PNSC - Internship Report (Pakistan National Shipping Corporation)

1
2010
Internship Report
on Pakistan
National Shipping
Corporation
(PNSC).Karachi
By:Qaim Deen
BBA(Hons). Finance
THE ISALAMIA UNIVERSITY OF

BAHAWALPUR
RAHIM YAR KHAN CAMPUS
Department Of Management
S ofcBahawalpuur,
The Islamia University i e n c e RYKs Campus.
15-Aug-10
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By:
Qaim Deen Mahar
BBA (Hons) Finance.
The Islamia University of Bahawalpur. Rahim Yar Khan Campus.
Status:
Completing MBA from Quaid-i-Azam University Islamabad.
Spring 2011.
Contact No.
0306-3456787
0332-2828028
qaim_mahar@yahoo.com
If you need any help regarding internship in PNSC you can

contact.
Thanks.
The Islamia University of Bahawalpuur, RYK Campus.

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Executive Summary
Pakistan National Shipping Corporation was established as a
result of merger of the National Shipping Corporation (NSC) and
the Pakistan Shipping Corporation (PSC) in 1979, with effect from
1st January 1979.
This was done with the view to improve the performance of the
shipping and ocean transport services and to develop of the
maritime shipping industry. Pakistan National Shipping
Corporation (PNSC) is an autonomous corporation, which
functions under the overall control of ministry of Ports and
Shipping, Government of Pakistan.
Pakistan National Shipping Corporation (PNSC) manages 19

subsidiary companies. The direction and administration of the
affairs of the business of the corporation are maintained by the
Board of Directors, which consist of five directors including the
Chairman, to be appointed by the federal government directors
to be elected by shareholders other than the federal government.
For the efficient running of the corporation business distributed

among the following four divisions each headed by and appointed
directors;
1) Corporation affairs and admin Division
2) Commercial division
3) Ship management Division
4) Special Project and Planning Division
Under these five main directors there are 48 subdivisions or units

are present. The report will gave a detailed working of some of
these departments and how these departments are working for
the overall profitability of the organization.
Financial position of the organization is becoming stronger since
2001.

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Pakistan National Shipping Corporation (PNSC) has great

opportunities to capture maximum market share. The company
has great future prospectus because of its long term contract
with oil refineries. Company has a sound plan of expansion in
near future.

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Introduction

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PNSC Introduction
Company Pakistan
Profile: National
Shipping
Corporation
Ticker: PNSC
Exchanges: KAR
2010 Sales: n/a
Major Transportatio
Industry: n
Sub Shipping
Industry:
Country: PAKISTAN
Employees: 1077
Head PNSC
Office: Building,
Moulvi
Tamizuddin
Khan Road,
Karachi –
Regional 74000
Office: Gulberg
Heights,
Lower
ground floor ,
Near sherpao
bridge Gulbe
rg ,
Lahore,
Pakistan
Corporate Information:
The corporation is managed by a board of directors constituted by
the Federal Government. Five of these Directors including the
Chairman are nominated by Government (majority share holder),
while, two Directors are elected by the Shareholders. Corporation
share holding as under.

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a. Authorized Capital Rs. 2000 Million

b. Paid up Capital Rs. 1320.63 Million
c. Government Share 77.13%
d. PNSC Employees
12%
Empowerment Trust
e. Individuals 7.07%
f. Institutions 3.80%
Pakistan National Shipping Corporation is the National flag carrier
managing a fleet of 10 Vessels. The corporation’s head office is in
Karachi. A regional office based in Lahore caters for upcountry
shipping requirements. The corporation also have extensive
overseas network of agents looking after its worldwide shipping
business.
Pakistan National Shipping Corporation (the corporation) and its

subsidiary companies (together ‘the Group) were incorporated
under the provision of Pakistan National Shipping Corporation
ordinance, 1979 and the companies’ ordinance, 1984
respectively.
The Group is principally engaged in the business of shipping,

including charter of vessel, transport of cargo and other related
services. It also engaged in renting out its properties to the
tenants under the long term lease agreements. Its registered
office is situated at PNSC Building Moulvi Tamizuddin Khan Road,
Karachi except for Pakistan co-operative Ship stores (Private)
Limited which is situated at 70/4, Timber Pond, N.M Reclamation
Kemari, Karachi.
The Group owns 55 percent of the share capital of Pakistan co-

operative Ship stores (Private) Limited and 100 percent of the
share capital of the remaining subsidiary companies. . All the fully
owned subsidiaries of the Group operate one vessel / tanker each
with the exception of Hyderabad Shipping (Private) Limited,
Karachi Shipping (Private) Limited, Lahore Shipping (Private)
Limited, Lalazar Shipping (Private) Limited, Malakand Shipping
(Private) Limited, Shalamar Shipping (Private) Limited and Sibi
Shipping (Private) Limited which currently do not own any
vessel / tanker.

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Pakistan National Shipping Corporation operates in the shipping

industry in Pakistan and internationally. It engages in the charter
of vessels, transportation of cargo, and other related services, as
well as in the provision of commercial, technical, administrative,
financial, and other services related to shipping to third parties.
As of June 30, 2010, the company operated a fleet of 10 vessels,

including bulk carriers, oil tankers, and combo vessels with a total
carrying capacity of 453,748 DWT. Pakistan National Shipping
Corporation also involves in the rental of real estate properties
comprising commercial buildings and spaces under lease
arrangements; and management of a repair workshop. The
company is headquartered in Karachi, Pakistan.

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The Group:
The Group consists of:
Holding company
Pakistan National Shipping Corporation
Subsidiary companies
Pakistan National Shipping Corporation (PNSC) has following

Subsidiary Companies:
1. Bolan Shipping (Private) Limited.
2. Chitral Shipping (Private) Limited.
3. Hyderabad Shipping (Private) Limited.
4. Islamabad Shipping (Private) Limited.
5. Johar Shipping (Private) Limited.
6. Kaghan Shipping (Private) Limited.
7. Karachi Shipping (Private) Limited.
8. Khairpur Shipping (Private) Limited.
9. Lahore Shipping (Private) Limited.
10. Lalazar Shipping (Private) Limited.
11. Makran Shipping (Private) Limited.
12. Malakand Shipping (Private) Limited.
13. Multan Shipping (Private) Limited.
14. Pakistan Co-operative Ship Stores (Private) Limited.
15. Quetta Shipping (Private) Limited.
16. Sargodha Shipping (Private) Limited.
17. Shalamar Shipping (Private) Limited.

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18. Sibi Shipping (Private) Limited.
19. Swat Shipping (Private) Limited.
Associate:
- Muhzammadi Engineering Works (Private) Limited.

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The Group owns 55 percent of the share capital of Pakistan Co-

operative Ship Stores (Private) Limited and 100 percent of the
share capital of the remaining eighteen subsidiary companies.
All the fully owned subsidiaries of the Group operate one vessel /
tanker each with the exception of Hyderabad Shipping (Private)
Limited, Karachi Shipping (Private) Limited, Lahore Shipping
(Private) Limited, Lalazar Shipping (Private) Limited, Malakand
Shipping (Private) Limited, Shalamar Shipping (Private) Limited
and Sibi Shipping (Private) Limited which currently do not own
any vessel /tanker. Subsequent to the year end a vessel has been
disposed off and a tanker has been acquired.

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Background:
Basically Pakistan National Shipping Corporation (PNSC) is the
merger of National Shipping Corporation (NSC) and Pakistan
Shipping Corporation (PSC).
National Shipping Corporation (NSC):

The national shipping corporation (NSC) was established under
the National Shipping Corporation Ordinance, 1963, with a view
to provide and efficient shipping services. The Corporation was
managed by a Board comprising of nine directors, out of which
five including the Chairman, the Managing Director and the
Financial Director were appointed by the Central Government and
remaining four were elected by the share holders, to from each
Province.
The authorized capital of the Corporation was Rs. 250 million

divided into 25 million and 5 million fully paid up share of Rs. 10/-
each and the subscribed capital was to be Rs. 50 million divided
into 5 million shares of Rs. 10/- each. The share of Central
Government in the capital was 25% and the balance of 75% was
raised from the public in East and West Pakistan on the basis of
parity. The Board of Director of the Corporation was authorized to
call for public subscribed to such extent within the amount of Rs.
50 million and at such time as the Board thought fit. The initial
subscribed was fixed by the Board at Rs. 16 million. The
Corporation called for the capital on 4th May, 1964 which was in
fact over-subscribed.
Pakistan Shipping Corporation (PSC):
In 1974 the Federal Government decided to take over the

management and control of entire shipping in Pakistan, including
NSC through promulgation of the Pakistan Maritime Shipping
(Regulation and control) Ordinance, 1974 which later on became
an Act.
In September, 1976 the Federal Government established the

Pakistan Shipping Corporation (PSC) under the Pakistan Shipping
Corporation Act, 1976, to take charge of ten shipping companies
and operate as a parallel corporation with the National Shipping
Corporation (NSC).

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Establishment of Pakistan National Shipping

Corporation (PNSC):
In 1977, the Federal Government decided amalgamates the NSC

and PSC to establish the Pakistan National Shipping Corporation.
The Pakistan National Shipping Corporation Ordinance, 1979 was
promulgated with effect from 1st January, 1979. By This
Ordinance the NSC and PSC were dissolved as of the 31st
December, 1978.
At the time of the merger the share capital of NSC was Rs.
144,375,000 and that of PSC was Rs. 85,124,350. Both the
Corporations had 24 ships each and their Books of Accounts had
shown a profit of Rs. 28,713,000 for NSC and Rs. 823,606 for PSC.
As provided for in the PNSC Ordinance, the net worth of the

business of NSC & PSC as on 31-12-1978 was evaluated and
shares were allocated to the combined shareholders according to
the principal prescribed in the Ordinance after the valuation had
been approved by the Federal Government. The share capital of
PNSC was pegged at Rs. 241,308,000.
So the Pakistan National Shipping Corporation (PNSC) is the

combination of the National Shipping Corporation (NSC) & the
Pakistan Shipping Corporation (PSC).

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V ISION &
STATEMENT
M ISSION
To develop and execute short-term long-term

business plans to ensure sustainable growth of the
Corporation as the National flag carrier and a lead
player in the shipping industry.

