Pak Electron Ltd

Change your life

Page # 1

Pak Electron Ltd

Change your life

Report on PEL
Submitted To: Mr. Riaz Hussain Ansari Submitted By: 17 Muhammad Salman Uzma Ikram Shahid Zubair Muhammad Luqman Waqas Akhtar Fahad Mehmood MBS-09-30 MBS-09-38 MBS-09-40 MBS-09-45 MBS-09-59 MBS-09-60 Group # 6 MBS-09Arshi Kanwal

SMESTER

2nd

Bahuddin Zakaria University Sahiwal Campus.

Page # 2

Pak Electron Ltd

Change your life

ACKNOWLEDGEMENT

A million thanks to the Almighty, without whose support, there can be no work. We would also like to take this opportunity to extend my appreciation and gratitude to Mr.Hasham and Mr. Aqeel, without their counseling and parallel skills I would have never been able to prepare this report. We owe special thanks to PEL company for assistance and data collecting. Finally we owe many thanks for participation of all group members and their coordination to accomplish the task.

Page # 3

Pak Electron Ltd

Change your life

Table of Contents
 Executive Summary…………………………………………  History  Introduction to Sagiol group…………………………….  Introduction to PEL…………………………………….. #9  Vision Statement……………………………………………  Mission Statement…………………………………………..  PEL Products  Products of Appliance Division…………………………  Products of Power Division………………………….....  Objectives…………………………………………………...  Board of Directors………………………………………….. #29  Organizational Hierarchy of PEL…………………………..  Departments…………………………………………………  Marketing department………………………………….. #32  Human resource department…………………………….  Finance department…………………………………….. #39  Industrial relation and administration (IR & A)……….. #40  Procurement……………………………………………..  Information technology………………………………….  Accounts department……………………………………  Financial Statements:  Balance Sheets………………………………………….. Page #43 Page #40 Page #41 Page #42 Page Page #38 Page Page #30 Page #31 Page Page #14 Page #25 Page #28 Page Page #12 Page #13 Page #7 Page Page #6

Page # 4

 Balance Sheet (Horizontal Analysis)…………………… Change your life Page #45 Page #47 Page #57 Page #59 Page #63 Page #65  PEST Analysis…………………………………………………  SWOT Analysis……………………………………………….  Profit and Loss Account (Horizontal Analysis)……….  References…………………………………………………….  Profit and Loss Account (Vertical Analysis)……………  Balance sheet (Vertical Analysis)………………………. Page #69 Page #72 Page #82 Page #83 Page #84 Page # 5 .Pak Electron Ltd  Profit and Loss Accounts………………………………..  Recommendations…………………………………………….  Conclusion……………………………………………………..  Ratio Analysis………………………………………….....

the company has always been contributing towards the advancement and development of the engineering sector in Pakistan by introducing a range of quality electrical equipments and home appliances and by producing hundreds of engineers. Budgeting section forecasts annual sales. Corporate Finance deals with the leasing. expenditures and costs for the company. Material Management section deals with the raw materials being purchased and shipment.Pak Electron Ltd Change your life Executive Summary Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan. Each play an important role in the working of Finance department. It is also one of the important parts of Finance department. Treasury section and Accounts Receivable section. PEL is currently dealing with over 15 banks. There are five sections in Finance department. It was established in 1956 in technical collaboration with M/s AEG of Germany. Accounts receivable section deals with every type of receivables the Page # 6 . loan and guarantees. Treasury section allocates the funds for the whole company. the company was taken over by Saigol Group of Companies. Corporate Finance section. skilled workers and technicians through its apprenticeship schemes and training programs. Budgeting section. It deals with the pledging of finished as well as raw materials under the custody of different banks. Each of the section has its own significance and importance. Those are Material management section. Since its inception. In October 1978.

Page # 7 .Pak Electron Ltd Change your life company is dealing with. There is another independent section known as Provident Funding section in Finance department.

Page # 8 .648 spindles “Wealth by itself is a curse. other inputs and yarn. Punjab. deep freezers and electric good supplied to WAPDA. This group is owned by the Saigol family of Pakistan.The Kohinoor Textile Mills under the umbrella of Kohinoor Industries Limited. The Kohinoor Textile Mill has state-of-theart quality control from raw material to finished product manufacturing. Pakistan. under the banner of Kohinoor Industries Limited Kohinoor Textile Mills The Saigols set up the first major textile unit . and owns a number of domestic automobile and textile plants. Initial Capacity:25.Pak Electron Ltd Change your life History Introduction to Saigol Group Group Profile In 1948.” The Saigol Group (also referred to as the Sehgal or Sahgal Group) is located in Lahore. It is also the biggest manufacturer of air conditioners. Saigol group headed by Nasim Saigol is perhaps Pakistan's biggest group in engineering goods industry with projects on the anvil for a car assembly plant with Daewoo and motorcycle assembly plant with Qingqi group of China. the textile city of Pakistan.000 spindles Current Capacity: 71. the Saigols migrated from Calcutta and initiated their business in Lyallpur (later named to as Faisalabad). Its laboratory is top rated amongst the best laboratories in Pakistan for testing of textile raw materials.

Pak Electron Ltd Change your life List of Companies of Saigol Group Kohinoor Textile Mills Pak Elektron Ltd. (PEL) Kohinoor Power Company Kohinoor Energy Saigol Computers (Private) Limited Kohinoor Motor Works Limited Page # 9 .

numerous successful power projects and greater than ever base of satisfied customers are evidence to these aspirations. PEL’s EPC contracting division delivers custom designed and built HV and EHV grid stations. Since its inception. creating new knowledge and adapting to global developments in technology and product design. the Saigol Group of Companies purchased major shares of Pak Elektron Limited. Pak Electron Ltd. the company has always been contributing towards the advancement and development of the engineering sector in Pakistan by introducing a range of quality electrical equipments and home appliances and by producing hundreds of engineers. Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan. In October 1978.Pak Electron Ltd Change your life Introduction to PEL PEL is public limited company under the flag of Saigol group. Page # 10 . Works of PEL are spread at two facilities in Lahore. Every increasing local market share. PEL aims to maintain this competitive edge and at the same time keep striving to improve it further by continuous R&D. PEL is now technology forerunner and market leader in providing new products and services to meet ever changing and technology intensive needs of its customers. industrial parks and optimum solutions for power utilization to all kinds of industries and commercial customers. the historical city and cultural hub of Pakistan. (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. electrification of housing projects. Saigol group has different companies in different industries like textiles. power and electronics. one of the top business groups of Pakistan. skilled workers and technicians through its apprenticeship schemes and training programs. sugar. growing export orders.

its knitted yarn is renowned in the Far East and Europe for its fine quality.200 Sq ft and 614. Both are equipped with latest technology. Saritow Spinning Mills & Azam Textile Mills In 1987. PEL started expanding its product range by entering into Air Conditioner manufacturing. the company was only manufacturing transformers and switchgears. during the last ten years. The products manufactured by PEL have always been of a high standard and the name “PEL is synonymous with quality all over Pakistan.” PEL. Azam Textile Mills is reputed for its carded and combed yarn. At that juncture.033. Page # 11 . PEL invests heavily on professional development. Pak Elektron Limited alone has a turnover of over 180 million US Dollars.440 spindles capacity. state of the art testing facilities and environment friendly production process. With the Saigol’s in management. As a result. skill improvement and well being of its human resource. the company has been working for the advancement and development of engineering know-how in Pakistan.Pak Electron Ltd Change your life The two facilities cover an area of 1. 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. since its inception. PEL has registered a significant increase in its sales volume. Facilitated with the most modern and efficient Japanese and European machinery. which is quite popular for premier knitting and weaving.252 Sq ft respectively. PEL has been continuously adding new products to its range. PEL’s employees are its most valuable asset and PEL keeps them very dear. has been acting as an institution working for the advancement and development of engineering and modern technology in Pakistan Since its inception. At the heart of PEL’s operations is its human resource.

Kohinoor Power Limited is a 120 MW power plant located on the outskirts of the city of Lahore. Its present production capacity is 15 MW. was established.Pak Electron Ltd Change your life Kohinoor Power Company Limited In 1991. Kohinoor Energy Limited 1995. This project has an annual turnover of $80 million. the first power unit commissioned in Pakistan. Kohinoor Energy Limited. another power unit. in the Private sector. Page # 12 . was Kohinoor Power Company Limited.

Pak Electron Ltd Change your life Vision “To excel in providing engineering goods and services through Continuous improvements” Page # 13 .

Page # 14 .Pak Electron Ltd Change your life Mission Statement  To provide quality products and services to the complete satisfaction of our customers and maximize returns for all stakeholders through optimal use of resources.  To promote good governance. corporate values and a safe working environment with a strong sense of social responsibility.  To focus on personal development of our Human resources to meet future challenges.

