Pak Electron LTD Change Your Life: Page # 1

Pak Electron Ltd Change your life
Page # 1
Report on PEL
Submitted To:
Mr. Riaz Hussain Ansari
Submitted By: Group # 6
Arshi Kanwal MBS-09-
17
Muhammad Salman MBS-09-30
Uzma Ikram MBS-09-38
Shahid Zubair MBS-09-40
Muhammad Luqman MBS-09-45
Waqas Akhtar MBS-09-59
Fahad Mehmood MBS-09-60
SMESTER 2nd
Bahuddin Zakaria University Sahiwal Campus.
Page # 2
ACKNOWLEDGEMENT
A million thanks to the Almighty, without whose support, there can be no work. We
would also like to take this opportunity to extend my appreciation and gratitude to
Mr.Hasham and Mr. Aqeel, without their counseling and parallel skills I would have never
been able to prepare this report. We owe special thanks to PEL company for assistance and
data collecting.
Finally we owe many thanks for participation of all group members and their
coordination to accomplish the task.
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Table of Contents
 Executive Summary………………………………………… Page #6
 History
 Introduction to Sagiol group……………………………. Page #7
 Introduction to PEL…………………………………….. Page
#9
 Vision Statement…………………………………………… Page #12
 Mission Statement………………………………………….. Page #13
 PEL Products
 Products of Appliance Division………………………… Page #14
 Products of Power Division…………………………..... Page #25
 Objectives…………………………………………………... Page #28
 Board of Directors………………………………………….. Page
#29
 Organizational Hierarchy of PEL………………………….. Page #30
 Departments………………………………………………… Page #31
 Marketing department………………………………….. Page #32
 Human resource department……………………………. Page #38
 Finance department…………………………………….. Page #39
 Industrial relation and administration (IR & A)……….. Page #40
 Procurement…………………………………………….. Page #40
 Information technology…………………………………. Page #41
 Accounts department…………………………………… Page #42
 Financial Statements:
 Balance Sheets………………………………………….. Page #43
 Profit and Loss Accounts……………………………….. Page #45
 Ratio Analysis…………………………………………... Page #47
 Profit and Loss Account (Vertical Analysis)…………… Page #57
 Balance sheet (Vertical Analysis)………………………. Page #59
 Profit and Loss Account (Horizontal Analysis)……….... Page #63
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 Balance Sheet (Horizontal Analysis)…………………… Page #65
 PEST Analysis………………………………………………… Page #69

 SWOT Analysis………………………………………………. Page #72
 Recommendations……………………………………………. Page #82
 Conclusion……………………………………………………. Page #83
 References……………………………………………………, Page #84
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Executive Summary
Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in
Pakistan. It was established in 1956 in technical collaboration with M/s AEG of
Germany. In October 1978, the company was taken over by Saigol Group of Companies.
Since its inception, the company has always been contributing towards the advancement
and development of the engineering sector in Pakistan by introducing a range of quality
electrical equipments and home appliances and by producing hundreds of engineers,
skilled workers and technicians through its apprenticeship schemes and training
programs.
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
play 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.
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History
Introduction to Saigol Group
Group Profile
In 1948, the Saigols migrated from Calcutta and initiated their business in
Lyallpur (later named to as Faisalabad), the textile city of Pakistan, under the banner of
Kohinoor Industries Limited
Kohinoor Textile Mills
The Saigols set up the first major textile unit - The Kohinoor Textile Mills under
the umbrella of Kohinoor Industries Limited. The Kohinoor Textile Mill has state-of-the-
art quality control from raw material to finished product manufacturing. Its laboratory is
top rated amongst the best laboratories in Pakistan for testing of textile raw materials,
other inputs and yarn.
Initial Capacity:25,000 spindles
Current Capacity: 71,648 spindles
“Wealth by itself is a curse.”

The Saigol Group (also referred to as the Sehgal or Sahgal Group) is located in
Lahore, Punjab, Pakistan. This group is owned by the Saigol family of Pakistan, and
owns a number of domestic automobile and textile plants.
Saigol group headed by Nasim Saigol is perhaps Pakistan's biggest group in
engineering goods industry with projects on the anvil for a car assembly plant with
Daewoo and motorcycle assembly plant with Qingqi group of China. It is also the biggest
manufacturer of air conditioners, deep freezers and electric good supplied to WAPDA.
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List of Companies of Saigol Group
Kohinoor Textile Mills

Pak Elektron Ltd. (PEL)
Kohinoor Power Company
Kohinoor Energy
Saigol Computers (Private) Limited
Kohinoor Motor Works Limited
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Introduction to PEL
PEL is public limited company under the flag of Saigol group, one of the top
business groups of Pakistan. Saigol group has different companies in different industries
like textiles, sugar, power and electronics. Pak Elektron Limited (PEL) is the pioneer
manufacturer of electrical goods in Pakistan. Pak Electron Ltd. (PEL) was established in
1956 with the technical collaboration of M/S AEG Germany and is the oldest composite
electrical equipment-manufacturing unit in Pakistan.
In October 1978, the Saigol Group of Companies purchased major shares of Pak
Elektron Limited. Since its inception, the company has always been contributing towards
the advancement and development of the engineering sector in Pakistan by introducing a
range of quality electrical equipments and home appliances and by producing hundreds of
engineers, skilled workers and technicians through its apprenticeship schemes and
training programs. PEL is now technology forerunner and market leader in providing new
products and services to meet ever changing and technology intensive needs of its
customers. PEL’s EPC contracting division delivers custom designed and built HV and
EHV grid stations, electrification of housing projects, industrial parks and optimum
solutions for power utilization to all kinds of industries and commercial customers. PEL
aims to maintain this competitive edge and at the same time keep striving to improve it
further by continuous R&D, creating new knowledge and adapting to global
developments in technology and product design. Every increasing local market share,
growing export orders, numerous successful power projects and greater than ever base of
satisfied customers are evidence to these aspirations. Works of PEL are spread at two
facilities in Lahore, the historical city and cultural hub of Pakistan.
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The two facilities cover an area of 1,033,200 Sq ft and 614,252 Sq ft respectively.

Both are equipped with latest technology, state of the art testing facilities and
environment friendly production process. At the heart of PEL’s operations is its human
resource. PEL invests heavily on professional development, skill improvement and well
being of its human resource. PEL’s employees are its most valuable asset and PEL keeps
them very dear. At that juncture, the company was only manufacturing transformers and
switchgears. With the Saigol’s in management, PEL started expanding its product range
by entering into Air Conditioner manufacturing.
The products manufactured by PEL have always been of a high standard and the
name “PEL is synonymous with quality all over Pakistan.” PEL, since its inception, has
been acting as an institution working for the advancement and development of
engineering and modern technology in Pakistan Since its inception, the company has been
working for the advancement and development of engineering know-how in Pakistan. 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.
Pak Elektron Limited alone has a turnover of over 180 million US Dollars.
Saritow Spinning Mills & Azam Textile Mills
In 1987, the Saritow Spinning Mills and Azam Textile Mills were established
under the banner of Saigol Group of Companies. Saritow Spinning Mills is a spinning
unit with 25,440 spindles capacity. Facilitated with the most modern and efficient
Japanese and European machinery, its knitted yarn is renowned in the Far East and
Europe for its fine quality. Azam Textile Mills is reputed for its carded and combed yarn,
which is quite popular for premier knitting and weaving.
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Kohinoor Power Company Limited

In 1991, the first power unit commissioned in Pakistan, in the Private sector, was
Kohinoor Power Company Limited. Its present production capacity is 15 MW.
Kohinoor Energy Limited
1995, another power unit, Kohinoor Energy Limited, was established. Kohinoor
Power Limited is a 120 MW power plant located on the outskirts of the city of Lahore.
This project has an annual turnover of $80 million.
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Vision
“To excel in providing engineering goods and services through

Continuous improvements”
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Mission Statement
 To provide quality products and services to the complete satisfaction of our

customers and maximize returns for all stakeholders through optimal use of
resources.
 To focus on personal development of our Human resources to meet future
challenges.
 To promote good governance, corporate values and a safe working environment
with a strong sense of social responsibility.
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PEL Products
The PEL Group comprises two divisions of products:
1. Appliances Division
2. Power Division
PRODUCTS OF APPLIANCES DIVISION