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Organizational Structure

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CHAIRMAN
SA to CHAIRMAN (M)
Executive Executive Executive

Executive Executive
Director Director Director Special
Director Finance Director Ship
Administrative Commercial project &
Division Division
Division Division Planning
Estate Commercial Finance MR & S (GM) SP & P (M)

(GM) (GM) (GM)
MR & S (M) Dry

Estate (M) Commercial Accounts (M) Cargo Vessel SP & P
(M) (DMs)
Technical Accounts (M) SUPDTS. Dry

(M) Tanker Librarian
Cargo Vessels
(M) (DM)
(DMs)
Finance (DM)
Personnel
(M) Bills (M) M. I. S (GM)
Manager Tech.
Corporation Tanker (M)
Operation Sectt
Admin (M)
(M) Secratery
PNSC Ship Store (DM)
Legal (M)
Operation CA & Shares ISM Code / TRG
(Port CAPT) (M) (DM)
S. M. O (DM)
CA & Share
(DM) Fleet Management Internal Audit
Security Import/ (DM) (Incahrge) (M)Report to
(DM) Export (DM) Board Audit
I & C (M) Committee
Protocol SUPDTS Fleet
(DM) TA (East)
Dry Cargo VSLS
(M)
(DMs)
TA (West)
(DM) Crew Section (M)
Ship Personnel
Lahore (RR) SUPDT SP
Workshop (GM)

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CORPORATE
INFORMATION

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CORPORATE INFORMATION
BOARD:
Brig. (R) Rashid Siddiqi
Chairman
Mrs. Rukhsana Saleem

Member
Mr. Rasheed Y. Chinoy

Member
Capt. Syed Akhlaq Hussain Abidi

Member
Mr. Khalid Idress

Member
Mr. Jahangir Siddiqui

Member
Mr. Khowaja Obaid Imran Ilyas

Member
AUDIT COMMITTEE OF THE BOARD:
Mr. Rasheed Y. Chinoy

Chairman
Mrs. Rukhsana Saleem

Member
Capt. Syed Akhlaq Hussain Abidi

Member
Mr. Khowaja Obaid Imran Ilyas

Member

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SECRETARY:
Ms. Zainab Suleman
HEAD OFFICE:
PNSC Building, Moulvi Tamizuddin Khan Road Karachi-74000
AUDITORS:
A.F. Ferguson & Co., Chartered Accountants.

Ford Rhodes Sidat Hyder & Co., Chartered Accountants
BANKERS:
Allied Bank Limited
Bank Al-Falah Limited
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank Limited
JS Bank Limited
MCB Bank Limited
National Bank of Pakistan
Meezan Bank Limited
Royal Bank of Scotland
Standard Chartered Bank
United Bank Limited

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Board of Directors

Chairman
Mr. Rasheed Y. Chinoy Mrs. Rukhsana Saleem Mr.

Khalid Idrees
Director Director Director
Capt. Syed Akhlaq Hussain Abidi Mr. Jahangir Siddqui Mr.

Khowaja Obaid Imran Ilyas
Director Director Director

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Management

Chairman
Cdre.S. Mohammad
Mr. Imtiaz C.
Brig. (R) Rashid Siddiqi Obaidullah
Agboatwala
Executive Director Executive Director
Executive Director
(Administration) (Special Project &
(Finance / CFO)
Planning)
Capt. Aftabuddin Siddiqui Mr. Zaheer Babar Quershi

Executive Director Executive Director
(Commercial) (Ship Management)
Note:
Brig. (R) Rashid Siddiqi is acting as Chairman and also Executive Director of Administration
at the same time.

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Real Estate of PNSC

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Real Estate of PNSC:

PNSC manages three commercial buildings.
1. PNSC Building
PNSC building is situated at Moulvi tamizuddin Road. The

foundation stone of building was laid on 11th May 1968 and this
sixteen strayed building (now PNSC building) was completed in
the year 1971 at an approximate cost of Rs.30 Million.
Huge Fire erupted in this building on Sunday 18th February, 2007,
getting the 10th, 11th, 12th, 13th, 14th, 15th, 16th, floors. Luckily no
life lost and no structural damage occurred on the affected floors.
Unfortunately again on Sunday,19th August, 2007 another huge
fire broke out, this time destroying 4th, 5th, 6th, 7th, 8th, 9th floor.
The Karachi Building control authority after thorough inspection
declared the Building safe. The building is under
refurbishment/renovation till now.

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2.Muhammadi House:
This building is located at I.I. Chandigarh Road, Karachi.

Different companies have Head Offices in this
building. It was constructed in 1950 and now it is
property of PNSC.

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3. Old Rally building:
This building is located at Talpur Road off I.I. Chandigarh Road

and adjacent to City Railway station. Old Rally Building originally
belongs to Chittagong Steamship Company. When shipping was
nationalized in 1974, this building was taken over by the
government. Now it is the property of PNSC.

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Trade Areas

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Trade Areas:
Trade Area EAST:
In the east the business of Pakistan National Shipping

Corporation is precede to the following countries:
1. Japan
2. Nepal
3. Sri Lanka
4. China
5. India
6. Indonesia
7. Thailand
8. Hong Kong
9. Philippine
10. Taiwan
11. Others
The purpose of formation of trade area east is to control all the

matters of and shipping trade in the eastern side of Pakistan.
The main countries in the east to which we have goo and strong
relations in trading are:
• China (26%)
• Japan (15%)
• South Korea (11%)
And we have agents in east countries for the purpose of
• Marketing of Pakistan National shipping corporation

• Selling the Freight
• Linkage with importer and exporter of Pakistan
• For transportation of goods by sea
• Conveying different other shipping information
• Looking after all vessels
• Accommodating cargo for our ships

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Trade Area WEST:
When Pakistan National Shipping Corporation traded to the west

area then the region will be treated as trade area west.
Following Countries are included in Trade Area West:
• Persian Gulf
• European Countries
• African Region
• USA
• Canada
• Others

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PNSC Ships

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PNSC Ships:
FLEET:
S. DWT Built Origin Tonnag Lengt Breadt

Vessel IMO
NO e h h
6571 85130
1 KAGHAN 1986 JAPAN 36, 098 225.78 32.26
6 15
COMBIES:
S. DWT Built Tonnag Lengt Breadt

Vessel Origin IMO
NO e h h
1814 78221
1 BOLAN 1980 JAPAN 12,395 153.00 23.00
4 08
1820 PAKISTA 78227
2 ISLAMABAD 1983 12,395 153.01 23.00
4 N 06
1825 78220
3 MULTAN 1980 JAPAN 12,395 153.01 23.00
7 93
1824 78220
4 SARGODHA 1980 JAPAN 12,395 153.01 23.00
2 17
TANKERS:
S. Built Origi Tonnag LengthBreadt

Vessel DWT IMO
NO n e h
79173
1 JOHAR 86803 1985 SPAIN 49,688 243.80 39.35
93
19174
2 SWAT 86593 1985 SPAIN 49,601 243.80 39.35
08
10721 92705
3 QUETTA 2003 Japan 58,118 246.80 42.00
5 55
10701 92775
4 LAHORE 2003 Japan 58,157 246.80 42.00
8 41
10708 92578
5 KARACHI 2003 Japan 58,127 246.80 42.00
1 14

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COMBIES:
M.V. BOLAN
SPECIFICATIONS
Call Sign AQOM

IMO Number 7822108
Gross Tonnage 12395
Summer deadweight 18144
Summer draught 9.745 m
Length overall 153.0 m
Breadth 23.0 m
Built KAWASAKI KOBE JAPAN - 1980
Cargo gear CRANES SWL 25 TS x 2 , VELLE
DERRICKS DWL 22 TS x 5

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M.V. SARGODHA
SPECIFICATIONS
Call Sign AQOK

IMO Number 7822017
Gross Tonnage 12395
Breadth 23.0m
Built OSHIMA JAPAN - 1980

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M.V. ISLAMABAD
SPECIFICATIONS
Call Sign AQPE

IMO Number 7822706
Gross Tonnage 12395
Breadth 23.0 m
Built KARACHI SHIPYARD PAKISTAN-1983

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M.V. MULTAN
SPECIFICATIONS
Call Sign AQOP

IMO Number 7822093
Gross Tonnage 12395
Summer draught 9.745
Breadth 23.0 m
Built MITUI JAMANO JAPAN - 1980

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Tankers:
M.V. SWAT
SPECIFICATIONS
Call Sign AQPU

IMO Number 7917408
Gross Tonnage 49601
Summer 86593
deadweight
Breadth 39.35 m
Built ASTILLEROS Y TALLERES DEL NORESTE, S.A.
(ASTANO),EL FEROL NOV,1985
Cargo gear DERRICKS SWL 15 x 2 , PROVISION DERRICKS
SWL 5 x 2

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M.V. JOHAR
SPECIFICATIONS
Call Sign AQPV

IMO Number 7917393
Gross Tonnage 49688
Summer 86803
deadweight
Breadth 39.35 m
Built ASTILLEROS Y TALLERES DEL NORESTE, S.A.
(ASTANO),EL FEROL NOV,1985
Cargo gear DERRICKS SWL 15 x 2 , PROVISION DERRICKS
SWL 5 x 2

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M.T. QUETTA
SPECIFICATIONS
Call Sign AQQB

IMO Number 9270555
Gross Tonnage 58,118 mt
Summer 107,215 mt
Deadweight
Summer Draught 14.798 m
Length Overall 246.80 m
Breadth 42.00 m
Built Imabari Shipbuilding Co. Ltd., Japan 2003.
Cargo Gear Cranes SWL 15 TS x 1

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M.T.LAHORE
SPECIFICATIONS
Call Sign AQQC

IMO Number 9277541
Gross Tonnage 58,157 MT
Summer 107,018 MT
Deadweight
Breadth 42.00 m

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M.T.KARACHI
SPECIFICATIONS
Call Sign AQQD

IMO Number 9257814
Gross Tonnage 58,127 MT
Summer 107,081 MT
Deadweight
Breadth 42.00 m

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Bulk carrier:
M.V.KAGHAN
SPECIFICATIONS
Call Sign AQPY

IMO Number 8513015
Gross Tonnage 36098.00
Breadth 32.26 m
Built NAMURA SHIP BUILDING CO.,
JAPAN-1986
Cargo gear GEARLESS

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Division and Departments

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Division and Departments

The Management of Pakistan National Shipping Corporation
establishes division and Departments to facilitate conduct of the
duties.
So following division and Departments are established.
 Commercial division
 Finance Division
 Ship Management division
 Administrative Division
 Special Project& Planning Division
 Internal Audit Department
Commercial Division:
Commercial Division is headed by Executive Director if

Commercial Division that is Capt. Aftabuddin Siddiqui.
This Department has following sub Sections.
• Trade Area (West)

• Trade Area (East)
• Chartering Department
• Tanker Section
• Container Logistics section
• Regional Office Lahore
• Operations
• Bill Section

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Finance Division:
Finance Division is headed by Executive Director of Finance that

is Mr. Imtiaz C. Agboatwala. Finance Division is under his control
& he manages all the affairs of Finance Department in Pakistan
National Shipping Corporation.
The Finance Division is divided in four major sub Sections:
• Finance
• Insurance and Claim
• Corporation Secretariat
• Corporate Affairs and shares
I will explain only Finance and Insurance & Claim Department

later.
Ship Management division:
This Division deals only with the affaire of Ship. This division is
headed by Ship Executive Director of Ship Management that is
Mr. Zaheer Babar Quershi.
All the issues that are related to the Ship like Vessel
Management, Crew management, Repair and Maintenance of
Ship etc… are handled under this division.
In this Ship Management division following head are included:
• Fleet Management
• Bunker section
• Workshop
• Repairs & Maintenance
• ISM Code/ Training section
• Ship Personnel
• Stores Supply Depot

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Administrative Division:
Administrative division is headed by Brig. (R) Rashid Siddiqi,

Executive Director of Administration and also he is the Chairman
of Pakistan National Shipping Corporation.
Administration Division covers the following areas:
• Personnel
• Administration
• Estate
• Security
• Public Relations
• Legal sections
• Medical sections
• Contributory provident fund functions
Special Project& Planning Division:
Special Project& Planning Division is headed by Cdre. S.

