Professional Documents
Culture Documents
ROLL NO 1030
Semester 8th
Section F(Afternoon)
Session 2006-2010
1 Internship Report
Pak Elektron Limited
2 Internship Report
Pak Elektron Limited
I am thankful to Almighty Allah for His help in the completion of this report. I am
highly obliged and thankful to these personalities for taking keen interest in
providing material regarding my report. Without their cooperation, I could not be
able to perform this task efficiently and effectively. Last, but not the least, many
thanks to respectable G.M. MR. NUMAN KHALID BUTT of FP-AD and Head of
FP-AD. MR. GHULAM MOHAY-UD-DIN who gave me proper guideline,
opportunity to learn and to polish my skills under their supervision. Without their
endorsement I would never been able to gain practical exposure, confidence
and self-belief in my personalities.
Special thanks to Mr. Rashid Hanif (Junior Executive), Mr. Ali Asad
(Accountant), Mr. Ghulam Abbas (Junior Executive), Mr. Naveed (E3 Officer)
and Mr. Hassan Raza (HR Officer) for assisting me and providing practical
knowledge during my internship program.
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TABLE OF CONTENT
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Executive Summary
The Pak Electronic Limited is Public Limited Company with the objective of
initially producing transformers, switchgears and electric motors. The designing
and production of the equipment was carried out jointly by AEG experts and
PEL personnel. After the conclusion of Joint Venture Agreement with AEG the
majority of share holding was acquired by Saigol Group. Its Appliances Division
was introduced and initially the production of window type air conditioners was
taken up and was well received in the market for its quality. The present range
of power products includes Transformers up to 33KV 5MVA capacity,
Switchgears up to 33KV, Cage Induction Motors up to 40HP, Single Phase
Energy Motors, Small Generators, Shunt Capacitor, Banks and Re-closer etc.
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The company has also started the production with the technical collaboration of
Hitachi Corporation, Japan, for the production of Vacuum Circuit Breakers for its
switchgear. In the year 1980 the company expanded into consumer products
with the introduction of Window Type Air Conditioners and today also
manufactures Split Air Conditioners, Refrigerators, Microwave ovens, Deep
Freezers and Compressors etc.
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The Saigol Group (also referred to as the Sehgal or Sahgal Group) is located in
Lahore, Punjab, Pakistan. This group is owned by the Saigol family of Pakistan,
and owns a number of domestic automobile and textile plants.
Group Profile
In 1948, the Saigols migrated from Calcutta and initiated their business in
Lyallpur (later named to as Faisalabad), the textile city of Pakistan, under the
banner of Kohinoor Industries Limited.
The Saigols set up the first major textile unit - The Kohinoor Textile Mills
under the umbrella of Kohinoor Industries Limited. The Kohinoor Textile Mill has
state-of-the-art quality control from raw material to finished product
manufacturing. Its laboratory is top rated amongst the best laboratories in
Pakistan for testing of textile raw materials, other inputs and yarn.
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In 1987, the Saritow Spinning Mills and Azam Textile Mills were
established under the banner of Saigol Group of Companies. Saritow Spinning
Mills is a spinning unit with 25,440 spindles capacity. Facilitated with the most
modern and efficient Japanese and European machinery, its knitted yarn is
renowned in the Far East and Europe for its fine quality.
Azam Textile Mills is reputed for its carded and combed yarn, which is quite
popular for premier knitting and weaving
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HISTORY
Pak Electron Ltd. (PEL) was established in 1956 with the technical collaboration
of M/S AEG Germany and is the oldest composite electrical equipment-
manufacturing unit in Pakistan.
In October 1978, the company was taken over by the SAIGOL GROUP, which
is one of the leading industrial and commercial groups of Pakistan. The
products manufactured by PEL have always been of a high standard and the
name “PEL is synonymous with quality all over Pakistan.” PEL, since its
inception, has been acting as an institution working for the advancement and
development of engineering and modern technology in Pakistan
Since its inception, the company has been working for the advancement and
development of engineering know-how in Pakistan. The company has produced
hundreds of engineers and skilled workers and technicians through its
apprenticeship schemes & training programs.
PEL has been continuously adding new products to its range. As a result, PEL
has registered a significant increase in its sales volume, during the last ten
years
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In 1987, PEL deep freezers were also introduced in technical collaboration with
M/s Ariston of Italy.
