INTERNSHIP REPORT

SUBMITTED BY: SAIF ULLAH RANA

STUDENT OF : FROM : COMMERC

B.COM OUAID-E- AZAM COLLEGE OF

Lahore

SUBMITTED TO: MR.

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PREFACE
There is a large difference between knowledge and practical work. Books are the source of Knowledge, but there is the practical work is something different. After B Com of Commerce an internship for six weeks is a good step for students to acquire some practical knowledge about the course. Here he applies his knowledge practically what ever he has learnt in the class. This program also improves the confidence in student when he works with some professionals. In class student gain different concepts of accounting, Finance, Banking, Insurance, Management, computer and about other related fields. Internship program provide him the chance to see all the things from near and strengthened his concepts. Office environment is entirely different than class, so the student faces various problems in practical work, business field and office environment. But with the laps of time they adopt themselves with the office environment and learn the management behaviors, attitudes and nature of work. This training provides me a lot of practical knowledge and confidence, which I feel will help me in my practical life. In PEL Industry, I learn some and the person with whom I worked tried best to deliver some knowledge. In this report there is a complete profile of the Saigol Group, Who is the owner of the PEL Industries. There are also all the information about the policies, structure and all the financial information about Pak Elektron Limited.

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DEDICATED
TO

My Sweet Parents, Nice Teachers, sisters and brothers Who instilled in me the importance of Education and hard work? Who sacrifice their sweet wishes to fulfill my wants? And whose prayers helped me in every field. My Friends Who encouraged me in the course of life?

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10--12 4. P/L Account & Capital Structure Borrowing & Financial Summary Management Hierarchy Divisions Finance Department Budgeting 4 . Company Information Range of Products Management Profile Associated Companies & Bankers of Company Balance Sheet. 6 2. 19 8. 20--21 10.CONTENTS Sr. 15--18 7. 7---9 3. 13 5. # Page # 1. 21--23 11. 24--25 Vision & Mission statement. 20 9. 14 6.

33—36 Products Hierarchy Industry Analysis Market Analysis COMPANY INFORMATION BRIEF HISTORY PAK ELEKTRON LIMITED was set up in 1956 as a joint venture with one of the largest and renowned manufacturers of electrical equipment Messrs. After conclusion of agreement with AEG. 28—33 14. when AEG finally phased out. The production continued with AEG designs with much greater emphasis on the quality and reliability of the products which earned unique distinction of supplying electrical equipment to projects of paramount national importance like Mangla Dam and Tarbela Dam Projects. the designing and manufacturing of all equipment was carried out jointly by AEG experts and PEL personnel. Up to 1962. Binnie & Partners (England). The entire job of machinery requirements and layout of the factory building was planned and implemented by AEG who produced very well balanced facility for the design and manufacture of the above equipment and the commercial production was commenced on 22 November 1956. PEL staff. in the meantime. total share holding of AEG was purchased by the then sponsors . As a part of first phase of its BMR 5 . AEG of West Germany for manufacturing Transformers.12. Harza Engineering International (USA) and Miner & Miner International Inc. The majority shares were acquired from Malik Brothers by Saigol Group on 11 October 1978 and immediately on takeover the new management chalked out both long term and short term plans to put the company back on the path of progress. Switchgears and Electric Motors etc. had received specialized training in USA and West Germany which enabled PEL to establish itself as the leading manufacturers of electrical equipment in the country with an excellent reputation for high quality and thus PEL came to be known as "THE QUALITY CONSCIOUS COMPANY". (USA). 26--27 13. PEL equipment was approved by consultants of international repute including Preece Cardew & Rider (England).Malik Brothers.

the production capacity of Refrigerator Section will reach a level of 252. Italy for the assembly and progressive manufacturing of compressors for refrigerators and deep freezers. Like Airconditioners these products have also been well received by the local market Which speaks highly of the confidence the consumer has developed in the quality products manufactured by the company? During the year 1990 the company has signed an agreement with Messrs HITACHI of Japan for the manufacture of Vacuum Circuit Breakers. The machinery has come into operation in October 1991 and with the balancing. The Company commissioned its plant for the manufacture of Electricity Meters in Pakistan in June 1994 with the technical collaboration and under licence from M/S Asea Brown Boveri United State of America (A. As a part of long term plans. For the project National Bank of Pakistan . balancing. USA). Ferozepur Road. The technical know-how agreement has been signed with M/S NECCHI Compressori. and is spread over an area of 242 kanals and 15 Marlas of leasehold land in industrial 6 .450 cubic feet. The plant consists of most modern and latest numerically controlled electronic machines with robotics technology and is capable to produce 960.the leading bank of the company provided the financing.m. Lahore. The company launched the second phase of its BMR and expansion of the existing product line in the year 1987 and imported machinery for the manufacture of Refrigerators and Deep-freezers for a total value of Rupees 22.B. the manufacturing of window type Air conditioners was taken up in 1981 and was immediately established for quality.98 million and Bridge Loan of Rupees 7.000 single phase electricity meters per annum in accordance with the international standards and specifications using the latest and most modern techniques available in the world. modernization and replacement of the Existing plant.11 million. The company has entered into an agreement with Pakistan Industrial Credit and Investment Corporation (PICIC) for a foreign currency as well as local currency loan of Rupees 25 million for the expansion. Pak Electrons Limited is known for its continuous research and development and transfer of technology from abroad. modernization and replacement of machinery. LOCATION AND FACILITIES: The project is situated at 14-k. The management of the Company decided to further expand its operation by establishing a plant for the manufacture of compressors for refrigerators and deep freezers.50 million (against the public issue of its shares) was provided by the ICP-led Consortium.Programmer the new management injected the additional working capital of Rupees 8.B.

