KSB INTERNSHIP PROJECT

KSB PUMPS AND VALVES COMPANY LIMITED
Our technology. Your success.
1
INTERNSHIP REPORT
Submitted to
MAM. SAJIDA NISAR
Submitted by
MISBAH AFZAL
BBA (A)
2012-2016
ROLL NO: 007(A)
INSTITUTE OF BUSINESS ADMINISTRATION
UNIVERSITY OF THE PUNJAB
LAHORE
SEPTEMBER 2016

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PREFACE
Without practical training, business education is meaningless so along with
the theory; practical training is provided to business students to expose them
to the actual working environment of any organization. Such training provides
a framework of knowledge relating to the concepts and practices of the
assigned topics in the organization. The summer training is an integral part
of the course curriculum of Bachelors of Business Administration (BBA
Honors). In this the student is in the position to analyze the integral working
of an organization with mature eyes and understand the dynamics in a much
better manner.
This particular project has been conducted at The KSB Pumps company
limited Head Office in a course of six weeks. I was sent to “Finance
Department”. In my department, I studied several documents of company
along with other documents describing regulations and guidelines which are
necessary for the effective working of a company.
In the first phase of this project, there is an introduction of company and
history, company profile and core values of a company are given. Second &
third phase describes major managerial policies and administrative styles; in
fourth and fifth phase products and marketing mix are given. Then ratio,
vertical, horizontal analysis is presented preceded by training program detail,
recommendations and conclusion.

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DEDICATION
This report is dedicated to the memory of my father who always supported
me and who taught me the ways of life. It is also dedicated to my mother,
who really loves me, takes care of me and who taught me that even the
largest tasks can be accomplished if they are done at a time.

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ACKNOWLEDGEMENT
First and foremost I would like to express my thanks to Allah Almighty
bestowed upon me and gave me strength finish this long book as my
internship report. I do thank for His blessings to my daily life, good health,
healthy mind and good ideas. The internship opportunity I had with the KSB
Pumps company limited was a great chance for learning and professional
development. Therefore, I consider myself as a very lucky individual as I was
provided with an opportunity to be a part of it. I am thankful to my parents
for their continuous support and encouragement during my studies. I would
also like to thank all my teachers who guide me in the right direction, they
taught me how to ask questions and express my ideas, and my special thanks
to Dr. Wajeeha how recommend and suggest me to join that organization. I
would like to express my deepest gratitude and special thanks to Mr. Hafiz
Muhammad Zia Ullah, who in spite of being extraordinarily busy with his
duties, took time out to hear, guide and keep me on the correct path and
allowing me to carry out my project. Without his guidance, this report would
not have been completed in time.
At the last but not the least, I would also like to thank Mr. Zeeshan and Ch.
Imran Ali (Deputy Manager HR) for providing me an opportunity to obtain
training in KSB Pumps Company Limited.

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EXECUTIVE SUMMARY
The Klein Schanzlin and Becker (or KSB) Group is one of the leading
producers of pumps, valves and related systems. KSB has expand
themselves that they are know all over the world and mostly everywhere,
where there is a new company or building the products of ksb there its
has a history of 130 years in business sector. KSB Pakistan enjoys a vast
network of Sales Offices throughout the country and also operates through a
widespread KSB Exclusive Partners & Authorized Dealer Network increasing
the breadth and effectiveness of its reach to its customers. Maintaining
innovation is critical and especially in tough times and getting it right is as
must. All CNC machines imported and modern technologies are being
utilized by a company so this is the prove that company innovate its products.
The core values of KSB are trust, honesty , responsibility, professionalism,
appreciation. These are the main values for success of a company. KSB
turnover and gross profit have shown a noteworthy growth, profit before tax
increased significantly by 46% as compared to previous year. Profit after tax
increased by 48% and earning per share reflect the same trend. During my
six week internship period I studied several documents of company along
with other documents describing regulations and guidelines which are
necessary for the effective working of multinational company.
Company should adopt these terms in its business empowerment,
communication, transperancy and synergy in order to achieve its vision.

