances 558,171 284,230

6,102,503 6,271,622

7,304,753 7,446,129

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive

15
 CONSOLIDATED CONDENSED INTERIM
PROFIT AND LOSS ACCOUNT (UN-AUDITED)
for the half year ended December 31, 2008

Half year ended Quarter ended

Note December 31, December 31,
2008 2007 2008 2007

(Rupees in thousand)

Sales - net 6,171,813 4,788,200 3,263,941 2,489,416

Cost of sales 5,407,403 4,184,389 2,781,789 2,164,252
Gross profit 764,410 603,811 482,152 325,164

Distribution and marketing expenses 176,452 172,482 80,505 90,824

Administrative expenses 109,147 104,144 54,213 54,934

285,599 276,626 134,718 145,758

Operating profit 478,811 327,185 347,434 179,406

Other operating income 62,917 134,281 (19,374) 68,535

541,728 461,466 328,060 247,941

Other operating expenses 20,230 26,687 10,959 8,783

Finance cost 38,766 18,548 28,647 12,202

58,996 45,235 39,606 20,985

Share of profit and loss
of associated companies 4,960 (13,327) (4,432) (20,457)

Profit before taxation 487,692 402,904 284,022 206,499

Taxation
Group 151,969 102,967 110,669 56,993
Associated companies 2,090 (2,614) (1,552) (3,377)

154,059 100,353 109,117 53,616

Profit after taxation 333,633 302,551 174,905 152,883

Attributable to:
Equity holders of the parent 330,962 301,896 172,960 151,794
Minority interest 2,671 655 1,945 1,089

333,633 302,551 174,905 152,883

Earnings per share - basic

and diluted (Rupees) 14.24 12.91 7.47 6.53

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

The annexed notes 1 to 16 form an integral part of the condensed consolidated interim financial
information.

16 Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive
 CONSOLIDATED CONDENSED INTERIM
CASH FLOW STATEMENT (UN-AUDITED)
for the half year ended December 31, 2008
Six months Six months
to December to December
31, 2008 31, 2007
(Rupees in thousand)
Note
Cash flows from operating activities

Cash generated from operations 12 620,337 374,499

Interest and markup paid (32,006) (12,548)
Net decrease in long term
loans to employees 297 (669)
Income tax paid (218,373) (128,009)
Net decrease in deferred revenue (28,600) (24,272)

Net cash inflow/(used in) from operating activities 341,655 209,001

Cash flows from investing activities

Purchase of property, plant & equipment (54,037) (117,743)

Purchase of intangible assets (6,787) -
Proceeds from sale of property, plant and equipment 3,814 3,966
Profit on bank deposits 3,905 777
Dividend received 19,154 7,677

Net cash (used in)/generated from investing activities (33,951) (105,323)

Cash flows from financing activities

Dividend paid (369,984) (221,646)

Net cash used in financing activities (369,984) (221,646)

Net decrease in cash and cash equivalents (62,280) (117,968)

Cash and cash equivalents at the

beginning of the period 228,027 73,340

Cash and cash equivalents at the

end of the period 12.2 165,747 (44,628)

The annexed notes 1 to 16 form an integral part of the consolidated condensed interim financial
information.

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive 17
 CONSOLIDATED CONDENSED INTERIM
STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)
for the half year ended December 31, 2008
(Rupees in thousand)

Revenue reserves
Share General Unappropriated Fair Value Minority
capital reserves profit Reserve Interest Total

Balance as on July 01, 2007 187,420 1,986,000 558,007 59,185 11,579 2,802,191

Final dividend for the year ended

June 30, 2007 @ Rs 12 each - - (224,904) - - (224,904)

Transferred from profit

and loss account - 225,000 (225,000) - - -

Profit for the half year ended

December 31, 2007 - - 301,896 - 655 302,551

Unrealised gain on
revaluation of investments - - - 26,169 - 26,169

Balance as on December 31, 2007 187,420 2,211,000 409,999 85,354 12,234 2,906,007

Interim dividend Rs 12.50 per share - - (234,275) - - (234,275)

Profit for the half year ended

June 30, 2008 - - 506,492 - 1,699 508,191

Right issue to the minority

share holders - - - - 3,278 3,278

Unrealized loss on
revaluation of investments - - - (35,149) - (35,149)

Balance as on June 30, 2008 187,420 2,211,000 682,216 50,205 17,211 3,148,052

Final dividend for the year ended

June 30, 2008 @ Rs 20 each - - (374,839) - - (374,839)

Issue of ordinary shares of Rs. 10

each as fully paid bonus shares 46,855 - (46,855) - - -

Thransferred from profit and loss account - 155,000 (155,000) - - -

Profit for the half year ended

December 31, 2008 - - 330,962 - 2,671 333,633

Unrealized loss on
revaluation of investments - - - (5,452) - (5,452)

Balance as on December 31, 2008 234,275 2,366,000 436,484 44,753 19,882 3,101,394

The annexed notes 1 to 16 form an integral part of the consolidated condensed interim financial information.

18
Sikandar Mustafa Khan Muhammad Shoaib Pasha
Chairman Chief Executive
 SELECTED NOTES TO THE CONOSOLIDATED
CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)
for the half year ended December 31, 2008

1. The Company is public limited Company incorporated in Pakistan under the Companies
Ordinance, 1984 and is listed on Karachi, Islamabad and Lahore Stock Exchanges. The
registered office of the Company is situated at Sheikhupura Road, District Sheikhupura.
It is engaged in assembly and manufacture of agricultural tractors, implements and
equipments. Millat Industrial Products Limited (MIPL) is a subsidiary of Millat Tractors
Limited and is engaged in business of manufacturing of vehicles, industrial and domestic
batteries, cells and components thereof.