In 2006, the Company has started manufacturing of split type air conditioners of
various capacities as the customer choice has shifted from window type to split
type. The product has been well received in the market. This encourages the
company to multiply its production in the coming year.
Today, PEL has become a household name. Its products are not only in great
demand in the local market but the Company has started exporting its
appliances division products.
Company Information
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Company information
Board of directors
Mr. Naseem Saigol Chairman /Chief Executive
Mr. Azam Saigol
Mr. Murad Saigol
Mr. Muhammad Rafi Khan
Mr. Haroon Ahmed Khan Managing Director
Mr. Homaeer Waheed
Mr. Gul Nawaz NIT Nominee
Mr. Masood Karim Sheikh NBP Nominee u/s 182 of the Ordinance
Mr. Tajammal H.Bokharee NBP Nominee u/s 182 of the Ordinance
Mr. Wajahat A. Baqai NBP Nominee u/s 182 of the Ordinance
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Audit Committee
Mr. Azam Saigol Chairman / Member
Mr. Haroon A. Khan Member
Mr. Tajammal H. Bokharee Member
Mr. Gul Nawaz Member
Company Secretary
Sheikh Muhammad Shakeel FCA
Auditors
M/s Yousaf Adil Saleem & Co. Chartered Accountant
Legal Advisor
M/s Hassan and Hassan Advocates
Bankers
• Bank of Punjab
• First Punjab Modaraba
• Bank Alfalah Limited
• Faysal Bank Limited
• National Bank of Pakistan
• NDLC-IFIC Bank Limited
• PICIC Commercial Bank Limited
• Saudi Pak Commercial Bank
• Union Bank Limited
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ISLAMABAD KARACHI
Room # 1404, 14th Floor Kohinoor Building
Green Trust Tower, Blue Area 25-West Wharf Road
Tel 051-2273858 Tel 021-2200951-4
Fax 042-2273858 Fax 021-2310330
CHINA AFGHANISTAN
910, No. 1007, Zhong Shan Naun Er Road Flat # 103, 1st Floor, Block A
Shanghai, china Qaiser Market, Kolola, Pushta,
Tel 86-21-64567533 Kabul
Fax 86-21-54109971 Tel 0093-79826293
Objectives
The objectives and mission for which the company is established are as
following
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• To do all such things that is incidental for the attainment of the above
objectives or any of them.
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• Appliances Division
• Power Division
APPLIANCES DIVISION
PEL’s Appliances Division is the flag carrier of the Saigol Group involved in
home appliances manufacturing.
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Refrigerator
Deep freezers
Television
Microwave oven
Washing machine
Generators
Air condition
PAK Elektron Refrigerators always have always been famous among every
home
due its superior quality and reliability. In Pakista International Companies who
are sharing the demand of refrigerators but all of
them are considered to be minor market shareholders in front of Pak Elektron’s
share. Strength of Pak Elektron’s share has always been its remarkable
Appliances Division due to its latest equipments and talented men power. n
there are so many National and
This Appliance Division is comprised of following departments
Marketing Appliance Division
Production Appliance Division
After Sales Services Department
Consumer Marketing Department
Market
Appliance
After
Consumer Production
Sales
Marketing AD
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Production Department
PEL’s production department has its own distinctive qualities from one end to
last
end. At this department every worker has got very special in job training from
the
seniors and remains committed in order to accomplish the given tasks
successfully either he is a part of assembling or a part of finishing section.
When
Research and development designs any new feature or product, production
department provides required men power estimates to the company’s human
resource department.
After Sales Services
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the
company at different places in the cities. This department assures 100 percent
parts replacement of appliances if complains fall in the warranty
POWER DIVISION
PEL Power Division manufactures energy meters,
Transformers
Switchgears
Kiosks
Compact stations
Shunt capacitor banks
Energy meters
Generators
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All these electrical goods are manufactured under strict quality control and in
accordance with international standards.
PEL is one of the major electrical equipment suppliers to Water and Power
Development Authority (WAPDA) and Karachi Electrical Supply Corporation
(KESC), which are the largest power utilities in Pakistan.
Over the years, PEL electrical equipment has had been used in numerous
power projects of national importance within Pakistan.