Appliances Division has the following products;
Refrigerators
PEL’s refrigerators are available in 6 series of different colors, models, prices and
capacities. The series are as follow,
 Xpression Series
 Premier Series
 6-Series
 Delux Series
 Smart Series
 Mini Series
PEL has 28 different models in the above 6 series in different prices, which gives
customers a wide range to select PEL refrigerator according to their needs. PEL uses
Danfoss compressors and Galaxy doors in all its series except Mini series in which
Reciprocating compressors and PCM doors are used. PEL offers warranty of 5 years
compressor & 1 year parts & service to the customers except Mini series where PEL
offers warranty of 3 years compressor & 1 year parts & service to the customers. The
refrigerators are available from the capacity of 60 to 420 liters. PEL’s refrigerators are
environment friendly and are CFC (chlorofluorocarbons) free, CFCs are a family of
chemicals that contain chlorine, fluorine and carbon. The chlorine content in these
compounds causes the depletion of the ozone layer. The refrigerators are with the direct
cool properties and PEL is using energy saving technology in its products to save energy
and giving benefits to the customers.
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Air Conditioners
The air conditioners are available in three types:
 Split Air Conditioners
 Window Air Conditioners
 Floor Standing Air Conditioners
Split Air Conditioners:
PEL presents Cool life Split AC which is a technologically advanced model
especially designed for Pakistani market. This masterpiece from PEL provides maximum
cooling even at very high temperatures while minimizing electricity consumption. The
wide range of models and prices gives customers more choices to select PEL’s product.
The air conditioners are available in the different prices, capacities and models. Split air
conditioners are available in three capacities:
 1 ton
 1.5 ton
 2 ton
Features of PEL Split AC:

The key features of PEL’s split air conditioners areas follow:
 Free Installation Kit Compressor Warranty
 Auto restart function
 Environment friendly refrigerant R22
 Anti-rust outdoor unit
 Easy-cleaned panel
 Self diagnosis and auto-protection
 Two-direction air flow (SLR)
 Independent dehumidification
 Trapeziform Inner groove tube
 Hydrophilic aluminum fin
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Window Air Conditioner:

Window ACs are available in capacity of 1.5 and 2 ton, and with manual and remote
control function.
Features of PEL Window Ac:
The following are the key features of PEL window air conditioners:
 Super quiet operation
 Maximum dehumidification
 Best after-sales service
 Anti-rust cabinet
 Environment friendly refrigerant
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Floor Standing Air Conditioners

floor standing air conditioners are available in the three models and capacities:
 FS 600 - 5 Ton
 FS 480 - 4 Ton
 FS 300 - 2.5 Ton
Features of Floor Standing Air Conditioners:
The key features of PEL Floor Standing Air Conditioners are as follow,
 Free Installation Kit Compressor Warranty
 Auto restart function
 Environment friendly refrigerant R22
 Anti-rust outdoor unit
 Easy-cleaned panel
 Self diagnosis and auto-protection
 Two-direction air flow (SLR)
 Independent dehumidification
 Trapeziform Inner groove tube
 Hydrophilic aluminum fin
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Floor Standing Air Conditioners
Page # 19
Microwave Oven
PEL the trustful company name in home appliances all over the country, now
introduced all new models of "PEL Silverline" Microwave Ovens.
Now PEL customers can have different models of PEL Microwave Ovens in
which they can enjoy the grilling feature as well. PEL Microwave Ovens are available in
different sizes and inner cavities (steel & painted). Cook, Bake, Roast or Grill with the all
new PEL Microwave. With cutting edge technology and advanced features. PEL presents
26 different models of ovens with different prices, models and capacities.
Features of Microwave Oven

 Smart Intelli-menu - Preset cooking menu's
 360 degree cooking system - Cook-Bake-Roast-Grill
 Enersave features - Energy Savings
 5 years Magnetron Warranty - Peace of Mind
Microwave oven
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Washing Machines
Magic Clean PWM7700
The PEL Semi Automatic Luxury Wash - 7700-N equipped with Japanese
technology has a 100% rust proof plastic body with a big multi pilaster. It can handle
heavy loads and has a quick dry spin. In addition, it supplements a drain switch that
quickly drains out all the excess water. So treat yourself with the Luxury Wash - washes
away heavy loads and dries them up quickly.
Magic Clean PWM512
The PEL Econo Wash 512 is made from Japanese Technology with 100% rust
and shock proof unbreakable plastic body with the capacity of 10 Kg. It's a top load with
a powerful motor that provides a brighter wash and has a build in energy saver that gives
you excellent energy efficiency. So save the energy with this Econo Wash – consumes
less electricity as it gives more output.
Features of PEL Washing Machines
The key features of PEL washing machines are as follow;
 One year parts & service warranty
 Japanese technology
 Super large multi pulsator
 Quick dry spin
 Drain switch to drain all excess water
 Semi automatic
 Ability to wash extremely heavy loads
 Low noise & easy operations
 100% rust & shock proof unbreakable plastic body
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Magic Clean
Magic Clean
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Water Dispensers
Water dispensers are a welcome addition to PEL range of home appliances. PEL’s
Silverline and Life-Stream water dispensers make life a little easier and fridge space a bit
more plentiful. While Cold water refreshes your mood in burning summer, Hot water on
demand is great in the office for packets of soup, instant coffee and tea.
Features
 Hot & cold water
 Refrigerator
 Separate Freezer
 Compressor Cooling
 Stainless Steel Water Tanks
 Super Quiet Design
 Energy Saving
 CFC Free
 1 Year Warranty
Water Dispensers
Silver line Life stream
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Generators
PEL presents generators for domestic and commercial use. PEL’s generators are
available in diesel and petrol in four capacities:
 KVA Generators
 2.5 KVA Generators
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POWER DIVISION
PEL was founded in 1956 and has since been serving the Power utilities,
industries, individual customers, housing and commercial projects by providing reliable,
customized and cost effective solutions. Backed by the innovative genius of Saigol
Group, PEL is now technology forerunner and market leader in providing new products
and services to meet ever changing and technology intensive needs of its customers.
PEL’s EPC contracting division delivers custom designed and built HV and EHV grid
stations, electrification of housing projects, industrial parks and optimum solutions for
power utilization to all kinds of industries and commercial customers.
PEL aims to maintain this competitive edge and at the same time keep striving to
improve it further by continuous R&D, creating new knowledge and adapting to global
developments in technology and product design. Ever increasing local market share,
growing export orders, numerous successful power projects and greater than ever base of
satisfied customers are evidence to these aspirations. PEL Power Division is one of the
major electrical equipment suppliers to WAPDA & KESC. Since 1956 the company
manufactures transformers, energy meters, switchgears, kiosks, compact stations and
shunt capacitor banks. PEL also has had the privilege of getting its equipment approved
and certified from well-reputed international consultants such as:
Preece, Cardew and Rider, England
Harza Engineering Company, USA
Snam Progeti, Italy
Societe Dumezm, France
Miner & Miner International Inc. USA
Ensa, France
Page # 25
PRODUCTS OF POWER DIVISION
The Power Division of PEL has the following products:

 EPC Contracting
 Power Transformer
 Distribution Transformer
 Dry type Transformer
 Energy Meter
 Switchgear
 Transformer Services
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PRODUCTS OF POWER DIVISION
Transformers
Energy Meter
Switch Gears
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Objectives
The objectives and mission for which the company is established are as following:
 To carry on the business or businesses of manufacturing, selling, installing,

maintaining designing and dealing in all kinds of electrical equipment.
 To carry on any business whether manufacturing or otherwise which maybe

found convenient to undertake in connection with or in addition to any of
these objectives mentioned above?
 To do all such things that is incidental for the attainment of the above
objectives or any of them.
 To produce high quality and standard products.
 To produce equipment to be used in numerous projects of national

importance.
 To secure a high share / quota of WAPDA’s demand for power products.
 To produce skilled workers and technicians through its apprenticeship

schemes and training programs for engineers and technicians.
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Board of Directors
Mr. Naseem Saigol Chairman /Chief Executive

Mr. Azam Saigol
Mr. Murad Saigol
Mr. Muhammad Rafi Khan
Mr. Haroon Ahmed Khan Managing Director
Mr. Homaeer Waheed
Mr. Gul Nawaz NIT Nominee
Mr. Masood Karim Sheikh NBP Nominee u/s 182 of the Ordinance
Mr. Tajammal H.Bokharee NBP Nominee u/s 182 of the Ordinance
Mr. Wajahat A. Baqai NBP Nominee u/s 182 of the Ordinance
Audit Committee:
Mr. Azam Saigol Chairman / Member

Mr. Haroon A. Khan Member
Mr. Tajammal H. Bokharee Member
Mr. Gul Nawaz Member
Auditors:
M/s Yousaf Adil Saleem & Co. Chartered Accountant
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Organizational Hierarchy of PEL
Chairman
Managing
Director
Director Marketing & sales

