Management Subject Related

1. 1
Dedication
We want to dedicate our report to all the people who helped and pray for us.
People who bring lots of happiness in our lives, including first of all our parents,
their prayers are always with us. Then our honourable teachers, they guide us in
difficult time especially in studies; their guidance will be with us in every field
of our lives. We were unable to prepare this report without their guidance. Then
our friends will always be with us throughout our lives and we will miss them in
future. So, we are going to dedicate this report all the above people who
are colours of our lives. We think without them our lives will be colourless.

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Acknowledgement
We are very thankful to our teacher PROF. HAFIZ IMRAN for
providing us a chance to Know that theoretical concepts are
applicable in practical life. It was a very good experience for us. We are also
very thankful to the persons who helped us in making this report.

3. 3
Al Ghazi tractors
INTRODUCTION:
Al Ghazi tractors was established in 1983, the plant of this corporation is
located in DERA GHAZI KHAN. In the plant of Al Ghazi they manufactures
New Holland tractors and generators with Fiat New Holland. 1991 the other
corporation named Al-Futtaim took the management control of Al-Ghazi and
this is the Group of Dubai. This group who took the management control of Al-
Ghazi acquire about 50% shares of this corporation. The head office of Al-
Ghazi is located in Karachi, Pakistan.
Parvez Ali who is the engineer in this corporation who did his Masters
from the renowned university named George Washington DC. He has
associated with this organization from its inception in 1983, first as a general
Managing Director. He is also certified Director From PICG.
This corporation has been manufacturing quality tractors based on ISO 9001:
2008 standards. This corporation also register their corporation and certifies
from Moody International and their validation is up to December 2012. This
corporation manufactures 350000 tractors and they serve in the whole country
and especially the agriculture sector. The plant which they planted produce115
tractors in 8 hours shift because they double the shift of employees because the
demand of tractors increasing day by day and they produce30000 tractors per
annum in a single shift.
AGTL is the first automobile company in Pakistan who ears the ISO- 9002
Certificate. The main and major strategy of this company is to produceproducts
with high quality by the low cost.
Todaythe Board of directors comprised of two executives who
also have to manage and they have also responsibility of day to day operations
which operate in the organization and these two directors are (CEO and CFO)
and six members are those who are not in the list of directors and they have no
such responsibility like these two. The majority of our directors are non
executive directors. This company is incorporated in 1983 and privatized in
1991. The ERP solution to put the IT process in full circle is first time
introduced in Pakistan by this corporation. In 2002 the complete ERP inter-
links all processes and supports company’s wider strategic objectives. AGTL
operates with disciplined focus on all management activities and its most

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important asset is its human capital. The company make effort to make each
process efficient, to drive down costper tractor. AGTL is the only automobile
company which has not raised its selling price ever since these were reduced
and agreed with the government. The company is not charge high its price
because they produceproducts in a bulk quantity and when they producein bulk
the costof per productreduces. To eliminate waste and to reduce costthey all
focus on target market, customer focus and to add continuously customer care
centers to give fillip to mechanization of farming in country

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Management
Mr. Parvez Ali
CEO & Managing Director
An engineer by profession, Mr. Parvez Ali, did his Masters in Engineering
Administration from George Washington University in Washington DC. He has
been associated with Al-Ghazi from the date of its inception in 1983 -
first as General Manager (Technical) and Deputy Managing Director. He is
also a Certified Director from PICG.
Boardof Directors:
Mr. Charles Leonard Hunt Non-Executive Chairman
Mr. M Ali Qaiyum Independent Non-Executive Director
Mr. Majid-ul-Ahsan Syed Non-Executive Director
Mr. Kahif Lawai Chief Financial Officer and Director
Mr. Giovanna Barbieri Non-Executive Director
Mr. Michele Lombardi Non-Executive Director
Mr. Damiano Cretarola Non-Executive Director

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Auditors:
A.F Ferguson & Co
Chartered Accountants
Karachi
Bankers:
Askari Bank Limited
Habib Bank Limited
Meezan Bank Limited
Faysal Bank Limited
Standard Chartered Bank (Pakistan) Limited
Bank AL-Habib Limited

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Products
Tractors:
All models share the exclusive combination of performance, flexibility
and safety that
has becomeour hallmark. In our opinion, these characteristics must be
experienced as
a whole and not seen in isolation.
Model 480S is a 55hp, 3 Cylinder quality tractor, designed to meet your
expectations in a costeffective manner.
This model is also available in Econo and Power Steering.
Model 640 is a 75hp, 4 Cylinder quality tractor, designed to meet your
expectations in a costeffective manner.
This model is also available with Disk Brakes

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Model 640S is a 85hp, 4 Cylinder quality tractor, designed to meet your
expectations in a costeffective manner.
This Model is also available with Disk brakes.
Model Ghazi is a 65hp, 3 Cylinder quality tractor, designed to meet your
expectations in a costeffective manner.
Model NH 55-56 is a 55hp, 3 Cylinder quality tractor,
designed to meet your expectations in a cost effective manner.