In spite of stiff competition from emerging local and multinational brands, PEL
Group's appliances and electrical equipments have remained in the spotlight
due to constant innovation. Strategic partnership with multinationals of repute
have enabled the PEL Group to incorporate new technologies into existing
product ranges, thus giving the Pakistani market access to innovative,
affordable and quality products.
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The second but the most powerful revenue generating business unit of PAK
Elektron, produces Transformers, Switchgears and Energy Meters for the public
sector such as KESC Karachi Electric Supply Corporation, LESCO Lahore
Electric Supply Corporation, IESCO Islamabad Electric Supply Corporation,
PESCO Peshawar Electric Supply Corporation, etc and for public sector as
well.
Market
power
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PEL has vast experience in design and manufacturing of standard and special
purpose transformers up to 33kV and up to 6000kVA ratings. This department
make oil immersed transformers with natural cooling are suitable for both indoor
and outdoor installations. These are manufactured according to BSS-171, IEC-
76
or VDE-0532 and tropicalized to meet adverse environmental conditions. All
transformers are offered with tabular tank, having a conservator and breather.
PEL's transformers have been successfully type tested for Impulse voltage and
short circuit tests at KEMA, (Holland), HV&SC Lab, Rawat (Pakistan), NIP
(Pakistan) and UET (Pakistan).
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MV & LV Switchgear being one of the major power products of PEL is produced
for indoor installations company with the latest international standards by this
department, i.e. IEC, BSS or VDE PEL's Switchboards are steel sheet
fabricated,
totally enclosed, floor mounting and vermin & dust proof. These are supplied
with
factory fitted relevant components and copper bus bars, internal wiring, terminal
blocks etc.
The cubicle housing and doors are fabricated from 2-3mm thick sheet steel,
welded together to form a robust and self-supporting structure. Painting
procedure includes through cleaning, pre-treatment, anti-rust coating and final
finishing in standard RAL colors.
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Finance Department
Accounts Department
Appliances Division
Power Division
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To receive C.V’s.
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Orientation Program
HR department is also starting orientation program for new
employees. This program will be completed in 5 modules.
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I have the honor to be an internee in the most reputed organization (PEL) in the
electronics industry. During my stay at PEL of 4 weeks (form 23th july, 2010 to
19th Aug, 2010) in FP-AD. of PEL, I tried to leave no stone unturned in getting
the best experience & practice of ground realities regarding financial matters
and maintaining accounts relating to sales and credit control. It is a pleasure for
me during my stay in the PEL; I take the practical exposure about the
Accounting and Finance under the well experienced and educated managers.
This is the result of their un-tired efforts that now I have known the use of
different financial softwares used by the Organization. If I talk actually about this
internship experience, I would like to say that my B.COM(HONS) is incomplete
without practical knowledge which was provided me by PEL.
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Department of FP-AD
IMPORT/EXPORT
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Management level M2
Perveez Malik
Kashif Manzoor Sherezi
Management level M1
Imran Kaazmi
Management level E1
Ghulam Mohayudin
Management level E2
Shariq Hussain
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Management level E3
Waqar Hussain
Mohsin Ali
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Internal environment
The company should evaluate strengths and weaknesses analysis
periodically. Company should review financial, marketing, manufacturing,
human resources and organization competences.
Strengths
PEL has the following strengths
Brand loyalty
Strong Dealer Network
Quality Products
After Sales services
Challenger position
Technological differential advantage
Strong Management control
Power division
Distribution of authority
Brand loyalty
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PEL has created a strong brand image in the mind of the customers
through higher quality and low prices. The customers of PEL always prefer its
home appliances like Window AC, split AC and refrigerators, during the time of
purchase. PEL is a popular company in Pakistan and every one knows about
the PEL products and its brand name.
It is also the plus point for PEL that it has developed a strong dealer
network in the market. The dealers always try to sell the PEL products to the
customers because, the company for its products, gives them a high margin.
The management of PEL also provides more incentives to their dealers than
their competitors. Dealers are very conscious about the PEL products and
always guide the customer in buying the PEL products.
Quality Products
PEL provides the after sale service to customers which increases the
customers satisfaction. The biggest strength of services department is that it
handles a complaint within 24 hours in any part of the country, which helps in
increasing the satisfaction level of customers.
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Power division
Distribution of Authority
Weaknesses
Along with its strengths PEL has also some weaknesses which needs to
eliminate in future. If PEL overcomes these weaknesses then it can become a
market leader in home appliances.
