PEL LTD

PAK ELEKTRON LTD
CMSATS
INSTITUTE OF INFORMATION AND TECHNOLOGY
PAK ELEKTRON LTD

14 Kilometers Feroz Pur Road,
LAHORE
COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 1

PAK ELEKTRON LTD
ACKNOWLEDGEMENT
I am really pleased here to acknowledge the sheer efforts and extreme of

numerous people, those who have provided me their relentless service in the
completion of my Internship report on the “Financial Practices at
PAK ELEKTRON LTD (PEL)”. I am also thankful to all the officials of this
Organization for helping me in achieving my internship targets in while being
internee at PEL.
FAHAD ARSHAD JAMIL
PART 1 PART 3

PAK ELEKTRON LTD
Introduction And Overview PEL’s Financial Data & My Observation
1. Executive Summary 4 14. PEL’s Banlance

Sheet 2005 47
2. Introduction Of Pak Elektron Ltd 5 15. Profit & Loss

Statement 2004 49
3. Pak Elektron's Profile 5 16. Profit & Loss

Statement 2005 51
4 PEL's Organizational Chart 18 17. Categories of Share

Holders 52
5. PEL's Organizational Chart Briefing 19 18. Key Operational

Statement 53
6. PEL’s Director Report 24 19. Ratio Analysis

2004 54
7. ISO 9001 26 20. R&A Conclusion,

Recommendations 55
8. PEL’s Marketing Strategy & Objectives 27 21. PEL's Sales & Share
Analysis 57
22. Dim ensions Wise

Share Analysis 58
23. B rand Wise Sales

Analysis 58
PART 2 PART 4
Intern’s Experience in PEL PEL’s SWOT Analysis
9. Assigned Duties 28 24.1 PEL’s Strengths

59
10. Learnings in PEL 36 24.2 PEL’s Weaknesses

61
11. Problems Encountered in PEL 37 24.3 Opportunities for

PEL 63
12. Experience & its Impact Over Career 38 24.4 Threats for PEL
64
13. MicroWaves Open Market Survey 39

PAK ELEKTRON LTD
PART 5
New Visions & Directions for PEL
25.
Recommendations 65
26. GLOSSARY 67
27. Biblograpy 69
1. EXECUTIVE SUMMARY
Pak Elektron Limited (PEL) is the flag bearer of the Saigol Group of Companies.
The products manufactured by PEL have always been of high standard and the
name 'PEL' is synonymous with QUALITY all over Pakistan. Since its inception,
the company has been working for the advancement and development of
engineering know-how in Pakistan. The company has produced hundreds of
engineers, skilled workers and technicians through its apprenticeship schemes &
training programs.
The company comprises of two divisions:
• Appliances Division: This Division of PEL consists of home appliances

manufacturing particularly Refrigerators
• Power Division: PEL Power Division is one of the major electrical
equipment suppliers to WAPDA & KESC. The company manufactures
transformers, energy meters, switchgears, kiosks, compact stations and
shunt capacitor banks
Other than this, the company has developed a very good repute in the world of
credit due to which most of the Financial Institutions like National Bank, Faysal
Bank, Punjab Modarba have provided especial credit limits to the Company in
order to support its operational activities.
While working with PAK ELEKTRON LTD, I got very broader visions about
company financial and marketing activities more than those that I had learned
during my MBA program.
In 1956, the Saigol Group of Companies purchased major shares of PAK

Elektron Limited. At this junction, the company was only manufacturing

PAK ELEKTRON LTD
transformers and switchgears. With the Saigols in management, PEL expanded

into Refrigerators & Air Conditioner manufacturing and now it has become a
Giant in the World of Appliances.
2. INTRODUCTION:
Pak Elektron Limited (PEL) is the flag bearer of the Saigol Group of Companies.
The products manufactured by PEL have always been of high standard and the
name 'PEL' is synonymous with QUALITY all over Pakistan. Since its inception,
the company has been working for the advancement and development of
engineering know-how in Pakistan. The company has produced hundreds of
engineers, skilled workers and technicians through its apprenticeship schemes &
training programs. PEL has been continuously adding new products to its range.
As a result, PEL has registered a significant increase in its sales volume, during
the last ten years.
3. PEL PROFILE:
Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in
Pakistan. It was established in 1956 in technical collaboration with M/s AEG of
Germany. In October 1978, the Saigol Group of Companies bought the company.
Since its inception, the company has always been contributing towards the
advancement and development of the engineering sector in Pakistan by
introducing a range of quality home appliances and by producing hundreds of
engineers, skilled workers and technicians through its apprenticeship schemes
and training programs.
The company comprises of two divisions:
• Appliances Division
• Power Division

PAK ELEKTRON LTD
APPLIANCES DIVISION:
PEL’s Appliances Division is the flag carrier of the Saigol Group. This Division of
PEL consists of home appliances manufacturing particularly refrigerators.
PEL AIR CONDITIONERS:

PEL window-type air conditioners were introduced in 1981 in technical
collaboration with General Corporation of Japan. Ever since their launch, PEL air
conditioners have a leading position in the market. PEL air conditioners cooling
performance has been tested and approved by Copeland and ITS USA and
today PEL holds approximately 45% of air conditioners market share.
PEL REFRIGRATORS:
The manufacturing of refrigerators started in 1986-87 in technical collaboration
with M/s IAR-SILTAL of Italy. Like the air conditioner, PEL's refrigerators are also
in great demand. Today, PEL Crystal has 30% market share. Its cooling
performance is tested and approved by Danfoss Germany and its
manufacturing facility is ISO 9002 certified by SGS Switzerland.
POWER DIVISION
PEL Power Division manufactures energy meters, transformers, switchgears,
Kiosks, compact stations, shunt capacitor banks etc. All these electrical goods
are assembled under strict quality control and in accordance with international
standards.
PEL is one of the major electrical equipment suppliers to Water and Power
Development Authority (WAPDA) and Karachi Electrical Supply Corporation
(KESC), which are the largest power companies working in Pakistan. Over the
years, PEL electrical equipment has had been used in numerous power projects
of national importance within Pakistan. PEL has the privilege of getting its
equipment approved and certified from well-reputed international consultants
such as:

PAK ELEKTRON LTD
• Preece, Cardew and Rider, England

• Harza Engineering Company, USA
• Snam Progeti, Italy
• Societe Dumezm, France
• Miner & Miner International Inc. USA
In spite of stiff competition from emerging local and multinational brands, PEL
Group's appliances and electrical equipments have remained in the spotlight due
to constant innovation. Strategic partnerships with Copeland, Danfoss, Samsung
and others have enabled the PEL Group to incorporate new technologies into
existing product ranges, thus giving the Pakistani market access to innovative,
affordable and quality products.
GROUP PROFILE
In 1948, the Saigols migrated from Calcutta and initiated their business in
Lyallpur (later named Faisalabad), the textile city of Pakistan, under the banner of
Kohinoor Industries Limited.
KOHINOOR TEXTILE MILLS:

The Saigols set up the first major textile unit- The Kohinoor Textile Mill under the
umbrella of Kohinoor Industries Limited. The Kohinoor Textile Mill has state-of-
the-art quality control from raw material to finished product manufacturing. Its
laboratory is rated among the best laboratories in Pakistan for testing of raw
materials, other inputs and yarn.
PEL (Pak Elektron Limited):

In 1956, the Saigol Group of Companies purchased major shares of PAK
Elektron Limited. At this junction, the company was only manufacturing
transformers and switchgears. With the Saigols in management, PEL expanded
into Air Conditioner manufacturing.

PAK ELEKTRON LTD
THE PEL GROUP COMPRISES OF TWO DIVISIONS:
 Appliances Division
 Power Division
APPLIANCES DIVISION:
PEL’s Appliances Division is the flag carrier of the Saigol Group. This Division of
PEL consists of home appliances manufacturing.
In 1981, PEL window type air conditioners were introduced in 1981 in technical
collaboration with General Corporation of Japan. Today, PEL Air Conditioners
hold approximately 45% market share.
In 1986-87, the company started manufacturing in technical collaboration with

M/s IARSILAT of Italy.
In 1987, PEL deep freezers were also introduced in technical collaboration with
M/s Ariston of Italy.
In 1993, with technical collaboration of NECCHI of Italy, the company started

assembly and manufacturing of compressors for refrigerators and deep freezers.
Today, PEL has become a household name. At the Gadoon Amazai industrial
estate, an export-processing zone in Pakistan, air conditioners and deep freezers
under the banner of PEL Appliances Limited are manufactured.
POWER DIVISION:
PEL Power Division is one of the major electrical equipment suppliers to WAPDA
& KESC. The company manufactures transformers, energy meters, switchgears,
kiosks, compact stations and shunt capacitor banks. PEL also has had the
privilege of getting its equipment approved and certified from well-reputed
international consultants such as:
• Preece, Cardew and Rider, England

PAK ELEKTRON LTD
• Harza Engineering Company, USA

• Snam Progeti, Italy
• Societe Dumezm, France
• Miner & Miner International Inc. USA
• Ensa, France
SARITOW SPINNING MILL & AZAM TEXTILE MILLS:

In 1987, the Saritow Spinning Mills and Azam Textile Mills emerged under the
banner of Saigol Group of Companies. Saritow Spinning Mills is a spinning unit
with 18420 spindles capacity. Facilitated with the most modern and efficient
Japanese and European machinery, its knitted yarn is renowned in the Far East
and Europe for its fine quality. While Azam Textile Mills is reputed for its carded
and combed yarn, which is quite popular for premier knitting and weaving.
KOHINOOR POWER COMPANY LTD:

In 1991, the first power unit to commission in Pakistan was Kohinoor Power
Company Limited initiated with two Nigatta engines of 5 MW; the company
increased its plant capacity to 15 MW within a span of three years.
KOHINOOR ENERGY LTD:

1995, another power unit, Kohinoor Energy Limited, was established. Kohinoor
Power Limited is a 120 MW power plant located on the outskirts of the city of
Lahore. This project has an annual turnover of $40 million.
SAIGOLS COMPUTERS PRIVATE LTD:

In early Eighties, the Saigols initiated with the sole distribution for Wang
Laboratories Inc., which was followed by the dealership of Radio Shack Line of
computers manufactured by Tandy Corporation. Resellers rights from Tricord
Systems Inc. USA and Tulip Computers of Netherlands were obtained along with
a line of RISC based multiprocessor capable of providing workstation solutions
from Sun Micro Systems Inc., USA.