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Table of Contents
1.0.0 INTRODUCTION AND HISTORY........................................................13
1.1.0 Introduction ..................................................................................13
1.1.2 KSB Specialization: ....................................................................14
1.2 corporate information.......................................................................14
History of ksb......................................................................................14
1.2.1 MARKETS AND LOCATIONS.......................................................16
Europe:...............................................................................................16
Asia:....................................................................................................16
1.3.0 KSB Pakistan ................................................................................16
1.3.1 Sales Offices...............................................................................17
1.4 Comparison with competitor.............................................................19
1.4.1 Competitor in INDIA ...................................................................19
1.4.2.Competitive advantage................................................................21
1.5 KSB Vision statement.......................................................................23
1.6 KSB Pumps Mission statement.........................................................24
1.7 Corporate objective...........................................................................25
1.8.0 Key Services Offered......................................................................26
1.9.0 Core Values...................................................................................26
1.9.1 Trust: .........................................................................................27
1.9.2 Honesty:.....................................................................................27
1.9.3 Responsibility:............................................................................27
1.9.4 Professionalism: .........................................................................27
1.10.0 Quality principles........................................................................27
1.11.0 KSB-Group strategy ....................................................................28
1.11.1 Active and goal-focused strategy: ..............................................28

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1.12.0 present financial status...............................................................29
2.0.0 Company management system .........................................................31
2.1.0 Management committee.................................................................31
2.2.0 COMPANY INFORMATION .............................................................33
2.2.1 CODE OF CONDUCT..................................................................35
2.2.2 BOARD OF DIRECTORS.............................................................36
2.2.3 organizational structure .............................................................37
2.3.0 MANAGERS RESPONSIBILITY.......................................................38
2.3.1 MANAGEMENT HIERARCHY ......................................................39
2.4.0 Career ladder ................................................................................39
2.4.1 Organizational structure:............................................................41
2.4.2 Diversity at KSB .........................................................................41
2.5.0 Hierarchy of finance department....................................................42
2.6.0 Policies:.........................................................................................43
2.7.0 Management of KSB Pumps Company Limited...............................44
3.0.0 management style ............................................................................49
3.1.0 PROCECSS OF CONTROLLING .....................................................49
3.1.1ADMINISTRATIVE CONTROL:......................................................49
3.1.2 FINANCIAL CONTROL: ...............................................................49
3.1.3 PURCHASE CONTROL:...............................................................50
3.1.4CONTROL OVER EMPLOYEES: ...................................................50
3.1.5 CONTROL OVER THE YEARS .....................................................50
3.2.0 ORGANIZATIONAL CULTURE........................................................50
3.2.1 Leadership style .........................................................................51
3.2.2 Human factor and motivation .....................................................52
3.3.0 PRODUCTION FACILITIES.............................................................55

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3.3.1 DEPARTMENTS..........................................................................56
duties: ...................................................................................................63
3.4.0 Resources and capabilities ............................................................64
Labour productivity.............................................................................64
Machine Productivity:..........................................................................65
Capital productivity:............................................................................65
Energy productivity: ............................................................................65
3.4.1 Naturally close to customers.......................................................66
3.5.0 Brands and products.....................................................................67
Diaphragm valves................................................................................68
Control valves .....................................................................................68
Pumps and fire protection systems ......................................................69
Pumps, control cabinets and emergency power generators...................69
4.0.0 MARKETING MIX .............................................................................71
4.1.0 Category of PROUCTS, applications and name...............................71
4.1.1 Water .........................................................................................71
4.2.2 water transport .........................................................................71
4.2.3 Waste water................................................................................72
4.2.4 CHEMICAL INDUSTRY ...............................................................72
4.2.5 Energy:.......................................................................................72
4.3.0 POTER’S FIVE MODEL..................................................................74
4.3.1 Competitor ................................................................................74
4.3.2 Potential New Entrants...............................................................75
4.3.3 Consumer ..................................................................................75
4.3.4 Supplier .....................................................................................75
4.3.5 Substitute ..................................................................................75

