Pel Report Final

Pak Elektron Limited
• Pak electron limited
Presented To Prof, Dr. Liaqat Ali

Principal
HAILEY COLLEGE OF COMMERCE
Presented By Talal Haroon
ROLL NO 1030
Semester 8th
Class B.com (hons)
Section F(Afternoon)
Session 2006-2010
Hailey College of Commerce

University of the Punjab,
Lahore
1 Internship Report
I DEDICATE THIS REPORT TO MY

PARENTS
&
THE WHOLE TEAM OF FP-AD.
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I am thankful to Almighty Allah for His help in the completion of this report. I am
highly obliged and thankful to these personalities for taking keen interest in
providing material regarding my report. Without their cooperation, I could not be
able to perform this task efficiently and effectively. Last, but not the least, many
thanks to respectable G.M. MR. NUMAN KHALID BUTT of FP-AD and Head of
FP-AD. MR. GHULAM MOHAY-UD-DIN who gave me proper guideline,
opportunity to learn and to polish my skills under their supervision. Without their
endorsement I would never been able to gain practical exposure, confidence
and self-belief in my personalities.
Special thanks to Mr. Rashid Hanif (Junior Executive), Mr. Ali Asad
(Accountant), Mr. Ghulam Abbas (Junior Executive), Mr. Naveed (E3 Officer)
and Mr. Hassan Raza (HR Officer) for assisting me and providing practical
knowledge during my internship program.
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TABLE OF CONTENT
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Executive Summary
The Pak Electronic Limited is Public Limited Company with the objective of
initially producing transformers, switchgears and electric motors. The designing
and production of the equipment was carried out jointly by AEG experts and
PEL personnel. After the conclusion of Joint Venture Agreement with AEG the
majority of share holding was acquired by Saigol Group. Its Appliances Division
was introduced and initially the production of window type air conditioners was
taken up and was well received in the market for its quality. The present range
of power products includes Transformers up to 33KV 5MVA capacity,
Switchgears up to 33KV, Cage Induction Motors up to 40HP, Single Phase
Energy Motors, Small Generators, Shunt Capacitor, Banks and Re-closer etc.
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The company has also started the production with the technical collaboration of
Hitachi Corporation, Japan, for the production of Vacuum Circuit Breakers for its
switchgear. In the year 1980 the company expanded into consumer products
with the introduction of Window Type Air Conditioners and today also
manufactures Split Air Conditioners, Refrigerators, Microwave ovens, Deep
Freezers and Compressors etc.
The summary of PEL’s market share (Product wise)

Refrigerator 32%
Split A/C 13%
Microwave Oven 22%
Water dispenser 8%
During my internship period I performed my assigned duties on time and

under the prescribed instructions of my immediate boss. I hope that this
practice experience will create glorious opportunities in future.
I am really thankful to my immediate bosses, managers at PEL in helping me
regarding different matters during my internship period.
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The Saigol Group (also referred to as the Sehgal or Sahgal Group) is located in
Lahore, Punjab, Pakistan. This group is owned by the Saigol family of Pakistan,
and owns a number of domestic automobile and textile plants.
Group Profile
In 1948, the Saigols migrated from Calcutta and initiated their business in
Lyallpur (later named to as Faisalabad), the textile city of Pakistan, under the
banner of Kohinoor Industries Limited.
KOHINOOR TEXTILE MILLS LIMITED
The Saigols set up the first major textile unit - The Kohinoor Textile Mills
under the umbrella of Kohinoor Industries Limited. The Kohinoor Textile Mill has
state-of-the-art quality control from raw material to finished product
manufacturing. Its laboratory is top rated amongst the best laboratories in
Pakistan for testing of textile raw materials, other inputs and yarn.
Initial Capacity 25,000 spindles

Current Capacity 71,648 spindles
PAK ELEKTRON LIMITED (PEL)

In 1978, the Saigol Group of Companies purchased major shares of Pak
Elektron Limited. At that juncture, the company was only manufacturing
transformers and switchgears. With the Saigols in management, PEL started
expanding its product range by entering into Air Conditioner manufacturing.
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SARITOW SPINNING MILLS & AZAM TEXTILE MILLS
In 1987, the Saritow Spinning Mills and Azam Textile Mills were
established under the banner of Saigol Group of Companies. Saritow Spinning
Mills is a spinning unit with 25,440 spindles capacity. Facilitated with the most
modern and efficient Japanese and European machinery, its knitted yarn is
renowned in the Far East and Europe for its fine quality.
Azam Textile Mills is reputed for its carded and combed yarn, which is quite
popular for premier knitting and weaving
KOHINOOR POWER COMPANY LIMITED

In 1991, the first power unit commissioned in Pakistan, in the Private
sector, was Kohinoor Power Company Limited. Its present production capacity
is 15 MW.
KOHINOOR ENERGY LIMITED

1995, another power unit, Kohinoor Energy Limited, was established.
Kohinoor Power Limited is a 120 MW power plant located on the outskirts of the
city of Lahore. This project has an annual turnover of $80 million.
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Pak Elektron Limited (PEL)

Elektron Limited. At that juncture, the company was only manufacturing
expanding its product range by entering into Air Conditioner manufacturing.
HISTORY
Pak Electron Ltd. (PEL) was established in 1956 with the technical collaboration
of M/S AEG Germany and is the oldest composite electrical equipment-
manufacturing unit in Pakistan.
In October 1978, the company was taken over by the SAIGOL GROUP, which
is one of the leading industrial and commercial groups of Pakistan. The
products manufactured by PEL have always been of a high standard and the
name “PEL is synonymous with quality all over Pakistan.” PEL, since its
inception, has been acting as an institution working for the advancement and
development of engineering and modern technology in Pakistan
Since its inception, the company has been working for the advancement and
development of engineering know-how in Pakistan. The company has produced
hundreds of engineers and skilled workers and technicians through its
apprenticeship schemes & training programs.
PEL has been continuously adding new products to its range. As a result, PEL
has registered a significant increase in its sales volume, during the last ten
years