PAK ELEKTRON LTD
KOHINOOR MOTOR WORKS LTD:

The Saigol Group also entered a joint venture with CHINA QINGQI under the
banner of Kohinoor Motor Works Limited. This joint venture enabled
manufacturing of an affordable and durable motorbike for the masses in
Pakistan.
HOME APPLIANCES:
Products PEL is dealing in under the head of Home Appliances.
REFRIGRATOR:
PEL has launched its Crystal Classic Series - a new range of

Refrigerators with great storage capacity and impressive
outlook. PEL as always has introduced more efficient and
technologically advanced product that promises to take
care of your refrigeration needs and guarantees freshness of
food when you rely on us.
PEL Crystal Classic is a step ahead towards the achievement of our goal of
satisfying customers today and in time to come.
PEL SPLIT AIR CONDITIONERS:
PEL recently launched its Cool life Split air-conditioner

which is a technologically advanced model specially designed for Pakistan
market. This masterpiece from PEL provides maximum cooling even at very high
SPLITS QUALITIES & FEATURES

1 Low power consumption
·2 Low Voltage startup
·3 Hydrophilic Aluminum Fins
·4 3-bend heat exchanger
·5 Scientific Louver Rotation (SLR)
·6 Independent
COMSATS de-humidification
INSTITUTE function AND TECHNOLOGY
OF INFORMATION 10
·7 Anti-bacterial and anti-dust filters
PAK ELEKTRON LTD
temperatures while minimizing your electricity consumption. Its salient features

include:
PEL Air Conditioners have been specially designed for countries, having climatic
conditions similar to Pakistan. The Air Conditioners have excellent cooling
capabilities at extreme temperatures at varying levels of humidity; high air dust
and uneven local power supply conditions.
PEL MICROWAVE OWEN:
PEL the trustful company name in home appliances all

over the country now introduced all new models of "PEL
Power Wave" Microwave Ovens. Now PEL customers can
have four models of PEL Power Wave in which they can
enjoy the grilling feature as well. PEL Microwave Ovens
are available in different sizes, inner cavities (steel & painted) and features.
PEL TELEVISION:
PEL introduced Color Television under the brand name of "PEL

DIGITAL LIFE". PEL has introduced four models (flat & semi
flat). Now PEL customers can enjoy a Multi System, Multi
Sound, DVD Input, AV In/Out, Clock, Timer and Auto Degauss
Technology all in PEL Digital Life Color Television. PEL provides strong back up
of customer services all over Pakistan with 5 years picture tube and 1 year parts
warranty.
POWER DIVISION & PRODUCTS:
This division was established in 1956, the name PEL has always been
synonymous with quality and backed by the organizational expertise of Saigols
Group, one of the leading industrial and commercial groups in Pakistan. PEL is
now surging ahead of its competitors in the field of Power and Distribution
equipment. The manufacturing facilities are equipped with state-of-the-art

PAK ELEKTRON LTD
technology and are serving a large base of customers. A team of highly qualified
and experienced engineers supervises all stages of design, production and
quality control. A part from meeting individual customer requirement for Power &
Distribution Transformers, MV & LV Switchgear, Energy Meters and Instrument
Transformers.
QUALITY CONTROL:
Strict quality control is maintained throughout the manufacturing process by our
inspection and quality control department. All PEL made equipment undergoes
stage-wise inspection and its complete routine testing is performed as per
IEC/customer's specifications. A complete set of factory test reports is prepared
before the dispatch of the equipment.
POWER AND DISTRIBUTION TRANSFORMER:

PEL has vast experience in design and manufacturing of standard and special
purpose transformers up to 33kV and up to 6000kVA ratings.
PEL make oil immersed transformers with natural cooling are suitable for both
indoor and outdoor installations. These are manufactured according to BSS-171,
IEC-76 or VDE-0532 and tropicalized to meet adverse environmental conditions.
All our transformers are offered with tabular tank, having a conservator and
breather. However, hermetically sealed transformers are also manufactured up to
1000kVA ratings.
PEL transformers are available for various applications:
• Distribution transformers (pole mounted or pad mounted design)

• Auto transformers
• Furnace transformers
• Welding transformers
• Chokes for furnace transformers
• Any other special requirement

PAK ELEKTRON LTD
PEL's transformers have been successfully type tested for Impulse voltage and
short circuit tests at KEMA, (Holland), HV&SC Lab, Rawat (Pakistan), NIP
(Pakistan) and UET (Pakistan).
INSTRUMENT TRANSFORMERS:
We offer a diverse range of our indigenously

developed CTs and VTs for various applications of metering and protection.
These transformers are type tested for impulse voltage short circuit and
temperature rise tests as per IEC-60044 & 186. Low voltage CTs are available
both in PVC cover or MS cover, in round or square shape, while CTs for MV
application up to 12KV ratings are casted in epoxy resin. These CTs conform to
IEC-60044. Single Pole epoxy resin VTs for protection and metering conforming
to IEC-186 are produced for system voltage up to 12KV
PEL SINGLE PHASE ENERGY METERS:
PEL manufactures Electro-mechanical Energy Meters under license from ABB-

USA. The quality of PEL meters has been certified by KEMA Laboratories
(Holland) and conforms to Ratings Voltage 220-240V
Current (Nominal) 10, 20, 40 A
IEC 521, SGS Yarsley,
Current (Maximum) 40, 60, 80, 100A
U.K., has certified PEL
Energy Meter plant for ISO 9002. PEL type MC8 is a direct connection single-
phase meter. The design and constructional features include overload
compensation and temperature compensation, thus providing maintenance-free
operation over a long period and accurate measurement of electrical energy. The
frame is sturdy in construction and the covers are available in unbreakable
polycarbonate plastic material.

PAK ELEKTRON LTD
PEL POLY PHASE ENERGY METERS:

PEL type TBL is a direct connection poly-phase meter having improved load
performance and precision accuracy over a wide load range. All meter parts are
corrosion protected Ratings Voltage 3x200/400V (3-ph, 4-wire)
Current (Nominal) 15A
for long-term
Current (Maximum) 90A
reliability. It has a
magnetic bearing system that is self-cleaning, non-aging and tamper resistant.
This ensures virtually frictionless operation of the rotor while withstanding abuse
from surges and magnetic tampering. The meter is available with one-piece high
impact polycarbonate cover. The terminal cover is extended type that completely
shrouds the service cable.
SWITCHGEARS:
MV & LV Switchgear being one of the major power products of PEL is produced
for indoor installations company with the latest international standards, i.e. IEC,
BSS or VDE PEL's Switchboards are steel sheet fabricated, totally enclosed,
floor mounting and vermin & dust proof. These are supplied with factory fitted
relevant components and copper bus bars, internal wiring, terminal blocks etc.
The cubicle housing and doors are fabricated from 2-3mm thick sheet steel,
welded together to form a robust and self-supporting structure. Painting
procedure includes through cleaning, pre-treatment, anti-rust coating and final
finishing in standard RAL colours.
4. ORGANIZATIONAL CHART OF PAK ELEKTRON:

PAK ELEKTRON LTD
ORGANIZATIONAL CHART
APPLIANCE DIVISION
MKT.
APPLIANCES
AFTER SALES PRODUCTION.

SERVICES AD
MATERIAL
FINANCE PLAN
CONSUMER
MARKETING
R&D
ACCOUNTS
POWER DIVISION
PACKAGING
HRM
MKT. POWER
CAREERS TRADING
PRODUCTION. PRODUCTION.
SG TR
PRODUCTION.
EM
5. PAK ELEKTRON ORGANIZATIONAL CHART’S BRIEFING:

PAK ELEKTRON LTD
PAK Elektron as being the most famous corporation of Pakistan deals in two
types of goods one is entirely related with home Appliances particularly
Refrigerators and other one is entirely related with the power goods such as
Transformers, Electric Meters, and Switchgears.
Due to difference in the products Nature it has established two different Strategic
Business Units that work and act as independent and separate entities under the
names of PAK Elektron. Each unit has its own Marketing, Production and other
specific departments.
In PEL these two units are known as:
 APPLIANCES DIVISION
 POWER DIVISION
1. APPLIANCES DIVISION:
PAK Elektron Refrigerators always have always been famous among every home
due its superior quality and reliability. In Pakistan there are so many National and
International Companies who are sharing the demand of refrigerators but all of
them are considered to be minor market shareholders in front of Pak Elektron’s
share. Strength of Pak Elektron’s share has always been its remarkable
Appliances Division due to its latest equipments and talented men power.
This Appliance Division is comprised of following departments.
 Marketing Appliance Division

 Production Appliance Division
 After Sales Services Department
 Consumer Marketing Department
1.1 Marketing Appliance Division:

Talking about marketing department, it always been and still it is considered to be

PAK ELEKTRON LTD
a backbone of the Appliances business unit. This department is having most

hardworking and talented staff that remain busy in searching new markets for its
products and always initiates different production programs to satisfy its
customer needs and preferences. This Marketing department has un-beatable
marketing forces that on regular basis conduct market surveys in order to look
into Competitors position, customer’s taste, retailers and wholesalers needs
under the supervision of four professional marketing managers plus General and
Senior Marketing Managers.
At time when the forces feel a change in customer preferences they immediately
undertake distinctive steps and make new sales plans. Such plans are forwarded
to each respective department by the marketing department in order to get their
requirements to make the plan successful.
1.2 Production Department:

PEL’s production department has its own distinctive qualities from one end to last
end. At this department every worker has got very special in job training from the
seniors and remains committed in order to accomplish the given tasks
successfully either he is a part of assembling or a part of finishing section. When
Research and development designs any new feature or product, production
department provides required men power estimates to the company’s human
resource department.
1.3 After Sales Services:

After Sales Services is another active department of PEL’s Appliances division,
which gives a sense of care to its customer when ever it feel things are going
wrong or against its desire. This department has their own technicians available
for the services in the company as well as having after sales centers out side the
company at different places in the cities. This department assures 100 percent
parts replacement of appliances if complains fall in the warranty time period.
1.4 Consumer Marketing Department:

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

department. Consumer marketing department is the only department that has
special sales forces for its appliances and deals the customer needs and
complains directly without the intervention of any retailers and wholesalers.
2. POWER DIVISION:
The second but the most powerful revenue generating business unit of PAK
Elektron, produces Transformers, Switchgears and Energy Meters for the public
sector such as KESC Karachi Electric Supply Corporation, LESCO Lahore
Electric Supply Corporation, IESCO Islamabad Electric Supply Corporation,
PESCO Peshawar Electric Supply Corporation, etc and for public sector as well.
This division is comprised for four departments.
 Marketing Power Division

 Production Transformers
 Production Switchgears
 Production Energy Meters
2.1 Marketing Power Division:

Marketing department of power division consists of most professional engineers
who market all the power products, seeks new customers and supervise all these
three departments to ensure best quality and reliable products every time.
2.2 Production Transformers:

PEL has vast experience in design and manufacturing of standard and special
purpose transformers up to 33kV and up to 6000kVA ratings. This department
make oil immersed transformers with natural cooling are suitable for both indoor
and outdoor installations. These are manufactured according to BSS-171, IEC-76
or VDE-0532 and tropicalized to meet adverse environmental conditions. All
transformers are offered with tabular tank, having a conservator and breather.
This department manufactures following types of transformers.

