ON

H Ha am mi id d R Ri ia az z
ACCA

(Sept 17 To Oct 15
)

YEAR 2013

ON
PAK ELEKTRON LTD.









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PREFACE

There is a large difference between knowledge and practical work. Books are the
source of knowledge, but practical work is something different. An internship for four
weeks is a good step for students to acquire some practical knowledge about the course.
In class a student gains different concepts of accounting, Finance, Costing, Banking,
Insurance, Management, computer and about other related fields. Internship program
provides him/her the chance to see all these things from near and thus strengthen his
concepts.
Office environment is entirely different than class, so the student faces various
problems in practical work, business field and office environment. But with the laps of
time they adopt themselves with the office environment and learn the management
behaviors, attitudes and nature of work.
This training provides me a lot of practical knowledge and confidence, which I feel will
help me in my practical life. In PEL Industry, I learn some and the person with whom I
worked tried best to deliver some knowledge. In this report there is a complete profile of
the Saigol Group, Who is the owner of the PEL Industries. There are also all the
information about the policies, structure and all the financial information about Pak
Elektron Limited.



















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ACKNOWLEDGMENT

First of all, I am thankful to Almighty Allah, who has given me the strength and
determination to carry out this internship. My resource persons were

Mr. Imtiaz Ahmad
Mr. Akmal Siddique
And each valuable member of Audit department

I would like expressing my sincere gratitude to:
Mr. Akmal Siddique
For being so kind and very cooperative.

DEDI CATI ON

My Sweet Parents, Nice Teachers, sisters and brothers, friends and very nice co-
operative people of the PEL Who instilled in me the importance of education and hard
work.
Who sacrifice their sweet wishes to fulfill my wants. And whose prayers helped me in
every field.















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CONTENTS

Sr. #

1. Vision & Mission statement
2. Company Information
3. Range of Products
4. Future Strategy
5. Management Profile
6. Expenses Audit
7. Management Hierarchy
10. Finance Department























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VI SI ON STATEMENT:

TO EXCEL IN PROVIDING ENGINEERING GOODS ANDSERVICES
THROUGH CONTINUOUS IMPROVEMENT

MI SSI ON STATEMENT:

To provide quality products & 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 employees 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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COMPANY INFORMATION
HI STORY

PAK ELEKTRON LIMITED (PEL) was set up in 1956 as a joint venture with one of the
largest and renowned manufacturers of electrical equipment Messrs. AEG of West
Germany for manufacturing Transformers, Switchgears and Electric Motors etc. The
entire job of machinery requirements and layout of the factory building was planned and
implemented by AEG who produced very well balanced facility for the design and
manufacture of the above equipment and the commercial production was commenced on
22 November 1956.
Up to 1962, when AEG finally phased out, AEG experts and PEL personnel carried out
the designing and manufacturing of all equipment jointly. PEL staff, in the meantime, had
received specialized training in USA and West Germany, which enabled PEL to establish
it as the leading manufacturers of electrical equipment in the country with an excellent
reputation for high quality, and thus PEL came to be known as "THE QUALITY
CONSCIOUS COMPANY".
After conclusion of agreement with AEG, the then sponsors purchased Malik Brothers
total share holding of AEG. The production continued with AEG designs with much
greater emphasis on the quality and reliability of the products, which earned unique
distinction of supplying electrical equipment to projects of paramount national
importance like Mangla Dam and Tarbela Dam Projects. PEL equipment was approved
by consultants of international repute including Preece Cardew & Rider (England),
Binnie & Partners (England), Harza Engineering International (USA) and Miner & Miner
International Inc. (USA).
The majority shares were acquired from Malik Brothers by Saigol Group on 11 October
1978 and immediately on takeover the new management chalked out both long term and
short term plans to put the company back on the path of progress. As a part of first phase
of its BMR Programmer the new management injected the additional working capital of
Rupees 8.98 million and Bridge Loan of Rupees 7.50 million (against the public issue of
its shares) was provided by the ICP-led Consortium. As a part of long term plans, the
manufacturing of window type Air conditioners was taken up in 1981 and was
immediately established for quality.