Appliances division
G.M Finance G.M Marketing Sr. Manager QC Sr. Manager

Power division (Appliance & HR & A
Power Division)
G.M Manufacturing
Sr. Manager HR & A
Power division
G.M Manufacturing G.M Marketing

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

Corporate Sales Department is very important department which generates the
revenues for the company. The Head of this department reports directly to Director
Operations. This department consists on employees in which Business Development
Manager, Senior Sales Officer, Area Sales Managers, Sales Officers, Sales Coordinators
and Technical Coordinator. First of all company analyze the total market potential. Find
out the PEL potential from the total market potential. Then find out the corporate sales
potential.
Hierarchy of Corporate Sales Department
Director
BDM
Sr. S.O ASM ASM S.C S.C

S.O RWP FSD
S.O T.C ASM ASM S.C

MUL KHI
S.O S.O S.O
S.O
S.C
Page # 33
To analyze the market potential, they use various resources like overall sales of
their company & their competitors throughout the year. 2nd resource they use the report
from the custom department on the import of compressors or other raw material that help
them to analyze the total market potential. After analyzing the market potential they set
the sales target for a year with mutual understanding, with set target, sales officers go in
the field & get order from customers. They use different inquiry tools to access their
customers like they visit market institutions, use the old references, they also find out
their customers through advertisers & tenders, fax, e mail and are forwarded to Business
Development Manager. When sales officers visit their customers they demand some pre-
qualification steps including some certificates:
 Name , postal and registration office address
 Legal status of firm
 Full particulars, organizational set-up along with firm’s brochure
 Financial soundness certificate, Annual Report
 Details of plant and machinery installed
 Details of similar projects completed
 Certificates of Income tax and Sales tax registration
 Pakistan Engineering Council certificates
 Company Status
 Company Profile.
After the pre-qualification Company sent quotation to the customer prepared on

standard F-MKT-01A signed by BDM that include Assessable price, sale tax, extra sale
tax, excise duty, price per unit and their terms and conditions.
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Terms & Conditions:

 Offer validation
 Delivery Time
 Payment Terms
 Warranty
 Installation Charges:
 Sales Tax registration Number
 National Tax Number
On the basis of quotation company and customer negotiate with each other on the
prices. The company has a technical and financial capability to meet customer
requirement. This may require consultation with General Manager Manufacturing. After
revised quotation finally customer issues purchase order. After issuing the purchase order
by the customer, customer makes pre-delivery inspection or inspection at site in which he
will check the availability of stock. After the inspection customer issues the inspection
note and it is the proof that inspection has made. After the issuance of inspection note
company issue the order form, check the availability of stock, if stock is available then
order form approved by manager Distribution and Credit Control department. Against
this order form, delivery order is issued from dispatched department after that delivery
order approved by manager distribution and credit control. In case of free delivery
dispatched department issues the goods received note and give it to the driver of vehicle,
which gives receiving from the customer. After that,
 Execution of Installation
 Awarding of Installation
 Installation forward to authorized installer of PEL Corporate Services Department
 Supervision of Installation
 Supervision of installation is done by PEL authorized technical teams
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After the delivery, sales coordinator prepare the invoice of installation that includes
product model, quantity, rate per unit, gross sales values, discounts, net sales values, sales
tax, special excise duty, extra sales tax and net to customer. And then prepare the supply
invoice annexure and bill that includes the total amount customer paid. Following
documents are attached with that invoice:
 Covering letter
 GRN
 Inspection note
Then maintain the record in concerned files therefore Earnest money, bank guarantee
and demand draft etc. after the record keeping sent request to the account department to
issue CDR against warranty. Mostly sales are done on credit basis so after sending the
invoices to the customers they follow up them to make payments. Continuous visit are
made to customer for removal of objection and collection of payments Corporate sales
department received the payment from customers against this payment they made
payment confirmation report and then depositing it to the Distribution and Credit Control
department where this department makes their entry into the system. With the help of that
data Distribution department feed into the system Corporate Sales department generate
different reports.
To keep the record up to date sales coordinators prepare consignee status on weekly
bases and aging reports. The department has its sales officers in different cities of
Pakistan and they are responsible for communicating with customer parties, sells
products, installation and to make collections of credit sales. This department prepares
different reports regarding sales and collection. Corporate Sales Department deals with
the business parties or organizations rather than individual customers.
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 Customer Service Department (CSD)

CSD is a customer service department under the Marketing AD Head. Where
after sales services are provided to satisfy customers having problem in their appliances.
PEL is well known for their customer care services.
 Distribution and Credit Control Department (D&CC)
Distribution and credit control department has 48 employees and it is a merger of two
departments:
 Distribution
 Credit Control
The distribution includes the activities to distribute company’s products from the
factory to the stores in Lahore and different cities of Pakistan. The head of this
department reports General Manager Marketing AD as well as General Manager Finance.
The basic function of credit control is to do sales accounting of Corporate Sales
department and maintains ledgers. This department is responsible for check and balance
of dealers, and allocates credit limitations for dealers and Corporate Sales department. It
plays a role of bridge between Corporate Sales Department and Accounts Department.
This department not only motivates the dealers but also check their activities. It also
checks their credit limit because dealers have awarded different credit limits according to
their potential of sales. Whenever any dealer’s credit crosses its limits they stop the
supply and first they try to motivate dealer to clear his credit then they restart his supply.
These all things happed because much of PEL’s sale is on credit.
 Dispatch
Dispatch is another department under the Marketing AD Head. In this department
all the data regarding products sending out from the factory is maintained. This
department sends daily dispatch report to Corporate Sales which help to identify the
orders and their status.
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 Consumer marketing department (CMD)

This department is basically under the marketing AD department. At the start this
department did not exist in the hierarchy but with the passage of time and with the
success of easy installment scheme, this department came into being. The reason is that in
the start this department’s target market was Lahore and its workforce had only 8 persons
and now after 2 years of its establishment it has covers major cities of Pakistan and it has
workforce of 45 and they are recruiting more to cover these areas fully. There are many
regional offices in major cities for example in Multan, Shawl, Karachi, Hydria,
Faisalabad, Gujranwala, Hattar, Rawalpindi, Sialkot, Bahawalpur, Sukkur, Sargoda and
AJK (Azad Jammu Kashmir) and the head-office is in the factory that is Consumer
Marketing Department.
HUMAN RESOURCE DEPARTMENT

Human Resource Department is the most important and key department of every
organization. It not only deals with the employees of the organization but also help in
management of the affairs of the company. HR Department’s activities are spread over
the whole organization. The following areas come under direct supervision of HR
department at PEL:
 Hiring and firing of employees
 Training and development
 Compensation system
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FINANCE DEPARTMENT
Finance Management is the lifeblood of any company. If this area of corporate
activities is improperly handled, a company may lead insolvency despite having all the
resources and opportunities. Therefore proper financial management is vital for every
business concern and PEL is not lacking behind over here. Functions of Finance
department are:
 Preparation of budget, appropriation of accounts, re-appropriations, surrender
and savings.
 Control of expenditure and ways & means position.
 Audit
 Treasury administration
 Administration of Taxes i.e. Sales Tax, Entertainment Tax, Luxury Tax and Entry
Tax etc.
 Resource mobilization through loans, Institutional Finance, Small Savings, Credit
and Investment and public debt.
 Financial concurrence and advice.
 Compilation of Codes, Rules and procedures concerning financial transactions
and having bearing on State finance and their implementation.
 Safety and investment of funds from consolidated funds, contingency fund and
public account.
 Contract, recovery and refund of revenue etc.
 Arrange monetary resources / funds at favorable prices and at proper time.
 Allocate resources / funds throughout the organization.
 Deal with banks, investment firms, modarabas, government departments of
Appliance and power division calculate and keep employees salaries record.
 Carry out final auditing of financial records prepared by Accounts department of
Appliances and power division.
Page # 39
INDUSTRIAL RELATION AND ADMINISTRATION (IR & A)

Key responsibilities of this department are:
 Maintenance of Attendance
 Check the material in & out from the factory
 Maintenance of factory
 Provide assistance to all departments regarding material
 Security and fire fighting
 Gate supervision
 Telephone exchange
 Fair price shops
 Canteen supervision
 Dispensary and health care
 Time clerks etc.
Procurement
PEL has state of the art methods of production and they also outsource the
products and raw material not only from Pakistan but also from foreign countries. So for
this purpose PEL has two different departments for procurement, which are:
 Local Procurement
 Foreign Procurement
Local Procurement
Local Procurement department is responsible for all the raw materials that are
required for making various products in the factory. It includes from nails to large metal
sheets. At the start of each financial year they receive a major plan from the management,
which highlights all the raw material required for each product. Dates and maximum time
limit for raw material requirement is also mention in this major plan. Now procurement
team makes small benchmarks and milestones from the major raw material required plan
in order to ease them for remembering the required time limit and also reminds finance
department to arrange finance for such purchases.
Page # 40
Foreign Procurement
Responsibilities and duties are same as Local procurement but they vary in the
dimension that, they have to arrange the raw material from abroad. They also receive
same plan as local procurement for the whole financial year and develop milestones to
carry out the plan execution properly.
The skill of this department is to purchase the raw material in the optimum cost
that best satisfy the need of production department and also to finance department in
quality as well as in monetary terms respectively.
Information technology department

