Internship Report

Submitted By
Rehan Aqeel Khawaja

Submitted to
Human Resource PEL

Internship Duration
July 2, 2009 to August 13, 2009

Internship Department
Finance

Program
MBA

Institution
COMSATS Institute of Information Technology,
Lahore

1
COMSATS Institute of Information Technology, Lahore
 DEDICATION

Dedicated to my family and all those who helped me

in this internship

2
COMSATS Institute of Information Technology, Lahore
 Acknowledgement

I am really pleased here to acknowledge the sheer efforts of many people those
who have provided me their relentless services in the completion of my Internship
and my internship report. I would like to thank personally all finance staff, Mr.
Mohammad Hanif, Mr. Manzoor, Mr Amjad, Mr. Tariq Jawed, Mr. Ghulam
Murshad, Mr. Umar Zahid, Mr. Tayyab Sharif, Mr. Assad, Mr. Tahir Mehmood,
Mr. Nadeem-ud-Din, Mr. Rashid Hanif, Mr Mohsin (CMD), Mr Hasan Raza (HR),
Mr. Junaid (BOP) who from there very busy schedule helped me in many ways.
May Allah bless you all.

Rehan Aqeel Khawaja

3
COMSATS Institute of Information Technology, Lahore
 Table of Contents

Executive Summary…………………………………….……....5
Background of PEL…………………………………….….……6
Business Operation……………………………………………26
Learning as a Student Intern…………………………………40
Problems Encountered………………………………………..49
Other Activities…………………………………………………49
Suggestions:………………………………………….……..….49
Annexure………………………………………………………..51
Glossary…………………………………………………………52
Reference…………………………………………………....….53

4
COMSATS Institute of Information Technology, Lahore
1.0 :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.
I did my internship in the Finance department of PEL. I learned a lot during my
internship period. There are five sections in Finance department. Those are
Material management section, Corporate Finance section, Budgeting section,
Treasury section and Accounts Receivable section. Each of the section has its
own significance and importance. Each 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.

5
COMSATS Institute of Information Technology, Lahore
2.0: Background of PEL

Vision:
To excel in providing engineering goods and services through continuous
improvement.

Mission:
• 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 Resource to meet future
challenges.
• To promote good governance, corporate values and a safe working
environment with a strong sense of social responsibility.

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 programmes.

Awards won by PEL:

Annual Environment Excellence Award-2009

Annual Environment Excellence Awards are instituted jointly by National Forum

for Environment and Health (NFEH), United Nations Environment Program
(UNEP), Ministry of Environment, Government of Pakistan and the Federation of
6
COMSATS Institute of Information Technology, Lahore
Pakistan Chambers of Commerce & Industry (FPCCI). Annual Environment
Excellence Awards are designed to recognize and promote the organizations
which make an outstanding contribution to sustainable development. They aim to
highlight policies, practices, processes and products from all sectors of business
in the country, which help to achieve economic and social development without
detriment to the environment and natural resources.

Pak Elektron Limited (PEL) was awarded 6th Annual Environment Excellence
Award for best Health, Safety and Environment performance. The Award was
presented to Pak Elektron Limited in a graceful ceremony; held on July 09, 2009
at Hotel Sheraton, Karachi. Mr. Hameed Ullah Jan Afridi, Federal Minister for
Environment, honored the ceremony by as chief guest whereas Mr. Askri Taqvi,
Minister for Environment, Sindh presided over. Javed jabber (Global Vice
President IUCN), Dr. Kaiser Waheed (Chairman NFEH) and Naeem Qureshi
(President NFEH) were also present on the occasion. Mr. Yaqub Tabasum
(Project Manager Unit-II) received the Environment Excellence Award on behalf
of PEL.

Health & Environment National Excellence Award-2008

On the basis of sound Health, Safety & Environmental performance; PEL was
selected for 4th Health & Environmental National Excellence Award-2008. These
awards are offered by Help International Welfare Trust, Pakistan in collaboration
with Corporate Social Responsibility (CSR) Association of Pakistan. The award
presentation ceremony was held at Hotel Regent Plaza, Karachi on April 15,
2009. Mr. Askari Taqvi, Minister for Environment, Government of Sindh was
Chief Guest of the ceremony and Ms. Khadija Balkhi, President of CSR
Association of Pakistan was the Guest of Honor at the occasion.

7
COMSATS Institute of Information Technology, Lahore
Best Environmental Reporting Award

Pak Elektron Limited (PEL) was awarded the Best Environmental Reporting
Award for 2008 at the 7th ACCA-WWF Pakistan Environmental Reporting
Awards (PERA) ceremony held on Earth Day; April 22, 2009 at the Serena Hotel,
Islamabad.

Endorsed by the Ministry of Environment and IUCN Pakistan; these

Environmental Awards were launched in 2002 to recognize and reward
companies that report corporate environmental, social and sustainability
performance to a broad range of stakeholders.

The company comprises of two divisions:

• Appliances Division
• Power Division

2.1: APPLIANCES DIVISION

This Division of PEL consists of appliances manufacturing.

PEL Air Conditioners

PEL window-type air conditioners were introduced in 1981 in technical
collaboration with General Corporation of Japan. Ever since their launch, PEL air
conditioners have a leading position in the market. PEL air conditioners cooling
performance has been tested and approved by Copeland and ITS USA. With the
shift of users preference from window type to split type air conditioners, PEL has
started manufacturing split type air conditioners. The PEL is currently producing 8
models of split type airconditioners and currently 1 model of window type
airconditioners. The PEL also produces Floorstanding Airconditioners and it is
currently producing 3 models for it. The PEL won the Winner of the Consumer
Choice Award for its air conditioners.