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During the year 1990 the company has signed an agreement with Messrs HITACHI of
Japan for the manufacture of Vacuum Circuit Breakers.
The company has entered into an agreement with Pakistan Industrial Credit and
Investment Corporation (PICIC) for a foreign currency as well as local currency loan of
Rupees 25 million for the expansion, balancing, modernization and replacement of the
existing plant. The machinery has come into operation in October 1991 and with the
balancing, modernization and replacement of machinery, the production capacity of
Refrigerator Section will reach a level of 252,450 cubic feet.
The management of the Company decided to further expand its operation by establishing
a plant for the manufacture of compressors for refrigerators and deep freezers. The
technical know-how agreement has been signed with M/S NECCHI Compressori, Italy
for the assembly and progressive manufacturing of compressors for refrigerators and
deep freezers.

LOCATION AND FACILITIES:

The project is situated at 14-k.m. Ferozepur Road, Lahore, and is spread over an area of
242 kanals and 15 Marlas of leasehold land in industrial area of Kot Lakhpat, Lahore, and
presently the total covered area comes to 232,883 square feet. Factory is located on the
main road where public transport is available round the clock helping in easy access to
the labor and customers.

TECHNICAL KNOW-HOW & FOREIGN COLLABORATION:

The company had obtained technical know-how from General Corporation (now Fuji
General Limited) of Japan for the manufacture of its Air conditioners and thus was able
to produce a unit, which is now preferred by the consumers over all the other imported as
well as locally manufactured units. The know-how contract was for five years ending in
the year 1988.
For the manufacture of Refrigerators, the know-how was obtained from SILTAL CASA
SPA of Italy, who are one of the major manufacturers of "white-goods" in Italy and has
assisted in the establishment of similar plants in many other countries. The technical
know-how for Deep-freezers was obtained from ARISTON of Italy who is the largest


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manufacturers of "white-goods" in Italy. They have also helped lot of other countries in
setting up similar projects for making "white goods".
The company has obtained technical know-how from HITACHI for the manufacture of
Vacuum Circuit Breakers.

PRODUCTS SUMMARY


















1. Appliances Division
2. Power Division

I. TRANSFORMERS:

Outdoor and indoor distribution transformers of 11/0.415 KV and 33/11 KV
up to 5000 KVA.
Pad mounted transformers, Kiosks, Dry Type Transformers.
PAK ELEKTRON
LIMITED
POWER
DIVISION
TRANSFORMER ENERGY METER
SWITCHGEAR
POWER
TRANSFORMER
APPLIANCES
DIVISION
REFRIGERATOR
SPLIT AIR
CONDITIONER
MICROWAVE
OVEN
TELEVISION
DEEP FREEZER


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Special Furnace Transformers and Silicon Oil Transformers, etc.
Major Customers:
WAPDA & KESC
Accounts for over 90% of the total transformer sales

SWITCHGEARS:
High Tension indoor and outdoor type switchgears up to 33 KV
voltage and short circuit level of 750 MVA.
Low Tension indoors and outdoors type switchgears up to 4000
Amps. And 100 KA short circuits withstand level.
Distribution Boards.
Motor Control Centers.
Major Customers:
WAPDA & KESC
Accounts for almost 100% of the total energy a meter sale

II. ELECTRICITY METERS:
Major Customer:
WAPDA & KESC
Accounts for almost 100% of the total energy a meter sale
4- REFRIGERATORS
5- DEEP-FREEZERS
6- SPLIT AIRCONDITIONERS
7- WINDOW TYPE AIRCONDITIONERS
8- MICROWAVE OVENS
9- TELEVISION SETS

All these things sold locally at different PEL CSD centers all over the Pakistan.
Presently we are importing these products under completely built units (CBUs). We also
manufactured earlier Window Type Air conditioners and Split Air conditioners.

Chairman/Chief Executive


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Mr. Mian Naseem Saigol

BOARD OF DIRECTORS
Mr. M. Azam Saigol
Mr. Haroon Ahmad Khan (Managing Director)
Mr. M. Murad Saigol
Mr. Zaid Yousaf Saigal
Mr. Abdullah Haroon Saigal
Mr. Syed Zubair Ahmed Shah (NIT Nominee)
Mrs. Tahira Raza (NBP Nominee U/S 182 of Ordinance)
Mr. Muhammad Khurram Khuwaja (NBP Nominee U/S0 182 of Ordinance)
Mr. Khalid Siddiq Tirmizi (BOP Nominee U/S 182 Of The Ordinance)