IT department’s key responsibilities are as follows:
 Troubleshooting and problems facing in computers.
 Installing and deletion of soft wares.
 Right protection and issuance.
 Developed and maintain internal network.
 Developed and maintain domain of each person.
 Create and enhance internal software’s running currently.
 Hardware and all software issues.
Production
Production department’s key responsibility is to develop and create products that
are required for the specific department. They also receive a major plan for the whole
financial year that indicates the number and models of each brand and the deadline time
for each lot. PEL’s production department is comprised of different units according to the
products.
Page # 41
Accounts department
This particular department has the responsibility to prepare and keep an up to date
record of following:
 Financial keep of daily, including the income statement and balance sheet.
 Book keeping of daily monetary transactions.
 Production maintenance reports
 Cost data on labor, materials and overheads.
 Remittances and loans
 Expense reimbursement
 Tax statement
 Financial deals with the banks, leasing companies, modaraba companies,
and other government agencies through Finance Center.
The Accounts department maintains record of all its expenses through vouchers.
Generally the following types of vouchers are used for this purpose.
 Cash payment vouchers for cash transactions recording.
 Purchase vouchers
 Bank payment vouchers
 Journal vouchers for general expenses.
Page # 42
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2008
2008 2007
Note (Rupees in thousand)
Revenue 27 13,926,52 13,077,67

Less: sales tax and discount 1,274,579 1,264,183
Revenue - net 12,651,99 11,813,48
Cost of sales 28 3
9,814,594 7
9,223,623
Gross profit 2,837,399 2,589,864

Other operating income 29 18,247 100,458
2,855,646 2,690,322
Distribution cost 30 676,452 618,981
Administrative expenses 31 514,122 386,556
Other operating expenses 32 46,697 52,429
Finance cost 33 993,565 937,109
Share of profit of associate 5,585 12,162
Profit before taxation 630,395 707,409

Provision for taxation 34 177,970 125,165
Profit for the year 452,425 582,244
Earnings per share Rupees Rupees
Basic 37 4.14 5.50
Page # 43
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2007
2007 2006
Note (Rupees in thousand)
Revenue 26 13,077,67 11,042,160

Less: sales tax and discount 1,264,183 1,634,142
11,813,48
Revenue - net 9,408,018
7
Cost of goods sold and contract cost 27 9,283,623 7,360,351
Gross profit 2,529,864 2,047,667

Other operating income 28 100,458 112,553
2,630,322 2,160,220
Distribution cost 29 588,981 590,412
Administrative expenses 30 356,556 262,482
Other operating expenses 31 52,429 25,108

Finance cost 32 937,109 742,130
Share of profit / (loss) of associate 12,162 (23,337)
Profit before taxation 707,409 516,751

Provision for taxation 33 125,165 74,609
Profit for the year 582,244 442,142
Earnings per share Rupees Rupees

Basic 35 6.87 5.04
Page # 44
Financial ratios
It is a percentage that expresses a relationship between two pieces of financial

information. Or financial ratios are formed from two or more numbers taken from
the financial statements of businesses. The numbers may be taken from the Balance
sheet, the Income statement, or the Cash flow statement and combined in any
number of combinations.
Tools for financial analysis

1. Ratio Analysis
2. Horizontal Ratio Analysis
3. Vertical Ratio Analysis
Types of financial ratios
1. Liquidity Ratios or Liquidity of Short Term Assets
 Current Ratio
 Quick Ratio or Acid Test Ratio
 Net Working Capital
2. Activity Ratios
 Inventory Turnover Ratio
 Average Collection Period
 Average Payment Period
 Total Assets Turnover
Page # 45
3. Analysis for Long Term Debt Paying Ability
 Debt Ratio
 Time Interest Earned Ratio
4. Profitability Ratios
 Gross profit margin Ratio
 Operating Profit margin Ratio
 Net Profit margin Ratio
 Earning Per Share
 Return on Total Assets (ROA)
 Return On Equity
5. Ratios for Investors or Market Ratios
 Price / Earning Ratio
 Market / Book Ratio
 Earning Per Share
 Diluted Earning Per Share
 Dividend Payout
 Book Value Per Share
Page # 46
RATIO ANALYSIS
LIQUIDITY RATIO ANALYSIS
It is the company’s ability to pay its short-term obligations by using its assets. It
must be greater then 1 for the company to minimize its credit risks.
Current Ratio
Current Assets
Current Liabilities
Formula & Computation
Rs 9,401,294,000
Rs 6,605,430,000
1.42 : 1
Interpretation
It means that how efficiently the current assets are being used in order to meet
short term loans. In the current year 1.42 is a satisfactory figure for the company. It is
because the current assets have been increased as compared to the previous year because
of increase in credit sales.
Quick Ratio
Quick Assets
Current Liabilities
Rs 5,748,136,000
Rs 6,605,430,000
0.87 : 1
Page # 47
Interpretation
It shows that how much a company is able to make the payments as cash in order
to meet its obligations. In this year the company has increased its cash purchases and on
the other hand sales are all credit except exports. So 0.87 is less which is risk for the
company.
Net Working Capital
= Current Assets – Current liabilities

=Rs9,401,294,000 – Rs6,605,430,000
= Rs. 2,795,864,000
Interpretation
To run all the operations of the business, how much assets it has after paying all
of its liabilities. So it must be positive. In 2008 it shows a comprehensive amount which
is greater then the previous years.
TURNOVER RATIOS
Turnover ratio shows that how quickly the accounts are converted into cash or
sales. It is used to interpret the liquidity of various current accounts. It includes the ratio
of inventory, account receivables and fixed assets.
Inventory Turnover
Cost of Goods Sold
Formula & Computation Average Stock at Cost
Rs 9,814,594,000
Rs 3,571,168,000
2.75 times
Page # 48
Interpretation
It shows the no. of times the inventory completes the circle of consumption in a
year. Company’s inventory turnover is quite satisfactory. It shows that the inventory is
consumed 2.75 times in a year.
Average Payment Period
Accounts Payables
Formula & Computation Average Purchase per day

Rs 580,615,000
Rs 2213100 per day
26 days
Interpretation
Average Payment Period shows that after how much time the creditors are being
paid by the company. Company’s position in this respect is just below the average. It
means as much the payment period is high, it is better for the company.
Average Collection Period
Accounts Receivables
Formula & Computation Net Sales / (# of days in a year)

Rs 4,207,741,000
(Rs 12,651,993)/(365)
122 days
Interpretation
It means that in how much time the company receives the cash against its all
credit sales. So in the current year the figures of collection period for the company are
highly unpredictable.
Page # 49
Total Assets Turnover
Net Sales
Total Assets
Rs 12,651,993,000
Rs 16,394,779,000
0.77 times
Interpretation
This ratio indicate that how the assets are being used to generate the sales.
Turnover in respect of assets is not up to the mark in the current year for the company.
DEBT RATIOS
The debt ratio compares the total liabilities to the total assets.
Debt Ratio
Total Liabilities x 100

Total Assets
Rs 10,777,023,000 x 100
Rs 16,394,779,000
= 66 %
Interpretation
It indicates that whether the company is in the position to pay its short-term
liabilities by using its assets or not. So, company’s debt ratio 66% in very low it must be
less then 50% of the total assets.
Page # 50
Time Interest Earned Ratio
Earning before Interest & Tax
Formula & Computation Interest
Rs 1,618,357,000
Rs 993,565,000
1.63 times
Interpretation
It indicates the ability of the company that whether it is earning the sufficient
amount to pay the interest on its debts. It must be between 3 to 5 times but the ratio of
1.63 is very low.
PROFITABILITY RATIOS
These ratios indicate the company’s profits at different stages that are generated
against the sales.
Gross Profit Margin Ratio
Gross Profit x 100
Net Sales
Rs 2,837,399,000 x 100
Rs 12,651,993,000
22.43 %
Interpretation
Gross profit margin indicates the percentage of profit included in the net revenue,
before all the indirect expenses. In current year, 22.43 % is a minor portion of the net
sales.
Page # 51
Operating Profit Margin Ratio
Operating Profit x 100
Net Sales
Rs 1,618,375,000 x 100
Rs 12,651,993,000
12.79 %
Interpretation
It indicates the portion of the profit over net sales after incurring all the indirect
expenses to run all the operations of the business. However current years operating profit
ratio is very low.
Net Profit Ratio
Net Profit x 100
Formula & Computation Net Sales

