KSB Pumps Company Limited KGB b.) Submitted To: Prof. DR. LIAQAT ALI Submitted By: MUHAMMAD SARFRAZ Roll No.433 Period: 6 Weeks (Jun 29" to August 12" 2011)KSB Pumps Company Limited xs, Table of Contents Acknowledgement 3 Preface wnnnnnsnnnnnne Exective Summary, Error! Bookmark not defined. Highlights of KSB AG Pumps Company... 7 KSB Code of Conduct... 9 Prevention of Curruption .umninnnuimninninninmnnniniininnnineinennenennnennannnnnnnnne 2 History of KSB Pumps Company Pakistan. 30 Vission Statement 32 Mission Statement sna Goal, Objectives and Strategic Planning 34 CORE VALUES nnn ses «we Error! Bookmark not defined. KSB ORGANOGRAM .nsesnnnnnninininninininnninninnininnnnnnmnnnnmnnnnenennsne® INTRODUCTION OF KSB PUMPS.....ssnanneinisinnninnnnnnnnnninnnnnnnnnsnnnnannassse AD KSB PUMPS DEPARTMENTS... sons se se RATIO ANALYSIS. se sev scr VERTICAL and HORIZONTAL ANALYSIS ose sce sce SWOT ANALYSIS OF KSB. 79 MY WORK AT KSB PUMPS sons se ocr B2 CONCLUSION rence sce evo scene 86 RECOMMENDATIONS. 87KSB Pumps Company Limited Ks, LETTER OF TRANSMITTAL To: Ma'am Fozia, Assistant Professor, Hailey College of Commerce, University of the Punjab, Lahore. From: Muhammad Sarfraz Respected Madam: Here is the report on KSB Pumps Company (Pvt.) Limited that has been authorized me by the department to prepare as a part of my internship assignment on Sep 2010. As you will see that the report provides a cavernous insight of the organization. | have discussed the working of concerned department and extemal and internal environment of company in detail. | would like to thank Mr. Munir Ahmad (Manager Projects Accounts), Mr. Amir Allyas (Assistant Manager Accounts), Mr.Umair Javed (Accountant), Mr. Khurram Rana, Mr. Tariq Shamsi, Mr.Usman Qayyum and others for their invaluable contribution in making this report. | also appreciate your help and guidance in preparing this report. It is a pleasure to accomplish this work and | have learned valuable lesson in preparing this formal report. | am submitting report to you on September 05, 2011 Yours sincerely, Muhammad Sarfraz Roll #433KSB Pumps Company Limited Ks, ACKNOWLEDGEME! Every word of praise and gratitude goes to Allah Almighty whose blessings and bounties are innumerable to realize and count, and due respect to Holy Prophet (peace be upon Him) who enables us to recognize our creator and whose teachings are a role model for us to follow in the time of darkness and despair. | am highly thankful to the staff members of KSB Pumps Company Limited; they really cooperated with me and provide me their complete guidance. In Head Office, | observe friendly environment between the employees and they also give me the friendly environment to learn about the Accounts & Finance of the projects as well as Sales, Admin & Human Resource Departments also. As The KSB’s rules and regulations are very much strict and sensitive to their secrecy, even they have not take any understanding from me and they let me handle their delicate operations. My extreme and heartiest thanks is for Esteemed Mr. Munir Ahmad, Manager Projects Accounts & Finance and Mr. Aamir Ilyas, Assistant Manger Projects Accounts & Finance who guided me so well at every stage of this internship and also motivated me and enhanced my confidence by providing useful knowledge to me . And especially thanks to the Accounts Officer, Projects Accounts & Finance, Mr. Umair Javed who added great contribution to my learning at KSB Pumps Company LimitedKSB Pumps Company Limited Ks, PREFACE The internship is an essential part of B.Com(HONOURS) degree program because through this training students come to know the real difference between theory and practice and they are also introduced to the outside business world. An important requirement of this training program is to compile a report about the activities of that organization in which the student has done the internship. The internship provided me great opportunity to equip myself with knowledge, techniques, application and tools used in an organization. The purpose of this Internship Report is to share the process of learning and experience that | underwent during the course of my Internship with KSB Pumps Company Limited. My Internship was in the Projects Accounts & Finance Department at the Head Office of KSB Pumps Company Limited. Intemship mainly consisted of work related to Projects Accounts & Finance. During the 6 weeks of internship | was able to grasp the procedures, processes and dynamic tasks of the Projects Accounts & Finance activities. My this experience in KSB Pumps will definitely help me a lot to make my foundation to enter into a professional field and where | can apply my this experience diligently. This period has @ key importance in my career life because | gained a lot through this intemship and | will try to apply it in my future job. In future correspondence, my internship period will guide me to choose my career path because it enables me to know the work nature of multinationals. | learnt practically a lot during this internship period which assists me to choose my practical field in future. | hope this report will help in understanding various aspects and features of KSB Pumps Company Limited and will be equally important for commerce students and persons making future careers in multinationals.KSB Pumps Company Limited Ks, EXECUTIVE SUMMARY This report is about my internship program with KSB Pumps Company Limited. In this comprehensive report, | have discussed about every major aspect of the KSB Pumps Company, which | observed and perceived during my intemship program. In this report you will find the detail about the KSB Pumps Company right from its incorporation to the current position. Along with it, the processes, policies and procedures of the KSB Pumps Company are also discussed in detail. During my intemship program, | mainly worked with two departments: Projects Accounts and Finance Departments. These departments have been discussed in detail and all the policies and procedures have been described thoroughly. As the main purpose of internship is to learn by working in practical environment and to apply the knowledge acquired during the studies in a real world scenario in order to tackle the problems using the knowledge and skill learned during the academic process. In this report the detailed analysis of the KSB Pumps Company has been done and all the financial, technical, managerial and strategic aspects have been evaluated to analyze the current position of the KSB Pumps Company. In the end the leaming and experiences section consists of all the policies, processes, practices and procedures which | have undergone through and learned during my internship program. This report also contains my perceptions about the employees’ satisfaction, motivation level and the working environment of the organization.KSB Pumps Company Limited Ks, Dedicated to: Uy loving Parents & Respectable TeachersKSB Pumps Company Limited Ks, THE HIGHLIGHTS OF KSB (Klein, Schanzlin & Becker) AG (AMAG) GERMANY KSB AG Address: Johann-Klein-Str. 9 D-67227 Frankenthal Germany Telephone: (49) (6233) 86 29 05 Fax: (49) (6233) 86 3401 http://www.ksb.com Statistics: Public Company Incorporated: 1871 as Frankenthaler Maschinen-& Armatur-Fabrik Klein, Schanzlin & Becker Employees: 12,252 Sales: EUR 1.18 billion ($1.47 billion) Stock Exchanges: Frankfurt Dusseldorf Ticker Symbol: KSB NAIC: 333911 Pump and Pumping Equipment Manufacturing; 332919 Other Metal Valve and Pipe Fitting Manufacturing Company Perspectives: KSB products’ success stems in large measure from the company's own Research and Development. Specialists there put major emphasis on the continual improvement and automation of pumps and valves, and on the reduction of life cycle costs.KSB Pumps Company Limited xsBb, Key Dates: 41871: Three entrepreneurs found the Klein, Schanzlin & Becker. 1909: A presence in London is established 1924: Production subsidiary is established in Homburg/Saar. 1930: KSB acquires major competitor AMAG in a hostile takeover. 1939: Jacob Klein gains a majority stake in KSB. 1942: Otto Klein-Kuhborth becomes Jacob Klein's heir. 4949: French administration of the company ends, and dismantling after World War Il is prevented, 1960: Otto Klein-Kuhborth transfers his majority stake in the company to the nonprofit foundation KSB Stiftung. 1971: Wolfgang Kahborth takes over as CEO. 1986: KSB acquires a majority share in French pump manufacturer Pompes Guinard SA. 1988: The company moniker is shortened to KSB AG. 1992: KSB gains a majority stake in Georgia-based GIW Industries Inc. 1995: KSB acquires a majority share in Chinese pump manufacturer Shanghai Pump Works. 2003: The company takes over Dutch pump maker DP industries B.V.KSB Pumps Company Limited xseb, KSB Code of Conduct Why we need a Code of Conduct Dear employees, In the global competitive environment, our customers and business partners expect, in addition to high-quality products and services, professional and honest behavior that includes compliance with legal regulations and ethical standards. By meeting these expectations we cement confidence in our company and the KSB brand. At the same time, we maintain the values that have characterized KSB's activity for decades. We are jointly responsible for our company’s reputation. Improper behavior by even one person can damage our reputation for a long time. That is why we need a binding concept of what defines our shared understanding of professional and honest business behavior. We have summarized the relevant guidelines and key rules in the following Code of Conduct. We will keep a close eye on future developments in the legal and business environment and adapt the Code as required 10KSB Pumps Company Limited xsBb, The KSB Code of Conduct offers orientation and assistance but also contains the binding requirements our actions need to be based on. Fully committed to these rules, we expect consistent adherence to the following “core values” from our managers and employees at all levels and will monitor this in an appropriate manner. We are confident that you will all comply with the requirements laid down in this Code of Conduct. Dr. Wolfgang Schmitt Chairman of the Board of Management of KSB Aktiengeselischaft 1, Purpose and scope: It is basically a matter of course that companies, their representatives, managers and employees act in compliance with the applicable laws. Ensuring that this is the case is becoming ever more difficult due to the myriad of requirements and the increasing number of legal provisions and regulations. All activities that help to ensure behavior by @ company and its employees that meets the regulations and laws in day-to-day practice and to prevent incorrect behavior are referred to as “compliance”. This also includes observing contractual agreements and voluntarily agreed commitments. The Code of Conduct constitutes the basis of compliance activities at KSB. It describes the key legal and business policy principles that we use in our relationships with customers, suppliers and other business partners as well as our internal cooperation. It also determines our conduct on financial markets and in the various countries in which we work, The Code aims to support employees in their day-to-day work Proper conduct particularly involves acting with integrity, reliability and transparency. Your observance of these core values is as much a requirement for justifying the trust our business partners place in us and being a successful market player as is the high quality of our products and services. KSB’s reputation is more important than the individual success of any particular business transaction or person. 