Internship report on pel

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

Internship Report on PEL P a g e | 1

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 ofFinance 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


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 it’s 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.


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 Division2. 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 & VisionMission: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 responsibilityTo 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.


Company AddressRegistered Office: 17-Aziz Avenue, Canal Bank, Gulberg V, Lahore.Tel: 042-35718274-6Fax: 042-35762707Email: [email protected] Facility14-K.M. Ferozepur Road,Tel: 042-35920151-9 34-K.M. Ferozepur Road,Tel: 042-35935151-2

Auditor of PELM/s Rahman Sarfaraz Rahim Iqbal RafiqChartered 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


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 Division2. 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


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


List of Functions Performed by different Departments

Finance Department

Finance department provide money for the working of the organization. PELcompany’s

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 organization’s continued existence

Marketing Department

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.

FINANCE MANAGER

ASSISTANT FINANCE

MANAGER

EXECUTIVE FINANCE

MANAGER

MARKETING MANAGER

ASSISTANT MARKETING MANAGER

EXECUTIVE MARKETING MANAGER


HR Department

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 organization’s continued existence.

Import & Export Department

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.

HR MANAGER

ASSISTANT HR MANAGER

EXECUTIVE HR MANAGER

IMPORT&EXPORT MANAGER

ASSISTANT IMPORT&EXPORT

MANAGER

EXECUTIVE IMPORT&EXPORT

MANAGER


I.T Department

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

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

I.T MANAGER

ASSISTANT I.T MANAGER

EXECUTIVE I.T MANAGER

ADMIN MANAGER

ASSISTANT ADMIN

MANAGER

EXECUTIVE ADMIN

MANAGER


Accounts Department

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

ACCOUNTS MANAGER

ASSISTANT ACCOUNTS MANAGER

EXECUTIVE ACCOUNTS MANAGER


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 wefinancial control on assets & accounts and to avoid errors fraud and theft and sure that Financial statement prepare according to International Accounting Standard.

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

Division Layout of Financial Activities in Finance Department

Finance Department

Corporate Finance

Managerial Management

Finance

Budgeting Finance

Treasury Finance

Leasing Bank

Guarantee

Arrangement Loan


Material Management Financial:

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

ÿ daily check on productionÿ daily check on stock (materials and finished goods)ÿ controlling the production plan for the futureÿ 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 admirableservice for the company and performing its operations with due diligence andconscientiousness.

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 acode; the code for NBP being 02.Work in the treasury department consists of two fundamental tasks:

1. Collections2. Receipts the ‘Cheque Management’ portion of PEL’s 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.


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 company’s humanresource 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,


∑ 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 Range2. Less Utilization Capacity3. 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


∑ 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.


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

ÿ Motors for all process-relevant movementsÿ Quartz heating elements with CLOSEDÿ LOP temperature control by means ofÿ Pyrometer to ensure a constant sheetÿ Temperatureÿ Vacuum/compressed air and mould releaseÿ Air regulated by control valves and Proportional Valvesÿ Prestretching height of the plastic sheetÿ Precisely and consistently defined by means of laser sensorÿ Pressure forming controlled by specialÿ Table-to-table locking mechanismÿ KIEFEL patentedÿ Servomotors and standard three-phase

Motors for all process-relevant movements

ÿ Quartz heating elements with CLOSED

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

ÿ Vacuum/compressed:

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

ÿ Prestretching height of the plastic sheet

Precisely and consistently defined by means of laser sensor

ÿ Pressure forming controlled by special

Table-to-table locking mechanism (KIEFEL patented)

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

For all applications


Capacity of production PEL

Items Annual Production Capacity

Actual Production during the year 2014.

Transformers 5,000 3097Switchgears 9,000 6258

Energy Meters 1700,000 579,237Air Conditioners 90,000 9712

Refrigerators 5000,000 41,52, 270Microwave Ovens 700,000 236, 391

Total Annual Production Capacity:

Total Annual Production during the year:

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.

750400

4986965


∑ 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 quality4) Provides for adequate continuous QC during design and production5) Provides for the development of a Project Quality Plan6) Provides for internal Quality Assurance monitoring7) Provides for the QC checking of manual calculations8) Provides for the QC checking of quantities and cost estimate9) Provides for the QC checking of specifications10)Provides for the QC checking of construction stakeout reports11)Provides for a document and report format review12)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.


Financial Analysis of PEL

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

Horizontal AnalysisRs. 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

Vertical AnalysisRs. 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

Vertical Analysis 2014 2013 2012Rs. In Million %

Rs. In Million %

Rs. In Million %

Total Equity 15,595 47.94 11,158 41.11 7,782 30.86Total Non Current Liabilities 9,783 30.08 8,203 30.22 7,601 30.15Total 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

2014 2013 2012

2014 2013 2012


∑ 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 Million %

Rs. In Million %

Rs. In Million

Net Revenue 20,518 24.58 16,469 (7.32) 17,770Cost 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 36Distribution 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 161Provision for Taxation (304) 81.30 (168) 262.29 (46)

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


∑ 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 2011Rs. In Million %

Rs. In Million %

Rs. In Million %

Net Revenue 20,518 100.00 16,469 100.00 17,770 100.00Cost 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 20.50Other Operating Income 32 0.16 46 0.28 36 0.20Distribution 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 0.91Provision 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.


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) Money’s 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 today’s 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


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 doesn’t 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

Employee’s 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


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

∑ China’s product introduction in the market

∑ Slow growth rate in Pakistan

∑ Instability of government

∑ Tax department


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:

ÿ To review past performance ÿ To asses training needs ÿ To help develop individuals ÿ To audit the skills with in an organization ÿ To set targets for future performanceÿ To identify potential for promotionÿ Performance Evaluationÿ Training designed according to area wiseÿ New Employee Induction Training ( Overall Training)ÿ Department Trainingÿ 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


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 whichcannot be taught in the classroom

PEL Organization enabled me to compare theoretical ideas learned in the class roomwithin 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 production5. daily check on stock (materials and finished goods)6. controlling the production plan for the future7. control on orders in hand


Internship influence my future career PlanInterns are expected to exhibit professionalism at all times during the experience. This professionalism should be evident in their interactions with clients, co-workers, andsupervisors. 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 thesite. It is a requirement for graduation

Some new things, which I learned here, were:

∑ How to work under someone’s 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 customer’s 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 alarge number as the internees do not have many tasks to perform. They are not provided with PC’s 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 department5. 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.


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 myinternship period. There are five sections in Finance department. Those areMaterial 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 aboutcompany financial activities more than those that I had learned during my M.Comprogram.


Glossary

AD: Appliances Division

PD: Power Division

QC: Quality Control

Referencewww.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

http://www.pel.com.pk/

http://www.pel.com.pk/air_conditioner.html

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

Business

Internship report on pel