The technical know-how for Deep-freezers was obtained from ARISTON of Italy who is the largest manufacturers of "white-goods" in Italy. Lahore. The company has obtained technical know-how from HITACHI for the manufacture of Vacuum Circuit Breakers.883 square feet. the know-how was obtained from SILTAL CASA SPA of Italy. TECHNICAL KNOW-HOW & FOREIGN COLLABORATION: The company had obtained technical know-how from General Corporation (now Fuji General Limited) of Japan for the manufacture of its Airconditioners and thus was able to produce a unit which is now preferred by the consumers over all the other imported as well as locally manufactured units. For the manufacture of Refrigerators. and presently the total covered area comes to 232. They have also helped lot of other countries in setting up similar projects for making "white goods".area of Kot Lakhpat. The know-how contract was for five years ending in the year 1988. RANGE OF PRODUCTS 7 . Factory is located on the main road where public transport is available round the clock helping in easy access to the labor and customers. who are one of the major manufacturers of "white-goods" in Italy and has assisted in the establishment of similar plants in many other countries.

A strict quality control at PEL has ensured that all its products are produced to the international standards. II. The company is presently producing the following very high quality goods:I. etc. Kiosks. ⇒ Special Furnace Transformers and Silicon Oil Transformers. And 100 KA short circuits withstand level. SWITCHGEARS: ⇒ High Tension indoor and outdoor type switchgears up to 33 KV voltage and short circuit level of 750 MVA.415 KV and 33/11 KV up to 5000 KVA. TRANSFORMERS: ⇒ Outdoor and indoor distribution transformers of 11/0. ⇒ Low Tension indoor and outdoor type switchgears up to 4000 Amps. ⇒ Pad mounted transformers. Dry Type Transformers. 8 .

⇒ Motor Control Centers. REFRIGERATORS: Full range of single door and double door refrigerators. IV. slim line. III. WINDOW TYPE AIRCONDITIONERS. DEEP-FREEZERS: Full range of deep-freezers will resume production shortly. 9 . SPLIT AIRCONDITIONERS. ⇒ Relay and Control Panels AC/DC Auxiliary Service Panels.⇒ Distribution Boards. ⇒ Automatic Power Factor Improvement Plants. V. MICROWAVE OVENS. and Jumbo size freezers. Presently being manufactured in suitable sizes ranging from 8 cubic feet to 17 cubic feet wide body. ELECTRICITY METERS: Electronic digital and Mechanical Single Phase/Three Phase electricity meters are produced in accordance with the International specifications.

financially sound and reputed sponsors manages the Company. Presently we are importing these products under completely built units (CBUs). Mian Naseem Saigol BOARD OF DIRECTORS 10 . Chairman/Chief Executive Mr.TELEVISION SETS. diligence and the Almighty’s Beneficence the management team at Pak Elektron Limited have earned reputation for excellence in manufacturing of electrical as well as home appliances and their marketing. Management Profile A committed team of highly qualified. experienced professionals. Through sheer dedication. We also manufactured earlier Window Type Air conditioners and Split Air conditioners.

Tajammal H. M. Bukharee (Member) AUDIRTORS Yousuf Adil Saleem & Company Charted Accountants Company Legal Advisor M/S Hassan & Hassan Advocates Associated Companies The following are the associated companies of the Company as per section 2(2) of the Companies Ordinance 1984. Wajahat A. Azam Saigol (Chairman/Member) Mr. Homaeer Waheed Mr. Haroon A. Bukharee (NBP Nominee U/S 182 of Ordinance) Mr. Gull Nawaz (NIT Nominee) Mr. Murad Saigol Mr. Khan (Member) Mr. Baqi (NBP Nominee U/S 182of Ordinance CHIEF FINANCIAL OFFICER.Mr. M. Tajammal H. FCA AUDIT COMMITTEE Mr. Shahid Sethi Mr. Masood Karim Sheikh (NBP Nominee U/S 182 of Ordinance) Mr. Azam Saigol Mr.         Kohinoor Industries Limited Kohinoor Power Company Limited Kohinoor Energy Limited Azam Textile Mills Limited Saritow Spinning Mills Limited Saritow Pakistan Limited Saigol Brothers Limited Guarantee Life Employment Limited 11 . FCA SYED MANZAR HASAN COMPANY SECRETARY: Sheikh Muhammad Shakeel. Haroon Ahmad Khan (Managing Director) Mr.