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Model NH 6056 is a 65hp, 3 Cylinder quality tractor,
designed to meet your expectations in a cost effective manner.
Model NH 70-56 4WD is a 85hp, 4 Cylinder quality tractor, with Hydrostatic
Power Steering designed to meet your expectations in a costeffective manner.
Generators:

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Implements:
CULTIVATOR DISK HARROW
ROTAVATOR CUM BED FORMER ARTICULATED AERIAL
PLATFORM
POTATO DIGGER BOOM SPRAYER
MOULD BOARD PLOUGH TRACTOR MOUNTED BACK HOE

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ROAD SWEEPER FRONT-END LOADER
LAWN MOVER MAIZE SHELLER
DISC PLOUGH FRONT MOUNTED FORK LIFTER

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TRACTOR OPERATED FLOUR MILL SAFARI CABIN
HYDRAULIC TIPPING TROLLEY

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Swot Analysis
Strengths Weakness
 The company has established itself
as one of the leading tractor
manufacturers in the country. Our
most competitive advantage is the
quality of our tractors. AGTL has
over the years supplied 400,000
plus tractors. We are the lowest
cost producers of a quality product.
 The company has a strong
financial base with no debts and no
bank borrowings.
 The company has a strong dealer
network in everywhere of the
country.
 The company now has diversified
its business into high efficiency
irrigation system, generator and
manufacturing of agricultural
machines with potential to export.
 Reduced loaning from the bank
and inconsistent polices.
Opportunity Threats
 Pakistan needs around on million
tractors more if the ratio of one
tractor to fifty acres is to be
attained the international standards
in one tractor to twenty five acres
and even lesser in the first world
countries. The opportunities
therefore are glore.It is the
government that needs to lead in
the pursuit of prioritizing Pakistan
agrarian economy.
 Launch of new products like four
wheel drive tractor and generator.
 Installation of smart irrigation
solutions through Drip Irrigation
systems has accelerated during the
year and is expected to increase in
years to come.
 Challenges being faced by the
economy current account
defict,power outages,paramount
political and geo strategic issues.
 Sharp increases in costs of inputs:
withdrawal of subsidies especially
on electricity, gas etc.
 Inconsistent government policies.

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Financial Data
Balance Sheet
Summary
2013 2014
Comparison
Current assets Rs.
(000)
9,367,867 9,477,010
109,143
Current liabilities
Rs. (000)
1,537,894 1,349,292
-188,602
Fix Assets 404,433 466,751 62,318
Net working capital
Rs. (000)
7,829,973 8,127,718
297,745
Long term liabilities
Rs. (000)
69,580 87,905
18,325
Total Liabilities 1,607,474 1,437,197 -170,277
Profit & Loss
Summary
Net sales Rs. (000) 9,262,626 8,780,685 -481,941
COGS 7,193,257 6,512,544 -680,713
Net purchases
Rs.(000)
6,584,131 6,243,344
-340,787
Gross profit Rs.
(000)
2,069,369 2,268,143
198,774
Operating profit Rs.
(000)
2,023,294 2,251,937
228,643
EBIT 2,023,294 2,251,937 228,643
Net profit Rs. (000) 1,371,490 1,574,744 203,254
Total Assets 9,826,433 9,998,692 172,259
Other Data 2013 2014 Comparison
Market price
per share
235 237.62 2.62
Earning per
share
23.66 27.17 3.51
Book value per
share
141.79 147.53 5.74
Dividend per
share
18.49 21.04 2.55
No Of shares 57964 57964 0

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Six years Analysis:
Figures in (‘000’)
1. Net sale of the Al Ghazi decreased by 481,941.
2. Gross profit increased by 198,774.
3. Company liabilities decreased as compared to previous years.
4. Production is affected due to the economic conditions and decreased more than previous
years.
5. Company assets increasing but liabilities, operating financial and other expenses also
increased as compared to previous years.
6. Dividend paid this year is more than the last year by the amount 2.55.
7. Liquidity ratios increasing in 2014 as compared to previous years, so company have large
margin to cover its short term debts.
8. Profitability ratios of the company is decreasing it means that company is earning less
profits as compared to the previous years.

