Acknowledgement ..................................................................................................................................

1
E X E C U T I V E S U M M A R Y ....................................................................................... 2
Pak Elektron Limited (PEL) ...................................................................................................................... 3
Mission & Vision......................................................................................................................................3
Ownership and main stakeholders of PEL ..............................................................................................4
BOARD OF DIRECTORS........................................................................................................... 4
Pak Elektron Limited operations............................................................................................................. 5
Major Customers of PEL..........................................................................................................................5
PEL Organization Chart along with information on number of employees............................................6
Centralized Structure in PEL..................................................................................................................10
Internship Activities in Pak Elektron Limited (PEL) ...............................................................................10
Division Layout of Financial Activities in Finance Department.............................................................11
Production system of PEL .....................................................................................................................13
Raw material use in Production of PEL .................................................................................................13
Constraints in Production System of PEL ..............................................................................................14
Process of a Major Product of PEL Refrigerator ...................................................................................14
Accounting Standard in PEL ..................................................................................................................15
Telecommunication Technologies in PEL..............................................................................................16
Manufacturing Technologies in Refrigerator........................................................................................16
Capacity of production PEL ...................................................................................................................17
Quality Planning in PEL .........................................................................................................................17
Development of Quality Plan in PEL .....................................................................................................18
Quality Control in PEL ...........................................................................................................................18
Quality Audit in PEL...............................................................................................................................18
Financial Analysis of PEL .......................................................................................................................19
Vertical Analysis of PEL Total Liabilities and Equity ..............................................................................19
HORIZONTAL ANALYSIS OF PROFIT AND LOSS .....................................................20
Profit and Loss Account Vertical Analysis .............................................................................................21
Financial Decisions on PEL ....................................................................................................................22
Incentives Used in PEL Organization.....................................................................................................23
PEL Marketing Performance of PEL ......................................................................................................24
Strategic Planning in PEL.......................................................................................................................25
Human Resource Department of PEL ...................................................................................................25
Practical Experience in PEL ...................................................................................................................25
Application of the Class Room Learning ...............................................................................................26
Responsibilities undertaken by me during internship ..........................................................................26
Internship influence my future career Plan..........................................................................................27
Suggestions and Recommendations .....................................................................................................27
.........................................................................................................28
Glossary.................................................................................................................................................29
Reference..............................................................................................................................................29
Information taken from person: ............................................................................................................29
 Acknowledgement
First of all I admit a receipt of all those who inspire and support me in a strengthened
and groomed way, what I am today. I wish to place on record to my parent for their
continuous support and encouragement which I received during my academic record
career. I would like to express my gratitude to those people who pray for my success. I
am deeply honored to be a student of Bahauddin Zakariya University, Lahore Campus
which enabled me to do an internship.
I am especially thankful to my charger Madam Rabra Abrar who guide me
throughout this internship with suggestions and guidance and who always
being with me and provide me the academic during my M.Com study.
I must say thank also my Supervisor Mr. Rameez and Mr.Tahir Mehmood officer of
Finance Department of PEL who guide me to share my theoretical concept with
practical Training. I am thankful for support which the staff members extended me as
they taught me the basics and the working of the departments. Without their support
this internship would not have been much interesting.
Furthermore, working at PEL also helped me in becoming a better time-managed
person. I got to know the importance of teamwork at the work place.
We owe special thanks to PEL Company for assistance, Development Work and data
collecting.
In the end, all the experience that I have gained during my stay at PEL has helped me
a lot in becoming a better organized person and will definitely help me in becoming
an even better person in the future. I can say this without doubt that the values that I
have gained while working at PEL will be applied to wherever I go to work in the
future

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 E X E C U T I V E S U M M A R Y

PEL appliances fall under the Saigol Group of Companies. PEL has long been known in
Pakistan as a company that produces quality products. PEL has created a brand loyalty
among its users and the company credits that to its high quality and vast product range.

The products manufactured by PEL have always been of high standard and the name
'PEL' is synonymous with Quality all over Pakistan. Since its in caption, 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. One sector
in Pakistan that has grown considerably in the past is the Home Appliances Division.
There is great competition in this sector and PEL has survived this competition with great
flair. PEL enjoys good reputation in the market. PEL is in a growth phase in this sector.
This sector carries a lot of potential and PEL can capitalize on this fact. My stay at PEL
was very beneficial due to the fact that I got the opportunity to learn the trends in the
market in this sector.