576.492 June 30 2005 1. Lahore 5717364-5 Fax: (042) 5715105 E-mail: Website Address: shares@saigols.215.         Progressive industries (Lahore) (Private) Limited Art Center (Private) Limited Saigols (Private) Limited Conforce (Private) Limited Kohinoor Autos (Private) Limited Kohinoor Tractors (Private) Innovative Technologies (Private) Limited Raytex (Private) Limited Standard Grinding Wheel Industries Limited Gulberg-V.683.pel.303.pk The Bank of Punjab Bank Alfalah Limited Faysal Bank Limited Meezan Bank Limited My Bank Limited National Bank of Pakistan PICIC Commercial Bank Limited Limited Saudi Pak Commercial Bank Registered /Head Office: 17-Aziz Avenue.619 2.346 2376893 12 .070 2.194 1.873 1.167.136. Tel: (042) 5718274-5 or Bankers of the Company: BALANCE SHEET: ASSETS SHARE CAPITAL & RESERVES (Rupees in Thousand) June 30 2006 1.264 June 30 2004 800547 Share Capital Reserves 1.com. Canal Bank.467.com www.

488 936.401 249.487 393.144.287 8. plant and equipment Intangible assets 3.grant-in-aid 69.880 2.365 182.904 602.048.599.281 3594164 4641 3598805 Long term investments 11.709 3.795.132 6.996 0 258980 0 Deferred Income .092 703910 74646 Deferred Liabilities Taxation Employee benefits 409.093 62 345.257 362.290.107.814 911.966.SURPLUS ON REVALUATION OF PROPERTY.369 2.227 60.697 140.711 96701 13 .741 8.747.601 NON CURRENT LIABILITIES Long-term financing Liabilities against assets to finance lease 250.531 3256102 404774 1.716.924 123.500 77356 1114892 CURRENT LIABILITIES Trade and other payables Interest / mark-up accrued on loans and other payables Short-term borrowings Proposed Dividend Current portion of long-term liabilities Long-term financing Liabilities against assets subject to finance lease Provision for taxation 321.685 4.018. PLANT AND EQUIPMENT 464.580 226.340 836.879.171 488.210 2.827 930063 0 1897577 23688 TOTAL LIABILITIES 10.496 105.896 6747887 (Rupees in Thousands) June 30 2004 June 302006 June 302005 NON CURRENT ASSETS Property.821 73.825 62.465 3.

266 91. spares and loose tools Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables Other financial assets Cash and bank balances 58.963.026 2.713 1.179 236.541 13073 CURRENT ASSETS Stores.543 2.022 448.853.765 1.396 225.966.113 287.811 25.363 49157 1309131 980491 565083 17530 0 0 117916 3039308 TOTAL CURRENT ASSETS 10.261 4.471 35.934 6.034 9.Long-term deposits 38.310.107.596 335.576.018.896 6747887 PROFIT & LOSS ACCOUNT 14 .741 8.334 52.889 218.489 270.614.

409 125.482 25.864 100.160.701 285.(Rupees in thousands) June 30 2007 June 30 2006 June 30 2005 Sales Less: Sales-Tax and Discount Sales .174 Rupees - Distribution cost Administrative expenses Other operating expenses Finance cost Share of loss of associate Profit before tax Provision for taxation Profit after tax 2.79 Earning per share Basic Diluted - 4.623 2.075.888 5.348 285.net Cost of goods sold Gross Profit Other Operating Income 13.412 262.787.500 6.813.634.981 356.162 707.393 60.489 1.322 588.283.630.549.042.108 742.751 74.556 52.609 442.27 Capital Structure Authorized Capital: 15 .529.351 2.670 1.553 2.077.018 7.130 23.625 450.142 Rupees 6.995 380.53 4.882 5.407 402.298.142 9.220 8.408.487 9.264.382 1.047.667 112.183 11.165 Rupees 590.458 11.360.489.109 12.337 516.30 5.160 1.287.875 95.676 23.429 937.014 1.