The refrigerators are with the direct cool properties and PEL is using energy saving technology in its products to save energy and giving benefits to the customers. PEL offers warranty of 5 years compressor & 1 year parts & service to the customers except Mini series where PEL offers warranty of 3 years compressor & 1 year parts & service to the customers. Power Division PRODUCTS OF APPLIANCES DIVISION Appliances Division has the following products. Refrigerators PEL’s refrigerators are available in 6 series of different colors. PEL uses Danfoss compressors and Galaxy doors in all its series except Mini series in which Reciprocating compressors and PCM doors are used. fluorine and carbon. CFCs are a family of chemicals that contain chlorine. prices and capacities. Appliances Division 2. The series are as follow. PEL’s refrigerators are environment friendly and are CFC (chlorofluorocarbons) free. • • • • • • Xpression Series Premier Series 6-Series Delux Series Smart Series Mini Series PEL has 28 different models in the above 6 series in different prices. Page # 15 . The chlorine content in these compounds causes the depletion of the ozone layer. The refrigerators are available from the capacity of 60 to 420 liters. models. which gives customers a wide range to select PEL refrigerator according to their needs.Pak Electron Ltd Change your life PEL Products The PEL Group comprises two divisions of products: 1.

Pak Electron Ltd Change your life Page # 16 .

The air conditioners are available in the different prices. The wide range of models and prices gives customers more choices to select PEL’s product. This masterpiece from PEL provides maximum cooling even at very high temperatures while minimizing electricity consumption. Split air conditioners are available in three capacities: • • • 1 ton 1.5 ton 2 ton Split Air Conditioners: Features of PEL Split AC: The key features of PEL’s split air conditioners areas follow: • • • • • • • • • • Free Installation Kit Compressor Warranty Auto restart function Environment friendly refrigerant R22 Anti-rust outdoor unit Easy-cleaned panel Self diagnosis and auto-protection Two-direction air flow (SLR) Independent dehumidification Trapeziform Inner groove tube Hydrophilic aluminum fin Page # 17 . capacities and models.Pak Electron Ltd Change your life Air Conditioners The air conditioners are available in three types: • • • Split Air Conditioners Window Air Conditioners Floor Standing Air Conditioners PEL presents Cool life Split AC which is a technologically advanced model especially designed for Pakistani market.

and with manual and remote control function.5 and 2 ton. This masterpiece from PEL provides maximum cooling even at very high temperatures while minimizing electricity consumption.Pak Electron Ltd Change your life Window Air Conditioner: PEL presents Cool life Split AC which is a technologically advanced model especially designed for Pakistani market. The Window ACs are available in capacity of 1. Features of PEL Window Ac: The following are the key features of PEL window air conditioners: • • • • • Super quiet operation Maximum dehumidification Best after-sales service Anti-rust cabinet Environment friendly refrigerant Page # 18 .

The floor standing air conditioners are available in the three models and capacities: • • • FS 600 . • • • • • • • • • • Free Installation Kit Compressor Warranty Auto restart function Environment friendly refrigerant R22 Anti-rust outdoor unit Easy-cleaned panel Self diagnosis and auto-protection Two-direction air flow (SLR) Independent dehumidification Trapeziform Inner groove tube Hydrophilic aluminum fin Page # 19 .5 Ton FS 480 .4 Ton FS 300 . This masterpiece from PEL provides maximum cooling even at very high temperatures while minimizing electricity consumption.Pak Electron Ltd Change your life Floor Standing Air Conditioners PEL presents Cool life Split AC which is a technologically advanced model especially designed for Pakistani market.2.5 Ton Features of Floor Standing Air Conditioners: The key features of PEL Floor Standing Air Conditioners are as follow.

Pak Electron Ltd Change your life Floor Standing Air Conditioners Page # 20 .

Cook-Bake-Roast-Grill Enersave features . Roast or Grill with the all new PEL Microwave.Preset cooking menu's 360 degree cooking system . models and capacities. Bake.Pak Electron Ltd Change your life Microwave Oven PEL the trustful company name in home appliances all over the country.Peace of Mind Microwave oven Page # 21 . With cutting edge technology and advanced features. now introduced all new models of "PEL Silverline" Microwave Ovens.Energy Savings 5 years Magnetron Warranty . PEL presents 26 different models of ovens with different prices. Now PEL customers can have different models of PEL Microwave Ovens in which they can enjoy the grilling feature as well. Features of Microwave Oven • • • • Smart Intelli-menu . Cook. PEL Microwave Ovens are available in different sizes and inner cavities (steel & painted).

washes away heavy loads and dries them up quickly. • • • • • • • • • One year parts & service warranty Japanese technology Super large multi pulsator Quick dry spin Drain switch to drain all excess water Semi automatic Ability to wash extremely heavy loads Low noise & easy operations 100% rust & shock proof unbreakable plastic body Page # 22 . So treat yourself with the Luxury Wash . So save the energy with this Econo Wash – consumes less electricity as it gives more output. It's a top load with a powerful motor that provides a brighter wash and has a build in energy saver that gives you excellent energy efficiency.7700-N equipped with Japanese technology has a 100% rust proof plastic body with a big multi pilaster.Pak Electron Ltd Change your life Washing Machines Magic Clean PWM7700 The PEL Semi Automatic Luxury Wash . it supplements a drain switch that quickly drains out all the excess water. Features of PEL Washing Machines The key features of PEL washing machines are as follow. Magic Clean PWM512 The PEL Econo Wash 512 is made from Japanese Technology with 100% rust and shock proof unbreakable plastic body with the capacity of 10 Kg. In addition. It can handle heavy loads and has a quick dry spin.

Pak Electron Ltd Change your life Magic Clean Magic Clean Page # 23 .

instant coffee and tea. While Cold water refreshes your mood in burning summer. Features • • • • • • • • • Hot & cold water Refrigerator Separate Freezer Compressor Cooling Stainless Steel Water Tanks Super Quiet Design Energy Saving CFC Free 1 Year Warranty Water Dispensers Silver line Life stream Page # 24 .Pak Electron Ltd Water Dispensers Change your life Water dispensers are a welcome addition to PEL range of home appliances. Hot water on demand is great in the office for packets of soup. PEL’s Silverline and Life-Stream water dispensers make life a little easier and fridge space a bit more plentiful.

5 KVA Generators 3.Pak Electron Ltd Change your life Generators PEL presents generators for domestic and commercial use.3 KVA Generators 5.2 KVA Generators Page # 25 . PEL’s generators are available in diesel and petrol in four capacities: • • • • KVA Generators 2.

energy meters. numerous successful power projects and greater than ever base of satisfied customers are evidence to these aspirations. PEL is now technology forerunner and market leader in providing new products and services to meet ever changing and technology intensive needs of its customers. Backed by the innovative genius of Saigol Group. Cardew and Rider. switchgears. USA Snam Progeti. PEL also has had the privilege of getting its equipment approved and certified from well-reputed international consultants such as: Preece.Pak Electron Ltd Change your life POWER DIVISION PEL was founded in 1956 and has since been serving the Power utilities. France Page # 26 . industries. creating new knowledge and adapting to global developments in technology and product design. USA Ensa. individual customers. Italy Societe Dumezm. PEL Power Division is one of the major electrical equipment suppliers to WAPDA & KESC. compact stations and shunt capacitor banks. Since 1956 the company manufactures transformers. housing and commercial projects by providing reliable. England Harza Engineering Company. industrial parks and optimum solutions for power utilization to all kinds of industries and commercial customers. Ever increasing local market share. kiosks. PEL’s EPC contracting division delivers custom designed and built HV and EHV grid stations. customized and cost effective solutions. growing export orders. France Miner & Miner International Inc. PEL aims to maintain this competitive edge and at the same time keep striving to improve it further by continuous R&D. electrification of housing projects.

Pak Electron Ltd Change your life PRODUCTS OF POWER DIVISION The Power Division of PEL has the following products: • • • • • • • EPC Contracting Power Transformer Distribution Transformer Dry type Transformer Energy Meter Switchgear Transformer Services Page # 27 .

Pak Electron Ltd Change your life PRODUCTS OF POWER DIVISION Transformers Energy Meter Switch Gears Page # 28 .

Page # 29 .Pak Electron Ltd Change your life Objectives The objectives and mission for which the company is established are as following: • To carry on the business or businesses of manufacturing. To produce skilled workers and technicians through its apprenticeship schemes and training programs for engineers and technicians. • 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. installing. To produce equipment to be used in numerous projects of national importance. maintaining designing and dealing in all kinds of electrical equipment. • • To produce high quality and standard products. • • To secure a high share / quota of WAPDA’s demand for power products. selling.