The company takes it as a liability to take care of its employees. The corporate culture at
PEL was very healthy and induced work habits. This atmosphere helped me in building
self-confidence and belief. At PEL I had an opportunity to deal directly with the
customers and find out their demands and problems associated with PEL. I got to know
about the trend in the industry and also conducted a research through which I got a better
understanding of the consumer buying behavior. I also got a chance to improve my
decision-making skills.

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 Pak Elektron Limited (PEL)
Pak Elektron Limited (PEL) is pioneer manufacturer of electrical goods in Pakistan. It
was established in 1956 in technical collaboration with M/G AEG of Germany. In
October 1978 the company has taken over by saigol Group of Companies.
Company has always been contributing towards achievement and development of
engineering sector in Pakistan bu introducing quality of electrical equipment and home
appliance by producing hundreds engineers and skill workers technician through its
apprenticeship schemes and training programs.
The company comprises two divisions

1. Appliance Division
2. Power Division

Appliance Division:

This division of PEL consists of appliance manufacturing,

Power Division

Power division manufacturing of electrical goods like energy meters and transformers.
PEL is one of major supplier of Water and power Development authority (WAPDA) and
Karachi electrical supply corporation (KESC) which is largest utilities in Pakistan.

Mission & Vision

Mission:
To provide quality of product and service to complete satisfaction of our customer and
maximize returns of stakeholders through optimal resources.
To focus the personal development of our employees to meet the future challenges to
promote good governance, corporate values and safe a working environment with a
strong sense of social responsibility
To promote good governance, corporate values and a safe working environment with a
strong sense of social.

Vision:
To excel in providing engineering goods and service to all customer through continuous
improvements.

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 Company Address
Registered Office: 17-Aziz Avenue, Canal Bank, Gulberg V, Lahore.
Tel: 042-35718274-6
Fax: 042-35762707
Email: shares@saigols.com
Works
Transformer Facility
14-K.M. Ferozepur Road,
Tel: 042-35920151-9
34-K.M. Ferozepur Road,
Tel: 042-35935151-2
Auditor of PEL
M/s Rahman Sarfaraz Rahim Iqbal Rafiq
Chartered Accountants

Ownership and main stakeholders of PEL

BOARD OF DIRECTORS

1. Mr. Azam Saigol (Chairman/Chief Executive)

2. Mr. Murad Saigol

3. Mr. Haroon Ahmad Khan (Managing Director)

4. Mr. Homaeer Waheed

5. Mr. Muhammad Rafi Khan

6. Mr. Gul Nawaz (NIT Nominee)

7. Mr. Masood Karim Sheikh

8. Mr. Tajammal H. Bokharee (NBP Nominee U/S 182 of the

Ordinance)

9. Mr. Wajahat A. Baqai (NBP Nominee U/S 182 of the Ordinance)

10. Mr. Naseem Saigol (NBP Nominee U/S 182 of the

Ordinance

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 Pak Elektron Limited operations
PEL operates in manufacturing the electronic product and selling it PEL is first Pakistani
Company which manufactures electronic products and sells them and export to different
countries following major Products of PEL
The company comprises two divisions

1. Appliance Division
2. Power Division
1. Appliance Division (AD)
PEL Air Conditioners
PEL Refrigerators
PEL Deep Freezers
PEL Microwave oven
PEL Washing machine
2. Power Division (PD)
Transformers
Switchgears
Kiosks
Compact Stations
Energy Meters
PEL Generator

Major Customers of PEL

1. PEL is one of the major electrical equipment suppliers to Water and Power
Development Authority (WAPDA)
2. Karachi Electrical Supply Corporation (KESC), which are the largest power
utilities in Pakistan.
3. Over the years, PEL electrical equipment has been used in numerous power
projects of national importance within Pakistan. PEL has the privilege of getting
its equipment approved and certified by well-reputed international consultants
such as:
Preece, Cardew and Rider, England

Harza Engineering Company, USA

Snam Progeti, Italy

Societe Dumezm, France

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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.
Miner & Miner International Inc. USA
Ensa, France

PEL Organization Chart along with information on number of

employees

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 List of Functions Performed by different Departments
Finance Department

FINANCE
MANAGER

ASSISTANT
FINANCE
MANAGER

EXECUTIVE
FINANCE
MANAGER

Finance department provide money for the working of the organization. PELcompanys
department borrows loan mainly from national bank and settle terms and conditioned of
the interest and time period of returning the load with it. When the sale is made the
company firstly returns the loan with interest. Compliance with labor, tax and
employment laws is a vital part of safeguarding the organizations continued existence
Marketing Department

MARKETING
MANAGER

ASSISTANT
MARKETING
MANAGER

EXECUTIVE
MARKETING
MANAGER
Marketing department is the back bone of any firm. Marketing department generally
analyze the needs and wants of the customer. Then this department tells about the
customer needs to the company which in turn launches the products according to the
needs of the customers. Marketing department is responsible for making strong
advertisement for the products.