1KSB Pumps Company Limited xsBb, The Code of Conduct is compulsory for all employees at all levels. It covers all organizational units and Group companies where KSB Aktiengesellschaft directly or indirectly holds an interest of more than 50%. If the interest held is lower we will encourage the relevant company to adhere to similar standards. Some of the requirements listed in the KSB Code of Conduct are supplemented and set out in greater detail by Group Guidelines, e.g. for cartel law and preventing corruption These documents are available both on the KSB intranet and with the Management of KSB Group companies; it is the responsibility of each employee to be familiar with the Group Guidelines relevant to his or her activity. In some countries business practices do not meet the requirements of this Code of Conduct. Nevertheless, we expect our employees to use these rules for guidance on the basis of the relevant applicable laws. Regional regulations shall have priority if and to the extent that they exceed these requirements; the relevant regional Management shall outline any variations. 2. Basic rules of conduct: 2.1 Working with each other; The relationships between managers, colleagues and employees in all corporate divisions and regions should be characterized by professionalism, mutual respect and fairness. In this we take account of cultural differences. It is our declared goal to not disadvantage anybody based on such individual characteristics as age, race, religion, skin color, gender, sexual orientation, disability, national origin, heritage or marital status. In the working environment we do not tolerate discrimination, harassment or reprisals. This also applies to our contacts with people outside KSB, for example job applicants. 12KSB Pumps Company Limited xsBb, 2.2 Acting as role models; The members of the Board of Management and Supervisory Board of KSB Aktiengeselischatt as well as the representatives of Group companies and others who exercise management responsibility shall act as role models for others. They are expected to observe the principles laid down in this Code of Conduct with special commitment, as well as provide support and ensure they are complied with in everyday work life 2.3 Communication and Transparency; Reports and communication to those within the company, business partners, investors, the public, official organizations and authorities shall be understandable, truthful and submitted in good time; they must also be in compliance with the applicable laws and regulations. Our financial statements shall correctly document business transactions. In order to avoid a lack of clarity and/or misunderstandings, only expressly authorized people can provide company statements. This applies in particular to communication with the media, investors and analysts We cooperate with official organizations and authorities and support their work — whilst maintaining our rights. As a matter of principle we do not provide information on customer relationships, matters relating to an individual employee, competitors or ongoing investigations: as a matter of principle we do not comment on rumors. 13KSB Pumps Company Limited xsBb, 2.4 Managing business; Law-abiding Behavior We operate our business in such a manner as to comply with the applicable laws, other binding regulations and obligations that we have entered voluntarily. It is in particular the responsibility of the relevant line manager to give employees all the necessary instructions and support, e.g. access to all internal guidelines, and if necessary to explain them. Preventive legal Advice In order to reduce risks employees should obtain advice from the relevant Legal Affairs department if there are legal issues in question Use of Company Resources Each employee shall handle the company’s resources, such as machinery, fixtures and office materials, responsibly. Private use shall be prohibited as a matter of principle and shall require approval in each individual case. In particular, the Group's guidelines governing the use of telecommunication resources and computers shall be complied with, Innovative products and solutions are of great importance for the development of the company. Inventions made by employees or third parties for the company must be legally protected by reasonable means. No employee may disclose information on the company’s know-how and expertise (e.g. design drawings) or business secrets to project partners or other third parties without being expressly authorized to do so. Corruption, Bribery When competing for orders KSB bases its decisions on objective economic criteria such as quality and price 14KSB Pumps Company Limited xsBb, Our employees are not permitted to offer or give third parties direct or indirect advantages to exert an unfair influence on economic decisions, whether through financial payments or other means. No employee may use his or her employment to demand, accept or otherwise acquire unfair advantages. Employees who sign contracts with consultants, agents or similar third parties must ensure that the latter also comply with these rules. Gifts, favors, hospitality or other benefits may only be given or accepted if they do not infringe applicable laws or KSB guidelines and neither damage the public reputation of KSB nor the probity of the employee if they become known publicly. In cases of doubt, the matter must be discussed and agreed with the line manager or the relevant Compliance Officer. 2.5 Business Rel; Awarding Contracts KSB maintains fair dealings with all business partners. Suppliers and service providers are selected using objective and traceable criteria as well as on the basis of comparing quotations. Business Incentives Commissions or benefits (e.g. discounts or price reductions) related to goods and services are permissible business incentives. Their use always requires — in addition to comprehensive documentation — great care and the observation of the relevant legal provisions and regulations. Payments Payment for goods and services received shall be made directly to the relevant contractual partner and in general in the country where it is based. Cash payments should not be made except in documented individual cases. Before agreeing on other 15KSB Pumps Company Limited xsBb, payment arrangements the relevant Legal Affairs department or company representatives (Advisory Board, Board of Management etc.) must be informed 2.6 Conflicts of Interest: Secondary Employment Holding a second job that is not simply of marginal scope requires the prior consent of the relevant Human Resources department. Secondary employment with customers, suppliers or competitors always requires prior consent. Consent will not be given as a matter of principle if the secondary employment may adversely affect work performance, contradicts the employee's duties or if there is a risk of a conflict of interests. Interests held in Competitor, Customer and Supplier Companies Material interests held by employees in a competitor, customer or supplier company of KSB require the consent of the Human Resources department Material interests held by close family members in a competitor, customer or supplier company must be notified to the responsible Compliance Officer if there is the possibility of a conflict of interests for the employee. Spouses, registered partners, children receiving support and other relatives with whom the employee has lived in the same household for at least a year at the time the stake is purchased are defined as close family members. A material interest is defined as 10% of the shares or more, for listed companies 1% or more. Transactions with Employees or Family Members There should be no KSB transactions with employees or their family members if they have not been agreed individually in advance by the employee's line manager or the relevant Management of the company. It should be ensured that the employee concerned is not involved in making the decision. 16KSB Pumps Company Limited xsBb, Business Opportunities No employee may exploit KSB business opportunities to his or her own advantage or the advantage of third parties. 2.7 Insider Information: Insider information shall always be treated in strict confidence and relates to facts the knowledge of which could affect an investor's decision about the purchase or sale of listed shares (or derivatives thereof). This applies, for example, to knowledge about material planned acquisitions or sell-offs, strategic alliances, major agreements or likely differences in corporate profits to those published, In line with the legal provisions and regulations applicable in this context, KSB employees must ensure that no insider information is used when trading shares or derivatives (including that relating to business partners) and that this information is not disclosed to third parties. 2.8 Confidentiality: Information that KSB has not made public (e.g. technical knowhow and expertise) shall be treated in strict confidence as a matter of principle. It must not be disclosed to un- authorized third parties (including family members and friends) during or after the end of the employment relationship. It is prohibited to use confidential business information during or after the end of the employment relationship for personal advantage, the advantage of third parties or the disadvantage of KSB Each employee shall handle confidential data responsibly and with foresight, for example store it carefully rather than “leave it lying around’, in order to protect it from access by third parties. 7KSB Pumps Company Limited xsBb, KSB's social commitment includes making donations, mainly for social or cultural purposes. Donations are made in a transparent manner and free of personal interests on the basis of traceable criteria and the corresponding intemal guidelines. All donation processes are documented. As a matter of principle KSB does not get involved in party political activities. This includes financial support and benefits for parties, political organizations and their representatives as well as activities or events on behalf of or on the premises of KSB. However, our employees are always free to get involved appropriately in political activities as private individuals and citizens — outside working hours. 3. Special Issues: 3.1 Competition and Cartel Law; When dealing with competitors and business partners we follow the rules of fair competition. These are the basic requirement for performance-based market regulations. Any and all actions that aim to create an economic advantage in a manner that contravenes competition law or using cartel agreements are prohibited. This relates in particular to agreements among competitors to fix or control prices, boycott certain suppliers or customers, share customers or markets or restrict the production or sale of products. Infringing current competition law can result in substantial fines, risk of damages end loss of image that harm our company and its position in the marketplace. In addition, the affected employees themselves will have to expect legal consequences. 3.2 International Trade and Export control KSB observes applicable intemational trade provisions. These include customs regulations and trade and production controls. Each employee shall follow the internal Tules on export control as well as the legal provisions and regulations. 18KSB Pumps Company Limited Without approval by the relevant authorities, KSB does not export or import materials, products or technologies that are subject to statutory control and require import or export permits. 3.3 Tax Laws As an internationally operating Group, KSB observes all relevant tax law provisions. It does not support improper behavior by business partners. We set transfer prices using globally recognized principles and compare them with the terms and conditions of external third parties. Employees on international assignments are obliged to comply with the tax laws that apply to them personally in line with our deployment regulations. 