Electron Limited. At that juncture, the company was only manufacturing
expanding its product range by entering into Air Conditioner manufacturing
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In 1981, PEL window type air conditioners were introduced in technical

collaboration with General Corporation of Japan.
In 1986-87, the company started manufacturing of refrigerators in technical

collaboration with M/s IAR-SILTAL of Italy.
In 1987, PEL deep freezers were also introduced in technical collaboration with
M/s Ariston of Italy.
In 2006, the Company has started manufacturing of split type air conditioners of
various capacities as the customer choice has shifted from window type to split
type. The product has been well received in the market. This encourages the
company to multiply its production in the coming year.
Today, PEL has become a household name. Its products are not only in great
demand in the local market but the Company has started exporting its
appliances division products.
Company Information
Company information
Board of directors
Mr. Naseem Saigol Chairman /Chief Executive
Mr. Azam Saigol
Mr. Murad Saigol
Mr. Muhammad Rafi Khan
Mr. Haroon Ahmed Khan Managing Director
Mr. Homaeer Waheed
Mr. Gul Nawaz NIT Nominee
Mr. Masood Karim Sheikh NBP Nominee u/s 182 of the Ordinance
Mr. Tajammal H.Bokharee NBP Nominee u/s 182 of the Ordinance
Mr. Wajahat A. Baqai NBP Nominee u/s 182 of the Ordinance
Audit Committee
Mr. Azam Saigol Chairman / Member
Mr. Haroon A. Khan Member
Mr. Tajammal H. Bokharee Member
Mr. Gul Nawaz Member
Company Secretary
Sheikh Muhammad Shakeel FCA
Chief Financial Officer

Syed Manzar Hassan FCA
Auditors
M/s Yousaf Adil Saleem & Co. Chartered Accountant
Legal Advisor
M/s Hassan and Hassan Advocates
Bankers
• Bank of Punjab
• First Punjab Modaraba
• Bank Alfalah Limited
• Faysal Bank Limited
• National Bank of Pakistan
• NDLC-IFIC Bank Limited
• PICIC Commercial Bank Limited
• Saudi Pak Commercial Bank
• Union Bank Limited
Registered Office Work Site

17-Aziz Avenue Canal Bank, 14-Ferozepur Road,
Gulberg-V, Lahore. Lahore.
Tel 042-5718274-5, 5717364-5 Tel 042-5811951-7 (7 Lines)
Fax 042-5715105 Website www.pel.com.pk
E-mail shares@saigols.com
ISLAMABAD KARACHI
Room # 1404, 14th Floor Kohinoor Building
Green Trust Tower, Blue Area 25-West Wharf Road
Tel 051-2273858 Tel 021-2200951-4
Fax 042-2273858 Fax 021-2310330
CHINA AFGHANISTAN
910, No. 1007, Zhong Shan Naun Er Road Flat # 103, 1st Floor, Block A
Shanghai, china Qaiser Market, Kolola, Pushta,
Tel 86-21-64567533 Kabul
Fax 86-21-54109971 Tel 0093-79826293
Objectives
The objectives and mission for which the company is established are as
following
• To carry on the business or businesses of manufacturing, selling,

installing, maintaining designing and dealing in all kinds of electrical
equipment.
• To carry on any business whether manufacturing or otherwise which

maybe found convenient to undertake in connection with or in
addition to any of these objectives mentioned above?
• To do all such things that is incidental for the attainment of the above
objectives or any of them.
• To produce high quality and standard products.
• To produce equipment to be used in numerous projects of national

importance.
• To secure a high share / quota of WAPDA’s demand for power

products.
• To produce skilled workers and technicians through its

apprenticeship schemes and training programs for engineers and
technicians.
“To Excel in Providing Engineering Goods and
Services through Continuous Improvement.”
 To provide quality products & services

for complete customer satisfaction and to
maximize returns for all stakeholders
through optimal use of resources
 To focus on personal development of

our employees to meet future challenges.
 To promote good governance, corporate

values and a safe working environment with
a strong sense of social responsibility.
The company comprises of two divisions
• Appliances Division
• Power Division
APPLIANCES DIVISION
PEL’s Appliances Division is the flag carrier of the Saigol Group involved in
home appliances manufacturing.
 Refrigerator
 Deep freezers
 Television
 Microwave oven
 Washing machine
 Generators
 Air condition
PAK Elektron Refrigerators always have always been famous among every
home
due its superior quality and reliability. In Pakista International Companies who
are sharing the demand of refrigerators but all of
them are considered to be minor market shareholders in front of Pak Elektron’s
share. Strength of Pak Elektron’s share has always been its remarkable
Appliances Division due to its latest equipments and talented men power. n
there are so many National and
This Appliance Division is comprised of following departments
Marketing Appliance Division
Production Appliance Division
After Sales Services Department
Consumer Marketing Department
Market
Appliance
After
Consumer Production
Sales
Marketing AD
19 ServiesInternship Report
1.1 Marketing Appliance Division