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 HR Department

HR MANAGER

ASSISTANT HR
MANAGER

EXECUTIVE HR
MANAGER

Human resource department of the PEL Company is very much conscious of hiring the
employees for the company. The standards he set for hiring the new people. HRM
department of the company mainly makes the external recruitment .this is usually done
through newspaper web sites extra. The HR department of PEL is responsible for
providing on-the-job as well as refresher training for all employees. Compliance with
labor, tax and employment laws is a vital part of safeguarding the organizations
continued existence.

Import & Export Department

IMPORT&EXPORT
MANAGER

ASSISTANT
IMPORT&EXPORT
MANAGER

EXECUTIVE
IMPORT&EXPORT
MANAGER

PEL import & export department are arrangement for domestic and foreign trade for their
products. Import and export arrangement for product through transportation and by see
and make agreements for international trade.

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 I.T Department

I.T MANAGER

ASSISTANT I.T
MANAGER

EXECUTIVE I.T
MANAGER

IT department are fully responsible for providing service of internet in Organization. IT

department perform the functions of web links for advertisement of PEL products and
maintain the Web-side of PEL. IT teams of PEL develop tools to collect, store, manage,
secure and distribute data to employees who need access to the latest information to make
decisions about strategic, financial and operational issues
Admin Department

ADMIN
MANAGER

ASSISTANT
ADMIN
MANAGER

EXECUTIVE
ADMIN
MANAGER
Administration department is backbone of an organization. An effective administrator is
an asset to an organization. This departments function is to handle organization, master
planning, financial review, land acquisition, site accessibility/use, easement standards and
outreach and other public concerns.

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 Accounts Department

ACCOUNTS
MANAGER

ASSISTANT
ACCOUNTS
MANAGER

EXECUTIVE
ACCOUNTS
MANAGER

Following Functions perform by accounts department of PEL;

Money out making payments and keeping the bills paid

Money in processing incoming payments
Payroll make sure everyone gets paid (including the government)
Reporting preparing financial reports, e.g. P&L, Balance sheets and budgets
Financial Controls to avoid errors, fraud and theft

Centralized Structure in PEL

In PEL decision making or centralization of power is kept at the top level. The important
decision like establishing goals, hiring employees, choosing contracts are made at the top
level, therefore in PEL Centralization is High

Internship Activities in Pak Elektron Limited (PEL)

Internship provided me with a practical real world experience in the PEL organization
and enabled me to develop important skills which cannot be taught in the classroom.

My supervisor Mr.Tahir Mehmood offer of Finance department of PEL. He teach to me

how we use our receivables, inventories in production and manage the finance activities
like payment of interest and leasing activities in organization and the management of
money, credit, banking and investments. My internships are not only in Finance
department. First two week I work under finance department and in third and fourth
weeks I work under Audit department. It includes three main costs i.e. stocks, trade debts
and creditors

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I observe in internal audit department that every transaction check like disposal of fixed
assets to be approved by top management and acquiring new assets with approve of tope
management. Mr. Tayyab Sharif who is senior internal auditor in PEL brief me how we
financial control on assets & accounts and to avoid errors fraud and theft and sure that
Financial statement prepare according to International Accounting Standard.

Learning Objectives:
Finance Department Operations
Accounts Department Operations
Audit Department Operations

Division Layout of Financial Activities in Finance Department

Finance Department

Corporate Managerial Budgeting Treasury

Finance Management Finance Finance
Finance

Bank
Arrangement
Leasing
Loan Guarantee

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Material Management Financial:
It is headed by Mr.M. Hanif and further consists of a senior accounts officer, two
junior executives and two accountants. Its also work on leasing agreement with
National Bank and Bank Guarantee.
The basic task carried out by the persons working in

daily check on production

daily check on stock (materials and finished goods)
controlling the production plan for the future
control on orders in hand

Budget Finance:

The forecasting of future cash flows, profit margins, sales turnover and projections
for the future assets and liabilities position is a practice exercised by all growing
and prospering businesses. Normally a business works on two methods for
projecting their future outcomes. These are:

1. Percentage of sales Method (Short Term)

2. Trend Forecast (Long Term

According to my observations the Budgeting Department of PEL is a providing admirable

service for the company and performing its operations with due diligence and
conscientiousness.