3.4 Environmental Protection Compliance with high environmental standards is an important element of our corporate policy. With an effective environmental protection approach, KSB bears its corporate responsibility not only to secure the health of its employees but also the natural basis for life for everybody. 3.5 Occupational Health and Safety KSB is committed to providing a safe working environment for employees. The strict observance of the relevant regulations on occupational health and equipment safety is a basic prerequisite for responsible cooperation in the company. We also counteract risks by voluntary, preventive measures. 3.6 Safety and Quality of Products As a leading technology company, KSB provides customers with innovative solutions for their needs. We research, develop and work to benefit people who trust - and have every right to trust — in the perfect condition of our products and services. Meeting the high safety and quality requirements of our customers is one of the key corporate objectives. 18KSB Pumps Company Limited Ks, 3.7 Data Privacy and Protection KSB respects the rights of employees and third parties relating to their personal data The company takes the necessary precautions to ensure that personal data is only recorded, processed and used in strict compliance with the relevant applicable provisions. 3.8. IT Security As a result of the intensive use of IT systems, the business activity of KSB is heavily dependent on their operation and availability. In order to limit the resulting potential risks the applicable guidelines on IT security must be observed strictly 4. Implementation: Each KSB employee consciously and actively contributes to implementing the principles of the Code of Conduct correctly in his or her area of work. The aim is to avoid problems as defined by the Code or to identify them early on and find a quick solution. Employees who have questions on specific situations can refer to the following at any time. Information and Control Duties by Line Managers Each line manager ensures that employees are informed about the content of the KSB Code of Conduct and comply with its stipulations. Employees can discuss any questions with their line manager or relevant Compliance Officer. Employee Duty of Notification if Variances Become Known If Group employees are or become aware of infringements of the KSB Code of Conduct, they are expected to inform their line manager or the relevant Compliance Officer. Group Compliance Officer The Group Compliance Officer, Dr. H. Stefan Wiss (Tel.: +49 6233 86-2266; hans- stefan. wiss@ksb.com), supports the implementation of the Code of Conduct throughout the Group. In this function he reports directly to the Chairman of the Board of 20KSB Pumps Company Limited xsBb, Management but does not receive instructions from him. In addition, other Compliance Officers may be appointed, e.g. with specific technical or regional responsibilities If the Group Compliance Officer determines that there is reasonable initial suspicion of an infringement of the provisions of the Code of Conduct he may request other Group departments to assist in clarifying the matter. Information on any incorrect behavior will be treated anonymously on request in order to avoid disadvantages for the person providing the information. Ombudsman If employees are or become aware of facts relating to criminal or cartel law, instead of the relevant Compliance Officer they may also inform the law firm commissioned for this purpose by KSB. The law firm will forward such information to the Group Compliance Officer but without naming the informant in order to ensure confidentiality in such cases (ombudsman system). Contact can be made from any country, either in German or English, and both by telephone and in writing. The contact is; Dr. André Grosze Vorholt Luther Rechtsanwaltsgeselischaft mbH Landshuter Allee 680637 Munich Germany Mobile +49 152 01624700 Fax +49 89 23714-110 E-mail: andre. groszevorholt@|uther-lawfirm.com Sanctions and Consequences Infringements of the KSB Code of Conduct may result in employment, civil or criminal law consequences for the employee concerned and will also be treated in line with the usual corporate practice. 21KSB Pumps Company Limited xsBb, Corporate Directive on Prevention of Corruption |. Purpose and Scope of Application of This Corporate Directive: 4. This Corporate Directive provides standards of behavior for all employees of the KSB Group for the avoidance of corruption. It is intended to help employees conduct themselves correctly in specific situations in order to avoid damage to themselves and the company, 2. In all their business activities and decisions, our employees shall at all times observe the applicable laws and regulations (including the relevant KSB regulations). 3. This Corporate Directive is based on German legislation, and is accordingly mandatory for all German employees of the Group and all Group employees working in Germany. 4. In addition, all other employees of the KSB Group shall also observe the stipulations of this Corporate Directive on the basis of the relevant applicable law, except where stricter provisions are applicable to the actions of the employees on account of their nationality or on account of the laws of the country in which they act. In such case, the stricter standards take precedence over this Corporate Directive. 22KSB Pumps Company Limited xsBb, Il, What is corruption? 1. In general, the term corruption is understood to mean the acceptance or granting of advantages or benefits for the purpose of the unfair influencing of business or official decisions. 2. Corruption is a crime. Both the recipient and the grantor of the advantage or benefit make themselves criminally liable 3. Particularly strict provisions apply in relation to dealings with public officials Corruption is, however, also prohibited in private industry. 4. Corruption does not just begin with the acceptance or granting of benefits. Even the offer, promise, demand or acceptance of a promise already results in criminal liability and all the consequences associated therewith: 5. The prohibition of corruption applies worldwide. Ill. Consequences for employees and the company: Corruption may have far-reaching consequences for employees and the company: 1, Consequences for employees 4.1. A person who is guilty of corrupt behavior — whether through the granting or the acceptance of advantages — commits a crime. In the course of investigations, searches ate frequently carried out of private homes and places of work, and interrogations conducted of work colleagues and supervisors. A person who is found guilty of corruption may be sentenced to several years of imprisonment or a high fine. 23KSB Pumps Company Limited xsBb, 4.2 Customers, contractors and competitors may suffer damage as a result of corruption. These parties may claim damages from the offenders personally. 4.3 Through corrupt behavior, employees breach their obligations as towards their employer. As a rule, corrupt behavior entitles the employer to dismiss the employee without notice. 2. Consequences for the company management 2.1 If employees are guilty of corrupt behavior which would have been prevented or made considerably more difficult through proper supervision on the part of the company management, the management may have an administrative fine imposed upon it, and in individual cases even be made criminally liable. 2.2 The company management is therefore obliged by law to counteract corrupt behavior, to carry out regular checks and controls, to investigate cases of suspicion and penalize breaches accordingly. 3. Consequences for the company 3.1 If employees are guilty of corrupt behavior, a high fine may be imposed on the company. This fine may, in certain circumstances, reach the amount of the sales revenue generated by the transaction affected. The company may also be excluded from public contracts. 3.2 If partners to a contract or any competitors have suffered damage by the corrupt action of an employee, the company may face a civil law claim for damages. 3.3 According to the credit terms of the credit insurance company Euler Hermes Kreditversicherung, the insurance cover lapses in relation to exports if the applicant has offered, promised or granted unlawful benefits in connection with the relevant contract. 24KSB Pumps Company Limited xsBb, The applicant is still charged with the insurance fees. In addition, it faces legal consequences on account of the attempt to obtain insurance cover by false pretences IV. The Position of KSB 4. KSB is determined not to tolerate any corrupt practices, either through employees or business partners. Infringement of the provisions of this Corporate Directive will lead to the legal and employment consequences appropriate in the individual case 2. KSB prohibits any and all participation in or tolerance of bribery or any other form of corruption 3. KSB will continuously improve the controls for the avoidance and exposure of corruption in order to detect and eliminate possible weak points that promote corrupt behavior. 4. The basic principles addressed in the KSB Code of Conduct require that in each commercial activity even the appearance of corruption or corruptibility shall be avoided. 5. KSB expects all employees to regard it as their personal task to contribute to the avoidance and exposure of corruption in the KSB business environment, and thereby to strengthen KSB's reputation. V. Standards of conduct for the prevention of corruption: The following rules of conduct are intended to serve the avoidance of even the appearance of corrupt behavior: 4.Dealings with customers and suppliers 4.4 Suppliers shall be selected exclusively according to principles of competition, i.e. in particular by reason of the price, the quality and suitability of their performance. 25KSB Pumps Company Limited xsBb, 4.2 KSB employees shall immediately reject any attempt on the part of suppliers to unfairly influence the placing of orders through the offer, promise or granting of personal advantages. 4.3 KSB maintains its market share exclusively through the high quality of its products and services, customer friendliness and an attractive price/performance ratio. 4.4 KSB employees are prohibited from making any attempt to unfairly influence customer decisions through the offer, promise or granting of personal advantages. 2. Presents and benefits to public officials 2.1 KSB employees are prohibited from offering, promising or granting monetary or material benefits of any kind whatever to public officials, however insignificant such benefits may be. The reason for this lies in the particularly strict rules which generally forbid the offering or granting of any benefits to a public official, regardless of their value. 2.2 The strict provisions relating to public officials and authorities apply first of all to all holders and institutions of public power, such as federal and state governments, district authorities, municipal authorities, facilities of the German Federal Armed Forces, courts, institutions, corporations and foundations established under public law, employees of the above-mentioned bodies, officials, soldiers and judges (the examples relate to Germany). 2.3 The strict provisions relating to public officials and authorities further apply to privately organized establishments with public tasks or state participation, such as public transport or utility companies, public hospitals or waste disposal companies, as well as to their employees. 2.4 The prohibition of the granting of benefits under 2.1 also applies to relatives of the public officials mentioned in 2.2 and 2.3, and alll other persons who may be suspected of accepting a benefit on behalf of a public official 2.5 Exceptions on an individual basis require the prior consent of the responsible Compliance Officer. 