2. This consolidated condensed interim financial information is un-audited and is being

submitted to shareholders, as required by section 245 of the Companies Ordinance, 1984.

3. The accounting policies adopted for the preparation of this consolidated condensed interim
financial information are the same as those applied in the preparation of preceding annual
published financial statements of the group for the year ended June 30, 2008.

4. This consolidated condensed interim financial information has been prepared in accordance
with the requirements of International Accounting Standard (IAS) 34 “Interim Financial
Reporting”.

5. Judgments and estimates made by the management in the preparation of the consolidated
condensed interim financial information are the same as those applied in preparation of
preceding annual published financial statements of the group for the year ended
June 30, 2008.

6. Income tax expense is recognized based on management’s best estimate of the weighted
average annual income tax rate expected for the full financial year.

7. 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. 1,032,427 thousand (June
30, 2008 : Rs. 447,199 thousand).

Dec. 31, 2008 June 30, 2008

(Rupees in thousand)

8. Property, plant and equipment

Opening book value 329,151 261,513
Add: Additions during the period - note 8.1 146,671 131,079

475,822 392,592

Less: Disposals during the period (at book value) (3,814) (8,413)
Transferred to investment property - (17,495)
Depreciation charged during the period (25,873) (37,533)

(29,687) (63,441)

Closing book value 446,135 329,151

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 Dec. 31, 2008 June 30, 2008
(Rupees in thousand)

8.1 Following is the detail of additions

during the period

- Land - 44,633
- Building on freehold land 1,009 4,863
- Plant and machinery 119,082 10,532
- Tools and equipments 2,901 18,376
- Furniture, fixture and office equipment 2,111 9,859
- Vehicles 21,449 37,021
- Computers 119 5,795

146,671 131,079

9. Capital work-in-progress
Plant & Machinery 13,335 111,145
Advance for purchase of vehicles 1,298 -
Advance for purchase of office furniture 1,938 -
Advance for purchase of office space 68,197 64,064
Others 2,553 4,746

87,321 179,955

10. Long term investments - equities

Investment at cost

Related parties
- Associated Company - quoted 145,528 146,540
- Associated Companies - unquoted 151,410 147,527

296,938 294,067

Others - available for sale - quoted

Cost 25,481 25,481

Surplus on revaluation of investment 44,753 50,205

70,234 75,686

367,172 369,753

11. Short term investments

Financial assets at fair value through profit
and loss - Mutual Fund units - cost 1,348,201 2,507,379
(Deficit)/surplus on revaluation of investments (9,756) 324,391

11.1 1,338,445 2,831,770

Market value as at December 31, 2008 1,338,445 2,831,770

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 11.1 These include 4,535 thousand units in an open end mutual fund amounting
Rs 402,778 thousand which have been valued at the offer price as at December
31, 2008 instead of the redemption price since at the balance sheet date the
redemption of these units was suspended.
Half year ended
December 31
2008 2007
(Rupees in thousand)

12. Cash generated from operations

Profit before taxation 487,692 402,904

Adjustment for:

- Depreciation on property, plant and equipment 25,873 16,739

- Bad debts written off 7,467 -
- Amortization of pre-operating expenses 516 515
- Provision for accumulating
compensated absences 1,500 2,610
- Unrealized gain on investment at fair value
through profit and loss - (77,264)
- Profit on bank deposits (9,577) (365)
- Dividend (19,154) (7,677)
- Finance cost 38,766 18,548
- Net share of income of associated
companies (4,960) 13,327
- Working capital changes - note 12.1 92,214 5,162

620,337 374,499

12.1 Working capital changes

(Increase)/decrease in current assets

- Stores and spares (754) (22,495)

- Stock in trade (551,945) 135,288
- Trade debts (189,183) 109,384
- Loan and advances (359,782) (49,593)
- Trade deposits and prepayments (12,516) (168,842)
- Interest accrued on loan to
Agrimall (Private) Limited (50) -
- Other receivables 152,183 2,656
- Short term investments 1,493,325 (24,291)

Increase/(decrease) in current liabilities

- Trade and other payables (439,064) 23,055

92,214 5,162

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 Half year ended
December 31
2008 2007
(Rupees in thousand)

12.2 Cash and cash equivalents

Cash and bank balances 558,171 331,082
Short term running finance (392,424) (375,710)

165,747 (44,628)

13. Transactions with associated

companies/related parties
Purchases from related parties 1,030,180 650,960
Dividend Income 19,154 7,677
Payable to related parties 148,597 46,341
Receivable from related parties 63,058 820

Payments to funds:
- Pension 4,767 4,849
- Gratuity 4,353 4,683
- Benevolent 267 254

14. Events after balance sheet date

The Board of Directors have declared an interim dividend of Rs. 20 per share (June 30,
2008: Rs 20 per share) at their meeting held on February 20, 2009, while appropriation to
general reserve made after the balance sheet date amounts to Rs. Nil thousand
(2008: Rs. 155,000 thousand). This condensed interim financial information does not
include the effect of the above interim dividend which will be accounted for in the period
in which it is declared.

15. Date of authorisation for issue

These financial statements were authorized for issue on February 20, 2009 by the Board
of Directors of the Comapny.

16. Corresponding figures

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

Sikandar Mustafa Khan Muhammad Shoaib Pasha

Chairman Chief Executive

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