PEL Refrigerators
The manufacturing of refrigerators started in 1986-87 in technical collaboration

8
COMSATS Institute of Information Technology, Lahore
with M/s IAR-SILTAL of Italy. Like the air conditioner, PEL's refrigerators are also
in great demand. Today, PEL Crystal has 30% market share. Its cooling
performance is tested and approved by Danfoss, Germany and its manufacturing
facility is ISO 9002 certified by SGS Switzerland. The PEL is currently producing
6 models of Refrigerators.

PEL Deep Freezers

PEL deep freezers were introduced in 1987 in technical collaboration with M/s
Ariston of Italy. Because of durability and high quality, PEL deep freezers are the
preferred choice of companies like Unilever.

PEL Microwave Ovens

PEL is currently producing two divisions of Microwave ovens. i.e. Silverline

Ovens and Microwave Ovens. And each division contains further models.

PEL Washing Machines

PEL is currently producing two models of washing machines, catering to the

needs of different consumers.

PEL Water Dispensers

PEL is currently producing two categories of water dispensers and those are
Silverline and Lifestream.

PEL Generators

PEL is currently producing two divisions of generators, Domestic Generators and

Commercial Generators. PEL is producing further four models in the category of
Domestic generators.

2.2: 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

9
COMSATS Institute of Information Technology, Lahore
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. Our 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. The company 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.

Works of PEL are spread at two facilities in Lahore, the historical city and cultural
hub of Pakistan. 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
company’s operations is its human resource. PEL invests heavily on professional
development, skill improvement and well being of its human resource. Our
employees are our most valuable asset and we keep them very dear.

PEL Power Division manufactures energy meters, transformers, switchgears,

Kiosks, compact stations, shunt capacitor banks etc. All these electrical goods
are manufactured under strict quality control and in accordance with international
standards.

PEL is one of the major electrical equipment suppliers to Water and Power
Development Authority (WAPDA) and Karachi Electrical Supply Corporation
(KESC), which are the largest power utilities in Pakistan.

Over the years, PEL electrical equipment has been used in numerous power
projects of national importance within Pakistan. PEL has the privilege of getting
its equipment approved and certified by well-reputed international consultants
such as:

• Preece, Cardew and Rider, England

10
COMSATS Institute of Information Technology, Lahore
 • Harza Engineering Company, USA
• Snam Progeti, Italy
• Societe Dumezm, France
• Miner & Miner International Inc. USA
• Ensa, France

In spite of stiff competition from emerging local and multinational brands, PEL
Group's appliances and electrical equipments have remained in the spotlight due
to constant innovation. Strategic partnership with multinationals of repute have
enabled the PEL Group to incorporate new technologies into existing product
ranges, thus giving the Pakistani market access to innovative, affordable and
quality products.

EPC Contracting

With restructuring of power sector in Pakistan and increase in economic,

commercial and industrial activity, more and more power utilities and other
customers demanded high value packaged solutions for their transmission
system and enterprise electrification requirements. To meet this demand PEL
established an Engineering Procurement and Construction division. PEL EPC
Division consists of human resource with high academic qualifications and
experience of local as well as global market. The EPC division delivers custom
designed and built solutions in following areas.

• 132kV and 220kV grid stations for power utility companies.

• 132kV and 11kV substations for industrial and commercial customers.
• Integration of private captive power generation plants into utility network
for sale of their surplus power to utility
companies.
• Electrification of housing projects and industrial parks.

Services include:

• Engineering
• Project Management
• Project Execution
• Turnkey or customized projects
11
COMSATS Institute of Information Technology, Lahore
 • Technical support and solution

Our turnkey power supply systems give you unique value added services. In
addition to employing its own resources, PEL keeps a well managed supply chain
of internationally renowned manufacturers and service providers to complete the
project scope. As such, the end product is a reliable, high quality and price-wise
most optimum solution.

Projects completed

1. 132/11kV AIS Satellite Town substation, Rawalpindi Pakistan

2. 132/11kV GIS DHA substation Islamabad-Pakistan
3. 132/11kV AIS Ghuinke substation, Sialkot-Pakistan
4. 132/11kV AIS Kamra substation, Attock-Pakistan
5. External Electrification of Askari Villas Phase-II, Lahore-Pakistan
6. Kohinoor City Faisalabad (Electrification & Networking)
7. Supply, supervision of installation and testing of MV and LV equipment for
external electrification of DHA Phase-6 Lahore-Pakistan
8. External Electrification of National University of Science & Technology
(NUST) Islamabad-Pakistan
9. External electrification of Iqbal Avenue housing society Lahore-Pakistan

Projects under construction

1. 132/11kV GIS Sheranwala Gate substation, Lahore-Pakistan

2. 220kV Dadu grid station Extension Dadu – Pakistan
3. 132/11kV FIEDMC AIS substation Faisalabad-Pakistan
4. Electrification of 4 small towns (Mangla Dam raising project)
5. Underground external electrification of DHA Ph-8 Lahore-Pakistan
6. External electrification of House Building Finance Corporation Lahore-
Pakistan
7. External electrification of DHA Homes Complex Lahore-Pakistan

12
COMSATS Institute of Information Technology, Lahore
Power Transformers

Extensive experience and success in manufacturing distribution transformers led

to the establishment of power transformer division in 2005. Since its birth the
division has produced transformers of ratings 31/40MVA, 20/26MVA, and
10/13MVA for ratings up to 132 KV. In order to provide its customers the best of
technology and products of international competence, PEL has combined its
technical expertise with GANZ, a renowned and experienced Hungarian
transformer
manufacturer.