26KSB Pumps Company Limited xsBb, 3. Presents and benefits in other business dealings 3.1 Outside the scope of application of the foregoing clause V.2., business partners within the meaning of the following provisions are persons or businesses and their management executives, employees and representatives with whom KSB maintains, has maintained or might in future maintain business relations. 3.2 KSB employees shall not demand, either for themselves or third parties, any invitations to meals or events, any presents, other benefits, personal services or any other favors from business partners. 3.3 Neither KSB employees nor the immediate members of their families may receive any monetary presents — regardless of their amount — from business partners. Conversely, KSB employees shall not offer, promise or give any monetary presents to business partners. 3.4 Notwithstanding the above, KSB, within the scope of the applicable laws, takes into account the concept of social custom in the case of the acceptance and granting of presents or benefits. Each culture and society has traditional manners of behavior which ate regarded as customary; the failure to observe the same would on occasion even be considered impolite, and convey a low estimation of the opposite party. Accordingly, as a rule of thumb, the following applies: The receipt or granting of presents or benefits is, as a rule, impermissible if the same no longer fall within the scope of what is socially customary, i.e. if the boundaries of business custom and also the personal status of the parties involved are exceeded — taking into account the respective level in the hierarchy and the reason for the present or benefit. The specific provisions to be observed at KSB in this connection are set out in the following sections. 7KSB Pumps Company Limited xsBb, 3.5 The acceptance, offer, promise or granting of any material benefits is only permissible where any possibility is excluded that business decisions might be influenced thereby. Nor may the impression be created that any influencing is intended or possible. Subject to these conditions, the acceptance and granting of material benefits is always permissible up to a value of 30 Euros; higher amounts so long as they remain within the customary social framework. Irrespective of this, the offer, promise or granting of material benefits is always impermissible if there is reason to assume that acceptance of the benefit by the recipient is prohibited by company regulations. 3.6 Provided any possibility is excluded that business decisions might thereby be influenced or a corresponding impression thereby be created, KSB employees may, on special business occasions, both participate in and issue business catering invitations within the customary social scope. 3.7 The participation in events and trips the costs of which are borne by third parties is permissible for KSB employees if: ‘A business reason exists, and the participation coincides in the individual case with the interests of KSB, and “+ The customary business framework is not exceeded, and + Any possibility is excluded that business decisions might thereby be influenced or a corresponding impression be thereby created. The participation in such events and trips which exclusively or primarily pursue social purposes (of a cultural, sporting etc. nature) is permissible only following the prior consent of the respective superior. 3.8 Invitations to business partners by KSB to trips or events are permissible if the same remain within the customary social framework, and provided any possibility is excluded 28KSB Pumps Company Limited xsBb, that business decisions could thereby be influenced or a corresponding impression be thereby created 3.9 In cases of doubt, the prior consent of the responsible Compliance Officer shall be obtained. 4, Involvement of agents and consultants Fees for agents and consultants are in practice frequently open to the suspicion that they serve to conceal corrupt benefits. In order to preclude even the appearance of unfair behavior, the following points in particular shall therefore be subjected to a critical examination when involving agents and consultants: 4.4 Seriousness of the agent / consultant: The basic principle reads: *(Better) know your consultant’! A critical examination of quality and reputation is always necessary. The location of the head office of a consulting firm in well known tax havens such as the Cayman Islands or the Channel Islands, but also Liechtenstein, Switzerland and Luxembourg, should arouse suspicion unless reasonable grounds for such location are evident. 4.2 Nature of the activity and documentation: The performances owed on the part of the agent / consultant shall be laid down in detail by contract (e.g. the negotiation on a case-by case basis of certain business transactions or certain financing). The KSB employee responsible shall record in writing the performances received, and confirm the same to the payee when remunerating the performance. Running activity reports or file notes may serve in this respect as documentary proofs. 4.3 Reasonableness of the consideration: The remuneration of the agent / consultant shall always be examined as to its reasonableness and conformity with market 28KSB Pumps Company Limited xsBb, conditions. The relevant industry, region and the nature of the performance may, inter alia, be used as criteria in this respect. In the case of a bank transfer of the remuneration, the agent / consultant shall always be indicated as contractually agreed recipient of the payment if the payment is not actually made direct to him - as wil, however, normally be the case. 4.4 Through the use of compliance clauses it should be contractually agreed that agents / consultants shall not use the money received from KSB for corrupt behavior, and that KSB shall also not tolerate any other corrupt practices on the part of the agents / consultants. Corrupt behavior / practices shall - as far as possible — be subject to penalties and the right to extraordinary termination of the contract. 30,KSB Pumps Company Limited xsBb, KSB Pumps Company Limited Pakistan History KSB Pakistan is an affiliate company of the world famous German KSB Group, which was founded in 1871. The KSB Group is among the leading companies in the field of pumps and valves with subsidiaries and affiliated companies all over the world KSB name stands for the highest standards of product and service quality. KSB Pakistan was established in July 1959 in Lahore. The production facilities at Hassanabdal were completed in 1964 and a full-fledged foundry was commissioned in the same premises in 1980. The Company is ISO 9001 certified since 1994 and lately has added ISO-14001 and 18001 certifications for complete Integrated Management System certified by TUV, Germany. Now the Company employs over 400 people and operates through its fully functional sales offices in Lahore, Karachi, Quetta, Rawalpindi, Hassanabdal, Peshawar and Multan and through a dealership network, KSB Partners. In addition, the Company has full-fledged Service Department comprising qualified and experienced personnel capable of undertaking turkey installation jobs and O&M Contracts. KSB believes in continuous innovations and adds new solutions for the customers in its production range, particularly to meet the requirements of sugar, paper and other process and chemical industries apart from meeting the requirements of drinking water supply, sewage disposal and surface drainage schemes 3KSB Pumps Company Limited xsBb, KSB pumps are produced strictly in accordance with the design and specifications of KSB AG, Germany, in order to maintain standards of the highest quality Comprehensive inspection and test bed facilities are available at Works, Hassanabdal to ensure compliance with these quality standards, The production facilities are also being regularly modemized and extended to cope with the challenges of new product technology. The foundry is capable of producing sophisticated automotive components apart from pump and valves castings and is a leading supplier of tractor/automobile castings in the country tractor/automobile castings in the country. At KSB Pumps Company Limited, Pakistan, we see Corporate Social Responsibility as the link that joins the Organization, including internal and external stakeholders to a brighter future of Pakistan. Working under the name of KSB Care, our Corporate Social Responsibility program is focused to provide a sustainable infrastructure and basic amenities to underprivileged students at schools in the rural areas of Pakistan. Our commitments towards our country shines through the efforts we put in our business and our corporate social responsibility. Company has recently completed five very successful decades in the country and become the first Asian Subsidiary of KSB AG, Germany to have this honor. It is a moment of great pride and joy for the Management and team of KSB Pakistan to celebrate 52 glorious years of setting standards, and we share this delight with all our business partners, who have helped us grow and strengthen over five decades. KSB has been accepted as a market leader in its line of business and is a benchmark today for new entrants. The Company's products, quality standards, people, business partners and leadership have all contributed to imprint company's score in the history of Pakistan by completion of 50 successful years of operation in the country. 32KSB Pumps Company Limited Ks, KSB PUMPS COMPANY LIMITED PAKISTAN Vision Statement “The main aim of KSB Pumps Company is to provide maximum satisfaction to his customers by providing goods and services to them .We also aim to outperform our competitors by achieving and maintaining leading competitive Position in attractive markets, at the same time sustain profitable growth to secure our long term future.” 33KSB Pumps Company Limited Ks, “We manufacture and market a selected range of standard and engineered pumps and castings of world class quality. Our efforts are directed to have delighted customers in the water, sewage, oil, energy, and industry and building services sectors. In line with the Group strategy, we are committed to develop into a centre of excellence in water application pumps and be a strong regional player. We want to market valves, complete system solutions and foundry products including patterns for captive, automotive and other industries. We will develop a world class human resource with highly motivated and empowered employees. The measure of our success is being a clear market leader, achieving quantum growth and providing attractive returns to stakeholders.” 