Talking about marketing department, it always been a a backbone of the
Appliances business unit. This department is having most
hardworking and talented staff that remain busy in searching new markets for
its
products and always initiates different production programs to satisfy its nd still
it is considered to be
customer needs and preferences. This Marketing department has un-beatable

marketing forces that on regular basis conduct market surveys in order to look
into Competitors position, customer’s taste, retailers and wholesalers needs
under the supervision of four professional marketing managers plus General
and
Senior Marketing Managers.
At time when the forces feel a change in customer preferences they
immediately undertake distinctive steps and make new sales plans. Such plans
are forwarded to each respective department by the marketing department in
order to get their requirements to make the plan successful.
Production Department
PEL’s production department has its own distinctive qualities from one end to
last
end. At this department every worker has got very special in job training from
the
seniors and remains committed in order to accomplish the given tasks
successfully either he is a part of assembling or a part of finishing section.
When
Research and development designs any new feature or product, production
department provides required men power estimates to the company’s human
resource department.
After Sales Services
After Sales Services is another active department of PEL’s Appliances division,

which gives a sense of care to its customer when ever it feel things are going
wrong or against its desire. This department has their own technicians available
for the services in the company as well as having after sales centers out side
the
company at different places in the cities. This department assures 100 percent
parts replacement of appliances if complains fall in the warranty
Consumer Marketing Department
A door-to-door marketing system introduced by PAK Elektron in the shape of

this
department. Consumer marketing department is the only department that has
special sales forces for its appliances and deals the customer needs and
complains directly without the intervention of any retailers and wholesalers
POWER DIVISION
PEL Power Division manufactures energy meters,
 Transformers
 Switchgears
 Kiosks
 Compact stations
 Shunt capacitor banks
 Energy meters
 Generators
All these electrical goods are manufactured under strict quality control and in
accordance with international standards.
PEL is one of the major electrical equipment suppliers to Water and Power
Development Authority (WAPDA) and Karachi Electrical Supply Corporation
(KESC), which are the largest power utilities in Pakistan.
Over the years, PEL electrical equipment has had been used in numerous
power projects of national importance within Pakistan.
In spite of stiff competition from emerging local and multinational brands, PEL
Group's appliances and electrical equipments have remained in the spotlight
due to constant innovation. Strategic partnership with multinationals of repute
have enabled the PEL Group to incorporate new technologies into existing
product ranges, thus giving the Pakistani market access to innovative,
affordable and quality products.
The second but the most powerful revenue generating business unit of PAK
Elektron, produces Transformers, Switchgears and Energy Meters for the public
sector such as KESC Karachi Electric Supply Corporation, LESCO Lahore
Electric Supply Corporation, IESCO Islamabad Electric Supply Corporation,
PESCO Peshawar Electric Supply Corporation, etc and for public sector as
well.
This division is comprised for four departments
Marketing Power Division

Production Transformers
Production Switchgears
Production Energy Meters
Market
power
Production Production Production

EM SC TR
2.1 Marketing Power Division
Marketing department of power division consists of most professional engineers

who market all the power products, seeks new customers and supervise all
these three departments to ensure best quality and reliable products every time.
2.2 Production Transformers
PEL has vast experience in design and manufacturing of standard and special
purpose transformers up to 33kV and up to 6000kVA ratings. This department
make oil immersed transformers with natural cooling are suitable for both indoor
and outdoor installations. These are manufactured according to BSS-171, IEC-
76
or VDE-0532 and tropicalized to meet adverse environmental conditions. All
transformers are offered with tabular tank, having a conservator and breather.
This department manufactures following types of transform

•
Distribution transformers (pole mounted or pad mounted design)

•
Auto transformers
•
Furnace transformers
•
Welding transformers
•
Chokes for furnace transformers
•
Any other special requirement
PEL's transformers have been successfully type tested for Impulse voltage and
short circuit tests at KEMA, (Holland), HV&SC Lab, Rawat (Pakistan), NIP
(Pakistan) and UET (Pakistan).
2.3 Production Energy Meters
Another successful and most powerful department of power division is its

energy
meter production department that manufactures Electro-mechanical Energy
Meters
under license from ABB-USA. The quality of PEL meters has been certified by
KEMA
Laboratories (Holland) and conforms to IEC 521, SGS Yarsley, and U.K, has
certified PEL Energy Meter plant for ISO 9002.
This department also manufactures MC8 type a direct connection single-phase

meter, which is commonly used for each home. Its design and constructional
features include overload compensation and temperature compensation, thus
providing maintenance-free operation over a long period and accurate
measurement of electrical energy. The frame is sturdy in construction and the
covers are available in unbreakable polycarbonate plastic material.
2.4 Production Switchgears
MV & LV Switchgear being one of the major power products of PEL is produced
for indoor installations company with the latest international standards by this
department, i.e. IEC, BSS or VDE PEL's Switchboards are steel sheet
fabricated,
totally enclosed, floor mounting and vermin & dust proof. These are supplied
with
factory fitted relevant components and copper bus bars, internal wiring, terminal
blocks etc.
The cubicle housing and doors are fabricated from 2-3mm thick sheet steel,
welded together to form a robust and self-supporting structure. Painting
procedure includes through cleaning, pre-treatment, anti-rust coating and final
finishing in standard RAL colors.
 Human Resource department
 Finance Department
 Accounts Department
 Internal Audit Department
 Appliances Division
 Marketing Appliances Division
 Production Appliances Division
 Buying Appliances Division
 Power Division
 Marketing Power Division
 Production Power Division
 Buying Power Division
 Consumer Marketing Division
 Distribution and Credit Control Department
 Customer Service Department
 Information Technology Department
 Industrial Relations and Administration Department
Human Resource Department is the most important and key department of