Chartered Accountant Chairman / Member Member Member Member NIT Nominee NBP Nominee u/s 182 of the Ordinance NBP Nominee u/s 182 of the Ordinance NBP Nominee u/s 182 of the Ordinance Managing Director Chairman /Chief Executive Page # 30 . Homaeer Waheed Mr. Wajahat A. Khan Mr. Bokharee Mr. Muhammad Rafi Khan Mr. Gul Nawaz Mr. Tajammal H. Tajammal H. Naseem Saigol Mr.Pak Electron Ltd Change your life Board of Directors Mr. Azam Saigol Mr.Bokharee Mr. Haroon Ahmed Khan Mr. Baqai Audit Committee: Mr. Gul Nawaz Auditors: M/s Yousaf Adil Saleem & Co. Azam Saigol Mr. Murad Saigol Mr. Masood Karim Sheikh Mr. Haroon A.

M Finance G. Manager QC (Appliance & Power Division) Sr.M Manufacturing Appliance division G.M Marketing Power division Sr. Manager HR & A G. Manager HR & A Page # 31 .M Marketing Appliance division Sr.M Manufacturing Power division G.Pak Electron Ltd Change your life Organizational Hierarchy of PEL Chairman Managing Director Director Marketing & sales Appliances division G.

Pak Electron Ltd Change your life Departments  Marketing department • • • • • Corporate Sales Department Consumer Marketing Department Customer Service Department Distribution & Credit Control Department Dispatch  Human resource department  Finance department  Industrial relation and administration (IR & A)  Procurement  Information technology  Accounts department Page # 32 .

Pak Electron Ltd Change your life Marketing department Marketing department is main nerve of any organization as far as PEL is concerned. ideas. It also performs the function of advertisement budget allocation for the whole year and to develop promotional plans for retailers. This department consists on 8 employees and Head of this department reports to Director Operations. images.” The Marketing Department is responsible for creating meaningful messages through words. The products marketed and managed in Appliance Division are as follows: • • • • • • Refrigerators Microwave ovens Split and window Air Conditioners Water Dispensers Washing Machines Generators The primary duty of marketing department is to make an overall marketing plan for each product and also analyze the current market situations by monitoring the competitors separately and constructing strategies accordingly. and names that deliver upon the promises / benefits an organization wishes to make with its customers. and end consumers within limited financial budget. The perceptions and feelings formed about an organization. wholesalers. its products / services. and its performance is what is known as its “brand. PEL Marketing AD department is a blend of following departments: • • • • • Corporate Sales Department Consumer Marketing Department Customer Service Department Distribution & Credit Control Department Dispatch Page # 33 .

Sales Officers. Sales Coordinators and Technical Coordinator. Hierarchy of Corporate Sales Department Director BDM Sr. First of all company analyze the total market potential. Find out the PEL potential from the total market potential.O S.O S.Pak Electron Ltd Change your life  Corporate sales department Corporate Sales Department is very important department which generates the revenues for the company. Senior Sales Officer.C S. The Head of this department reports directly to Director Operations.O ASM RWP ASM FSD S.C S.C ASM MUL S.O S.O T.O S. Area Sales Managers.O ASM KHI S. This department consists on employees in which Business Development Manager.C Page # 34 .C S. S. Then find out the corporate sales potential.

organizational set-up along with firm’s brochure Financial soundness certificate. 2nd resource they use the report from the custom department on the import of compressors or other raw material that help them to analyze the total market potential. extra sale tax. they use various resources like overall sales of their company & their competitors throughout the year. Page # 35 .Pak Electron Ltd Change your life To analyze the market potential. e mail and are forwarded to Business Development Manager. price per unit and their terms and conditions. After analyzing the market potential they set the sales target for a year with mutual understanding. sale tax. excise duty. After the pre-qualification Company sent quotation to the customer prepared on standard F-MKT-01A signed by BDM that include Assessable price. They use different inquiry tools to access their customers like they visit market institutions. Annual Report Details of plant and machinery installed Details of similar projects completed Certificates of Income tax and Sales tax registration Pakistan Engineering Council certificates Company Status Company Profile. postal and registration office address Legal status of firm Full particulars. sales officers go in the field & get order from customers. they also find out their customers through advertisers & tenders. with set target. fax. use the old references. When sales officers visit their customers they demand some prequalification steps including some certificates: • • • • • • • • • • Name .

After the issuance of inspection note company issue the order form. Against this order form. After revised quotation finally customer issues purchase order. delivery order is issued from dispatched department after that delivery order approved by manager distribution and credit control. customer makes pre-delivery inspection or inspection at site in which he will check the availability of stock. if stock is available then order form approved by manager Distribution and Credit Control department. In case of free delivery dispatched department issues the goods received note and give it to the driver of vehicle. After the inspection customer issues the inspection note and it is the proof that inspection has made.Pak Electron Ltd Terms & Conditions: • • • • • • • Offer validation Delivery Time Payment Terms Warranty Installation Charges: Sales Tax registration Number National Tax Number Change your life On the basis of quotation company and customer negotiate with each other on the prices. This may require consultation with General Manager Manufacturing. The company has a technical and financial capability to meet customer requirement. After issuing the purchase order by the customer. • • • • • Execution of Installation Awarding of Installation Installation forward to authorized installer of PEL Corporate Services Department Supervision of Installation Supervision of installation is done by PEL authorized technical teams Page # 36 . which gives receiving from the customer. check the availability of stock. After that.

Pak Electron Ltd

Change your life

After the delivery, sales coordinator prepare the invoice of installation that includes product model, quantity, rate per unit, gross sales values, discounts, net sales values, sales tax, special excise duty, extra sales tax and net to customer. And then prepare the supply invoice annexure and bill that includes the total amount customer paid. Following documents are attached with that invoice: • • • Covering letter GRN Inspection note

Then maintain the record in concerned files therefore Earnest money, bank guarantee and demand draft etc. after the record keeping sent request to the account department to issue CDR against warranty. Mostly sales are done on credit basis so after sending the invoices to the customers they follow up them to make payments. Continuous visit are made to customer for removal of objection and collection of payments Corporate sales department received the payment from customers against this payment they made payment confirmation report and then depositing it to the Distribution and Credit Control department where this department makes their entry into the system. With the help of that data Distribution department feed into the system Corporate Sales department generate different reports. To keep the record up to date sales coordinators prepare consignee status on weekly bases and aging reports. The department has its sales officers in different cities of Pakistan and they are responsible for communicating with customer parties, sells products, installation and to make collections of credit sales. This department prepares different reports regarding sales and collection. Corporate Sales Department deals with the business parties or organizations rather than individual customers.

Page # 37

Pak Electron Ltd  Customer Service Department (CSD)

Change your life

CSD is a customer service department under the Marketing AD Head. Where after sales services are provided to satisfy customers having problem in their appliances. PEL is well known for their customer care services.  Distribution and Credit Control Department (D&CC) Distribution and credit control department has 48 employees and it is a merger of two departments: • • Distribution Credit Control

The distribution includes the activities to distribute company’s products from the factory to the stores in Lahore and different cities of Pakistan. The head of this department reports General Manager Marketing AD as well as General Manager Finance. The basic function of credit control is to do sales accounting of Corporate Sales department and maintains ledgers. This department is responsible for check and balance of dealers, and allocates credit limitations for dealers and Corporate Sales department. It plays a role of bridge between Corporate Sales Department and Accounts Department. This department not only motivates the dealers but also check their activities. It also checks their credit limit because dealers have awarded different credit limits according to their potential of sales. Whenever any dealer’s credit crosses its limits they stop the supply and first they try to motivate dealer to clear his credit then they restart his supply. These all things happed because much of PEL’s sale is on credit.  Dispatch Dispatch is another department under the Marketing AD Head. In this department all the data regarding products sending out from the factory is maintained. This department sends daily dispatch report to Corporate Sales which help to identify the orders and their status.

