INTERNSHIP REPORT
ACKNOWLEDGEMENT ACKNOWLEDGEMENT All gratitude is due to Almighty Allah and peace be upon the Holy Prophet Muhammad (SAW). We are really thankful to Sir,Fazali Subhan Su bhan for his kind supervision and advice adv ice in the preparation of this report. He will always remain a source of inspiration inspiration and motivation for us. We also wish to express our gratitude to Eng,Riaz En g,Riaz Muhammad Assistant manager in HR department and all the staff of KSB for their coop eration throughout our internship. Our sincere thanks are due to our o ur loving parents and sincere friends for their continuous encouragement and moral support which ultimately made it happen.
Siyab Muhammd Sajjad Farman Khan
ACKNOWLEDGEMENT ACKNOWLEDGEMENT All gratitude is due to Almighty Allah and peace be upon the Holy Prophet Muhammad (SAW). We are really thankful to Sir,Fazali Subhan Su bhan for his kind supervision and advice adv ice in the preparation of this report. He will always remain a source of inspiration inspiration and motivation for us. We also wish to express our gratitude to Eng,Riaz En g,Riaz Muhammad Assistant manager in HR department and all the staff of KSB for their coop eration throughout our internship. Our sincere thanks are due to our o ur loving parents and sincere friends for their continuous encouragement and moral support which ultimately made it happen.
Siyab Muhammd Sajjad Farman Khan
EXECUTIVE SUMMARY The Klein Schanzlin and Becker (or KSB) Group is one of the leading producers of pumps, valves and related systems. KSB has expand themselves that they are know all over the world and mostly everywhere, where there is a new company or building the products of KSB there its has a history of 130 years in business sector. KSB is one affiliated group in many countries. The company’s international operation makes the organization as manageable dimensions for short pathways. They are large enough to offer the whole spectrum of operations and all the interesting activities one expects of a global player. They are there in every sector of production engineering, design and development, sales and marketing, services, materials management or in all the areas of business administration. The aims to find out whether KSB is managing its resources for competitive advantages by company’s key business structure and operations, products as well as provides summary of its strategies. The strategic method of making process within the company through porter’s method. SWOT Analysis of the company provides Strengths, weaknesses, opportunities, Threats as well as provides a good framework for reviewing strategy, position and direction of a company or business proposition
ACKNOWLEDGEMENT
2
EXECUTIVE SUMMARY
3
CHAPTER 1
6
INTRODUCTION
6
CHAPTER 2
11
STRATEGIC OBJECTIVES
11
CHAPTER 3
13
PRODUCTS AND SERVICES
13
CHAPTER 4
15
STRATEGIC ANALYSIS
15
CHAPTER 5
18
SWOT ANALYSIS
18
CHAPTER 6
20
COMPETITIVE ADVANTAGE
20
CHAPTER 7
23
CORPORATE GOVERNANCE AT KSB
23
CHAPTER 8
ERROR! BOOKMARK NOT DEFINED.
FINANCIAL STATEMENT ANALYSIS
ERROR! BOOKMARK NOT DEFINED.
CHAPTER 9
32
ORGANIZATION CHART
32
CONCLUSION
34
CHAPTER 10
35
RECOMMENDATIONS
35
REFERENCES
36
Chapter 1 INTRODUCTION KSB has been serving the community since 1887 which is founded in Germany and expanded almost all over the world in 130 years. Company main objective was innovation and development in the field of pumps and valves.KSB Production amenities in 19 countries, marketing companies and service centres in more than 100 countries. The KSB Group is on furnishing all over the world with approximately 140,000 employees globally. With Market capitalization of € 707.6 million sales of companies, offices, agencies and more than 30 manufacturing sites. 2000 highly trained specialists from around 120 service centres offer customers global inspection, maintenance and repair of KSB products and even competitor makes. KSB PUMPS COMPANY profiles provided detailed financial data and key credit information. KSB Pumps Company predominantly operates in the Engineering Services sector. The Company is principally engaged in the manufacture and sale of industrial pumps, valves, castings and related parts. According to KSB Pakistan is an affiliate company of the world famous German KSB Group, which was founded in 1871. The KSB Group is among the leading companies in the field of pumps and valves with subsidiaries and affiliated companies all over the world. The KSB name stands for the highest standards of product and service qualit y. KSB Pakistan was established July 1959 in Lahore. The production facilities at Hassanabdal were completed in 1964 and a full fledged foundry was commissioned in the same premises in 1980. Now the company employees over 500 people and have Sales Office at Lahore, Karachi, Quetta, Rawalpindi, Peshawar and Multan. The company also operates through a dealership network throughout the country.