every organization. It not only deals with the employees of the organization
but also helps in managing the affairs of the company.
PEL has a full fledge HR Department. The GM is the top executive in the
HR department and there is one manager of HR to facilitate the work of
G.M.
HR Department’s activities are spread over the whole organization. HR
department is divided into
 Recruitment & Selection
 Training And Development
 Performance Management System
Recruitment & Selection
Recruitment and selection team consists of 5 members and
one manager. The basic purpose of this team is
 To give advertisement for the vacant job.
 To receive C.V’s.
 Screening the C.V’s
 To conduct interview and test of screened applicants.
 After completing this procedure final selection is made.
Training and Development
Training and development team is also consists of 5 members
(3 A.M. & 2 executives). The function of this team is to trained and
develops new employees about the traditions of organizations as well as
sharing new aspects with existing employees.
Performance Management System
Performance management team consists of 3 members.
Orientation Program
HR department is also starting orientation program for new
employees. This program will be completed in 5 modules.
I have the honor to be an internee in the most reputed organization (PEL) in the
electronics industry. During my stay at PEL of 4 weeks (form 23th july, 2010 to
19th Aug, 2010) in FP-AD. of PEL, I tried to leave no stone unturned in getting
the best experience & practice of ground realities regarding financial matters
and maintaining accounts relating to sales and credit control. It is a pleasure for
me during my stay in the PEL; I take the practical exposure about the
Accounting and Finance under the well experienced and educated managers.
This is the result of their un-tired efforts that now I have known the use of
different financial softwares used by the Organization. If I talk actually about this
internship experience, I would like to say that my B.COM(HONS) is incomplete
without practical knowledge which was provided me by PEL.
During my internship period I performed my assigned duties on time and

under the prescribed instructions of my immediate boss. I hope that this
practice experience will create glorious opportunities in future.
Inter-department dealing are also very important duty of mine, the major
activities are with Accounts, Finance, Sales, Dealership and , Store Mkt. A.D,
Receiving, Production, IT, Commercial, H.R, Customer Service Dept. (CSD),
Admin & Industrial Relationship (A & IR), Purchase Department.
I feel very comfortable as the concern officers are all very helping and
courteous, it obviously helped me a lot in gaining my confidence and learnt new
things to develop official attitudes. Each department is connected with other, so
there is a team oriented working relationships among departments. The
success story of PEL is also depended upon so loyal team of employees with
admirable motivational package from owners.
Department of FP-AD
IMPORT/EXPORT
FP-AD (IMPORT/EXPORT) is one of the important divisions of Pak

Elektron Limited. This department was established in 1962. The purpose of this
department was to enhance the business of the organization that remains
successful every year up till now. The basic function of the department is to
provide the Home Appliances goods to the consumers under the instilment
business.
FP-AD (IMPORT/EXPORT) fulfill basic need of factory by providing the raw

material for abroad which is not available in local market.
FP-AD (IMPORT/EXPORT) is conducting this business with the Bank Alfalah

Limited.
Department of Credit Control
Credit Control Department is engaged in marinating the complete record of

customers in financial data base software named as “Consumer Marketing
Division with Accounts Receivable”. This department is also engaged in
recovering the amount from customers and creating the debtors.
The basic purpose of D&C.C is engaged
 To maintain the complete records of customers applications.
 To record the total financing by the bank.
 To keep record about loan application.
 To maintain the record about processing fee.
 To maintain the record of customer’s installments.
 To record the delivery orders.
 To maintain the record of installments.
 To maintain the product assessment record.
FP-AD (IMPORT/EXPORT) HIRARCY

General Manager FP-AD (IMPORT/EXPORT)
 Numan Khlid Butt
Management level M2
 Perveez Malik
 Kashif Manzoor Sherezi
Management level M1
 Imran Kaazmi
Management level E1
 Ghulam Mohayudin
Management level E2
 Shariq Hussain

Management level E3
 Waqar Hussain
 Mohsin Ali
FP-AD (IMPORT/EXPORT) TEAM

Head of department
 Ghulam Mohyudin
Accountants
 Rashid Haneef
 Noor-Ul Khan
 Ghulam Abbas
 Muhammad Naveed
 Ali Raza Butt
 Ahmad Baig
NEW SOFTWARE USED BY FP-AD
Swot analysis consists of analysis of internal and external environment of

an organization.
Internal environment
The company should evaluate strengths and weaknesses analysis
periodically. Company should review financial, marketing, manufacturing,
human resources and organization competences.
So PEL also use its strengths to avail the opportunity.
Strengths
PEL has the following strengths
 Brand loyalty
 Strong Dealer Network
 Quality Products
 After Sales services
 Challenger position
 Technological differential advantage
 Strong Management control
 Power division
 Distribution of authority
Brand loyalty
PEL has created a strong brand image in the mind of the customers
through higher quality and low prices. The customers of PEL always prefer its
home appliances like Window AC, split AC and refrigerators, during the time of
purchase. PEL is a popular company in Pakistan and every one knows about
the PEL products and its brand name.
Strong Dealer Network
It is also the plus point for PEL that it has developed a strong dealer
network in the market. The dealers always try to sell the PEL products to the
customers because, the company for its products, gives them a high margin.
The management of PEL also provides more incentives to their dealers than
their competitors. Dealers are very conscious about the PEL products and
always guide the customer in buying the PEL products.
Quality Products
PEL is also in a strong position because it provides superior quality

products to customers. So it gives an edge to company over its competitors.
Due to best quality, guarantee of products of PEL is more than its competitors.
After Sales Services
PEL provides the after sale service to customers which increases the
customers satisfaction. The biggest strength of services department is that it
handles a complaint within 24 hours in any part of the country, which helps in
increasing the satisfaction level of customers.
Strong Management control
It is another plus point that PEL has a strong management. Its

employees are competent, efficient, skilled and knowledgeable. They always
cooperate with the top management in achieving of goals that are assigned to
them. Employees are well aware about the company objectives and are
committed to the development of company.
Power division
Power division is the unique strength for PEL. Most of electronics

companies deal in only home appliances but PEL is the only company which
deals in home appliances and power appliances
Technological differential advantage
Strength for PEL is the advancement in the technology. The company

uses imported danfoss compressor in refrigerators, air conditioners and it is
also a differential advantage for the company because no any company has this
advantage.
Distribution of Authority
Top management of PEL delegates the power to the subordinates for