Page # 38

Pak Electron Ltd  Consumer marketing department (CMD)

Change your life

This department is basically under the marketing AD department. At the start this department did not exist in the hierarchy but with the passage of time and with the success of easy installment scheme, this department came into being. The reason is that in the start this department’s target market was Lahore and its workforce had only 8 persons and now after 2 years of its establishment it has covers major cities of Pakistan and it has workforce of 45 and they are recruiting more to cover these areas fully. There are many regional offices in major cities for example in Multan, Shawl, Karachi, Hydria, Faisalabad, Gujranwala, Hattar, Rawalpindi, Sialkot, Bahawalpur, Sukkur, Sargoda and AJK (Azad Jammu Kashmir) and the head-office is in the factory that is Consumer Marketing Department. HUMAN RESOURCE 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 help in management of the affairs of the company. HR Department’s activities are spread over the whole organization. The following areas come under direct supervision of HR department at PEL: • • • Hiring and firing of employees Training and development Compensation system

Page # 39

Pak Electron Ltd

Change your life

FINANCE DEPARTMENT Finance Management is the lifeblood of any company. If this area of corporate activities is improperly handled, a company may lead insolvency despite having all the resources and opportunities. Therefore proper financial management is vital for every business concern and PEL is not lacking behind over here. Functions of Finance department are: • • • • • • • • • • • • • • Preparation of budget, appropriation of accounts, re-appropriations, surrender and savings. Control of expenditure and ways & means position. Audit Treasury administration Administration of Taxes i.e. Sales Tax, Entertainment Tax, Luxury Tax and Entry Tax etc. Resource mobilization through loans, Institutional Finance, Small Savings, Credit and Investment and public debt. Financial concurrence and advice. Compilation of Codes, Rules and procedures concerning financial transactions and having bearing on State finance and their implementation. Safety and investment of funds from consolidated funds, contingency fund and public account. Contract, recovery and refund of revenue etc. Arrange monetary resources / funds at favorable prices and at proper time. Allocate resources / funds throughout the organization. Deal with banks, investment firms, modarabas, government departments of Appliance and power division calculate and keep employees salaries record. Carry out final auditing of financial records prepared by Accounts department of Appliances and power division.

Page # 40

At the start of each financial year they receive a major plan from the management.Pak Electron Ltd Change your life INDUSTRIAL RELATION AND ADMINISTRATION (IR & A) Key responsibilities of this department are: • • • • • • • • • • • Maintenance of Attendance Check the material in & out from the factory Maintenance of factory Provide assistance to all departments regarding material Security and fire fighting Gate supervision Telephone exchange Fair price shops Canteen supervision Dispensary and health care Time clerks etc. PEL has state of the art methods of production and they also outsource the products and raw material not only from Pakistan but also from foreign countries. It includes from nails to large metal sheets. Dates and maximum time limit for raw material requirement is also mention in this major plan. which highlights all the raw material required for each product. So for this purpose PEL has two different departments for procurement. Now procurement team makes small benchmarks and milestones from the major raw material required plan Page # 41 . which are: • • Local Procurement Foreign Procurement Procurement Local Procurement Local Procurement department is responsible for all the raw materials that are required for making various products in the factory.

PEL’s production department is comprised of different units according to the products. Installing and deletion of soft wares. Production department’s key responsibility is to develop and create products that are required for the specific department. The skill of this department is to purchase the raw material in the optimum cost that best satisfy the need of production department and also to finance department in quality as well as in monetary terms respectively. Hardware and all software issues. they have to arrange the raw material from abroad. Right protection and issuance. Production Page # 42 .Pak Electron Ltd Change your life in order to ease them for remembering the required time limit and also reminds finance department to arrange finance for such purchases. Information technology department IT department’s key responsibilities are as follows: • • • • • • • Troubleshooting and problems facing in computers. They also receive same plan as local procurement for the whole financial year and develop milestones to carry out the plan execution properly. Developed and maintain internal network. Create and enhance internal software’s running currently. They also receive a major plan for the whole financial year that indicates the number and models of each brand and the deadline time for each lot. Foreign Procurement Responsibilities and duties are same as Local procurement but they vary in the dimension that. Developed and maintain domain of each person.

Remittances and loans Expense reimbursement Tax statement Financial deals with the banks. leasing companies. Book keeping of daily monetary transactions. including the income statement and balance sheet. Purchase vouchers Bank payment vouchers Journal vouchers for general expenses. The Accounts department maintains record of all its expenses through vouchers. modaraba companies. • • • • Cash payment vouchers for cash transactions recording. materials and overheads. Production maintenance reports Cost data on labor. Generally the following types of vouchers are used for this purpose. Page # 43 . and other government agencies through Finance Center.Pak Electron Ltd Change your life Accounts department This particular department has the responsibility to prepare and keep an up to date record of following: • • • • • • • • Financial keep of daily.

585 630.697 993.247 2.322 618.565 5.Pak Electron Ltd PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30.122 46.651.864 100.623 2.970 452.926.165 582.589.556 52.67 1.594 2.077.399 18.274.244 28 Distribution cost Administrative expenses Other operating expenses Finance cost Share of profit of associate Profit before taxation Provision for taxation Profit for the year 30 31 32 33 676.99 3 9.50 Page # 44 .813.425 34 Earnings per share Basic 37 Rupees 4.48 7 9.264. 2008 Change your life Note Revenue Less: sales tax and discount Revenue .52 1.452 514.223.837.458 2.814.429 937.14 Rupees 5.579 12.net Cost of sales Gross profit Other operating income 29 27 2008 2007 (Rupees in thousand) 13.109 12.981 386.646 13.690.162 707.395 177.855.409 125.183 11.

220 590.67 1.Pak Electron Ltd PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30.409 125.48 7 9.553 2.458 2.351 2.634.042.322 588.408. 2007 Change your life Note Revenue Less: sales tax and discount Revenue .109 12.04 Page # 45 .net Cost of goods sold and contract cost Gross profit Other operating income Distribution cost Administrative expenses Other operating expenses Finance cost Share of profit / (loss) of associate Profit before taxation Provision for taxation Profit for the year 33 26 2007 2006 (Rupees in thousand) 13.429 937.337) 516.623 2.864 100.047.264.981 356.813.077.183 11.529.283.87 Rupees 5.130 (23.556 52.630.412 262.142 27 28 29 30 31 32 Earnings per share Basic 35 Rupees 6.244 11.108 742.160 1.751 74.667 112.160.018 7.165 582.360.482 25.162 707.609 442.142 9.

Ratio Analysis 2. The numbers may be taken from the Balance sheet. the Income statement. Horizontal Ratio Analysis 3. Or financial ratios are formed from two or more numbers taken from the financial statements of businesses. Liquidity Ratios or Liquidity of Short Term Assets • • • Current Ratio Quick Ratio or Acid Test Ratio Net Working Capital 2. Tools for financial analysis 1.Pak Electron Ltd Change your life Financial ratios It is a percentage that expresses a relationship between two pieces of financial information. Activity Ratios • • • • Inventory Turnover Ratio Average Collection Period Average Payment Period Total Assets Turnover Page # 46 . Vertical Ratio Analysis Types of financial ratios 1. or the Cash flow statement and combined in any number of combinations.

Analysis for Long Term Debt Paying Ability • • Debt Ratio Time Interest Earned Ratio Change your life 4. Ratios for Investors or Market Ratios • • • • • • Price / Earning Ratio Market / Book Ratio Earning Per Share Diluted Earning Per Share Dividend Payout Book Value Per Share Page # 47 .Pak Electron Ltd 3. Profitability Ratios • • • • • • Gross profit margin Ratio Operating Profit margin Ratio Net Profit margin Ratio Earning Per Share Return on Total Assets (ROA) Return On Equity 5.

430. It is because the current assets have been increased as compared to the previous year because of increase in credit sales.000 0.430. It must be greater then 1 for the company to minimize its credit risks.Pak Electron Ltd Change your life RATIO ANALYSIS LIQUIDITY RATIO ANALYSIS It is the company’s ability to pay its short-term obligations by using its assets.000 Formula & Computation Interpretation It means that how efficiently the current assets are being used in order to meet short term loans.87 : 1 Page # 48 .748. 1.401.605.136.42 is a satisfactory figure for the company. Current Ratio Current Assets Current Liabilities Rs 9.000 Rs 6.294.000 Rs 6.42 : 1 Quick Ratio Quick Assets Current Liabilities Formula & Computation Rs 5.605. In the current year 1.

It includes the ratio of inventory. how much assets it has after paying all of its liabilities. So 0.000 TURNOVER RATIOS Turnover ratio shows that how quickly the accounts are converted into cash or sales.571. It is used to interpret the liquidity of various current accounts.401.430. So it must be positive. Rs. In this year the company has increased its cash purchases and on the other hand sales are all credit except exports.000 = Interpretation To run all the operations of the business.Pak Electron Ltd Interpretation Change your life It shows that how much a company is able to make the payments as cash in order to meet its obligations. account receivables and fixed assets. Net Working Capital = Current Assets – Current liabilities Formula & Computation =Rs9.795.864. 2.000 – Rs6.605.168.594. Inventory Turnover Cost of Goods Sold Average Stock at Cost Formula & Computation Rs 9.75 times Page # 49 .000 Rs 3.814.294. In 2008 it shows a comprehensive amount which is greater then the previous years.87 is less which is risk for the company.000 2.