375 185.87 6 83.50 1 83.10/.375 4.000.00 0 - 250.51 8 1. SUBSCRIBED AND PAIDUP CAPITAL: Issued at Rs.50 1 189.Ordinary shares of Rs.0 00 250.0 (Rs.0 (Rs.24 3 1.082 531.525 147.41 8 185.87 3 605.00 0 - ISSUED.375 4.Each) 00 1.each.375 4.000.082 610.92 2 1.500.082 189.10 each (Rupees in Thousands) June 30 2006 June 30 2005 June 30 2004 June 30 2003 June 30 2002 250.525 100.41 8 June 30 2005 June 30 2004 Rupees June 30 2003 June 30 2002 16 .525 100.10/.each) 00 Preference Share Capital 1.00 0 1.87 6 236.10/.00 0 605.49 4 288.082 236.1 94 83.19 4 605. (Thousands) June 30 2006 Ordinary share capital: Opening Issued for Cash Bonus Shares Issued against building and machinery Issued against Scheme of amalgamation Closing Preference Shares: Class – A Class -.215.500.B Closing Total issued share capital 237.00 0 605.49 4 367.136.00 0 - Ordinary Share Capital 1.0 00 1.51 9 1.375 4.00 0 1.89 4 1.8 73 237.

788 5. 2001 to 2006 is as below: A o n in P Rm mu t K illion s Ju e 2006 n G ross S ales D iscounts &T axes N S et ales C G O S G ross P rofit A inistrative E dm xpenses S elling E xpenses O perating P rofit F inancial &other C harges P rofit before T axes T axes P rofit after T axes S rce: P L ou E 1 1.654.897.287 6.5 32 1. 927 2. 907 June 30 2003 84.*The company is in the process of issuing 302. 577 3. 820 FINANCIAL SUMMARY A snapshot of the Company’s performance over the last few years.129 1.489 285 402 838 450 442 96 285 Ju e 2004 n 6.042 1.859 1.634 9.132. 17 .077 1.893 685 143 141 402 342 146 16 130 Ju e 2001 n 2. 798 1. cumulative non-voting Preference Shares.37 9 756. 827 3.521 392 2. 994 June 30 2002 65.298 1.147 4.078.382 827 134 166 527 359 184 43 141 Ju e 2002 n 3.509 620 98 125 397 373 107 13 94 The Group also holds expertise in trading business which adds to the wide array of business activities already undertaken by the Group.3 76 1.0 43 785. 889 Lease Finance Long-term Borrowing Short-term Borrowing Total 287. 955 June 30 2004 104.080.282 742 517 75 442 Ju e 2005 n 8.0 65 1.821.048 262 590 1.8 61 3. BORROWINGS Rupees (Thousands) June 30 2006 June 30 2005 185.202.639.070 169 274 627 396 280 3 277 Ju e 2003 n 3.47 0 789.983 773 3.74 9 2.00 2 986.408 7.578 1.209 2. 340 4.075 1. 2.360 2.6 19 571.163 585 2.879.929 3.795.5 milliom class B.

Transformers and energy meters production is already ISO 9002: 2000 certified while production of switchgear is in process of being certified. (A p plia nces & P ow er ) S r. M an a g e r F in an ce S r. M a n ag e r M kt . M a na g e r (F o re ig n P ro cu re m e nt ) S r. M a n a ge r Q C . ⇒ Manufacturing and Quality Control ⇒ Design and Development ⇒ Marketing A brief description of each is as follows: Manufacturing and Quality Control: The Manufacturing Department is responsible for monitoring and execution of production activities for transformers. energy meters and switchgear and also overlooks the vendor development and procurement of local and imported components used in manufacturing of power equipment. M an a ge r H R&A S r. The Quality Control department is responsible for maintaining product quality. The sales and profit participation by the Division is high due to high quality standards and future growth opportunities. M a na g e r M kt .MANAGEMENT HIERARCHY: C h ai rm an M a n a gin g D ire c to r G M F ina n ce G M M a nu fa ctu r in g (P ow e r D ivison ) G M M a rketing (P o w e r D ivison ) G M M a nu factu rin g (A pp lian ce s D ivisio)n G M M a rke ting (A p p lian ce s D ivisio)n S r. (P o w e r D ivisio n ) S r. (A pp lia nces D ivsiio)n S r. M a n ag e r H IA M a na g e r C o m m e r cia l DIVISIONS POWER DIVISION Power Division accounted for 47% of the Net Sales of the Company as of June 30th 2006. 18 . The Power Division comprises of three departments.

The facility is equipped with state of the art technology and is responsible for developing power distribution products in line with customer Requirements.Design and Development: An independent design and development facility with highly qualified team of engineers has been established. ⇒ ⇒ ⇒ ⇒ Manufacturing and Quality Control Research and Development Marketing Consumer Finance A brief description of each is as follows Manufacturing and Quality Control: The Manufacturing Department is responsible for the monitoring and execution of production activities related to the refrigerators and air conditioners and also overlooks vendor development and procurement of local and imported components. The Appliances division comprises of four departments. Marketing The Marketing Department is responsible for the marketing and sales of Power Division products. APPLIANCES DIVISION The Appliance Division accounted for 53% of the Net Sales as of June 30th 2006. Quality maintenance is the prime concern for the success of this segment therefore. The facility ensures reliable power distribution to industrial and commercial projects. Research and Development: 19 . Since the products involved are tailor made to customer requirements. Most of the selling activity involves personal selling. knowing the requirements well and adhering to the quality standards required by the customer is of utmost importance. a separate Quality Control department is responsible for the pre-sale inspection of products. The Department is responsible for meeting sales target for regular customers and negotiating sales deals.