achieving the marketing objectives in a specified time period. So every manager
has an authority to take decisions to achieve the goals of company. In this way
they save the time and react quickly.
Weaknesses
Along with its strengths PEL has also some weaknesses which needs to
eliminate in future. If PEL overcomes these weaknesses then it can become a
market leader in home appliances.
PEL looses some competitive edge in the following areas
 Financial Problems
 Lack of advertisement
 System variations
 Lack of Product range
 Less Utilization of capacity

 price setting
Financial problems
Sometimes PEL faces the financial problems because its stocks are so
much piled up in the stores that creates problem of cash inflow and outflow and
cause a problem in production process due to short raw material.
System variations
It is also the main weakness of PEL that there is a rapid change in

polices of selling the products. That creates problems for the selling team to sell
the products to the dealers.
Lack of Product Range
PEL has introduced more products of consumer items but there are more
needs to develop new consumer items.
Less utilization of capacity
Due to lack of finance a company cannot utilize all its resources on its full
capacity. It increases the cost of products per unit that decreases the profit
margin of each consumer item. As the production capacity and actual
production of different products is given below (2005)
Production capacity Actual

production
Refrigerators 3500000 2924905
Energy meters 1200000 986085
Transformers 2000 1356
Air conditioners 36250 6560
Price setting
Price setting is also a main problem for PEL because it sets its prices on
the bases of competition and this strategy reduces its profit margin.
External environment
It consists of opportunity and threats
Market opportunity
It is an area of buyer need in which a company can perform profitably.
Market threat
It is a challenge due to an unfavorable trend of development or decline in

sales or profits in absence of defensive marketing action
The strengths, weaknesses, opportunities and threats of PEL are discussed

below
Opportunities
For PEL, there are more opportunities for expansion in business. Following are
the opportunities for the PEL.
 Exploration of market
 Increase in product range
 Export opportunity
 Increase in production capacity
Exploration of market
PEL has the opportunity to explore the market in all over Pakistan. Even
though PEL has introduced its products in many cities of Pakistan but there are
so many places that are yet to be exploited.
Increase in Product Range
PEL can increase its product range that will be more profitable for the
company. There are more needs to develop new consumer items like PEL
Vacuum cleaners etc.
Export opportunity
PEL has also the opportunity to export their products in other

international countries like UAE, SAUDI ARABIA, and some other countries of
Middle East.
Threats
Following are the main threats for the PEL
 Strong competition
 Chinese product in the market
 supplier’s growing bargaining power
 Instability of governments
 Tax department
 World Trade Organization
Strong competition
There is very strong competition in the home appliance division. Every

company adopts different strategies for selling of the products. It reduces the
profit margin of each company and increases the bargaining power of the
buyers who will demand higher quality of products at lower cost.
Chinese product
Chinese products are another threat for the Pakistani companies

because these products are cheaper than the Pakistani products. Chinese
products stress the indigenous companies to lower the quality and prices that
will not be profitable in the long run.
Instability of Government
The rapid change in governments has become a threat for the

companies because every government adopts new policies for the industries.
So it increases the uncertainty for the investors who want to invest heavy
amounts in their new projects.
Tax department
Tax department is another major threat for the company that is

restraining the business expansion. There is a most complicated tax procedure
operating in the country that creates hurdle in the production and smooth
functioning of different companies in Pakistan.
World trade organization
World trade organization has allowed from 2005 to any company offering
home appliances to export their products after paying less duties or duty free
products. That will increase the pressures for the local companies to reduce the
prices and increase the quality. It will increase the competition among the
foreign companies and local companies.
Supplier’s growing bargaining power
The supplier growing power is increasing due to more demand of the

electronic industry due to this phenomena the suppliers of raw material are
charging high prices and it is reducing average profit margin of companies.
Liquidity Analysis
Current Ratio
Year 2004-05 2005-06 2006-07
Current Ratio 1.15 1.04 1.32
Interpretation
The liquidity position of PEL has been satisfactory in the last few years. As the
above analysis table indicates, in 2005 the liquidity position was 1.15 times
which means that in 2005 the firm has Rs. 1.15 to pay a liability of RS. 1 which
is quite well but in 2006 it suddenly reduced to 1.04 times. This change in the
liquidity position is due to higher increased percentage of current liabilities in
the balance sheet of year 2006. But in 2007 PEL has decreased its current
liabilities and is having an improved current ratio of 1.32 times which is much
better in a sense that the company has maintained a well managed level of
assets to pay its liabilities.
Quick Ratio
Year 2004-05 2005-06 2006-07
Quick Ratio 0.70 0.62 0.84
Interpretation
Secondly, quick ratio is also indicating that in 2006 the higher
increased percentage of liabilities also cause quick ratio to
decrease from 0.70 times to .62 times but in 2007 PEL managed to gain
quick ratio of .84 times by reducing level of stock in trade as well as its
current liabilities portion.
Activity Analysis
Inventory turnover
Year 2007 2006 2005
Inventory 3.70 2.85 2.69