So in the current year the figures of collection period for the company are highly unpredictable. It means as much the payment period is high. Company’s position in this respect is just below the average.Pak Electron Ltd Interpretation Change your life It shows the no.207. of times the inventory completes the circle of consumption in a year.615. Page # 50 .741.651. Company’s inventory turnover is quite satisfactory.75 times in a year.000 (Rs 12. Average Payment Period Accounts Payables Average Purchase per day Rs 580. it is better for the company.000 Rs 2213100 per day 26 days Formula & Computation Interpretation Average Payment Period shows that after how much time the creditors are being paid by the company. It shows that the inventory is consumed 2. Average Collection Period Accounts Receivables Net Sales / (# of days in a year) Rs 4.993)/(365) 122 days Formula & Computation Interpretation It means that in how much time the company receives the cash against its all credit sales.

Page # 51 .023. So. company’s debt ratio 66% in very low it must be less then 50% of the total assets.Pak Electron Ltd Change your life Total Assets Turnover Net Sales Total Assets Formula & Computation Rs 12. DEBT RATIOS The debt ratio compares the total liabilities to the total assets.779.394.394.77 times Interpretation This ratio indicate that how the assets are being used to generate the sales. Debt Ratio Total Liabilities x 100 Total Assets Formula & Computation Rs 10.993. Turnover in respect of assets is not up to the mark in the current year for the company.777.000 = 66 % Interpretation It indicates that whether the company is in the position to pay its short-term liabilities by using its assets or not.000 Rs 16.000 x 100 Rs 16.000 0.779.651.

PROFITABILITY RATIOS These ratios indicate the company’s profits at different stages that are generated against the sales.000 1. before all the indirect expenses.399.63 times Interpretation It indicates the ability of the company that whether it is earning the sufficient amount to pay the interest on its debts.993.618. Page # 52 .000 x 100 Rs 12.837.000 22.43 % Interpretation Gross profit margin indicates the percentage of profit included in the net revenue.000 Rs 993. It must be between 3 to 5 times but the ratio of 1.Pak Electron Ltd Change your life Time Interest Earned Ratio Earning before Interest & Tax Interest Formula & Computation Rs 1. In current year.357. 22.63 is very low. Gross Profit Margin Ratio Gross Profit x 100 Net Sales Formula & Computation Rs 2.565.43 % is a minor portion of the net sales.651.

Pak Electron Ltd Operating Profit Margin Ratio Change your life Operating Profit x 100 Net Sales Formula & Computation Rs 1.79 % Interpretation It indicates the portion of the profit over net sales after incurring all the indirect expenses to run all the operations of the business.375.000 x 100 Rs 12.618.651. Company’s net profit margin in the current is just 3. 58 % Interpretation It represents the percentage of profit after excluding all the expenses and including all the other incomes.993. Formula & Computation Page # 53 .000 12.58% which is very low.000 x 100 Rs 12. However current years operating profit ratio is very low. Net Profit Ratio Net Profit x 100 Net Sales Rs 452.425.651.000 3.993.

000 x 100 Rs 3.3 % which is showing a very little rate of return.000 x 100 Rs 16.779.000 12. In 2008 it is only 2. 3 % Interpretation It shows that how much a company is gaining against the investments of the ordinary share holders.76 % Interpretation Return on assets ratio represents the profit earned by the utilization of company’s all the assets.Pak Electron Ltd Change your life Return on Equity Net Profit x 100 Stock Holder Equity Formula & Computation Rs 452.425. Page # 54 .425.000 2. Company’s return on equity in is 12.391.76 % which represents a very low margin.394.677. Return on Assets Net Profit x 100 Total Assets Formula & Computation Rs 452.

Price Earning Ratio Market Price per Share Earning per Share Formula & Computation Rs 21. For an investor these ratios are considered.29 times Interpretation It shows that how much amount an investor invests to get a rupee profit from the company. it shows the share of profits that are distributed among the share holders. Page # 55 . company declared neither cash nor stock dividend.91per share Rs 4.Pak Electron Ltd Change your life MARKET RATIOS These are the ratios that represent company’s worth in the market.14per share 5. Dividend Yield Dividend per Share Formula & Computation Market Price per Share zero (no dividend declared in 2008) Interpretation In this year.29 times means that the investor is investing 5.29 rupees to earn 1 rupee which is not a bad option for the investor. 5.

of Shares Outstanding Formula & Computation Rs 1.91per share Rs 15.Pak Electron Ltd Change your life Book Value Common Stock Equity No.42 Interpretation It shows the credit standing of the company’s share. Here 1.000 97. Market / Book Ratio Market Price per Share Book Value Formula & Computation Rs 21. Page # 56 .42 is positive which shows that its market price is more then the book value. So it is favorable.042.687 shares Rs 15.677.42 per share Interpretation Book value is the value of each share issued in the market. Company’s book value is favorable in the current period. either is issued at par or discount.496.42per share 1.

company declared neither cash nor stock dividend. Page # 57 .Pak Electron Ltd Change your life Dividend Payout Ratio Dividend per Share Formula & Computation Earning per Share zero (no dividend declared in 2008) Interpretation In this year.

00 78.37 7.23 21.00 78. It tells us about the relationship between sales to income and expenditures.44 7.98 1. In it net revenues of the year are taken as base and all the items fluctuations are determined on the basis of it.70 % age 100.99 1.79 4.42 0.06 0. Profit & Loss Account ( Vertical Analysis) 2006 Description % age Revenue net Cost of sales Gross profit Other operative income Distribution cost Administration Other operative expense Finance cost Profit before taxation Provision for taxation Profit for the year 100.02 0.77 1.93 % age 100.58 2007 2008 Page # 58 .00 77.85 4.99 3.58 21.20 6.79 0.28 2.14 5.06 4.57 22.35 4.49 0.93 5.85 4.41 3.31 5.27 8.Pak Electron Ltd Change your life COMMON SIZE ANALYSIS Common size analysis is used to indicate the company’s internal structure.43 0.

It is because the interest on short term borrowings is increased and on long term borrowings. there were at increasing trend.35% in 2008 as compared to. it has been decreased.02% in 2008. Administration cost increases to 4. however it was improved in 2008 but due to increase in expenditure in 2009. The firm’s profit before tax increases to 5. Page # 59 . The company has increased its provisions for taxation in relation to revenues.98%. There is also a little bit change in the Operating Income and Distribution Cost. The firm finance also shows minor changes as compared to previous years.99% in 2008 because of increase in operations. Other operative expenses are showing minor fluctuations. 4.99% in 2008 but in 2008. it decreased.06% of revenue as compared to 3. Only in 2007 they were decreased but before it. At the end. it is shown that there is a very minor difference in the cost of sales and gross profit. it is decreased to 4. It is 5.This cost is increasing from last 3 years whish must be taken under consideration.Pak Electron Ltd Interpretations Change your life In the Common Size analysis of the Profit and Loss Account of Pak Elektron Limited. The plus point of the company is that distribution cost is cutting down as compared to the last 3 years. the net profit is decreased in 2009.

77 0.13 0.38 0.80 11.48 4.22 7.Pak Electron Ltd Change your life BALANCE SHEET Vertical analysis of balance sheet is done to compute the %ages of the items under assets and liabilities.62 11.55 4.83 2.52 4. total assets are taken as base.81 2. Equity & Liabilities Description Vertical analysis 2006 % age 2007 % age 2008 % age Share Capital & Reserves Share Capital Reserves Surplus on Revaluation Non Current Liabilities Liabilities Against Assets Subject to Finance Lease Long Term Financing Deferred Liabilities Deferred Income Current Liabilities Trade and Other Payables Interest on Loans and other Payable Short Term Borrowings Current Portion of Long Term Debts 15. To calculate the % of the items of assets.85 26. similarly the total liabilities are taken as base to calculate the % ages of liabilities.63 12.05 0.60 2.13 9.36 3.22 13.51 Page # 60 .59 11.84 1.02 12.34 23.04 15.85 16.57 1.03 14.69 1.71 1.38 6.13 8.24 37.62 1.

the short term borrowing has been decreased because the company has paid its short term debts every year.22% in 2009. Deferred liabilities are also showing an increasing behavior in the last some years.Pak Electron Ltd Change your life Interpretations In the common size analysis of the Balance Sheet it is shows that in 2007 share capital is just 3. Regarding the non current liabilities. it has a decreasing trend from 2007 to 2008. However there is a little variation in trade payables and interest payables. Regarding the current portion of long term liabilities. Reserves have been decreased up to 0. Regarding current liabilities company paid 10% of its short term borrowing in 2008. Page # 61 . It is because the company has decreased its short term financing. However. long term financing is decreasing till 2007 but it in 2009 it has an increasing trend. which is a positive factor.49% of total liabilities.80% from 16.