KSB Pakistan became a public limited company in 1979 providing a broader base for local participation. The company’s shares are traded on both the Karachi and Lahore Stock Exchanges. The Company received the Merit Trophy for exports of the Federation of Pakistan Chambers of Commerce and Industry and top company award for exemplary payment to the shareholders by Karachi Stock Exchange. Another award for corporate excellence and good Management practice as bestowed on the company by the management Association of Pakistan. During the last thirty years the company has rapidly expanded its production range to include a large variety of pumps to serve various sectors of the economy. The new pumps for local production have been selected to particularly meet the requi8rements of sugar, paper and other process and chemical industries apart from meet the requirements of drinking water supply, sewage disposal and surface drainage schemes. The latest additions have been pumps of large capacity which are specifically meant for irrigation and drainage applications. Pumps are produced in various metallurgical executions including cast iron, Ni-resist cast iron, bronze and stainless steel. The range submersible motors ranging from 3HP to over 100HP. KSB Pakistan has been the major supplier to the vitally important control and reclamation projects (SCARP) installed by WAPDA. In the agricultural section, KSB’s name is synonymous with productivity and reliability. The latest technology and know how has been made available to KSB Pakistan’s customers. KSB Pumps are produced strictly in accordance with the design and specifications of KSB AG in order to maintain standards of the highest quality. Comprehensive inspection
and test bed facilities are available at Works Hassanabdal to ensure compliance with these quality standards. The production facilities are also being regularly modernized and extended to cope with the challenges of new product technology. The foundry is capable of producing sophisticated automotive components apart from pump and valves casting and is leading supplier of tractor castings in the country.
Vision / Mission, Purpose, Goal and Core Values KSB’s vision/mission statement outlines the projected business growth that the company expects to achieve and the steps it will take to get there. Every company or business is established with a fundamental set of core values- These are usually the beliefs and passion of the founder that has flowed through to the business without a lot of conscious effort.
KSB Mission
KSB pumps manufacture and market a selected range of standard and engineered pumps and castings of world class quality. Their efforts are basically directed to have delighted customers in the water, sewage, oil, energy, Industry and b uilding services sectors. In line with the Group strategy, they are committed to develop into a centre of excellence in water application pumps and be a strong regional player. We want to market valves, complete system solutions and foundry products including patterns for captive, automotive and other industries. We will develop a world class human resource with highly motivated and empowered employees. The measure of success is being a clear market leader, achieving quantum growth and providing attractive returns to the stakeholders.
Vision
KSB provides the best solutions worldwide...
as an independent and profitable company
demonstrating more skill than our competitors
as the most successful company in our markets
with employees who take on leadership responsibilities
as the best people’s best company
while respecting social values and the environment
Core Values
KSB believes in self-esteem of their customers, suppliers and employees.
KSB works as a team where every member owns the process with an entrepreneurial spirit.
KSB works with professional honesty and integrity.
KSB trusts their employees and appreciate their contributions.
KSB strives for continuous improvement to achieve excellence in all spheres of their activities.
KSB is an equal opportunity employer and follow merit in human resources development.
KSB fulfils moral obligation towards society and environment.
Acts of Success Empowerment
Empowerment refers to increasing the spiritual, political, social or economic strength of individuals and communities. It often involves the empowered developing confidence in own capacities.
Communication
Communication is a process of transferring information from one entity to another.
Transparency
Transparent procedures include open meetings, financial disclosure statements, the freedom of information legislation, budgetary review, audits, etc.
Synergy
Synergy is where different entities cooperate advantageously for a final outcome. If used in a business application it means that teamwork will produce an overall better result than if each person was working toward the same goal individually.