Treasury Finance:

The treasury section consists of a total of 5 persons. 1 of them is in the bank on a

permanent basis, the bank being National Bank of Pakistan (NBP). Each bank is given a
code; the code for NBP being 02.Work in the treasury department consists of two
fundamental tasks:

1. Collections
2. Receipts the Cheque Management portion of PELs software is used for this
purpose. The basict asks carried out are as follows:
Bank dealings
Funds payment
Export transactions

Corporate Finance:

Corporate finance department of PEL is concerned primarily with making investment and
financing decisions; that is, making sure that money is being used in the best way. The
corporate finance department must also determine how to finance projects.

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 Production system of PEL
The products manufactured by PEL have always been of high standard and the name
'PEL' is synonymous with Qualities all over Pakistan. Since its inception, the company
has been working for the advancement and development of engineering know-how in
Pakistan. Managerial accounting suggests us to go for Job order costing in batch
production for the engineering industry like refrigeration. Therefore, we select Pak
Electron Ltd. To further investigate the implications, fundamentals of Batch production
on the profitability of manufacturing process of PEL. 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 companys human
resource department

Production System in PEL an OVERVIEW

PEL Job Order Costing System in Batch production

Three Divisions (SBUs)-Multiple Products
Appliances Division
Refrigerators 14 to 18 different models
Air Conditioners 06 to 08 different models
Deep Freezers 05 different models
Trading Items 05 different products
Power Division
Distribution Transformers 12 to 15 different ratings
Power Transformers 04 to 06 different ratings
Energy Meters 05 different ratings
Switchgears Various products

Raw material use in Production of PEL

Imports are now comprised largely of raw materials such as
polystyrene sheets (ABS and HIPS),
Aluminum sheets,
Steel sheets,
Copper tubing,
Electrostatic paint powder,
CFC-free gases,
chemicals for insulation materials manufacture; components such as compressors,
Thermostats,
Switches,

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 Electric motors,
Door gaskets,
Evaporators, driers and
Electronic controls;
Medical storage refrigerators, blood banks and cold storage plants

Constraints in Production System of PEL

1. Lack of Product Range
2. Less Utilization Capacity
3. Financial Problems
1. Lack of Product Range:

PEL has introduced more products of consumer items but there are more needs to develop
new consumer items like PEL Washing Machines, Vacuum Cleaner and other items.
2. Less Utilization Capacity:

Due to lack of Finance a company cannot utilize all its resources on its full capacity. It
increases the cost of product per unit that decrease profit margin of each consumer item.
Sometimes company cannot allocate the resources according to requirements of
production Department.
3. Financial Problems:
Sometimes PEL faces the financial Problems because its stock are so much piled up
in the stores that Creates problem of Cash flow because the when the stocks are not
sold and production is in 24 Hours a day then company faces such problems.

Process of a Major Product of PEL Refrigerator

Concept Highlights
Fast movements and optimized cooling to reduce machine time with
Direct impact to overall cycle time to a minimum > high production
Yields
Low energy consumption thanks to motor drives and quartz heating
Elements > low production costs
Minimized sheet formats and maximum waste reduction guaranteed
By chain-guide conveyor and automated start sequence > savings
On raw materials
No need for manual finishing of cut products thanks to high cutting
Accuracy > savings on labour costs and time
Machines can be adapted to work with existing production tools

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 Lower tool investment costs
Fast tool-change system permits

Accounting Standard in PEL

It is the responsibility of the Company's management to establish and maintain a system
of internal control, and prepare and present the above said statements in conformity with
the approved accounting standards and the requirements of the Companies Ordinance,
1984.

Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of
1980.).

IAS 1 Presentation of Financial Statement:

Financial statements are made according of IAS 1 financial statement discuss about
presentation of currency, unit and date of financial statement.

IAS 2 Inventories:

Inventories are record according to IAS 2 and Lower cost market value of inventory.

IAS 5 Cash Flow:

Cash flow prepare according to IAS 5 operating, investing and financing activities are
clearly mentioned.

IAS 12 Taxes:

Deferred income taxes are calculating record according to IAS 12 of Income taxes.

IAS 16 Overall valuation policy:

Purchase of fixed asset, calculation of depreciation and disposal according to IAS 16.

IAS18 Revenue:

Recognize of revenue according to IAS 18.