PAK ELEKTRON LTD
• Distribution transformers (pole mounted or pad mounted design)

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

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

meter, which is commonly used for each home. Its design and constructional
features include overload compensation and temperature compensation, thus
providing maintenance-free operation over a long period and accurate
measurement of electrical energy. The frame is sturdy in construction and the
covers are available in unbreakable polycarbonate plastic material.
2.4 Production Switchgears:

MV & LV Switchgear being one of the major power products of PEL is produced
for indoor installations company with the latest international standards by this

PAK ELEKTRON LTD
department, i.e. IEC, BSS or VDE PEL's Switchboards are steel sheet fabricated,
totally enclosed, floor mounting and vermin & dust proof. These are supplied with
factory fitted relevant components and copper bus bars, internal wiring, terminal
blocks etc.
The cubicle housing and doors are fabricated from 2-3mm thick sheet steel,
welded together to form a robust and self-supporting structure. Painting
procedure includes through cleaning, pre-treatment, anti-rust coating and final
finishing in standard RAL colors.
3. COMMON DEPARTMENTS:
Other than those particular and specific departments there are some
departments that deal directly with these two divisions and following are the
names of those departments.
 Human Resource Department

 Accounts Department
 Finance Department
 Packaging Department
 Careers Department
 Trading Department
 Research and Development Department
 Material Planning Department
3.1 Human Resource Department:

Workers at PEL always feel free in expressing their needs, desires and problems
and this right and freedom has been given to them by the personnel of Human
Resource Department that always look forward to serve every one in the
company. This department is handling the personnel of both power and
appliances division. When ever it gets any new plan either from power or from
appliances it starts searching the best talent to be hired for the respective need
and prepares salaries estimates statement. Similarly it also actively participates

PAK ELEKTRON LTD
in hiring employees for other departments and settling down all issues related
with employee’s needs, wants and hurdles.
3.2 Accounts Department:

Pak Elektron has a big accounts department that records daily transactions of
both appliances and power division that prepares financial statements such as
Balance sheets, Income Statements, Cash Flow Statements, etc, etc.
3.3 Finance Department:

In PEL Finance department is working under the supervision of four managers
and one General Manager. This department is comprised of four sections,
namely
 Budgeting Section
 Guarantees Section
 Material Planning Section
 Leasing Section
3.3-a Budgeting Section:

Starting with Budgeting Department that forecasts Annual Sales, Expenditures
and Costs for the company after getting production estimates and Sales plans
from the marketing and than tell the amount to be arranged for production in
order to finance either power division’s production or Appliances division’s
production.
3.3-b Guarantees Section:

Secret behind PEL’s success and increasing market share is its guarantees
section that actively works to get every order either for appliances or for power of

PAK ELEKTRON LTD
the company by speedily participating for the contract with the help of Tender
Bonds of Guarantees.
3.3-c Leasing Section:

This section works in order to fulfill the corporate production, personnel and
operational needs such as Machineries, Auto Mobiles and office equipments. It
enters into the Buying Contracts always with the one who offers best terms and
conditions as well as the best Internal Rate Of Return to the Company.
3.3-d Material Planning Section:

In finance department, this is the only section that is engaged in facilitating rather
entertaining the material department’s needs by arranging finances from different
financial institutions after getting material planning purchasing plans.
3.4 Packaging Department:

In PEL there are two different packaging departments one for the Appliances
such as Refrigerators and other one for the power products such as
Transformers, switchgears and energy meters.
Both of the departments take care of all safety requirements for the best delivery
of goods to the customer and always do the final audit of the finalized goods
before distribution.
3.5 Careers Department:

PEL does not only take care of the internal talent rather always keep on
struggling in order to chalk out and hire the best available human resources all
around Pakistan by the help of its Career Department, which can be called a part
of Human Resource Department but has its own separate entity in the
organization.
3.6 Trading Department:

PAK ELEKTRON LTD
As trading restriction are relaxed by most of the Asian Countries, Pakistan And
China have started sharing most their production surplus with each other,
similarly providing each other a facility to share their production technology.
As Labor and power is cheaply available in China, Pak Elektron has started
importing Splits, Microwaves and Televisions from China in order to get
competitive edge over the competitors due to its price and cost effectiveness.
3.7 Researches and Development Department:

A department of active and professional people, having distinctive characteristics,
that always remains engaged in designing goods better than before. This
department experts fully co ordinate with the marketing department and very
efficiently and effectively interprets their findings for introducing new features in
the same products or designing and launching new products into the markets.
After interpreting plans and getting approvals it forwards the design and
procedure to the production department.
3.8 Material Planning Department:

This is the department that assures superior quality and world finest material to
the customer in PEL’s products. Its teams always take care of the customer
preferences and keep an eagle eye over the newly invented and best material in
the market to be used in production after getting Research and Development
plans. This department than plan and arrange required material for the
production department with the help of Finance Department.

PAK ELEKTRON LTD
6. PEL’S DIRECTORS REPORT:

The Directors feel pleasure in presenting their Report along with the audited
financial statements and a review of the performance of the Company for the
year ended June 30, 2004.
OPERATING RESULTS:
In the year under review gross turnover reached at Rs. 6,077 million, which is
higher by Rs. 2,094 over the last year showing an increase of 53%. The net profit
reflects an increase of Rs. 136 million (96%) on the comparative financial results.
Financial Results (Rs. in Million) 2004 2003
Gross Sales 6,077 3,983

Gross Profit 1,070 827
Operating Profit 627 527
Profit Before Tax 280 184
Profit After Tax 277 141
Earning per share Rs. 11.70 5.96

PAK ELEKTRON LTD
DIVIDENDS AND RIGHT SHARES:

The board has recommended a cash dividend of 10% and stock dividend (Bonus
shares) of 30% of the paid up capital of the company. At the same time the board
has approved the issuance of 50% right shares at an issue price of Rs. 35 per
share including a premium of Rs. 25 per share. Bonus shares to be issued as
above shall also qualify for rights offering. The funds generated through right
shares would amount to Rs. 538.8 million. The right issue is aimed at
strengthening PEL's equity base and enabling the company to finance its growth
requirements.
The company has chalked out a comprehensive financing plan aimed at

strengthening the company's equity base and enabling PEL to finance its growth
requirements. For this purpose Preference shares of up to Rs. 625 million are in
process of being privately placed. These will be listed, cumulative, non-voting
convertible, preference shares, carrying fixed dividend @ 9.5% p.a. The
company is seeking the approval for the issue from the members in the
upcoming Extraordinary General Meeting.
AUDITORS AND THEIR REPORTS:

The present auditors Messrs Yousuf Adil Saleem & Co. Chartered Accountants
retire and being eligible, offer themselves for re-appointment.
The company is negotiating with Daewoo Electronics Korea for meeting the loss
incurred by PDEL. At the same time company is considering a revival plan based
on the marketing and production strategies keeping in view the growing market of
television.
EARNING PER SHARE:

Based on the net profit for the year earning per share is Rs. 11.70 where as Last
year’s was Rs. 5.96.

PAK ELEKTRON LTD
7. ISO 9001:
PEL was 16th Company in Pakistan, which got ISO 9002 Certification in 1997,
since, and then PEL Management is applying this International Standard
Practices for Effectively Managing Quality of Products and Services that
Company Offers. The International Standard Practices in PEL have been
upgraded as per the Revised ISO 9001 Standards and its Scope of Application is
expanding ever since and Top Management is committed to make PEL a Total
Quality Management (TQM) Company.
In PEL Quality is the Subject of Management at all Levels. IT focus on
continuous improvement in its Systems thus establishing Good Management
Practices that ensure Product and Services Standards, it is committed to and
making continuous efforts in developing and strengthening its internal and
external customers and suppliers, employees training and development and their
participation are the KEY forces which are Increasing the Organization's
Capabilities thus making it more competitive and fast growing Company. Top
management is not only tremendously improving the Working Environment but
also investing in improving internal Communication Network for better
Teamwork. Continuous Up-gradation in production facility/equipment thus going
for State-of-the-art production facility reflects management Vision and
commitment for Quality. Having around Fifty years of manufacturing
experience with cooperative and dedicated employees and now coupled with
efficiency monitoring processes and Data Analysis enable management to
take Preventive Actions before things really go wrong.
Elimination of wasteful activities, practices, processes, norms and behavior are

the top management's priorities that need to be managed so that the philosophy
of ZERO DEFECT can be taken on board. Benchmarking with National and
International repute Organizations will be in our road to manufacturing excellence
to prove PEL as a World Class Manufacturer.

PAK ELEKTRON LTD
8. PAK ELEKTRON’S MARKETING STRATEGIES AND OBJECTIVES:
OBJECTIVES:
1. To increase Refrigerators Sales Volume from 255,000 to 330,000 units.
2. To increase over all market share from 33.38 percent to 37 percent.
3. To ensure profitability on the basis of
 Improved Model Mix

 Launching New product
 Increase Awareness, Image and Positioning of Brands.
Marketing Strategies:
1. Dealer Network Analysis and identify weak share areas.

2. Promote products
3. To undertake a Comprehensive research about demographics, products,
preferences, requirements and behaviors of customers for existing and
new products. Research findings will become norms.
Sales Promotion Objectives:
 To ensure that the sales promotion scheme should be designed to

motivate dealers towards providing active and enthusiastic support
in marketing the product and at the same time reduce the
incentives and increase the profitability.
Advertising Objectives:
 Advertising budgets should be utilized properly to support
marketing of the products.
Other Objectives:

PAK ELEKTRON LTD
 Sales force Coaching and Interactions.

9. DUTIES ASSIGNED TO ME ON DIFFERENT DATES IN PEL
In PEL, I worked for the Finance department’s Budgeting, Leasing and
Guarantees Sections.
FINANCE DEPARTMENT:
10.1 BUDGETING SECTION:

July 5th , 2005
Getting started from the first day after getting internship letter, MR. Arshad, Asst
Manager Finance (Budgeting Section), PEL assigned task to Mr. Amer Khawaja ,
E2 Same section Finance of my supervision. Mr Amer told me PEL has two
Divisions
1) Power Division, which deals in the manufacturing of
a) Transformers
b) Electric Meters
c) Switch Gears
2) Appliances Division includes production of Refrigerators and Imports of
Micro-wave Ovens, Splits & Window Units from CHINA.
Afterwards, he shown me the budgets of both divisions which are prepared at the
beginning of every year with the help of forecasts and than laterly throughout the
year they compare it with the actual transactions of these two divisions. That day
i did some price and cost calculations of Transformers for him.
July 6th, 2005

Today, i have learned how to prepare GROSS MARGIN BUDGET that shows
every product model's expected profit for the up coming year. I found that 97% of
PEL Sales will be made locally by the distributors and by the Consumer
marketing department where as only 3% will be exported to Afghanistan, Dubai,
etc. Major Portion of these sales constitutes upon Refrigerator. As World is
moving towards Globalization, PEL might suffer hurdles in the near future if it

PAK ELEKTRON LTD
does not start penetration to get some foreign market space.
Another important thing which i have observed over there is the back biting and
leg pulling trend due to MR Arshad's stubborn personality.
July 7th, 2005

Today, i worked on Transformers Basis Sheet which is required for the
preparation of Budgeted Cash Flows 2006. This sheet includes Materials, Work
in Process and Finished Goods ending inventories which are projected and
calculated with the help of last year's data and Managers use it for the Financial
Planning of year 2006 like, how much Revenue they will be generating and how
much they will be required to borrow from the credit houses.
July 8th, 2005