Mohammad Obaidullah, Executive Director of Special Project&
Planning Division.
This Division has the following sections:
• Special Projects
• Planning
• Management Information System

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Internal Audit Department:

Internal audit department is headed by Manager of Internal audit,
reporting direct to the Board audit Committee.
Internal Audit is the main internal control process of any

organization. The main functions of the internal audit are to
examine the financial transactions according to laws, regulations,
policies and accounting standards.
Pre Audit:
In pre audit all the transactions are verified before its

enforceability, just for minimizing risk of frauds and mistakes.
In pre audit we check following list of titles:
• Volume of amount involve in transaction

• Party details
• Deadline for maturity of contracts
• Signature of guarantors if any
• Bank Guarantees if any
• Chairman Authority to sign the document of transaction
After all examination it will be passed for enforceability.
Post Audit:
Post audit examines the after affects of transactions settlement.

It is confirmed that funds are reached to the real party or the loan
that was acquired is consumed at right place.

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Commercial Division/Department:
Commercial department of PNSC is the backbone of the

organization. Commercial department performs worldwide and
chartering operations.
The basic function of commercial department is to promote and
enhance fleet and cargo trading. The commercial division deals
with normal daily business related to the organization.
The commercial Department is sub divided in 5 main categories
1. Trading
2. Chartering
3. Tanker Line
4. Containers
5. Bills
1. Trading:
Trading can be sub divided in two regions:
Trade Area East

Trade Area west
Trade Area EAST:
In the east the business of Pakistan National Shipping

Corporation is precede to the following countries:
12. Japan
13. Nepal
14. Sri Lanka
15. China
16. India
17. Indonesia
18. Thailand
19. Hong Kong
20. Philippine
21. Taiwan
22. Other
The purpose of formation of trade area east is to control all the
matters of and shipping trade in the eastern side of Pakistan.

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The main countries in the east to which we have goo and strong
relations in trading are:
• China (26%)
• Japan (15%)
• South Korea (11%)
And we have agents in east countries for the purpose of
• Marketing of Pakistan National shipping corporation

• Selling the Freight
• Linkage with importer and exporter of Pakistan
• For transportation of goods by sea
• Conveying different other shipping information
• Looking after all vessels
• Accommodating cargo for our ships
Trade Area WEST:
When Pakistan National Shipping Corporation traded to the west

area then the region will be treated as trade area west.
Following Countries are included in Trade Area West:
• Persian Gulf
• European Countries
• African Region
• USA
• Canada
• Others
Most of the time Oil is imported by PNSC oil tankers.

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2. Chartering:
Most of the tome a party or parties charter the ships for the
voyage and freight is received to PNSC. Two types of contracts
can be done when chartering ships that are:
• Time charter
• Voyage charter
In Time Charter the main thing is focused is time. In this case the
ship is chartered for a specific time period, no matter how many
voyages are completed.
In Voyage Charter the freight is taken on the voyages that are

completed or made. Freight is due on every voyage that is made.
There can be one or more parties that can be involved in

acquiring or taking ship, cargo or tanker by time or voyage
charter.
Mostly in case of voyage charter 90% of the freight that should

be paid is normally paid in advance.
In case of time charter 100% full amount is paid at advance

before going to voyage.
2. Tanker Line:
Tanker Line is related to Liquid cargo. The need of Government of

Pakistan’s crude oil is normally carried through PNSC.
The following Companies need Crude oil:
• Pak Arab Limited

• National Refinery Limited
• Pakistan Refinery

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In a month 10 tankers fulfill the demand of the above companies.

Major exporters of oil are following:
• Saudi Arabia
• United Arab Ammarat
• Iran
Most of the oil is imported from Saudi Arabia region.
Name of the PNSC Tankers are:
• Johar
• Swat
• Lalazar
3. Containers:
Containers are the Boxes that load goods have some specific
sizes.
There are three types of Boxes:
• Dry cargo ( 20 Fitters & 40 Fitter dry boxes including open

top )
• Bagged cargo
• Drums
4. Bills:
This section of commercial department deals with the recovery of

freight and other tariff charges regarding contracted dealings.
They also provide special services to military of Pakistan. Items of

military are provided to authorize dealers. Bills have to be sent to
listed dealers for payments.

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Working on Various
Departments

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Finance Department:
The Finance Department is divided into several sections. Each

section is directed its own Assistant Manager and these AMs are
directed by their respective Deputy Managers. Sections are listed
below:
1. Freight Section
2. Port Section
3. Assets Section
4. Spares Section
5. Insurance & Claim Section
6. Payrolls Section
7. Remittance Section
8. Tax Section
9. Bill Section
10. Cash Section
11. Book Keeping Section
12. Afloat Section
13. Mess Committee Section
14. Workshop Section
15. Store Account Cell Section
I will provide detail of some of the sections of Finance

Department where I have spend some time or the sections that
were visited by me during my Internship in Pakistan National
shipping Corporation.

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Mess Committee Section:
Mess committee is the section of Finance department which is

related to mess expenses or food expenses of all the employees
that are working on the ship.
So obviously there would be expenses of food for the people that
are on the ship and going for any voyage.
Mess committee section is responsible to provide all food items

that are required to fulfill the needs of the employees that are
working on the ship.
The needed amount of money for food or items will estimated on

this basis
If the voyage is less than 120 days then the daily cost of food per
person on ship will be $4. And if the voyage is more than 120
days then per person cost per day on food will be $5.5. So if the
members on ship are 40 and total days of voyage are 110 then
total cost of mess will be $17600 = (40x110x4)
So all the expenses related to mess/food are handled under this

section. When the captain of the ship purchases any mess related
item he sends the bill of purchasing that food to the Mess
Committee section in the PNSC Karachi, but not immediately.
First of all when the ship is sailing for a voyage from Karachi, at
that time all the needed food items are purchased according to
the need and according to the estimated days that would be
spent on the ship during voyage.
It is tried that all the needed things should be purchased from

Karachi because 1st here these will be available on cheap rate as
compared to purchasing from another country. 2nd Quality will be
better and 3rd own country’s things will be purchased on own
money so it will be better for the country that its own wealth is
coming back to its own people.
The Mess Committee section will pay that amount to the seller
and food items will be sent to the ship. The Mess Committee will
charge this to the expenses head.

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It is also possible that in the ship the food items can be

consumed fully before the completion of full voyage or the
specified voyage. At that time the ship need food for its crew. So
the country in which they are right at the moment, the Captain
will inform to PNSC about their need and the PNSC will ask the
bank which will be operating in that country and also will be
linked with the PNSC. So the bank will provide the needed
amount of money to the captain of the ship and required food
equipment will be purchased.
It is also possible that in that country no bank is linked with PNSC,

at that time the agent of PNSC in that country will be advised to
provide the required amount or required products to the ship or
captain of the ship. Agent will provide the required amount and
food items will be purchased. And the bill will be sent to the
PNSC, PNSC will record it into its books of accounts.
If there is no agent of Pakistan National Shipping Corporation in

that country at that time London Bank will arrange the money in
that country or it will arrange an agent in that country, and the
agent will provide required things or money.
The amount that will be paid to the ship will be in foreign

currency. When they will be sent vouchers to the PNSC, then it
will convert it into local currency i.e. in Rupees, and the account
will be maintained.

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Insurance & Claim Department:
Insurance means to secure, covering any kind of risk of things

against some considerations. In Pakistan National Shipping
Corporation insured things or goods are vehicles, fleet, vessels,
estate, buildings and machines.
In insurance and claim section there are 3 sections that are:
• Hull & Machinery section

• Cargo section
• Miscellaneous section
Hull & Machinery section:
The functions of hull and machinery section include:
• Collision, fire, breakdown of machinery claims

• If there are some general or particular average claims
• Premium that is annually payable to National Insurance
Company.
• Damages claims
• Verify the deck; engine rooms repair bills and claims for
normal damages for the recovery purpose
• Also arrange renewal meeting with National Insurance
Company.
Cargo section:
The function of the cargo section in the insurance and claim

department are as under:
• Assist and arrange annual meeting with National Insurance

company
• Claims for shortage of cargo
• Claims for damages of cargo
• Claims that arise out if chartering parties.

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Miscellaneous Insurance section:
The functions that are performed by the Miscellaneous Insurance

section are as follows:
• Insurance of building, workshop, barges, office equipment

and others
• Workman’s compensation
• Stowaway cases
• Smuggling cases
• Repatriation /death compensation claims of afloat staff.
There are basically two type of Insurance:
• Asset Insurance
• Liability Insurance
Asset Insurance:
Asset insurance is also called Hull insurance. It means that if

there is any loss is done to the ship or vessel then it will be asset
insurance. If a loss is done to any vessel then National Insurance
Company will give the premium to us if the vessel is insured to
NIC. All the vehicles are also insured along with the vessels.
The responsibility of the members of insurance claim department

will make specifications of the loss that has been occurred and
they will send it to the NIC.
The members of the NIC will visit the vessel and see the
damaged area. After that settlement will be made and
transaction will take place with the mutual consent of both
parties.
The loss to any vehicle of PNSC that is insured is also brings

premium to PNSC. The procedure is same as in the vessel case.
Liability Insurance:
If the loss that is beard is due to the negligence of our own, then
it will be liability insurance. Like stowaway cases in which illegal
persons come to the vessel because of our own negligence.

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All the expenses of liability insurance are covered by P&I club

that is in London.
Short Landing:
Short landing occurs when goods that are on the ship are short in
quantity. In this situation following documents are required:
• Final Outrun Report: It is issued for the arrangement of

short lading report and then next steps are taken to fulfill of
short landing of goods.
• Short landing Certificate: It is an order due to which we

can claim on our short landing goods and claim loss to P&I
club.
Shortage case:
It mean that that the volume is less of product instead its

quantity.
Like demand was 50 kg bag but only 20 kg was appeared.
In this situation following documents are required:
• Provisional outrun report: It is issued for the

arrangement of shortage case and then next steps are
taken to fulfill of shortage volume of goods.
• Joint Survey Report: it is an investigation certificate upon

which investigation will be done over vessels.
• Bill of Lading: This is the document that tells all the

specifications of goods that were loaded to the vessel.