Financial Problems
Lack of advertisement
System variations
Lack of Product range
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Financial problems
Sometimes PEL faces the financial problems because its stocks are so
much piled up in the stores that creates problem of cash inflow and outflow and
cause a problem in production process due to short raw material.
System variations
PEL has introduced more products of consumer items but there are more
needs to develop new consumer items.
Due to lack of finance a company cannot utilize all its resources on its full
capacity. It increases the cost of products per unit that decreases the profit
margin of each consumer item. As the production capacity and actual
production of different products is given below (2005)
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Price setting
Price setting is also a main problem for PEL because it sets its prices on
the bases of competition and this strategy reduces its profit margin.
External environment
It consists of opportunity and threats
Market opportunity
Market threat
Opportunities
For PEL, there are more opportunities for expansion in business. Following are
the opportunities for the PEL.
Exploration of market
Increase in product range
Export opportunity
Increase in production capacity
Exploration of market
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PEL has the opportunity to explore the market in all over Pakistan. Even
though PEL has introduced its products in many cities of Pakistan but there are
so many places that are yet to be exploited.
PEL can increase its product range that will be more profitable for the
company. There are more needs to develop new consumer items like PEL
Vacuum cleaners etc.
Export opportunity
Threats
Following are the main threats for the PEL
Strong competition
Chinese product in the market
supplier’s growing bargaining power
Instability of governments
Tax department
World Trade Organization
Strong competition
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Chinese product
Instability of Government
Tax department
World trade organization has allowed from 2005 to any company offering
home appliances to export their products after paying less duties or duty free
products. That will increase the pressures for the local companies to reduce the
prices and increase the quality. It will increase the competition among the
foreign companies and local companies.
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Liquidity Analysis
Current Ratio
Interpretation
The liquidity position of PEL has been satisfactory in the last few years. As the
above analysis table indicates, in 2005 the liquidity position was 1.15 times
which means that in 2005 the firm has Rs. 1.15 to pay a liability of RS. 1 which
is quite well but in 2006 it suddenly reduced to 1.04 times. This change in the
liquidity position is due to higher increased percentage of current liabilities in
the balance sheet of year 2006. But in 2007 PEL has decreased its current
liabilities and is having an improved current ratio of 1.32 times which is much
better in a sense that the company has maintained a well managed level of
assets to pay its liabilities.
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Quick Ratio
Interpretation
Secondly, quick ratio is also indicating that in 2006 the higher
increased percentage of liabilities also cause quick ratio to
decrease from 0.70 times to .62 times but in 2007 PEL managed to gain
quick ratio of .84 times by reducing level of stock in trade as well as its
current liabilities portion.
Activity Analysis
Inventory turnover
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Interpretation
The above inventory turnover table and graph shows an increased level of
inventory turnover in year 2007, which is a very good indicator that shows
higher ability of the firm to utilize its inventory to generate sales during the
year 2007.
Interpretation
Fifthly, total asset turnover ratio is also moving upwards which
indicates that the firm’s operations are tending to be more efficient
then from previous years. So the overall activity analysis of PEL
shows that the firm is performing its business activities effectively and
efficiently
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Analyzing Debt
Debt Ratio
Interpretation
The above debt analysis table shows that in year 2007, the debt ratio of the
firm has decreased as compared with years 2006 and 2005 which seems to be
a good indicator and it shows that the firm is trying to maximize the utilization
of its own business resources and minimizing the reliability on outside sources
of debt or financing for investment purposes.
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Interpretation
The above calculated value shows that the firm 0% debt equity ratio which means
that the firm is taking no long term debt and using owner’s equity for investment
purpose. It is a good indicator in a sense that the firm has no long term obligation
as well as the firm does not have to pay interest on long term debts. But on the
other side it might be a drawback for the firm. They can get long term debt and
can increase their investments as well as their profits
Analyzing profitability
Return on equity % 17 16 12
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Interpretation
The above profitability schedule shows that Gross profit margin ratio of the
firm has decreased in year 2007 due to unexpected increase in cost of good
sold which is not a good indicator but considering the volume of decline and
changing environment of the market it is coverable and the firm might
improve it in near future.
Next you can see that the operating profit margin ratio is improving as
compare with last years so it is providing support to some extent to the
profitability of the firm. And while considering net profit margin, it also
indicates an increase in the margin of net profit of the firm in sales which is
also supportive for profitability.