Consumer Finance: The Consumer Finance Department is responsible for the marketing and sales of Appliance Division products under consumer finance arrangements with banks. preparation and monitoring of budgets targets. FINANCE DEPARTMENT The Finance Division manages the financial resources of the Company.A well equipped Research and Development Centre is responsible for product design and development. The Centre is staffed with more than 30 engineers. Kamra. 20 . The financing plan under consumer finance arrangements is optimized for people with low Salary that otherwise would not be able to afford up-front payments. MEPCO. It has the overall responsibility of preparing the Company’s operating results. The Department comprises 21 area sales offices having over 100 marketing and sales personnel supported by area credit control and ware housing departments. the primary focus is on utilizing the dealer network to push sales. In addition dies and moulds making shop is equipped with latest Computerized Numerically Controlled (CNC) machines and uses CAD-CAM and other modern tools. Sales promotion activities undertaken by this Department involve direct marketing and mass marketing through media. Pakistan Aeronautical Complex. maintenance of financial records. In this regard. Packages and The Group companies. The Division is also responsible for human resources related activities. through incentive schemes targeted at dealers. inventory management financing arrangements and dealing with government agencies such as CBR etc. designers and technicians. the Company has entered into arrangements with a number of corporate institutions to provide employees with attractive schemes. Hasanabdal. Air Weapons Complex. PEL has already started this scheme with various public sector entities like LESCO. Latest Computer Aided Designing (CAD) and Computer Aided Modeling (CAM) equipment and devices are being used. variance analysis. private and public sector corporate institutions. POF Wah Cantt. The Department was formed in 2003 and focuses on salaried individuals employed in Government organization. Marketing: The Marketing Department is responsible for the marketing and sales of home appliances products and also undertakes sales promotion. However.

Handling cash INS & OUTS. Handling short term and long term funds requirements ASST. JOBS ASSIGNMENTS IN FINANCE DEPARTMENT: GENERAL MANAGER FINANCE To take major financial decisions. The Company has a Local Area Network (LAN) of over 450 computers and Wide Area Network (WAN) linked with the area offices. MANAGER FINANCE     Rate negotiations.Information Technology Department The Information Technology Department is responsible for providing efficient communication infrastructure with an objective of paper less environment and fast and reliable information sharing. MANAGER FINANCE  Reports to manager finance  Arranging funds for production  Preparation of Budget COURIERS  Documents correspondence  Dealing with other departments to avail the documents required Reporting to all the manager of finance department  OBJECTIVE OF FINANCE DEPARTMENT Finance people concentrate on following points for accomplishment of their tasks  Try to raise maximum funds 21 . Bank relations.

sales. capital expenditures. Make arrangement for allocation of funds appropriately  Doing above mentioned activities by controlling cost FINANCE SECTION There are different modes of financing are used. It is true in case of finance department. HOW THEY MAKE PLANS Planning is an important aspect for achieving objectives ahead. These Budgets are sent by all departments by keeping in mind the cost of the 22 . So while Making planes manager foresee the situations in advance and take decisions. Arshad Ali. CASH FINANCE FACIALITY Loans can be taken from any commercial bank. Budgeting: Budgeting means to make the estimation of next financial year’s expenses. In the budgeting first all the Managers send budgets of their relative departments in which the details of the previous year’s actual and next year’s budgeted expenses and also the actual and budgeted employees by their grades are given to the Assistant Manager M. Finance department have to do advance Planning for different tasks about production and utilization of loans appropriately In advance HOW THEY TAKE DECISIONS The only thing that is considered at the time of taking decisions regarding fund raising is lower markup rates down because this is what makes loans feasible Or otherwise. Employees etc.

About each of them a brief Detail is given below. Then both Arshad Ali and Senior Accounts Officer prepare the following from these budgets in the summary form so that it can be easily presented to Senior Finance Manager Amir Sattar and who shows these final reports to the owner of this firm who in the end approves the entire budget. ⇒ Product Wise sales summary. ⇒ Daily Report.products. (1) Expense Summary: In the expense summary the expenses of whole year Month wise are prepared in the summary form by using the software budgeting system and also the estimation of employees are given that how much employees will be needed in the financial year and also which employees are going to be promoted. ⇒ Capital Expenditures Summary. ⇒ Expense Summary. (3) Product Wise Sales Summary: The sales summary of all the products by their sale in the local market and also their sale through export and the sale of the products through the 23 . In the Software the expenses and Employees grades are already given you have to just add the data in it and we also calculate the variance and some of the expenses in some of the departments are not given and for those the code have to be opened. (2) Capital Expenditures Summary: In this the capital Expenditures of the next financial year are given and also the detail of each is given where these expenditures are going to be spend and also shown in which month they will occur by using the excel.