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4.4.0 SWOT ANALYSIS- KSB ..................................................................76
4.4.1 Strength.....................................................................................76
4.4.2 Weakness:..................................................................................76
4.4.3 Opportunities .............................................................................77
4.4.4 Threats.......................................................................................77
4.5.0 STRATEGY ANALYSIS: ..................................................................77
4.5.1 Pricing strategy ..........................................................................78
4.5.2 Cost-based Pricing......................................................................79
4.5.3 Cost-plus Pricing:.......................................................................79
4.5.4 Demand-based pricing:...............................................................80
4.5.5 Competition-based Pricing:.........................................................80
4.6.0 DISTRIBUTION..............................................................................80
4.6.1 DISTRIBUTION METHODS .........................................................81
5.0.0 ANALYSIS OF VARIOUS ACCOUNTING PROCEDURES.....................84
5.1.0 Ratio analysis................................................................................84
5.1.1 Liquidity Ratios ..........................................................................84
5.1.2 Activity Ratios ............................................................................90
Analysis and interpretation: ................................................................98
5.1.3 Profitability Ratio......................................................................105
5.1.4 Leverage ratios .........................................................................118
5.2.0 VERTICAL ANALYSIS ..................................................................126
5.2.1 Balance sheet...........................................................................126
5.2.2 Income statement.....................................................................127
5.3.0 Horizontal analysis......................................................................128
5.3.1 Balance sheet...........................................................................128
5.3.2 Income statement.....................................................................129

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6.0.0 TRAINING PROGRAMME................................................................131
WEEK ONE & two ................................................................................132
WEEK THREE & FOUR ........................................................................133
Week fIVE & SIX ..................................................................................134
Sales tax: ..........................................................................................134
7.0.0 Conclusion and recommendation ...................................................139
7.1.0 Acts of Success: ..........................................................................139
7.2.0 Conclusion..................................................................................140

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INTRODUCTION AND HISTORY

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1.0.0 INTRODUCTION AND HISTORY
1.1.0 INTRODUCTION
The Klein Schanzlin and Becker (KSB) is a German based company which
was founded in 1871 by Johannes Klein (mechanical engineer) and
expanded almost all over the world in 130 years. KSB Pumps Company
Limited is a subsidiary of KSB Aktiengesellschaft operates as a public limited
company in the industry of mechanical engineering.
“Company main objective was innovation and development in the
field of pumps and valves.”
As a global player, it provides services and produces complete hydraulic
systems for the transport of water and waste water in all industries. Today
the Group has a presence on all continents with its own sales and marketing
companies, manufacturing facilities and service operations, with sales
revenue running to 2.2 billion euro’s. Worldwide, KSB employs more than
16,000 people , these all are committed to providing excellent service and the
highest product quality.
KSB’s first subsidiary outside Germany was established in Great Britain in
1896, oversaw by Jacob Klein, the younger sibling of Johannes Klein.
Somewhere around 1924 and 1934 KSB acquired further plants in Germany
and set up European subsidiaries. In the Americas KSB's first backup was
started its operations in 1941. The company's first Asian-Pacific subsidiary
was set up in Pakistan in 1959. In 1960 the KSB Foundation was set up with
stated aims of empowering research in the natural sciences and supporting
education in technology, natural science and economics. Inside the KSB
Group, centrifugal pumps account for around two thirds of sales revenue.
These pumps, as well as valves, are sold to engineering contractors, OEMs
and end users or, in some cases, distributed via dealers.