Other profitability ratios are improving as compared with previous years
which show the firm is earning high amount of profits and the assets are
being effectively utilized by the firm to generate profit. And the amount of
earning per share is also increasing which shows that firm is distributing the
earning in its shareholders at a increasing rate which is very much
encouraging for the investors to buy the shares of PEL.
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its net profit ratio is not quite satisfactory due to increased costs and
internees.
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Skill Acquired
Post shipment
The senior commercial office taking the following step for
efficiently moving the consignment from Karachi to Lahore dry port for custom
clearance etc by road and rail on nature of material.
1) Shipping document
i. Receiving the shipment document courier or bank.
ii. SD thoroughly scrutinerized and forward to custom for
clearaning agent.
iii. For onward submission to local forwarder for movement
of consignment by road and rail.
2) Destuffing
In case of containerized consignment IO will immediately
destuff the consignment at Karachi port, to avoid any
mishandling so that we may able to transport it up to LDP.
3) Negotiable Document
IO will send a request to concerning bank for
release of
SD to PEL approved custom clearance agent.
4) Insurance
Upon receipt of SD they also inform the insurance
company for arrival of consignment at Pakistan.
Custom clearance
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Reception of consignments
I. After clearance and released the consignment from
custom port, IO will issue an internal memo to the
store In.
II. Change with concerning HOD for this information.
III. In case of shortage of material, store tell the IL
department .
On Payment Of Bill
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Bank Account
Credit
Incoming store
↓
Supplier deliver
Challan
↓
PBL Purchase
↓
LMRP (Local Material
Receipt Point)
↓
Quality Verification
Physical is responsibility
Of RSI(Receiving Store
Inventory)
↓
QC for inspection
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↓
RSI GRNO Alloted
PRODUCTS
Appliance division
Deep freezers 1
Television 2
Microwave oven 3
Washing machine 4
Generators 5
Air condition 6
Refrigerator 7
Power Division
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OTHERS 0
A) Manufacturing (0)
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Balance Sheet
as at December 31, 2009
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December 31,
Note June 30, 2009
2009
(Rupees in thousand)
4,186,906 4,007,358
7,183,256 5,720,534
CURRENT LIABILITIES
Current portion of
7,191,289 6,553,832
22,935,220 19,070,035
December 31,
Note June 30, 2009
2009
ASSETS
NON-CURRENT ASSETS
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13,968,272 10,303,534
CURRENT ASSETS
8,851,890 8,664,551
22,935,220 19,070,035
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Year ended
Note Six months ended December 31, 2009 June 30,
2009
(Rupees in Thousand)
1,523,738 3,374,904
Rupees Rupees
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Year
Six months ended ended
Note
Dember 31, 2009 June 30,
2009
(Rupees in Thousand)
Adjustments for
Provision / (reversal) of provision for obsolete and slow moving stocks 381 (6,637)
Gain/(loss) due to change in the fair value of other financial assets (1,415) 46,188
Gain on sale and lease back activities (net of amortization during the year (13,608) (18,408)
949,089 1,813,446
Cash generated from operations before working capital changes 1,170,983 2,207,043
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(730,583) (1,539,127)
Cash and cash equivalents at beginning of the period /year 193,058 434,484
Cash and cash equivalents at end of the period /year 28 123,263 193,058
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Transfer to unappropriated
profits on account of
incremental depreciation - - - 94,185 94,185
charged during the year net
of deferred taxation
Transfer to unappropriated
profits on account of
incremental depreciation - - - 68,291 68,291
charged during the period -
net of deferred taxation
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Balance as at December
1,593,720 131,931 - 2,461,255 4,186,906
31, 2009
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In order to match the seasonal business cycle with the accounting year,
Company has adopted calendar year as its accounting year whereby the year-
end will not fall in the peak season. As such these accounts have been
prepared for six months ended December 31,2009 after
Financial Results (Rs. in Million) 6 months ended 6 months ended Year ended
December 31, December 31, June 30, 2009
2009 2008
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BIBLIOGRAPHY
BOOKS
ARTICLE
WEBSITES
• www.pel.com.pk
• www.secp.com.pk
• www.scribed.com.pk
• www.kse.com.pk
• www.google.com.pk
• www.ibp.com.pk
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