Chapter 2 Strategic Objectives Focus business lines
KSB grows more strongly than the market
KSB achieves above average profitability
KSB gains or builds on a leading competitive position
Further business lines
KSB continues its business profitability
KSB makes the most of sales potential
KSB contributes to the revenue and profitability of the group
Corporate Philosophy Sustainability and corporate social responsibility (CSR) are an integral part of KSB’s corporate culture. KSB’s sense of corporate responsibility is not only towards its customers, shareholders and employees. In all 0f business activities, KSB are guided by the principles of sustainability and fairness in the way we deal with the environment and society.
Global Compact As a signatory to the Global Compact, KSB is committed to upholding the ten principles of the United Nations, which are aimed at promoting sustainability and fairness in the business environment.
Environmental Protection KSB is aware of the threat to the climate and the depletion of natural resources. That is why KSB support the goals of the Kyoto Protocol. KSB’s products and technologies contribute to energy efficiency and environmental protection. In addition, KSB work processes and working environment are designed to require as little energy and as few raw materials as possible.
Corporate Social Responsibility (CSR) KSB aims to help resolve social problems for the common good. Education for young people is a key theme of the company’s social commitment and is also part of its corporate social responsibility. KSB is therefore helping to pave the way for young people to develop their skills early enough so that they can later pursue a career that’s the right fit for their talents and optio ns.
Chapter 3 Products and services KSB is manufacturing engineering products which includes different types of pumps and valves which are used in both public sectors as well as in private sectors. These pumps are mainly used in water, industry, energy, waste water management and agriculture.
Pumps KSB mainly deals in Centrifugal pumps these pumps works on the mechanism of centrifugal force (a force keeps a body in a circular path).The pumps use a propeller fan shape matter which moves the water or air in circular path with the help of motor to create pressure to flow in the water or air in and out ward direction.
Valves KSB also manufactures valves that are used to control flow of different types of fluid. Values are basically to block and unblock the fluid in different situations or circumstances.
Services Offered by KSB KSB offers complete customer support and nationwide after-sales service for convenience of its valued customers. At KSBs’ Customer Service Canters, highly qualified and professionally trained Engineers and Supervisors are available to provide expert services.
Key Services Offered
Technical Support on Complete System Solution
Repair, Maintenance & Overhauling of Pumps
Ex-Stock Emergency Spare Parts Availability
Installation/Commissioning & Supervision
Services Contracts
Customer Complaint Handling
Life Cycle Cost Calculation
Inspection & Repair at site
Energy Audits
The customers receive on the spot value-added services ensuring quality of product in minimum time with cost effectiveness. KSB is global player operating in more than 30 countries of the world. The Network of Sales and services in Pakistan of KSB are offered at the head office, KSB Sales, KSB Dealers and repair workshops all over Pakistan.
Chapter 4 Strategic Analysis For several years, the share pump-related services have taken in the value creation chain has been on the increase. The term is used to describe the road from the raw material to the consumer plus the value added at every station. In KSB Pakistan the Structure in the designing of implementing and e valuating strategies is based on the specific process of the organization’s mission, Vision and objectives, developing policies and plans. A balance scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Poter’s Five Model
Poter’s five forces have been analysed to develop KSB successful marketing strategies. By focusing and analysing the structure of and dynamics between the Five forces – Competitor, Potential new entrants, Customer, Supplier and Substitute. KSB is working on to find the o pportunities for improving upon its marketing strategies. These forces are identified as follows. Rivalry among Existing competition KSB belong to Metal and mining Engineering industry of Pakistan. In present days the industry is in growth stage. The major Existing competitor in the industry is following.
MAK Pumps Company Limited
HMA Pumps Company
Flow Pak Pumps company
Kinetic Flow Systems
KSB has also faced competitions’ from Kirloskar Bros. both companies have achieved their reason of competitive advantage as well as quality in terms of product services and innovation the rivalry among these firms is mainly based on 1. Price 2. Flexibility 3. Quality Service 4. Differentiation 5. Time. These five identify the real competitor of the business. Threat of new Entry New Entrants
In current scenario the threat of new entry to KSB is very low due to intensive competition in industry, and other barriers like high economy of scale, lack of technology, lack of experience, strong customers loyalty, strong brand preference and government policies etc. In 1970 Dawood engineering introduces new technology in the pumps and valves business. In after that a joint venture between the cheenab engineering and dawood revealed new entity in the business of manufacturing goods. Bargaining Power of Consumer
As the industry is in growth stage in which Bargaining Power of Consumer often high, therefore KSB is trying to reduce the Bargaining Power of his Consumer Product is to be provided to consumers on economical cost prevailing in the market. All facilities such as installation, commissioning, periodically repairs & maintenance are to be provided by the Suppliers. Suppliers as and demanded by them on Priority basis. KSB Operates in the field of Industry and agriculture sector and industry sector is related with the industry of spare parts which includes companies such as Toyota and Honda. But as far as agriculture sector is concerned the actual consumer is the agricultural land consumer.