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Freight Section:
In freight section there is checking, analyzing and clearing the

freight (rent) of Pakistan National Shipping Corporation’s vessels
and also the freight of subsidiaries of Pakistan National Shipping
Corporation.
When the client party is going to give all the statements of
accounts that will be Time Chartered account. It includes
company’s General Ledger, Journal Voucher and chartered hire
invoice.
Then Pakistan National Shipping Corporation will be going to

make the statements or accounts. In which PNSC and its
subsidiaries freight earnings are calculated by considering each
vessels earning. This will be all included in “ageing Schedule” In it
total earning of each vessel are included on monthly basis and
balance are also included on monthly basis.
It includes:
• Voyage charter earning (freight on number of Voyages)

• Time charter earning ( freight depending upon time period)
• Foreign chartered earning (Freight charged on Foreign
voyages by taking cargo of customers)
After these three kinds of earning they totaled these earnings

and a total earning or total revenue is acquired.
When the revenue or freight is received they Debit the

Receivables and Credit the income portion when they are going
to record the transaction.
Outstanding Schedule of Receivable is the schedule in which

the balance that is not collected in that month is settled. The
outstanding balance is settled in this schedule.
Slot Business means that when PNSC have made the

agreement with his customer to carry his cargo but it did not
have any ship to carry the cargo of his customer. At that time
PNSC made an agreement to another cargo ship to carry the
cargo of its customer on time.

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For example, PNSC made agreement to carry the cargo of Mr.

Michael to Japan for $20000. But At the time no ship was
available at that time PNSC will find another ship of other
company going to Japan and made an agreement to carry Mr.
Michael’s cargo. Suppose agreement was made 0n $15000. So
PNSC is getting $20000 from its customer and giving $15000 to
the other company to carry the cargo and having profit of $5000.
This is Slot Business.
Time Chartered Voyage is voyage base on time. Chartering the

whole ship for a specified time period, no matter how many
voyages are completed in that time period l.ike, chartering ship
for 200 days. In time chartering the book keeping is made on
monthly basis but charges are taken on daily basis.
Voyage chartering refers to taking freight on number of

voyages that are completed by a ship. In this chartering the
freight is paid on basis of voyage completed. In voyage
chartering the book keeping is made on monthly basis and
payment is made on voyage basis.
The main functions performed by freight section are:
• Follow the regulation of State Bank of Pakistan and keep

knowledge of fluctuations in the exchange rates for taking
freight and other charges according to the change in
exchange rates.
• Prepare the periodic statements about all the collection of

freight and also make statements for outstanding freight for
the knowledge and information of management.
• Release all the information about the freight and all other
receivables from the parties before the release of delivery
order for cargo that is being discharged from Pakistan.
• Be quick in collecting information and data required from

the bill section for the timely preparation of annual business
plan, annual strategies and policies.

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• Also prepare monthly forecast of the cash that is incoming

to the Pakistan National Shipping Corporation from the
freight that is collected in Pakistan.
• Always give detailed and timely response to all the audit

queries.

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Bills Section:
Bills section of Finance department in Pakistan National Shipping

Corporation is concerned with the bills that are related to the
business. All the bills that are local and handled in Pakistan and
are in local currency in rupees relate to this section.
The responsibility of this section is to clear all types of bills of

Pakistan National Shipping Corporation and its subsidiaries. The
bill section actually makes the payments that are payable due to
bills.
The ill section doesn’t receive the bills directly. Bills are all those
payments that need payments. Like bill against purchasing of
uniform need payment of the bill of uniform.
If the bill is less then Rs. 25000 then no need of quotation. But if
the bill is greater than 25000 then the bill section need quotation
of all the products that are purchased. At that time requirement
of quotation is necessary for the payment made against the bills.
The billing section deals in only Pakistani Rupees not in foreign

currency. The foreign bills or payments are handled in
Remittance section that is related to all the foreign expenses that
are in shape of bills.
Pakistan National shipping Corporation defines or fixes a budget

every year for different kinds of items or for different kinds of
equipment every year. It design budget for every item
separately.
Different items or expenses that need bills and need payment are
the following items. Pakistan National shipping Corporation set a
specified budget each item in the following list has its own
budget.
• Courier services
• Printing and stationary
• Repair & Maintenance of different things like office
machines
• Uniforms for employees
• Telephone bills
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• Computer expenses
• Diesel or oil for generator
• Postage

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One thing also can be possible that the bill section has less
amount or budget for an item but the bill or payment is much
more then the budget, at that time the billing section will make
request to the General Manager of Finance for the sanction of
payment or budget.
But when the payments should be made immediately at that

time there is little time of making payments and the budget
approved from General Manager of Finance takes time in this
situation billing section do another method.
The action that billing section take in this situation is that it

makes the payments from another item’s budget that has
sufficient balance. When the payments are made then the budget
that is sanctioned from the General Manager of Finance is added
to that item’s budget where from payments were made.
The main functions of billing section are as follows:
• Clear all types of bills of Pakistan National Shipping

Corporation.
• Clear all types of bills of PNSC and its subsidiaries.
• Give timely response all audit queries.
• Prepare periodic statements of bills section.

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Book Keeping Section:
Book keeping in Pakistan National Shipping Corporation is the

recording of routine transaction and day to day record keeping
normally by an electronic or computer system. In Pakistan
National Shipping Corporation Maintenance of record related to
finance is kept. All record of the company that is finance related
is under this section.
All the other finance sections send their all data related to book
keeping department which maintain all the data electronically.
The book keeping department is responsible for the preparation
of financial statements.
Book keeping department firstly record all the transaction and

then put these transaction into general Journal. General Journal is
the day to day record of business transactions in convenient
intervals, the debit and credit amounts recorded in the Journal
(posted) to the accounts in the ledger.
After the journal the transactions are pasted to Ledger account

from the general journal. The record keeps using track of the
increase and decrease in financial statement items is termed as
‘ledger account’ or simply an account. The entire group of
accounts is kept together in an increasing record called a ledger.
After the ledger posting the balances are posted to Trial Balance.
In a trial balance, separate debit and credit columns are used to
list the balance of the individual balance account.
After completion of trial balance adjusted entries are made. Often

a transaction affects the revenue or expenses of two or more
different periods. In these cases adjusted entries are needed to
assign to each period the appropriate amounts of revenues and
expenses. These entries adjust the balance of various ledger
accounts.
After all the necessary adjusting entries have been journalized

and posted, an adjusted trial balance is prepared to prove that
the ledger is still in balance.

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Once an adjusted trial balance has been prepared, the process of

recording changes in financial position for the accounting period
for the accounting period is complete. Financial statements are
prepared directly from the adjusted trial balance.

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Now the financial statements like Balance sheet, Income

statements, Statement of cash flow, statement of owner’s equity
can be prepared directly from the adjusted trial balance.
After that closing entries are made, Closing entries are the
journal entries made at the end of the period for the purpose of
closing temporary accounts.
All of this process is done by computer system. In all of this

process verification is made and reasoning is checked behind
every transaction. Book keeping is made effectively because all
these transactions and financial statements will be audited by
government. Internal audit department is lying in the Pakistan
National shipping corporation & it also conduct audit in different
intervals of time.
The record of book keeping is also kept in manual form in the

shape of files. There are many reasons to keep the data in
manual form. But the most important is that the audit is
conducted on manual record of book keeping.
Another reason is that this manual data will be available at any

time to any person who needs that data in hard form. So it will be
easier to give the data to the people who require it.
The book keeping department is the most important and

technical work section at all. The entries should be recorded
carefully. The thing that made this section complicated is that all
the finance sections have to send their data to the book keeping
section.
Book keeping section has to arrange all the data of all other 14
sections and it will bring all the data in a mannered way and
arrange all those sections in a single section to use all the data of
all sections to make the financial statements.
The process or system in the book keeping section is same as we

have read in the books. Almost same procedure of accounting
that is used in Pakistan National Shipping Corporation that we
have taught in our BBA program.

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But the practical work and experience is much more different

from that which we were told before. The things that look so
simple are very deep and complicated when we enter in that
system.

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Workshop Section:
Workshop section is related to workshop related accounts and all

the financial matters that are related to the workshop. Pakistan
National Shipping Corporation has its own workshop at the port of
Karachi.
It has a marine engineering workshop and the basic purpose of

that workshop is to provide the repair and maintenance services
to the PNSC own fleet also give services to the foreign ships
arriving at the port of Karachi.
It make repair and maintenance to the foreign ships also to

increase the revenues earned by the workshop of Pakistan
National Shipping Corporation and also chance for improving of
workshop workforce by examining and making work to the
international and high tech vessels.
It also gives the services to the Pakistan Navy Ships. Pakistan

Navy also brings its ships to the PNSC workshop if there is any
kind of need of repair in the ship.
The workshop is now having international standard services in all
aspects of its work like in Mechanical and Electrical repairs.
The workshop is located in Kemari. In the workshop section all

the data about the workshop is maintained that is related to
Finance. Like the assets that are present in the workshop are
maintained in books of accounts of workshop section.
All the wages and salaries related to the workers that are doing
work in the workshop are maintained and kept proper in books of
accounts are under workshop section.
The head of Revenues and expenses are also separately

maintained and updated in this section that is related to the
workshop. Revenues are all those received values that are due to
the repair services given to the ships that were bring to the
workshop.
All the expenses are also kept in record in this section that is
related to the workshop. Like maintenance of workshop, wages

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and salaries of employees working in the workshop, daily

workshop expenses etc.

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The functions of PNSC workshop section are:
• For the workman, officers, supervisors, staff, tradesman and

apprentices prepare and conduct training programs in the
workshop as well as outside the workshop.
• Plan and submit different proposals for the addition,

alterations and improvements of the workshop to be the
equal of the requirements of new vessels and also to
acquire new technology.
• Carry out deck, engine rooms and electrical repairs of PNSC

vessel at Karachi as per defect list and advice of
Maintenance and repair department.
• First plan and then manufacture such workshop equipments

which can reduce the cost of repair of the vessel.
• Try for the welfare of the workforce in Pakistan National

Shipping Corporation workshop.
• Carry out test and trials of machinery in association with

maintenance and repair department.

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Afloat Section:
Afloat section is related to the wages of the employees that are

working on the ship. Like wages of captain or wages of crew that
are working on the ship or vessel. The term afloat is related to
the ship employee’s wages. This section of finance department
deals with all the matters and affairs of the ship employee’s
wages and their work.
All the members on the ship in voyage didn’t need pay in cash
because it will be useless for them on the ship. They need no
money on the ship; they need only daily usage products and the
food when they are on the voyages.
So on the ship all the data of a member is maintained that how

much he gets daily usage products from company, like
cigarettes, soap etc. The extra work done by any member is also
recorded that how much a member works in extra time.
The normal work for a member is 6 hour ON then 6 hour OFF. It

means that a member will work for 12 hours in a day. If he is
agree t do extra work then extra work will be on pay.
When the daily expenses and extra wok revenue is recorded at

that time they make all record in a proper way. They see that
what the balance is. If their revenues earned are greater than
their expenses they add the balance in their basic pay. If the
expenses are greater than the extra work earning then the
balance is subtracted from their basic salary.
At the end of the voyage the members are paid their wages with
their earnings on the ship. The wages are always paid at the end
of the voyage except any kind of emergency or uncertainty.
Sometime the Pakistan National Shipping Corporation is also gave

some benefits to the members working on the ship, like
allowances, daily usage products for free. These expenses are
from Pakistan National Shipping Corporation for which it made an
agreement with the employees at the time Pakistan National
Shipping Corporation was hiring these members into its crew.