Consumer marketing department means that the products which are sold through the marketing and then totally estimated. Finance Manager. dispatch/sales Qty shows how much quantity have been sold or dispatched. PRODUCTS HIRARCHY 1. Ghulam Asghar sends the collection report and Mr. Gross Sales shows the gross sales of all the departments. This report is prepared by the senior accounts officer Mr. Appliances Division Power Division 24 . Nadeem –u-din sends the receivables Report through the mail. The hard copy of this report in the final form is send to the Amir Sattar. For this Report Mr. This is the secret report and they do not show to the internees. (4) Daily Report: In the daily production report the detail about the previous day’s production/Received Qty means how much production or quantity they have produced or received yesterday. and physical collection shows that how much they have received cash and how much sales is receivable and this report also shows the previous day’s finished goods production which are in the store available today. 2. We also prepare the previous 2 years summary so that we can estimate that our sales has increased or decreased. Amer Fayyaz Khawaja and sends to the Sr.

refrigerators. and split airconditions. The Company is engaged in the manufacturing and/or marketing of the following home appliances.PAK ELEKTRON LIMITED POWER DIVISION APPLIANCES DIVISION TRANSFORMER ENERGY METER REFRIGERATOR AIR CONDITIONER SWITCHGEAR GENERATOR MICROWAVE OVEN TELEVISION DEEP FREEZER WASHING MACHINE APPLIANCES DIVISION: The Appliances Division of PEL is the pioneer manufacturer of electrical goods in Pakistan. microwave ovens. The Division’s product portfolio comprises of airconditioners. PEL is one of the three leading players in the home appliances market. The main reasons for this growth are increase in market 25 . M n fa tu g a u c rin R frig ra rs e e to A C n itio e (S lit) ir o d n rs p De F ee e p re z rs T d g ra in M ro a e O e s ic w v v n A C n itio e (W d w ir o d n rs in o ) The Company’s Appliances Division contributed significantly to its sales in 2005-06. televisions.

sizes along with PEL’s strong brand image accompanied with its extensive dealership network spread nationwide with over one thousand outlets and an after sales service network with over 100 workshops. During the year 2006. the Appliances Division contributed around 53%to the Company’s sales whereas the Power Division made up the remaining 47%. PEL’s leadership in the Power Equipment market is largely due to its strong Research and Development knowledge and high product quality. new entrants represent a threat and the Company is responding by introducing innovations to its existing products. shunt capacitor banks etc. increasing its market share from 33% in 2005 to 36% in 2006 in the switchgear market and also maintained share of 35% in 2006 as well in the energy meters market. thus introducing new product features. PEL retained its market leadership in the Power Equipment market. 26 . PEL is a major power equipment supplier to Water and Power Development Authority (WAPDA) and Karachi Electrical Supply Corporation (KESC). Availability of Chinese products at very competitive prices has not proven to be that big a threat to the local industry. PEL’s appliances and power equipments have consistently gained marked share due to constant innovation and high quality standards. switchgear. PEL has been able to prevent Chinese manufacturers from gaining any market share. PEL’s power equipment has been used in numerous power projects of national importance. PEL itself is involved in selling its products through a marketing wing for sales against consumer financing. Refrigerators and Split air conditioners were the main source of revenue in the Appliances Division. Most of these are tailor made to buyer’s specifications. kiosks. All the power equipment is assembled under strict quality control and in accordance with international standards. Strategic partnerships with Copeland. However. energy meters. Another major reason for the increasing growth in the home appliances market is the easy availability of consumer financing at lower interest rates. compact stations. Over the years. Due to strict quality standards. POWER DIVISION: PEL’s Power Division manufactures transformers. whereas transformers and energy meters are the main revenue drivers in the Power Division. This is because of the improved quality of the local products and cost efficiencies due to economies in product and raw material purchases hence making the local products competitive with the Chinese imports. Danfoss. One such innovation is digitization of its electrical meters which is in the development stage. In 2005-06. Samsung and others have enabled the Company to incorporate new technologies into existing product ranges. In-spite stiff competition from emerging local and multinational brands.