Rs 452,425,000 x 100
Rs 12,651,993,000
3. 58 %
Interpretation
It represents the percentage of profit after excluding all the expenses and
including all the other incomes. Company’s net profit margin in the current is just 3.58%
which is very low.
Page # 52
Return on Equity
Net Profit x 100
Formula & Computation Stock Holder Equity
Rs 452,425,000 x 100
Rs 3,677,391,000
12. 3 %
Interpretation
It shows that how much a company is gaining against the investments of the
ordinary share holders. Company’s return on equity in is 12.3 % which is showing a very
little rate of return.
Return on Assets
Net Profit x 100
Formula & Computation Total Assets
Rs 452,425,000 x 100
Rs 16,394,779,000
2.76 %
Interpretation
Return on assets ratio represents the profit earned by the utilization of company’s
all the assets. In 2008 it is only 2.76 % which represents a very low margin.
Page # 53
MARKET RATIOS
These are the ratios that represent company’s worth in the market. For an investor
these ratios are considered, it shows the share of profits that are distributed among the
share holders.
Price Earning Ratio
Market Price per Share
Earning per Share

Rs 21.91per share
Rs 4.14per share
5.29 times
Interpretation
It shows that how much amount an investor invests to get a rupee profit from the
company. 5.29 times means that the investor is investing 5.29 rupees to earn 1 rupee
which is not a bad option for the investor.
Dividend Yield
Dividend per Share

Formula & Computation Market Price per Share
zero
(no dividend declared in 2008)
Interpretation
In this year, company declared neither cash nor stock dividend.
Page # 54
Book Value
Common Stock Equity
Formula & Computation No. of Shares Outstanding
Rs 1,496,677,000
97,042,687 shares
Rs 15.42 per share

Interpretation
Book value is the value of each share issued in the market; either is issued at par
or discount. Company’s book value is favorable in the current period.
Market / Book Ratio
Market Price per Share
Formula & Computation Book Value
Rs 21.91per share
Rs 15.42per share
1.42
Interpretation
It shows the credit standing of the company’s share. Here 1.42 is positive which
shows that its market price is more then the book value. So it is favorable.
Page # 55
Dividend Payout Ratio
Dividend per Share
Formula & Computation Earning per Share

zero
(no dividend declared in 2008)
Interpretation
In this year, company declared neither cash nor stock dividend.
Page # 56
COMMON SIZE ANALYSIS
Common size analysis is used to indicate the company’s internal structure. It tells
us about the relationship between sales to income and expenditures. In it net revenues of
the year are taken as base and all the items fluctuations are determined on the basis of it.
Profit & Loss Account ( Vertical Analysis)
2006 2007 2008

Description
% age % age % age
Revenue net 100.00 100.00 100.00
Cost of sales 78.23 78.58 77.57
Gross profit 21.77 21.42 22.43
Other operative income 1.20 0.85 0.14
Distribution cost 6.28 4.99 5.35
Administration 2.79 3.02 4.06
Other operative expense 0.27 0.44 0.37
Finance cost 8.31 7.93 7.85
Profit before taxation 5.49 5.99 4.98
Provision for taxation 0.79 1.06 1.41
Profit for the year 4.70 4.93 3.58
Page # 57
Interpretations
In the Common Size analysis of the Profit and Loss Account of Pak Elektron
Limited, it is shown that there is a very minor difference in the cost of sales and gross
profit. There is also a little bit change in the Operating Income and Distribution Cost.
The plus point of the company is that distribution cost is cutting down as
compared to the last 3 years. It is 5.35% in 2008 as compared to, 4.99% in 2008 because
of increase in operations. Administration cost increases to 4.06% of revenue as compared
to 3.02% in 2008.This cost is increasing from last 3 years whish must be taken under
consideration. Other operative expenses are showing minor fluctuations. Only in 2007
they were decreased but before it, there were at increasing trend.
The firm finance also shows minor changes as compared to previous years. It is
because the interest on short term borrowings is increased and on long term borrowings,
it decreased. The firm’s profit before tax increases to 5.99% in 2008 but in 2008, it is
decreased to 4.98%. The company has increased its provisions for taxation in relation to
revenues. At the end, the net profit is decreased in 2009, however it was improved in
2008 but due to increase in expenditure in 2009, it has been decreased.
Page # 58
BALANCE SHEET
Vertical analysis of balance sheet is done to compute the %ages of the items
under assets and liabilities. To calculate the % of the items of assets, total assets are taken
as base; similarly the total liabilities are taken as base to calculate the % ages of
liabilities.
Equity & Liabilities Vertical analysis
2006 2007 2008

Description
% age % age % age
Share Capital & Reserves
Share Capital 12.03 11.85 9.13
Reserves 14.52 16.22 0.80
Surplus on Revaluation 4.59 7.13 11.84
Non Current Liabilities

Liabilities Against Assets Subject to
1.81 1.62 1.04
Finance Lease
Long Term Financing 2.48 11.38 15.13
Deferred Liabilities 4.05 6.38 8.77
Deferred Income 0.69 0.57 0.51
Current Liabilities
Trade and Other Payables 15.83 13.62 12.71
Interest on Loans and other Payable 2.24 1.85 1.34
Short Term Borrowings 37.55 26.36 23.60
Current Portion of Long Term Debts 4.22 3.02 2.63

Interpretations
Page # 59
In the common size analysis of the Balance Sheet it is shows that in 2007 share
capital is just 3.49% of total liabilities. Reserves have been decreased up to 0.80% from
16.22% in 2009. It is because the company has decreased its short term financing.
Regarding the non current liabilities, long term financing is decreasing till 2007 but it in
2009 it has an increasing trend.
Deferred liabilities are also showing an increasing behavior in the last some years.
However, the short term borrowing has been decreased because the company has paid its
short term debts every year. Regarding current liabilities company paid 10% of its short
term borrowing in 2008. However there is a little variation in trade payables and interest
payables. Regarding the current portion of long term liabilities, it has a decreasing trend
from 2007 to 2008, which is a positive factor.
Page # 60
Assets ( Vertical analysis)
2006 2007 2008

Description
% age % age % age
Non-Current Assets
Property Plant and
31.11 35.04 38.63
Equipment
Intangible Assets 5.96 5.04 3.50
Long Term Investment 0.11 0.11 0.32
Long Term Deposits 0.38 0.31 0.21
Current Assets
Stores Spares and Loose
0.58 0.56 0.50
Tools
Stock in Trade 25.49 21.72 21.78
Trade Debt 25.87 25.53 25.67
Loans and Advances 2.23 2.73 3.31

Trade Deposit and Short
2.84 2.66 1.96
Term Pre Payments
Other Receivables 0.09 0.25 0.20
Other Financial Assets 0.90 1.41 0.44
Cash and Bank Balances 4.44 4.65 2.65

Interpretations
In the common size analysis of the Balance Sheet it is shows that in 2007
total non current assets are almost 53% of total assets company invest huge investment in
the property plant and equipment. But in next years it is decreased up to a minimum of
40%. Moreover, we can analyze that there is an increase in long term investment instead
Page # 61
of long term deposits. Company has very minor %age in long term investment and long
term deposit.
Regarding the current assets company has almost 66% investment in 2009.
Investment in current assets shows that company has ability to earn more and more. It is
shown that there is a continuous decrease in store spares and loose tools but there is also
a continuous increase in stock in trade which is a good sign for company’s growth. There
is a little change in advances, trade debts and other pre-payments till 2009.
Other receivables are decreasing rapidly as compared to the previous years.
Company’s cash and bank balance situation in the last four years is just above 4% of the
total assets except in 2009. It is decreased very sharply is this year because company
made the purchase payments from this.
Page # 62
Profit & Loss Account ( Horizontal Analysis)
2006 2006-2007 2006-2008