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KSB manufactures products and components in a total of 16 countries; they
are sold through the Group’s own companies or agencies in more than 100
countries. With their products, the Group companies serve customers in
industry including the chemical and petrochemical industries, customers in
the energy and construction/building services sectors, transport equipment
manufacturers and operators (e.g. ships, rail vehicles), water and waste water
utilities, and mining companies. Once again in 2015, the top-selling markets
for their products were the industrial and energy supply sectors.
1.1.2 KSB SPECIALIZATION:
KSB Pumps Company Limited has some expertise in Bespoke Solutions,
Pumps, Valves and frameworks for modern, building administrations, vitality
and water and waste water applications.
1.2 CORPORATE INFORMATION
HISTORY OF KSB
Foundation of ksb in Pakistan | Jul 18, 1959
Year 1959 marks foundation of KSB subsidiary in Pakistan by the name of
KSB Pumps Company Limited. KSB was established as separate entity in
Pakistan on July 18, 1959. Initially the company had presence in Lahore,
Karachi, East Pakistan and Wah, an army settlement in near Islamabad,
around 10 km away from Hassanabdal, where KSB has its production facility
today.
Technical milestone| Mar 12, 1964
1964 marked the initiation of production at KSB Pakistan's factory located in
Hassanabdal. The employee strength at the facility was approximately 200
employees.
Technical milestone | Dec 4, 1965

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1965 saw the successfull launch of the Deep Well Turbine Pumps (DWT): a
new product in KSB Pakistan's existing line. DWT is an open line shaft water
lubricated single or multistage verticle borehole pump, having application in
water supply, irrigation, lowering of ground water level and de-watering
operations. These pumps are particularly suited for deep installation.
Listing on stock exchange | May 11, 1979
1979 saw KSB Pumps Company Limited become Public Limited and it was
listed on the Lahore and Karachi Stock Exchanges.
Commencement of foundry | Dec 6, 1980
KSB Pumps Company Limited commissioned its Foundry at the factory
premises in Hassanabdal in 1980. Prof. Dr. Otto Schiele, Director KSB AG
West Germany, did the groundbreaking ceremony of this project. Mr. Gert
Lutter was the first Foundry Manager and under his leadership, the Foundry
started the production of ETA, DWT & KWP pumps.
New ranges of submersible pumps |Dec 1, 1983
KSB Pakistan introduced new series of Submersible Pumps in a range of sizes
including BPH-272, 333 and BPN-374, 394, 425 in the year 1983. It was the
continous hardwork of 20 engineers and 29 sub-engineers that had helped
this tehcnological advancement.
Jun 7, 1985
1984 was the silver jubilee year for KSB Pumps Company Limited. Under the
slogan, 'Pumping for Progress', KSB Pakistan defined new heights of success.
The year wittnessed a series of celebrations. Prominent presonalities from
KSB all over the world visited KSB Pakistan; this also included Dr. Klaus
Wiegand, Chairman KSB Pakistan and President of Kay Pump Company,
Canada.

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Dec 4, 1986
KSB Pakistan became the proud recepient of the Merit Trophy for Exports by
the Federation of Pakistan Chambers of Commerce and Industry for 1985-86.
Apr 8, 1987
KSB Pumps Company Limited recieved the Top Company Award in 1987 for
exemplary payment of the shareholdes by karachi stock exchange.
Jan 28, 2000
2000 marked the reciept of the first 'Made by KSB' (MbK) Certificate' for KSB
Pakistan. KSB AG approved and verified the high global qualty standards
used by KSB Pakistan for producing Tubular Casing Pumps: SNW and PNW.
KSB Pakistan was the first Asian Subsidiary to become the proud recipient of
MbK Certification.
1.2.1 MARKETS AND LOCATIONS
EUROPE:
Europe is the best developed sale market for KSB products, where KSB
operates its main manufacturing facilities in Germany and France. Main plant
of KSB AG’s is in Frankenthal, which is its largest in Europe.
ASIA:
Asia is the second-largest market for KSB products, followed by the Americas
and the Region Middle East / Africa. Outside Europe, KSB’s biggest
manufacturing facilities are in Brazil, China, India and the USA.
1.3.0 KSB PAKISTAN
In Pakistan, the company was founded in 1959 and is based in Lahore.
Company in Pakistan offers a wide range of services and activities, from the
manufacture of special pumps, design and production of bespoke systems. A
total of 350 staff commit to first-class customer service, comprehensive
support & consultancy along with development and management of excellent