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The salaries or wages that are related to the office work or

administration work other then the ship management is named
as Ashore or Pay rolls.

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Payrolls Section:
Payrolls are all the wages or salaries that are related to the office
workman. These are also called Ashore section. Like the
employees who are working in Pakistan National Shipping
Corporation at Main office also including all the employees
working on all 19 subsidiaries office work.
This section maintains all the information and keep the record
salary of each employee separately in Pakistan National Shipping
Corporation. This section also deals extra benefits that are
offered to the employees and maintain the record of extra
benefits also.
Extra benefits include medical allowances, residential allowances,

workers fund, transportation allowances, and Mess allowances
etc.
There are three kinds of workers in the Pakistan National

Shipping Corporation.
Permanent
On contract
On daily wages
Above benefits that are described are only for permanent

employees. Little bit benefits are also offered to ‘on contract’
employees. But no allowances or benefits are offered to the daily
wages employee but only their basic daily wages are given.
The payroll section is responsible to maintain all payrolls of each

employee either that is permanent, either it is contractual or it is
on daily wages.
The section is responsible to send all the information regarding to

the payrolls of the employees of the Pakistan National Shipping
Corporation to book keeping section where the payrolls will be
charged into the head of expenses in different books of accounts.
The employees that are on daily wages and they are off from the
office for one day then the wage of that day will not be payable
to that employee.

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So the work of payroll section in Pakistan National Shipping

Corporation is very complicated and demands much attention of
the person that is responsible and working on the payroll section.

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Fixed Assets Section:
Assets are the property of the Pakistan National Shipping

Corporation. Assets section also called fixed assets section in
PNSC. This department is responsible for the accounting of
assets.
Assets of PNSC include:
• Land
• Buildings
• Vessels
• Vehicles
• Office equipment
• Furniture and fittings
• Motor launch and jetty
• Equipment on board
• Container fitting
• Beach huts
• Workshop machinery and equipment
• Computer equipment
In accounting of fixed assets their Net book value is calculated by

using different methods.
The main asset of the Pakistan National Shipping Corporation is

the Vessels. Vessel is depreciated according to its cost and life off
the vessel. For the Pakistan National Shipping Corporation it is
necessary to Dry Dock the vessel right after every 2.5 years and
Class Renewal survey after 5 years.
Dry Docking means color paint of the vessel and its repair and
maintenance. I mean that vessel is brought at dry place and color
and other work is made. It is necessary for all the shipping
companies to dry dock their vessels after 2.5 years of last dry
docking. When 2.5 years are passed they are asked to dry dock
their vessel as soon as possible.
The expenses of dry docking will be depreciated or charged or

adjusted in 2.5 years. The reason is that if we charge it in only 1
year then our profit will be decrease at a very low level even it

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can go to the negative side because the dry docking is very much
expensive even in million dollars.

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Class Renewal is another necessary work in ship. It means that

after every 5 years a survey will be conducted to the ship and it
will be checked that either the ship is in condition to carry the
voyages for upcoming 5 years or not. Normally survey is
conducted before the repair work that is done to that ship that is
going to be surveyed.
Class renewal is the requirement of IMO International Maritime

Organization which held the right to survey the vessels of every
ship in the world. It is necessary to every shipping Corporation in
the world to survey its vessels under IMO after every 5 years. The
basic purpose of the survey is to safe the voyage and lives of
human.
International Maritime Organization conduct surveys of the

vessels by following three organizations who work under the
International Maritime Organization. These are:
• Loyed Registered Shipping

• American Bureau Ship
• Bureau Barry Task
If the ship is declared fit for the sail to sea for upcoming 5 years
or more then 5 years then a letter will be issued that this ship is
fit for sail for 5 years and after 5 years again a survey will be
conducted to see the performance of the ship. As it is fit for more
voyages then now you can do repair and maintenance on the
ship.
But if the survey is conducted and the condition of ship didn’t

allow that the ship will continue for next 5 years at that time the
ship will not be allowed to continue the voyage and there will be
no need for repair and maintenance to the ship and the ship will
be scrapped.
Class renewal survey is also very expensive and it is adjusted or
depreciated in 5 years. Reason is the same that if we charge it in
only 1 year then our profit will be decrease at a very low level
even it can go to the negative side because the class renewal and
survey is very much expensive even in million dollars.
The depreciation of other asset depends upon the nature of the

asset and its life. Followings are the depreciation rates that were

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applied on different assets at June 30, 2009 to calculate their

book value.

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Annual rate of Depreciation on Assets
Assets
Rate
Buildings 3% to
20%
Vessels 04%
Vehicles
20%
Office equipment
15%
Furniture and fittings
10% to 15%
Motor launch and jetty
10% to 15%
Equipment on board
10% to 15%
Container fitting
15%
Beach huts
15%
Workshop machinery and equipment
5% to 10%
Computer equipment
25%

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Summary of Functions Finance Department:
There are various important functions that are performed by the

Finance department of Pakistan National Shipping Corporation.
But broad functions of department comprising finance division
are as under.
• Responsible to manage and allocate the funds.
• Find the resources of obtaining funds.
• Make the best strategy to invest those funds
• Responsible for overall direction and policy implementation
• Responsible for budgeting, accounting, purchasing, and

treasury functions.
• Maintain the accounting system, the payroll system, the

fixed assets system, reconcile book accounts, and prepare
financial reports.
• Prepare annual budget
• Maintain Books of accounts, supporting vouchers, and other

accounting record of the corporation and subsidiaries in all
with legal and regulatory requirements.
• Preparation of quarterly, semi annually, and annual

accounts of the corporation as well as of the subsidiary
company and consolidated accounts of PNSC group in
accounting with legal and regulatory requirements.
• Ensure complete compliance with the policies and

procedures set out in internal control system.
• Arrange audit of accounts.
• Maintain effective control over all local and foreign bank

accounts and regularly reconcile those accounts.

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• Exercise effective control over cash flow and ensure that

surplus funds are invested in accordance with governing
rules so as to maximize income.
• Accounting of receivables, payables, deposits, receipts,

payments, and advances.
• Ensuring that all returns required under the income tax

ordinance are filed promptly.
• Accounting for PNSC workshop, stores, departments, and

regional office accounts.
• Maintain financial control over regional officers.
• Obtain approval from State bank of Pakistan for all foreign

currency transactions.
• Processing and accounting of payments of salaries,

allowances, advances etc, to Ashore & Afloat personnel &
controlling recovery, adjustment and reconciliation thereof.
• Accounting of all revenues earned by the corporation &

expenses incurred locally as well as abroad.
• Checking and arranging payments of all bills including cargo

expenses, bills, medical bills, legal expenses bills, purchases
of capital assets, stores, spares etc.
• It also Sanction expenditure then control and review of

expenditures.
• Review of contracts, agreements, schedule of rates and

charges, documents and files from financial angles.
• Preparations, implementation and monitoring of revenues &

capital budgets, & revised budget estimated.
• Short and long term financing arrangements- tapping of

sources of funds, evolution of loans offers, negotiation with
leader.
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• Accounting and Maintenance of loans profile & subsidiary

loan ledger, register of mortgage & charge register of
debentures, filing of returns as also processing of debt
services payments with government & state Bank of
Pakistan, preparation of schedules & medical incidental to
or connected therewith.
• Accounting and maintenance of fixed assets.
• Custody of assets and reconciliation of record with annual

physical verification.
• Investment appraisal, completions of formalities relating to

acquisition of ships & other assets, import license, custom
duty, sales tax and other levies, letter of credit etc and
disposal of ships of scrapping locally.
• Preparation of provisional voyage results and review of

performance of each ship in relation to the budget,
preparation of periodical voyage summaries, port statistic
etc.
• Interpretation of financial and services rules & regulations

and amendments thereto, developing adequate record,
safety and custody.
• Collection, tabulation, summarization of information figures,

data etc & supplying the same to management,
government and other agents.
• Representation on various committees e.g. Tender

Committee, personnel Committee, Negotiation Committee,
Welfare fund, Purchase, Economy Committee.

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MIS Department:
MIS department of PNSC is very important department because it

is the hub that connects all departments and make link between
different departments. This department constantly provides the
services in data processing and it also plans the future data
processing strategies. To achieve the desired goals it establishes
strategies.
It also maintains coordination between different departments. In

MIS department the computer systems are used for the different
kinds of tasks like financial accounting, payrolls, billing, purchase
etc. MIS department is the provider to all the departments and
staff the equipment like electronic tools and computer system.
The programs like, the development of the new programs,

accessing the software’s requirements and planning for different
actions, the need of training to its employees are also come
under the MIS departments.
Whenever the user department require any reports then MIS
department also provide the required reports to the department
who need reports like cash book, bank book, general ledger, trial
balance, financial statements, voyage and cargo ledger, bills
receivables, realized statements, outstanding statements,
category wise and aging statements.
The MIS department basically performs 2 functions:
• Support function
• Software function
Support function that is performed by the MIS department is

that takes care of Networking in the PNSC; also take care of the
different system matters like take care of Hardware, Operating
system, firewall, Server and Antivirus Maintenance, procurement
of I.T equipments and other services.
The Software function is the second function that is performed

by the MIS department that involved implementation of new
software and training to its employees that how to use that
software, website management, database management, up
gradation of previous system.
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Function of MIS department:
The functions that are performed by the MIS department in

Pakistan National Shipping Corporation are the following:
• The MIS department is responsible to plan and formulate

strategies while keeping the desired goals in front of them
so that goals that are defined can be achieved.
• MIS department also establish strategies regarding the data

processing that will be processed in the future.
• This department also makes changes, modifications,

alterations and up gradation of the operational system that
now exists in the MIS department of PNSC.
• Data processing should be constant and MIS give services

to the corporation.
• MIS department also maintain a good and strong relation

with the other departments for the coordination among all
the departments so that MIS department can assess their
needs and fulfill their needs with the suggestion for the
future.
• Also develop new software, systems and program and also

implement them in the department.
• MIS also asses the software needs and plan various actions
to fulfill the requirements of software.
• Also get information about the employee training needs and

if training is necessary then plan & monitor the training no
matter that either its is in the house or outside agencies.
• Responsibility of MIS department also include Design some

standards and reporting performance to measure and
monitor the activities and performance of different sections
that are working under the MIS department.