Description
% age % age % age
Net Revenue 100.00 18.43 26.12

Cost of Sales 100.00
(22.64) (22.00)
Gross Profit 100.00
26.48 34.48
Other Operative
100.00
Income (10.75) 33.34
Distribution Cost 100.00
4.84 14.57
Administration 100.00
47.27 95.87
Other Operative
100.00
Expense 108.81 85.98
Finance Cost 100.00
26.27 33.88
Profit Before Taxation 100.00
36.90 21.99
Provision for Taxation 100.00
67.76 138.53
Profit for the Year 100.00
31.69 2.33
Interpretations
The above analysis has been made by taking 2007 as a base year. There is
incensement in revenue at really greater rate as compared to 2007, which is showing a
good sign for the company. Rapid increase in Cost of Sales is not a good sign for the
company; it must be reduced in order to make good profit although Cost of sales is
increasing but G.P is also increasing rapidly. We can analyze that that as the sale is
increasing; all kind of expenses are increasing which means company is not becoming
Page # 63
able to meet its all kind of expenses in a less ratio. Finance cost is increasing which is
showing that the firm’s long term borrowings are increasing.
The firm has to reduce this cost. A huge incensement in the provisions for
taxation is due to the very low provisions in base year2007.It is also a need for the
company to make huge provisions as profit is increasing. Profits of the company are also
increasing as compared to 2007 which is a good sign.
Page # 64
BALANCE SHEET
In the horizontal analysis of the balance sheet, we take 2007 as a base year on and
on the basis of which the changes in each item is calculated. In it we calculate the
fluctuations in share capital, current and non current liabilities and on the assets side,
fixed assets and current assets are being analyzed.
Equity & Liabilities ( Horizontal analysis)
2006 2007 2008

Description
% age % age % age
Share Capital & Reserves
Share Capital
100.00 577.77 631.90
Reserves
100.00 2409.37 169.74
Surplus on Revaluation
100.00 52.23 123.09
Non Current Liabilities
Liabilities Against Assets
100.00 250.55 224.35
Subject to Finance Lease
Long Term Financing
100.00 186.70 352.35
Deferred Liabilities
100.00 284.31 555.41
Deferred Income
100.00 85.74 85.74
Current Liabilities
Trade and Other Payables

100.00 192.53 224.11
Interest/Markup Occurred on
Loans and other Payable 100.00 188.42 194.43
Short Term Borrowings
100.00 160.40 203.89
Current Portion of Long Term
100.00 86.12 106.72
Liabilities
Page # 65
Interpretations
In horizontal analysis trends are computed by taking 2007 as a base year.
Company has more and more reserves because by taking 2007 as base year reserves are
almost 200% more in 2009 than 2008. There is also handsome increase in long term
financing. Management should decide to reduce long term financing because it creates
negative effect on the net income of the company. Regarding the current liabilities,
company’s current liabilities are increasing rapidly from 2007 to 2008 but in 2009 it is
slightly decrease. Short term borrowing has also same situation like trade payables.
Page # 66
Assets ( Horizontal Analysis)
2006 2007 2008

Description
% age % age % age
Non-Current Assets
Plant and Equipment 100.00 121.36 176.19

Intangible Assets 100.00 219.86 216.80
Long Term Investment 100.00 12.90 54.75
Long Term Deposits 100.00 270.27 405.00
Current Assets
Stores and Loose Tools 100.00 130.96 166.79

Stock in Trade 100.00 191.55 272.79
Trade Debt 100.00 324.46 429.15
Loans and Advances 100.00 161.80 278.18
Trade Deposit and Short
100.00 240.96 252.58
Term Pre Payments
Other Receivables 100.00 10.12 11.17
Other Financial Assets 100.00 928.84 412.41
Cash and Bank Balances 100.00 455.05 368.47
Interpretations
There is an increasing trend almost in the items of the Balance sheet such as
property and plant equipment, Trade debt, Loans and advances trade deposits and short
term pre payments other financial assets. A huge increase in Cash and Bank Balances.
There is a decreasing trend in receivables which is a good sign for the company.
Page # 67
Summary Ratio Analysis
Liquidity ratio
Ratio 2008 2007 2006

Current ratio 1.42 1.32 1.04
Quick ratio 0.87 0.84 0.62
Net working capital Rs2,795,864,000 Rs1,692,604,000 Rs262,077,000
Activity ratio
Ratio 2008 2007 2006
Inventory turnover 2.75 times 3.68 times 2.85times
Average collection period 122days 92days 101days
Average payment period 26days 20days 27days
Total asset turnover 0.77 1.02 0.93
Profitability ratio
Ratio 2008 2007 2006
Gross profit margin 22.43% 21.92% 21.77%
Net operating profit 12.79% 13.82% 13.63%
Net profit 3.58% 4.93% 4.70%
Return on asset 2.76% 5.04% 4.37%
Return on equity 12.3% 17.96% 16.48%
Debt ratios
Ratio 2008 2007 2006
Debt ratio 60% 64% 68%
Time interest earned ratio 1.63 times 1.74 times 1.73 times
Market ratios
Ratio 2008 2007 2006
Price Earning ratio 5.29 6.58 5.66
Dividend Payout ratio -------- -------- --------
Page # 68
PEST ANALYSIS
Political environment
 Pakistan is facing the situation of great political instability and uncertainty since
last couple of years. According to the economic survey Pakistan is at the 11 th
number of top most vulnerable countries of the world. Due to this problem
business activities in Pakistan are severely affected. The Foreign Direct
Investment also decreased dramatically due to current insecurity.
 There are very few incentives to the manufacturers in Pakistan government as

compare to upcoming giants like China. The cost of manufacturing is very high
due to the electricity rates and other overheads. So most of the time manufacturer
hesitates to do manufacturing in Pakistan and prefer to import finished goods or
only assemble goods in Pakistan.
 The government decided to increase the minimum wage rate of workers from
Rs.4500 to Rs. 6000 which increase the cost of production and inflation. It is
heard that it will be increased more in future.
Economic environment
· Due to the global economic crises, Pakistan’s economy is also facing a lot of
problems. Although Pakistan’s economy is not directly hit by the crises yet the
economic situation is severe in Pakistan.
· To resolve the power sector issues, removing subsidies and concurrent transfer of
international oil price changes is also likely to risk a further slowdown in
economic activities, at least in the near future.
· In Pakistan there is a strong black economy due to the circulation of black money
from illegal businesses like smuggling.
· Unemployment rate has been increased from 5.6% to 7.4% in
Pakistan Inflation Rate is above 20% in Pakistan
· Per capita income in dollar term rose from $1042 last year to $1046 in 2008-09,
thereby showing marginal increase of 0.3 percent
· Private sector investment was decelerating steadily since 2004-05 and its ratio to
Page # 69
· GDP has declined from 15.7 percent in 2004-05 to 13.2 percent in 2008-09
· Public sector investment to GDP ratio which has been depicting a consistent
increase from 4.0 percent in 2002-03 to 5.6 percent in 2006-07, declined to 4.9
percent in 2008-09.
· The consumers in Pakistan are spending most of their income on food and basic
needs of life.
Social environment
· Now a days people are becoming more price conscious due to inflation and crises
in Pakistan. Their primary focus is on food and daily use goods and thus people
have lessened their interest in electronic goods.
· Now consumers prefer the Split Air Conditioners over Window Air Conditioners
because Split ACs are considered as energy savers. That is why Window ACs are
almost obsolete because of high energy consumption and Split ACs are becoming
more popular because of low electricity bills.
· In countries like Pakistan the usage of Air Conditioners is great because of
extended summer season of nearly 8 months. In Pakistan Air Conditioners are
used by upper and middle class.
· The companies are becoming more socially responsible these days as they have
introduced CFC free refrigerants, anti bacterial and anti dust filters.
· The people in Pakistan have started considering Split Air Conditioners as a status
symbol and feel disgraced if split units are not installed in every room of their
houses. That is why people purchase home appliances on installments from the
dealers.
Page # 70
Technological environment
With the introduction of Split Air Conditioners, it made the air condition
affordable and easy to install and maintain.
· The efficiency of air conditioner depends upon its outer unit. The bigger is the
outer units the more efficient will its inner unit. So companies are introducing big
outer units to get more efficiency.
· In split Air Conditioners the rotator compressors are used which are soundless and
do not heat up in extreme hot situation.
· In the international market, the non CFC (Chloro-floro Carbons) are shifting in air
conditioning industry and all major companies are using non CFC gases in their
products. CFC gases are harmful for the environment and cause depletion of
ozone layer, due to which the danger of global warming is happening. From 2005,
no CFC gases product can be sold or bought in the international market. So to
remain in the international market it is necessary for the Pakistani companies to
adopt new technology of non-CFC gases.
· Companies are introducing refrigerators with cool bank which remain working for
5 hours even after switch off
· The multinational companies are using information technology to coordinate and
communicate within companies as well as with external parties. The electronic
inventory management systems are used to reduce the cost of handling the
inventory and orders.
Page # 71
SWOT ANALYSIS
The strengths, weaknesses, opportunities and threats of PEL are discussed below:
STRENGTHS
PEL has the following strengths and is in more competitive position in these areas
than its competitors. Following are the main strong points of PEL.
 Strong Brand Image
PEL has created the strong brand image in the mind of the customers
through higher quality and low price. The customers of the PEL always prefer to
buy the PEL home appliances like WRAC split AC and refrigerators whenever they
wanted to buy. PEL is a popular company in Pakistan and every one knows about
the PEL products and its brand. That’s why PEL selling of WRAC are very high in
the market than the competitors selling.
 Strong Dealer Network
It is also the plus point for the PEL that it has also developed the
strong dealer network in the market. PEL has its dealers in 22 major cities of
Pakistan like Karachi Lahore, Quetta, Peshawar, Rawalpindi, Hyderabad, Multan,
Gujarat etc. The dealers are always trying to sell the PEL appliance to the customers
because they know there are high margin in the PEL products. They can get more
money after selling the PEL products. The PEL also provides more incentives to
their dealers than their competitors. Dealers are very conscious about the PEL
products and always guide the customer in buying the PEL appliances and tell them
the more qualities of PEL products than others products.
 Strong Quality, Sales and Services
PEL has Country-wide Customer Care Centers in 21 major cities
of Pakistan which enable customers to access PEL customer care centers easily. PEL
is also in a strong position that it provides the superior quality to its customers. It
makes sense in the mind of the customers that PEL products are better in quality
than the other companies’ products. PEL also provides the after sale service to their
Page # 72
customers which delight the customers satisfaction. It is another way to advertise the
products because when customer is highly satisfied then he tells the other ten
persons that they should buy the PEL products. It is very good publicity of PEL
products that PEL Company gains.
 ISO Certified Company
PEL was 16th company in Pakistan which got ISO 9002
Certification in international standard practices in PEL have been upgraded as per
the revised ISO 9001 standards and its scope of application is expanding ever since
and top management is committed to make PEL a total quality management (TQM)
company.
 Market leader in WRAC (Window Room Air Conditioner)
It is another strong point that PEL is a market leader in WRAC. The
window room air conditioner is more demanded by the customers than its
competitor’s air conditioners because it has more durability in operating systems
and cools the room in few minutes. PEL always strives to provide the innovative
features in WRAC. PEL air conditioner is cheaper and has a higher quality than
others WRAC. That’s why customers always purchase the PEL window air
conditioner.
 Monopoly in Power market
PEL has the largest market share in power market in Pakistan and has a
monopoly in market. PEL is one of the major electrical equipment suppliers to
Water and Power Development Authority (WAPDA) and Karachi Electric Supply
Corporation (KESC), which are the largest power utilities in Pakistan. Backed by
the innovative genius of Saigol Group, PEL is now technology forerunner and
market leader in providing new products and services to meet ever changing and
technology intensive needs of its customers. PEL aims to maintain this competitive
edge and at the same time keep striving to improve it further by continuous R&D,
creating new knowledge and adapting to global developments in technology and
product design.
Page # 73
 Number 2 in Appliances Market in Pakistan