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technology. In addition, their engineers and technicians can draw on many
years of experience with all KSB products but also products of other
manufacturers. They also offered services to customers at a regional level in
order to further expand their business, KSB Pakistan maintains business
relations with trusted and selected dealers.
At KSB Pakistan the focus is on:
• Division
• Co-ordination
• Control of tasks
• Flow of information
It’s Head Office based in Lahore, a state-of-the-art manufacturing facility at
Hassanabdal
with, sales offices in:
 Lahore
 Karachi
 Multan
 Rawalpindi
 Peshawar
KSB Pakistan enjoys a vast network of Sales Offices throughout the country
and also operates through a widespread KSB Exclusive Partners & Authorized
Dealer Network increasing the breadth and effectiveness of its reach to its
customers.
1.3.1 SALES OFFICES
 Lahore
16/2 Sir Aga Khan Road Lahore.
Ph: (042) 111 572 786, 36304173
Fax: (042) 36366192, 36368878

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Email: info@ksb.com.pk
 Karachi
307 & 308, 3rd Floor Parsa Tower, Block 6,
PECHS Shahrah-e-Faisal, Karachi
Ph: (021) 111 572 786 Fax: (021) 34388302
Email: ksbkhi@ksb.com.pk
 Multan
Golden Heights, Nusrat Road, Multan.
Ph: (061) 111 572 786 Fax: (061) 4541784
Email: ksbmul@ksb.com.pk
 Rawalpindi
309, A3 Peshawar Road, Westridge 1,
Opp. Valley Clinic, Rawalpindi.
Ph: (051) 111 572 786. Fax: (051) 5472612
Email: ksbrwp@ksb.com.pk
 Peshawar
3rd Floor, Mall Tower, 35 The Mall
Peshawar Cell: 0300-5895289
Ph: 091-5285679
Fax: 091-5278919
Email: franchise.kpk@ksb.com.pk

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1.4 COMPARISON WITH COMPETITOR
“Our technology. Your success.”
This is basically the tagline of KSB Pumps and valves company limited
so they continually innovate new products or make modification in an
existing one, in order to satisfy their customer and to make them happy,
they use new technologies and equipped their products with innovation.
In Pakistan KSB has no competitor so they have a monopoly in Pakistan.
The company is a global player so it faces some competitors in other
countries like in India
1.4.1 COMPETITOR IN INDIA
Kirloskar Brothers Limited (KBL)
Kirloskar Brothers Ltd (KBL) is the flagship company of Kirloskar group,
Incorporated in 1920. I t is India's biggest producer and exporter of pumps.
Kirloskar Brothers Limited (KBL) is engaged in the manufacture of a range of
pumps, valves, machine tools and anti-corrosion products. It dominates
almost all segments of various pumps that it manufactures. The organization
is a business sector pioneer in the modern pumps portion with a 24% share.

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KBL dominates the projects and engineered pumps segment (utilised in
turnkey projects) with a 60% share. The company's valves division also caters
to a wide range of industries (8% market share). The company dominates the
machine tools market with a 40% share. It additionally runs a printing
division to oblige printing needs of gathering organizations.
KSB Pump India:
KSB Pumps India, is a subsidiary of KSB group, Germany. It manufactures
various pumps and valves of various specifications to enable fluid
transportation. It is may be the only company that manufactures pumps and
valves to support operations of the agricultural sector and water and sewage
management systems apart from industrial applications such as power,
petrochemicals, etc.
Comparison
KSB
PUMPS
Rs.
KIRLOSKA
R BROS
Rs.
Dec-15 Mar-16
High 624 230
Low 556 113
Sales per share 235.8 326.7
Earnings per share 19.7 -4.2
Cash flow per share 27.7 5.5
Dividends per share 5.50 0.50
TABLE1.11
1