PEL is also exporting Power Transformer to International customers for their

special requirements and specifications. PEL power transformers are equipped
with best transformer accessories like OLTC from MR (Germany), High Voltage
Bushing from PASSONI & VILLA (Italy), Buchholz Relay from EMB (Germany),
insulation material from WEIDMANN (Switzerland), silicon steel from THYSSEN
(Germany), and cooling fans from SCHORMANN (Germany). Material of the
windings is usually 99.99% pure electrolytic copper. Multiple conductors as well
as CTC are used in winding. The magnetic cores are manufactured from cold
rolled grain oriented (CRGO) steel sheets. A robust clamping structure, jointing
technique and cutting and mitering of laminations ensure low no load losses. The
steel sheets in the core limbs and in the yokes are clamped together by glass-
epoxy bands.

Tank is constructed with boiler steel plates welded together and a cover plate
bolted on top. Strength is ensured by stiffeners. Earthing terminals are attached
to both sides of tank. Measuring Instruments are installed on cover plate. Surface
protection is done by the process of sand blasting and by applying weather
resistant paint. Tap changers are in accordance with IEC standards. Usually
motorized On-Load tap changers are provided for voltage regulation. Off- Load
tap changers can be installed on request. The diverter switch is placed in
hermetically sealed oil filled chamber in order to avoid contamination of oil in
main tank.

Distribution Transformers

PEL made distribution transformers’ range includes oil immersed core type
transformers, Dry type (VP impregnated) transformers and autotransformers.
13
COMSATS Institute of Information Technology, Lahore
These transformers are tailor made for various ratings. IEC or national standards
are followed. We offer distribution transformers voltage up to 33 kV and ratings
up to 30 MVA.

PEL offers transformer tanks with corrugated walls, detachable radiators and
tubular arrangement. The corrugated tanks have a better cooling efficiency, since
the fins are expandable. Tanks are hermetically sealed where possible. In order
to meet sophisticated requirements of customers PEL has also started
manufacturing transformers with foil winding. Foil winding efficiently uses space
which results in size reduction. It has better heat dissipation and also
increases potential to withstand short circuit current.

PEL transformers are available for various applications:

• Distribution Transformers (Pole /Pad Mounted)

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

Dry Type Transformer

Introduction
The demand of electricity in Pakistan has been increasing rapidly in the last few
years. There is a mushroom growth in the high rise buildings, shopping areas,
CNG and petrol stations, residential colonies, etc. Due to the scarcity of space in
cities, installation of conventional oil type transformers in such congested and
populated areas is always a big safety risk. The developed as well as many
developing countries are installing dry type transformers as a solution for
ensuring safety in such scenarios.

Types of Dry Type Transformers

There are primarily two main manufacturing techniques for dry type transformers;
Cast Resin and Vacuum Pressure Impregnated (VPI) with their own typical
features. The main difference is their insulation class; Cast Resin is Class F
(155°C) and VPI is Class H (180°C). The Vacuum Pressure Impregnated

14
COMSATS Institute of Information Technology, Lahore
transformers not only offers in-build safety feature but there are many other
advantages of using these transformers such as improved reliability, reduced
losses, minimal maintenance, enhanced overloading capability etc.

Energy Meters
PEL is currently producing the following type of energy meters:
• Single Phase Static Energy Meters
• Single Phase Electromechanical Energy Meters
• Poly Phase Static Energy Meters
• Poly Phase Electromechanical Energy Meters

Switchgears
The switchgears are basically the panels through which the other electric
equipments can be handled. They are mostly used in industries. PEL is currently
producing switchgears for MV equipments and LV equipments.

The main Customers of PEL

The customers of PEL can be categorized in two categories i.e. home consumers
and industrial consumers. Home consumers are the common individuals who
mostly purchase the home appliances. The industrial consumers are as follows:
• LESCO
• GEPCO
• FESCO
• IESCO
• PESCO
• MEPCO
• HESCO
• QESCO
• KESC
• AJK Electricity Department
The buyers other than these electric supply companies are the independently
working companies.

2.3: The Departments of PEL

The departments which are currently in operation at PEL are as follows:
Common Departments:
15
COMSATS Institute of Information Technology, Lahore
 • HR & D
• IR & A
• Finance
• IT
• FP & Commercial
• Accounts
Marketing and Sales:
• Marketing AD
• Marketing PD
• CMD
• CSD
Production Department:
• Production AD
• Production PD

Customer Service Department (CSD)

CSD is a customer service department under the Marketing Head. Where the

after sale service is provided to satisfy customers having problem in their

appliances. PEL is well known for their customer care service.

Credit Control Department (D&C)

D&C is a credit control department under the Marketing Head. A responsibility of

this department is to maintain record for all the credit transactions.

Dispatch

Dispatch is another department under the Marketing Head. In this department all

the things are maintained which are send out of the factory or to dealers.

16
COMSATS Institute of Information Technology, Lahore
Consumer Marketing Department (CMD)

This department is basically under the marketing 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, Sahiwal,

Karachi, Hyderabad, Faisalabad, Gujranwala, Hattar, Rawalpindi, Sialkot,

Bahawalpur, Sukker, Sargodha and AJK (Azad Jammu Kashmir) and the head-

office is in the factory that is Consumer Marketing Department.