53 2.20 0.25 1.38 35.50 0.23 2.31 1.11 5.96 0.72 25.44 2.04 5.63 3.65 0.21 % age 2007 % age 2008 % age Page # 62 .65 31.56 21.96 0.84 0.78 25.49 25.31 38.32 0.41 4.73 2.Pak Electron Ltd Change your life Assets ( Vertical analysis) 2006 Description Non-Current Assets Property Plant and Equipment Intangible Assets Long Term Investment Long Term Deposits Current Assets Stores Spares and Loose Tools Stock in Trade Trade Debt Loans and Advances Trade Deposit and Short Term Pre Payments Other Receivables Other Financial Assets Cash and Bank Balances 0.90 4.50 21.04 0.66 0.67 3.09 0.58 25.44 0.87 2.11 0.11 0.

Company has very minor %age in long term investment and long term deposit. But in next years it is decreased up to a minimum of 40%. Company’s cash and bank balance situation in the last four years is just above 4% of the total assets except in 2009. Regarding the current assets company has almost 66% investment in 2009. Investment in current assets shows that company has ability to earn more and more. Moreover. we can analyze that there is an increase in long term investment instead of long term deposits. Other receivables are decreasing rapidly as compared to the previous years. It is shown that there is a continuous decrease in store spares and loose tools but there is also a continuous increase in stock in trade which is a good sign for company’s growth.Pak Electron Ltd Change your life Interpretations In the common size analysis of the Balance Sheet it is shows that in 2007 total non current assets are almost 53% of total assets company invest huge investment in the property plant and equipment. There is a little change in advances. Page # 63 . trade debts and other pre-payments till 2009. It is decreased very sharply is this year because company made the purchase payments from this.

84 47.98 33.00 100.00 2006-2007 % age 18.64) 26.90 67.00 100.88 21.34 14.75) 4.00 100.00 100.Pak Electron Ltd Change your life Profit & Loss Account ( Horizontal Analysis) Description Net Revenue Cost of Sales Gross Profit Other Operative Income Distribution Cost Administration Other Operative Expense Finance Cost Profit Before Taxation Provision for Taxation Profit for the Year 2006 % age 100.00) 34.76 31.48 33.00 100.53 2.00 100.00 100.57 95.99 138.48 (10.00 100.27 36.12 (22.00 100.81 26.33 Page # 64 .87 85.00 100.27 108.69 2006-2008 % age 26.43 (22.

Page # 65 .Pak Electron Ltd Change your life Interpretations The above analysis has been made by taking 2007 as a base year. which is showing a good sign for the company. A huge incensement in the provisions for taxation is due to the very low provisions in base year2007. it must be reduced in order to make good profit although Cost of sales is increasing but G. Finance cost is increasing which is showing that the firm’s long term borrowings are increasing. Rapid increase in Cost of Sales is not a good sign for the company. The firm has to reduce this cost. all kind of expenses are increasing which means company is not becoming able to meet its all kind of expenses in a less ratio.P is also increasing rapidly.It is also a need for the company to make huge provisions as profit is increasing. There is incensement in revenue at really greater rate as compared to 2007. We can analyze that that as the sale is increasing. Profits of the company are also increasing as compared to 2007 which is a good sign.

fixed assets and current assets are being analyzed.Pak Electron Ltd Change your life BALANCE SHEET In the horizontal analysis of the balance sheet. current and non current liabilities and on the assets side. Page # 66 . we take 2007 as a base year on and on the basis of which the changes in each item is calculated. In it we calculate the fluctuations in share capital.

00 100.55 186.00 577.77 2409.00 100.37 52.40 86.00 100.00 100.00 100.Pak Electron Ltd Change your life Equity & Liabilities ( Horizontal analysis) Description 2006 % age Share Capital & Reserves Share Capital Reserves Surplus on Revaluation Non Current Liabilities Liabilities Against Assets Subject to Finance Lease Long Term Financing Deferred Liabilities Deferred Income Current Liabilities Trade and Other Payables Interest/Markup Occurred on Loans and other Payable Short Term Borrowings Current Portion of Long Term Liabilities 100.31 85.74 123.00 100.41 85.53 188.70 284.72 100.00 250.12 224.00 100. Company has more and more reserves because by taking 2007 as base year reserves are almost 200% more in 2009 than 2008.74 224.90 169.42 160.35 352.00 100.11 194.00 192.35 555.89 106. There is also handsome increase in long term Page # 67 .09 2007 % age 2008 % age Interpretations In horizontal analysis trends are computed by taking 2007 as a base year.74 100.23 631.43 203.

Page # 68 . Management should decide to reduce long term financing because it creates negative effect on the net income of the company. Short term borrowing has also same situation like trade payables.Pak Electron Ltd Change your life financing. Regarding the current liabilities. company’s current liabilities are increasing rapidly from 2007 to 2008 but in 2009 it is slightly decrease.

00 100.86 12.00 130.46 161.00 100.27 176.00 2006 % age 2007 % age 2008 % age Page # 69 .47 100.96 10.75 405.90 270.00 100.80 54.00 100.Pak Electron Ltd Change your life Assets ( Horizontal Analysis) Description Non-Current Assets Plant and Equipment Intangible Assets Long Term Investment Long Term Deposits Current Assets Stores and Loose Tools Stock in Trade Trade Debt Loans and Advances Trade Deposit and Short Term Pre Payments Other Receivables Other Financial Assets Cash and Bank Balances 100.00 100.96 191.15 278.00 100.18 252.00 100.00 100.36 219.55 324.00 100.41 368.05 166.79 429.17 412.84 455.00 121.58 11.19 216.80 240.12 928.79 272.00 100.

Pak Electron Ltd Change your life Interpretations There is an increasing trend almost in the items of the Balance sheet such as property and plant equipment.604.43% 2007 21.795.000 Page # 70 .87 Activity ratio 2008 2.692. Summary Ratio Analysis Liquidity ratio Ratio Current ratio Quick ratio Net working capital Ratio Inventory turnover Average collection period Average payment period Total asset turnover Ratio Gross profit margin 2008 1.864.42 0.92% 2006 21.85times 101days 27days 0.62 Rs2.02 2006 2.32 0.000 Rs262.93 2007 1.77% 2007 3.000 Rs1. Loans and advances trade deposits and short term pre payments other financial assets. Trade debt.68 times 92days 20days 1.04 0.077.84 2006 1. There is a decreasing trend in receivables which is a good sign for the company.75 times 122days 26days 0. A huge increase in Cash and Bank Balances.77 Profitability ratio 2008 22.

Page # 71 .66 -------- PEST ANALYSIS Political environment • Pakistan is facing the situation of great political instability and uncertainty since last couple of years. According to the economic survey Pakistan is at the 11th number of top most vulnerable countries of the world. • There are very few incentives to the manufacturers in Pakistan government as compare to upcoming giants like China.96% 2007 64% 1.58% 2.93% 5.70% 4.48% 2006 68% 1.63% 4.79% 3.29 -------- Change your life 13.73 times 2006 5. Due to this problem business activities in Pakistan are severely affected. The cost of manufacturing is very high due to the electricity rates and other overheads.63 times Market ratios 2008 5.76% 12.58 -------4.74 times 2007 6.04% 17.3% Debt ratios 2008 60% 1.82% 13. The Foreign Direct Investment also decreased dramatically due to current insecurity. So most of the time manufacturer hesitates to do manufacturing in Pakistan and prefer to import finished goods or only assemble goods in Pakistan.37% 16.Net operating profit Net profit Return on asset Return on equity Ratio Debt ratio Time interest earned ratio Ratio Price Earning ratio Dividend Payout ratio Pak Electron Ltd 12.