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1.4.2.COMPETITIVE ADVANTAGE
Nature and sources of competitive advantage:
 Standardization
 Use of Internet
 Computer viruses
 Searching for lost or misplaced items
 Scrap rates
 New workers
 Cuts in health benefits
Competetive advantage :
The emergence of competitive advantage because of some factors like:
 External sources of change
 Changing customer demand
 Changing prices
 Technological change
TYPES OF COMPETITIVE ADVANTAGE
 cost and differentiation Cost advantage (similar product at lower cost)
 Differentiation (price premium from a unique product)
INNOVATION OR CHANGE
There are plenty of innovation and changes around the world, but the most
important change is going on the Australia. With water consume and recycling
the water and in industrial sector high pressure pumps showcasing in
exhibition in Brisbane 2010.gobally Ksb innovating a product to convert the

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thermal heat in to energy and use it to increased the operating reliability of
optimised high suitable handling mineral and synethic.
Maintaining innovation is critical and especially in tough times and getting it
right is as must. In 2009 KSB introduce a new pump called “ZORRO” that
was a new innovative change. That was introduced with the current study of
the customer needs.
The company define its change on following factors.
1. Develop productivity measure
2. Determine critical bottleneck operations
3. Develop methods for productivity improvements.
4. Establish reasonable goals
5. Get management support
6. Measure and publicize improvement
7. Don’t confuse productivity with efficiency.
EVIDENCE OF NEW STRATEGIES FOR GROWTH
1. All CNC Machines imported and installed
2. Modern technology is being utilized
3. Workforce/Management people are being deputed on deputed
locally/abroad for training.
4. Most of facilities beyond the Labour Laws are being extended to workforce.
5. Best environmental atmospheres have been provided at their workplace to
facilities the workers and enhance their productivity

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1.5 KSB VISION STATEMENT

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1.6 KSB PUMPS MISSION STATEMENT
We manufacture and market a wide 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, industry
and construction sectors. In line with the Group's
strategy, we are committed to develop into a center 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.

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1.7 CORPORATE OBJECTIVE
Defend high market share in a
growing but competitive sectors.
Continuously expand product &
service offerings in order to
strengthen the position as the
complete solution provider in the
market.

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1.8.0 KEY SERVICES OFFERED
These are some key services that KSB 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
1.9.0 CORE VALUES
The core values of KSB depict the environment in which everyday business is
run and how the management with the help of employees manages to
complete the tasks, successfully. Experience has shown that to get the best
out of employees, it is necessary to create a conductive environment in which
the employed feel that the organization belongs to them and the merit and the
professionalism are the only basis for the career advancement.
The KSB core values also shows the company’s culture and customer use it
to get an overview of the organization. The core values of KSB are:

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 Trust
 Honesty
 Responsibility
 Professionalism
 Appreciation
1.9.1 TRUST:
Trust has to be earned. Everyone of us wanted to achieve it, we can achieve it
through reliability and professionalism in our daily tasks.
1.9.2 HONESTY:
Their top priority is to get the best results that worth for company, regardless
of someone or some specific department. We should not serve to gain advantage
at the expense of others.
1.9.3 RESPONSIBILITY:
Everyone is responsible his own actions, similarly this company is also
responsible in its business and social relations and infect responsibility is their
core value.
1.9.4 PROFESSIONALISM:
The company have a good command of the techniques and methods they need
for their work, and seek to continually acquire further knowledge to improve
effectiveness and efficiency.
1.10.0 QUALITY PRINCIPLES
These quality principles shows the successful past, present and future of the
company. the company first priority is to satisfy their customer KSB knows
the worth of their customer and always satisfy their wishes and change the
specifications according to their demand.thir employees are highly qualified
because they trained their workers and give them necessary information, their
employees are loyal because they provide a family environment, so these loyal
employees work honestly and never compromise on quality