Today, i learned how to prepare a Lease sheet for the Machineries purchased by
PEL and found that PEL has been paying up to 14% Markup for those
machineries which is not a good signal because if the company pays more to the
Creditors in the shape of markup, PEL Shareholders Earnings will start getting
affected, they might loose their confidence and PEL wouldn't be able to call up
additional Capital from them.
July 9th, 2005

Today all day long we did error rectifications in the selling and cost prices of
Transformers that happened due to the wrong information provided by the
ACCOUNTS Department and similarly helped my supervisor in preparing the
KEY FIGURES STATEMENT of the Refrigerators which states how much has
been Produced, Dispatched, Sold and Remaining as a stock during the day. It
also shows expected and original payments and this statement after completion
is presented to the Directors of the Company.
July 11th 2005

Today we received “Budgeted expenses summary” of all departments prepared

PAK ELEKTRON LTD
and sent by Maintenance Department and similarly an individual budgeted

expenses summary from each department than we did the comparison and
analysis in order to prepare a final Controllable Cost Statement for each
department. During the comparison we found that Production A.D Budgeted
expenses significantly vary from the one provided by the Maintenance but with
the little effort we chalked out that A.D is expecting High Over time cost for the
production of 370,000 Units of Refrigerator, Maintenance did not consider.
July 12th 2005

Today, I worked on Actualized Statement, which is a kind of Income Statement
prepared on monthly basis. In this statement one takes the actual Revenues,
Expenses, etc. occurred during the month, projects the same for the remaining
time period with the help of last year data as well as with the help of Financial,
Economical and Political factors and compare it with the budgeted figures in
order to see the variances. Finally in the end one tries to figure out the factors
which wasn’t being considered at times of Sales planning such as Inflation,
Government policies, etc. Other than this my immediate boss shared a secret
with me that currently among PEL’s liabilities the huge liability is the amount
borrowed from the National Bank Pakistan. It was an alarming sign because
National Bank now any time can freeze all PEL’s operations due to its in-ability to
pay back the loan.
July 13th 2005

Today I worked on Receivables Budget in which one projects the amount to be
received against Sales during the year from the dealers. Among its top 32
Dealers some of them are expected to make payments in Advance or with in 30,
60, 120 and 180 days based upon their Payment Behaviors. Dealers in Karachi
usually pay after 120 days to the company that really blocks the money from
getting into the circulation and that if received earlier by PEL can help it to boost
its productivity level. It’s another bad indication.
July 14th 2005

PAK ELEKTRON LTD
Today I again examined and did some calculations for the Receivables Budget
and found that near about 100 Million was stuck for 180 Days last year 2004 –
2005. Similarly, I have examined their borrowing behavior, which is very frequent
from the credit houses and also examined the allocation of those finances
reflecting a ratio of 52:48 in Appliance and Power division.
July 15th 2005

Today while working on leasing I came to know that currently PEL’s lesser are
eight big Institutions namely: Crescent, Grays, Punjab Modarba, Saudi Pak,
Faisal Bank, P.I.C.I.C and Bank of Punjab to whom it’s making millions of markup
payments annually against the purchases of Machineries and Autos. This is
simultaneously reducing PEL’s profitability and further reflects improper planning
and management.
July 16th 2005

Today I was assigned a task to do the verification and rectification of all the
transactions recorded and upgraded on the Network by the Accounts Department
with the help of actual Vouchers. I found that PEL is selling Samsung’s Air
Conditioners in the market through its dealers against a fee under a contract
signed by both parties but important point was that it might affect PEL owns
Sales or its exclusive dealer network.
July 18th 2005

Today I prepared a Leasing Statement of COMUPTER EQUIPEMENTS
purchased by P.E.L through Faisal Bank Leasing Facility worth 2.7 Million at
8.5% Markup Annually and RS 76,170 was the negotiated monthly installment for
three years. Afterwards I calculated the total three years markup and that was 0.4
Million. Similarly than I helped my immediate Boss in preparing actual Sales
Report for the year 2004 – 2005.
July 19th 2005

Today I worked on Transformers Budgets based upon Six scenarios which reflect

PAK ELEKTRON LTD
expected Political and Economical changes and its impact on PEL’s Sales. I
found that if these factors remained constant almost P.E.L could fulfill almost 50%
of the market demand.
July 20th 2005

Today, I did a comparison between over all Budgeted Sales of P.E.L for the Year
2006 with over all sales of previous year and noticed that P.E.L is expected to
increase its total sales volume by 45% in this year.
July 21st 2005

For the Production material purchases purposes, budgeting and Material
Planning Sections of Finance Department prepare BOQ Statement, which
reflects, what was the last paid cost of material? What are the current prices and
finally how much it varies from the old one either in negative direction or in
positive direction? In case If it falls Company immediately changes its material
planning and Buys more to save additional cost to be paid for the same in future.
July 22nd 2005

Today I worked on MAN POWER budget for the year 2006 and did a comparison
with the same type of budget prepared in prior year. I found that PEL’s workers
strength is expected to be reduced by this year due to the introduction of latest
and much more efficient machineries in both A.D and P.D Divisions due to which
company might go towards right sizing. Other than this I found that last year
P.E.L paid wages for 988706 idle hours to its workers.
July 23rd 2005

Today I did some verification of the accounts transactions and similarly helped
my boss in preparing Switchgears budget where I found a very rapid growth in
comparison with last years growth.

PAK ELEKTRON LTD
10.2 GURARANTEES AND LEASING SECTION:
JULY 25th 2005

Today I changed the budgeting section and started working for the Guarantees,
Letter of Credit, Leasing, Finance against Merchandise and Cash Financing
Section. Today they just gave me an introduction and shared important points.
JULY 26th 2005

Today I spent my time visiting all the Credit Houses such as FAISAL BANK,
NATIONAL BANK MAIN BRANCH, PICIC etc, in order to collect all the Bank
Statements for the Company along with my immediate boss.
JULY 27th 2005

Companies usually make payment against imported goods through Letter of
Credits involving banks but when the firms become un-able to pay the specific
amount than banks make the payments on their behalf where as take the
possession of the imported goods. Than Banks provide a facility to pay back the
sum at a particular interest rate and get the goods backs with in a particular time
period under an agreement of FINANCE AGAINST MERCHANDISE. Today I
worked on its markup and holding charges statement.
JULY 28th 2005

Today I worked on Cash Financing a credit facility provided by National Bank
Pakistan with a limit of 950 millions to Pak Elektron PVT LTD through which the
company deals with its Vendors, Import bills, and other Debts.
JULY 29th 2005

Today I worked on Issuance of Guarantees, Guarantees which are required to
participate in the Tenders or to get an order in simple words. This involves
intermediaries such as BANKS who charge Commission and maintain a margin

PAK ELEKTRON LTD
in order to give an assurance to the buying party on the behalf of selling party
that in case if the selling party refuses to sell goods than they will take care.
JULY 30th 2005
Today I collected the details of FANFORD, FANFORD is basically a special type
of voucher that reflects a refundable amount which was deducted from the
DEMAND DRAFT’S value at time of its discounting.
AUGUST 1st 2005

Today I, along with some of the marketing guys, have conducted an open market
survey in order to collect the rates of Microwave Owens produced by different
Companies of Pakistan such as Dawlence, LG, PEL etc. Reason of conducting
this survey was to make a price, incentive and discount comparison between
these appliances.
AUGUST 2nd 2005

Today again I visited the market in order to collect some information regarding
the different offered features of all those Microwave Owens and similarly have
gathered information about the customer preferences, complains, etc.
AUGUST 3rd 2005

Today I examined the annual leasing details for the year 2003-2004 which
includes Auto financing, Machinery Leasing, other equipments leasing etc. while
examination I found that their major financing contracts took place with Askari
and Faisal Bank.
AUGUST 4th 2005

Today all day long I was busy in collecting the bank statements for FIM, Current
Account and Guarantees from different Banks such as National Bank Main
Branch, P.I.C.I.C etc.
AUGUST 5th 2005

Today I worked on Tender Bond Vouchers and have prepared vouchers for the

PAK ELEKTRON LTD
last 3 months.
AUGUST 6th 2005

Today my boss asked me for a favor he wanted me to prepare some budgets
slides on Power point for him because he needed that in order to present it in
front of the external auditors so I prepared the presentation slides for him in
power point, 
AUGUST 8th 2005

Today I worked on the Performance Guarantees statements, showing how much
amount has been redeemed by the company from the banks up till now after its
establishment.
AUGUST 9th 2005

Today I worked on the vouchers of performance, advance guarantees that further
helps the company in identifying for how much tenders they have participated, for
how much orders the company got approval etc.
AUGUST 10th 2005

Today I did verification and error rectification of the annual 2006 budgeted
expenditures of the company, which was required by the external auditors.
AUGUST 11th 2005

Today I spent my day delivering tender bond guarantees to different banks, which
reflects that the company is willing to serve or to produce switchgears for
WAPDA.
AUGUST 12th 2005

Today I visited Banks in order to collect Bank Statements of the Company’s
Current Account and Letter of credit limit balances.
AUGUST 13th 2005

PAK ELEKTRON LTD
Last day, the day of good bye they people taught me some key points and I left.
10. MY LEARNINGS IN PAK ELEKTRON:

While working with PAK ELEKTRON LTD, I got very broader visions about
company financial and marketing activities more than those that I had learned
during my MBA program. What were those experiences? I would like to share
them in this report.
 During my education time period, I learnt while entering into Trading

contracts importer always has to open up a letter of credit in order
to assure the exporter that it will make the payment by certain date
through its bank and on maturity Importer becomes obliged to make
payment but I had no idea that importer’s bank provides certain
payment facilities to the importer for making the trading goods
payment for example Importer Bank pays the bill on the behalf of
the importer and takes possession of the goods. Simultaneously
bank enters into a FINANCE AGAINST MERCHANDISE
agreement with the importer and by and by the importer makes
imported goods payment to the bank in the shape of installments
Bank starts releasing the possessed goods for the company. Banks
usually charge Margin and Holding Charges to the company for
providing them such type of facility.
 I have also learned that in order to get an order, a company has to

follow a participation procedure and this procedure starts from
TENDER BONDS or Guarantees given through banks to the buying
party in order to assure that certain company has a legal entity, has
an ability to fulfill the desired order with in specified date and incase
if the company dissolves bank will stand liable for the fulfillment of
the order.

PAK ELEKTRON LTD
 Similarly another important thing which I had learned over there

was the Buying procedure through leasing agreements like writing
a purchase order, asking for quotations, making comparisons of the
offered features and Internal Rate of Return and lastly the best
institutional selection in order to avail leasing facility.
 I also learnt how to operate an online budgeting system, how to

keep it up to date, where to get the daily information regarding
actual transactions, etc.
11. PROBLEMS ENCOUNTERED IN PEL:

As one says there is no free food in this world, you need to struggle for it similarly
I believe there is no free learning in this world until and unless one encounters
problems.
I too faced large number of problems in PAK Elektron during my internship and
some of them are mentioned below:
• While working for the Budgeting section of finance department in PAK

ELEKTRON LTD I found that staff / Executives are not co-operative at all.
• Budgeting staff rather than teaching keep the interns engage in printing
the notes, photocopying etc, etc.
• Attitude and behaviors of the staff is sick and pathetic they people did not
feel any hesitation in openly abusing others.
• Managers at finance department always use to make fun of the intern’s

physical traits and that de-motivates the trainees badly.