This scheme is well received so its now on expansion. This scheme is only in big

cities. The target market of this scheme is Government employees or the

employees of those companies, which have signed Memorandum of

Understanding (MOU) with the bank who is financing. Why so? It is because

those Govt. offices make sure to the bank that their employee’s salary will go to

their hands after the deduction of installment of the bank and MOU also make

sure that employees who got financing will get salary after deduction of bank’s

installment. Askari Bank Limited is financing the PEL employees and Soneri

Bank and Bank of Punjab to the others employees of Govt. or company which

has been signed MOU with the bank.

17
COMSATS Institute of Information Technology, Lahore
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.

PEL has a full fledge HR Department known as HR&A or administration

department with the staff strength of 38 employees. The GM is the top executive

in the HR department and there is one manager of HR to facilitate the work of

G.M. and 2 personnel and an admin officer.

HR Department’s activities are spread over the whole organization. The following

areas come under direct supervision of HR department at PEL.

 Hiring and right sizing of employees

 Training and development

 Compensation system

 Security and fire fighting

 Gate supervision

 Telephone exchange

 Fair price shops

 Canteen supervision

 Dispensary and health care

As the security in the company like PEL is very much important so there is 24-

hour arrangement of security by three shifts in charges headed by a security

18
COMSATS Institute of Information Technology, Lahore
officer. He is also responsible for the fire fighting activities and for the placement

and checking of all the fire fighting equipments. For the purpose of security and

for the visitors there are two gates under the supervision of a supervisors with

two gate assistants who are responsible for all the in and out transport and

movement activities in the organization.

There is a telephone exchange in the organization having a facility of 13 lines.

The organization is providing the basic necessities to the workers e.g. flour,

ghee, sugar etc. from the fair price shop at very controlled price and quality.

Because this is part of fringe benefits that are provided to the employees. There

is a fair price supervisor who is responsible for the purchase and distribution.

PEL is also providing the facility of mess to the workers and as well as officer.

Mess is provided at very nominal charges. Mess supervisor is responsible for the

purchases and cooking.

There is not a particular hospital in PEL but there is a dispensary with two

dispensers and one senior dispenser. For the medical check ups and for any

detailed curves the employees are sent to social security hospital.

Finance Department

Finance Management is the lifeblood of any industry. If this area of corporate

activities is improperly handled, a company may lead insolvency despite

having all the resources and opportunities. Therefore proper financial

19
COMSATS Institute of Information Technology, Lahore
management is vital for every business concern and PEL is not lacking

behind over here.

At PEL finance department for both division (Appliance and Power) is separate

but their procedure are same. To control both another departments called

“Finance Center” is established. Functions of finance are:

 Perform as a workstation and as an integrated circuit amongst all

department of the company.

 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.

Income Tax /Sales Tex Recording

The Finance Center prepares and keeps up to date record of income tax & Sales

Tax deductible at source on the payments made to its buyers i.e. WAPDA and

others, income tax/sales tax deductible on the salaries / wages or on sales of its

employees/dealers and tax payable to the government on the company’s profit.

20
COMSATS Institute of Information Technology, Lahore
Employees Salary Recording

Controlled by Account Officer, this section is responsible for keeping three types

of employee’s salaries record. These records pertain to workers, staff and

officers / managers.

When a person joints the organization he needs to submit a joining report to

HR&A for verification. Only those employees are eligible for salaries that have

salary authorization and appointment letter issued by HR&A department. Every

month HR and A department send an absentees report to salary controller of

Finance Center. This list contains names of those employees who were on

unauthorized leave. The salary controller deducts required amount of money for

unauthorized leave. No salary is deducted if casual / sick / earned leave is

properly applied for.

The monthly salary record of each employee is entered in the permanent master

file of computer. Necessary changes are made if any increment is observed in

the employee’s salary.

Administration (IR & A)

Key responsibilities are:

 Maintenance of Attendance

 Maintenance of Stores

 Check the material in & out from the factory

 Maintenance of factory

21
COMSATS Institute of Information Technology, Lahore
  Provide assistance to all departments regarding material

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 Asia, America,

Europe, and Africa. 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.

22
COMSATS Institute of Information Technology, Lahore
 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.

Internal Audit

The internal audit department is made to keep record and track of each

department.

The main responsibilities of this Dept are as follows:

 How things are working in each department?

 Avoiding of illegal use of company resources.

 Creating a check and balance procedures for each department.

 Keeping track for misuse of responsibilities.

 Indicating unnecessary usage of Budget allocation.

Information Technology Department

IT department’s key responsibilities are as follows:

23
COMSATS Institute of Information Technology, Lahore
  Troubleshooting and problems facing in computers.

 Installing and deletion of software’s.

 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. Following are the names of production

department:

 Refrigerators Production Department.

 Transformers And Switchgears Production Department

 Electricity Meters Production Department.

Accounts Department

The Accounts Department looks after the financial matters. Accounts department

for both power and appliances division have similar functions as below.

24
COMSATS Institute of Information Technology, Lahore
Functions

This particular department has the responsibility to prepare and keep an upto

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, DFIs and other government agencies through Finance

Center.

The finance 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.