IAS 23 Capitalization of borrowing cost:

Borrowing cost and calculates measure at IAS 23.

IAS 37 Provision, contingent liabilities and contingent assets:

Provision, contingent liabilities and contingent assets are recognizing according to

IAS 37.

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 Telecommunication Technologies in PEL
PEL combines its domain experience in IT, Telecom, Power, Data Acquisition and
Security solutions together with its unique cross-functional knowledge of Electronic,
Project Implementation, Maintenance Depot and Calibration of Test & Measurement
equipment to support the operations of Telecom, Military, Railways, Airports, Harbours
and other Critical Infrastructures.

Manufacturing Technologies in Refrigerator

Motors for all process-relevant movements
Quartz heating elements with CLOSED
LOP temperature control by means of
Pyrometer to ensure a constant sheet
Temperature
Vacuum/compressed air and mould release
Air regulated by control valves and Proportional Valves
Prestretching height of the plastic sheet
Precisely and consistently defined by means of laser sensor
Pressure forming controlled by special
Table-to-table locking mechanism
KIEFEL patented
Servomotors and standard three-phase

Motors for all process-relevant movements

Quartz heating elements with CLOSED

LOP temperature control by means of pyrometer to ensure a constant sheet Temperature

Vacuum/compressed:

Air and mold release and air regulated by control valves and proportional Valves

Prestretching height of the plastic sheet

Precisely and consistently defined by means of laser sensor

Pressure forming controlled by special

Table-to-table locking mechanism (KIEFEL patented)

Inline perimenter trimming for inside liners and door liners, separation cutting

For all applications

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 Capacity of production PEL

Items Annual Production Actual Production

Capacity during the year 2014.
Transformers 5,000 3097
Switchgears 9,000 6258
Energy Meters 1700,000 579,237
Air Conditioners 90,000 9712
Refrigerators 5000,000 41,52, 270
Microwave Ovens 700,000 236, 391

Total Annual Production Capacity: 750400

Total Annual Production during the year: 4986965

Quality Planning in PEL

The performance of PEL Product, co-ordinates and staff members is evaluated and
individual development plans are in place to support performance improvement.
There is commitment to continuous improvement.
An effective self-assessment and quality improvement process is in place.

Quality Improvement Plan in PEL:

Be informed by an assessment of the quality of practice
Identify areas for improvement
Contain a statement of philosophy of the service
Be updated at least annually
Be available at the service for parents and the Regulatory Authority (DETE)
Be submitted to the Regulatory Authority
(6 weeks following notification of assessment and rating visit and on request)
Be revised following the assessment and rating process (if required)
Scope of each review.
Allocation of resources and areas of responsibility.

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 Analysis of risks and design decisions.
First step in assuring that best practices and sound engineering judgment is used
A certificate of compliance is to be submitted for ALL deliverables
An audit report for each of the current QA/QC plans will be developed.
The reports will be distributed.
Meeting to discuss the results will be scheduled, as necessary, to address findings.
Development of Quality Plan in PEL
Scope of each review of product
Allocation of resources and areas of responsibility.
Analysis of risks and design decisions.
First step in assuring that best practices and sound engineering judgment is used.
Quality assurance of sub-consultants.
Reference quality procedures to be used.
Quality Control in PEL
1) Verify that the mechanisms that control quality are in place so the product meets
the expectations of the team
2) Provides for quality checking and reviewing processes through all phases of
product development
3) Provides for involvement of the project manager in the control of quality
4) Provides for adequate continuous QC during design and production
5) Provides for the development of a Project Quality Plan
6) Provides for internal Quality Assurance monitoring
7) Provides for the QC checking of manual calculations
8) Provides for the QC checking of quantities and cost estimate
9) Provides for the QC checking of specifications
10) Provides for the QC checking of construction stakeout reports
11) Provides for a document and report format review
12) Bridge quality assurance/quality control minimum requirements
Quality Audit in PEL
1) An audit report for each of the current QA/QC plans will be developed.
2) The reports will be distributed.
3) Meeting to discuss the results will be scheduled, as necessary, to address findings.