PAK ELEKTRON LTD
12. EXPERIENCES AND IMPACT OVER MY CAREER:
Regardless of the problems encountered by me in PAK Elektron, I believe the

things I have learned in there will help me rather will support my position in the
long run.
 I got a very good exposure of Business Budgeting that is directly

related to the forecasting of the Country’s Future Cultural,
Economical and Political transformation and its interpretation. This
budgeting activity is almost done in every play of life and having
knowledge about the procedure ensures a very good position to me
in future.
 Similarly paying visits to different Markets and Financial Institutions

have developed very good Public Relation and Analytical skills and
due to this I believe I will be able to tackle most of the problems in
the Services sector in case I get a job in there.
 So far as the business planning is concerned, in PEL, I always

acted as a critic and used to identify the existing and hidden flaws,
they were un-able to identify in their plans. Executives over there in
PEL always appreciated these skills and I believe having this ability
will ensure me a bright future in my professional life.

PAK ELEKTRON LTD
13. MICROWAVES OPEN MARKET SURVEY

In order to see PEL’s microwaves market position some of the internees working
over there in PEL including me decided one day to conduct an open market
microwave survey during the internship program. In the market, we people found
that in total currently there is Eight/8 companies serving all over the Pakistan with
its products particularly microwaves. Following are the names of the companies
and Number of models of the microwaves.
BRAND NAME NO OF MODELS

PEL 5
DAWLENCE 14
WAVES 24
LG 13
ORIENT 6
HAIER 6
FAST 7
SAMSUNG 10
During the survey we looked into different features offered by those companies in
their microwave Owens where some of the features have significantly increased
the value of those microwaves and some have shattered down the image of the
company. Let’s look into the distinct features.
13.1 Distinct Features:

Following are some of the distinct features found by me during the survey
Tea Maker:
A value added feature introduced by LG in its Microwaves Owens, considered to
be a convenience by the upper class society but an un-attractive facility by the

PAK ELEKTRON LTD
middle class which is the largest segment all because of the higher prices i.e. 40
percent higher than the similar microwaves offered by other companies.
Up Side Down Doors:

A very special feature designed for the commercial usage such as bakeries,
Snack Bars, Hotels, Restaurants, etc., has its own importance and such
microwaves were first introduced by National Appliances in Pakistan. No doubt
other than businesses, general public show less interest in this feature but
National Appliances all alone has captured the commercial market and enjoying
the significant return because PEL, LG and others are not under taking any step
to share this opportunity.
Grills:
A Cultural transformation has been rapidly taking place these days due to Mass
Media. People of Pakistan have started preferring rather showing their interest in
western foods. And as this need is arising swiftly most appliances corporations
have started introducing Grills for Baking and other purposes. But still there are
some companies, which are not offering grills along with some of their own
models to the customer, despite its highly demanded like Orient, Hiaer, LG, and
PEL, due to which they are loosing their customer loyalty.
Digital Panels:
Few years back, if we remember microwave Owens were introduced with analog
operational kits but with the passage of time they arrived with attractive digital
kits. This feature if has added a beauty in the microwaves also has created lots
of problems for the customers. Reason being;
o Majority people are un-able to operate because of illiteracy.

o Quality Complaints.
o Parts replacement of microwaves have become expensive and many
more.

PAK ELEKTRON LTD
Due to this many companies including PEL, have suffered a lot and still suffering
and among them Orient, LG are at top just because of poor quality of digital kits
and continuous customer complaints. Only Dawlence is ensuring high quality and
reliability to its customer.
13.2 COMPETITIVE BUSINESS STRATEGIES:
During conducting the survey our main motive was to identify the distinctive
features and all business strategies of those 8 Giants. Different retailers have
different opinions about all these companies but their emphasis lies around some
of the major issues such as problems with delivery of appliances and after sales
services facility. We heard that few companies are good at one end but lacks at
other only Dawlence being the big crocodile is highly committed with its promises
and is actively participating in after sales services which ensure care to its
customer due to which no one can take its customer away from its products
easily.
PRICE FACTOR:
Price stability always counts a lot. A fluctuation in prices with regular interval of
course does not leave a good impression rather changes the mind of customer
because a customer too have planned its shopping budgets.
During the survey we found that only Dawlence is the company that has
considered this important issue and have entered into the market with stabled
prices comparatively with others. It also declares that if some one like retailers
sells Dawlence products lower than the offered selling prices by the company will
be subjected to a penalty of 100,000Rs. Strategy is to protect its corporate
promising image and keep the customer always closer.
DEALERS INCENIVE:
Margins either earned by the retailers, whole sellers or by the Companies,
always being a source of motivation. Creating a discrimination in between Major
and Minor distributors creates dissatisfaction. In order to build an exclusive
distribution channel, equal incentives to all counts a lot. A retailer disclosed that

PAK ELEKTRON LTD
Dawlence, Orient is the one who never discriminates and always ensures us the
same entertainment as it does to the others.
PENETRATION AND CONTRACTS:

A demand for the electronic goods are increasing day by day, we found that
Dawlence struggles more than all the other companies in seeking rather
exploring new markets in order to increase its market share. It has a special
sales force that conducts surveys with continuity and keep the company informed
about the new slots and similarly than Dawlence negotiates and enters into a
fixed sales contracts with those dealers but a good thing was, it also allows or
gives flexibility to them for alternations in the orders and other arrangements.
Where as PEL and other companies usually enter later specifically when we talk
about microwave Owens.
PUBLICITY:
Again Dawlence is going well in comparison with others in increasing its
microwaves awareness in the markets. Its special skilled and talented sales force
is highly involved in spreading word of mouth that is a very effective marketing
strategy rather weapon. Talking about PEL, PEL is not concentrating on this point
rather its just focusing on the dealer ship networks due to which its product
image has never been as good as Dawlence’s image is.
Competitive Price Analysis:

So far as the prices are concerned PEL is charging reasonable prices to its
customer for all of its microwaves comparatively from others. Prices charged by
National, which is a multinational firm, are very higher in comparison with others
because it uses special Japanese parts in its microwaves and ensures high
quality and performance and only rich class shows interest in National Products.

PAK ELEKTRON LTD
Currently, PEL is not manufacturing Microwaves rather is has under taken an

agreement with a Chinese firm to manufacture Owens for it and PEL is just
supplying material to that firm. According to the retailer’s information, people are
satisfied with the prices charged by PAK Elektron but still their preferences go
along with Dawlence microwaves because of its highly created awareness.
BRAND: ___ORIENT MITSUBISHI_____
MODEL RANGE
Sr.NO MODEL FEATURES PRICE in RS
1 OM-7020-PM MANUAL PAINTED CAVITY 3,499
2 OM-8025-DS-M DIGITAL PANEL, STEEL CAVITY 4,799
3 OM-8025-DGS-M DIGITAL PANEL, STEEL CAVITY,GRILL 5,299
4 OM-8035-DS-M DIGITAL PANEL, STEEL CAVITY 5,599
5 OM-8035-DGS-M DIGITAL PANEL, STEEL CAVITY, GRILL 5,899
6 OM-8052-PG-M DIGITAL PANEL, PAINTED CAVITY 6,999
BRAND:__HAIER MICROWAVEOVEN______
MODEL RANGE
1 HR-570-2D STRAIGHT TYPE MANUAL 3,500
2 HR-750-2D STRAIGHT TYPE MANUAL 4,500
3 MG-2280-EG GRILL AND GRAY COLOR 8,000
4 MK-2280-MG GRILL, DIGITAL AND KNOB 6,000
5 MD-2485-EG STABLE PLATE, GRILL AND AUTOMATIC 8,000
6 HR-7803-SS LARGE DISPLAY, STAINLESS STEEL AND GRILL 9,000
BRAND:__LG MICROWAVE OWENS______

MODEL RANGE
1 MS-202-W INTELLO WAVE MANUAL 4500
2 MS204-W INTELLO WAVE MANUAL 5000
3 MS-2344-B NOT AVAILABLE 6100
4 MS-3443-A NOT AVAILABLE 9900
5 MS-4842-DP NOT AVAILABLE 10900
6 MS-563-XD NOT AVAILABLE 13100
7 MS-604-W DIGITAL, GRILL 17900
8 MS-724-J NOT AVAILABLE 11900
9 MS-C DIGITAL, TEA MAKER
BRAND:__DAWLENCE MICROWAVE OWENS______

MODEL RANGE
1 DW-22-M ALARM, CHILD SAFETY AND 6 POWER LEVEL 4400
2 DW-44-T MANUAL + GRILL 5200
3 DW-66-TG COMBI GRILL, CHILD SAFETY LOCK 6500
4 DW-EC-20 MANUAL + GRILL 4200

PAK ELEKTRON LTD
5 DW-DS-20 MANUAL + GRILL 4200

6 DW-DS-20-G CONTROL PANEL, SPEEDY COOKING 4700
7 DW-631 TOUCH SYS, AUTO DEFROST AND COCK 5700
8 DW-390-M SAME MANUAL + GRILL 5700
9 DW-390-T SAME MANUAL + GRILL 6200
10 DW-391 NOT AVAILABLE 7200
11 DW-131-G TOUCH SYS, CHILD-SAFETY LOCK, DEFROST, 7400
12 DW-131-A NOT AVAILABLE 8200
13 DW-180 NOT AVAILABLE 8700
14 DW-180-G NOT AVAILABLE 10300
BRAND:__SAMSUNG MICROWAVE OWENS______

MODEL RANGE

1 M1610N AUTOMATIC KITS + GRILL 5900
3 M1733N MANUAL + GRILL 9000
5 M1933N AUTOMATIC KITS + 7 POWER LEVELS 11600
6 MID33 ROTATING PLATE, 7 POWER LEVELS, TIMER 12500
7 MF45 AUTOMATIC KITS + TIMER + POWER LEVELS 13400
8 CE2977 HELP SCREEN, TOUCH PANEL, 8 POWERS 16900
9 MS9796 HELP SCREEN, TOUCH PANEL, TIMER 14600
10 C100 HELP SCREEN, ROTATING PLATE, 8 POWERS 16500
BRAND:__FAST MICROWAVE OWENS______
MODEL RANGE

1 BS-20 MANUAL, GRILL 3900
2 BS-20-M MANUAL, GRILL 4100
3 BS-26 AUTOMATIC, GRILL 5500
4 BS-26-M AUTOMATIC, GRILL 5600
5 BS-36 ROTATING PLATE, GRILL 6800
6 BS-36-D TOUCH PANEL, GRILL 6900
7 BS-465 ALARM, TOUCH PANEL, GRILL 7100
BRAND:__WAVES MICROWAVEOVEN______
MODEL RANGE
1 W-520 NOT AVAILABLE 3500
4 W-520-GDI NOT AVAILABLE 3700
5 W-525-GDG GRILL, TOUCH PANEL 5100
6 W-535-GDG NOT AVAILABLE 5399