Pak Elektron Limited has a second position in appliances market in Pakistan after
Dawlance. PEL always continuously strives to pursue the strategies adopted by the
competitors. PEL is also making efforts for the technological improvements and
better customer services to become market leader in appliances Pakistan.
 Strategic Alliance with LG
The strategic alliance with LG has increased the strength of PEL. As
LG is a major player in international appliances market, it will give PEL the
advantage of technology and increase market share.
 Contract with Government of Punjab
PEL has the contract with Government of Punjab for providing and installation of air
conditioners in the premises of Service and General Administration Department of
Punjab. This remains PEL busy in operations even in the current crises of low
demand in market.
 Customer Loyalty
As PEL is a pioneer of electronic manufacturer in Pakistan and in the market since
last 5 to 6 decades. So it has a strong customer loyalty and people are using PEL’s
products generation to generation. As PEL is satisfying the needs of customers with
economic and durable products, the loyalty of its customers is ever increasing.
 Strong Grip in Home Appliance
So PEL is one of the companies, which is having a strong grip in the home
appliance i.e. WRAC, Refrigerators, micro way Owen etc that is a strong point for
the company. PEL is penetrating the market by introducing the new home appliance
like Split Air conditioners and Water Dispensers and always trying to get the
maximum shares in the home appliance market.
 Strong Research and Development Department
PEL has a strong research and development department that is continuously trying
to develop new features for the products. R&D department spends huge amount of
Page # 74
money for the development of product. R&D makes research for introducing the
new product and asks the customers what they want extra in our product purpose
they hire the highly qualified employees in R&D department. That is another strong
position of PEL.
 Free Customer Service
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.
 Public Limited Company
Although PEL is owned by the SAIGOL GROUP but its shares can be purchased
and sold in stock exchange market. So every one who is interested in purchasing the
shares of PEL he can purchase. It is also called public limited company. So people
are more interested in buying the PEL products.
WEAKNESSES
Like other companies PEL has some weaknesses in operating the business. If PEL
overcome on these weaknesses then it can become a market leader in the home
appliance. PEL loose some competitive edge in the following points:
 Financial Problems
Sometimes PEL faces the financial problems because its stocks are so much piled up
in the stores that create the problem of cash flow because when the stocks are not
sold and the production is in process for 24 hours a day than the company faces such
problems. So company aggressively researches the sources of cash and stresses the
dealers
 Lowto sell the PEL’s Level
Satisfaction products to the end consumers. Company sometimes sells
of Employees
The most useful and important assets for any company are its employees; if they are
satisfied they will give their best performance and which will be fruitful for both
employees as well as for the company. It is very big weakness of PEL that its
employees are not satisfied and thus not giving their best performance. Middle and
Page # 75
lower level of employees have not any sense of involvement in decision making for
the company, as PEL has not given them empowerment to take their decisions for
the company.
 Lack of Advertisement
It is a second major weakness of PEL that it has lack of advertisement on TV and
other media. That creates hurdle in selling the products and customers cannot know
the changes, which are made in products by the company time to time. Company is
not in a position that it made advertising of all their products on a wide range
because of its high cash requirement towards the production side. Due to this
problem company always make efforts to develop strong relationships with dealers.
 System Variations
It is also the main weakness of PEL that there are rapidly a change in polices of
selling the products. That’s creates problems for the selling team how to sell the
products to the dealers because the top management requires the urgent amount of
money. So selling team sells the products sometimes on hard cash that will reduce
the prices of products that gives the benefits to the dealers and creates problems for
the management.
 Lack of Product Range
PEL has introduced more products of consumer items but there are more needs to
develop new consumer items like PEL Television, Vacuum cleaner and other items.
Due to lack of product Range, Company cannot earn more profi consumers have
high demand of these products and they say that if company is investing in these
products then we can keep all PEL items and we never need to keep other’s
company products.
 Inappropriate Working of HR Department
In this modern and highly competitive era, Human Resource Management has an
immense importance for the company. The companies making progress in the world
have excellent human resource management departments. In PEL, the Human
Resource department is not performing their all duties properly. HR department was
started before 3 years and it looks like a formality that company has HR department.
Page # 76
HR department is not functioning properly and it is weakness of company which can
cause company’s repute in the market and will loose attractiveness for the
employees.
 Less Utilization of Resources

Due to lack of finance a company cannot utilize all its resources on its
full capacity. It increases the cost of products per unit that decreases the profit
margin of each consumer item. Sometimes company cannot allocate the resources
according to the requirements of production department that’s becomes the problem
for the complete utilization of resources. For the company it is also the main point
of weakness.
OPPORTUNITIES
For the PEL there are more opportunities for expansion the business. If
PEL realize that opportunities then it will be more fruitful and profitable for the
company. Even if company does not take advantage of these opportunities then it
will loose its competitive position and high profit. Its competitors will give PEL
tough time to pursuing the opportunities that are adopted by them. Following are the
opportunities for the PEL.
 Exploration of Market in Pakistan

PEL has the opportunity to explore the market in all over the Pakistan.
Even though PEL introduce its products in all cities of Pakistan but there are so many
places that have the capacity to absorb the PEL’s products. These places are tribal
areas in NWFP and northern areas of Punjab and NWFP, central area of SIND. If
company introduces their products in these areas then it can get a large amount of
profit and increase its market shares.
 Rising population
Although rise in population is a problem for the country but where
there is problem, there is an opportunity. So due to increase in population the demand
will also increase in the market. So PEL can have more customers in future.
Page # 77
 Increase in Product Range
It is the main opportunity for the PEL that it can increase its product
range that will be a more profitable for the company. PEL can improve its product
range in the power segment with the establishment of a new factory and can explore
further growth opportunities in the Middle East and Eastern Europe, going forward. If
PEL does not take this opportunity then it will loose high margin of profit and market
share. It will reduce the fixed cost and increase the efficiency of the employees.
 Export Opportunity
PEL Company has also the opportunity to export their products in other
countries like UAE, SAUDI ARABIA, and other Arabic and African countries. It will
not only reduce the dependence on one market but also increase the market shares and
profits. It will also help the company to spread the fixed cost on all of its production
that will reduce the total cost and company will enjoy the high profit.
 Increase in Production Capacity
Company can also increase its production capacity at the maximum
level that will increase the efficiency of the employees and also will reduce the total
cost. Sometimes company cannot allocate the resources according to the
reproduction department that’s becomes the problem for the complete utilization of
resources. Company should look the market conditions then it will produce their
products.
 Increasing Investment in Power Sector
Due to current power and energy crises in Pakistan, the government
is increasing investment in power sector. So this is a great opportunity for PEL to
focus on power division and take the steps to capture high demand of power
products in the future.
THREATS
PEL Company in such a competitive era has many threats as well.