3aKSB Pumps Company Limited xsBb, Goals & Objectives The Goals and Objectives of the company are listed below: + The main goal of this company to build strong customer relationship by giving g00d facilities. ‘+ Become a clear market leader, achieving quantum growth and providing attractive returns to stakeholders “+ Manufacture and market a selected range of standard and engineered pumps and castings of world class quality. + Develop a world class human resource with highly motivated and empowered employees % Develop into a centre of excellence in water application pumps and be a strong regional player. Strategic Planning The strategic objectives and plans of KSB Pumps Company Limited are discussed below: + The company plans to grow more strongly than the market + Focusing business lines by achieving above average profitability + Plans to gain or build on a leading competitive position 35KSB Pumps Company Limited + Plans for high sales potential + Contribution to the revenue and profitability of the group Core Values xsBb, The core values of KSB also depict the environment in which everyday business is run and how the management with the help of employees manages to complete the tasks, successfully These values are also a model for the customers to use as a means to get an overview of the organization and make the best possible choice. We believe in self-esteem of our customers, suppliers and employees We work as a team where every member owns the process with an entrepreneurial spirit. We work with professional honesty and integrity. We trust our employees and appreciate their contributions. We strive for continuous improvement to achieve excellence in all spheres of our activities. We are an equal opportunity employer and follow merit in human resources development We fulfill moral obligation towards society and environment. Their imagination forms the foundation for our success and It 36KSB Pumps Company Limited Ks, reflect from their culture and work. Code of Business Principle KSB is the market leaders and has completed its 50 glorious years in Pakistan. It has been working on the following principles that have helped the company to maintain its position. These have been explained below Empowerment: We are Empowered yet Accountable for our responsibilities and objectives. Communication: We believe in clear, effective, Accurate and Timely Communication. Transparency: We exercise openness while adhering to systems & procedures and maintaining records. Synergy: For us Synergy means 1#1=11 not 2, we have mutual Trust and Complement each other in futfiling our responsibilities. KSB pumps introduce 5 more new values in the organization i.e. * Appreciation + Honesty + Trust + Professionalism + Responsibility 7KSB Pumps Company Limited xsBb, Environment, Health & Safety Policy KSB's vision allows for no compromises in our commitment to safety, health and responsible care for the environment. Every manager has the responsibility to maintain a safe working environment in which risks arising from the manufacture, storage, distribution and use of the Company's products are identified and controlled. The health and safety of our employees, of those who from time to time work with the Company, of our customers and of the general public are of fundamental importance to us and are necessarily safeguarded 38KSB ) KSB ORGANOGRAMKSB Pumps Company Limited Ks, MANAGEMENT COMMITTEE Mr. Mohammad Masud Akhtar C.£.0 Mr. Sajid Mahmood Awan Mr. Nadeem Hamid Butt Mr. Kamran Khan Mangol Director Finance & Company | Director Production & Projects | Director Sales, Marketing & Secretary Product Management s 7, Jc A Mr. Saeed Zafar ‘Syed Kamran Hassan Ms, Sanam Mujeeb Sheikh GM Customer Ser General Manager Material Manager Human Resource 40,KSB Pumps Company Limited xsBb, SALES OFFICES Lahore 16/2 Sir Aga Khan Road, Lahore. (042) 111 572 786, 36304173 Fax: (042) 36366192, 36368878 Email: info@ksb.com.ok Karachi 501, 5th Floor, Faiyaz Centre, 3A, SindhiMuslim Cooperative Housing Society, Opposite FTC Building, Shahrah-e-Faisal, Karachi, h: (021) 111 572 786 Fax: (021) 34388302 Email: sohaib.rathore@ksb.com.pk Peshawar Office No. 7, 3rd Floor, The Mall Towers, 35 The Mall, Peshawar. h: (091) 111 572 786 Fax: (091) 5278919 Email: ksbpsh@ksb.com.pk Rawalpindi 309, A3 Peshawar Road, Westridge 1,Opp. Valley Clinic, Rawalpindi Sh: (051) 111 572 786 Fax: (051) 5472612 Email: ksbrwp@ksb.com.pk Multan 85A, Qasim Road, Opp. Metro Plaza, Multan Cant h: (061) 111 572 786 Fax: (061) 4541784 Email: ksbmul@ksb.com.pk House No. F-1/5, First Floor, Al-Zain Centre, Zarghoon Road, Quetta. (081) 111 572 786 Fax: (081) 2830445 Email: ksbata@ksb com.pk a1KSB Pumps Company Limited Ks, COMPANY INFORMATION Board of Directors Dr. Augus Lee Mohammad Masud Akhtar Jan Stoop Tonjes Cerovsky R.D. Ahmad Sajid Mahmood Awan Aizaz Sarfraz Hasan Aziz Bilgrami Sajid Mahmood Awan Mohammad Masud Akhtar Sajid Mahmood Awan Nadeem Hamid Butt Kamran Khan Mongol Chairman Managing Director (Nominee NIT) Company Secretary Management Chief Executive Officer Finance & Administration Production & Projects Sales, Marketing & Product Management 42KSB Pumps Company Limited Auditors AF. Ferguson & Co, Legal Advisors Mandviwala & Zafar Bankers NIB Bank Limited Bank Alfalah Limited MCB Bank Limited Deutsche Bank AG United Bank Limited National Bank Of Pakistan Audit Committee Hasan Aziz Bilgrami R. D. Ahmad Tonjes Cerovsky Registered Office 16/2 Sir Aga Khan Road, Lahore - 54000. Ph: (042) 36304173, 36370969, Fax: (042) 36368878, 36366192 Email: info@ksb.com.pk 43 Chartered Accountants Chairman Member Member Ks,KSB Pumps Company Limited Works Hazara Road, Hassanabdal Ph; (087) 2520236 Fax: (087) 2520237 Email: info@ksb.com.pk Service Office Gardee Trust Building, Napier Road, Lahore. Ph: (042) 37364845, 37238343, 37311661, 37355238 Fax: (042) 37236922 Email: saeed.zatar@ksb.com.pk Workshop Plot No.6, Street No.26, Korangi Industrial Area, Near G.P.O, Korangi, Karachi Ph: (021) 36070498 Email: munir.igbal@ksb.com.pk Share Registrar Central Depository Company of Pakistan Limited. CDC House, 99-8, SMCHS, Shahra-e-Faisal, Karachi-74000 Tel: (021) 111-111-500 Fax: (021) 34326053 aa Ks,KSB Pumps Company Limited Ks, NOTICE OF THE ANNUAL GENERAL MEETING Notice is hereby given that the 54" Annual General Meeting of the members of the KSB Pumps Company Limited, will be held on Tuesday 26" April, 2011, at 11:30 am at Hotel Holiday Inn,25-26 Egerton Road, Lahore, to transact the following business: . To confirm the minutes of Annual General meeting held on April 30, 2010. To consider and adopt the audited accounts of the company for the year ended December 31, 2010 and report of Auditors and Directors thereon. To approve and declare Dividend of 12.5% for the Financial year ended December 31, 2010 as recommended by the Directors. To appoint Auditors and fix their remuneration, M/s AF.Ferguson &Co., Chartered Accountants, the retiring auditors offer themselves for re-appointment as auditors of the company. To elect seven (7) Directors as fixed by the Board, in accordance with the provisions of the companies ordinance, 1984, for a period of three years commencing from April 25, 2011 in place of following retiring Directors. Mr. Tonjes Cerovsky Mr. Muhammad Masud Akhtar Mr. Jan Stoop Mr. Sajid Mahmood Awan Mr. Werner Spiegel Mr. R.D. Ahmad Mr. Aizaz Sarfraz 45KSB Pumps Company Limited Ks, DEPARTMENTS Production and Services Department KSB is mainly concemed with the manufacture of different valves and pumps. Different pumps, valves and spares are designed according to the requirement of a particular industry. Customers, according to their needs, places orders for a specific product Which are then delivered to them. KSB has divided its products into five basic categories which are as follows: “Industry fing Services “> Waste Water “Water Energy The infrastructure improvement at the factory continued throughout the year as per master plan. A key seating machine was added in the machine shop which improves operational efficiency by reducing the lead time in key way cutting and optimizing the outsourced process through cost saving . The new production office was renovated ‘on modem concepts allowing the engineers tohave a better view of the production operation, while providing an excellent work environment. The cafeteria for employees at Hassanabdal has been renovated to provide a healthy atmosphere during lunch and tea breaks, enabling the teams to be truly rejuvenated. A dedicated shop, for assembling the ultrafiltration units for CDWA project is now fully operational to manufacture the units in large quantities and fully support the requirements of the this mega project. 46KSB Pumps Company Limited xsBb, Naturally close to our customers From a German company that came in existence more than 130 years ago to manufacture pumps and valves, KSB has grown to be a global leader. Today KSB reaches you with more than 12000 employees, 30 production sites and 60 marketing companies worldwide. As well as making its presence felt in more than 100 countries through agencies and collaborative ventures KSB aims to get processes flowing. This philosophy needs a dedicated commitment to continuous development of products and services in all areas of pump and valve technology. KSB's modern systems are installed all over the world. Whatever fluids need to be transported, guided and controlled, KSB's products and expertise are prime movers in applications ranging from building services to industrial processes, from mining to power generation, we set the world of our customer flowing! Innovative technology, efficient solutions and highest quality standards are essential in competitive business. KSB is closer to its customers because services underlines our strategy for success. Choose KSB and you will be choosing integrated system solutions! KSB & you... flowing together, growing together. We believe that we are partners in turning your dreams into reality. And the more you expect from us, the better we deliver. Whatever be your application... KSB is close at hand with right solutions! We have a strong presence in Region Asia Pacific with strong manufacturing bases in Pakistan, China, Australia and India With production facility at Hassanabdal, KSB Pakistan serves its customers 7KSB Pumps Company Limited b) throughout the country with sales, services and dealer network supported by over 400 employees. "We are always on call whenever you need us and even when you don't” KSB offers complete customer support and nationwide after-sales service for convenience of it's valued customers. At KSBs Customer Service Centers, highly qualified and professionally trained Engineers and Supervisors are available to provide expert services. The customers receive on the spot value-added services ensuring quality of product in minimum time with cost effectiveness. WATER Low pressure self-regulating with radial type vane impeller centrifugal Dump which sutabl for various system for townships, industrial, plant, sgrcularal and lrigston purposes, dewatering, crculting het find eo (ciled) water in ar conditioning plants, pumping fuels, edible ts and condensates Specications . Do ree seer] 40-150 /br up to-450'm_ upto 94m upto 405°C up to 2900 rpm © Download Product Intro. ~ Download O&M anual. Kwe Single stage, non-clogging, horizontal centrifugal purnps used in process Gesign, sultsble for meciume that contain suspendad solids and vious Substahces, finds its applications in building, f00d, daper, ugar, Senaue nc eftuent incustriae Specifications 5-200 fhe up ta 1900 m up to 120m “P19 302C up em m 165-300 /hr up to 1900 m up to 120m YP*9-39°C up 9 2900 rp = Download Product Intro. = Download 08M Manual. a8tei Pe KSB Pumps Company Limited 6) Ks, OMEGA Single stage, ax.ally split volute casing purnp with double fo radial impaller, for horizontal and vertical installation, in water works, it Irrigation drainage pumping stations, powerplants, industrial ater supply system, injection and spray ponds in sugar industry and fire fighting system. Specifications a 200-350 /he upto 2900m upto 100m upto 105% ~ Download Product Intro. ~ Download O&M Manual. wer High pressure multistage, centrifugal pump of ring section desion, Suitable for small ane machin si283 boars, industrial snd municipal Water supply, irrigation, pressure faac, water supply ane fre Aaghting systems. Specifications a a 65-125 /hr upto 370m up to 600m upto 200 °C up to 2900 rom up to 25 bars © Download Product Intro. Manual. RoK Horizontal radially split double volute cesing pumps of process type, having application in refineries, chemical and petrochemical plants, coal Coneztvation plants, environmental snginesring and other industri applications. Specifications Fup ta 27am upto sam Yt 40°C uote 7 80-100 /hr upto 270m upto s&m PT2-40 °C up 9 2900 rp ~ Download Product Intro. ~ Download ORM. Manual. Low pressure, self-regulating with radial type vane impeller centrifugal pump which is suitable for various systems for townships, industrial plants, agricultural and irrigation purposes, de-watering, circulating hot tnd cole (chilled) water in air conditioning plants, pumping fuels, edible bis and concenente= a8KSB Pumps Company Limited Energy KSB - Because we know