Turnover
Interpretation
The above inventory turnover table and graph shows an increased level of
inventory turnover in year 2007, which is a very good indicator that shows
higher ability of the firm to utilize its inventory to generate sales during the
year 2007.
Total Assets Turnover
Year 2007 2006 2005
Total Assets Turnover 1.02 0.93 0.84
Interpretation
Fifthly, total asset turnover ratio is also moving upwards which
indicates that the firm’s operations are tending to be more efficient
then from previous years. So the overall activity analysis of PEL
shows that the firm is performing its business activities effectively and
efficiently
Analyzing Debt
Debt Ratio
Year 2007 2006 2005
Debt Ratio 64% 68% 65%
Interpretation
The above debt analysis table shows that in year 2007, the debt ratio of the
firm has decreased as compared with years 2006 and 2005 which seems to be
a good indicator and it shows that the firm is trying to maximize the utilization
of its own business resources and minimizing the reliability on outside sources
of debt or financing for investment purposes.
Debt Equity Ratio
Year 2006-07 2005-06 2004-05
Debt Equity Ratio 0% 0% 0%
Interpretation
The above calculated value shows that the firm 0% debt equity ratio which means
that the firm is taking no long term debt and using owner’s equity for investment
purpose. It is a good indicator in a sense that the firm has no long term obligation
as well as the firm does not have to pay interest on long term debts. But on the
other side it might be a drawback for the firm. They can get long term debt and
can increase their investments as well as their profits
Analyzing profitability
Year 2007 2006 2005
Gross Profit Margin % 21 22 22
Operating profit margin% 13 12 11
Net profit margin % 4.9 4.6 4.2
Return on total assets % 5 4 3
Return on equity % 17 16 12
Interpretation
The above profitability schedule shows that Gross profit margin ratio of the
firm has decreased in year 2007 due to unexpected increase in cost of good
sold which is not a good indicator but considering the volume of decline and
changing environment of the market it is coverable and the firm might
improve it in near future.
Next you can see that the operating profit margin ratio is improving as
compare with last years so it is providing support to some extent to the
profitability of the firm. And while considering net profit margin, it also
indicates an increase in the margin of net profit of the firm in sales which is
also supportive for profitability.
Other profitability ratios are improving as compared with previous years
which show the firm is earning high amount of profits and the assets are
being effectively utilized by the firm to generate profit. And the amount of
earning per share is also increasing which shows that firm is distributing the
earning in its shareholders at a increasing rate which is very much
encouraging for the investors to buy the shares of PEL.
IN PAKISTAN PEL IS ONLY LISTED COMPANY IN HOME

APPLIANCES INDUSTRY. THE OVERALL POSITION ON THE COMPANY IS
WELL. MARKETING DEPARTMENTS ARE PLAYING IN IMPORTANT ROLE
IN ENHANCING THE SALES OF THE ORGANIZATINS. ESPECIALLY CMD IS
CONTRIBUTING VERY WELL IN GENERATING PROFITS. COMPANY’S
ATMOSPHERE IS VERY COMFROTABLE FOR WORKING. COMPANY’S
OTHER POLICIES REGARDING OPERATIONS, FINANCIALS, HR,
MARKETING ARE ALSO VERY POSITIVE AND SATISFACTORY. MAY
ALLAH PROSPERS THIS ORGANIZATION AND FLOURISHED BY LEAPS
AND BOUNDS.
In my opinion there are following areas in which management can improve
organization’s performance by giving some special concentration.
• Regarding financial positions, Company’s profitability ratios are well. But
its net profit ratio is not quite satisfactory due to increased costs and
expenses & management should try to minimize its cost.
• Company should also take measures to improve it return on assets by
properly utilizing its assets to generate sales.
• Company’s inventory turnover ratio is also not satisfactory. Management
should try to increase its stock turnover ratio.
• Regarding HR department, orientation program should be started for
internees.
• Regarding products, company should try to enhance its product range.
• There should be pick and drop facility for the employees.
• There should be separate flats for outstation employees.
Skill Acquired
In FP-AD (Import/export) department the skill that I acquired during my

internship period is following.
Post shipment
The senior commercial office taking the following step for
efficiently moving the consignment from Karachi to Lahore dry port for custom
clearance etc by road and rail on nature of material.
1) Shipping document
i. Receiving the shipment document courier or bank.
ii. SD thoroughly scrutinerized and forward to custom for
clearaning agent.
iii. For onward submission to local forwarder for movement
of consignment by road and rail.
2) Destuffing
In case of containerized consignment IO will immediately
destuff the consignment at Karachi port, to avoid any
mishandling so that we may able to transport it up to LDP.
3) Negotiable Document
IO will send a request to concerning bank for
release of
SD to PEL approved custom clearance agent.
4) Insurance
Upon receipt of SD they also inform the insurance
company for arrival of consignment at Pakistan.
Custom clearance
For clearance of all consignment, IO will give written

instruction to the clearance agent, for filing the Goods Declaration (GD).
Reception of consignments
I. After clearance and released the consignment from
custom port, IO will issue an internal memo to the
store In.
II. Change with concerning HOD for this information.
III. In case of shortage of material, store tell the IL
department .
In Accounts department the skill that I acquired during my internship period

is following.
On Receipt of Material in store

Following transaction madein account department
1)Raw Material Component Debit
Party Provision Credit
On receipt of Bill in Accounys Department
2)Party Provision Debit

Advance Sales Tax Debit
Fedral Excise Duty Debit
Fright/Process charges Debit
Party Account Credit
On Payment Of Bill
3)Party Account Debit
Bank Account Credit

Withholding tax Credit
On Payment Of With Holding Tax
4) Withholding tax Debit
Bank Account
Credit
In Receiving Store department the skill that I acquired during my internship

period is following.
Incoming store
↓
Supplier deliver
Challan
↓
PBL Purchase
↓
LMRP (Local Material
Receipt Point)
↓
Quality Verification
Physical is responsibility
Of RSI(Receiving Store
Inventory)
Allotted the Inventory

Gate Pass No
↓
QC for inspection
↓
RSI GRNO Alloted
In Accounts (cost control system) department the skill that I acquired

during my internship period is following.
PRODUCTS
Appliance division
 Deep freezers 1
 Television 2
 Microwave oven 3
 Washing machine 4
 Generators 5
 Air condition 6
 Refrigerator 7
Power Division
PEL Power Division manufactures energy meters,