PAK ELEKTRON LTD
8 W-20-DG2 NOT AVAILABLE 3700

9 W-535 DIGITAL, GRILL 5699
10 W-520-MD NOT AVAILABLE 3700
12 W-525-MDG NOT AVAILABLE 5100
15 W-622-MM NOT AVAILABLE 6999
16 W-620-GM NOT AVAILABLE 3500
19 W-740-GD NOT AVAILABLE 6500
BRAND:__PEL MICROWAVE OWENS______

MODEL RANGE
1 PMO-20 MANUAL 3900
2 PMO-23 MANUAL 5800
3 PMO-36 AUTOMATIC, GRILL 6900
4 PMO-52 AUTOMATIC, GRILL, TIMER 7100
5 PMO-56 AUTOMATIC, GRILL, TOUCH PANEL 7900

PAK ELEKTRON LTD
PAK ELEKTRON FINANCIAL DATA:

14. BALANCE SHEET
As at MARCH 31st, 2005
EQUITY & LIABILITIES NOTE Mar-05 Jun-04
SHARE CAPITAL & RESERVES

Ordinary Share Capital 4 531,194 236,876
Preference Shares 4 605,000
Reserves, Un-Appropriate profit 1,091,952 563,671
2,228,146 800,547
SURPLUS ON REVALUATION OF
FIXED ASSETS 1,563,810 1,576,346
NON CURRENT LIABILITIES

Long term loans 5 437,372 703,910
Liabilities against assets subject to finance
lease 6 123,542 74,646
Deferred Liabilities 258,980 258,980
DEFERRED INCOME - GRANT IN AID 74,456 77,356
CURRENT LIABILITIES
Short term finances – Secured 2,399,223 1,897,577
Current portion of long term liabilities 516,919 404,744
Creditors, provisions and accrued liabilities 983,361 930,063

Proposed dividend 1,231 23,688
CONTINGENCIES AND COMMITMENTS

8,587,040 6,747,887

PAK ELEKTRON LTD
ASSETS NOTE Mar-05 Jun-04

NON-CURRENT ASSETS
Operating fixed assets 8 3,761,010 3,594,164
Capital work in progress 95,429 4,641
3,856,439 3,598,805
INVESTMENTS 96,701 96,701
LONG TERM DEPOSITS 25,596 13,073
CURRENT ASSETS
Stores, spares and loose tools 56,037 49,157
Stock in trade 1,793,332 1,309,131
Trade Debts 1,833,068 980,491
Advances, deposits and prepayments 735,035 565,083

Short term investment 27,983 17,530
Cash and bank balances 162,849 117,916
4,608,304 3,039,308
8,587,040 6,747,887
CAPITAL N RESERVES in (000)
Balance as on 30-06-2004 236,876,000 6,662,000
15. PROFIT AND LOSS STATEMENT

For the Year ended June 30, 2004

PAK ELEKTRON LTD
Note 2004 2003
(Rupees in Thousand)
SALES-GROSS 24 6,077,006 3,983,106
LESS: SALES-TAX, EXCISE DUTY AND
24 1,147,510 773,870
DISCOUNT
SALES-NET 4,929,496 3,209,236

COST OF GOODS SOLD 25 3,859,115 2,382,619
GROSS PROFIT 1,070,381 826,617
OPERATING EXPENSES
Administrative 26 169,321 133,822
Selling 27 273,692 165,720
443,013 299,542
OPERATING PROFIT 627,368 527,075
FINANCIAL EXPENSES 28 379,001 349,388
OTHER INCOME 29 48,798 16,058
OTHER CHARGES 30 17,063 9,951
PROFIT BEFORE TAXATION 280,102 183,794

TAXATION 31 2,878 42,587
PROFIT AFTER TAXATION 277,224 141,207

Un-APPROPRIATE LOSS BOUGHT
204,228 (118,309)
FORWARD
UN-APPROPRIATED PROFIT/(LOSS) 481,450 21,898
TRANSFERRED AND APPROPRIATIONS:
Transfer from surplus on revaluation of fixed assets
Prior year - 136,684
Current year - net of tax 28,184 45,644
PROFIT AVAILABLE FOR
509,634 204,226
APPROPRIATION
APPROPRIATION:
Proposed dividend 10% (2003: Nil) 23,688 -
UN-APPROPRIATED PROFIT CARRIED
485,946 204,226
FORWARD

PAK ELEKTRON LTD
16. PROFIT & LOSS STATEMENT

FOR THE YEAR ENDED 31st March 2005 And 2004
PROFIT AND LOSS STATEMENT

For the Year ended MARCH 31st, 2005 and 2004
Note 2005 2004
(Rupees in Thousand)
SALES-GROSS 9 5,238,702 3,749,404
LESS: SALES-TAX, EXCISE DUTY AND
DISCOUNT 746,939 712,446
SALES-NET 4,491,763 3,036,958
COST OF GOODS SOLD 10 3,506,707 2,321,049
GROSS PROFIT 985,056 715,909

OPERATING EXPENSES
Administrative 116,507 96,438
Selling 259,336 201,089
OPERATING PROFIT 609,213 418,382

FINANCIAL EXPENSES 363,026 297,527
OTHER INCOME 47,442 24,314
PROFIT BEFORE TAXATION 293,629 145,544
PROVISION FOR TAXATION 22,458 15,185
PROFIT AFTER TAXATION 271,171 130,359
EARNING PER SHARE Basic 7.3 3.46

PAK ELEKTRON LTD
17. CATEGORIES OF SHARE HOLDERS, NO OF SHARE

HOLDERS AND TOTAL SHARES:
Number of
Categories of Shareholders Number of Share Held Percentage
Shareholders
Associated Companies and Undertakings NIL NIL NIL

Investment Corporation of Pakistan 1 20,310 0.09
National Investment Trust Limited 1 70,625 0.3
CEO, Directors, Their Spouses etc.
M. Naseem Saigol (CEO & Director) 6,846,945

M. Azam Saigol (Director) 63,762
Muhammad Murad Saigol (Director) 625
Shahid Sethi (Director) 687
Haroon Ahmed Khan (Director) 625
Homaeer Waheed (Director) 625
Mrs. Sehyr Saigol W/o M. Naseem Saigol 236,596
Mrs. Amber Saigol W/o M. Azam Saigol 3,072,155
8 10,222,022 43.15
Executives NIL NIL NIL
Public Sector Companies & Corporations NIL NIL NIL
Joint Stock Companies 70 5,190,953 21.91
Financial Institutions/Insurance Companies
16 3,584,535 15.05
/Modarba/Mutual Funds etc.
Foreign Companies/Foreigners 31 46,982 0.2
Others/Individuals 1,839 4,572,164 19.3
1,966 23,687,591 100

PAK ELEKTRON LTD
18. KEY OPERATIONS
Rs. in Million
Particulars 2004 2003 2002 2001 2000 1999
Sales Gross 6,077 3,983 3,163 2,521 2,295 1,788
Sales-Net 4,929 3,209 2,578 2,129 1,930 1,540
Gross Profit 1,070 827 685 620 638 470
Operating Profit 627 527 402 397 401 268
Financial Charges 379 349 338 370 404 381
Profit/(Loss) after Tax 277 141 130 94 59 -96
LIABILITIES
Share Capital 237 190 185 185 185 185
Reserves 563 329 6 -124 -219 -278
Shareholders' Equity 824 519 191 61 -33 -92
Long Term Liabilities 779 786 778 940 998 1,092
Deferred Liabilities 259 14 4 - - -
Current Liabilities 3,232 2,467 1,901 1,747 1,683 1,328
ASSETS
Fixed Assets 3,599 3,030 2,394 2,375 2,098 2,037
Current Assets 3,039 2,218 2,040 1,936 1,873 1,615
Net Current Assets -193 -249 139 189 190 287
Total Assets 6,748 5,351 4,521 4,498 4,162 3,843
19. PEL RATIO ANALYSIS

AS AT THE YEAR ENDED DEC 31st, 2004
Dividend (%)
2004 2003 2002 2001 2000 1999
Cash Dividend 10% - - - - -

PAK ELEKTRON LTD
Stock Dividend 30% 25% - - - -

Ratios
Profitability 2004 2003 2002 2001 2000 1999
Gross Profit 22% 26% 27% 29% 33% 31%
Profit/(Loss) after Tax 6% 4% 5% 4% 3% -6%
Return to Shareholders
2004 2003 2002 2001 2000 1999
ROE after Tax 41% 40% 103% 671% -94% 218%
Return on Capital
Employed 5% 3% 3% 2% 1% -3%
EPS after Tax Rs. 11.7 5.96 5.58 4.04 2.53 -4.12
Activity (Times)
2004 2003 2002 2001 2000 1999
Sales to Total Assets 0.73 0.6 0.56 0.47 0.46 0.4
Sales to Fixed Assets 1.37 1.06 1.08 0.9 0.92 0.76
Inventory Turnover 3.5 3.45 3.3 2.61 2.46 2.16
Interest cover ratio 1.74 1.53 1.43 1.29 1.17 0.77
Liquidity/Leverage
In Times 2004 2003 2002 2001 2000 1999
Current Ratio times 0.94 0.9 1.07 1.11 1.11 1.22
Debt to equity 0.49 0.6 0.8 0.94 1.03 1.09
20. RATIO ANALYSIS CONCLUSIONS AND RECOMMENDATION:

As complete information regarding year 2005 is not fully available, I have done
the ratio analysis for the year 2004 in comparison with prior years and now going
to declare the conclusion about the PAK Elektron Financial Activities.
 Pak Elektron never declared Cash Dividends as well as Stock Dividend to

the shareholders since last couple of years except year 2003 where it had
declared stock dividend and in year 2004 where it had declared a 10

PAK ELEKTRON LTD
percent cash dividend of the after tax profit. This reflects that Pak
Elektron’s liabilities have been started reducing now and getting better
position in the markets. Similarly it also seems that Pak Elektron has been
successful in achieving its goals as per planning since last two years.
 Talking about Gross profit ratio which reflects a decline comparatively from
last year’s ratio that is year 2003 portrays that its cost of production has
been higher by year 2004 which further reflects that its material planning
was not as good as it had to be but talking about NET PROFT AFTER TAX
RATIO they have achieved 2 percent more of the sales than prior year and
this is due to the un-appropriate brought forward profits by the company
but it sounds good.
 Of course Return on Equity has its own importance, the company has
again started earning more in respect with year 2003 returns but still it has
to ensure at least 100 percent return like it did before over the share
holders equity in order to increase its business capital. Similarly I found a
continuous improvement in returns on Capital Employed that reflect that
Company’s internal growth rate has started increasing.
 A corporate achievement are highly related with its stock positioning in the
market regardless of it shares the success with the stock holders or not
but it really does effects over its reputation, goodwill and Business Capital
Value. Since there is an increase of nearly 50 percent found in earning per
share, I believe its stock prices must have reached the sky and it’s a very
good sign for the company.
 Chances of dissolving and black listed increases when a company sales

does not ensures the coverage of Total assets and Fixed Assets especially
to the shareholders due to which some times other companies also try to
take over the sinking company because when sales are low profitability is