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• Enhance the knowledge of the employees or users who are

engaged in the work of data processing. MIS department
responsibility is also to educate the users in the field of
data processing.
• Provide all the account reports that are required by the any
user department, whenever the user department need
more particularly the following:
 Local Cash book (daily, monthly and annually)
 Bank book (foreign) monthly
 General Ledger (quarterly)
 Trial balance (quarterly)
 Profit and loss group statement (quarterly semi

annually and annually)
 Financial statements
 Hull and cargo claims subsidiary ledger & voyage

ledger (current, previous, and advance quarterly and
annually)
 Bill receivable, realize and outstanding statements
 Voyage statistic account
 Operating expenditures, vessel voyage-wise Earning

and expenditures (semi annually)
 Port expenses, Port disbursement, agent

disbursement account
 Foreign income & expenditure account, exchange rate
 Head office register of payrolls, pay slip, overtime

estimates

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 Welfare fund statements (monthly and annually)
 Consolidated salary statements (semi annually)

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Online enquiry system
• Vessel position and status
• Voyage accounts , port, Vessel, route & voyage-wise
• Bill receivable, party-wise, age-wise, sequence-wise
• Position of on board inventories.
Purchasing Section in MIS:
In the purchasing process there are three modules

-- Requirement
-- Procurement
-- Inventory
Purchasing Process:
The purchasing process starts from the Requisition of the ship
mean there is the requirement of an inventory.
After that the sign of the supplier are required who will supply the
inventory at the ship.
Then we will make analysis the quotation that is sent by the ship
to ensure that the inventory required is necessary to purchase.
After the analysis we will order that allow purchasing inventory.
Then there will be outstanding order means further order to the

seller.
Then the seller will send the required inventory and we will make
payment.
At the last stage the physical inventory will reach on the ship.

113
Financial Statements

113
PNSC and its Subsidiary Companies

CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2009
2009 2008
(Rupees in '000)
NON-CURRENT ASSETS
Property, plant and equipment 8,264,524
13,624,883 Intangible asset -
1,649 Investment properties
969,296 969,987 Long-term
investments in: - -
Related party (associate) -
- Listed companies and another entity
22,715 40,229
Long-term loans 1,012
1,434 Long-term deposits 90
90 Deferred tax - net
20,655 15,316
9,278,292
14,653,588
--------------------------------------
-------
CURRENT ASSETS
Stores and spares 444,682
475,663 Trade debts 798,023
563,000
Agents' and owners' balances 20,420
32,145 Loans and advances 76,852
39,495
Deposits and short term prepayments 21,260
9,535
Interest / mark-up accrued 147,214
65,143 other receivables 136,052
137,148
Incomplete voyages 83,587
-Insurance claims 33,063
13847 Short-term investments 5,108,614
3,113,147 Cash and bank balances
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2,223,490 3, 39
------------------------------------------
9,093,257 7,848,228
NET CURRENT ASSETS 18,371,549
22,501,816
===================
============
Continued

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LESS: CURRENT LIABILITIES AND PROVISIONS

Trade and other payables 1,366,078
1,201,541
Provision against damage claims 99,810
130,579 Incomplete voyages -
3,931 Current portion of long-term financing
- 245,607 Taxation – net
252,268 212,372
1,718,156 1,794,030
SHARE CAPITAL AND RESERVES
Issued, subscribed and paid-up share capital 1,320,634
1,320,634
Reserves 14,512,150
11,572,647
15,832,784
12,893,281
MINORITY INTEREST 1,895
1,694
--------------------------------------
-------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS 15,834,679
12,894,975
SURPLUS ON REVALUATION OF FIXED ASSETS-NET OF TAX
-Group 596,672
7,601,880
- Minority 2,148
2,148
--------------------------------------
----- 598,820
7,604,028
NON-CURRENT LIABILITIES
Long-term financing -
-Deferred liabilities 219,894
208,783
--------------------------------------
-------
18,371,549
22,501,816
================
===========

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PNSC and its Subsidiary companies

CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2009
2009 2008
(Rupees in
'000)
REVENUES
Chartering revenues 5,390,341
4,761,142
Freight 6,005,781 5,915,303
Rental income 78,227 77,083
-----------------------------------------
--
11,474,349
10,753,528
EXPENDITURE
Fleet expenses-direct 31 8,394,921
7,258,730
- Indirect 16,860 18,331
-----------------------------------------
--
8,411,781 7,277,061
-----------------------------------------
--
GROSS PROFIT 3,062,568 3,476,467
Administrative and general expenses 519,807

445,027
Other operating expenses 319,113
184,265
Finance costs 54,154
174,987
-----------------------------------------
--
893,074 804,279
+ Other operating income 825,417
814,973
-----------------------------------------
--
PROFIT BEFORE TAXATION 2,994,911
3,487,161
Taxation 682,069 1,038,281
---------------------------------
----------

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PROFIT AFTER TAXATION 2,312,842

2,448,880
============================
Attributable to:
Equity holders of the Group 2,312,641
2,448,540
Minority interest 201 340
---------------------------------
---------------
2,312,842 2,448,880
=================
=============
EARNINGS PER SHARE FOR PROFIT ATTRIBUTABLE

TO EQUITY HOLDERS OF THE CORPORATION 17.51
18.54

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PNSC AND ITS SUBSIDIARY COMPANIES

CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2009
2009 2008
(Rupees in '000)
Cash flows from operating activities
Cash generated from operations 2,216,760 6,193,569

Employees' gratuity paid (1,108)
(31,945)
Employees' compensated absences paid (41,859)
(36,833)
Post retirement medical benefits paid (19,632)
(8,445)
Contribution to plan assets of employees gratuity fund -00
(235,159)
Long-term loans and advances – net 422
593
Finance costs paid (8,789)
(30,229)
Taxes paid (642,066) (787,258)
---------------------------------
-----------
Net cash generated from operating activities 1,503,728
5,064,293
Cash flows from investing activities
Fixed capital expenditure (3,465,790) (3,347,801)

Investment in investment properties (2,138)
(3,350)
Proceeds from disposal of property, plant and equip. 886,846
6 2,712
Interest / mark-up received 544,706
684,374
Dividends received 1,898 1,716
Net cash used in investing activities (2,034,478)

(2,662,349)
Cash flows from financing activities
Repayment of long-term financing (282,642)

(264,857)

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Dividends paid (403,609)

(195,888)
-----------------------------------------
---
Net cash used in financing activities (686,251)
(460,745)
-----------------------------------------
----
Net (decrease) / increase in cash and cash equivalents (1,217,001)
1,941,199
Cash and cash equivalents at the beginning of the year 4,649,105
2,707,906
----------------------------------------
-----
Cash and cash equivalents at the end of the year 3,432,104

4,649,105

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Pattern of Shareholders as at June 30 2009:

No. of
Sharehold Sharehol Total share
ers ding held
From To
11002 1 100 372182
3227 101 500 747982
878 504 1000 638118
721 1001 5000 1538384
81 5001 10000 586254
24 10001 15000 296674
19 15001 20000 347854
12 20001 25000 280285
6 25001 30000 170104
2 30001 35000 69500
8 35001 40000 301312
6 40001 45000 257815
5 45001 50000 250000
4 50001 55000 215600
3 55001 60000 179865
4 70001 75000 292200
2 75001 80000 155300
1 80001 85000 83000
1 90001 95000 95000
2 100001 105000 205595
1 125001 130000 128200
1 150001 155000 150900
2 155001 160000 317642
1 190001 195000 192241
1 195001 200000 200000
1 225001 230000 227500
1 235001 240000 235916
1 240001 245000 242800
1 245001 250000 246500
1 260001 265000 262344
1 385001 390000 386236
1 435001 440000 436564
1 445001 450000 449697
1 495001 500000 500000
1 745001 750000 746603
1 765001 770000 769700
1 1440001 1445000 1443762
_____1_____ 1177050 1177100 117706724

113
01 00
16,030 132,063,379
COMPARATIVE STATEMENT OF YAER WISE REVENUE &

EXPENSES 1979 TO 2009
Year Revenue Expenses Gross

Profit/(Loss)
1979 455,814 423,526 32,288
1980 1,084,177 1,073,573 10,604
1981 1,444,582 1,437,877 6,705
1982 1,660,459 1,653,866 6,593
1983 1,599,148 1,805,733 (206,585)
1984 1,534,116 1,738,179 (204,063)
1985 2,289,554 2,243,245 46,309
1986 2,657,624 2,553,188 104,436
1987 2,209,737 2,404,063 (194,326)
1988 2,643,383 2,775,940 (132,557)
1989 3,787,923 3,618,384 1,695,390
1990 3,164,931 3,193,129 (28,198)
1991 3,860,369 3,751,710 108,659
1992 4,062,877 4,023,743 39,134
1993 3,134,077 3,272,481 (138,404)
1994 3,302,474 3,638,029 (335,555)
1995 5,159,560 5,687,483 (527,923)
1996 6,962,004 6,902,996 59,008
1997 7,761,518 7,479,472 282,046
1998 4,597,215 4,393,437 203,778
1999 3,710,787 3,552,518 158,269
2000 3,540,170 3,839,190 (299,020)
2001 5,458,665 5,013,725 44,940
2002 4,899,201 4,326,001 573,200
2003 5,404,864 4,605,487 799,377
2004 6,963,102 4,864,589 2,098,531
2005 7,950,981 5,416,485 2,534,496
2006 7,924,614 6,255,047 1,669,567
2007 9,089,124 6,495,702 2,593,422
2008 10,753,528 7,277,061 3,476,467
2009 11,747,349 8,411,781 3,062,568
2010 - - -

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Summarized Performance

113
Summarized Performance:
The financial performance of PNSC regarding different aspects is

summarized below.
Revenue:
The consolidated revenue for PNSC group for 2009 was 6.7%
higher than FY08. It increased from Rs 10.753bn to Rs 11.474bn
in 2009. This increase is credited to the increased voyages in the
current year as well as the enlarge freight tons for the current
year.
Total freight however decreased for 2009. It decreased by

approximately 8.1% from 9451 million to 8684 million tons.
Except the liquid sector, the other entire shipping sector showed
some signs of decrease in freight tons.
Total expenditure too, showed a considerable increase in 2009. It

showed an increase of approximately 15.5%. This was attributed
to a substantial increase of direct fleet expenses that inflated
from Rs 7.25bn to Rs 8.39bn in 2009.
Sub-category of expenses includes general and other expenses,

operating expenses, which too showed an increasing trend for
the current year, which affected the profitability of the company.
The current year showed an increase in the liquidity position of
the company. The current ratio increased by 21% in 2009.
This has resulted because of a greater proportion increase of
current assets with respect to current liabilities.
Operating and Net Profits:
Considering the profitability of PNSC in 2009, there has been a

mixed trend in certain ratios calculated. First the Gross Profit
Margin, there has been a decrease from 32.33% in 2008 to
26.69% in 2009. This is basically attributed to an increase in
direct fleet expenses incurred by the company. This considerable
increase has resulted in lower gross profit margin in 2009.