COMPANY SECRETARY:
Muhammad Omer Farooq
AUDIT COMMITTEE:
Mr. Azam Saigol (Chairman/Member)
Mr. Haroon A. Khan (Member)
Mrs. Tahira Raza (Member)
Mr. Syed Zubair Shah (Member)
AUDITORS:
Rahman Serfaraz & Co.
HR & REMUNERATION COMMITTEE:
Mr. Azam Saigol (Chairman/Member)
Mr. Haroon A. Khan (Member)
Mr. Akbar Hassan Khan (Member)
Mr. Syed Zubair Shah (Member)
Associated Companies:
The following are the associated companies of the Company as per section 2(2) of the
Companies Ordinance 1984.
Kohinoor Industries Limited
Kohinoor Power Company Limited
Kohinoor Energy Limited


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Azam Textile Mills Limited
Saritow Spinning Mills Limited
Saritow Pakistan Limited
Saigol Brothers Limited
Guarantee Life Employment Limited
Progressive industries (Lahore) (Private) Limited
Art Center (Private) Limited
Saigols (Private) Limited
Conforce (Private) Limited
Kohinoor Autos (Private) Limited
Kohinoor Tractors (Private)
Innovative Technologies (Private) Limited
Raytex (Private) Limited
Standard Grinding Wheel Industries Limited
Registered /Head Office:
17-Aziz Avenue, Canal Bank, Gulberg-V, Lahore
Tel: (042) 5718274-5 or 5717364-5
Fax: (042) 5715105
E-mail:shares@saigols.com
Website Address: www.pel.com.pk

Bankers of the Company:
The Bank of Punjab
Bank Alfalah Limited
Faysal Bank Limited
Meezan Bank Limited
My Bank Limited
National Bank of Pakistan
PICIC Commercial Bank Limited
DIVISIONS



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POWER DIVISION:

Power Division accounted for 47% of the Net Sales of the Company as of June 30th
2006. The sales and profit participation by the Division is high due to high quality
standards and future growth opportunities.
The Power Division comprises of three departments;

Manufacturing and Quality Control
Design and Development
Marketing


M Ma an nu uf fa ac ct tu ur ri in ng g a an nd d Q Qu ua al li it ty y C Co on nt tr ro ol l: :

The Manufacturing Department is responsible for monitoring and execution of
production activities for transformers, energy meters and switchgear and also overlooks
the vendor development and procurement of local and imported components used in
manufacturing of power equipment. The Quality Control department is responsible for
maintaining product quality. Transformers and energy meters production is already ISO
9002: 2000 certified while production of switchgear is in process of being certified.

D De es si ig gn n a an nd d D De ev ve el lo op pm me en nt t: :

An independent design and development facility with highly qualified team of engineers
has been established. The facility is equipped with state of the art technology and is
responsible for developing power distribution products in line with customer
Requirements. The facility ensures reliable power distribution to industrial and
commercial projects.

Marketing:
The Marketing Department is responsible for the marketing and sales of Power Division
products. Most of the selling activity involves personal selling. Since the products


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involved are tailor made to customer requirements, knowing the requirements well and
adhering to the quality standards required by the customer is of utmost importance. The
Department is responsible for meeting sales target for regular customers and negotiating
sales deals.

APPLIANCES DIVISION:
The Appliance Division accounted for 53% of the Net Sales. The Appliances division
comprises of four departments;
Manufacturing and Quality Control
Research and Development
Marketing
Consumer Finance
A brief description of each is as follows

Manufacturing and Quality Control:
The Manufacturing Department is responsible for the monitoring and execution of
production activities related to the refrigerators and air conditioners and also overlooks
vendor development and procurement of local and imported components. Quality
maintenance is the prime concern for the success of this segment therefore; a separate
Quality Control department is responsible for the pre-sale inspection of products.

Marketing:
The Marketing Department is responsible for the marketing and sales of home appliances
products and also undertakes sales promotion. Sales promotion activities undertaken by
this Department involve direct marketing and mass marketing through media. However,
the primary focus is on utilizing the dealer network to push sales, through incentive
schemes targeted at dealers. The Department comprises 21 area sales offices having over
100 marketing and sales personnel supported by area credit control and ware housing
departments





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ACCOUNTS DEPARTMENT
Following sections are in the accounts Department:
1- Accounts payable section.
2- Costing section.
3- Fixed asset section.
4- Book keeping section.
5- Pay roll section.
6- Inventory control section.
7- Expense and revenues
8- Insurance

Sections in which I have working experience are given below with brief description.