PAK ELEKTRON LTD
low and shareholders start moving out speedily from the possession of the
firms equity.
 For inventory turn over, I recommend that the company should not keep
that much idle inventory rather keep according to needs and keep the idle
money in circulation in order to get rid of the excessive loans and their
highly payable interests.
 With the help of sufficient Net Profits this company is able to pay 100
Percent interests on all borrowed loans. But it is recommended that PEL
should minimize the burden of debts over it in order to increase
shareholders portion of profits rather wealth.
 Current ratio from prior year has reached its rite place but in up coming
years it should show the same stability and should not exceed above 1
Times. Where as Long-term debts to equity is also reflecting a very sound
position but in order to attract more investments it should show the same
decline by next and up coming years.
21. COMPETITORS SHARE IN THE MARKET

SALES AND SHARE ANALYSIS
COMPETITORS SHARE
BRAND 97-98 98-99 99-00 00-01
Sales % Share Sales % Share Sales % Share Sales % Share
28,46
PEL 0 22.41% 27,500 14.47% 49,550 20.48% 62,028 23.97%
75,00 121,70
DAWLANCE 0 59.06% 85,000 44.74% 107,000 44.21% 0 47.04%
WAVES 12,00 9.45% 20,000 10.53% 25,000 10.33% 25,000 9.66%

PAK ELEKTRON LTD
0
33,00
PHILIPS 0 25.98% 40,000 21.05% 33,000 13.64% 28,000 10.82%
11,54
OTHERS 0 9.09% 17,500 9.21% 27,450 11.34% 22,000 8.50%
127,00 258,72
TOTAL 0 125.98% 190,000 100.00% 242,000 100.00% 8 100.00%
Market Growth - 18.75% 27.37% 6.91%
BRAND 01-02 02-03 03-04 04-05

Sales % Share Sales % Share Sales % Share Sales % Share
100,2 163,00
PEL 80,023 26.47% 88 28.07% 0 30.07% 240000 33.38%
150,30 165,0 240,00
DAWLANCE 0 49.72% 00 46.18% 0 44.28% 312000 43.39%
45,0
WAVES 40,000 13.23% 00 12.59% 95,000 17.53% 120000 16.69%
PHILIPS - 0.00% - 0.00% - 0.00% - 0.00%

47,0
OTHERS 32,000 10.58% 00 13.15% 44,000 8.12% 47000 6.54%
302,32 357,2 542,00 719,00
TOTAL 3 100.00% 88 100.00% 0 100.00% 0 100.00%
Market
Growth 16.85% 18.18% 51.70% 32.66%
22. MARKET SIZE AND PERCENTAGE COMPETITION:

MARKET SIZE AND %AGE COMPOSITION
Dawlance PEL Others
Sale Sale Sale
REGION AREA MARKET Mkt. Mkt.
2002- 2002- Mkt. Share 2002-
Share Share
03 03 03

PAK ELEKTRON LTD
19,50 18,37 32,12

Lahore 70,000 0 27.86% 5 26.25% 5 45.89%
9,80 3,30 1,90
Sahiwal 15,000 0 65.33% 0 22.00% 0 12.67%
NORTH
30,69 13,00 1,30
Gujranwala 45,000 7 68.22% 0 28.89% 3 2.90%
35,00 17,50 2,50
Rawalpindi 55,000 0 63.64% 0 31.82% 0 4.55%
94,99 52,17 37,82
TOTAL 185,000 7 51.35% 5 28.20% 8 20.45%
20,55 11,40 1,04
Faisalabad 33,000 1 62.28% 0 34.55% 9 3.18%
11,68 7,80 9,31
Multan 28,800 9 40.59% 0 27.08% 1 32.33%
3,81 4,40 6,78
SOUTH
Sukkur 15,000 6 25.44% 0 29.33% 4 45.23%
6,60 3,50 14,90
Hyderabad 25,000 0 26.40% 0 14.00% 0 59.60%
27,70 19,50 17,80
Karachi 65,000 0 42.62% 0 30.00% 0 27.38%
70,35 46,60 49,84
TOTAL 166,800 6 42.18% 0 27.94% 4 29.88%
GRAND 165,35 98,77 87,67
TOTAL 351,800 3 47.00% 5 28.08% 2 24.92%
23. BRAND WISE SALES COMPARISON
BRAND 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05
28,46 27,50 49,55 62,02 80,02 100,28
PEL 0 0 0 8 3 8 163,000 240,000
Growth -3.37% 80.18% 25.18% 29.01% 25.32% 62.53% 47.24%
75,00 85,00 100,00 115,00 128,00 165,00
DAWLANCE 0 0 0 0 0 0 240,000 312,000
Growth 13.33% 17.65% 15.00% 11.30% 28.91% 45.45% 30.00%
12,00 20,00 25,00 25,00 40,00 45,00
WAVES 0 0 0 0 0 0 95,000 120,000
Growth 66.67% 25.00% 0.00% 60.00% 12.50% 111.11% 26.32%
33,00 40,00 33,00 28,00
PHILIPS 0 0 0 0 - - - -
-17.50
Growth 21.21% % -15.15% 0.00% 0.00% 0.00% 0.00%
11,54 17,50 27,45 22,00 32,00 47,00
OTHERS 0 0 0 0 0 0 44,000 47,000
Growth 51.65% 56.86% -19.85% 45.45% 46.88% -6.38% 6.82%
127,00 150,00 202,00 224,02 280,02 357,28
TOTAL 0 0 0 8 3 8 542,000 719,000
Market
Growth 18.11% 34.67% 10.90% 24.99% 27.59% 51.70% 32.66%
24. PAK ELEKTRON SWOT ANALYSIS:
Working with Pak Elektron was a great exposure for me. As we all know that its
almost 50 years ago that PEL has been serving under the supervision of Saigols
groups and has build a very good repute in the market due to its large number of

PAK ELEKTRON LTD
finest products in the world. At first glance, no one will be able to identify its
weaknesses and threats.
People might believe that companies like PEL must be having more strengths
than the required ones and is always ready to avail the up coming opportunities
and tackle the threats. But during my internship time period, considering my self
a part of the same society having same image of the company, I found that
regardless of the perceived strengths and qualities to avail opportunities and
tackling powers it too has some weaknesses and will be facing some threats in
the future due to many reasons. And I would like to share those identified
Strengths, Weaknesses, Opportunities and Threats.
PAK ELEKTRON STRENGTHS:
 As we all know PEL has been serving since 5 to 6 decades, it has captured
almost 50% of the Appliances demand and near about 70% of the power
products demand with the passage of time. Due to its strong positioning, its
Goodwill has always been a threat for the new business arrivals and for the
small-scale businesses. And PEL holds a great part of the people trust.
 Technological improvements in the business environment always play a vital

role for the expansion of the Corporations. PEL has sensed the importance of
technology very earlier and has introduced latest equipments to all of its
departments along with the expertise to increase its staff technological know how
as well as their efficiency level. Now people working in PEL are ready to cope
with any of the internal and external threats easily. This technological
improvement has enhanced company’s productivity comparatively more than 60
percent from past and still the company is struggling for more improvements.
 In a competitive environment, where every producer tries to maximize its
market share and profitability, requires a very strong financial backup. Pak
Elektron Appliance division has large number of competitors in the market
including National and International firms and they are continuously trying to

PAK ELEKTRON LTD
break PEL’s market share but due to strong financial backup from its own
POWER DIVISION, from Top class financial institutions and its exclusive
distribution network all those companies have become un-able to change its
position.
 One another Strength would be the environment, PEL ensures a very neat,
clean environment to its staff which keeps them motivated and committed to their
jobs and that’s why they usually resist to jump for external opportunities.
 Due to PEL’s reputation and Goodwill many financial institutions have

increased its credit facility limits due to which it has started expanding its
businesses into those areas where access was a bit tough or where it wanted to
participate. Similarly due to this advantage it has started increasing its product’s
National and International Material Supply to achieve production scale as well as
the annual Sales.
 Almost 80 percent of the WAPDA, KESC, PESCO, LESCO, IESCO, GESCO,

and AJK ‘s demand specifically TRANSFORMERS, SWITCHGEARS, ENERGY
METERS, etc., is being fulfilled by PAK ELEKTRON due to its finest products and
trust worthiness and Pak Elektron all alone is enjoying high profits by fulfilling the
needs that further helps it in supporting the appliance division.
PAK ELEKTRON WEAKNESSES:

PAK ELEKTRON LTD
 Other than strengths the internal weaknesses of PEL includes low morale of
the employees due to OLD and RIGID ideologies of the top-level staff. Top level
staff at PEL dislike middle or lower level employees participation in the decision
making, exert excessive, un-necessary pressures, work loads and discourage
them a lot, this significantly reduces employees interests in their work and
respect for the Top-level staff.
 Another weaknesses of the PAK Elektron lies in its marketing strategy where
its continuously trying to rely on the Distribution Network for its Appliances
specially for its microwaves and splits with out proper Advertisement and
promotions. Due to which people un-awareness remains there as it is and they
bother to go for its products.
 Sayings: “if internal customer is satisfied do not worry about the external
satisfaction”
Ensuring speedy growth and handsome packages to the employees does matter
because they keep the employees motivated and committed with their assigned
tasks, especially in Pakistan. In PEL, I saw employees are dissatisfied with their
jobs due to the lack of these two factors and further due to this new talent resists
becoming a part of this organization.
 Money acts as a life blood for an organization, while working on the

Receivables Aging Statement I found that near about 100 Million Rupees of
Refrigerator Sales remain stuck in wholesalers and retailers after the delivery till
180 days due to which the production plan of the organization gets disturbed and
to keep the production smoother it usually borrows funds from the financial
institutions and returns back along with high interests. All this portrays that such
steps increase the effective cost of the organization that reduces the profitability
of the company and further deviates the investors in the stock market towards
other companies stocks.