what you're doing Energy moves the world. You want to produce it more reliably and economically. KSB has the full range of pumps, valves, motors, actuators and systems for building or upgrading power stations and district heating systems. Our products give reliable service in primary and secondary circuits all over the world. They help you manage boiler feed water, condensate, cooling water and coolant systems. Customers choose them because KSB means high availability, good long-term value, and comprehensive service on site. KSB is certified by TUV CERT to DIN EN ISO 9001. You'll hear the name KSB around every new power plant being built worldwide. Energy department at KSB Pakistan, catering the needs of the power plants with state of the art engineered products. KSB Pakistan has clientele of all major power plants of Pakistan. Most of the major power plants are equipped with KSB. Kot Addu Power Company (KAPCO) AES Lalpir Pvt. Limited UCH Power CompanyCentral Power Generation Guddu Saba Power Company Southern Electric Power Company Central Power Generation Company Muzaffargarh Jamshoroo Power Company Lakhra Power Generation Production Purpose; Manufacturing the depth and the pump related know how differentiates KSB from competitors and translates into customized solutions with attractive lead times and competitive prices. Scope: Foundry “ Production 50KSB Pumps Company Limited xsBb, + Sub contracting and out sourcing + Planning and stores Key Services Offered; ¢ Technical Support on Complete System Solution ¢ Repair, Maintenance & Overhauling of Pumps + Ex-Stock Emergency Spare Parts Availability Installation/Commissioning & Supervision Services Contracts Customer Complaint Handling + Life Cycle Cost Calculation + Inspection & Repair at site Energy Audits Projects Department KSB Projects department is involved in new installations, rehabilitation, operation & maintenance of water and waste water transfer and treatment systems. The Projects department designs and implements customized, package systems and installations in close co-operation with our customers all over Pakistan. As a dependable partner with decades of experience, KSB Projects has the know-how to offer customers, innovative systems for all water transfer applications. Our Project Department has created history by winning the Clean Drinking Water for All (CDWA) project worth Rupees 1.86 billion in the year 2009, initiated by the Government of Pakistan. The project includes the installation of 793 filtration plants 31KSB Pumps Company Limited xsBb, in Central Punjab-II Region. This project will not only enrich the experience of the Company in turnkey business but will also create employment opportunities for more than 800 people at different stages of the project. KSB focuses on three types of projects namely: + Turnkey construction + Rehabilitation & refurbishment + Operation and maintenance + Complete engineering and design ¢ Project development and optimization Hydraulic and mechanics + Construction including all civil, mechanical & electrical works + Automation & electro-techniques + Project management & controlling KSB Projects, provides intelligent and economically sound solutions, from planning phase to the commissioning of the finished installation for all applications in the field of water supply, irrigation, drainage and waste water. In addition, KSB Projects supplies every service needed to run, maintain and monitor the trouble-free operation of customer's installation. KSB Projects assumes full responsibility for the process as a whole as well as for all tasks involved in the construction of fluid transfer system and all this with a quality Management system certified to ISO 9001 52KSB Pumps Company Limited xsBb, Projects Finance & Control KSB Pumps Company Limited as per German philosophy have small head counts in every department all around KSB the departments are not over-crowded with employees and there is not very complex hierarchy being followed. Likewise, the structure of Projects Accounts & Finance Department is also very simple. It is headed by the Director Finance, Mr. Sajid Mahmood Awan. Mr. Munir Anmad & Mr. Usman Sikandar are reporting to the Director Finance as per defined job description. Culture of the Department The culture of Projects Accounts & Finance is very work friendly. It depicts a well organized and team effort on the whole. Employees are fully committed towards their responsibility. The level of communication is feasible and responsive. However, discipline and professionalism is always maintained by the people of this department and deadlines are also efficiently met. Thus, the environment maintained by the department is quite pleasant which is good for the employees as they can work comfortably with the timely completion of assignments or tasks, as the first priority efficiently and effectively. Customers and Market KSB Projects department is involved in new installations, rehabilitation, operation & maintenance of water and waste water transfer and water treatment systems. The Projects department designs and implements customized, package systems and installations in close co-operation with our customers all over Pakistan. As a dependable partner with decades of experience, KSB Projects has the know-how to offer customers, innovative systems for all water transfer applications. 33KSB Pumps Company Limited Ks, Customer Service KSB is number one in Europe and around the globe- with service centers, service vehicles and all around service at the customer's site. + Installations, commissioning + Onsite maintenance and repair + Total pump management “ Repair at the service center + Rehabilitation management * Tele: services “ Complete engineering and design + Project development and optimization * Hydraulic and mechanics + Construction including all civil, mechanical & electrical works *» Automation and Electro techniques Finance & Control Department Responsibilities Purpose: To optimally develop financial, technical, material and information technology recourses, in reporting departments, ensuring compliance with macro strategies and goals. Scope; “> Financial accounting and book keeping * Cost accounting 34KSB Pumps Company Limited xsBb, ¢ Management accounting ** Materials ¢ Administration, corporate and legal affairs Information technology Materials: Ensure timely and quality provisions of input material required for KSB operations in Pakistan while working towards reducing the cost for the same. Contribute and own the organization's business plans Administration: Manage the corporate affairs & administration tasks for KSB Pakistan by maintaining relationships with shareholders and regulatory bodies. Track, review and validate all the transactions being carried out by shareholders. Maintain and update the registers for ensuring proper records relating to shareholders and employee data. Accounts: Management of book keeping, financial accounting functions and MIS reporting as well as control activities of statuary functions relating to income tax, sales tax, special federal excise duty, special security, EOBI etc. to manage disbursements, payrolls, employee taxation, loans and advances to employees and contractors, customer accounts and sales accounting functions. Financial planning: To plan and mange all the financial activities in KSB including management of treasury functions, accounts payable management, capital expenditures etc in order to manage the sources and uses of funds in cost efficient and effective manner. Also manage monthly group reporting and prepare annual budgets and forecasts. 35KSB Pumps Company Limited xsBb, Projects accounts: Responsible for financial planning and control of all projects through coordination with project management wing and the financial department Information technology: To provide IT support to various businesses functions and proactively drive the business processes in an integrated environment. To ensure the smooth functioning of network infrastructure and to resolve hardware/software issues. Costing: Monitor and organize production costs and material costs and report deviations in order to maintain these costs within defined limits. Credit control: To work independently towards speeding up the process of recoveries, to facilitate sales office in collection of receivables, earnest money and guarantees. Sales Department 2010 has been a promising year for Order Intake. We have experienced a phenomenal growth in our Zaree segment by achieving an order intake of PKR 100 million. Our economically viable submersible product has helped us to successfully penetrate the NWFP and Baluchistan low-end water markets. This is an area that promises substantial potential for business in future. In addition to this, the growth pattern in Building Services was healthier than that in the last year and is forecasted to increase continuously. On the Industry side, we have further diversified our business through penetration into specific process industries like Fertilizer and Oil & Gas by providing solutions for process applications. We have re-organized our sales structure to focus better on more lucrative market segments. Future efforts for enhancing the overall efficiency and improving responsiveness to our customers, 36KSB Pumps Company Limited xsBb, include revamping the sales processes and bringing in resources from cross industry to add value and bring in better results. Human Resource Management In-house Training Resource Centre, which was initiated last year, is now working effectively. Under this initiative a training program on “Management Development” has been undertaken at the Factory. Also, Informal Learning Sessions in Head Office & Works support our idea of informal knowledge sharing, Different sports activities were introduced to inculcate team spirit. These included Table Tennis and Cricket Matches. The bonding and positive spirit that resulted from these team activities has definitely given a boost to the synergy between professional teams. Human Resource Policy Manual has been revised to match HR best practices prevalent in the industry aligning KSB Pakistan's HR Policies with the market. All key vacant and new positions have been effectively filled by HR with high potential individuals that have immensely contributed to the growth and sustainability of the business. HR Department is emerging as a true strategic business partner along with gaining operational command in KSB Pakistan. Industry category for its annual report for the year 2008. The aim of this award is to encourage and give recognition to excellence in Annual Corporate Reporting and is jointly decided by The Institute of Chartered Accountants of Pakistan and The Institute of Cost & Management Accountants of Pakistan. Purpose: Manage the HR functions for KSB in Pakistan. Design/review/ revise and implement the HR systems for employee management and development. Discuss with the internal stakeholders, their requirements/expectations for HR and create annual HR plans to ensure implementation of the same. 7KSB Pumps Company Limited xsBb, Scope: 4 HR isa steward to oversee HRM culture in the company To report state of HE management throughout the company by holding formal designs with line management and employees on a regular basis + Continuously improve upon HR processes * To ensure a culture of transparency , fair play and equitable treatment “ To develop KSB as institute of technical and managerial trainings to meet current and future basic needs. QHSE (Quality, Health, Safety and Environment) Assuring quality means careful documentation and following Standard Operating Procedures (SOPs) resulting in efficiency and excellence. KSB Pakistan takes great pride in having its products and plants certified for meeting international standards. KSB Pumps Company Limited is the first foundry based engineering company in Pakistan to have been certified for the Integrated Management System (ISO 9001, ISO 14001 & OHSAS 18001). At KSB, we attach great importance to Quality, Environment, Occupational Health and Safety Policies. The European Foundation for Quality Management (EFQM) Model for the business excellence provides the framework of the KSB Policy for Quality, Environment, Occupational Health and Safety. The Total Quality Management (TOM) concept has been up held in all our operations to ensure a sustainable improvement in our products, processes, services and working conditions. The achievement of a favorable result, through its implementation, is demonstrated by the various national and international quality certifications that we have received over time. Purpose: QHSE ensure KSB group quality, health, safety and environmental policies & objectives in KSB Pakistan. 