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Financial ratios
Liquidity Ratio 2013 2014 Result
Current Ratio 6.09:1 7.02:1 Good
Liquid Ratio 4.93:1 5.31:1 Good
Absolute Liquid
Ratio
5.30:1 4.82:1 Bad
Explanation:
The condition is favourable. Increase in operating cycle is mainly due to higher asset balance
at the yearend. All the liquid ratios are increasing.
Solvency 2013 2014 Result
Debt Ratio 0.16:1 0.14:1 Good
Equity Ratio 0.83:1 0.85:1 Bad
Debt to Equity
Ratio
0.00846:1 0.01:1 Bad
Explanation:
The condition is favourable for debt ratio an unfavourable for equity and debt to equity ratio.
Total debts are increasing than 2013.
Activity
1 Total asset turn over 0.94 t 0.87 t bad
2 Fix asset turnover 22.9 t 18.81 t bad
3 Current asset turnover 0.98 t 0.926 t bad
4 Working capital turnover 1.18 t 1.08 t bad
5 A/R turnover 55.69 t 636.46 t good
6 A/P turnover 4.281 t 4.63 t good
7 Inventory turnover 4.2 t 2.96 t bad
8 Collection period 6.55 d 0.59 d good

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9 Payment period 85.255 d 56.02 d bad
10 Age of Inventory 86.71 d 123.09 d bad
Explanations:
1. The condition is unfavourable. It means company is not using is assets efficiently and
have problems.
2. The condition is unfavourable.
3. The condition is unfavourable. It means that the company does achieve maximum sales
with minimum investment in current assets.
4. The condition is unfavourable. It means that company does not using its capital efficiently
in 2014 the condition is gradually better.
5. The condition is favourable. The higher ratios mean that company collecting its
receivables more frequently.
6. The higher is favourable; it indicates that the company pays its bills frequently and
regularly.
7. The condition is unfavourable. It means that in more time company collect its receivable.
8. The condition is favourable. It means that company collects its payments earlier.
9. The condition is unfavourable. It means company pay its payables earlier.
10. The condition is unfavourable. It means company keep its inventory longer than 2013.
Profitability
1 Gross profit ratio 22.34 % 25.83 % Good
2 Operating profit ratio 21.84 % 25.64 % Good
3 Net profit ratio 14.8 % 17.93 % Good
4 Return on asset 13.95 % 15.74 % Good
5 Return on Equity 16.68 % 18.41 % Good
Explanation:
1. The condition is favourable. The high profit margin shows that the company is earning
more profit.
2. The condition is favourable. Company has more money.
3. The condition is favourable. Higher ratio indicates that company is generating more
revenue.
4. The condition is favourable because company is more efficiently managing its assets to
produced greater amount of income.
5. The higher answer is favourable.

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MarketAnalysis
Price earning Ratio 9.92 8.77 Bad
Market to bookratio 1.65 1.61 Bad
Dividend yield ratio 7.86 % 8.85 % Good
Dividend payment ratio 78.14 % 77.43 % Bad
Comparison of Al ghazi with Millat tractors:
Liquidity Ratio
Al Ghazi
Tractor
Millat
Tractors
Comparison Result Favourable
Al Ghazi Millat
Current Ratio 7.02:1 2.17:1 4.85:1 
Liquid Ratio 5.31:1 1.15:1 4.16:1 
Absolute Liquid
Ratio
4.82:1 0.45:1 4.37 
Solvency
Debt Ratio 0.14:1 0.01:1 0.13:1 
Activity
Total asset turn
over
0.87 t 2.36 t 1.49 t 
Fix asset
turnover
18.81 t 23.91 t 5.1 t 
Current asset
turnover
0.92 t 3.06 t 2.14 t 
A/R turnover 636.46 t 30.28 t 606.18 t 
A/P turnover 4.63 t 7.51 t 2.88 t 
Inventory
turnover
2.96 t 5.15 t 2.19 t 
Profitability
Gross profit ratio 25.83% 17.19% 8.64% 
Operating profit
ratio
25.64% 12.80% 12.84% 
Net profit ratio 17.93% 8.90% 9.03% 
Return on asset 15.74% 31.11% 15.37% 
Return on Equity 18.41% 33.02% 14.61% 

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Market Analysis
Price earning
Ratio
8.77 14.92 6.15 
Market to book
ratio
1.61
Dividend yield
ratio
8.85% 7.96 787.15% 
Dividend
payment ratio
77.43% 119.56 11878.57% 
Explanation:
The liquidityratiosare betterinAl ghazi tractors.Millat tractors heave bestactivityratios.The
profitabilityratioisbetterinAl Ghazi as comparedtoMillattractors. It meansthat Al Ghazi is
generatingmore revenue.