Bargaining Power of Supplier
The Bargaining power of supplier affects the intensity of competition. As large organization KSB deals with lot of suppliers who are providing goods and services to KSB as well as to its customers. Therefore KSB and their suppliers assist each other with responsible prices, improved quality. Development of new services, Just in Time deliveries, and reduced inventory cost. Both KSB and suppliers deals by think win win. There is a supply chain Model Consumer KSB Supplier of component group and systems. Supplier of components systems suppliers of c part Supplier of un-machined semi finished and standardized parts.
Threat of Substitute Products
In industry Metal and mining engineering the firm’s produces highly expensive products to which the substitute are not easily available in market. The sector is in state of rapid growth and technological development, and therefore new competitors are coming to the sector even though the sector is dominated by KSB As far as other companies are in they are playing good role in the market. To eliminate the threat of substitute product KSB take the following initiates
Products to be supplies on low case
High-performance design or high quality consistent quality.
Rapid delivery (on-time delivery)
Flexibility= Variety/Volume.
Superior customer service.
Convenience.
Chapter 5 SWOT Analysis Strengths
Manufacturing facilities (Local presence)
Wide range of products
Trained and expert staff
Brand image strength
Service setup
Market leader
Compliance with international quality standards
Less number of competitors in local market.
Weakness
Takes long time to import material
Prices are too high in today’s competitive world
Lack of expertise of submersible sewage pumps/other imported pumps.
No prices for imported pumps readily available
Negative perception in market for g iving extra ordinary discount.
Over head are high (salaries, expenses & row material and energy cost)
Late delivery of Pumps (high lead time)
Opportunities:
Growth potential in new markets
Heavy Budget allotment in Govt. Sector for w ater supply Schemes
High profit margins in Turbine pumps
Selling of system solutions to customers
Threats
Registration of new companies in Govt. Sector
Price war with competitors
High cost of Local/Imported pumps
Lack of knowledge /Skills for imported pumps specially submersible
Sewage pump, which is becoming a threat for KSB day by day. KSB takes some important initiatives to capitalise their strength of trained and expert staff and remove their threats of lack of knowledge for imported pumps by hiring professional team for research and development department. KSB remove their weakness by purchasing material in the local market in instead of importing products and they have to offer the product at low prices.
Chapter 6 Competitive advantage KSB achieved competitive advantage by offering products and services according to the changing customers demand by providing quality product at low cost as compared to their competitors. KSB cannot lose their competitive advantage easily because they have the potential to survive and compete in industry. KSB can sustain their competitive advantage by adopting new technology and expertise. KSB can defend their competitive advantage by continuously improvement and innovation in their product and by using latest technology in their process.
The emergence of competitive advantage
External sources of change
Changing customer demand
Changing prices
Technological change
Sustaining competitive advantage
Identification
Incentives for imitation
Diagnosis
Resource acquisition
Competitive advantage in different market settings
Market type
Source of imperfection of competition
Opportunity for competitive advantage
Types of competitive advantage: cost and differentiation
Cost advantage (similar product at lower cost)
Differentiation (price premium from a unique product)
Innovation / Change There are plenty of innovation and changes around the world, but the most important change is going on the Australia. With water consume and recycling the water and in industrial sector high pressure pumps showcasing in exhibition in Brisbane 2010.gobally KSB innovating a product to convert the thermal heat in to energy and use it to increased the operating reliability of optimised high suitable handling mineral and synaptic. Maintaining innovation is critical and especially in tough times and getting it right is as must. In 2009 KSB introduce a new pump called “ZORRO” that was a new innovative change. That was introduced with the current study of the customer needs. The company define its change on following factors.
Develop productivity measure
Determine critical )bottleneck) operations
Develop methods for productivity improvements.