113
Coming to the net profit margin, we can see the same trend as it
is for gross profit margin. It decreased from 22.7% to 20.16% in
FY09. This again can be seen as the general and other expenses
increased in a great proportion to the revenues earned. Though
the financial costs were reduced, it couldn’t t play a considerable
role in increasing the net profit as huge expenses were incurred.
The major sub-category that showed an increase in the direct
expenses was the fuel expenses which showed a 4.3% and claims
which showed a 33% increase in 2009.
Market Share and Marketability:
Marketability of PNSC showed a huge decline over the past year.

The market price has nearly halved in 2009. This is because the
company has been facing constrains in their profitability for past
2-3 years. Considering the earning per share, there has been an
increase in this ratio from Rs 18.54 to Rs 19.54 in 2009, basically
due to an increase in the net-profit seen in the current year.
Moreover, dividend per share also saw a rise as the company was
announced a 30% cash dividend this year; this increased the total
cash dividend paid out this year.
However, the biggest slum could be seen in price-earnings ratio,

the traders are not ready to higher prices for the shares of PNSC
in the market, because of severe effects in profitability and their
expenses which constraints their growth in income. Therefore
there was a decline of Rs 5 to Rs 2.4 in 2009.
This is one major concern for the company as it has reduced its
market worth for 2 consecutive years, which has dented upon the
reputation of the company. Moreover, investors are not ready to
invest because of the reasons mentioned above; hence the
company needs to revive the trust of the investors by effectively
managing its resources and assets.
Share Prices in Rupees

Year 2009 2008 2007 2006 2005
High 52.31 112.20 97.20 139.70 150.00
Low 44.14 65.00 40.00 57.00 50.50

113
In 2009 Total numbers of share holders of PNSC are 16030. And

total shares held are 132,063,379.

113
Pattern of shareholding in 2008.
CATEGORY OF No Share Held %

SHAREHOLDERS
NBP Truestee Deptt 1 888,937 0.67
Investment 1 74,575 0.06
Corporation of Pak
Mr. Jahangir Siddiqui 1 5,616 0.00
Mr. Khowaja Obaid 1 2,414 0.00
Imran Ilyas
Bank,Develp.Finance 24 860,160 0.65
Institution
Non-Banking Finance 48 727,351 0.55
Instituions
Insurance Companies 12 1,481,339 1.12
Modarabas and Mutual 12 1,747,861 1.33
Funds
Federal Government 1 117,706,724 89.13
Individuals 11747 7,538,034 5.71
Foreign/Non-resident 3889 441,919 0.33
Investors
Others 72 588,449 0.45
Total 15819 132,063,379 100.00
No. of Employees:
In Pakistan National Shipping Corporation total number of

employees is 1077.
Future outlook:
In line with PNSC’s expansion/replacement plans, the Corporation

acquired two Aframax Tankers. The first, named Lahore was
delivered in February 2010, and the second Karachi was
delivered in April 2010. In addition, PNSC is actively working on
an acquisition plan to add five more dry cargo vessels to its fleet,
to replace the vessels scrapped in the last year.

113
No. of Ships PNSC owns during 1979 TO 2010
Freight Revenue
Rs. In Million

113
Operating expenses
Rs. In Million
Operating Profit
Rs. In Million

113
No. of Voyages
Cargo Handled
Freight in Million Tons

113
Financial Analysis

113
Financial Analysis:
Financial analysis is the most important part of the internship
report. It enables us to know the financial position of the
company. That’s why I applied the financial ratios to know the
current and previous financial condition of the Pakistan National
Shipping Corporation. So the analysis of financial statement is
also the part of this internship report.
Financial statements are projection and management tools and

should be used by management to analyze the business. Ratios
use information from these reports to reveal the financial status
of the company. Ratios allow you to judge the company’s relative
performance compared to others in the industry and to its
previous performance. Ratios also help you see relationships or
correlations between financial items on different statements.
By measuring performance in percentages rather than raw

numbers, ratios allow you to evaluate the company’s
performance over a period of time, to compare the company to
other companies of different sizes but in the same or similar
business, and to plan for the future. Calculating financial ratios
should become part of your regular financial reporting process.
The ratios can then be assessed at the same time as the other
financial reports.
When using financial ratios to analyze a company, you should

answer the Following questions:
• How consistent and realistic are the numbers used to

calculate the ratios?
If the numbers have been tallied in an inconsistent manner, are
not realistic, or are not up-to-date, the ratios will be of no value.
• How closely do the individual ratios compare with

company policies?
Company policies should be established to help the business
meet financial goals. For example, most entrepreneurs set a
standard for the number of days they will
Allow on credit terms. If they allow customers a Net/30 payment
schedule, then their Days Sales Outstanding should be near 30
113
days. This number would confirm that the company is following

the policy to collect on receivables within 30 days.

113
Liquidity Ratios:
Liquidity ratios measure the amount of cash or investments that

can be converted to cash to pay expenses and short-term debts.
Liquidity ratios determine your ability to meet current liabilities.
Current Ratio:
How it is calculated-------- Total current assets / Total current

liabilities
What it measures ---------- Whether the company has enough

liquidity to pay its short-term obligations.
What it tells-------------------This ratio tells whether enough cash is

available to pay the bills. Theoretically, a current ratio of 2.0 is
preferred for most companies.
Year 2009 2008 2007 2006 2005

Ratio 5.44 4.37 5.47 3.54 3.24
Interpretation:
Current ratio of PNSC tells that company is in strong position to
pay its short term obligation. In 2005 and 2006 the current ratio
was low but still it was strong. And now the current ratio is 5.44 it
means that company can pay very easily its short term
obligation.

113
Asset Turnover Ratio (Times):
Year 2009 2008 2007 2006 2005

Ratio 0.62 0.47 0.55 0.58 0.62
Interpretation:
Asset turnover ratio shows that sales/revenue are how much
percent of the Assets. If this ratio increases it is good for the
business. If we see in PNSC case, we can see that in previous few
years the revenue was decreasing as compared to the assets but
in 2009 again it increases to 0.62. This means that revenue is 62
percent of the total assets of Pakistan National Shipping
Corporation. It can be called good because the assets of PNSC are
very large.
Equity / Total Assets (%)
Year 2009 2008 2007 2006 2005

Ratio % 90% 91% 87% 83% 79%

113
Interpretation:
This ratio tells that how much equity is involved in the assets that
are purchased or acquired. We can see that in assets the equity
is present in a large amount. Mostly PNSC didn’t take loans to
acquire any asset. It is purchased by equity portion. This
condition is good for PNSC as it is a government company. As a
result PNSC avoid from giving any interest to the banks.
The equity portion has an increasing trend in the few last year as
you can see above. PNSC should maintain it.

113
Profitability Ratios:
Profitability ratios help you evaluate the profitability of your

business. By comparing certain numbers, these ratios can help
identify elevated expenses, inefficient operations, and profitable
margins. Although dozens of ratios exist, an understanding of a
just a few simple profitability ratios will get you started.
Gross Profit Margin:
Year 2009 2008 2007 2006 2005

Ratio % 26.69 32.32 28.53 21.06 37.17
40.00%
35.00%
30.00%
25.00%
20.00% G.P %
15.00%
10.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Interpretation:
Gross profit is that profit which comes after deducting the cost of
goods sold or expenditure. When gross profit is high it is
expected that the operating and net profit will also be high. The
gross profit margin of PNSC was high in 2005 as compared to
other 5 years. In 2009 the gross profit was 26.69 percent of total
revenue earned. It means that CGS was 73% of the total
revenue. So the total CGS should be decreased to enhance the
gross profit margin. It varies because the COGS of PNSC vary
along with the total revenue.
Operating Profit Margin:
Year 2009 2008 2007 2006 2005

113
Ratio % 27% 32% 29% 21% 37%
Interpretation:
Operating profit comes after deducting operating expenses. In
last 5 years operating profit was high in the year of 2005 because
the gross profit in that year was high. When operating profit
comes we deduct tax and interest. In this condition PNSC’s
operating profit margin is looking good. But still less than the
2008 operating profit margin. Operating profit in 2009 is 27% of
the total revenue. It varies in these 5 years because the
operating expenses vary along with revenue.
Net Profit Margin:
Year 2009 2008 2007 2006 2005

Ratio % 20.16 22.77 25.71 16.08 34.00
Interpretation:

113
Net profit comes when all the expenses, costs, interests, and
taxes are deducted from the sales revenue. Net profit margin
tells that how much percent of the total revenue, net margin is.
The net profit margin of PNSC was high in 2005 and 20 % in
2009. Net margin is in decreasing trend from 2008. It should go
upward so it is quite good that net profit is 20 percent of the total
revenue. PNSC should maintain it and try to increase it in next
year.
Return on Assets:
Year 2009 2008 2007 2006 2005

Ratio % 12.58 10.88 14.25 9.10 21.28
Interpretation:
This ratio tells that how much percent is earned on the assets.
We can see that in 2005, 21.28% was earned on every rupee and
in 2009 this ratio was 12.58 %. Reason is that earning available
on common stock holders has been changed but minor. But the
assets of the PNSC have changed their value, that’s why return
on assets is fluctuating in these 5 years.
Return on Equity:
Year 2009 2008 2007 2006 2005

Ratio % 14.60 18.98 22.50 16.94 46.49

113
Interpretation:
This ratio tells whether the company is a good investment. As
ROE increases, the company becomes more attractive to
potential investors. Generally, improving net income will also
improve shareholders’ equity as the profits will become retained
earnings. Return on equity is on decreasing trend so the PNSC
should look that what they had to do. In 2005 it was 46% but now
it is only 14% so there must be some corrections.

113
Debt Ratio:
Debt Ratio:
Year 2009 2008 2007 2006 2005

Ratio % 10.54 8.90 12.89 18.72 20.95
Interpretation:
Debt Ratio tells that how much percent of the assets debt is
payable by the company. PNSC has a decreasing trend for getting
loans. It basically uses equity for acquiring assets. In 2005 debt
ratio was 21% and in 2009 it was 10 %. So PNSC has to pay low
level of debt. And it is good for the business of PNSC.