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 Financial Analysis of PEL

2014 2013 2012

Horizontal Analysis
Rs. In Million % Rs. In Million % Rs. In Million

Total Equity 15,595 39.76 11,158 43.39 7,782

Total Non Current Liabilities 9,783 19.27 8,203 7.91 7,601
Total Current Liabilities 7,148 (8.14) 7,782 (20.85) 9,832

Total Equity and Liabilities 32,527 19.84 27,143 7.65 25,215

2014 2013 2012

Vertical Analysis
Rs. In Million % Rs. In Million % Rs. In Million %

Total Equity 15,595 47.94 11,158 41.11 7,782 30.86

Total Non Current Liabilities 9,783 30.08 8,203 30.22 7,601 30.15
Total Current Liabilities 7,148 21.98 7,782 28.67 9,832 38.99

Total Equity and Liabilities 32,527 100 27,143 100 25,215 100

The analysis show that the current liabilities of PEL are decrease as compare to last year 2013
19.21% is decrease.

The equity finance is increase which is good for Company the finance use for Investment
purpose.

Vertical Analysis of PEL Total Liabilities and Equity

Vertical Analysis 2014 2013 2012

Rs. In Rs. In Rs. In
Million % Million % Million %

Total Equity 15,595 47.94 11,158 41.11 7,782 30.86

Total Non Current Liabilities 9,783 30.08 8,203 30.22 7,601 30.15
Total Current Liabilities 7,148 21.98 7,782 28.67 9,832 38.99

Total Equity and Liabilities 32,527 100 27,143 100 25,215 100

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 According to Vertical Analysis the equity are increases 47% in PEL. The
investment is increase in PEL.
According to Vertical Analysis liabilities are increase 100% which is Good for
investment of PEL and it will increase PEL sales and Profit.

The total current liabilities of PEL are less than as compare to last year.
Because PEL meet current liabilities which show Financial position of PEL
is much better last year.

According to Vertical Analysis the current liabilities increase 21% which less than
year PEL meet current liabilities which show financial position of PEL is
much better last year.

HORIZONTAL ANALYSIS OF PROFIT AND LOSS

2014 14Vs13 2013 13VS12 2012
Rs. In Rs. In Rs. In
Million % Million % Million

Net Revenue 20,518 24.58 16,469 (7.32) 17,770

Cost of Sales (14,209) 14.46 (12,414) (12.12) (14,126)

Gross Profit 6,309 55.59 4,055 11.29 3,644

Other Operating Income 32 (29.73) 46 27.45 36

Distribution Cost (1,090) 34.66 (089) (2.20) (827)
Administrative Expenses (690) 7.24 (643) 2.99 (624)
Other Operating Expenses (114) 234.13 (34) 631.50 (5)

Operating Profit 4,449 70.12 2,615 17.61 2,224

Finance Cost (1,893) 4.03 (1,819) (11.25) (2,050)

Share of Profit/Loss of
Associate (11) (47.98) (21) 64.98 (13)

Profit Before Taxation 2,545 228.55 775 381.49 161

Provision for Taxation (304) 81.30 (168) 262.29 (46)

Profit/(Loss) for the year 2,241 269.19 607 429.58 115

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 According to Base year of Horizontal Analysis of Revenue is increase 24% last
compare to last year.
According to Base year of Horizontal Analysis of Production also increase day by
day.
According to Base year of Horizontal Analysis, the expenses of PEL are increase
due to increase in Production of Company.
Finance Cost of PEL is prior increase due to increase in Long term Liabilities.
According to Base year of Horizontal Analysis, Profit of company is increase as
compare to last years.

Profit and Loss Account Vertical Analysis

2013 2012 2011
Rs. In Rs. In Rs. In
Million % Million % Million %

Net Revenue 20,518 100.00 16,469 100.00 17,770 100.00

Cost of Sales (14,209) (69.25) (12,414) (75.38) (14,126) (79.05)

Gross Profit 6,309 30.75 4,055 24.62 3,644 20.50

Other Operating
Income 32 0.16 46 0.28 36 0.20
Distribution Cost (1,090) (5.31) (809) (4.91) (827) (4.66)
Administrative
Expenses (690) (3.36) (643) (3.91) (624) (3.51)
Other Operating
Expenses (114) (0.55) (34) (0.21) (5) (0.03)
Operating Profit 4,449 21.68 2,615 15.88 2,224 12.51

Finance Cost (1,893) (9.23) (1,819) (11.05) (2,050) (11.54)

Share of Profit/Loss of
Associate (11) (0.05) (21) (0.13) (13) (0.07)

Profit Before Taxation 2,545 12.41 775 4.70 161 0.91

Provision for Taxation (304) (1.48) (168) (1.02) (46) (0.26)

Profit/(Loss) for the

year 2,241 10.92 607 3.69 115 0.65

1) According the Sales comparison the revenue of Company is 100% increase because in
Vertical analysis the sales are compare.
2) According to vertical Analysis, the cost of production is 69% but in last year the cost
of production is 75% which is higher than Present year.