Accountant prepares the Purchase Voucher for record keeping purpose. Following this
procedure payments are made to the parties from PEL.

NOTE:
Single provision account can also be maintained for payment to all parties, but PEL
maintains a separate provision account for each party.

EXPENSES DETAIL:
Expenses for which PEL has to pay are categorized as follows:

ADMIN EXPENSES:
PEL records Accounts Department Expenses, Finance Department Expenses, HR
Department Expenses and Gate Reception Expenses as Admin Expenses.

SELLING EXPENSES:
All the expenses incurred by Selling Department, Advertising Department and warranty
expenses are treated as Selling Expenses.

MANUFACTURING EXPENSES:


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All the expenses incurred by the Manufacturing Department, FOH Expenses And
expenses for raw material are Manufacturing Expenses.

TRADE ITEMS:
All the items, which they purchase from others and do not incurr any manufacturing
expense, are trade items. For example PEL purchase Air Conditioner, Heavy Generators
from career and punch the logo of PEL and pack them into the PEL packing and send
them for sale.





IMPRESSET ACCOUNT:
PEL has also created an impressed or petty cash account. It contains a limited amount,
which is already decided by the Finance Manager. This account is used almost in other
than factory areas for routine (daily) expense. For example tea, Entertainment, stationary
and other cash purchases at the PEL Customer Service Center.

Credit Purchases Procedure

Need Generation


Intend/Demand Note


Buying Department


Quotations*
(Approval by buying head)



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Purchase order preparation


Supplier


Delivery by supplier


IGP (Inward gate pass)


Challan


Store (GRN preparation)

SALARIES AND WAGES PAYABLE SYSTEM:
PEL has established salaries and wages payable system very efficient. Cashier pays
salaries to the permanent employees after the job time. During the work time it is
intended not to waste the work time. Wages to the temporary employees are paid at
working place. They continue their work while receiving the wages

BOOKING KEEPING SECTION:
The record of internal expenses related to the employees is maintained in the book
keeping section
Different types of voucher are prepared in this section.
a) Cash payment Voucher:
b) Bank payment Voucher:
c) Cash Receipt Voucher:
d) Bank Receipt Voucher:
e) Journal Voucher:


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Expense Types:
Detail of following expenses is maintained in this section.
Medical Expenses
Traveling Expense
Inland
Local
Foreign
Utilities Bills
Electricity
Mobile
PTCL
Gas
Etc
Stationary Expense
Employee Welfare Expense
Entertainment Expense
Postage & Telegram Expense
Rent rate & Taxes Expense
Fee & Subscription Expense
Cleaning & Sanitation Expense

Procedure for the approval and payment of these Expenses is given as following.

Section In charge


Admin


Accounts



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Book Keeping section


Voucher preparation


Payment (Through cashier)

SWOT Analysis

Strengths:-

Well established base
Hard working and committed employees
High growth rate
Uniqueness of operations from competitors
Good departmental support by other depts.
Flexible supply of appliances

Weaknesses:-

Long official procedures
Vast uncovered markets
Lack of advertisement
Lack of public awareness
Slow order processing and delivery

Opportunities:-

Large market areas with great potential
Formation of alliances with potential partners
Online and more customized marketing
Search for more suitable banking institutions with lowest mark-up
Foreign alliances especially in technology and development

Threats:-

Competitors threat to occupy markets that are not yet covered
Un-explored markets may be attacked by foreign companies
Difficulties in recovery process
Deteriorating political conditions
Increasing prices due to inflation


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Recommendations

Must try to expand the market by exploring new areas and signing new MOUs
Save time by minimizing the official procedures
Advertise the companys offerings to maximum extent
Form alliances with potential partners to strengthen the grip over market
Search for more suitable banks
Try to focus on foreign market for consideration
Strong focus on marketing intelligence
Speed up recovery procedures by using specialized methods
Speed up delivery process by establishing stores in areas of high demand
Customer service needs to improved
Incentives should be given to motivate sales and recovery teams at initial stages
Develop proper goals and objectives for every member of team and department.