 Transformers 2
 Switchgears 3
 Kiosks 4
 Compact stations 5
 Shunt capacitor banks 6
 Energy meters 7
 Generators 8
OTHERS 0
Following number are allotted to No of jobs
A) Manufacturing (0)
B) Repair under warrenty (1)
C) Chargeable repair (2)
D) Development of new design (3)
E) Resale inspection of products (4)
F) Issue of component for sale (5)
G) Auxiliary material and wages (6)
H) Fabrication of component (7)
I) MFG./Issue of capital assets (8)
J) Maintainance and foctory overhead (9)
Balance Sheet
as at December 31, 2009
December 31,
Note June 30, 2009
2009
(Rupees in thousand)
EQUITY AND LIABILITIES
SHARE CAPITAL & RESERVES
Authorized capital 5 2,500,000 2,500,000
Issued, subscribed and paid up capital 6 1,593,720 1,496,677
Reserves 7 131,931 131,931
Un-appropriated profits 7 2,461,255 2,378,750
4,186,906 4,007,358
SURPLUS ON REVALUATION OF PROPERTY, PLANT AND

8 4,373,769 2,788,311
EQUIPMENT
NON CURRENT LIABILITIES
Long-term financing - secured 9 4,079,149 3,493,417
Liabilities against assets subject to finance lease 10 119,368 103,367
Deferred taxation 11 2,883,631 2,013,543
Deferred income 12 101,108 110,207
7,183,256 5,720,534
CURRENT LIABILITIES
Trade and other payables 13 1,284,080 1,506,702
Interest / mark-up accrued on loans and other payables 14 333,763 337,322
Short-term borrowings 15 4,706,890 3,946,515
Current portion of
- long-term financing 9 783,597 677,349
- liabilities against assets subject to finance lease 10 82,959 85,944
7,191,289 6,553,832
CONTINGENCIES AND COMMITMENTS 16
22,935,220 19,070,035
December 31,
Note June 30, 2009
2009
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 17 13,457,138 9,720,022
Intangible assets 18 511,134 583,512
13,968,272 10,303,534
Long term investments 19 22,906 21,771
Long-term deposits 20 92,152 80,179
CURRENT ASSETS
Stores, spares and loose tools 21 90,721 76,854
Stock-in-trade 22 3,826,744 3,258,607
Trade debts - unsecured 23 3,227,219 3,807,776
Advances 24 825,807 686,044
Trade deposits and short-term prepayments 25 193,963 180,262
Other receivables 14,952 12,671
Other financial assets 26 27,522 26,107
Sales tax refundable 27 154,374 131,593
Income tax refundable 367,325 291,579
Cash and bank balances 28 123,263 193,058
8,851,890 8,664,551
22,935,220 19,070,035
The annexed notes 1 to 48 form an integral part of these financial statements.
NASEEM SAIGOL HAROON A. KHAN

Chairman / Chief Executive Officer Managing Director
Profit & Loss Account / Statement of Coprehensive Income

For the Six months period ended December 31, 2009
Year ended
Note Six months ended December 31, 2009 June 30,
2009
(Rupees in Thousand)
Revenue 29 5,203,152 16,117,524
Sales-tax and discount 30 571,721 1,495,912
Revenue - net 4,631,431 14,621,612
Cost of sales 31 3,148,401 11,283,796
Gross profit 1,483,030 3,337,816
Other operating income 32 40,708 37,088
1,523,738 3,374,904
Distribution cost 33 315,170 892,068
Administrative expenses 34 349,450 609,004
Other operating expenses 35 19,751 116,807
Finance cost 36 619,911 1,372,676
Share of profit/(loss) of associate 19.2 2,438 9,248
Profit before taxation 221,894 393,597
Provision for taxation 37 60,643 133,051
Profit for the period / year 161,251 260,546
Other comprehensive income - -

Total comprehensive income for the period/year 161,251 260,546
Rupees Rupees
Earning per share - -
Basic 40 1.31 1.97
Diluted 40 1.24 1.94
Cash Flow Statement

Annual Statement ended December 31, 2009
Year
Six months ended ended
Note
Dember 31, 2009 June 30,
2009
(Rupees in Thousand)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments for
Amortization of intangible assets 1,925 3,134
Share of profit of associate (2,438) (9,248)
Provision of impairment in value of investments 1,303 40,422
Finance cost 619,911 1,372,676
Provision for doubtful receivables & advances 52,042 58,539
Impairment loss of goodwill 73,632 -
Provision / (reversal) of provision for obsolete and slow moving stocks 381 (6,637)
Provision for compensated absences 1,157 13,599
Gain/(loss) due to change in the fair value of other financial assets (1,415) 46,188
Loss on sale and lease back 1,864 -
Amortization of grant in aid (1,497) (3,150)
Gain on sale and lease back activities (net of amortization during the year (13,608) (18,408)
(Gain) / loss on disosal of property, plant and equipment (748) 1,026
949,089 1,813,446
Cash generated from operations before working capital changes 1,170,983 2,207,043
Working capital changes 45 (455,667) (10,189)
Cash generated from operations 715,316 2,196,854
Finance cost paid (623,470) (1,255,458)
Compensated absences paid (1,081) (14,198)
Income taxes paid (106,032) (269,471)
(730,583) (1,539,127)
Net cash (used in) / from operating activities (15,267) (657,727)
Cash flows from investing activities
Purchase of property, plant and equipment (1,466,257) (2,394,040)
Proceeds from disposal of property, plant and equipment 3,699 12,984
Proceeds from sale and leaseback activities 55,521 210,769
Long-term deposits made during the period/year (11,400) (11,338)
Net cash used in investing activities (1,418,437) (2,181,625)
Cash flows from financing activities
Repayment of long-term financing (269,292) (744,412)
Proceeds from long-term financing 961,272 2,103,237
Payment of liabilities against assets subject to finance lease (38,452) (103,886)
Proceeds from short-term borrowings 760,375 77,527
Dividends paid (49,994) (49,994)
Net cash from financing activities 1,363,909 1,282,472
Net decrease in cash and cash equivalents (69,795) (241,426)
Cash and cash equivalents at beginning of the period /year 193,058 434,484
Cash and cash equivalents at end of the period /year 28 123,263 193,058
Statement of Changes in Equity