Establish reasonable goals
Get management support
Measure and publicize improvement
Don’t confuse productivity with efficiency.
Chapter 7 Corporate Governance at KSB Corporate Governance is necessary because it provides structure through which the objectives of a company are set and also means of attaining that objectives are determined. KSB adopt highly in controlling and Responsible corporate governance. The rules and regulation of corporate governance are based on the German Corporate Governance Code at KSB. The long-term success of KSB is achieved through best and responsible corporate governance. The responsibilities are distributed between the Board of Management and the Supervisory Staff. The guideline of German Corporate governance code is a key factor by which they work towards ensuring compliance within organization. This Code provides suggestions and recommendations to the management and supervision of KSB subsidiary companies and adopted nationally and internationally recognized standards of best and responsible corporate governance. Developing the principles of corporate governance in all areas of the company is the main objective of KSB.
Board of Management of KSB Pakistan The KSB Group is operating and runs by board of management. The rules and guideline are regulated and implemented by the Board of Management within the organization.
Mohammad Masud Akhtar (CEO)
Mohammad Masud Akhtar Has been a member of the Board of Management and CEO since 2006.He is Certified Director of Pakistan Institute of Corporate Governance.
He is also in charge of Operations, Sales and Marketing, Central Purchasing, Programmed Coordination and the Business Unit Submersible Pumps. In addition, he is responsible for HR and HR Director.
Sajid Mehmood Awan
Sajid Mahmood Awan has been a member of the Management Committee KSB Pumps Company Limited since 2006. He is FCMA, FCIS and Certified Director. He has 19 years of experience in Finance & Accounting, Corporate Governance and Compliance.
Supervisory Board of KSB Pakistan The Supervisory Board of KSB identifies the corporate management issues and regularly report to the Board of Management and monitors their own works as the part of their function as defined in law, in the Articles of Association . Saeed Zafar General Manager Customer Services
Saeed Zafar has been a member of the company management KSB Pumps Company Limited Since 2007. He has 27 years of experience in Sales & Operations.
Shahzad Saleem Manager Human Resource
Shahzad Saleem has been a member of the company management as Manager Human Resource KSB Pumps Company Limited since 2012. Business graduate by profession, he has 8 years of experience in HR operations.
Khawaja Rasheed Head Internal Audit
Khawaja Faisal Rasheed has been member of the company management since 2006. Management Accountant by profession he is CIA, CISA and CFE (USA). He has around 15 years of work experience. Shahzad Umer
Deputy General Manager Quality, Health, Safety & Environment (QHSE) Shahzad Umer has been the member of the company management since 2010. He is a qualified B.E from National University of Sciences and Technology. He has worked with a number of national and international organizations in various capacities of Quality Assurance, Quality Management and HSE Systems. KSB Pakistan Offices Contacts
NO 1
Offices Lahore
Address
Telephone
Fax
Email
16/2 Sir Aga Khan Road Lahore.
0423- 63673881
042-36368011
[email protected]
2
Multan
Golden Heights, Nusrat Road, Multan.
061-111 572 786
061-4541784
[email protected]
3
Rawalpindi
309, A3 Peshawar Road, Westridge 1, Opp. Valley Clinic, Rawalpindi.
051-111 572 786.
051-5472612
[email protected]
4
Karachi
307 & 308, 3rd Floor Parsa Tower, Block 6, PECHS Shah rah-e Faisal,
021-35390481-2
021-35390483
[email protected]
5
Peshawar
091-5285679
091-5278919
franchise.kpk @ksb.com.pk
6
Quetta
081-2829635
081-2839721
Gulistanmachinery@ yahoo.com
3rd Floor Mall Tower , Zonkiram Road near mellenium Mall
Per Share Prices of KSB in KSC for 4 years (Monthly) Rupees*
Date
Open
High
Low
Close
Volume
Adj Close
2/1/2013
431.64
434.1
427.5
427.5
0
427.5
1/1/2013
423.25
448
418
431.35
0
431.35
12/3/2012
367.25
423.25
367.25
423.25
0
423.25
11/1/2012
369
369
348
358.1
0
358.1
10/1/2012
370.5
378.2
359.25
370.25
0
370.25
9/3/2012
356.25
382
352.9
379.85
0
379.85
8/1/2012
372.2
388.15
348.55
355
0
355
7/2/2012
357.1
373.6
353.1
373.6
0
373.6
6/1/2012
404
404
355.05
367
0
367
5/1/2012
434.5
451.7
386
398.55
0
398.55
4/2/2012
439.2
439.3
415
434.5
0
434.5
3/1/2012
432.45
454.7
423.2
441
0
441
2/1/2012
401.9
450
401.9
423.8
0
423.8
1/2/2012
386.65
400.35
366.1
398.25
0
398.25
12/1/2011
392.51
392.51
357.95
366.7
0
366.7
11/1/2011
417.1
427
376.3
376.65
0
376.65
10/3/2011
391
434
362
430.2
0
430.2
9/1/2011
430
435
358
389
0
389
8/1/2011
524
524
397.8
410
0
410
7/1/2011
524.1
550
520.5
520.5
0
520.5
6/1/2011
575
588
513
531
0
531
5/2/2011
594.35
594.51
557.9
592
0
592
4/1/2011
601.25
610
578.75
590
0
590
3/1/2011
607
613.6
505
603.1
0
603.1
2/1/2011
590
640
585
602
0
602
1/3/2011
584.55
624.45
562.2
590
0
590
12/1/2010
557.6
583
545
582.25
0
582.25
11/1/2010
550
579
542.2
550.2
0
550.2
10/1/2010
506.85
528.95
501.05
526.65
0
526.65
9/1/2010
475.45
585
471.85
505
0
505
8/2/2010
512
541.65
471.95
476
0
476
7/1/2010
461
513.4
457.65
508
0
508
6/1/2010
466.85
490
463
463
0
463
5/3/2010
466.3
490
435
465.15
0
465.15
4/1/2010
446
490.25
440
467.5
0
467.5
3/1/2010
463.45
463.45
440.5
447.75
0
447.75
2/1/2010
433
473.9
430
463.85
0
463.85
1/5/2010
392
430.1
392
422
0
422
12/8/2009
392.02
392.02
363.7
385
0
385
11/5/2009
397.98
412.9
396.68
398.85
0
398.85
10/2/2009
461.51
463.6
399
407.72
0
407.72
9/1/2009
393.82
430
379
430
0
430
8/3/2009
329.21
400
327.22
400
0
400
7/2/2009
330.42
340
326.5
326.5
0
326.5
6/2/2009
275
335
275
304
0
304
5/6/2009
270.9
294
270.9
285
0
285
4/1/2009
193.75
260
193.75
260
0
260
3/2/2009
230
230
188.05
204.78
0
204.78
2/2/2009
262
270
249.22
249.22
0
249.22
1/2/2009
298.25
310
237.14
253
0
253
Current ratio Current ratio= current assets/current liabilities
Year
Current assets
Current liabilities
Current ratio
2006
734,516
347,408
2.11
2007
921,314
459,208
2.01
2008
997,293
505,152
1.97
2009
1,336,274
768,817
1.74
2010
1,483,920
918,665
1.62
2011
1,631,367
1,258,172
1.3
Interpretation
The current ratio is one of the most common ratio analyses which I used to measure of the solvency of firm and its ability to pay short term obligations. As shown in the table in 2006 the bank has 2:11 ratio which means that if it has two rupee it has to pay 11 paisa as liability that is pretty much good ratio for KSB, after 2006 the current ratio gradually decrease year by year and in 2011 at came to 1:3 The reason of decreasing in currents ratio taking short loans for expansion business and made new investment in new project.
Operating Profit Margin Operating profit margin=Operating profit /Sales Year
Operating profit
Sales
O.P margin
2006
211,111
1,401,145
15.07
2007
255,115
1,664,543
15.33
2008
270,782
1,876,445
14.43
2009
254,782
2,024,248
12.59
2010
205,618
2,047,989
10.04
2011
(184,167)
1,944,764
-9.47
Interpretation
The operating profit margin shows the percentage of each rupee remain as profit after the deduction of costs and all expenses except interest and taxes. The profit margin ratio decrease after year 2006 in every year. By analysis the profit & loss statements’ the Material consumption expenses increases by lunching new products in the market.
Return on Assets Return on Assets= Net Profit/Total Assets* 100
Year
Net profit
Total assets
ROA
2006
126,393
829,944
15.93
2007
170,680
1,081,953
16.55
2008
170,688
1,224,286
14.89
2009
147,789
1,594,110
9.92
2010
99,779
1,809,108
6.47
2011
-106,120
1,997,597
-4.5
Interpretation
This ratio measures the effectiveness of management that how it uses the available assets to generate revenue. Higher the ratio better is the position. In cases of KSB it is decreased from 15.93%to -4.5% in 2011 which shows in of organization performance. The reason of consistently decreased return on assets ratio by increasing materials consumption and taken loans for the lunching new products in market to capture more market share.
Inventory turnover ratio Inventory turnover ratio=Sales/inventory*Times
Year
Sales
Inventory
Inventory turnover ratio
2006
1,401,145
308,171
2.27
2007
1,664,543
288,347
2.92
2008
1,876,445
394,488
2.45
2009
2,024,248
414,139
2.45
2010
2,047,989
504,449
2.08
2011
1,944,764
436,319
2.42
Interpretation
This ratio measure the firm selling performance of its inventories compared to industry average and firm holdings excessive stock of inventories. The firm KSB hold their Inventory turnover ratio constant with industry average.
Earnings per Share ratio EPS= Net Profit/ Paid up capital * 100 Year
Net income
Paid up capital
EPS
2006
126,393
120,000
9.58
2007
170,680
120,000
12.93
2008
170,688
120,000
12.93
2009
147,789
132,000
11.2
2010
99,779
132,000
7.56
2011
(106,120)
132,000
-8.04
Interpretation
This ratio measures the effectiveness earning available to share holders of common stocks. In case of KSB the ratio was very good in 2006, 2007 and 2008 respectively but in 2011 the EPS ratio down to -8.04 due to loss. The negative EPS in recent year due increase in expenses and high materials consumption. The common stock share in market in high number with high price is another cause of negative EPs ratio.
Net Profit Margin Net profit Margin=Net Profit/Revenue* 100
Year
Net profit
Sales
N.P margin
2006
126,393
1,401,145
9.02
2007
170,680
1,664,543
10.25
2008
170,688
1,876,445
9.1
2009
147,789
2,024,248
7.3
2010
99,779
2,047,989
4.87
2011
-106,120
1,944,764
-5.46
Interpretation
The net profit margin shows the percentage of each rupee remain as profit after the deduction of costs and all expenses including interest and taxes. Higher net profit margin is preferable. The decrease in net profit margin due to increase in expense of high materials consumption. Increase in materials consumption import news machinery and installment of latest equipment to compete in industry and fulfill customer’s requirement
Chapter 9 Organization Chart
Board of Directors
Mr. Tonjes Cerovsky
Mohammad Masud Akhtar
Chairman Board of Directors
Managing Director
Mr. Hasan Aziz Bilgrami
Director
Mr. R. D. Ahmad
Director
Mr. Sajid Mahmood Awan
Director
Mr. Werner Spiegel
Engr. M. Abdul Jabbar
Mr. Aizaz Sarfraz
Director
Director
Director
Conclusion KSB is one of the old companies in the world with the major business enterprise. KSB has a responsibility to our shareholders, employees, customers and the nation to continually improve the performance of the company and its business. Doing the works with responsible way will lead the prosperity in the industries and communities in which it participate, there are plenty of bigger challenges to be face yet, the way the company is growing to innovation of technology will provide the cutting-edge technology with less cost in internally and investment. The competitive improvement mentioned earlier gives KSB confidence that if it’s prepared to take the lead in the new world. It can be seen that various strategies are used by KSB in order to gain advantages over its competitors. In a competitive market a company must identify its strengths, weaknesses, opportunities and threats to strengthen the company and achieve its objectives and target different market.
Chapter 10 Recommendations
KSB may develop close contacts with permanent and contractual employees
KSB may increase employee satisfaction through counseling
KSB may take active part in training session
May increase the profit margin & decrease the discount levels
May demonstrate more professional skills than its competitors
KSB needs to have more HR professionals in their HR department
KSB needs to have a staffing manager in their factory at Hasanabdal because most of the
recruitment is done for the factory.
Needs more efficiency on part of t he administration
The HR should work more towards the organizational development
KSB should give some assignments to the students coming for internship so that they could have something fruitful to do besides having a taste of office e nvironment.