25
COMSATS Institute of Information Technology, Lahore
3.0: Business Operation

3.1: Organizational Structure

See annexure 1 at the end

3.2: 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

 Strong dealer network

 Strong quality, sale and service

 Market leader in WRAC

 Number 2 in refrigerators in Pakistan

 Strong grip in home appliances

 Strong Management

 Distribution of Authority

 Strong research and development department

 Free customer service

26
COMSATS Institute of Information Technology, Lahore
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. 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 management of

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, Sale and Service

PEL is also in a strong position that it provides the superior quality to your

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 customers which delight the customers satisfaction. It is

another way to advertise the products because when customer is highly satisfied

27
COMSATS Institute of Information Technology, Lahore
then he tells the other ten persons that they should buy the PEL products. It is

the free publicity of PEL products that PEL Company gains.

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.

Number 2 in Refrigerators in Pakistan

After the Dawlance refrigerators PEL has a second position in refrigerators

market. PEL always continuously strives to pursue the strategies adopted by the

competitors. As a consequence the price war starts among the companies so

each company reduces the prices and try to increase the sales of its

refrigerators. PEL is also making efforts for the quality improvements than its

competitor Dawlance.

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 conditioner and always trying to get the maximum shares

in the home appliance market.

28
COMSATS Institute of Information Technology, Lahore
Strong Management

It is another plus point that PEL has a strong management. Its employees are

more competent and fully skill and knowledge. They always cooperate the top

management in achieving the goals that are assigned to them. Employees are

well aware about the company objectives and so they are committed to the

development of company.

Distribution of Authority

Top management of PEL delegates the power to the subordinates for achieving

the marketing objectives in a specified time period. So every manager has an

authority that use in achieving the Goals. He can easily handle the complaints of

customers and try to satisfy them. So it is a strong point for the PEL because

there is decentralization of powers.

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 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

products. For this purpose they hire the highly qualified employees in R&D

department. That is another strong position of PEL.

29
COMSATS Institute of Information Technology, Lahore
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:

 Lack of advertisement

 System variations

 Lack of Product range

 Less Utilization of capacity

 Financial Problems

30
COMSATS Institute of Information Technology, Lahore
Lack of Advertisement

It is a second major weakness of PEL that it never makes advertising on TV. 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 washing Machines, Vacuum cleaner

and other items. Due to lack of product Range, Company cannot earn more profit

because 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.

31
COMSATS Institute of Information Technology, Lahore
Less Utilization of Capacity

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.

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 research the sources

of cash and stress the dealers to sell the PEL’s products to the end consumers.

Company sometimes sells their products on advance bases to the dealers and

gives them high margin of profit. That’s why a company is facing the financial

problems and company never pays attention on the alternative resources that will

help in reducing the stocks. That is a customer demand and due to this it is the

main weakness of company.

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

32
COMSATS Institute of Information Technology, Lahore
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

 Increase in product range

 Export opportunity

 Increase in production capacity

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.

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. There are more needs to develop new

consumer items like PEL washing Machines, Vacuum cleaner and other items.

Due to lack of product Range, Company cannot earn more profit because

consumers have high demand of these products. If PEL does not take this

33
COMSATS Institute of Information Technology, Lahore
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

international 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 Line

Company can also increase its production line 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

requirements of production department that’s becomes the problem for the

complete utilization of resources. Company should look the market conditions

then it will produce their products.

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:

34
COMSATS Institute of Information Technology, Lahore
  Strong competition

 China’s product introduction in the market

 Price war

 Slow growth rate in Pakistan

 Instability of government

 Tax department

 World Trade Organization

 Investors

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.

China’s Product

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

35
COMSATS Institute of Information Technology, Lahore
stress the indigenous companies to lower the quality and prices that will not be

profitable in the long run.

Price war:

As there is 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.

Slow 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

low and it has no income to buy the expensive the 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.

36
COMSATS Institute of Information Technology, Lahore
Tax Department

Tax department is another major threats 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. A tax

department also asks the company from where it receives the money and where

this money will spend. Due to fear of heavy taxes companies would not like to

invest the heavy amount.

World trade Organization

World trade organization will give the permission in 2005 to each company of

home appliance to export their products after paying less 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.

3.3: Marketing Strategy

Marketing strategy of PEL is that it focuses mostly on middle class people. The
other competitors like LG, Samsung, Dawlance etc have higher process of their
products. PEL products have comparatively lower prices.
Now we will discuss the 4 Ps of PEL
Product:
PEL has a wide range of products catering to different needs of the society. Like
it has appliances division and power division. The PEL product are of high
quality. They have innovative designs. The product detail is discussed above.

37
COMSATS Institute of Information Technology, Lahore
Price:
The price of the PEL products are affordable and less as comparative to its
competitors. It keeps its prices low specially for the appliances division, because
it focuses on the middle class people.
Place:
PEL has a strong dealers network. PEL products are easily available throughout
Pakistan. PEL products are also available in the newly opened mega stores like
mackro, hyperstar etc.
DISTRIBUTION CHANNELS
Producer Agent Wholesaler Retailer Customer

Promotion
PEL mostly advertise its products through electronic media like for example
through TV channels. No doubt the TV advertisements of PEL are less frequent
as compared to its competitors. But still it has great brand awareness among
people. PEL also uses print media for its advertisements.

3.4: Competitive Strategy

• The competitive strategy of PEL is that it has a wide range of products and
at low prices.
• PEL focuses on cost leadership strategy in its power division appliances.
i.e. the prices of its power division appliances are high but they are of very
high quality. PEL has a competitive advantage of its brand name.
• PEL has high quality products both in appliances and power division
because most of the raw materials are imported from different countries
and these raw materials are of very high quality.