6 percent in 2006-07. Their primary focus is on food and daily use goods and thus people have lessened their interest in electronic goods. It is heard that it will be increased more in future.3 percent Private sector investment was decelerating steadily since 2004-05 and its ratio to GDP has declined from 15. Social environment • Now a days people are becoming more price conscious due to inflation and crises in Pakistan. • The consumers in Pakistan are spending most of their income on food and basic needs of life.9 percent in 2008-09. Pakistan’s economy is also facing a lot of problems. Although Pakistan’s economy is not directly hit by the crises yet the economic situation is severe in Pakistan. at least in the near future. 6000 which increase the cost of production and inflation. • • • • • • In Pakistan there is a strong black economy due to the circulation of black money from illegal businesses like smuggling. removing subsidies and concurrent transfer of international oil price changes is also likely to risk a further slowdown in economic activities. Economic environment • Due to the global economic crises. declined to 4. • To resolve the power sector issues.2 percent in 2008-09 Public sector investment to GDP ratio which has been depicting a consistent increase from 4.0 percent in 2002-03 to 5. Unemployment rate has been increased from 5.6% to 7.4500 to Rs. • Now consumers prefer the Split Air Conditioners over Window Air Conditioners Pakistan Inflation Rate is above 20% in Pakistan Page # 72 .• Pak Electron Ltd Change your life The government decided to increase the minimum wage rate of workers from Rs.7 percent in 2004-05 to 13.4% in Per capita income in dollar term rose from $1042 last year to $1046 in 2008-09. thereby showing marginal increase of 0.

So to Page # 73 . So companies are introducing big outer units to get more efficiency. • In countries like Pakistan the usage of Air Conditioners is great because of extended summer season of nearly 8 months. the non CFC (Chloro-floro Carbons) are shifting in air conditioning industry and all major companies are using non CFC gases in their products. The people in Pakistan have started considering Split Air Conditioners as a status symbol and feel disgraced if split units are not installed in every room of their houses. it made the air condition affordable and easy to install and maintain. • • The companies are becoming more socially responsible these days as they have introduced CFC free refrigerants. anti bacterial and anti dust filters. • • In split Air Conditioners the rotator compressors are used which are soundless and do not heat up in extreme hot situation. In Pakistan Air Conditioners are used by upper and middle class. That is why Window ACs are almost obsolete because of high energy consumption and Split ACs are becoming more popular because of low electricity bills. In the international market. From 2005. Technological environment With the introduction of Split Air Conditioners. That is why people purchase home appliances on installments from the dealers. The bigger is the outer units the more efficient will its inner unit. no CFC gases product can be sold or bought in the international market. • The efficiency of air conditioner depends upon its outer unit.Pak Electron Ltd Change your life because Split ACs are considered as energy savers. CFC gases are harmful for the environment and cause depletion of ozone layer. due to which the danger of global warming is happening.

PEL is a popular company in Pakistan and every one knows about the PEL products and its brand. The electronic inventory management systems are used to reduce the cost of handling the inventory and orders. The customers of the PEL always prefer to buy the PEL home appliances like WRAC split AC and refrigerators whenever they wanted to buy. weaknesses. SWOT ANALYSIS The strengths. Following are the main strong points of PEL.Pak Electron Ltd Change your life remain in the international market it is necessary for the Pakistani companies to adopt new technology of non-CFC gases. Page # 74 .  Strong Brand Image PEL has created the strong brand image in the mind of the customers through higher quality and low price. • • Companies are introducing refrigerators with cool bank which remain working for 5 hours even after switch off The multinational companies are using information technology to coordinate and communicate within companies as well as with external parties. opportunities and threats of PEL are discussed below: STRENGTHS PEL has the following strengths and is in more competitive position in these areas than its competitors. That’s why PEL selling of WRAC are very high in the market than the competitors selling.

Multan. The window room air conditioner is more demanded by the customers than its competitor’s air conditioners because it has more durability in operating systems and cools the room in few minutes. Peshawar. Quetta. PEL has its dealers in 22 major cities of Pakistan like Karachi Lahore.Pak Electron Ltd  Strong Dealer Network Change your life It is also the plus point for the PEL that it has also developed the strong dealer network in the market. PEL also provides the after sale service to their customers which delight the customers satisfaction. PEL is also in a strong position that it provides the superior quality to its customers.  Market leader in WRAC (Window Room Air Conditioner) It is another strong point that PEL is a market leader in WRAC.  ISO Certified Company PEL was 16th company in Pakistan which got ISO 9002 Certification in international standard practices in PEL have been upgraded as per the revised ISO 9001 standards and its scope of application is expanding ever since and top management is committed to make PEL a total quality management (TQM) company. They can get more money after selling the PEL products. Gujarat etc. Dealers are very conscious about the PEL products and always guide the customer in buying the PEL appliances and tell them the more qualities of PEL products than others products. The PEL also provides more incentives to their dealers than their competitors. The dealers are always trying to sell the PEL appliance to the customers because they know there are high margin in the PEL products. It is very good publicity of PEL products that PEL Company gains. It makes sense in the mind of the customers that PEL products are better in quality than the other companies’ products. Sales and Services PEL has Country-wide Customer Care Centers in 21 major cities of Pakistan which enable customers to access PEL customer care centers easily. It is another way to advertise the products because when customer is highly satisfied then he tells the other ten persons that they should buy the PEL products.  Strong Quality. Hyderabad. Rawalpindi. PEL always strives to provide the innovative Page # 75 .

 Contract with Government of Punjab PEL has the contract with Government of Punjab for providing and installation of air conditioners in the premises of Service and General Administration Department of Page # 76 . which are the largest power utilities in Pakistan. Backed by the innovative genius of Saigol Group. As LG is a major player in international appliances market.  Strategic Alliance with LG The strategic alliance with LG has increased the strength of PEL. creating new knowledge and adapting to global developments in technology and product design. PEL aims to maintain this competitive edge and at the same time keep striving to improve it further by continuous R&D. PEL is now technology forerunner and market leader in providing new products and services to meet ever changing and technology intensive needs of its customers. PEL is one of the major electrical equipment suppliers to Water and Power Development Authority (WAPDA) and Karachi Electric Supply Corporation (KESC).  Monopoly in Power market PEL has the largest market share in power market in Pakistan and has a monopoly in market.  Number 2 in Appliances Market in Pakistan Pak Elektron Limited has a second position in appliances market in Pakistan after Dawlance. That’s why customers always purchase the PEL window air conditioner. PEL always continuously strives to pursue the strategies adopted by the competitors. PEL is also making efforts for the technological improvements and better customer services to become market leader in appliances Pakistan.Pak Electron Ltd Change your life features in WRAC. PEL air conditioner is cheaper and has a higher quality than others WRAC. it will give PEL the advantage of technology and increase market share.

which is having a strong grip in the home appliance i. Refrigerators. WRAC. Refrigerators and other items. This remains PEL busy in operations even in the current crises of low demand in market. So it has a strong customer loyalty and people are using PEL’s products generation to generation. PEL is penetrating the market by introducing the new home appliance like Split Air conditioners and Water Dispensers and always trying to get the maximum shares in the home appliance market. micro way Owen etc that is a strong point for the company. PEL always make efforts to satisfy the customers. R&D department spends huge amount of money for the development of product. the loyalty of its customers is ever increasing. PEL always provides help to their customers for repairing the WRAC.  Strong Grip in Home Appliance So PEL is one of the companies.  Customer Loyalty As PEL is a pioneer of electronic manufacturer in Pakistan and in the market since last 5 to 6 decades.  Public Limited Company Although PEL is owned by the SAIGOL GROUP but its shares can be purchased and sold in stock exchange market.Pak Electron Ltd Change your life Punjab.e. So every one who is interested in purchasing the Page # 77 .  Strong Research and Development Department PEL has a strong research and development department that is continuously trying to develop new features for the products.  Free Customer Service PEL provides free customer service for one year to its customers. As PEL is satisfying the needs of customers with economic and durable products. R&D makes research for introducing the new product and asks the customers what they want extra in our product purpose they hire the highly qualified employees in R&D department. That is another strong position of PEL. So the customers always buy the PEL products due to its free service and it becomes loyal customer for the PEL.

as PEL has not given them empowerment to take their decisions for the company. PEL loose some competitive edge in the following points:  Financial Problems Sometimes PEL faces the financial problems because its stocks are so much piled up in the stores that create the problem of cash flow because when the stocks are not sold and the production is in process for 24 hours a day than the company faces such problems. So company aggressively researches the sources of cash and stresses the dealersLow Satisfaction Level of Employees consumers. Due to this problem company always make efforts to develop strong relationships with dealers. It is also called public limited company. If PEL overcome on these weaknesses then it can become a market leader in the home appliance. if they are satisfied they will give their best performance and which will be fruitful for both employees as well as for the company. WEAKNESSES Like other companies PEL has some weaknesses in operating the business. Middle and lower level of employees have not any sense of involvement in decision making for the company. So people are more interested in buying the PEL products. which are made in products by the company time to time.Pak Electron Ltd Change your life shares of PEL he can purchase.  System Variations Page # 78 . Company sometimes sells  to sell the PEL’s products to the end The most useful and important assets for any company are its employees. That creates hurdle in selling the products and customers cannot know the changes.  Lack of Advertisement It is a second major weakness of PEL that it has lack of advertisement on TV and other media. It is very big weakness of PEL that its employees are not satisfied and thus not giving their best performance. Company is not in a position that it made advertising of all their products on a wide range because of its high cash requirement towards the production side.