These threats are for the present situations and future. Company should make its
policies and strategies according to these threats. So following are the main threats
for the PEL:
Page # 78
 Strong Competition
There is very strong competition for the home appliance in the market. So every
company tries to come in the number 1 position for achieving the maximum shares
in the market. Every company adopts different strategies for selling of the products.
It reduces the profit margin of each company and increase the bargaining power of
the buyers who will demand higher quality of products and lower cost. That is the
main threat for the PEL Company.
 Chinese Products
China’s products are another threat for the Pakistani companies
because these products are cheaper than the Pakistani products. An even china
product not well in quality but it is comparatively in low prices than the consumer’s
home appliance that are manufactured by the indigenous company. China products
stress the indigenous companies to lower the quality and prices that will not be
profitable in the long run.
 Decrease in Pakistani Rupee Value
The economy of Pakistan is not strong and that is why value of
Pakistani Rupee is decreasing. This decrease in value of Rupee can severely affect
the company as it will result into increase in the cost of raw material purchased from
outside Pakistan. This will increase the cost of production and company has to rise
in prices of its product which can disturb its economic products position in the
customer’s minds.
 Price war
As there is a stiff competition in the home appliance market that will
cause the price war. So every company reduces the prices of its products to increase
the sales. It will not only reduce the profit margin of the company but also reduce
the quality of products. So price war is the main threats for all the companies, which
are operating in these products.
 Decreasing Growth Rate in Pakistan
There is also slow growth rate of home appliance in Pakistan that will
increase the stocks of the company. It becomes the burden for the company that how
to sell these stocks. Its main reason is that purchasing power of the buyer is very
Page # 79
low and it has no income to buy the expensive home appliance. It is also becoming a
main threat for all the companies.
 Instability of Government
The rapid changes in governments will become threats for the
companies because every government adopts its own policies for the industries. So
it increases the uncertainty for the investors who want to invest heavy amount in their
new projects. That’s become the major threat for the companies and decreases the
profitability. Due to fear of politically instability companies will also not invest the
heavy amounts.
 Tax Department
Tax department is another major threat for the companies that will
restrain the business expansion. There is more complicated tax procedure for the
companies, which are interested to increase the investment in their businesses. Due to
fear of heavy taxes companies would not like to invest the heavy amount.
 World Trade Organization
World Trade organization gave the permission in 2005 to each company
of home appliance to export their products after paying fewer duties or duty free
products. That will increase the pressures for the indigenous companies to reduce the
prices and increase the quality. It will increase the competition among the foreign
companies and indigenous companies. But our companies also run under uncertainty
conditions. This will decrease the morale of indigenous companies.
 Rapid Technological Changes
World is watching fast technological changes and there is a rapid change
in designs and technologies in products. So it is very important to move with latest
technologies which increase the cost of production.
 Black Economy in Pakistan
Due to the black economy in Pakistan the marketers cannot make proper
estimation of market demand. The marketers acquire data from State Bank Economic
Page # 80
Surveys which do not reflect the fair picture of the economy. It is a threat for company
as it will not properly forecast and meet the market demand of Pakistan, which can cause
customers to switch from PEL products to other companies products.
Page # 81
RECOMMENDATIONS
On the basis of my knowledge and perception I can recommend the company:
· Pak Elektron Limited should adopt a true decentralized organization setup

which gives all employees to take part in decision making for the company. It will
boost their motivation and loyalty for the company.
· The company should have a strong marketing information system to make
proper forecasts about market situation.
· The company should use information technology efficiently to communicate
between departments in fast and proper way to save time and other resources.
· The company should announce two holidays (Saturday & Sunday) in a week; it
will not only help the company in cost cutting but also increase efficiency of its
employees.
· The company should add more features to their products. People are attracted
towards products with unique features and something that would make the
customers feel that they have got their moneys worth.
· The company should give Incentives and other benefits to its employees to
motivate them and to increase their performance.
· The company should take steps to make sure proper functioning of Human
Resource Department. There should be fair performance of employees and
reward them according to their performance.
· As economy is facing recession, PEL should give more allocation of budget to
its marketing department. Because in such economic conditions Marketing is
considered the key department which creates more value in the minds of the
customers. To gain more competitive advantage over its co-market players, PEL
more focus on the Pull strategy in its promotion mix especially for appliances.
Page # 82
CONCLUSION
To conclude I can say that I had a wonderful and learning experience in Pak Elektron
Limited which make possible me to write this report. In Pakistan the brand image of Pak
Elektron Limited is excellent in the minds of its customers. The company has good
strengths and so it can make a rapid progress in local as well as foreign markets. In my
views the management philosophy is the main hurdle in progress of the company. Now
the company’s focus is only profit and employer’s oriented which cause emp motivation.
No doubt PEL is making excellent products, but unfortunately PEL is not realizing
creative advertising is also important part of their Marketing success.
The current strategic alliance of PEL with LG will helpful for the company to expand its
technical and production capacity and will also expand the target market. I see the future
of PEL very bright as it is finding new opportunities and the company has the potential to
compete with any challenge in the market as it is in the market since an era of above 50
years.
Page # 83

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Bahuddin Zakaria University Sahiwal Campus.

 PEST Analysis………………………………………………… Page #69

Introduction to Saigol Group

“Wealth by itself is a curse.”

List of Companies of Saigol Group

Kohinoor Textile Mills

The two facilities cover an area of 1,033,200 Sq ft and 614,252 Sq ft respectively.

Kohinoor Power Company Limited

“To excel in providing engineering goods and services through

 To provide quality products and services to the complete satisfaction of our

PRODUCTS OF APPLIANCES DIVISION

Features of PEL Split AC:

Window Air Conditioner:

Floor Standing Air Conditioners

Floor Standing Air Conditioners

Features of Microwave Oven

Silver line Life stream

PRODUCTS OF POWER DIVISION

The Power Division of PEL has the following products:

PRODUCTS OF POWER DIVISION

 To carry on the business or businesses of manufacturing, selling, installing,

 To carry on any business whether manufacturing or otherwise which maybe

 To produce high quality and standard products.

 To produce equipment to be used in numerous projects of national

 To secure a high share / quota of WAPDA’s demand for power products.

 To produce skilled workers and technicians through its apprenticeship

Mr. Naseem Saigol Chairman /Chief Executive

Mr. Azam Saigol Chairman / Member

Organizational Hierarchy of PEL

Director Marketing & sales

G.M Finance G.M Marketing Sr. Manager QC Sr. Manager

G.M Manufacturing G.M Marketing

 Corporate Sales Department

 Consumer Marketing Department

 Customer Service Department

 Distribution & Credit Control Department

 Human resource department

 Industrial relation and administration (IR & A)

 Corporate sales department

Hierarchy of Corporate Sales Department

Sr. S.O ASM ASM S.C S.C

S.O T.C ASM ASM S.C

S.O S.O S.O

After the pre-qualification Company sent quotation to the customer prepared on

Terms & Conditions:

 Customer Service Department (CSD)

 Consumer marketing department (CMD)

HUMAN RESOURCE DEPARTMENT

INDUSTRIAL RELATION AND ADMINISTRATION (IR & A)

Information technology department

Revenue 27 13,926,52 13,077,67

Gross profit 2,837,399 2,589,864

Profit before taxation 630,395 707,409

Earnings per share Rupees Rupees

Basic 37 4.14 5.50

Revenue 26 13,077,67 11,042,160

Gross profit 2,529,864 2,047,667

Administrative expenses 30 356,556 262,482

Other operating expenses 31 52,429 25,108

Profit before taxation 707,409 516,751

Earnings per share Rupees Rupees