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 3) The gross profit of PEL is 30% increase according to Vertical Analysis.
4) According to vertical Analysis the operating profit is less than last year 2013 due to
high Administrative expenses.
5) According to vertical Analysis, the PEL paid high tax than the last year.
6) According to vertical Analysis the profit ratio show that PEL earn high profit in every
year.

Financial Decisions on PEL

Financial Analysis and Decision Making provides a financial framework to underpin the
life cycle approach of managing complex projects over a long time-scale. The module
provides a foundation from which a participant will be able to achieve a financial
perspective over the life of a project. The module considers the fundamental accounting
structures necessary to provide sound information on which decisions to make based on
accounting criteria, or, to support decision-making processes.

Planning is an important aspect for achieving objectives ahead. So while making plans
manager foresee the situations in advance and take decisions.. Finance department have to
do advance Planning for different tasks about production and utilization of loans
appropriately in advance

1) Performing a Cost/Benefit Analysis is essential to sound financial decision-

making in PEL.
2) Moneys value changes over time are important in PEL financial decisions process
in PEL.
3) Measures what money at a specified period of time in the future would be worth if
valued in terms of todays money.
4) PEL uses the cash Flow is a measure of cash flow remaining after all expenditures
required to maintain the operation.
5) In PEL decision-makers, it is only necessary to understand the concepts so PEL
can make informed decisions based on data presented to you by PEL financial
staff or consultants.
6) Financial considerations include the details regarding the cost of the project, what
working capital is required and the sources of any funds that you do not already
control
7) There will be legal considerations. A physical expansion will raise environmental
issues. The purchase of major equipment will require contractual agreements.
There are federal, state and local ordinances and regulations that must be followed,
and tax considerations that must be met at all levels.

We know that almost 50 years ago that PEL has been serving under the supervision of
Saigols groups

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 Incentives Used in PEL Organization
Drivers and Tea Boys

Drivers =Rs.8000

Tea Boys =Rs.7500

Administrative Staff

HR, Finance

Marketing (Rs.20000-250000 starting pay)

Other depts

Medical Allowance
It is per month allowance in addition to the gross salary. But it doesnt form the part of
the salary for any other benefits e.g. Provident fund, bonus.

House Rent

10% of the basic salary is given to each senior/ executive level employee.

Gratuity

It is one gross salary (last drawn), for each completed year of service, which is payable on
leaving the company.

Provident Fund

Employees contribution @ 10% of basic salary after confirmation of service

Bonus:

Bonus on salary is provided annually to the employees.

PEL follows the performance base pay structure and pay for their performance.

Increments
Employee Health Plans
Employee Leave
Bonuses

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 PEL Marketing Performance of PEL
Customer Evaluation:
PEL provides free customer service for one year to its customers. So the customers
always buy the PEL products due to its free service and it becomes loyal customer for the
PEL. PEL always provides help to their customers for repairing the WRAC, Refrigerators
and other items. PEL always make efforts to satisfy the customers Marketing Analysis of
PEL

Strengths:
Strong dealer network
Strong quality, sale and service
Number 2 in refrigerators in Pakistan
Strong grip in home appliances
Strong Management
Strong research and development department
Free customer service

Weakness:
Lack of effective advertisement
Lack of Product range
Less Utilization of capacity
Financial Problems

Opportunities:
Increase in product range
Export opportunity
Increase in production capacity

Threats:
Strong competition
Chinas product introduction in the market
Slow growth rate in Pakistan
Instability of government
Tax department

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 Strategic Planning in PEL
Cost leadership:

PEL aim is to become low-cost leader in Appliances sectors that is why PEL is
providing effective services in low cost than other Competitor.

Differentiation:

PEL strategy is to provide unique services to its customers in Appliances sectors to

make itself valuable for its customers.

Human Resource Department of PEL

This department deals executives appraisals, their training, hiring and firing. They
traditionally have been referred as personal management or administration.

PEL has a strong management. Its employees are more competent and fully skill and
knowledge. They always co-operate the top management in achieving the goals that are
assigned to them. Employees are well aware about the company objectives and so they
are committed to the development of company

Objectives of HR Department of PEL:

To review past performance
To asses training needs
To help develop individuals
To audit the skills with in an organization
To set targets for future performance
To identify potential for promotion
Performance Evaluation
Training designed according to area wise
New Employee Induction Training ( Overall Training)
Department Training
On job Training

Practical Experience in PEL

I learned a lot during my internship, related and un-related. Related is that I learned the
actual working of Finance department, their rules and policies, procedures, systems,
values etc.