consumer financing and after sales service has increased customer satisfaction and sales have been increasing every year. 537 mn 27 . Waves in deep freezers and PEL in window air conditioners. deep freezers and air conditioners is currently being met primarily by three active players namely Dawlance. Furthermore. The total size of home appliances market is Rs31.MARKET ANALYSIS HOME APPLIANCES MARKET: The domestic consumer durables industry suffered over the past decade as a consequence of unabated flow of smuggled goods through the Afghan Trade Transit and other channels. Market Size: The home appliances market in Pakistan has expanded in the past several years and the growth is expected to continue. As a result of these measures. The industry recovered and from 1999 onwards. besides the levy of excise duty. seven companies out of a total of 11 either liquidated or suspended their production due to heavy taxation measures and falling demand of consumer durables resulting from price increase. The quality of locally produced goods. Almost the entire domestic demand of refrigerators. Dawlance is the market leader in refrigerators. However the volume level at which the local manufacturers are operating has resulted in cost efficiencies due to economies in product and raw material purchases thereby making local products competitive with Chinese brands. As the market is growing. The industry enjoyed a boom period from 1992 to 1995 but it received a blow in 1996 when sales tax was raised to 18% from 15%. competitive prices. The influx of A Chinese product is a threat to the local industry. PEL and Waves. new brands are being imported from China. following the governments tariffs rationalization on imported components and the increasing domestic demand. the threat from Chinese manufacturers is further reduced due to the high level of deletion achieved by the local producers.

Dawlance.0 00 170.0 00 15.00 0 2. 28 .35 8 X 1 .51% 5.0 00 270.36% 10 0.720 mn from electronic goods.8 4 % 3 7.78 5 1 4 .950 2.0 00 900.60% 1 0.0 00 3. refrigerators account for almost 50.21 0 68 0 7. Currently Dawlance is leading in the Refrigerators market followed by Waves and PEL Recently Haier has joined in marketing & sale of Refrigerators.21 4 1 . The market is expanding mainly due to the low prices.0 00 8.0 00 17. If the Same trend continues. in m n) 2 9 .025bn. The key reason for upward trend is low prices.785 % eo S ag f ales 6. PEL.0 00 350. and Rs1. The details of white goods category is as follows: In the chart below sales (Rs.5 00 S ales R inth u d s.31% 1 6.82% 4. the main competition has been between the three domestic brands. o U its o f n 75.0 00 4.) shall be written as (million thousand) P d ct ro u R efrig erator (N F t) o ros R efrig erator (D irect C ool) D eep F reeze r A C nd ir o itione (W r indow ) A C nd ir o itione (S r plit) W ing M hin (Lo l) ash ac e ca W ing M hin (Im ash ac e ported) V umC ner acu lea M w ve O icro a ven T tal o S rc P L ou e: E N .21 5 29 . Philips exited from the market in 2001-02 and since Then. sales for 2005-06 are expected to be one million units representing a growth rate of 21%.0 00 50. Waves.1 00 4.950bn and No frost Refrigerators account for Rs 2.44% in sales. Market Growth The refrigerator market has grown at a CAGR of 20. Competitive Environment There were four major players in the refrigerator market in 1999-2000 namely.3 5 9 4 5 .10% 1.2 5 + 1 0 0 Perc enta ge 5 8.84% 4 3. o san s 2.260 mn from gas appliances. 557 mn comes from sales of white goods.0 0 % In white goods.0 00 50.0 00 20.0 00 700.10 0 40 5 20 0 1.00 % 1 0 0. D e s cription W h ite Goo d s Electro n ic Go o d s Ga s A p p lia n ce s Tota l So urce: PE L Va lue (R s .75% 0. The expected growth for year 2005-06 is 35%. economic growth and easy availability of consumer financing at low interest rates.out of which Rs18.02 5 13 .2% in the last five years.00% 13.1 6 % 4 . Rs11.2 0 + 1 5 0 X 1 .0 00 A erag P v e rice 27.5 00 13. and Philips. availability of consumer financing at low interest rates and changing life styles with a trend towards preserving eatables for a longer period.71% 1 0.0 00 40.

3. Syed Bhais (Private) Limited. Lahore Telephone Industries of Pakistan Haripur PEL has been able to maintain its leadership in all three products market and is expanding its market share backed by strong R&D knowledge in power equipment and high product quality. Karachi Alstom Pakistan (Private) Limited. 4. 2.Com petitive Market Others 8% Waves 14% PEL 32% Daw lance 46% Major Competitors Product Category Transformers Major Competitors 1. 2. The refrigerator was fitted with imported compressor which improved consumer perception of the product and helped boost sales. 29 . 2. Lahore Escorts Pakistan Limited. The Company has recently introduced refrigerators with water dispensers. Gujranwala Transfopower (Private) Limited. Lahore Elmetec (Private) Limited. Energy Meter Siemens (Pakistan) Engineering Company Limited. Lahore Fico Engineering Pakistan Limited 1. Karachi Climax Limited. Pak Elektron Limited (PEL) PEL re-launched their refrigerator brand “Crystal” in 1999 and obtained good response from the market. Lahore Siemens (Pakistan) Engineering Company Limited. 3. Switchgear 1. 3.