38KSB Pumps Company Limited xsBb, Scope: + Implementation of group QHSE policies & procedures + Compliance with ISO 9001, ISO 14001, OHSAS 18001 and KSB AG directives + To coordinate with all departments in order to eradicate customer complaints Internal Audit Purpose: Ensure that KSB Pakistan adheres to standards & policies set by the management and KSB worldwide and rules and regulations of government of Pakistan. Present an unbiased view on the audited functions with recommendations to the board audit committee. Scope: The audit reports as per the milestones defined in the audit plan Minimum significant NCR / observations in the external audit report Carrying out audit activities as defined in the audit plan Reducing observations in the external audit report * * Enterprise Risk Management We define risk as: “a potential damage-causing event” It is the policy of KSB to anticipate and avoid risk, wherever possible, rather than dealing with the consequences. Risk management policy is directed towards avoiding risk, as management understands that risks cannot be totally eliminated. Only decision taken in uncertainty (whether to do or not to do something) results in a risk. KSB risk management is a continuous process for identifying the financial, operational and general business risks. Board of Directors has the overall responsibility for the Company's system of risk management and internal controls. The Directors have delegated to Executive 58KSB Pumps Company Limited xsBb, Management, the establishment and implementation of an internal control system. The controls reduce risks from unacceptable level, to a stage deemed acceptable by the Company. The system of intemal controls provides reasonable but not absolute assurance that assets are safeguarded, transactions are authorized/recorded properly Financial Risk Factor The Company's activities expose it to a variety of financial risks: market risk (including currency risk, other price risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance. Liquidity Risk Liquidity risk represents the risk that the Company will encounter difficulties in meeting obligations associated with financial liabilities. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the Company's business, the Company's Finance Department maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors the forecasts of the Company's cash and cash equivalents on the basis of expected cash flow. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company's liquidity management policy involves projecting cash flows in each quarter and considering the level of liquid assets necessary to meet its liabilities; monitoring balance sheet liquidity ratios against internal and external regulatory requirements; and maintaining debt financing plans. 60KSB Pumps Company Limited xsBb, Corporate Social Responsibility KSB Care: Our Corporate Social Responsibility (CSR) Program works under the umbrella of KSB Care — APAC Program. It focused on providing a sustainable infrastructure and basic amenities to underprivileged students at schools in the rural areas of Pakistan, around our Production Facility in Hassanabdal. The activities under the KSB Care umbrella, ranged from provision of uniforms for students and making available comfortable classroom environments for effective leaming to assist in strengthening the infrastructure. Our initiatives have received a very encouraging response from our beneficiaries. The enthusiasm and cooperation that they have shown has strengthened our belief in our efforts for raising the bar of education and helping the recipients of this act of goodwill even further. In 2009, KSB Pakistan introduced another angle, also related to education. We offered the opportunity for giving scholarships to students who were bright and good performers but poverty barred them from completing their education. The limitation of insufficient funds for finishing high school is a dilemma often leading to frustration in the youth. KSB Pakistan initiated to deal with it under the KSB Care program, in its own small way as a contribution towards a brilliant future of Pakistan In a ceremony held in November 2009, 122 high achievers, who were unable to continue studies due to poverty, were awarded scholarships under the KSB Care program. This was a proud and encouraging moment for KSB Pakistan. It gave us the sense of contribution to the Country while touching the lives of many families in a manner that gave hope and security. Alongside this the assistance in strengthening of school infrastructures and provision of comfortable learning environments continued as an ongoing efforts. 61KSB Pumps Company Limited Ks, RATIO ANALYSIS Ratio refers the one number in terms of another. The purpose of ratio analysis depends upon the event for which the analysis is made. Management likes to know about the operational efficiency and think of such ratios as return on investment, turnover of fixed assets, and net profit to sales etc. Creditors like to know the ability of the company to meet its current obligations and therefore, think of current and liquid ratios, turnover of receivables, and coverage of interest by the level of earings. So ratio analysis is important from all perspective. Liquidity Ratios 1) Current Ratio Current Assets / Current Liabilities = 1,483,920,186 / 918,664,908 = 1.62(Times) Year Times 25: 2006 zal 2 2007 201 15. 2008 197 1 2009 174 05: 2010 Tez 0. 2006 «62007 «= 2008)» 2009 2010 Generally, the higher the current ratio, the more liquid the firm is considered to be. A current ratio of 2.0 is occasionally sited as acceptable, but a value’s acceptability 62KSB Pumps Company Limited xseb, depends on the industry in which the firm operates. KSB is involved in different project businesses so the current ratio of 1,62 is almost acceptable. 2) Quick Ratio/Acid Test Ratio = (Current Assets - Inventory) / Current Liabilities = (1,483,920,186 — 504,449,000) / 918,665,000 = 1.07(Times) Year Times 2006 1.23 2007 138 2008 119 2009 120 2010 107 The quick ratio is similar to the current ratio except that it excludes inventory, which is generally the least liquid current asset. A quick ratio of 1.0 is occasionally recommended, but as with the current ratio, what value is acceptable depends on the industry. The quick ratio provides a better measure of all overall liquidity only when a firm's inventory cannot be easily converted into cash. If inventory is liquid, the current ratio is a preferred measure of overall liquidity. 6KSB Pumps Company Limited Acti 1) Inventory Turnover xseb, ity Ratios = Cost of Goods Sold / Inventory = 1564429000 / 504,449,000 = 3.10(Times) Year Times 35; 2006 227 3 2007 22 28 2 2008 245 15: 1 2009 245 os. 2010 3.10 ° 2008 2007 2008 2009-2010 Inventory turnover commonly measure the activity or liquidity of a firm's inventory. The resulting turnover is meaningful only when it is compared with that of other firms in the same industry or to the firm's past inventory tumover. In KSB the inventory turnover is increasing that is good for the companyKSB Pumps Company Limited xsBb, Average Collection Period = Accounts Receivable / Average Sales per Day = 632,843,688 / 5610929.000 = 113 (Days) Year Days 2006 36 120 100 2007 35 eo 2008 76 60. 40 2009 5 20 2010 113 ° 2008 2007 2008 «2008-2010 The average collection period, or average age of accounts receivable, is useful in evaluating credit and collection policies. The average collection period of KSB is 113 days; it means that on the average it takes 113 days to collect an account receivable. The average collection period is meaningful only in relation to the firm's credit terms. The credit period offered by the KSB to customers is 30 days, average collection period of 113 days is quite acceptable. Comparing with last years the KSB is recovering its amounts not earlier from its customers. It increases the risk of bad debts 65KSB Pumps Company Limited isp, Total Asset Turnover = Sales / Total Assets = 2047989000 / 1809108000 = 1.13 (Times) Year Times 18 2006 168 16 14 2007 1.54 412. 1 2008 153 08 0.6: 2009 127 os 2010 LB 02 0 2008 2007 2008-2009 2010 The total asset turnover indicates the efficiency with which the firm uses its assets to generate sales. The total asset turnover of KSB is 1.13 times. This means that the company turns over its assets 1.13 times a year. Generally, the higher a firm's total asset turnover, the more efficiently its assets have been used. Total asset turnover of KSB is decreasing which indicates its slightly weaker position. 66KSB Pumps Company Limited xseb, Debt Ratio = Total Liabilities / Total Assets = 982,508,000 / 1,809,108,000 = 0.54% Year % 2008 oa os os: 2007 0.45 oa 2008 045 os 02 2008 052 oa ° 2010 054 2008 2007 2008 «20082010 The debt ratio measures the proportional of assets financed by the firm’s creditors. The higher this ratio, the greater the amount of other people's money being used to generate profits. The debt ratio of ICI is 0.54% which indicates the degree of indebtedness. The debt ratio of the KSB is inoreased by the last year: it means that the level of indebtedness is increased by the company. Increase in debt ratio shows the negative progress of company. 7Gross Profit Margin KSB Pumps Company Limited xsBb, Profitability Ratios = (Sales ~ Cost of Goods Sold) / Sales = (2047989000— 1564429000) / 2047989000 = 23.61% Year % 35 2006 30.33 *° 2B. 2007 28.00 20. 2008 27.05 % . 10: 2009 AL 5 o 2010 23.61 2008 2007 2008 2009 2010 The gross profit margin measures the percentage of each sales dollar remaining after the firm has paid for its goods. The higher the gross profit margin, the better (that is, the lower the relative cost of merchandise sold). This is very significant ratio for small retailers, especially during times of inflationary prices. If the owner of the firm does not increase the price when cost of sales is increased, the gross profit margin will decrease The gross profit margin of the KSB is lower as compared to last years, it means that the manufacturing cost of the goods is increased and the sale price is not increased 6KSB Pumps Company Limited xseb, Net Profit Margin = Net Profits / Sales = 99,779,000 / 2,047,989,000 = 4.87% Year % 12. 2006 9.02 10. 2007 10.25 8 2008 9.10 6 4 2003 7.30 2 2010 4.87 0. 2006 ©2007-2008 20092010 The net profit margin measures the percentage of each sales dollar remaining after all costs and expenses, including interests, taxes and preferred stock dividends have been deducted. The higher the firm's net profit margin, the better. Along with gross profit margin and operating profit margin the net profit margin of the KSB is also decreasing Which predicts a negative impact on shareholders. 6KSB Pumps Company Limited xseb, Earnings per Share = Earnings Available for Common Stockholders / No. of Common Stock Outstanding = 99779383 / 13200,0000 = Rs. 7.56 Year Rs. 14 2006 958 12 2007 12.93 10 8 2008 12.93 6 2009 11.20 4 2 2010 756 °. 