Unrelated is that I got to know the office environment. How people are work together
systematically and co-operating with each other. No doubt the routine of the Finance

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department and nature of job there is quite tough. But I found all the employees and
managers hardworking, disciplined and punctual in their task accomplishments.

Other activities:

I Visited the PEL factory with Mr. Tariq Jaw (Material Management) and Mr.Tayyab
Sharif. (Corporate Finance)

Application of the Class Room Learning

PEL Organization enabled me to develop important public administration skills which
cannot be taught in the classroom

PEL Organization enabled me to compare theoretical ideas learned in the class room
within the world of work regarding public administration experiences

Permitted me, a student to apply the technical skills learned in the classroom to real world
public administrative problems.

Internships provide an opportunity for students to link theory with practice and further
serve as a temporary labor pool for those agencies that have committed to participate in
the internship program.

The internship help fulfill its mission of preparing students for significant professional
and managerial positions in the public sector

Internship experience provided me with a practical real world experience in the

Organization.

These experiences vary from working on special projects for the interning agency to
learning about the human motivation process in a complex organization .

Responsibilities undertaken by me during internship

On initially I work in Finance and Account department. I perform following functions.

1. Inventory record in book of Account.

2. Send document for Authorization of transactions to relevant officer. .
3. Managerial department decision about Purchase of Raw material and Production.
4. daily check on production
5. daily check on stock (materials and finished goods)
6. controlling the production plan for the future
7. control on orders in hand

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Internship influence my future career Plan
Interns are expected to exhibit professionalism at all times during the experience. This
professionalism should be evident in their interactions with clients, co-workers, and
supervisors. Interns are expected to apply their knowledge, skills, and abilities in the
performance of all duties, to behave ethically, and to follow all rules and policies of the
site. It is a requirement for graduation

Some new things, which I learned here, were:

How to work under someones supervision.

Patience is very important in dealings, as anger can lose your customer.
To increase your sales and stay in competition with top brands it is necessary to
keep your dealers happy by giving them incentives.
How to coordinate with the other sales areas of PEL via telephone/fax
How to deal with your customers complaints in such a way to satisfy themed

Above points useful for me for professional life.

Suggestions and Recommendations

1. Although they do recruit many internees but they are not able to manage such a
large number as the internees do not have many tasks to perform. They are not
provided with PCs to better understand their system.
2. The managers are very cooperative but the behavior of executives especially
towards female employees or internees is discriminatory. The environment is
hostile and male oriented.
3. The mess area needs to be more hygienic and the food available is the same very
day. Separate washrooms and prayer room for females are not available.
4. Recruiting and hiring of females for finance and accounts department
5. The nature of job is very tough and employees find it difficult to finish the tasks
within office timings. They have to sit there for another two to three hours
averagely for the completion of their tasks.

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 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 and
Punjab Bank have provided especial credit limits to the Company in order to
support its operational activities.

I did my internship in the Finance department of PEL. I learned a lot during my

internship period. There are five sections in Finance department. Those are
Material management section, Corporate Finance section, Budgeting section,
Treasury section and Accounts Receivable section. Each of the section has its own
significance and importance.

Each plays an important role in the working of Finance department. Material

Management section deals with the raw materials being purchased and shipment.
It deals with the pledging of finished as well as raw materials under the custody of
different banks. PEL is currently dealing with over 15 banks.

Corporate Finance deals with the leasing, loan and guarantees. It is also one of the
important parts of Finance department. Budgeting section forecasts annual sales,
expenditures and costs for the company. Treasury section allocates the funds for
the whole company. Accounts receivable section deals with every type of
receivables the company is dealing with. There is another independent section
known as Provident Funding section in Finance department.

I learned the actual working of Finance department, their rules and policies,
procedures, systems, values etc. I got to know the office environment. How people
work together systematically and co-operating with each other. I found all the
employees and managers hardworking, disciplined and punctual in their task
accomplishments.

While Working with PAK ELEKTRON LTD, I got very broader visions about
company financial activities more than those that I had learned during my M.Com
program.

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Glossary
AD: Appliances Division

PD: Power Division

QC: Quality Control

Reference
www.pel.com.pk

www.pel.com.pk/air_conditioner.html

www.pel.com.pk/distribution-tr.html

Information taken from person:

Mr.Tahir Mehmood

Mr.Tayyab Sharif

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