Annual Statement ended December 31, 2009
(Rupees in thousand)
Capital Reserves Revenue reserves
Share Capital Premium on Total

Reserves for Unappropriate
issue of
bonus shares profit
shares
Balance as at July 01, 2008 1,496,677 131,931 - 2,074,013 3,702,621
Total comprehensive income

for the year ended June 30, - - - 260,546 260,546
2009
Final dividend for the year

ended June 30, 2009 @ Rs. - - - (49,994) (49,994)
0.95 per preference share
Transfer to unappropriated
profits on account of
incremental depreciation - - - 94,185 94,185
charged during the year net
of deferred taxation
Balance as at June 30,

1,496,677 131,931 - 2,378,750 4,007,358
2009
Total comprehensive income

for the six months period - - - 161,251 161,251
ended December 31, 2009
Final Dividend for the year

ended June 30, 2009 @ Rs. - - - (49,994) (49,994)
0.95 per preference share
Transferred to reserve for

bonus shares
- - 97,043 (97,043) -
Issue of bonus shares 97,043 - (97,043) - -
Transfer to unappropriated
profits on account of
incremental depreciation - - - 68,291 68,291
charged during the period -
net of deferred taxation
Balance as at December
1,593,720 131,931 - 2,461,255 4,186,906
31, 2009
NASEEM SAIGOL HAROON A. KHAN

Chairman / Chief Executive Officer Managing Director
Key Operating and Financial Data
Directors' Report to the Shareholders
Directors' Report to the Shareholders

The Directors are pleased to present their Report together with Company’s
audited financial statements for six months ended December 31, 2009.
Operating Results & Performance Overview Company achieved sales of Rs.

5.203 billion during six months ended December 31, 2009 which were
marginally lower than corresponding period’s sales of Rs. 5.547 billion. Profit
after taxation of Rs. 161 million grew more than 16% over previous six months
figure of Rs. 138 million. This performance is noteworthy especially in view of
prevailing non-conducive business conditions. Comparative figures, although,
have been reported for the year ended June 30, 2009 but for better
understanding figures of corresponding six months have also been reported
wherever necessary, in this report.
In order to match the seasonal business cycle with the accounting year,
Company has adopted calendar year as its accounting year whereby the year-
end will not fall in the peak season. As such these accounts have been
prepared for six months ended December 31,2009 after
obtaining necessary approvals from relevant authorities. Summary of the results

is as under
Financial Results (Rs. in Million) 6 months ended 6 months ended Year ended
December 31, December 31, June 30, 2009
2009 2008
Gross Sales 5,203 5,547 16,117
Gross Profit 1,483 1,305 3,337
Operating Profit 839 820 1,757
Profit before tax 224 204 394
Profit after tax 160 139 261
Earnings per share (Basic) - Rupees 1.31 1.17 1.97
Earnings per share (Diluted) - Rupees 1.24 1.06 1.94
BIBLIOGRAPHY
BOOKS
• Principle of marketing by Kotler Armstrong
ARTICLE
• Monthly article of pak electron limited(PEL)
• Quarter report of pak electron limited(PEL)
• Semi annually report of pak electron limited(PEL)
• Annually report of pak electron limited(PEL)
WEBSITES
• www.pel.com.pk
• www.secp.com.pk
• www.scribed.com.pk
• www.kse.com.pk
• www.google.com.pk
• www.ibp.com.pk

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Pak Elektron Limited

• Pak electron limited

Presented To Prof, Dr. Liaqat Ali

Presented By Talal Haroon

Class B.com (hons)

Hailey College of Commerce

I DEDICATE THIS REPORT TO MY

The summary of PEL’s market share (Product wise)

During my internship period I performed my assigned duties on time and

KOHINOOR TEXTILE MILLS LIMITED

Initial Capacity 25,000 spindles

PAK ELEKTRON LIMITED (PEL)

SARITOW SPINNING MILLS & AZAM TEXTILE MILLS

KOHINOOR POWER COMPANY LIMITED

KOHINOOR ENERGY LIMITED

Pak Elektron Limited (PEL)

In 1978, the Saigol Group of Companies purchased major shares of Pak

In 1981, PEL window type air conditioners were introduced in technical

In 1986-87, the company started manufacturing of refrigerators in technical

Chief Financial Officer

Registered Office Work Site

• To carry on the business or businesses of manufacturing, selling,

• To carry on any business whether manufacturing or otherwise which

• To produce high quality and standard products.

• To produce equipment to be used in numerous projects of national

• To secure a high share / quota of WAPDA’s demand for power

• To produce skilled workers and technicians through its

“To Excel in Providing Engineering Goods and

Services through Continuous Improvement.”

 To provide quality products & services

 To focus on personal development of

 To promote good governance, corporate

The company comprises of two divisions

1.1 Marketing Appliance Division

customer needs and preferences. This Marketing department has un-beatable

After Sales Services is another active department of PEL’s Appliances division,

Consumer Marketing Department

A door-to-door marketing system introduced by PAK Elektron in the shape of

This division is comprised for four departments

Marketing Power Division

Production Production Production

2.1 Marketing Power Division

Marketing department of power division consists of most professional engineers

2.2 Production Transformers

This department manufactures following types of transform

Distribution transformers (pole mounted or pad mounted design)

2.3 Production Energy Meters

Another successful and most powerful department of power division is its

This department also manufactures MC8 type a direct connection single-phase

2.4 Production Switchgears

 Human Resource department

 Internal Audit Department

 Marketing Appliances Division

 Production Appliances Division

 Buying Appliances Division

 Marketing Power Division

 Production Power Division

 Buying Power Division

 Consumer Marketing Division

 Distribution and Credit Control Department

 Customer Service Department

 Information Technology Department

 Industrial Relations and Administration Department