2006 ©2007-2008» 2009» 2010 The firm's eamings per share is generally of interest to present to prospective stockholders and management. Earnings per share represent the dollar amount earned on behalf of each outstanding share of common stock. The dollar amount of cash actually distributed to each shareholder is the dividend per share. The earnings per share of KSB is Rs. 7.56, it means that the shareholder is earning Rs. 7.56 on each share. The earnings per share is decreasing which means that shareholders are earning less than the last year. Earnings per share are closely watched by the investing public and are considered an important indicator of corporate success. 70Assets KSB Pumps Company Limited xsBb, Return on Assets Earnings Available for Common Stockholders / Total = 99779383 / 1,809,108,000 = 5.52% % 2006 15.23 2007 15.78 2008 13.98 2009 9.27 2010 5.52 16 14 12 10 2006 ©2007 2008 += 20092010 The retum on total assets (ROA), often called the retum on investment (ROI), measure the overall effectiveness of management is generating profits with its available assets The higher the firm’s return on total assets, the better. The return on assets of KSB is 5.52% which shows that company is earning 5.52% on each Rs. of asset investment. It is decreasing as compared to last year which is showing its bad performance. 71KSB Pumps Company Limited xseb, Return on Equity = Earnings Available for Common Stockholders / Common Stock Equity = 99779383/ 826,600,040 = 12.07% Year % 72006 27.08 2007 28.92 2008 25.22 2009 19.12 2010 12.07 The return on common stock equity 30: 2. 20- 15: 10. 5 0. 2006 2007 ©2008-2009 2010 (ROE) measures the return on the common stockholders’ investment in the firm. Generally, the higher this return, the better off is the owners. The return on equity for KSB is 12.07% which is decreased as compared to last year. The calculated ROE of 12.07% indicates that during 2010 KSB earned 12.07% on each Rs. of common stock equity. 72KSB Pumps Company Limited xsBb, Market Ratios Price Earnings Ratio = Market Price per Share of Common Stock / Earning per Share = 60.11 / 7.56 = Rs. 7.95 Times Year Times 20. 2006 834 15 2007 15.36 2008 17.86 10 2008 670 5 2010 7.35 0. 2006 2007 2008 +2009 2010 The price earnings ratio is commonly used to assess the owners’ appraisal of share value. The P/E ratio measures the amount that investors are willing to pay for each Rs. of firm's earnings. The level of this ratio indicates the degree of confidence that investors have in the firm’s future performance. The higher the P/E ratio, the greater the investors’ confidence. The P/E ratio of KSB is Rs. 7.95, which means that investors are paying Rs. 7.95 for each Rs. 1 of earnings. It is increased by last year which indicates that investors have to pay more for less earnings. 73KSB Pumps Company Limited xseb, Book Value per Share = Common Stock Equity / No. of Common Stock Outstanding = 826,600,040/ 13200,0000 = Rs. 62.62 Year Rs. 70 2006 35.41 60 50 2007 4a71 40 2008 51.28 30 20 2009 58.56 40. 2010 62.62 0 2006 ©2007 +2008 «2009-2010 Book value per share of common stock shows the value of the stock which is written in the books of accounts. In KSB the book value per share of the common stock is incteasing over years. 74KSB Pumps Company Limited xsBb, Market Book Ratio = Market Price per Share of Common Stock / Book Value per Share of Common Stock = 60.11 / 62.62 = 0.96 ‘Year Ratio Ratio 5. 2006 2.26 173 4 2007 4.44 0.773. 2008, 4.50 2.40 4 2009 1.28 156 0. 2010 036 Tae 7006 2007 2008 ©2009-2010 The market book ratio provides an assessment of how investors view the firm's performance. It relates the market value of the firm’s shares to their book-strict accounting value. The market book ratio of the KSB is 0.96. It means that investors are paying Rs.0.96 for each Rs. 1 of book value of KSB company stock. Clearly, KSB future prospects are being viewed favorably by investors, who are willing to pay not more than its book value for the firm’s shares. 75KSB Pumps Company Limited VERTICAL ANALYSIS xsBb, Vertical Analysis 2010 | 2009 | 2008 2007 2006 Percentage % % % % % PROFIT AND LOSS ACCOUNT Sales 400 400 | 100 100 100 Cost of sales “76.39 | -75.22 | -72.95 | -72.00 -69.51 Gross Profit 23.61 | 24.78 | 27.05 28.00 30.49 Distribution & Marketing Cost | -10.45 | -9.06 | -10.28 “3.73 “11.36 Administrative Expenses 628 | 5.85 | 5.86 “5.44 5.89 Other Operating Expenses 0.65 | 0.85 | -0.82 112 1,38 Other Operating Income 209 | 2.06 | 3.00 2.49 247 ‘Operating Profit 833 | 11.08 | 13.09 14.20 14.03 Finance Cost 0.84 | 0.51 | 0.62 “0.51 “0.44 Profit Before Tax 748 | 10.56 | 12.47 13.70 13.62 Taxation 261 | 3.26 | 3.37 “3.44 -4.60 Profit For The Year 4387 | 7.30 | 9.10 10.25 9.02 76KSB Pumps Company Limited VERTICAL ANALYSIS xs, Vertical Analysis 2010 | 2009 | 2008 | 2007 | 2006 Percentage % % % % % BALANCE SHEET Net worth / shareholders equity 45.69 | 48.49 | 55.28 | 54.54 | 56.32 Noncurrent liabilities 353 | 328 | 346 | 3.01 | 1.82 Short term running finance/ bank borrowings | 9.12 | 0.01 | 1.34 | 4.42 | 0.01 Creditors, accrued and other liabilities 41.66 | 48.22 | 39.92 | 38.02 | 41.85 Total liabilities and Equity 100.00 | 100.00 | 100.00 | 100.00 | 100.00 Fixed assets 17.33 | 15.79 | 17.90 | 14.08 | 11.16 Long term loans and Deposits assets 065 | 0.39 | 064 | O77 | 0.34 Current Assets 82.02 | 83.83 | 81.46 | 85.15 | 88.50 Total Assets 100.00 | 100.00 | 100.00 | 100.00 | 400.00 7KSB Pumps Company Limited xsBb, HORIZONTAL ANALYSIS Vertical Analysis 2010 2009 2008 2007 2006 Percentage % % % % % PROFIT AND LOSS ACCOUNT Sales iT | 7.88 | 1273 | 18.80 11.90 Cost of sales 214 | 124 | 1422 | 23.05 655 Gross Profit =3.58 1.20 8.91 9.10 26.36 Distribution & Marketing | 16.70 | -694 | 1947 | 1.70 37.29 Cost Administrative Expenses | 8.62 | 7.53 | 2150 | 9.77 342 Other Operating Expenses 22.54 | 12.45 | -17.62 3.28 34.93 Other Operating Income 2.79 -25.91 | 35.86 36.31 10.04 Operating Profit “23.96 | 869 | 387 | 20.23 26.29 Finance Cost 65.52 | -10.47 | 38.35 45.30 (45.75, Profit Before Tax 28.32 | -8.61 2.60 19.47 31.59 Taxation -18.98 4.38 10.33 11.08 16.94 Profit For The Year “3249 | 1342 | 0.01 | 3504 W058 78KSB Pumps Company Limited 6 HORIZONTAL ANALYSIS Vertical Analysis 2010 | 2009 | 2008 | 2007 | 2006 Percentage % % % % % BALANCE SHEET Net worth / shareholders equity 693 | 14.21] 1469] 2624 | 23.97 Noncurrent liabilities 22.13 | 23.57 | 29.75 | 116.32 : 17.11 Short term running finance/ bank 96153.82) 0 - = | 101591.49) = borrowings 98.96 | 65.64 99.95 Creditors, accrued and other liabilities 1.94 | 57.27 | 18.79 | 18.44 | 0.03 Total liabilities and Equity 13.49 | 30.21 | 13.16 | 30.36 | -1.86 Fixed assets 25.58 | 14.85 | 43.86 | 64.42 | 18.01 Long term loans and Deposits assets 88.59 ~ | 541 | 197.93 > 21.42 17.37 Current Assets 11.05 | 33.99 8.25 | 25.43 | -3.84 Total Assets 13.49 | 30.21 | 13.16 | 30.36 | -1.86 78KSB Pumps Company Limited xsBb, SWOT ANALYSIS SWOT Analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either corporate level or the business unit level and frequently appears in marketing plans. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. As far the SWOT analysis of KSB Pumps is concerned, situation show the following facts: Strengths: ¢ Strong Brand Name “ Good reputation among customers + Cost advantage from proprietary know-how + Exclusive access to high grade natural resources + Favorable access to distribution networks + Resources, Assets and People + Innovation Aspects + Experience, Knowledge & Data + Quality process and procedures KSB Pumps enjoys a good reputation not only in Pakistan but across the globe. Further it is a subsidiary of KSB AG by which is also Pumps and Valves leader in the world. So it strengthens the image of KSB Pumps Pakistan business also. Innovation and quality control also have been a success for the KSB Pumps. Business has a team of experience people and has a powerful distribution network across Pakistan. 80KSB Pumps Company Limited xsBb, Weaknesses: ¢ Timescale, Deadlines and pressure + Reliability of Data, plan predictability + Location of the business Along with the strengths, KSB Pumps also has some weaknesses. First one is the pressure and deadlines for the plant. Plant is operating at its full capacity and company cannot afford the breakdown or shutdown of the plant because demand is always on the higher end. Plant is in remote area, that's why in case of any emergency, when expertise are not available in Hasanabdal, it takes time to repair any damage to the production. Further production at remote area, also increased transportation cost to the different areas of the country Opportunities: + Market Development * Anunfilled customer need ¢ Arrival of new technologies + Loosening of regulations 4 Removal of international trade barriers + Information and Research + Partnership, Agencies and Distribution + Volume, Production and Economies 81KSB Pumps Company Limited 6 KSB There are a lot of opportunities for the KSB for the Pumps Business. Due to high growth of industry in Pakistan, demand of the Pumps is increasing day by day as it is an important segment for different industries like power generation, textile, paper etc. Further economy of scale is also an important opportunity. There is only one competitor for the KSB in Pumps and KSB has hold on more than 70% of the market. New technologies are also helping in order to reduce cost of production. Threats: + Emergence of new technological products + Political Effects % Recession conditions in the world market + Loss of key staff + Environmental Effects + Competitors Intentions + New regulations KSB Pumps is also facing some threats in process of conducting business. Pumps are mainly used in different industries. Due to growth of production and new technologies, it is possible to substitute some products from others. So business faces this threat that in future their products can be replace by some other low cost products. Due to situation if far area, many employees leave the job when they got an opportunity in some other sector in main city. Further competitors can also expand their capacity or adopt some better technique in order to produce more quality goods. That's also another threat for the business Environment effects are also important one. Awareness is also increasing day by day. Although business has adopted a strategy in order to the effects to the environment but it has to make it fast. 82KSB Pumps Company Limited xsBb, Further political situation effect the business a lot, especially the multinational one. Falling price of rupee against dollar, inflation, increase in raw material, shortage in electricity are also threats for the industries. MY WORKING AT KSB Pumps Working at KSB remained a very successful experience for me and it was great experience for me that | worked with such a dynamic firm. Mainly | worked in the Finance & Projects Account Department at head office of the KSB Pumps Lahore Pakistan, however | also visited other departments of the company and also interviewed different people. | think | remained successful in order to grasp the procedures and extract the valuable knowledge. | want to appreciate the efforts and their corporation of KSB staff for their advice and their assistance in helping me to avail this opportunity. | learned a lot from these people. They were much experienced and have a great command in their own work & on policy of KSB. Mainly | worked in the following tasks 1. Preparation of Landed Cost for Imports The cost which is incurred on the imports of raw material from the premises of exporter up to the premises of KSB is called landed cost. During my internship in KSB | learned how to prepare landed cost for the import of Pumps (Raw Material). | prepared landed cost in excel sheet with the help of different documents as Purchase Order, GRN (Goods Receipt Note), Sales Invoice, LC (Letter of Credit) and Insurance Documents etc. | calculated taxes and excise duties with the help of their rates which were imposed during transit to find the landed cost. 83