38
COMSATS Institute of Information Technology, Lahore
3.5: Business Process Analysis

Work Flow
The organizational hierarchy of Pak Elektron Ltd. has both flat and tall span of
administration. In case of lower level of hierarchy (the worker and their
supervisors) the span is wide but as the level goes up, it becomes tall.

The managing director who is answerable to the Chairman holds the top position.
General Managers are answerable to the Managing Director (MD) and are
responsible for respective division, Managers are heading some departments,
and Assistant Managers (AM) is leading some by Deputy Managers (DM) and
other. There are senior engineers who are section in charge Supervisors and
foremen report to them.

Executive level:
At executive level, three to five engineers report to a manager and almost some
numbers of managers’ report to a General Manager.
Workers level:
At workers level, usually 10 to 30 workers report to a foreman. Three to seven
foremen report to a section in charge.
Division of Labor:
In Pak Elektron Limited (PEL), two types of employees hired
• Permanent Workers
• Temporary Workers
Temporary workers are employed for about 6 months, and when the season
concludes the temporary workers are laid off. Temporary workers are employed
as helpers and assigned those jobs where skills are not required.
Workers are divided into different teams based upon their skills and nature of job.
The team is lead by head worker who is responsible for the work assigned to his
team and directs the fellow workers to perform the assigned task. These teams
are masters of their jobs. With in a team, tasks have been assigned in a

39
COMSATS Institute of Information Technology, Lahore
sequential order and every individual is assigned a specific task. This activity not
only helps productivity but also helps the quality standards of the workers as
each of them tries to keep an eye on the other to see that he is performing
correctly because if any thing goes wrong, the blame goes to the whole group.
Number of workers varies in different teams depending upon the nature of jobs.

4.0: Learning as a Student Intern

4.1: Finance Department:

As an internee I did my internship in the Finance department of PEL. I learnt
many things during my internship. The details are as follows:

Sections of Finance:
Basically the Finance Department has further different sections. Those sections
are as follows:
• Corporate Finance
• Material Management Section
• Treasury
• Budgeting
• Accounts Receivable
There is another section currently in function in Finance Department and that is
Provident Funding, which is not directly related to Finance but functioning there
independently. All the sections mentioned above have their respective Heads or
Managers. And the employees working there are supposed to report to their
immediate heads. Now I will discuss that what I learnt in these sections. The
detail is as follows:

40
COMSATS Institute of Information Technology, Lahore
Corporate Finance
This section plays a very important role in Finance Department and overall PEL’s
progress. The corporate finance is further dealing with three important tasks
which are Loan Handling, Leasing and Guarantees handling.

Loan Handling Section

PEL deals with many banks in this regard. Currently PEL is dealing with
approximately 15 Banks, government owned and private. Each bank gives upto
specific amount of loan. PEL has its master account in the National Bank of
Pakistan. NBP can provide loan to PEL upto 4 billion Pak Rupees. The main
purpose of the loan is to acquire raw materials for the company. Each bank has
different policy to give loans to the company. The PEL is currently dealing with
the following banks:
• National Bank of Pakistan
• The Bank of Punjab
• National Investment Bank
• My Bank
• Soneri Bank Limited
• Bank Al-Falah Limited
• The Bank of Khyber
• Meezan Bank Limited
• Al- Barakah Islamic Bank
• Standard Chartered Bank
• Deutsche Bank
• Royal Bank of Scotland
• KASB
• Silk Bank
• Dawood Islamic Bank
• Bank Islami

41
COMSATS Institute of Information Technology, Lahore
Leasing Section
The company leases vehicles and different machinery and holds record for them.
The leasing section is currently dealing with approximately 15 banks for leasing
purposes. But mostly PEL leases cars for different purposes and mostly for its
employees. The records of cars are stored in the form lots with every single detail
related to car. When the company wants to lease a car it writes a letter to the
concerned bank requesting it to lease a for a specific period. The company keeps
the record of newly purchased cars by specifying the details such as:
• Serial Number
• Vehicle
• Registration Number
• Chassis Number
• Engine Number
• Delivery Status
• Price
If the company wants to terminate the leasing contract, it writes a letter to the
bank requesting to terminate the contract. The bank charges extra 5% for pre-
mature termination. The company policy related to lease cars for its employees is
that, 50% discount is given to Assistant Managers and above. i.e. 50%
contributes the company and 50% is contributed by the employee. Bank gives
leasing cars to the company on corporate rate which is 5%, whereas the market
rate is 18-20%. Depreciation rate for the vehicles is 20% per year and 10% for
machinery.