PAK ELEKTRON LTD
 Though PEL is struggling to build an exclusive distribution channel in market

but still a flaw exists in its marketing strategy that is a non-justification of the
distributed incentives to the retailers and wholesalers. In the market, during the
survey, we found small retailers claiming for the equalent incentives and benefits
provided to the big retailers and wholesalers by the company. Due to this small
retailers and wholesalers resist to continue any further business with PEL and
prefer Dawlence and other brands to be sold by them due to their non-
discrimination policy.
 Pak Elektron has started buying almost all the Equipments, Auto Mobiles, and
Machineries on Leasing Agreements from different Institutions. No Doubt it first
collects the quotations to make a comparison from all the leasing companies in
order to buy any product at best price but while working on Machinery Leasing
Statement, I found that it purchases machineries usually with the help of Private
Leasing Companies charging high interests rates than the public institutions and
this further effects over the profitability of the company significantly.
 As it was mentioned earlier that due to certain reasons PEL’s Cost of

Production fluctuates it simultaneously effect over the sales price level due to
which it does not remain stable through out the year. And if the company does
not have a tight control over cost of production, customer who comes to buy any
product after estimating its own budget when finds a different price from the prior
visit or information faces decisional problems and in this way Company looses its
customer. It is happening with Pak Elektron.
 While preparing Actualized Statement for the Budgeting Section the thing I
have noticed was an improper forecasting method, adopted by the Finance
Managers to project the Sales of the following months in order to add it up in the
monthly realized sales to further get the Annual sales. They use an average
method without considering Economical, Political factors such as Refrigerators
are usually less purchased in winters as compare with summer but average

PAK ELEKTRON LTD
method results might fall outside due to which company can suffer huge losses
and frustrations.
 Another weaknesses of PAK ELEKTRON, is its delivery system. Retailers of

PEL use to complain about its delivery patterns and they are un-happy and
moving towards other company’s products.
PAK ELEKTRON OPPORTUNITIES:

Following are the opportunities on the way, which the company can avail in
future.
 SAFTA, a free trade agreement between South Asian Countries, is hopefully

going to bring large number of penetration opportunities for the companies like
PEL in January 2006. This will help PEL in achieving Economies of Scale and
further help it in bringing technological enhancements in it all facilities. This will
also make its name stronger in the market.
 Since couple of years, Pakistani Government has initiated many development

plans for the prosperity of general public including direct and in direct
employment opportunities, similarly electric supply to the rural areas and etc,
these steps ensure huge demand of Appliances and Power products in future.
PEL being the giant will be flourishing much more in the future.
 Another opportunity is the Sales Tax exemption by the Government over the
Production material and Sales of transformers, switchgears, electric meters, etc
by this year. Due to this PEL soon will enjoy huge profits than before.

PAK ELEKTRON LTD
PAK ELEKTRON THREATS:

Following are the threats on the way, which the can shake the Company badly in
future if appropriate steps will not be taken by it.
 As SAFTA, an agreement between south Asian Countries is on its way so

sooner we will be having all Asian Products and producers such as Chinese,
Hong kong, etc. Competition in all Asian Countries will be so tight we can’t even
imagine. Where it is going to bring large number of opportunities it will also
create threats for the domestic producers like PEL because of their Advance
Factors of production such as technology and because of their Basic Factors of
Production such as cheep labor etc. Further, these factors will give those
producers a chance to charge lower prices than domestic producers for their
products and they will soon be having a competitive edge over companies like
PEL due to which its survival would become difficult.
 Similarly, another threat for PAK Elektron is the increasing preferences of

customers towards other companies’ products like Dawlence, which is speedily
exploring un-identified markets in Pakistan and engage in heavy advertisement
of its products. This has been increasing its brand loyal day by day. It seems that
PEL will be no more dealing in Appliances if it does not take any precautionary
measures for future.
 Distributors of any product always look forward for the higher margins.
Companies have started offering sufficient amount more than PEL, as incentives
to the distributors soon will take over PEL’s Exclusive Distribution Network and
this will be the huge loss for PAK ELEKTRON.

PAK ELEKTRON LTD
25. RECOMMENDATIONS:
After looking into different weaknesses and future threats I recommend following
steps to PAK Elektron in order to cope with future problems.
 PEL must introduce a true decentralize setup in the organization, giving every
one some grounds for decision making, increase employees involvement in day
to day planning and retain back the morale plus satisfaction of the employees.
 PEL should also consider the importance of Advertisement for its microwaves
and Splits, which plays an important role in increasing awareness, customer
preferences and in maximizing market share. It should also use some
promotional tools like organizing shows, schemes, gifts, etc.
 PEL should at least ensure same level of growth and packages among
employees working at each level like its competitors are offering to its employees
in order to retain the old employees as well as to attract new talent.
 PEL should also tighten up its monitoring and inspection Networks in order to
minimize the miss-utilization of the resources by the employees and verify the
data accuracy gathered by them.
 PEL should also form especial skilled and efficient sales collection team in
order to collect Receivables amount from the retailers and the wholesalers
especially from ones located in Karachi, Lahore and at least reduce their
payment time period from 180 days to 90 days. Further should also negotiate
with them to ensure that we care for you and for the best in time delivery we
need you to be more responsive in making early payments to the company.

PAK ELEKTRON LTD
 PEL should also ensure equal incentives to all the distributors in order to
increase their willingness to offer more shelf space to the company.
 PEL should also negotiate with the public leasing institutions in order to buy
desired equipments such as machines, cars at low interest rates than private
ones. Similarly ask them to introduce new packages to the company like private
sector. This will significantly help it in having a tight control over cost of
production.
 PEL should also take care of the Economical, Political Factors such as
inflation, Government Policies while projecting the Cost of Production for future
because this will help the company in entering into a fix price contracts for the
purchases of material at a single time similarly than it will be able to charge
stable prices to its customer.
 PEL should also adopt any other methodology for projecting up coming time
period sales which should include seasonal factors consideration in order to get
accurate future estimates rather than using that silly old average methodology.

PAK ELEKTRON LTD
A F
Assets FANFORD
Company’s belongings such as Buildings, Machineries. A special type of voucher that reflects a
refundable amount which was deducted from the
DEMAND DRAFT’S.
Accrued FIM
Outstanding liabilities. Finance against Merchandise A credit facility or
Limit provided by the Bank to the Company in
order to make the import’s payment
Advance Bond
A guarantee given by the Banks in order to
provide some Sales Revenue to the Selling company G
from the Buying party and an assurance
that in case of fraud liability will fall over Bank . Guarantees
An assurance given by the bank to
the buying party that selling party has a legal entity
and will be able to fulfill the desired order and to
get
its good released.
B
Benchmarking
Copying any of the other company’s process with its consent
Bonus Shares
New shares
which are offered to the share holders,
instead of offering the profit, by the company.
Budget
A Statement showing predications
regarding company’s different activities.
C
Cash financing
A credit facility provided by the Bank on a
negotiated markup to the Company in order to
meet its daily operational expenditures.
Contingencies
Assets and liabilities about which
the company doesn’t have any idea whether they will incurred or not?
D
Dividends
Profit allowed to shareholders
Debts
Liabilities of a company.
Interest Coverage ratio
A ratio showing how many times
a company is able to pay its interest liabilities
with the help of generated profits.

PAK ELEKTRON LTD
Exclusive Dealers Network

A network that resist sharing the shelf with other corporate
Economical Factors
Inflation, Wars, etc.
I R
Inflation Rectifications
A rise in the general price level. Errors identification and adjustments.
Right sizing
Reducing the men power in the company.
Inventory
Stocks of the company such as Raw material. Reserves
Saved amount for different operations.
ISO 9000
A quality maintenance certification
K S
KAIBER
Karachi inter bank Exchange Rate. Sales Promotion Offering Discounts, Dealer’s
incentive Gifts, etc with the product to the
customer.
Key figures
Daily performance report of the company. T
L Tender Bond A guarantee given through the Bank
to the Buying party to represent company’s
willingness in order to participate in the contract.
Leasing
A Financing facility of goods. Turnover
A company’s realized sales of the year.
Lesser
Offer different buying packages on installments.
W
Lessee
Willing to buy any desired thing on installments Word of Mouth
A Marketing tool in which company uses humans
to spread the name, quality of the products all over
in the assigned areas
Letter of Credit
An assurance given by the importer’s bank Z
that he will surely make the payment of import
ZERO DEFECTS
Defect less products.
M
Model Mix
A combination of Refrigerator models
Markup
Profits earned on providing different credit facilities to the company.
N
Net Profit
Profit earned after taxation
P
Preference Shares
Shares having a fixed income
Performance bond.

PAK ELEKTRON LTD
A guarantee given through the Bank in order to

assure the Company had certain production prior year.
Political Factors
Government’s policy, rules, intervention etc
BIBLOGRAPHY
The sources from where I have gathered data for my report are
• www.pel.com.pk
• Finance Department. PEL, Lahore
• Consumer Marketing Department, PEL, Lahore
• Appliances Division, Marketing Department, PEL, Lahore

PEL LTD

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

PEL LTD

Hochgeladen von

Copyright:

Verfügbare Formate

PAK ELEKTRON LTD

PAK ELEKTRON LTD

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 1

I am really pleased here to acknowledge the sheer efforts and extreme of

FAHAD ARSHAD JAMIL

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 2

Introduction And Overview PEL’s Financial Data & My Observation

1. Executive Summary 4 14. PEL’s Banlance

2. Introduction Of Pak Elektron Ltd 5 15. Profit & Loss

3. Pak Elektron's Profile 5 16. Profit & Loss

4 PEL's Organizational Chart 18 17. Categories of Share

5. PEL's Organizational Chart Briefing 19 18. Key Operational

6. PEL’s Director Report 24 19. Ratio Analysis

7. ISO 9001 26 20. R&A Conclusion,

22. Dim ensions Wise

23. B rand Wise Sales

9. Assigned Duties 28 24.1 PEL’s Strengths

10. Learnings in PEL 36 24.2 PEL’s Weaknesses

11. Problems Encountered in PEL 37 24.3 Opportunities for

13. MicroWaves Open Market Survey 39

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 3

The company comprises of two divisions:

• Appliances Division: This Division of PEL consists of home appliances

In 1956, the Saigol Group of Companies purchased major shares of PAK

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 4

transformers and switchgears. With the Saigols in management, PEL expanded

The company comprises of two divisions:

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 5

PEL AIR CONDITIONERS:

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 6

• Preece, Cardew and Rider, England

KOHINOOR TEXTILE MILLS:

PEL (Pak Elektron Limited):

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 7

THE PEL GROUP COMPRISES OF TWO DIVISIONS:

In 1986-87, the company started manufacturing in technical collaboration with

In 1993, with technical collaboration of NECCHI of Italy, the company started

• Preece, Cardew and Rider, England

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 8

• Harza Engineering Company, USA

SARITOW SPINNING MILL & AZAM TEXTILE MILLS:

KOHINOOR POWER COMPANY LTD:

KOHINOOR ENERGY LTD:

SAIGOLS COMPUTERS PRIVATE LTD:

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 9

KOHINOOR MOTOR WORKS LTD:

PEL has launched its Crystal Classic Series - a new range of

PEL SPLIT AIR CONDITIONERS:

PEL recently launched its Cool life Split air-conditioner

SPLITS QUALITIES & FEATURES

temperatures while minimizing your electricity consumption. Its salient features

PEL MICROWAVE OWEN:

PEL the trustful company name in home appliances all

PEL introduced Color Television under the brand name of "PEL

POWER DIVISION & PRODUCTS:

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 11

POWER AND DISTRIBUTION TRANSFORMER:

PEL transformers are available for various applications:

• Distribution transformers (pole mounted or pad mounted design)

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY 12

We offer a diverse range of our indigenously

PEL SINGLE PHASE ENERGY METERS: