KSB Pumps Company Limited
Submitted To:
Prof. DR. LIAQAT ALI
Submitted By:
MUHAMMAD SARFRAZ
Roll No.433
Period:
6 Weeks (Jun 29th to August 12th 2011)
KSB Pumps Company Limited
Table of Contents
Acknowledgement ........................................................................................................................................ 3
Preface .......................................................................................................................................................... 5
Exective Summary .......................................................................................... Error! Bookmark not defined.
Highlights of KSB AG Pumps Company ........................................................................................................ 7
KSB Code of Conduct..................................................................................................................................... 9
Prevention of Curruption ............................................................................................................................ 21
History of KSB Pumps Company Pakistan…………………………………………………………….…………………………………30
Vission Statement ....................................................................................................................................... 32
Mission Statement ...................................................................................................................................... 33
Goal, Objectives and Strategic Planning ..................................................................................................... 34
CORE VALUES ................................................................................................. Error! Bookmark not defined.
KSB ORGANOGRAM ................................................................................................................................ 4040
INTRODUCTION OF KSB PUMPS.................................................................................................................. 41
KSB PUMPS DEPARTMENTS ........................................................................................................................ 45
RATIO ANALYSIS .......................................................................................................................................... 61
VERTICAL and HORIZONTAL ANALYSIS ....................................................................................................... 75
SWOT ANALYSIS OF KSB .............................................................................................................................. 79
MY WORK AT KSB PUMPS ........................................................................................................................... 82
CONCLUSION............................................................................................................................................... 86
RECOMMENDATIONS ................................................................................................................................. 87
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KSB Pumps Company Limited
LETTER OF TRANSMITTAL
To: Ma’am Fozia,
Assistant Professor,
Hailey College of Commerce,
University of the Punjab, Lahore.
From: Muhammad Sarfraz
Respected Madam:
Here is the report on KSB Pumps Company (Pvt.) Limited that has been authorized me
by the department to prepare as a part of my internship assignment on Sep 2010. As
you will see that the report provides a cavernous insight of the organization. I have
discussed the working of concerned department and external and internal environment
of company in detail.
I would like to thank Mr. Munir Ahmad (Manager Projects Accounts), Mr. Amir Allyas
(Assistant Manager Accounts), Mr.Umair Javed (Accountant), Mr. Khurram Rana, Mr.
Tariq Shamsi, Mr.Usman Qayyum and others for their invaluable contribution in making
this report. I also appreciate your help and guidance in preparing this report.
It is a pleasure to accomplish this work and I have learned valuable lesson in preparing
this formal report. I am submitting report to you on September 05, 2011.
Yours sincerely,
Muhammad Sarfraz
Roll # 433
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KSB Pumps Company Limited
ACKNOWLEDGEMENT
Every word of praise and gratitude goes to Allah Almighty whose blessings and
bounties are innumerable to realize and count, and due respect to Holy Prophet
(peace be upon Him) who enables us to recognize our creator and whose teachings
are a role model for us to follow in the time of darkness and despair.
I am highly thankful to the staff members of KSB Pumps Company Limited; they really
cooperated with me and provide me their complete guidance. In Head Office, I observe
friendly environment between the employees and they also give me the friendly
environment to learn about the Accounts & Finance of the projects as well as Sales,
Admin & Human Resource Departments also. As The KSB’s rules and regulations are
very much strict and sensitive to their secrecy, even they have not take any
understanding from me and they let me handle their delicate operations.
My extreme and heartiest thanks is for Esteemed Mr. Munir Ahmad, Manager Projects
Accounts & Finance and Mr. Aamir Ilyas, Assistant Manger Projects Accounts &
Finance who guided me so well at every stage of this internship and also motivated me
and enhanced my confidence by providing useful knowledge to me . And especially
thanks to the Accounts Officer, Projects Accounts & Finance, Mr. Umair Javed who
added great contribution to my learning at KSB Pumps Company Limited.
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KSB Pumps Company Limited
PREFACE
The internship is an essential part of B.Com(HONOURS) degree program because
through this training students come to know the real difference between theory and
practice and they are also introduced to the outside business world. An important
requirement of this training program is to compile a report about the activities of that
organization in which the student has done the internship.
The internship provided me great opportunity to equip myself with knowledge,
techniques, application and tools used in an organization.The purpose of this Internship
Report is to share the process of learning and experience that I underwent during the
course of my Internship with KSB Pumps Company Limited.
My Internship was in the Projects Accounts & Finance Department at the Head Office of
KSB Pumps Company Limited. Internship mainly consisted of work related to Projects
Accounts & Finance. During the 6 weeks of internship I was able to grasp the
procedures, processes and dynamic tasks of the Projects Accounts & Finance activities.
My this experience in KSB Pumps will definitely help me a lot to make my foundation to
enter into a professional field and where I can apply my this experience diligently. This
period has a key importance in my career life because I gained a lot through this
internship and I will try to apply it in my future job. In future correspondence, my
internship period will guide me to choose my career path because it enables me to
know the work nature of multinationals. I learnt practically a lot during this internship
period which assists me to choose my practical field in future.
I hope this report will help in understanding various aspects and features of KSB Pumps
Company Limited and will be equally important for commerce students and persons
making future careers in multinationals.
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KSB Pumps Company Limited
EXECUTIVE SUMMARY
This report is about my internship program with KSB Pumps Company Limited. In this
comprehensive report, I have discussed about every major aspect of the KSB Pumps
Company, which I observed and perceived during my internship program. In this report
you will find the detail about the KSB Pumps Company right from its incorporation to the
current position. Along with it, the processes, policies and procedures of the KSB
Pumps Company are also discussed in detail. During my internship program, I mainly
worked with two departments: Projects Accounts and Finance Departments. These
departments have been discussed in detail and all the policies and procedures have
been described thoroughly. As the main purpose of internship is to learn by working in
practical environment and to apply the knowledge acquired during the studies in a real
world scenario in order to tackle the problems using the knowledge and skill learned
during the academic process. In this report the detailed analysis of the KSB Pumps
Company has been done and all the financial, technical, managerial and strategic
aspects have been evaluated to analyze the current position of the KSB Pumps
Company.
In the end the learning and experiences section consists of all the policies,
processes, practices and procedures which I have undergone through and learned
during my internship program. This report also contains my perceptions about the
employees’ satisfaction, motivation level and the working environment of the
organization.
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KSB Pumps Company Limited
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KSB Pumps Company Limited
THE HIGHLIGHTS OF KSB (Klein, Schanzlin & Becker) AG (AMAG)
GERMANY
KSB AG
Address:
Johann-Klein-Str. 9
D-67227 Frankenthal Germany
Telephone: (49) (6233) 86 29 05
Fax: (49) (6233) 86 34 01
http://www.ksb.com
Statistics:
Public Company
Incorporated: 1871 as Frankenthaler Maschinen-& Armatur-Fabrik Klein, Schanzlin &
Becker
Employees: 12,252
Sales: EUR 1.18 billion ($1.47 billion)
Stock Exchanges: Frankfurt Dusseldorf
Ticker Symbol: KSB
NAIC: 333911 Pump and Pumping Equipment Manufacturing; 332919 Other Metal
Valve and Pipe Fitting Manufacturing
Company Perspectives:
KSB products' success stems in large measure from the company's own Research and
Development. Specialists there put major emphasis on the continual improvement and
automation of pumps and valves, and on the reduction of life cycle costs.
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KSB Pumps Company Limited
Key Dates:
1871: Three entrepreneurs found the Klein, Schanzlin & Becker.
1909: A presence in London is established.
1924: Production subsidiary is established in Homburg/Saar.
1930: KSB acquires major competitor AMAG in a hostile takeover.
1939: Jacob Klein gains a majority stake in KSB.
1942: Otto Klein-Kühborth becomes Jacob Klein's heir.
1949: French administration of the company ends, and dismantling after World War II is
prevented.
1960: Otto Klein-Kühborth transfers his majority stake in the company to the nonprofit
foundation KSB Stiftung.
1971: Wolfgang Kühborth takes over as CEO.
1986: KSB acquires a majority share in French pump manufacturer Pompes Guinard
S.A.
1988: The company moniker is shortened to KSB AG.
1992: KSB gains a majority stake in Georgia-based GIW Industries Inc.
1995: KSB acquires a majority share in Chinese pump manufacturer Shanghai Pump
Works.
2003: The company takes over Dutch pump maker DP industries B.V.
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KSB Pumps Company Limited
KSB Code of Conduct
Why we need a Code of Conduct
Dear employees,
In the global competitive environment, our customers and business partners expect, in
addition to high-quality products and services, professional and honest behavior that
includes compliance with legal regulations and ethical standards. By meeting these
expectations we cement confidence in our company and the KSB brand. At the same
time, we maintain the values that have characterized KSB’s activity for decades.
We are jointly responsible for our company’s reputation. Improper behavior by even one
person can damage our reputation for a long time. That is why we need a binding
concept of what defines our shared understanding of professional and honest business
behavior. We have summarized the relevant guidelines and key rules in the following
Code of Conduct. We will keep a close eye on future developments in the legal and
business environment and adapt the Code as required.
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KSB Pumps Company Limited
The KSB Code of Conduct offers orientation and assistance but also contains the
binding requirements our actions need to be based on. Fully committed to these rules,
we expect consistent adherence to the following “core values” from our managers and
employees at all levels and will monitor this in an appropriate manner.
We are confident that you will all comply with the requirements laid down in this Code of
Conduct.
Dr. Wolfgang Schmitt
Chairman of the Board of Management of KSB Aktiengesellschaft
1. Purpose and scope:
It is basically a matter of course that companies, their representatives, managers and
employees act in compliance with the applicable laws. Ensuring that this is the case is
becoming ever more difficult due to the myriad of requirements and the increasing
number of legal provisions and regulations. All activities that help to ensure behavior by
a company and its employees that meets the regulations and laws in day-to-day
practice and to prevent incorrect behavior are referred to as “compliance”. This also
includes observing contractual agreements and voluntarily agreed commitments.
The Code of Conduct constitutes the basis of compliance activities at KSB. It describes
the key legal and business policy principles that we use in our relationships with
customers, suppliers and other business partners as well as our internal cooperation. It
also determines our conduct on financial markets and in the various countries in which
we work. The Code aims to support employees in their day-to-day work.
Proper conduct particularly involves acting with integrity, reliability and transparency.
Your observance of these core values is as much a requirement for justifying the trust
our business partners place in us and being a successful market player as is the high
quality of our products and services. KSB’s reputation is more important than the
individual success of any particular business transaction or person.
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KSB Pumps Company Limited
The Code of Conduct is compulsory for all employees at all levels. It covers all
organizational units and Group companies where KSB Aktiengesellschaft directly or
indirectly holds an interest of more than 50%. If the interest held is lower we will
encourage the relevant company to adhere to similar standards.
Some of the requirements listed in the KSB Code of Conduct are supplemented and set
out in greater detail by Group Guidelines, e.g. for cartel law and preventing corruption.
These documents are available both on the KSB intranet and with the Management of
KSB Group companies; it is the responsibility of each employee to be familiar with the
Group Guidelines relevant to his or her activity.
In some countries business practices do not meet the requirements of this Code of
Conduct. Nevertheless, we expect our employees to use these rules for guidance on
the basis of the relevant applicable laws. Regional regulations shall have priority if and
to the extent that they exceed these requirements; the relevant regional Management
shall outline any variations.
2. Basic rules of conduct:
2.1 Working with each other;
The relationships between managers, colleagues and employees in all corporate
divisions and regions should be characterized by professionalism, mutual respect and
fairness. In this we take account of cultural differences. It is our declared goal to not
disadvantage anybody based on such individual characteristics as age, race, religion,
skin color, gender, sexual orientation, disability, national origin, heritage or marital
status. In the working environment we do not tolerate discrimination, harassment or
reprisals. This also applies to our contacts with people outside KSB, for example job
applicants.
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KSB Pumps Company Limited
2.2 Acting as role models;
The members of the Board of Management and Supervisory Board of KSB
Aktiengesellschaft as well as the representatives of Group companies and others who
exercise management responsibility shall act as role models for others. They are
expected to observe the principles laid down in this Code of Conduct with special
commitment, as well as provide support and ensure they are complied with in everyday
work life.
2.3 Communication and Transparency;
Reports and communication to those within the company, business partners, investors,
the public, official organizations and authorities shall be understandable, truthful and
submitted in good time; they must also be in compliance with the applicable laws and
regulations. Our financial statements shall correctly document business transactions.
In order to avoid a lack of clarity and/or misunderstandings, only expressly authorized
people can provide company statements. This applies in particular to communication
with the media, investors and analysts.
We cooperate with official organizations and authorities and support their work – whilst
maintaining our rights.
As a matter of principle we do not provide information on customer relationships,
matters relating to an individual employee, competitors or ongoing investigations; as a
matter of principle we do not comment on rumors.
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KSB Pumps Company Limited
2.4 Managing business;
Law-abiding Behavior
We operate our business in such a manner as to comply with the applicable laws, other
binding regulations and obligations that we have entered voluntarily. It is in particular
the responsibility of the relevant line manager to give employees all the necessary
instructions and support, e.g. access to all internal guidelines, and if necessary to
explain them.
Preventive legal Advice
In order to reduce risks employees should obtain advice from the relevant Legal Affairs
department if there are legal issues in question.
Use of Company Resources
Each employee shall handle the company’s resources, such as machinery, fixtures and
office materials, responsibly. Private use shall be prohibited as a matter of principle and
shall require approval in each individual case. In particular, the Group’s guidelines
governing the use of telecommunication resources and computers shall be complied
with.
Innovative products and solutions are of great importance for the development of the
company. Inventions made by employees or third parties for the company must be
legally protected by reasonable means. No employee may disclose information on the
company’s know-how and expertise (e.g. design drawings) or business secrets to
project partners or other third parties without being expressly authorized to do so.
Corruption, Bribery
When competing for orders KSB bases its decisions on objective economic criteria such
as quality and price.
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KSB Pumps Company Limited
Our employees are not permitted to offer or give third parties direct or indirect
advantages to exert an unfair influence on economic decisions, whether through
financial payments or other means. No employee may use his or her employment to
demand, accept or otherwise acquire unfair advantages. Employees who sign contracts
with consultants, agents or similar third parties must ensure that the latter also comply
with these rules.
Gifts, favors, hospitality or other benefits may only be given or accepted if they do not
infringe applicable laws or KSB guidelines and neither damage the public reputation of
KSB nor the probity of the employee if they become known publicly.
In cases of doubt, the matter must be discussed and agreed with the line manager or
the relevant Compliance Officer.
2.5 Business Relationships:
Awarding Contracts
KSB maintains fair dealings with all business partners. Suppliers and service providers
are selected using objective and traceable criteria as well as on the basis of comparing
quotations.
Business Incentives
Commissions or benefits (e.g. discounts or price reductions) related to goods and
services are permissible business incentives. Their use always requires – in addition to
comprehensive documentation – great care and the observation of the relevant legal
provisions and regulations.
Payments
Payment for goods and services received shall be made directly to the relevant
contractual partner and in general in the country where it is based. Cash payments
should not be made except in documented individual cases. Before agreeing on other
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KSB Pumps Company Limited
payment
arrangements
the
relevant
Legal
Affairs
department
or
company
representatives (Advisory Board, Board of Management etc.) must be informed.
2.6 Conflicts of Interest:
Secondary Employment
Holding a second job that is not simply of marginal scope requires the prior consent of
the relevant Human Resources department. Secondary employment with customers,
suppliers or competitors always requires prior consent. Consent will not be given as a
matter of principle if the secondary employment may adversely affect work
performance, contradicts the employee’s duties or if there is a risk of a conflict of
interests.
Interests held in Competitor, Customer and Supplier Companies
Material interests held by employees in a competitor, customer or supplier company of
KSB require the consent of the Human Resources department Material interests held by
close family members in a competitor, customer or supplier company must be notified to
the responsible Compliance Officer if there is the possibility of a conflict of interests for
the employee. Spouses, registered partners, children receiving support and other
relatives with whom the employee has lived in the same household for at least a year at
the time the stake is purchased are defined as close family members. A material
interest is defined as 10% of the shares or more, for listed companies 1% or more.
Transactions with Employees or Family Members
There should be no KSB transactions with employees or their family members if they
have not been agreed individually in advance by the employee’s line manager or the
relevant Management of the company. It should be ensured that the employee
concerned is not involved in making the decision.
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KSB Pumps Company Limited
Business Opportunities
No employee may exploit KSB business opportunities to his or her own advantage or
the advantage of third parties.
2.7 Insider Information:
Insider information shall always be treated in strict confidence and relates to facts the
knowledge of which could affect an investor’s decision about the purchase or sale of
listed shares (or derivatives thereof). This applies, for example, to knowledge about
material planned acquisitions or sell-offs, strategic alliances, major agreements or likely
differences in corporate profits to those published.
In line with the legal provisions and regulations applicable in this context, KSB
employees must ensure that no insider information is used when trading shares or
derivatives (including that relating to business partners) and that this information is not
disclosed to third parties.
2.8 Confidentiality:
Information that KSB has not made public (e.g. technical knowhow and expertise) shall
be treated in strict confidence as a matter of principle. It must not be disclosed to unauthorized third parties (including family members and friends) during or after the end of
the employment relationship.
It is prohibited to use confidential business information during or after the end of the
employment relationship for personal advantage, the advantage of third parties or the
disadvantage of KSB.
Each employee shall handle confidential data responsibly and with foresight, for
example store it carefully rather than “leave it lying around”, in order to protect it from
access by third parties.
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KSB Pumps Company Limited
2.9 Social Commitment:
KSB’s social commitment includes making donations, mainly for social or cultural
purposes. Donations are made in a transparent manner and free of personal interests
on the basis of traceable criteria and the corresponding internal guidelines. All donation
processes are documented.
As a matter of principle KSB does not get involved in party political activities. This
includes financial support and benefits for parties, political organizations and their
representatives as well as activities or events on behalf of or on the premises of KSB.
However, our employees are always free to get involved appropriately in political
activities as private individuals and citizens – outside working hours.
3. Special Issues:
3.1 Competition and Cartel Law;
When dealing with competitors and business partners we follow the rules of fair
competition. These are the basic requirement for performance-based market
regulations. Any and all actions that aim to create an economic advantage in a manner
that contravenes competition law or using cartel agreements are prohibited. This relates
in particular to agreements among competitors to fix or control prices, boycott certain
suppliers or customers, share customers or markets or restrict the production or sale of
products.
Infringing current competition law can result in substantial fines, risk of damages and
loss of image that harm our company and its position in the marketplace. In addition, the
affected employees themselves will have to expect legal consequences.
3.2 International Trade and Export control
KSB observes applicable international trade provisions. These include customs
regulations and trade and production controls. Each employee shall follow the internal
rules on export control as well as the legal provisions and regulations.
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KSB Pumps Company Limited
Without approval by the relevant authorities, KSB does not export or import materials,
products or technologies that are subject to statutory control and require import or
export permits.
3.3 Tax Laws
As an internationally operating Group, KSB observes all relevant tax law provisions. It
does not support improper behavior by business partners. We set transfer prices using
globally recognized principles and compare them with the terms and conditions of
external third parties.
Employees on international assignments are obliged to comply with the tax laws that
apply to them personally in line with our deployment regulations.
3.4 Environmental Protection
Compliance with high environmental standards is an important element of our corporate
policy. With an effective environmental protection approach, KSB bears its corporate
responsibility not only to secure the health of its employees but also the natural basis for
life for everybody.
3.5 Occupational Health and Safety
KSB is committed to providing a safe working environment for employees. The strict
observance of the relevant regulations on occupational health and equipment safety is a
basic prerequisite for responsible cooperation in the company. We also counteract risks
by voluntary, preventive measures.
3.6 Safety and Quality of Products
As a leading technology company, KSB provides customers with innovative solutions for
their needs. We research, develop and work to benefit people who trust – and have
every right to trust – in the perfect condition of our products and services. Meeting the
high safety and quality requirements of our customers is one of the key corporate
objectives.
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KSB Pumps Company Limited
3.7 Data Privacy and Protection
KSB respects the rights of employees and third parties relating to their personal data.
The company takes the necessary precautions to ensure that personal data is only
recorded, processed and used in strict compliance with the relevant applicable
provisions.
3.8. IT Security
As a result of the intensive use of IT systems, the business activity of KSB is heavily
dependent on their operation and availability. In order to limit the resulting potential risks
the applicable guidelines on IT security must be observed strictly.
4. Implementation:
Each KSB employee consciously and actively contributes to implementing the principles
of the Code of Conduct correctly in his or her area of work. The aim is to avoid problems
as defined by the Code or to identify them early on and find a quick solution. Employees
who have questions on specific situations can refer to the following at any time.
Information and Control Duties by Line Managers
Each line manager ensures that employees are informed about the content of the KSB
Code of Conduct and comply with its stipulations. Employees can discuss any questions
with their line manager or relevant Compliance Officer.
Employee Duty of Notification if Variances Become Known
If Group employees are or become aware of infringements of the KSB Code of Conduct,
they are expected to inform their line manager or the relevant Compliance Officer.
Group Compliance Officer
The Group Compliance Officer, Dr. H. Stefan Wiss (Tel.: +49 6233 86-2266; hansstefan.wiss@ksb.com), supports the implementation of the Code of Conduct throughout
the Group. In this function he reports directly to the Chairman of the Board of
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KSB Pumps Company Limited
Management but does not receive instructions from him. In addition, other Compliance
Officers may be appointed, e.g. with specific technical or regional responsibilities.
If the Group Compliance Officer determines that there is reasonable initial suspicion of
an infringement of the provisions of the Code of Conduct he may request other Group
departments to assist in clarifying the matter. Information on any incorrect behavior will
be treated anonymously on request in order to avoid disadvantages for the person
providing the information.
Ombudsman
If employees are or become aware of facts relating to criminal or cartel law, instead of
the relevant Compliance Officer they may also inform the law firm commissioned for this
purpose by KSB. The law firm will forward such information to the Group Compliance
Officer but without naming the informant in order to ensure confidentiality in such cases
(ombudsman system). Contact can be made from any country, either in German or
English, and both by telephone and in writing. The contact is;
Dr. André Grosze Vorholt
Luther Rechtsanwaltsgesellschaft mbH
Landshuter Allee 680637 Munich Germany
Mobile +49 152 01624700
Fax +49 89 23714-110
E-mail: andre.groszevorholt@luther-lawfirm.com.
Sanctions and Consequences
Infringements of the KSB Code of Conduct may result in employment, civil or criminal
law consequences for the employee concerned and will also be treated in line with the
usual corporate practice.
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KSB Pumps Company Limited
Corporate Directive
on
Prevention of Corruption
I. Purpose and Scope of Application of This Corporate Directive:
1. This Corporate Directive provides standards of behavior for all employees of the KSB
Group for the avoidance of corruption. It is intended to help employees conduct
themselves correctly in specific situations in order to avoid damage to themselves and
the company.
2. In all their business activities and decisions, our employees shall at all times observe
the applicable laws and regulations (including the relevant KSB regulations).
3. This Corporate Directive is based on German legislation, and is accordingly
mandatory for all German employees of the Group and all Group employees working in
Germany.
4. In addition, all other employees of the KSB Group shall also observe the stipulations
of this Corporate Directive on the basis of the relevant applicable law, except where
stricter provisions are applicable to the actions of the employees on account of their
nationality or on account of the laws of the country in which they act. In such case, the
stricter standards take precedence over this Corporate Directive.
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KSB Pumps Company Limited
II. What is corruption?
1. In general, the term corruption is understood to mean the acceptance or granting of
advantages or benefits for the purpose of the unfair influencing of business or official
decisions.
2. Corruption is a crime. Both the recipient and the grantor of the advantage or benefit
make themselves criminally liable.
3. Particularly strict provisions apply in relation to dealings with public officials.
Corruption is, however, also prohibited in private industry.
4. Corruption does not just begin with the acceptance or granting of benefits. Even the
offer, promise, demand or acceptance of a promise already results in criminal liability
and all the consequences associated therewith.
5. The prohibition of corruption applies worldwide.
III. Consequences for employees and the company:
Corruption may have far-reaching consequences for employees and the company:
1. Consequences for employees
1.1 A person who is guilty of corrupt behavior – whether through the granting or the
acceptance of advantages – commits a crime. In the course of investigations, searches
are frequently carried out of private homes and places of work, and interrogations
conducted of work colleagues and supervisors. A person who is found guilty of
corruption may be sentenced to several years of imprisonment or a high fine.
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KSB Pumps Company Limited
1.2 Customers, contractors and competitors may suffer damage as a result of
corruption. These parties may claim damages from the offenders personally.
1.3 Through corrupt behavior, employees breach their obligations as towards their
employer. As a rule, corrupt behavior entitles the employer to dismiss the employee
without notice.
2. Consequences for the company management
2.1 If employees are guilty of corrupt behavior which would have been prevented or
made considerably more difficult through proper supervision on the part of the company
management, the management may have an administrative fine imposed upon it, and in
individual cases even be made criminally liable.
2.2 The company management is therefore obliged by law to counteract corrupt
behavior, to carry out regular checks and controls, to investigate cases of suspicion and
penalize breaches accordingly.
3. Consequences for the company
3.1 If employees are guilty of corrupt behavior, a high fine may be imposed on the
company. This fine may, in certain circumstances, reach the amount of the sales
revenue generated by the transaction affected. The company may also be excluded
from public contracts.
3.2 If partners to a contract or any competitors have suffered damage by the corrupt
action of an employee, the company may face a civil law claim for damages.
3.3 According to the credit terms of the credit insurance company Euler Hermes
Kreditversicherung, the insurance cover lapses in relation to exports if the applicant has
offered, promised or granted unlawful benefits in connection with the relevant contract.
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KSB Pumps Company Limited
The applicant is still charged with the insurance fees. In addition, it faces legal
consequences on account of the attempt to obtain insurance cover by false pretences.
IV. The Position of KSB
1. KSB is determined not to tolerate any corrupt practices, either through employees or
business partners. Infringement of the provisions of this Corporate Directive will lead to
the legal and employment consequences appropriate in the individual case.
2. KSB prohibits any and all participation in or tolerance of bribery or any other form of
corruption.
3. KSB will continuously improve the controls for the avoidance and exposure of
corruption in order to detect and eliminate possible weak points that promote corrupt
behavior.
4. The basic principles addressed in the KSB Code of Conduct require that in each
commercial activity even the appearance of corruption or corruptibility shall be avoided.
5. KSB expects all employees to regard it as their personal task to contribute to the
avoidance and exposure of corruption in the KSB business environment, and thereby to
strengthen KSB’s reputation.
V. Standards of conduct for the prevention of corruption:
The following rules of conduct are intended to serve the avoidance of even the
appearance of corrupt behavior:
1.Dealings with customers and suppliers
1.1 Suppliers shall be selected exclusively according to principles of competition, i.e. in
particular by reason of the price, the quality and suitability of their performance.
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KSB Pumps Company Limited
1.2 KSB employees shall immediately reject any attempt on the part of suppliers to
unfairly influence the placing of orders through the offer, promise or granting of personal
advantages.
1.3 KSB maintains its market share exclusively through the high quality of its products
and services, customer friendliness and an attractive price/performance ratio.
1.4 KSB employees are prohibited from making any attempt to unfairly influence
customer decisions through the offer, promise or granting of personal advantages.
2. Presents and benefits to public officials
2.1 KSB employees are prohibited from offering, promising or granting monetary or
material benefits of any kind whatever to public officials, however insignificant such
benefits may be. The reason for this lies in the particularly strict rules which generally
forbid the offering or granting of any benefits to a public official, regardless of their
value.
2.2 The strict provisions relating to public officials and authorities apply first of all to all
holders and institutions of public power, such as federal and state governments, district
authorities, municipal authorities, facilities of the German Federal Armed Forces, courts,
institutions, corporations and foundations established under public law, employees of
the above-mentioned bodies, officials, soldiers and judges (the examples relate to
Germany).
2.3 The strict provisions relating to public officials and authorities further apply to
privately organized establishments with public tasks or state participation, such as
public transport or utility companies, public hospitals or waste disposal companies, as
well as to their employees.
2.4 The prohibition of the granting of benefits under 2.1 also applies to relatives of the
public officials mentioned in 2.2 and 2.3, and all other persons who may be suspected
of accepting a benefit on behalf of a public official.
2.5 Exceptions on an individual basis require the prior consent of the responsible
Compliance Officer.
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KSB Pumps Company Limited
3. Presents and benefits in other business dealings
3.1 Outside the scope of application of the foregoing clause V.2., business partners
within the meaning of the following provisions are persons or businesses and their
management executives, employees and representatives with whom KSB maintains,
has maintained or might in future maintain business relations.
3.2 KSB employees shall not demand, either for themselves or third parties, any
invitations to meals or events, any presents, other benefits, personal services or any
other favors from business partners.
3.3 Neither KSB employees nor the immediate members of their families may receive
any monetary presents – regardless of their amount – from business partners.
Conversely, KSB employees shall not offer, promise or give any monetary presents to
business partners.
3.4 Notwithstanding the above, KSB, within the scope of the applicable laws, takes into
account the concept of social custom in the case of the acceptance and granting of
presents or benefits. Each culture and society has traditional manners of behavior which
are regarded as customary; the failure to observe the same would on occasion even be
considered impolite, and convey a low estimation of the opposite party. Accordingly, as
a rule of thumb, the following applies: The receipt or granting of presents or benefits is,
as a rule, impermissible if the same no longer fall within the scope of what is socially
customary, i.e. if the boundaries of business custom and also the personal status of the
parties involved are exceeded – taking into account the respective level in the hierarchy
and the reason for the present or benefit. The specific provisions to be observed at KSB
in this connection are set out in the following sections.
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KSB Pumps Company Limited
3.5 The acceptance, offer, promise or granting of any material benefits is only
permissible where any possibility is excluded that business decisions might be
influenced thereby. Nor may the impression be created that any influencing is intended
or possible. Subject to these conditions, the acceptance and granting of material
benefits is always permissible up to a value of 30 Euros; higher amounts so long as
they remain within the customary social framework. Irrespective of this, the offer,
promise or granting of material benefits is always impermissible if there is reason to
assume that acceptance of the benefit by the recipient is prohibited by company
regulations.
3.6 Provided any possibility is excluded that business decisions might thereby be
influenced or a corresponding impression thereby be created, KSB employees may, on
special business occasions, both participate in and issue business catering invitations
within the customary social scope.
3.7 The participation in events and trips the costs of which are borne by third parties is
permissible for KSB employees if:
 A business reason exists, and the participation coincides in the
individual case with the interests of KSB, and
 The customary business framework is not exceeded, and
 Any possibility is excluded that business decisions might thereby be
influenced or a corresponding impression be thereby created. The
participation in such events and trips which exclusively or primarily
pursue social purposes (of a cultural, sporting etc. nature) is
permissible only following the prior consent of the respective superior.
3.8 Invitations to business partners by KSB to trips or events are permissible if the same
remain within the customary social framework, and provided any possibility is excluded
28
KSB Pumps Company Limited
that business decisions could thereby be influenced or a corresponding impression be
thereby created.
3.9 In cases of doubt, the prior consent of the responsible Compliance Officer shall be
obtained.
4. Involvement of agents and consultants
Fees for agents and consultants are in practice frequently open to the suspicion that
they serve to conceal corrupt benefits. In order to preclude even the appearance of
unfair behavior, the following points in particular shall therefore be subjected to a critical
examination when involving agents and consultants:
4.1 Seriousness of the agent / consultant: The basic principle reads: "(Better) know your
consultant"! A critical examination of quality and reputation is always necessary. The
location of the head office of a consulting firm in well known tax havens such as the
Cayman Islands or the Channel Islands, but also Liechtenstein, Switzerland and
Luxembourg, should arouse suspicion unless reasonable grounds for such location are
evident.
4.2 Nature of the activity and documentation: The performances owed on the part of the
agent / consultant shall be laid down in detail by contract (e.g. the negotiation on a
case-by case basis of certain business transactions or certain financing). The KSB
employee responsible shall record in writing the performances received, and confirm the
same to the payee when remunerating the performance. Running activity reports or file
notes may serve in this respect as documentary proofs.
4.3 Reasonableness of the consideration: The remuneration of the agent / consultant
shall always be examined as to its reasonableness and conformity with market
29
KSB Pumps Company Limited
conditions. The relevant industry, region and the nature of the performance may, inter
alia, be used as criteria in this respect. In the case of a bank transfer of the
remuneration, the agent / consultant shall always be indicated as contractually agreed
recipient of the payment if the payment is not actually made direct to him - as will,
however, normally be the case.
4.4 Through the use of compliance clauses it should be contractually agreed that agents
/ consultants shall not use the money received from KSB for corrupt behavior, and that
KSB shall also not tolerate any other corrupt practices on the part of the agents /
consultants. Corrupt behavior / practices shall - as far as possible – be subject to
penalties and the right to extraordinary termination of the contract.
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KSB Pumps Company Limited
KSB Pumps Company Limited Pakistan
History
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.
KSB name stands for the highest standards of product and service quality. KSB
Pakistan was established in 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. The Company is ISO 9001 certified since 1994 and lately
has added ISO-14001 and 18001 certifications for complete Integrated Management
System certified by TUV, Germany. Now the Company employs over 400 people and
operates through its fully functional sales offices in Lahore, Karachi, Quetta, Rawalpindi,
Hassanabdal, Peshawar and Multan and through a dealership network, KSB Partners.
In addition, the Company has full-fledged Service Department comprising qualified and
experienced personnel capable of undertaking turnkey installation jobs and O&M
Contracts.
KSB believes in continuous innovations and adds new solutions for the customers in its
production range, particularly to meet the requirements of sugar, paper and other
process and chemical industries apart from meeting the requirements of drinking water
supply, sewage disposal and surface drainage schemes.
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KSB Pumps Company Limited
KSB pumps are produced strictly in accordance with the design and specifications of
KSB AG, Germany, 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
castings and is a leading supplier of tractor/automobile castings in the country
tractor/automobile castings in the country.
At KSB Pumps Company Limited, Pakistan, we see Corporate Social Responsibility as
the link that joins the Organization, including internal and external stakeholders to a
brighter future of Pakistan. Working under the name of KSB Care, our Corporate Social
Responsibility program is focused to provide a sustainable infrastructure and basic
amenities to underprivileged students at schools in the rural areas of Pakistan. Our
commitments towards our country shines through the efforts we put in our business and
our corporate social responsibility.
Company has recently completed five very successful decades in the country and
become the first Asian Subsidiary of KSB AG, Germany to have this honor. It is a
moment of great pride and joy for the Management and team of KSB Pakistan to
celebrate 52 glorious years of setting standards, and we share this delight with all our
business partners, who have helped us grow and strengthen over five decades.
KSB has been accepted as a market leader in its line of business and is a benchmark
today for new entrants. The Company’s products, quality standards, people, business
partners and leadership have all contributed to imprint company’s score in the history of
Pakistan by completion of 50 successful years of operation in the country.
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KSB Pumps Company Limited
KSB PUMPS COMPANY LIMITED PAKISTAN
Vision Statement
“The main aim of KSB Pumps Company is to provide maximum satisfaction
to his customers by providing goods and services to them .We also aim to
outperform our competitors by achieving and maintaining leading
competitive Position in attractive markets, at the same time sustain
profitable growth to secure our long term future.”
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KSB Pumps Company Limited
“We manufacture and market a selected range of standard and engineered pumps and
castings of world class quality. Our efforts are directed to have delighted customers in
the water, sewage, oil, energy, and industry and building services sectors. In line with
the Group strategy, we 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 our success is being a clear market
leader, achieving quantum growth and providing attractive returns to stakeholders.”
34
KSB Pumps Company Limited
Goals & Objectives
The Goals and Objectives of the company are listed below:
 The main goal of this company to build strong customer relationship by giving
good facilities.
 Become a clear market leader, achieving quantum growth and providing
attractive returns to stakeholders
 Manufacture and market a selected range of standard and engineered pumps
and castings of world class quality.
 Develop a world class human resource with highly motivated and empowered
employees
 Develop into a centre of excellence in water application pumps and be a strong
regional player.
Strategic Planning
The strategic objectives and plans of KSB Pumps Company Limited are discussed
below:
 The company plans to grow more strongly than the market
 Focusing business lines by achieving above average profitability
 Plans to gain or build on a leading competitive position
35
KSB Pumps Company Limited
 Plans for high sales potential
 Contribution to the revenue and profitability of the group
Core Values
The core values of KSB also depict the environment in which everyday business
is run and how the management with the help of employees manages to
complete the tasks, successfully.
These values are also a model for the
customers to use as a means to get an overview of the organization and make
the best possible choice.

 We believe in self-esteem of our customers, suppliers and
employees.
 We work as a team where every member owns the process with

an entrepreneurial spirit.
  We work with professional honesty and integrity.
  We trust our employees and appreciate their contributions.
 We strive for continuous improvement to achieve excellence in all

spheres of our activities.
 We are an equal opportunity employer and follow merit in human

resources development.
 We fulfill moral obligation towards society and environment.

 Their imagination forms the foundation for our success and it
36
KSB Pumps Company Limited
reflect from their culture and work.
Code of Business Principle
KSB is the market leaders and has completed its 50 glorious years in Pakistan. It has
been working on the following principles that have helped the company to maintain its
position. These have been explained below
Empowerment: We are Empowered yet Accountable for our responsibilities and
objectives.
Communication: We believe in clear, effective, Accurate and Timely Communication.
Transparency: We exercise openness while adhering to systems & procedures and
maintaining records.
Synergy: For us Synergy means 1+1=11 not 2, we have mutual Trust and Complement
each other in fulfilling our responsibilities.
KSB pumps introduce 5 more new values in the organization i.e.
 Appreciation
 Honesty
 Trust
 Professionalism
 Responsibility
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KSB Pumps Company Limited
Environment, Health & Safety Policy
KSB's vision allows for no compromises in our commitment to safety, health and
responsible care for the environment.
Every manager has the responsibility to maintain a safe working environment in which
risks arising from the manufacture, storage, distribution and use of the Company's
products are identified and controlled.
The health and safety of our employees, of those who from time to time work with the
Company, of our customers and of the general public are of fundamental importance to
us and are necessarily safeguarded.
38
KSB Pumps Company Limited
39
KSB Pumps Company Limited
MANAGEMENT COMMITTEE
Mr. Mohammad
Masud Akhtar
C. E.O
Mr. Sajid Mahmood Awan
Director Finance & Company
Secretary
Mr. Nadeem Hamid Butt
Director Production & Projects
Mr. Kamran Khan Mangol
Director Sales, Marketing &
Product Management
Mr. Saeed Zafar
GM Customer Service
Syed Kamran Hassan
General Manager Material
Ms. Sanam Mujeeb Sheikh
Manager Human Resource
40
KSB Pumps Company Limited
SALES OFFICES
Lahore
Rawalpindi
16/2 Sir Aga Khan Road, Lahore.
309, A3 Peshawar Road, Westridge 1,Opp. Valley
Clinic, Rawalpindi.
Ph: (042) 111 572 786, 36304173
Fax: (042) 36366192, 36368878
Ph: (051) 111 572 786
Fax: (051) 5472612
Email: info@ksb.com.pk
Email: ksbrwp@ksb.com.pk
Karachi
Multan
501, 5th Floor, Faiyaz Centre, 3A,
SindhiMuslim Cooperative
85A, Qasim Road, Opp. Metro
Housing Society, Opposite
Plaza, Multan Cantt.
FTC Building, Shahrah-e-Faisal, Karachi.
Ph: (061) 111 572 786
Ph: (021) 111 572 786
Fax: (061) 4541784
Fax: (021) 34388302
Email: ksbmul@ksb.com.pk
Email: sohaib.rathore@ksb.com.pk
Quetta
Peshawar
Office No. 7, 3rd Floor, The Mall
House No. F-1/5, First Floor,
Towers, 35 The Mall, Peshawar.
Al-Zain Centre, Zarghoon Road, Quetta.
Ph: (091) 111 572 786
Ph: (081) 111 572 786
Fax: (091) 5278919
Fax: (081) 2830445
Email: ksbpsh@ksb.com.pk
Email: ksbqta@ksb.com.pk
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KSB Pumps Company Limited
COMPANY INFORMATION
Board of Directors
 Dr. Augus Lee
Chairman
 Mohammad Masud Akhtar
Managing Director
 Jan Stoop
 Tonjes Cerovsky
 R. D. Ahmad
 Sajid Mahmood Awan
 Aizaz Sarfraz
 Hasan Aziz Bilgrami
(Nominee NIT)
Company Secretary
 Sajid Mahmood Awan
Management
 Mohammad Masud Akhtar
Chief Executive Officer
 Sajid Mahmood Awan
Finance & Administration
 Nadeem Hamid Butt
Production & Projects
 Kamran Khan Mongol
Sales, Marketing & Product Management
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KSB Pumps Company Limited
Auditors
A.F. Ferguson & Co.
Chartered Accountants
Legal Advisors
Mandviwala & Zafar
Bankers
NIB Bank Limited
Bank Alfalah Limited
MCB Bank Limited
Deutsche Bank AG
United Bank Limited
National Bank Of Pakistan
Audit Committee
Hasan Aziz Bilgrami
Chairman
R. D. Ahmad
Member
Tonjes Cerovsky
Member
Registered Office
16/2 Sir Aga Khan Road, Lahore - 54000.
Ph: (042) 36304173, 36370969,
Fax: (042) 36368878, 36366192
Email: info@ksb.com.pk
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KSB Pumps Company Limited
Works
Hazara Road, Hassanabdal
Ph: (057) 2520236
Fax: (057) 2520237
Email: info@ksb.com.pk
Service Office
Gardee Trust Building, Napier Road, Lahore.
Ph: (042) 37364845, 37238343, 37311661, 37355238
Fax: (042) 37236922
Email: saeed.zafar@ksb.com.pk
Workshop
Plot No.6, Street No.26, Korangi Industrial Area,
Near G.P.O, Korangi, Karachi.
Ph: (021) 35070498
Email: munir.iqbal@ksb.com.pk
Share Registrar
Central Depository Company of Pakistan Limited.
CDC House, 99-B, SMCHS, Shahra-e-Faisal,
Karachi-74000
Tel: (021) 111-111-500
Fax: (021) 34326053
44
KSB Pumps Company Limited
NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given that the 54th Annual General Meeting of the members of the KSB
Pumps Company Limited, will be held on Tuesday 26 th April, 2011, at 11:30 am at Hotel
Holiday Inn,25-26 Egerton Road, Lahore, to transact the following business:
1. To confirm the minutes of Annual General meeting held on April 30, 2010.
2. To consider and adopt the audited accounts of the company for the year ended
December 31, 2010 and report of Auditors and Directors thereon.
3. To approve and declare Dividend of 12.5% for the Financial year ended
December 31, 2010 as recommended by the Directors.
4. To appoint Auditors and fix their remuneration. M/s A.F.Ferguson &Co.,
Chartered Accountants, the retiring auditors offer themselves for re-appointment
as auditors of the company.
5. To elect seven (7) Directors as fixed by the Board, in accordance with the
provisions of the companies ordinance, 1984, for a period of three years
commencing from April 25, 2011 in place of following retiring Directors.
 Mr. Tonjes Cerovsky
 Mr. Muhammad Masud Akhtar
 Mr. Jan Stoop
 Mr. Sajid Mahmood Awan
 Mr. Werner Spiegel
 Mr. R.D. Ahmad
 Mr. Aizaz Sarfraz
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KSB Pumps Company Limited
DEPARTMENTS
Production and Services Department
KSB is mainly concerned with the manufacture of different valves and pumps. Different
pumps, valves and spares are designed according to the requirement of a particular
industry. Customers, according to their needs, places orders for a specific product
which are then delivered to them.
KSB has divided its products into five basic
categories which are as follows:
  Industry
  Building Services
  Waste Water
  Water
 Energy
The infrastructure improvement at the factory continued throughout the year as per
master plan. A key seating machine was added in the machine shop which improves
operational efficiency by reducing the lead time in key way cutting and optimizing the
outsourced process through cost saving . The new production office was renovated
on modern concepts allowing the engineers tohave a better view of the production

operation, while providing an excellent work environment.
The cafeteria for employees at Hassanabdal has been renovated to provide a
healthy atmosphere during lunch and tea breaks, enabling the teams to be truly
rejuvenated. A dedicated shop, for assembling the ultrafiltration units for CDWA
project is now fully operational to manufacture the units in large quantities and fully
support the requirements of the this mega project.
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KSB Pumps Company Limited
Naturally close to our customers
From a German company that came in existence more than 130 years ago to
manufacture pumps and valves, KSB has grown to be a global leader. Today KSB
reaches you with more than 12000 employees, 30 production sites and 60 marketing
companies worldwide. As well as making its presence felt in more than 100
countries through agencies and collaborative ventures.
KSB aims to get processes flowing. This philosophy needs a dedicated commitment
to continuous development of products and services in all areas of pump and valve
technology.
KSB's modern systems are installed all over the world. Whatever fluids need to be
transported, guided and controlled, KSB's products and expertise are prime movers
in applications ranging from building services to industrial processes, from mining to
power generation, we set the world of our customer flowing!
Innovative technology, efficient solutions and highest quality standards are essential
in competitive business. KSB is closer to its customers because services underlines
our strategy for success.
Choose KSB and you will be choosing integrated system solutions!
KSB & you....flowing together, growing together.........
We believe that we are partners in turning your dreams into reality. And the more
you expect from us, the better we deliver. Whatever be your application.... KSB is
close at hand with right solutions!
We have a strong presence in Region Asia Pacific with strong manufacturing bases
in Pakistan, China, Australia and India.
With production facility at Hassanabdal, KSB Pakistan serves its customers
47
KSB Pumps Company Limited
throughout the country with sales, services and dealer network supported by over
400 employees.
"We are always on call whenever you need us and even when you don't"
KSB offers complete customer support and nationwide after-sales service for
convenience of it's valued customers. At KSBs Customer Service Centers, highly
qualified and professionally trained Engineers and Supervisors are available to
provide expert services.
The customers receive on the spot value-added services ensuring quality of product
in minimum time with cost effectiveness.
WATER
ETA
Low pressure, self-regulating with radial type vane impeller centrifugal
pump which is suitable for various systems for townships, industrial
plants, agricultural and irrigation purposes, de-watering, circulating hot
and cold (chilled) water in air conditioning plants, pumping fuels, edible
oils and condensates.
Specifications
DN
Q
H
TEMP
SPEED
40-150 /hr up to 450 m up to 94 m up to 105 ºC up to 2900 rpm
Download Product Intro.
Download O&M
Manual.
KWP
Single stage, non-clogging, horizontal centrifugal pumps used in process
design, suitable for mediums that contain suspended solids and viscous
substances, finds its applications in building, food, paper, sugar, sewage
and effluent industries.
Specifications
DN
Q
H
65-300 /hr up to 1900 m up to 120 m
Download Product Intro.
Manual.
48
TEMP
SPEED
up to -30 ºC
up to 2900 rpm
to 250 ºC
Download O&M
KSB Pumps Company Limited
OMEGA
Single stage, axially split volute casing pump with double flow radial
impeller, for horizontal and vertical installation, in water works, lift
irrigation drainage pumping stations, power plants, industrial water
supply system, injection and spray ponds in sugar industry and fire
fighting system.
Specifications
DN
Q
/hr up to 2900 m
200-350
Download Product Intro.
Manual.
H
TEMP
up to 100 m
up to 105 ºC
Download O&M
WKF
High pressure multistage, centrifugal pump of ring section design,
suitable for small and medium sized boilers, industrial and municipal
water supply, irrigation, pressure feed, water supply and fire fighting
systems.
Specifications
DN
Q
H
TEMP
65-125 /hr up to 370 m up to 600 m up to 200 ºC
SUCTION PRESSURE
up to 25 bars
Download Product Intro.
Manual.
SPEED
up to 2900 rpm
DISCHARGE PRESSURE
up to 63 bars
Download O&M
RPK
Horizontal radially split double volute casing pumps of process type,
having application in refineries, chemical and petrochemical plants, coal
conservation plants, environmental engineering and other industrial
applications.
Specifications
DN
Q
H
80-100
/hr up to 270 m
up to 58 m
Download Product Intro.
Manual.
TEMP
SPEED
up to -40 ºC
up to 2900 rpm
to 400 ºC
Download O&M
ETA
Low pressure, self-regulating with radial type vane impeller centrifugal
pump which is suitable for various systems for townships, industrial
plants, agricultural and irrigation purposes, de-watering, circulating hot
and cold (chilled) water in air conditioning plants, pumping fuels, edible
oils and condensates.
49
KSB Pumps Company Limited
Energy
KSB - Because we know what you're doing
Energy moves the world. You want to produce it more reliably and economically.
KSB has the full range of pumps, valves, motors, actuators and systems for building
or upgrading power stations and district heating systems. Our products give reliable
service in primary and secondary circuits all over the world. They help you manage
boiler feed water, condensate, cooling water and coolant systems. Customers
choose them because KSB means high availability, good long-term value, and
comprehensive service on site.
KSB is certified by TÜV CERT to DIN EN ISO 9001. You'll hear the name KSB
around every new power plant being built worldwide. Energy department at KSB
Pakistan, catering the needs of the power plants with state of the art engineered
products. KSB Pakistan has clientele of all major power plants of Pakistan. Most of
the major power plants are equipped with KSB. Kot Addu Power Company (KAPCO)
AES Lalpir Pvt. Limited UCH Power CompanyCentral Power Generation Guddu
Saba Power Company Southern Electric Power Company Central Power Generation
Company Muzaffargarh Jamshoroo Power Company Lakhra Power Generation.
Production
Purpose;
Manufacturing the depth and the pump related know how differentiates KSB from
competitors and translates into customized solutions with attractive lead times and
competitive prices.
Scope:
 Foundry
 Production
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KSB Pumps Company Limited
 Sub contracting and out sourcing
 Planning and stores
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
Projects Department
KSB Projects department is involved in new installations, rehabilitation, operation &
maintenance of water and waste water transfer and treatment systems. The Projects
department designs and implements customized, package systems and installations
in close co-operation with our customers all over Pakistan. As a dependable partner
with decades of experience, KSB Projects has the know-how to offer
customers, innovative systems for all water transfer applications.
Our Project Department has created history by winning the Clean Drinking Water for
All (CDWA) project worth Rupees 1.86 billion in the year 2009, initiated by the
Government of Pakistan. The project includes the installation of 793 filtration plants
51
KSB Pumps Company Limited
in Central Punjab-II Region. This project will not only enrich the experience of the
Company in turnkey business but will also create employment opportunities for more
than 800 people at different stages of the project.
KSB focuses on three types of projects namely:
  Turnkey construction
  Rehabilitation & refurbishment
  Operation and maintenance
 Complete engineering and design
 Project development and optimization
 Hydraulic and mechanics
 Construction including all civil, mechanical
& electrical works
 Automation & electro-techniques
 Project management & controlling
KSB Projects, provides intelligent and economically sound solutions, from planning
phase to the commissioning of the finished installation for all applications in the field
of water supply, irrigation, drainage and waste water. In addition, KSB Projects
supplies every service needed to run, maintain and monitor the trouble-free
operation of customer's installation. KSB Projects assumes full responsibility for the
process as a whole as well as for all tasks involved in the construction of fluid
transfer system and all this with a quality Management system certified to ISO 9001.
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KSB Pumps Company Limited
Projects Finance & Control
KSB Pumps Company Limited as per German philosophy have small head counts in
every department all around KSB the departments are not over-crowded with
employees and there is not very complex hierarchy being followed.
Likewise, the
structure of Projects Accounts & Finance Department is also very simple. It is headed
by the Director Finance, Mr. Sajid Mahmood Awan. Mr. Munir Ahmad & Mr. Usman
Sikandar are reporting to the Director Finance as per defined job description.
Culture of the Department
The culture of Projects Accounts & Finance is very work friendly. It depicts a well
organized and team effort on the whole. Employees are fully committed towards their
responsibility. The level of communication is feasible and responsive. However,
discipline and professionalism is always maintained by the people of this department
and deadlines are also efficiently met.
Thus, the environment maintained by the
department is quite pleasant which is good for the employees as they can work
comfortably with the timely completion of assignments or tasks, as the first priority
efficiently and effectively.
Customers and Market
KSB Projects department is involved in new installations, rehabilitation, operation &
maintenance of water and waste water transfer and water treatment systems. The
Projects department designs and implements customized, package systems and
installations in close co-operation with our customers all over Pakistan. As a
dependable partner with decades of experience, KSB Projects has the know-how to
offer customers, innovative systems for all water transfer applications.
53
KSB Pumps Company Limited
Customer Service
KSB is number one in Europe and around the globe- with service centers, service
vehicles and all around service at the customer’s site.
 Installations, commissioning
 Onsite maintenance and repair
 Total pump management
 Repair at the service center
 Rehabilitation management
 Tele- services
 Complete engineering and design
 Project development and optimization
 Hydraulic and mechanics
 Construction including all civil, mechanical & electrical works
 Automation and Electro techniques
Finance & Control Department Responsibilities
Purpose:
To optimally develop financial, technical, material and information technology recourses,
in reporting departments, ensuring compliance with macro strategies and goals.
Scope;
 Financial accounting and book keeping
 Cost accounting
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KSB Pumps Company Limited
 Management accounting
 Materials
 Administration, corporate and legal affairs
 Information technology
Materials:
Ensure timely and quality provisions of input material required for KSB operations in
Pakistan while working towards reducing the cost for the same. Contribute and own the
organization’s business plans
Administration:
Manage the corporate affairs & administration tasks for KSB Pakistan by maintaining
relationships with shareholders and regulatory bodies. Track, review and validate all the
transactions being carried out by shareholders. Maintain and update the registers for
ensuring proper records relating to shareholders and employee data.
Accounts:
Management of book keeping, financial accounting functions and MIS reporting as well
as control activities of statuary functions relating to income tax, sales tax, special federal
excise duty, special security, EOBI etc. to manage disbursements, payrolls, employee
taxation, loans and advances to employees and contractors, customer accounts and
sales accounting functions.
Financial planning:
To plan and mange all the financial activities in KSB including management of treasury
functions, accounts payable management, capital expenditures etc in order to manage
the sources and uses of funds in cost efficient and effective manner. Also manage
monthly group reporting and prepare annual budgets and forecasts.
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KSB Pumps Company Limited
Projects accounts:
Responsible for financial planning and control of all projects through coordination with
project management wing and the financial department
Information technology:
To provide IT support to various businesses functions and proactively drive the
business processes in an integrated environment. To ensure the smooth functioning of
network infrastructure and to resolve hardware/software issues.
Costing:
Monitor and organize production costs and material costs and report deviations in order
to maintain these costs within defined limits.
Credit control:
To work independently towards speeding up the process of recoveries, to facilitate sales
office in collection of receivables, earnest money and guarantees.
Sales Department
2010 has been a promising year for Order Intake. We have experienced a phenomenal
growth in our Zaree segment by achieving an order intake of PKR 100 million. Our
economically viable submersible product has helped us to successfully penetrate the
NWFP and Baluchistan low-end water markets.
This is an area that promises substantial potential for business in future. In addition to
this, the growth pattern in Building Services was healthier than that in the last year and
is forecasted to increase continuously. On the Industry side, we have further diversified
our business through penetration into specific process industries like Fertilizer and Oil &
Gas by providing solutions for process applications. We have re-organized our sales
structure to focus better on more lucrative market segments. Future efforts for
enhancing the overall efficiency and improving responsiveness to our customers,
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KSB Pumps Company Limited
include revamping the sales processes and bringing in resources from cross industry to
add value and bring in better results.
Human Resource Management
In-house Training Resource Centre, which was initiated last year, is now working
effectively. Under this initiative a training program on “Management Development” has
been undertaken at the Factory. Also, Informal Learning Sessions in Head Office &
Works support our idea of informal knowledge sharing. Different sports activities were
introduced to inculcate team spirit. These included Table Tennis and Cricket Matches.
The bonding and positive spirit that resulted from these team activities has definitely
given a boost to the synergy between professional teams.
Human Resource Policy Manual has been revised to match HR best practices prevalent
in the industry aligning KSB Pakistan’s HR Policies with the market. All key vacant and
new positions have been effectively filled by HR with high potential individuals that have
immensely contributed to the growth and sustainability of the business. HR Department
is emerging as a true strategic business partner along with gaining operational
command in KSB Pakistan.
Industry category for its annual report for the year 2008. The aim of this award is to
encourage and give recognition to excellence in Annual Corporate Reporting and is
jointly decided by The Institute of Chartered Accountants of Pakistan and The Institute
of Cost & Management Accountants of Pakistan.
Purpose:
Manage the HR functions for KSB in Pakistan. Design/review/ revise and implement the
HR systems for employee management and development. Discuss with the internal
stakeholders, their requirements/expectations for HR and create annual HR plans to
ensure implementation of the same.
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KSB Pumps Company Limited
Scope:
 HR is a steward to oversee HRM culture in the company
To report state of HE management throughout the company by holding formal designs
with line management and employees on a regular basis
 Continuously improve upon HR processes
 To ensure a culture of transparency , fair play and equitable treatment
 To develop KSB as institute of technical and managerial trainings to meet current
and future basic needs.
QHSE (Quality, Health, Safety and Environment)
Assuring quality means careful documentation and following Standard Operating
Procedures (SOPs) resulting in efficiency and excellence. KSB Pakistan takes great
pride in having its products and plants certified for meeting international standards. KSB
Pumps Company Limited is the first foundry based engineering company in Pakistan to
have been certified for the Integrated Management System (ISO 9001, ISO 14001 &
OHSAS 18001).
At KSB, we attach great importance to Quality, Environment, Occupational Health and
Safety Policies. The European Foundation for Quality Management (EFQM) Model for
the business excellence provides the framework of the KSB Policy for Quality,
Environment, Occupational Health and Safety. The Total Quality Management (TQM)
concept has been up held in all our operations to ensure a sustainable improvement in
our products, processes, services and working conditions. The achievement of a
favorable result, through its implementation, is demonstrated by the various national
and international quality certifications that we have received over time.
Purpose:
QHSE ensure KSB group quality, health, safety and environmental policies & objectives
in KSB Pakistan.
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KSB Pumps Company Limited
Scope:
 Implementation of group QHSE policies & procedures
 Compliance with ISO 9001, ISO 14001, OHSAS 18001 and KSB AG directives
 To coordinate with all departments in order to eradicate customer complaints
Internal Audit
Purpose:
Ensure that KSB Pakistan adheres to standards & policies set by the management and
KSB worldwide and rules and regulations of government of Pakistan. Present an
unbiased view on the audited functions with recommendations to the board audit
committee.
Scope:
 The audit reports as per the milestones defined in the audit plan
 Minimum significant NCR / observations in the external audit report
 Carrying out audit activities as defined in the audit plan
 Reducing observations in the external audit report
Enterprise Risk Management
We define risk as: “a potential damage-causing event”
It is the policy of KSB to anticipate and avoid risk, wherever possible, rather than
dealing with the consequences. Risk management policy is directed towards avoiding
risk, as management understands that risks cannot be totally eliminated. Only decision
taken in uncertainty (whether to do or not to do something) results in a risk. KSB risk
management is a continuous process for identifying the financial, operational and
general business risks.
Board of Directors has the overall responsibility for the Company’s system of risk
management and internal controls. The Directors have delegated to Executive
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KSB Pumps Company Limited
Management, the establishment and implementation of an internal control system. The
controls reduce risks from unacceptable level, to a stage deemed acceptable by the
Company. The system of internal controls provides reasonable but not absolute
assurance that assets are safeguarded, transactions are authorized/recorded properly.
Financial Risk Factor
The Company's activities expose it to a variety of financial risks: market risk (including
currency risk, other price risk and interest rate risk), credit risk and liquidity risk. The
Company's overall risk management program focuses on the unpredictability of financial
markets and seeks to minimize potential adverse effects on the financial performance.
Liquidity Risk
Liquidity risk represents the risk that the Company will encounter difficulties in meeting
obligations associated with financial liabilities. Prudent liquidity risk management implies
maintaining sufficient cash, the availability of funding through an adequate amount of
committed credit facilities. Due to the dynamic nature of the Company's business, the
Company's Finance Department maintains flexibility in funding by maintaining
availability under committed credit lines.
Management monitors the forecasts of the Company’s cash and cash equivalents on
the basis of expected cash flow. This is generally carried out in accordance with
practice and limits set by the Company. These limits vary by location to take into
account the liquidity of the market in which the entity operates. In addition, the
Company's liquidity management policy involves projecting cash flows in each quarter
and considering the level of liquid assets necessary to meet its liabilities; monitoring
balance sheet liquidity ratios against internal and external regulatory requirements; and
maintaining debt financing plans.
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KSB Pumps Company Limited
Corporate Social Responsibility
KSB Care:
Our Corporate Social Responsibility (CSR) Program works under the umbrella of KSB
Care – APAC Program. It focused on providing a sustainable infrastructure and basic
amenities to underprivileged students at schools in the rural areas of Pakistan, around
our Production Facility in Hassanabdal. The activities under the KSB Care umbrella,
ranged from provision of uniforms for students and making available comfortable
classroom environments for effective learning to assist in strengthening the
infrastructure. Our initiatives have received a very encouraging response from our
beneficiaries. The enthusiasm and cooperation that they have shown has strengthened
our belief in our efforts for raising the bar of education and helping the recipients of this
act of goodwill even further.
In 2009, KSB Pakistan introduced another angle, also related to education. We offered
the opportunity for giving scholarships to students who were bright and good performers
but poverty barred them from completing their education. The limitation of insufficient
funds for finishing high school is a dilemma often leading to frustration in the youth. KSB
Pakistan initiated to deal with it under the KSB Care program, in its own small way as a
contribution towards a brilliant future of Pakistan.
In a ceremony held in November 2009, 122 high achievers, who were unable to
continue studies due to poverty, were awarded scholarships under the KSB Care
program. This was a proud and encouraging moment for KSB Pakistan. It gave us the
sense of contribution to the Country while touching the lives of many families in a
manner that gave hope and security. Alongside this the assistance in strengthening of
school infrastructures and provision of comfortable learning environments continued as
an ongoing efforts.
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KSB Pumps Company Limited
RATIO ANALYSIS
Ratio refers the one number in terms of another. The purpose of ratio analysis depends
upon the event for which the analysis is made. Management likes to know about the
operational efficiency and think of such ratios as return on investment, turnover of fixed
assets, and net profit to sales etc.
Creditors like to know the ability of the company to meet its current obligations and
therefore, think of current and liquid ratios, turnover of receivables, and coverage of
interest by the level of earnings. So ratio analysis is important from all perspective.
Liquidity Ratios
1)
Current Ratio
= Current Assets / Current Liabilities
= 1,483,920,186 / 918,664,908
= 1.62(Times)
Year
Times
2006
2.11
2007
2.01
2008
1.97
2009
1.74
2.5
2
1.5
1
0.5
2010
1.62
0
2006
2007
2008
2009
2010
Generally, the higher the current ratio, the more liquid the firm is considered to be. A
current ratio of 2.0 is occasionally sited as acceptable, but a value’s acceptability
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KSB Pumps Company Limited
depends on the industry in which the firm operates. KSB is involved in different project
businesses so the current ratio of 1.62 is almost acceptable.
2) Quick Ratio/Acid Test Ratio
= (Current Assets - Inventory) / Current Liabilities
= (1,483,920,186 – 504,449,000) / 918,665,000
= 1.07(Times)
Year
Times
2006
1.23
2007
1.38
2008
1.19
2009
1.20
2010
1.07
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2006
2007
2008
2009
2010
The quick ratio is similar to the current ratio except that it excludes inventory, which is
generally the least liquid current asset. A quick ratio of 1.0 is occasionally
recommended, but as with the current ratio, what value is acceptable depends on the
industry. The quick ratio provides a better measure of all overall liquidity only when a
firm’s inventory cannot be easily converted into cash. If inventory is liquid, the current
ratio is a preferred measure of overall liquidity.
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KSB Pumps Company Limited
Activity Ratios
1) Inventory Turnover
= Cost of Goods Sold / Inventory
= 1564429000 / 504,449,000
= 3.10(Times)
Year
Times
2006
2.27
2007
2.92
3.5
3
2.5
2
2008
2.45
2009
2.45
2010
3.10
1.5
1
0.5
0
2006
2007
2008
2009
2010
Inventory turnover commonly measure the activity or liquidity of a firm’s inventory. The
resulting turnover is meaningful only when it is compared with that of other firms in the
same industry or to the firm’s past inventory turnover. In KSB the inventory turnover is
increasing that is good for the company.
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KSB Pumps Company Limited
Average Collection Period
= Accounts Receivable / Average Sales per Day
= 632,843,688 / 5610929.000
= 113 (Days)
Year
Days
2006
56
2007
55
2008
76
2009
95
2010
113
120
100
80
60
40
20
0
2006
2007
2008
2009
2010
The average collection period, or average age of accounts receivable, is useful in
evaluating credit and collection policies. The average collection period of KSB is 113
days; it means that on the average it takes 113 days to collect an account receivable.
The average collection period is meaningful only in relation to the firm’s credit terms.
The credit period offered by the KSB to customers is 30 days, average collection period
of 113 days is quite acceptable. Comparing with last years the KSB is recovering its
amounts not earlier from its customers. It increases the risk of bad debts.
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KSB Pumps Company Limited
Total Asset Turnover
= Sales / Total Assets
= 2047989000 / 1809108000
= 1.13 (Times)
Year
Times
2006
1.69
2007
1.54
2008
1.53
2009
1.27
2010
1.13
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2006
2007
2008
2009
2010
The total asset turnover indicates the efficiency with which the firm uses its assets to
generate sales. The total asset turnover of KSB is 1.13 times. This means that the
company turns over its assets 1.13 times a year. Generally, the higher a firm’s total
asset turnover, the more efficiently its assets have been used. Total asset turnover of
KSB is decreasing which indicates its slightly weaker position.
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KSB Pumps Company Limited
Debt Ratio
= Total Liabilities / Total Assets
= 982,508,000 / 1,809,108,000
= 0.54%
Year
%
2006
0.44
0.6
0.5
2007
0.45
2008
0.45
0.4
0.3
0.2
2009
0.52
2010
0.54
0.1
0
2006
2007
2008
2009
2010
The debt ratio measures the proportional of assets financed by the firm’s creditors. The
higher this ratio, the greater the amount of other people’s money being used to generate
profits. The debt ratio of ICI is 0.54% which indicates the degree of indebtedness. The
debt ratio of the KSB is increased by the last year; it means that the level of
indebtedness is increased by the company. Increase in debt ratio shows the negative
progress of company.
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KSB Pumps Company Limited
Profitability Ratios
Gross Profit Margin
= (Sales – Cost of Goods Sold) / Sales
= (2047989000– 1564429000) / 2047989000
= 23.61%
Year
%
2006
30.33
2007
28.00
2008
27.05
2009
24.41
2010
23.61
35
30
25
20
15
10
5
0
2006
2007
2008
2009
2010
The gross profit margin measures the percentage of each sales dollar remaining after
the firm has paid for its goods. The higher the gross profit margin, the better (that is, the
lower the relative cost of merchandise sold). This is very significant ratio for small
retailers, especially during times of inflationary prices. If the owner of the firm does not
increase the price when cost of sales is increased, the gross profit margin will decrease.
The gross profit margin of the KSB is lower as compared to last years, it means that the
manufacturing cost of the goods is increased and the sale price is not increased.
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KSB Pumps Company Limited
Net Profit Margin
= Net Profits / Sales
= 99,779,000 / 2,047,989,000
= 4.87%
Year
%
12
2006
9.02
10
2007
10.25
8
2008
9.10
2009
7.30
2010
4.87
6
4
2
0
2006
2007
2008
2009
2010
The net profit margin measures the percentage of each sales dollar remaining after all
costs and expenses, including interests, taxes and preferred stock dividends have been
deducted. The higher the firm’s net profit margin, the better. Along with gross profit
margin and operating profit margin the net profit margin of the KSB is also decreasing
which predicts a negative impact on shareholders.
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KSB Pumps Company Limited
Earnings per Share
= Earnings Available for Common Stockholders / No. of Common
Stock Outstanding
= 99779383 / 13200,0000
= Rs. 7.56
Year
Rs.
14
2006
9.58
12
2007
12.93
10
8
2008
12.93
6
2009
11.20
4
2010
7.56
2
0
2006
2007
2008
2009
2010
The firm’s earnings per share is generally of interest to present to prospective
stockholders and management. Earnings per share represent the dollar amount earned
on behalf of each outstanding share of common stock. The dollar amount of cash
actually distributed to each shareholder is the dividend per share. The earnings per
share of KSB is Rs. 7.56, it means that the shareholder is earning Rs. 7.56 on each
share. The earnings per share is decreasing which means that shareholders are
earning less than the last year. Earnings per share are closely watched by the investing
public and are considered an important indicator of corporate success.
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KSB Pumps Company Limited
Return on Assets
= Earnings Available for Common Stockholders / Total
Assets
= 99779383 / 1,809,108,000
= 5.52%
Year
%
2006
15.23
2007
15.78
2008
13.94
2009
9.27
2010
5.52
16
14
12
10
8
6
4
2
0
2006
2007
2008
2009
2010
The return on total assets (ROA), often called the return on investment (ROI), measure
the overall effectiveness of management is generating profits with its available assets.
The higher the firm’s return on total assets, the better. The return on assets of KSB is
5.52% which shows that company is earning 5.52% on each Rs. of asset investment. It
is decreasing as compared to last year which is showing its bad performance.
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KSB Pumps Company Limited
Return on Equity
= Earnings Available for Common Stockholders / Common
Stock Equity
= 99779383/ 826,600,040
= 12.07%
Year
%
2006
27.04
2007
28.92
2008
25.22
2009
19.12
2010
12.07
30
25
20
15
10
5
0
2006
2007
2008
2009
2010
The return on common stock equity (ROE) measures the return on the common
stockholders’ investment in the firm. Generally, the higher this return, the better off is
the owners. The return on equity for KSB is 12.07% which is decreased as compared to
last year. The calculated ROE of 12.07% indicates that during 2010 KSB earned
12.07% on each Rs. of common stock equity.
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KSB Pumps Company Limited
Market Ratios
Price Earnings Ratio
= Market Price per Share of Common Stock / Earning per
Share
= 60.11 / 7.56
= Rs. 7.95 Times
Year
Times
2006
8.34
2007
15.36
2008
17.86
2009
6.70
5
2010
7.95
0
20
15
10
2006
2007
2008
2009
2010
The price earnings ratio is commonly used to assess the owners’ appraisal of
share value. The P/E ratio measures the amount that investors are willing to pay
for each Rs. of firm’s earnings. The level of this ratio indicates the degree of
confidence that investors have in the firm’s future performance. The higher the
P/E ratio, the greater the investors’ confidence.
The P/E ratio of KSB is Rs.
7.95, which means that investors are paying Rs. 7.95 for each Rs. 1 of earnings.
It is increased by last year which indicates that investors have to pay more for
less earnings.
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KSB Pumps Company Limited
Book Value per Share
=
Common
Stock
Equity
/
No.
of
Common
Stock
Outstanding
= 826,600,040/ 13200,0000
= Rs. 62.62
Year
Rs.
70
2006
35.41
2007
44.71
2008
51.28
2009
58.56
2010
62.62
60
50
40
30
20
10
0
2006
2007
2008
2009
2010
Book value per share of common stock shows the value of the stock which is written in
the books of accounts. In KSB the book value per share of the common stock is
increasing over years.
74
KSB Pumps Company Limited
Market Book Ratio
= Market Price per Share of Common Stock / Book Value per
Share of Common Stock
= 60.11 / 62.62
= 0.96
Year
Ratio
Ratio
5
2006
2.26
1.73
4
2007
4.44
0.773
2008
4.50
2.40
2009
1.28
1.56
2
1
0
2010
0.96
1.38
2006
2007
2008
2009
2010
The market book ratio provides an assessment of how investors view the firm’s
performance. It relates the market value of the firm’s shares to their book -strict
accounting value. The market book ratio of the KSB is 0.96. It means that
investors are paying Rs.0.96 for each Rs. 1 of book value of KSB company
stock. Clearly, KSB future prospects are being viewed favorably by investors,
who are willing to pay not more than its book value for the firm’s shares.
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KSB Pumps Company Limited
VERTICAL ANALYSIS
Vertical Analysis
Percentage
2010
2009
2008
2007
2006
%
%
%
%
%
PROFIT AND LOSS ACCOUNT
Sales
100
100
100
100
100
Cost of sales
-76.39
-75.22
-72.95
-72.00
-69.51
Gross Profit
23.61
24.78
27.05
28.00
30.49
Distribution & Marketing Cost
-10.45
-9.06
-10.28
-9.73
-11.36
Administrative Expenses
-6.28
-5.85
-5.86
-5.44
-5.89
Other Operating Expenses
-0.65
-0.85
-0.82
-1.12
-1.38
Other Operating Income
2.09
2.06
3.00
2.49
2.17
Operating Profit
8.33
11.08
13.09
14.20
14.03
Finance Cost
-0.84
-0.51
-0.62
-0.51
-0.41
Profit Before Tax
7.48
10.56
12.47
13.70
13.62
Taxation
-2.61
-3.26
-3.37
-3.44
-4.60
Profit For The Year
4.87
7.30
9.10
10.25
9.02
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KSB Pumps Company Limited
VERTICAL ANALYSIS
Vertical Analysis
Percentage
2010
2009
2008
2007
2006
%
%
%
%
%
BALANCE SHEET
Net worth / shareholders equity
45.69
48.49
55.28
54.54
56.32
Noncurrent liabilities
3.53
3.28
3.46
3.01
1.82
Short term running finance/ bank borrowings
9.12
0.01
1.34
4.42
0.01
Creditors, accrued and other liabilities
41.66
48.22
39.92
38.02
41.85
Total liabilities and Equity
100.00
100.00
100.00
100.00
100.00
Fixed assets
17.33
15.79
17.90
14.08
11.16
Long term loans and Deposits assets
0.65
0.39
0.64
0.77
0.34
Current Assets
82.02
83.83
81.46
85.15
88.50
Total Assets
100.00
100.00
100.00
100.00
100.00
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KSB Pumps Company Limited
HORIZONTAL ANALYSIS
Vertical Analysis
Percentage
2010
2009
2008
2007
2006
%
%
%
%
%
PROFIT AND LOSS ACCOUNT
Sales
1.17
7.88
12.73
18.80
11.90
Cost of sales
2.74
11.24
14.22
23.05
6.55
Gross Profit
-3.58
-1.20
8.91
9.10
26.36
Distribution & Marketing
16.70
-4.94
19.17
1.70
37.29
8.62
7.53
21.50
9.77
3.42
-22.54
12.45
-17.62
-3.28
34.93
2.79
-25.91
35.86
36.31
10.04
Operating Profit
-23.96
-8.69
3.87
20.23
26.29
Finance Cost
65.52
-10.47
38.35
45.30
-45.75
Profit Before Tax
-28.32
-8.61
2.60
19.47
31.59
Taxation
-18.98
4.38
10.33
-11.08
16.94
Profit For The Year
-32.49
-13.42
0.01
35.04
40.58
Cost
Administrative Expenses
Other Operating Expenses
Other Operating Income
78
KSB Pumps Company Limited
HORIZONTAL ANALYSIS
Vertical Analysis
Percentage
2010
2009
2008
2007
2006
%
%
%
%
%
BALANCE SHEET
Net worth / shareholders equity
6.93
14.21
14.69
26.24
23.97
Noncurrent liabilities
22.13
23.57
29.75
116.32
17.11
Short term running finance/ bank
96153.82
borrowings
-
-
98.96
65.64
101591.49
99.95
Creditors, accrued and other liabilities
-1.94
57.27
18.79
18.44
0.03
Total liabilities and Equity
13.49
30.21
13.16
30.36
-1.86
Fixed assets
25.58
14.85
43.86
64.42
18.01
Long term loans and Deposits assets
88.59
-
-5.41
197.93
-
21.42
17.37
Current Assets
11.05
33.99
8.25
25.43
-3.84
Total Assets
13.49
30.21
13.16
30.36
-1.86
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KSB Pumps Company Limited
SWOT ANALYSIS
SWOT Analysis is a simple framework for generating strategic alternatives from a
situation analysis. It is applicable to either corporate level or the business unit level and
frequently appears in marketing plans. SWOT stands for Strengths, Weaknesses,
Opportunities and Threats.