POWER EQUIPMENT MARKET: The demand for power equipment is on the rise in the country due to system revamping and village electrification projects being implemented by the utilities and more investment in electricity transmission and distribution by the private sector. This is relatively a new company and continues to make efforts aimed at gaining market share. split air conditioners and certain kitchen appliances.0 9 4 m n 1 .- Dawlance Dawlance started operations in early 80’s and currently holds market leadership with annual sales expected to be 305. the improved economic outlook of the country is expected to have a positive impact on the power equipment business. The company provides interest free 12 month’s easy installment plan and 24 months installment plan at an attractive financing cost. The company’s R&D is very active which resulted in Dawlance been able to introduce new designs after every 2-3 years.031bn while PEL’s share of the market is over 38%. Furthermore. They started refrigerators production in mid 90’s under the brand name of “Waves”. The product range includes deep freezers. Switchgear and Energy Meters.7 6 5 m n 8 . Waves Cool Industries is primarily a deep freezers manufacturing company which started its operations in late 80’s. Dawlance is also running its consumer financing operations in all major cities. microwave ovens.8 9 1 m n 30 .4 7 3 m n ( 3 6 % ) 4 5 1 m n (3 4 % ) 9 6 7 m n (3 5 % ) 2 .3 2 0 m n 1 . The Power Division market mainly comprises of Transformers.000 units in 2004-05.4 7 0 m n 2 . P r o d c u ts T r a n s fo r m e r s S w i tc h g e a r E n e r g y M e te r s To ta l S o urc e : P E L WAPDA 95% 95% 85% KESC 5% 5% 15% M a r k e t S iz e 2 0 0 5 E L S h a r e P 4 . The total market size is in 2003-04 is Rs 7.

Credit Purchase Supplier Direct Purchase Cash Purchase Vendor Purchase 1. Vendor Purchase Receipts Procedure (Local)  Departments raise indents to local procurement section for their required items.  Local procurement section arranges to purchase the indented items in form of four types of purchases. Credit Purchase 2. Credit Purchase: For credit purchase local procurement section raise purchase orders to local 31 .ACCOUNTS PAYABLE CONTENTS 1. Cash Purchase 4. Supplier Direct Purchase 3.

Vendor Purchase: In this type of purchase company to local vendor for Die-casting supplies raw material. If he finds any discrepancy he mention on Challan. Printing. When items are purchased through any type of purchase as mentioned above. Procurement section makes a Purchase Challan against cash memo or delivery Challan of supplier and hands over to receiving store. PO also bears the terms and condition of payment and delivery schedule according to production plan. In receiving store. 4. Supplier Direct Purchase: In this type of purchase no PO is raised to supplier/parties. Vendor claims only processing charges. Molding. Store Keeper cheeks the items according to purchase Challan. Cash Purchase: Items purchased through cash by Company Purchase are called cash Purchase. Chroming. After counting or weighing the items he makes a GRN and hands over to QC department 32 . Powder costing etc. 3. 2. PO bears the quality computer code rate and value drawing and all specifications of required items.suppliers/parties.

The relevant department head must approve this form and all it is done through online system. quantity FB No. Etc. ISSUE PROCEDURE Production department can receive material through a material request form that includes items code. QC department gives the remarks or reason of rejection (if any) on GRN. Cost center No. Material is they stored in raw material and them issued to jobs as required by production department. Now receiving store process is OK. QC department inspects the items according to their standard.After approving the items QC supervisor sins the GRN and send it backs to Receiving store. Sub standard or defective items are rejected. which is subsequently.for inspection. receive y 33 . After posting the GRN on Bin Card Store keeper sends the GRN to Accounts Department where GRN is posted into stock ledger after its valuation. After this Store Keeper sends the items along with GRN to relevant Store. Here related Storekeeper again checks the material according to GRN then he posts it on his Bin Card. Storekeeper assigns a Serial No and date to GRN in its relevant group such as R C A T D P X T E N etc.

If there is any difference between requested Qty and available stock then storekeeper changes the qty and posts it on Bin Card.Bank Receipt Voucher 4. After pasting into Bin Card storekeeper sends the requests to Accounts Dept for its value wise processing. 34 . before the incorporation into stock ledger. Accounts department allot serial number aromatically. BOOK KEEPING CONTENTS Cash Payment Voucher 1. date and value etc.the relevant store for its issuance.Cash Receipt Voucher 2. Stock is issued (if available) after necessary formalities such as store allocation etc.Journal Voucher Expense Types: Detail of following expenses is maintained in this section.Bank Payment Voucher 3.

Section Incharge Admin 35 . Medical Expenses  Traveling Expense • • • • • • • • Inland Local Foreign  Utilities Bills Electricity Mobile PTCL Gas Etc  Stationary Expense  Employee Welfare Expense  Entertainment Expense  Postage & Telegram Expense  Rent rate & Taxes Expense  Fee & Subscription Expense  Cleaning & Sanitation Expense Procedure for the approval and payment of these Expenses is given as following.

(Verification) Accounts Book Keeping section Voucher preparation (Approval) Payment (Through cashier) 36 .