Guarantees Handling Section:

This section handles one of the important tasks which to handle different
guarantees. There are basically three types of guarantees which the PEL deals
with. Those are:
• Tender Bond Guarantee

42
COMSATS Institute of Information Technology, Lahore
 • Performance Bong Guarantee
• Advance Payment Guarantee
• Balance Payment Guarantee
• Earnest Money/Retention Money Bank Guarantee

Now each of the guarantee is discussed below:

Tender Bond Guarantee:
Before participating in the bidding contract, the concerned bank on the behalf of
the company issues a tender guarantee to the beneficiary. The bank charges 2%
of the total guarantee amount. The guarantees are written on stamp paper. The
details of this stamp paper are:
Beneficiary
Sum of Bond
Tender Number
Validity
Name of Surety
Name of Principal
Date of tender opening
Performance Bond Guarantee:
In this guarantee, the bank on behalf of PEL, gives assurance to the purchaser
that the principal(PEL) shall and will and truly perform and fulfill all the
undertaking, covenants, terms and conditions of the said contract during the
original terms of contract.
The details of this guarantee are as follows:
Performance Guarantee Number:
Date:
Beneficiary:
Sum of Bond
Name of Surety
Name of Principal

43
COMSATS Institute of Information Technology, Lahore
Purchase order number
Validity

Advance Payment Guarantee:

When the purchaser places the order to the PEL for certain equipment, the PEL
in return demands some money in advance in order to carry out production
process smoothly. When the purchaser agrees to pay some advance, the bank
on PEL’s behalf issues a guarantee to the purchaser and that if PEL is unable to
fulfill the contract, then bank on PEL’s behalf will pay back the advance amount
to the purchaser.
The details of this guarantee are:
Guarantee number
Date
Validity
Sum of guarantee
Beneficiary

Balance Payment Guarantee:

The bank gives this guarantee when the advance payment has been made by
the purchaser. The remaining balance is given to the company when this
guarantee is approved.
Earnest Money Guarantee:
In this type of guarantee, the company gives some amount of money to its
dealers. The dealers can utilize this sum of amount in case there is a warranty
claim.
Foreign Bank Guarantee:
Along with the above mentioned guarantees, there is another guarantee known
as foreign bank guarantee. This guarantee is used only if company wants to sell
its goods to any other country. The procedure of this guarantee is as follows:

44
COMSATS Institute of Information Technology, Lahore
As in other cases, there is only one bank involved which gives guarantee on
behalf of the company, but in this case there are two banks involved, one from
PEL’s side and one from the other company which is in another country. For
example National Bank of Pakistan is a guarantor for PEL, it will give guarantee
of PEL to the other company’s bank, this type of guarantee is called counter
guarantee. That bank then transfers that guarantee to that specific company
which is called local guarantee. The transaction between banks globally is done
through SWIFT mode. SWIFT stands for Switzerland Worldwide Interbank
Financial Transaction. The bank charges against each guarantee from the
company. The bank keeps 5% margin and takes commission which is .4% per
quarter. Government also charges against each guarantee which is known as
FED (Federal Excise Duty) which is 16% of the commission. Every guarantee
can be extended i.e. if there is a change in amount then it can be extended up to
that amount. The tender guarantee is usually valid up to 3 quarters.

Material Management Section

This section is also one of the important parts of Finance department. Whenever
there is a requirement of any raw material from productions department, it notifies
the finance department. Then finance department handles the shipment process
of raw materials. As we know that the PEL deals with many banks, so whenever
he company wants to acquire the raw materials, it contacts with the banks.
Because for every raw material purchase, the handsome amount of cash is
required. The bank purchases or we can say it gives loan to the company to buy
raw materials. When the raw materials are purchased and shipped back to the
company premises, it is up to the company that whether it wants to keep the raw
materials with itself or to give raw materials under pledge. In case of pledge, the
banks takes the custody of the raw materials under the supervision of third party
service providers known as Mucaddams. They just supervise the raw materials
placed at any specific godowns. PEL has many godowns, some in the factory’s
premises and other at different places of Lahore. The responsibility of buying the
raw material is of FP and Commercial department, when the raw material is
45
COMSATS Institute of Information Technology, Lahore
purchased it informs the finance department and that whether it is to be
transferred to PEL or any other godown. FP department prepares a memo for the
appliances parts that are assembled in PEL factory, and FP department that
memo to the finance department. It contains an invoice slip, detail of every single
part, units and price. It also contains the information of the country from which the
parts are imported. Whenever the company wants its materials to be pledges by
bank, it writes a letter requesting the required material to be pledged. The detail
against which the material is pledged is as follows:
• Description of Material
• Quantity
• Rate
• Value in Rupees
And whenever the company wants to release the material from pledge, it writes a
letter to the bank requesting it to release the material and issue the delivery order
against that material. The detail against which the material is released is as
follows:
• LC number:
• Material description
• Quantity
• Rate
• Value in Rupees

When the company needs the raw materials, it writes a letter to the concerned
bank to deliver their raw materials against payment. The bank then issues a
delivery order(DO) against each raw material delivered and hence the raw
material is then transferred in to the custody of PEL. The company also maintains
the record of pledged stocks and their position and status. The bank provides
different services to the company. Some of those are LC, USANCE and CF (cash
finance).

46
COMSATS Institute of Information Technology, Lahore
LC
Sight LC: The Company releases the pledged stocks as needed

USANCE: The Company can use the pledged stock and can pay the bank in 120
days. The days can vary according to the contract.

CF: Whenever there is a need for cash, the company can pledge its stock under
bank’s custody to obtain some cash in return. This cash then further be utilized
for more production processes. In this case the bank only take the pledge of
finished goods. Unfinished goods cannot be given into the custody of banks.

Lets have a look on the system, that how material management section works.
Whenever the concerned department receives orders from its customers for
example refrigerator department receives order from its customers then
refrigerator section will prepare a detail of all the raw materials required for its
production. That detail is then submitted to Finance department for approval
under Material Management section. After verification from Material Management
section, the detail is submitted to the Treasury section of Finance department.
The Treasury section then allocates the funds for production. In case PEL don’t
have enough funds for production, they use the facility provided by the bank
which is known as CF. i.e. they pledge the some stocks under the custody of
bank and PEL receives some cash in return against the stocks pledges. From
that cash they can utilize it in the production process.
When the company wants to shift its pledges stocks from one godown to another,
it requests the concerned bank by writing a letter. The reason for switching the
godown is that when the company has less stock remaining then there is no use
of paying the extra amount of rent to godown. So the company switches its
pledges stocks to some other godown.