As far the SWOT analysis of KSB Pumps is concerned, situation show the following
facts:
Strengths:
 Strong Brand Name
 Good reputation among customers
 Cost advantage from proprietary know-how
 Exclusive access to high grade natural resources
 Favorable access to distribution networks
 Resources, Assets and People
 Innovation Aspects
 Experience, Knowledge & Data
 Quality process and procedures
KSB Pumps enjoys a good reputation not only in Pakistan but across the globe. Further
it is a subsidiary of KSB AG by which is also Pumps and Valves leader in the world. So
it strengthens the image of KSB Pumps Pakistan business also. Innovation and quality
control also have been a success for the KSB Pumps. Business has a team of
experience people and has a powerful distribution network across Pakistan.
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Weaknesses:
 Timescale, Deadlines and pressure
 Reliability of Data, plan predictability
 Location of the business
Along with the strengths, KSB Pumps also has some weaknesses. First one is the
pressure and deadlines for the plant. Plant is operating at its full capacity and company
cannot afford the breakdown or shutdown of the plant because demand is always on the
higher end. Plant is in remote area, that’s why in case of any emergency, when
expertise are not available in Hasanabdal, it takes time to repair any damage to the
production. Further production at remote area, also increased transportation cost to the
different areas of the country.
Opportunities:
 Market Development
 An unfilled customer need
 Arrival of new technologies
 Loosening of regulations
 Removal of international trade barriers
 Information and Research
 Partnership, Agencies and Distribution
 Volume, Production and Economies
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There are a lot of opportunities for the KSB for the Pumps Business. Due to high growth
of industry in Pakistan, demand of the Pumps is increasing day by day as it is an
important segment for different industries like power generation, textile, paper etc.
Further economy of scale is also an important opportunity. There is only one competitor
for the KSB in Pumps and KSB has hold on more than 70% of the market. New
technologies are also helping in order to reduce cost of production.
Threats:
 Emergence of new technological products
 Political Effects
 Recession conditions in the world market
 Loss of key staff
 Environmental Effects
 Competitors Intentions
 New regulations
KSB Pumps is also facing some threats in process of conducting business. Pumps are
mainly used in different industries. Due to growth of production and new technologies, it
is possible to substitute some products from others. So business faces this threat that in
future their products can be replace by some other low cost products. Due to situation if
far area, many employees leave the job when they got an opportunity in some other
sector in main city.
Further competitors can also expand their capacity or adopt some better technique in
order to produce more quality goods. That’s also another threat for the business.
Environment effects are also important one. Awareness is also increasing day by day.
Although business has adopted a strategy in order to the effects to the environment but
it has to make it fast.
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Further political situation effect the business a lot, especially the multinational one.
Falling price of rupee against dollar, inflation, increase in raw material, shortage in
electricity are also threats for the industries.
MY WORKING AT KSB Pumps
Working at KSB remained a very successful experience for me and it was great
experience for me that I worked with such a dynamic firm. Mainly I worked in the
Finance & Projects Account Department at head office of the KSB Pumps Lahore
Pakistan, however I also visited other departments of the company and also interviewed
different people. I think I remained successful in order to grasp the procedures and
extract the valuable knowledge.
I want to appreciate the efforts and their corporation of KSB staff for their advice and
their assistance in helping me to avail this opportunity. I learned a lot from these people.
They were much experienced and have a great command in their own work & on policy
of KSB. Mainly I worked in the following tasks:
1. Preparation of Landed Cost for Imports
The cost which is incurred on the imports of raw material from the premises of exporter
up to the premises of KSB is called landed cost.
During my internship in KSB I learned how to prepare landed cost for the import of
Pumps (Raw Material). I prepared landed cost in excel sheet with the help of different
documents as Purchase Order, GRN (Goods Receipt Note), Sales Invoice, LC (Letter of
Credit) and Insurance Documents etc. I calculated taxes and excise duties with the help
of their rates which were imposed during transit to find the landed cost.
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2. Vendor Clearance
KSB Pumps purchases material from customers and make the payments at the end of
the month. The process in which outstanding balances of the vendors are cleared is
called vendor clearance.
I worked on vendor clearance and calculated outstanding balances of vendors after
deducting discounts and withholding taxes.
3. Import Cost Analysis
My supervisor assigned me task to analyze the impost cost of different purchase orders.
I analyzed these costs by making a comparison between the costs of different purchase
orders of the last year with cost of the recent year. I identified differences between these
costs and concluded that, exchange rates were the main reason for these differences.
4. Reconciliation of Bank Statement
During my internship period I learned how to reconcile the bank statement with
company records. Reconciliation was a lengthy and difficult process. I learned how to
identify differences and how to resolve them.
5. Management of Sales Tax and WHT (With Holding Tax)
During my internship at KSB Pumps, I learned how to calculate and check the sales tax
and WHT (with holding tax) on different sales and purchase orders. Many times I
identified errors which were found by me during the rechecking of calculation of sales
tax and WHT. I conveyed these errors to my supervisor to rectify them.
6. Creation of Master Data for New Customers
When a new customers enters in the organization, his master data is created in Comet
for further usage. Master data contains the name, address, phone number, email, fax
and NTN of the customer. It also contains the fixed foreign currency rates, sales tax
rates on different items and tax exemptions on different items. I entered the master data
of many new customers in Comet software.
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7. Updating Foreign Exchange Rates in Comet
Many times I updated the exchange rates in comet. In KSB, foreign exchange rates
were updated in system on daily basis so that the transactions which take place on a
day can be settled on that specific day exchange rates. An email comes to all relevant
persons who need exchange rates. The email contains the exchange rates of all foreign
currencies in which KSB Pumps is dealing.
8. Process of Petty Payments
During my internship period I learned how to make petty cash payments for small
expenses such as, transportation, employee funeral expenses and cash withdrawal for
cash office. I also learned how to make entries of these petty payments in comet
software. Amounts mentioned on these bills were checked correctly and the vouchers
which were prepared for these bills were checked and signed by three different persons.
9. Payments of Interest to Customers on Their Securities
I learned that when a customer enters in KSB Pumps Business, he is asked to pay
some amount of money in the shape of security deposit. The purpose of this security
deposit is to reduce the fear of bad debts. If a customer purchases goods on credit
basis and did not pay the cash on specified date, the losses which occurred can be
recovered from his security deposit.
KSB Pumps deposits these securities in bank in the shape of fixed deposits. KSB earns
interest on these deposits and pays to customers. I calculated the interest for customers
on their securities and adjusted their securities balances if they were increased or
decreased during the period.
10. Purchase Process
During my stay in KSB, I was briefed about the purchase process that is adopted by the
KSB Pumps. I learned how a purchase order takes place and how KSB imports goods
according to that specific purchase order. I practically examined the documents which
were necessary for a purchase order.
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11. Management of Record
In KSB I was given a task to check the files and arrange them according to purchase
order number. I examined 32 files and arranged them according to LC number and
purchase order number. I attached all the documents of a specific purchase order
number at one place and arranged all the purchase orders. I prepared the stickers for
those files which contains their PO numbers and LC numbers. I asked the binder to bind
the files according to the stickers in a sequence. I identified many documents which
were missing for many purchase orders and conveyed to my supervisor.
12. Preparation of Cheques
I prepared cheques for salary of customers and for welfare program of customers.
Skills Acquired by Me
COMET Usage Skills
During my internship period, many times I worked in Comet software. I updated the
exchange rates in Comet, created master data for the customers. Some entries were
made by me in comet. I have an overview of all the comet software.
Excel Skills
I acquired many excel skills during my internship. I prepared many excel sheets in
Microsoft excel. I learnt many excel formulas which are frequently used in office work.
Time Management
I learned how to manage my time. I was explained how to manage the objectives with
the help of important, unimportant, urgent and un urgent quadrant. I learned how to use
my time in efficient manner.
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Work Environment
I observed the work environment of an organization. I observed how employees
cooperate with each other in time of need. Confidentiality was an important factor; I
observed how auditors were satisfied without losing the confidentiality of the company.
Conclusion
Overall, in recent past the company has steady
growth over the years.
There are enough
skilled and qualified personnel to make sure
that the company does not lag behind in any
way.
The products and services of the
company have gained confidence of the
customers as having brand investment of more
than 50 years. The internal environment of the
company is also quite work-friendly and there is
a lot of cooperation among the employees. The departments work in close coordination
with each other and thus have maintained the goodwill of the company. Employees and
customers are the assets of any organization and KSB has maintained good and strong
relations with them.
Concluding the report, I would add that it was a great learning experience. The people I
have worked with have made my first practical experience quite educating and
informative. They happened to be quite professional and had great expertise at their
jobs. They have made me comprehend things and analyze them in a better way. It has
been a memorable working experience and KSB has let me learn a number of
significant practical things. KSB provides a number of opportunities for those who are
stepping into the practical life and I am glad to have been a part of it.
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RECOMMENDATIONS
Following recommendations are based on my observation during my internship at KSB
Pumps and some have been given during formal and informal interview with the
employees.
 Although KSB Pumps is offering a lot of incentives to its employees in case of
salary and benefits. However there is a clear different in facilities of permanent
and contract employees. For example in department I worked, finance officers
were on contract basis and there was more burden of work on them while they
were getting only the basis salary. Facilities like medical allowance, Pension,
Gratuity; Provident Fund is not for the contract employees. This creates a lot of
dissatisfaction among the employees.
 Pay increment of people should be according to the work and duties they
perform. In some cases it does not happen and pay is not increased according to
seniority and work base. For example, during my stay at KSB Pumps pay was
increased and clerk handling the most work was awarded 20% increment while
other was awarded 40% increment although his work was less and duties were
easy one as compared to first one.
 Procurement department is very important department of any company and
production depends a lot on purchased of timely raw material, plant equipment
and other supplies. Sometimes the purchase staff make himself painful when the
payments are not made on time.
 Consumer Services Department but couldn’t get what and where it is. Well the
name suggests that it should be most visible and active department, I wonder if it
is there. If it is there it should be organized at a larger scale and efforts should be
made to interact more frequently and at a personal level with the consumers.
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Though the company is on its good pace but there is always a room for improvement
and high standard settings. In this short span of time I have seen good integration
approach among all departments. However, more target orientation should be imparted
in the employee as they being a strong and vital asset of the company. More focus
should be given on employee satisfaction to help strengthen the value chain between
customers and the company.
Moreover the reporting system can be made more effective and efficient by deploying
SAP into the organization followed by proper training of the employees.
Last of all I must THANK KSB Pumps and HAILEY COLLEGE OF COMMERCE once
again for providing me the golden opportunity of spending 6 weeks in such a wonderful
place where most people can only dream of it. It was an experience of life time. I got
the chance of sitting among the ideal sort of people, professionals whose names are
engraved as pioneers and geniuses of the field. I learned about meeting and dealing
with people. I must say that the integration of this internship program will definitely a
significant improvement in my future professional life.
I conclude my report here by again paying regards to Allah Almighty who gave the
ability to complete this tedious task and all other people who have helped me in this
task.
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