113
Solvency ratios:
The leverage or solvency ratios are used to analyze the financial
structure of a firm and its capacity to comply with its long term
obligations.
Leverage Ratio:
Year 2009 2008 2007 2006 2005

Ratio % 11.91 15.53 20.35 34.85 45.76
Interpretation:
This ratio tells that total liabilities are how much percent of the
stock holder equity. As we can see that the total liabilities are
consistently decreasing year to year as a result the leverage or
solvency ratio is also decreasing. It means that the total liabilities
are decreasing. PNSC operate the business by the equity. Now
liabilities are 12 % of the total equity. And these liabilities are
current liabilities that remain in every business.
Short Term Debt ratio:
Year 2009 2008 2007 2006 2005

Ratio % 88.37 89.33 71.01 63.26 56.93

113
Interpretation:
This ratio tells that how much percent short term liabilities are
the part of total liabilities. As PNSC didn’t take much loans that
are of long term nature, that’s why this ratio is continuously
increasing. PNSC is also willing to pay its long term
payments/liabilities. The short term debt ratio was 56 % in 2005
it mean that current liabilities were near to half of the total
liabilities. But in 2009 short term or current liabilities were near
to 90% and only 10% were long term loans.
Capitalization Ratio:
Year 2009 2008 2007 2006 2005

Ratio % 1.38 1.60 5.90 11.68 19.70

113
Interpretation:
This ratio tells that long term debt is how much percent to the
share holder equity. So in PNSC long term debt was 20 % in 2005
but now it is only 1.38%. Reason is that PNSC operate by equity
not taking loans rather it pays all the long term loans. Its equity is
increasing year to year and long term loan is decreasing year to
year that’s why capitalization ratio is decreasing from previous
year.

113
Investment Ratios:
Price Earnings Ratio:
Year 2009 2008 2007 2006 2005

Rs. 2.64 22.79 8.52 8.28 4.92
Interpretation:
Price earnings ratio tells that on how much investment on shares
we are earning Rs.1. in 2008 on each 23 rupees we were earning
Rs.1. In 2009 on each Rs. 2.64 we are earning rupee 1. Reason is
that in 2008 the market price of share was high and Earning per
share was low. But in 2009 e earning per share increases to
17.51 as a result price earnings ratio come to 2.64.
Earnings per Share:
Year 2009 2008 2007 2006 2005

Rs. 17.51 3.14 11.03 7.62 21.06

113
Interpretation:
Earnings per share in 2005 were highest among the upcoming
years. Reason was that at that time earning available for share
holder was high. As a result per share earnings were high. Then
in 2006 earnings available for share holder decrease as a result
earning per share also decreases. In 2009 again earning available
for share holder goes high as a result again EPS increases to Rs.
17.51.

113
SWOT Analysis

113
SWOT Analysis:
S: Strength (relate to internal environment)
W: Weakness (relate to internal environment)
O: Opportunity (relate to external environment)
T: Threat (relate to external environment)
Strength:
Pakistan National shipping Corporation has following strengths:
• A large capital investment

• Worldwide operation
• Skilled employees
• Having its own ships
• Both market policy ( Skimming & Penetration)
• Government Corporation
Weakness:
• Over staff organization

• Lack of coordination between different departments
• Lack of proper planning and absence of coordination with
other shipping companies
• A bias policy of management towards the selected staff
• Low level skill staff

113
Opportunity:
• Lucrative strategic geographical location

• Being a national flag carrier approximately 99%
government base organization hires PNSC services for their
shipment.
Threats:
• Limited amounts of imports and exports due to financial

crunch in Pakistan.
• High charges as compared to other shipping companies
worldwide.
• High duty and taxes from the government
• Dilapidated vessels
• Having few Vessels

113
Suggestion &
Recommendations

113
Suggestions and Recommendations:

I would like to give some suggestions and recommendations to
the management of the Pakistan National Shipping Corporation
which I feel important in my point of view. I think that if they are
being followed then it will be better for the organization and
overall performance will be increased of the organization.
These suggestions and recommendations are:
• There should be paper free environment in the

organization because it reduces the speed of work and it
is also very time-consuming and challenging.
• The place for sitting and work is not according to the

number of employees that are working in the
organization. So how we can get efficient results where
seating arrangements are not up to the mark, where
employees work in tough conditions.
• The appointment should be on merit basis not on the

reference basis so as a result eligible and efficient
employees will be hired that will enhance the
performance of the organization
• To enhance the working speed and overall performance

of the organizations. Corporation should offer training
about new technology like computers to its employees
who are old worker and doesn’t have much knowledge
about new ways of working.
• There must be downsizing in employees because

workforce is much more high then it is needed. Many of
them sit idle all the day as they are just taking salary
against giving nothing to the organization.
• The promotion should be on performance and seniority

not on the reference base or executive’s own liking or
disliking.

113
• The coordination between the employees and

departments should be increased for efficient work.
• There should be proper supervision on every employees

work because sometime a single signature is required to
complete a file and to send it to the next department.
But the file remains on only one table even for weeks due
to carelessness and negligence of an employee.
• There should be allowances, incentives, and bonuses to

the employees especially for the contractual and on daily
basis employees.
• There must be supervision on permanent employees also

because sometime they are careless about their duties
and responsibilities because they know that they are
permanent so they show laziness in their work and don’t
play active part in the organization.
• The number of ships that PNSC owns at that time is 10.

Which I think a little bit low. The number of ships should
be increased to enhance the profit level.

113
Limitations
During my internship program at PNSC I face some certain
problems that come under the limitations head. These problems
and matters are following
• No friendly behavior of the staff of PNSC
• Hesitation to give knowledge and information
• Lack of coordination between different departments that

create problem for me.
• No practical knowledge, staff only gives overview of their

section.
• Sitting arrangements are so poor
• No computer facilities for the internees.
• Website of PNSC is not very much informative. Limited

information is available on the Website of Pakistan National
Shipping Corporation.

113
Conclusion
Private sector is not allowed to play any part in the shipping
sector due to which Pakistan National Shipping Corporation
enjoys absolute monopoly in Pakistan.
Pakistan National Shipping Corporation and its subsidiary
companies were incorporated under the provision of Pakistan
National Shipping Corporation Ordinance, 1979and the
Companies Ordinance, 1984 respectively. The board of directors
consist five directors appointed by Federal government and two
directors appointed by the shareholders.
The group is principally engaged in the business of shipping,

including charter of vessels, transportation of cargo, and other
related services. The group is also engaged in renting out its
properties under long-term lease agreements. Pakistan National
Shipping Corporation (PNSC) is an autonomous corporation, which
functions under the overall control of the Ministry of Ports and
Shipping, Government of Pakistan. It also manages real estate
and a repair workshop.
Pakistan National Shipping Corporation (PNSC) is a Pakistan-

based company. The Company, together with its subsidiary and
associate companies, is engaged in the business of shipping,
including charter of vessels, transportation of cargo and other
related services.
The Company is also engaged in renting out its properties to

tenants under long-term lease agreements. During the fiscal year
ended June 30, 2009 (fiscal 2009), PNSC and its vessel-owning
subsidiary companies together performed a total of 637 voyages
(inclusive of foreign chartered vessels and slot chartered
vessels), and lifted 8.684 million freight tons of cargo.
The Company operates in four sectors: Trade Area East, Trade

Area West, Liquid Bulk and Dry Bulk. In July 2008, an AFRAMAX oil
tanker, MT Quetta, was purchased and inducted in to the PNSC

113
fleet. In fiscal 2009, three dry cargo combo vessels, MV Sibi, MV

Hyderabad, MV Malakand and an AFRAMAX oil tanker MT Lalazar
were sold for scrapping.
The company comprises only 10 vessels at the moment, which

are far less than the vessels that it has in 1979. At that time it
has 48 vessels. Pakistan National Shipping Corporation (PNSC) is
considered as a financial troubled organization because during
the part of its existence it remains in losses most of the year.
But Pakistan National Shipping Corporation (PNSC) improves its

performance from the last few years.
The company has invested in new vessels and dispatched the old
ones. This shows that the new vessels can be used effectively to
show better performance in future and earn higher revenues.
One of the concerns that still remain in light is the financial

meltdown decreasing the demand of freight delivery. This has
greatly dented the profitability of the company. However, global
recovery is on the rise and Pakistan s economy has also shown a
sign of recovery, which is a good sign and it can assure the
company of better business opportunities in future.

113
Annexure

PNSC - Internship Report (Pakistan National Shipping Corporation)

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1

THE ISALAMIA UNIVERSITY OF

If you need any help regarding internship in PNSC you can

The Islamia University of Bahawalpuur, RYK Campus.

Pakistan National Shipping Corporation (PNSC) manages 19

For the efficient running of the corporation business distributed

1) Corporation affairs and admin Division

3) Ship management Division

4) Special Project and Planning Division

Under these five main directors there are 48 subdivisions or units

The Islamia University of Bahawalpuur, RYK Campus.

Pakistan National Shipping Corporation (PNSC) has great

The Islamia University of Bahawalpuur, RYK Campus.

The Islamia University of Bahawalpuur, RYK Campus.

The Islamia University of Bahawalpuur, RYK Campus.

a. Authorized Capital Rs. 2000 Million

Pakistan National Shipping Corporation (the corporation) and its

The Group is principally engaged in the business of shipping,

The Group owns 55 percent of the share capital of Pakistan co-

The Islamia University of Bahawalpuur, RYK Campus.

Pakistan National Shipping Corporation operates in the shipping

As of June 30, 2010, the company operated a fleet of 10 vessels,

The Islamia University of Bahawalpuur, RYK Campus.

Pakistan National Shipping Corporation

Pakistan National Shipping Corporation (PNSC) has following

2. Chitral Shipping (Private) Limited.

3. Hyderabad Shipping (Private) Limited.

4. Islamabad Shipping (Private) Limited.

5. Johar Shipping (Private) Limited.

6. Kaghan Shipping (Private) Limited.

7. Karachi Shipping (Private) Limited.

8. Khairpur Shipping (Private) Limited.

9. Lahore Shipping (Private) Limited.

10. Lalazar Shipping (Private) Limited.

11. Makran Shipping (Private) Limited.

12. Malakand Shipping (Private) Limited.

13. Multan Shipping (Private) Limited.

14. Pakistan Co-operative Ship Stores (Private) Limited.

15. Quetta Shipping (Private) Limited.

16. Sargodha Shipping (Private) Limited.

17. Shalamar Shipping (Private) Limited.

The Islamia University of Bahawalpuur, RYK Campus.

18. Sibi Shipping (Private) Limited.

19. Swat Shipping (Private) Limited.

The Islamia University of Bahawalpuur, RYK Campus.

The Group owns 55 percent of the share capital of Pakistan Co-

The Islamia University of Bahawalpuur, RYK Campus.

National Shipping Corporation (NSC):

The authorized capital of the Corporation was Rs. 250 million

Pakistan Shipping Corporation (PSC):

In 1974 the Federal Government decided to take over the

In September, 1976 the Federal Government established the

The Islamia University of Bahawalpuur, RYK Campus.

Establishment of Pakistan National Shipping

In 1977, the Federal Government decided amalgamates the NSC

As provided for in the PNSC Ordinance, the net worth of the

So the Pakistan National Shipping Corporation (PNSC) is the

The Islamia University of Bahawalpuur, RYK Campus.

To develop and execute short-term long-term

The Islamia University of Bahawalpuur, RYK Campus.

The Islamia University of Bahawalpuur, RYK Campus.

Executive Executive Executive

Estate Commercial Finance MR & S (GM) SP & P (M)