Treasury Section

47
COMSATS Institute of Information Technology, Lahore
The main task of the treasury section is to handle the imports and exports and
bank statements reconciliation. Basically the Treasury section helps and support
the whole Finance department i.e. it allocates funds. The other task of Treasury
section is to collect the payments and payables. It receives payments from its
corporate customers. And the payables are mostly the loans taken from different
banks. It is the responsibility of the Treasury section to pay off these loans. It is
also the responsibility of the treasury section to allocate the salaries for the
employees.

Budgeting Section
Budgeting section forecasts annual sales, expenditures and costs for the
company after getting production estimates from different production
departments and sales plan from marketing department. And then it arranges the
funds according to the production needs of various deparments.

A/R Section
This section deals with all types of receivables. This section also deals with the
local LCs. It also deals with that how many LCs are with a bank or with a
company. It keeps track of transportation dues.

Provident Funding Section

The provident funding section and payroll system works independently from the
Finance department. Usually the provident fund is withdrawn by the employee
when he leaves the job. If it is withdrawn during the job then it is considered as a
loan. The employee can take two types of loan, either refundable or non-
refundable. The employee has to return the loan with the markup applied on it.
The loan that is withdrawn permanently is non refundable. The same amount that
is withdrawn is deducted from the employees account. And the loan that is
refundable is paid back by the employee in terms of installments with markup
added by the company. If the loan amount is up to Rs 20,000 then it is paid in the
form of cash. And if the amount is greater than Rs 20,000 then it is paid in the
48
COMSATS Institute of Information Technology, Lahore
form of cheque. The 10% salary is deducted from employee’s account and
additional 10% is added by the company at the end of each month and that
collected amount is given to the employee at the end of his job. For refundable
loan, the installments are either 10 or 20. Zakat is deducted on non-refundable
loan i.e. 2.5% on employees contribution. If the employee wants an interest free
loan then there is a company policy that the interest free loan will be given to the
employee and no interest will be charged on repayment.

4.2: New Knowledge Acquired

I learned a lot during my internship, related and un-related. Related is that I
learned the actual working of Finance department, their rules and policies,
procedures, systems, values etc. Unrelated is that I got to know the office
environment. How people work together systematically and co-operating with
each other. No doubt the routine of the Finance department and nature of job
there is quite tough. But I found all the employees and managers hardworking,
disciplined and punctual in their task accomplishments.

4.3: Problems Encountered

As such I didn’t face any type of problem during my internship. The only thing I
found a bit problematic was that it was a bit harder for me to take time from
employees to teach me new things and the working of Finance department,
because of their extreme busy schedule. Otherwise I found the whole PEL staff
very friendly and co-operative, specially with internees.

4.4: Other activities:

Visited the PEL factory with Mr. Tariq Jawed (Material Managemnt) and Mr.
Tayyab Sharif. (Corporate Finance).

4.5: Suggestions
49
COMSATS Institute of Information Technology, Lahore
I have noticed during my internship that the employees which are currently
employed under the rank of JE and E, have salaries below average, means that
they are underpaid. Their salaries are not according to their nature of job and
their qualifications. The nature of job is very tough and employees find it difficult
to finish the tasks within office timings. They have to sit there for another two to
three hours averagely for the completion of their tasks. My suggestion is this, that
the salaries of the employees should be according to the nature of job and their
qualification and the salaries should be a bit more higher than the current one.

Another suggestion that I would like to give is that, there should be a separate
training session for the internees where some employees can deliver lectures to
the internees about the working of the concerned department.

50
COMSATS Institute of Information Technology, Lahore
Annexure 1

Chairman

Managing
Director

GM GM GM
GM Finance Manufacturing Marketing(PD) Marketing(AD) GM IR & A

Manager SR Manager
Controller Senior Manager SR Chief Audit
Manager FP Commercial QC(Appliances
Finance Marketing(PD) Manager(AD) Executive
and Power)

51
COMSATS Institute of Information Technology, Lahore
 Management/Organizational Hierarchy

Glossary

AD: Appliances Division

PD: Power Division
QC: Quality Control
E: Executive
JE: Junior Executive

52
COMSATS Institute of Information Technology, Lahore
Reference
www.pel.com.pk/refrigerator.html
www.pel.com.pk/air_conditioner.html
www.pel.com.pk/oven.html
www.pel.com.pk/washing-machine.html
www.pel.com.pk/water-dispenser.html
www.pel.com.pk/genset.html
www.pel.com.pk/pd-intro.html
www.pel.com.pk/epc-contracting.html
www.pel.com.pk/power-tr.html
www.pel.com.pk/distribution-tr.html

Information Taken from persons:

Material Management : Mr. Mohammad Hanif, Mr. Ghulam Murshad, Mr Amjad,

Mr. Tariq Jawed
Corporate Finance: Mr. Tahir Mehmood, Mr. Umar Zahid, Mr. Assad,
Mr. Tayyab Sharif
A/R: Mr. Nadeem-ud-Din
Provident Funding: Mr. Rashid Hanif

53
COMSATS Institute of Information Technology, Lahore