Human Resource Management has an immense importance for the company. Sometimes company cannot allocate the resources according to the requirements of production department that’s becomes the problem for the complete utilization of resources.  Less Utilization of Resources Due to lack of finance a company cannot utilize all its resources on its full capacity. Page # 79 . It increases the cost of products per unit that decreases the profit margin of each consumer item. Vacuum cleaner and other items. Company cannot earn more profi consumers have high demand of these products and they say that if company is investing in these products then we can keep all PEL items and we never need to keep other’s company products.Pak Electron Ltd Change your life It is also the main weakness of PEL that there are rapidly a change in polices of selling the products.  Lack of Product Range PEL has introduced more products of consumer items but there are more needs to develop new consumer items like PEL Television.  Inappropriate Working of HR Department In this modern and highly competitive era. That’s creates problems for the selling team how to sell the products to the dealers because the top management requires the urgent amount of money. the Human Resource department is not performing their all duties properly. HR department is not functioning properly and it is weakness of company which can cause company’s repute in the market and will loose attractiveness for the employees. Due to lack of product Range. In PEL. The companies making progress in the world have excellent human resource management departments. For the company it is also the main point of weakness. HR department was started before 3 years and it looks like a formality that company has HR department. So selling team sells the products sometimes on hard cash that will reduce the prices of products that gives the benefits to the dealers and creates problems for the management.

central area of SIND.Pak Electron Ltd OPPORTUNITIES Change your life For the PEL there are more opportunities for expansion the business.  Export Opportunity PEL Company has also the opportunity to export their products in other countries like UAE. there is an opportunity. Following are the opportunities for the PEL. If PEL does not take this opportunity then it will loose high margin of profit and market share. Even if company does not take advantage of these opportunities then it will loose its competitive position and high profit. It will reduce the fixed cost and increase the efficiency of the employees. going forward.  Increase in Product Range It is the main opportunity for the PEL that it can increase its product range that will be a more profitable for the company. These places are tribal areas in NWFP and northern areas of Punjab and NWFP. So PEL can have more customers in future.  Rising population Although rise in population is a problem for the country but where there is problem. PEL can improve its product range in the power segment with the establishment of a new factory and can explore further growth opportunities in the Middle East and Eastern Europe. It will not only reduce the dependence on one market but also increase the market shares and Page # 80 . Even though PEL introduce its products in all cities of Pakistan but there are so many places that have the capacity to absorb the PEL’s products.  Exploration of Market in Pakistan PEL has the opportunity to explore the market in all over the Pakistan. If PEL realize that opportunities then it will be more fruitful and profitable for the company. SAUDI ARABIA. If company introduces their products in these areas then it can get a large amount of profit and increase its market shares. and other Arabic and African countries. Its competitors will give PEL tough time to pursuing the opportunities that are adopted by them. So due to increase in population the demand will also increase in the market.

It will also help the company to spread the fixed cost on all of its production that will reduce the total cost and company will enjoy the high profit. Company should make its policies and strategies according to these threats.Pak Electron Ltd Change your life profits. It reduces the profit margin of each company and increase the bargaining power of the buyers who will demand higher quality of products and lower cost. So this is a great opportunity for PEL to focus on power division and take the steps to capture high demand of power products in the future. These threats are for the present situations and future.  Increase in Production Capacity Company can also increase its production capacity at the maximum level that will increase the efficiency of the employees and also will reduce the total cost.  Chinese Products China’s products are another threat for the Pakistani companies because these products are cheaper than the Pakistani products.  Increasing Investment in Power Sector Due to current power and energy crises in Pakistan. That is the main threat for the PEL Company. Sometimes company cannot allocate the resources according to the reproduction department that’s becomes the problem for the complete utilization of resources. An even china product not well in quality but it is comparatively in low prices than the consumer’s Page # 81 . So every company tries to come in the number 1 position for achieving the maximum shares in the market. So following are the main threats for the PEL:  Strong Competition There is very strong competition for the home appliance in the market. Company should look the market conditions then it will produce their products. THREATS PEL Company in such a competitive era has many threats as well. Every company adopts different strategies for selling of the products. the government is increasing investment in power sector.

That’s become the major threat for the companies and decreases the Page # 82 . China products stress the indigenous companies to lower the quality and prices that will not be profitable in the long run.Pak Electron Ltd Change your life home appliance that are manufactured by the indigenous company. So it increases the uncertainty for the investors who want to invest heavy amount in their new projects. It is also becoming a main threat for all the companies. This will increase the cost of production and company has to rise in prices of its product which can disturb its economic products position in the customer’s minds. which are operating in these products.  Decrease in Pakistani Rupee Value The economy of Pakistan is not strong and that is why value of Pakistani Rupee is decreasing.  Price war As there is a stiff competition in the home appliance market that will cause the price war. It becomes the burden for the company that how to sell these stocks. So every company reduces the prices of its products to increase the sales. It will not only reduce the profit margin of the company but also reduce the quality of products. So price war is the main threats for all the companies. This decrease in value of Rupee can severely affect the company as it will result into increase in the cost of raw material purchased from outside Pakistan.  Instability of Government The rapid changes in governments will become threats for the companies because every government adopts its own policies for the industries. Its main reason is that purchasing power of the buyer is very low and it has no income to buy the expensive home appliance.  Decreasing Growth Rate in Pakistan There is also slow growth rate of home appliance in Pakistan that will increase the stocks of the company.

which can cause customers to switch from PEL products to other companies products.  Tax Department Tax department is another major threat for the companies that will restrain the business expansion. That will increase the pressures for the indigenous companies to reduce the prices and increase the quality. Due to fear of politically instability companies will also not invest the heavy amounts. It is a threat for company as it will not properly forecast and meet the market demand of Pakistan.  Black Economy in Pakistan Due to the black economy in Pakistan the marketers cannot make proper estimation of market demand. Due to fear of heavy taxes companies would not like to invest the heavy amount. It will increase the competition among the foreign companies and indigenous companies.  World Trade Organization World Trade organization gave the permission in 2005 to each company of home appliance to export their products after paying fewer duties or duty free products. There is more complicated tax procedure for the companies.  Rapid Technological Changes World is watching fast technological changes and there is a rapid change in designs and technologies in products. which are interested to increase the investment in their businesses. But our companies also run under uncertainty conditions. The marketers acquire data from State Bank Economic Surveys which do not reflect the fair picture of the economy. This will decrease the morale of indigenous companies. Page # 83 . So it is very important to move with latest technologies which increase the cost of production.Pak Electron Ltd Change your life profitability.

There should be fair performance of employees and reward them according to their performance. • The company should add more features to their products. It will boost their motivation and loyalty for the company.Pak Electron Ltd Change your life RECOMMENDATIONS On the basis of my knowledge and perception I can recommend the company: • Pak Elektron Limited should adopt a true decentralized organization setup which gives all employees to take part in decision making for the company. Because in such economic conditions Marketing is considered the key department which creates more value in the minds of the customers. The company should announce two holidays (Saturday & Sunday) in a week. PEL more focus on the Pull strategy in its promotion mix especially for appliances. The company should take steps to make sure proper functioning of Human Resource Department. The company should use information technology efficiently to communicate between departments in fast and proper way to save time and other resources. it will not only help the company in cost cutting but also increase efficiency of its employees. PEL should give more allocation of budget to its marketing department. To gain more competitive advantage over its co-market players. • As economy is facing recession. • • The company should give Incentives and other benefits to its employees to motivate them and to increase their performance. People are attracted towards products with unique features and something that would make the customers feel that they have got their moneys worth. Page # 84 . • • • The company should have a strong marketing information system to make proper forecasts about market situation.

The current strategic alliance of PEL with LG will helpful for the company to expand its technical and production capacity and will also expand the target market. In my views the management philosophy is the main hurdle in progress of the company. Now the company’s focus is only profit and employer’s oriented which cause emp motivation. The company has good strengths and so it can make a rapid progress in local as well as foreign markets. In Pakistan the brand image of Pak Elektron Limited is excellent in the minds of its customers.Pak Electron Ltd Change your life CONCLUSION To conclude I can say that I had a wonderful and learning experience in Pak Elektron Limited which make possible me to write this report. but unfortunately PEL is not realizing creative advertising is also important part of their Marketing success. No doubt PEL is making excellent products. I see the future of PEL very bright as it is finding new opportunities and the company has the potential to compete with any challenge in the market as it is in the market since an era of above 50 years. Page # 85 .

Sign up to vote on this title
UsefulNot useful