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 Achieving maximum customer satisfaction
 Promoting quality consciousness
 Every employee meets the customer's wishes
 Avoiding mistakes instead of remedying them
 Improving quality
 Involving suppliers
1.11.0 KSB-GROUP STRATEGY
1.11.1 ACTIVE AND GOAL-FOCUSED STRATEGY:
KSB is actively shaping its future, developing new applications for KSB
products and working hard to convince more customers of KSB quality.
The goals for the coming years:
 To be a leading supplier of pumps, valves and related systems in attractive
markets
 To achieve sustainable, profitable growth

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1.12.0 PRESENT FINANCIAL STATUS
present financial status that company show in its annual report 2015 in
the part of director report to shareholders:
Rupees in
‘000’
2015
Rupees in
‘000’
2014
Sales 4,007,244 3,152,062
gross profit 907,592 697,611
profit before tax 368,678 252,099
Profit/ loss for the year 277,366 186,989
earning per share 21.01 14.17

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COMPANY MANAGEMENT
SYSTEM

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2.0.0 COMPANY MANAGEMENT SYSTEM
2.1.0 MANAGEMENT COMMITTEE
Mohammad Masud Akhtar Sajid Mahmood Awan
Managing Director Director
Dr. Matthias Beth Hasan Aziz Bilgrami
Director Director

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Rahat Kaunain Hassan
Director
Syed Hyder Ali Jamal Nasim
Director Director

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Mr. Tonjes Cerovsky
Chairman Board of Directors
2.2.0 COMPANY INFORMATION
Board of Directors
 Tonjes Cerovsky (Chairman)
 Mohammad Masud Akhtar (Managing Director)
 Sajid Mahmood Awan
 Dr. Matthias Beth
 Rahat Kaunain Hassan
 Hasan Aziz Bilgrami
 Syed Hyder Ali
 Jamal Nasim (Nominee NIT)

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Company Secretary
 Sajid Mahmood Awan
Management
 Mohammad Masud Akhtar (Chief Executive Officer)
 Sajid Mahmood Awan (Finance, Administration&Corporate Affairs)
 Syed Tariq Ali (Operations)
Auditors
 A.F. Ferguson & Co. ( Chartered Accountants)
Legal Advisors
 Mandviwala & Zafar
Bankers
 Allied Bank Limited
 Bank Alfalah Limited
 Deutsche Bank AG
 Habib Bank Limited
 MCB Bank Limited
 National Bank Of Pakistan
 NIB Bank Limited
 United Bank Limited
Audit Committee
 Jamal Nasim (Chairman)
 Hasan Aziz Bilgrami (Member)
 Dr. Matthias Beth (Member)
 Syed Hyder Ali (Member)

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Secretary Audit Committee
 Saeed Hussain
Registered Office
 16/2 Sir Aga Khan Road, Lahore - 54000.
 Ph: (042) 36304173, 36370969
 Fax: (042) 36368878, 36366192
 Email: info@ksb.com.pk
Works
 Hazara Road, Hassanabdal
 Ph: (057) 2520236
 Fax: (057) 2520237
 Email: info@ksb.com.pk
HR & R Committee
Rahat Kaunain Hassan Chairperson
Syed Hyder Ali
Member
Mohammad Masud Akhtar Member
2.2.1 CODE OF CONDUCT
The Board of Directors has already adopted a Code of Conduct. The
compliance with the Code of Conduct is compulsory for all employees at all
levels.

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MATERIAL CHANGES
 There have been no material changes since December 31, 2015
and the company has not entered into any
 commitment, which would affect its financial position at the
balance sheet date.
HOLDING COMPANY
 The Company’s holding company is KSB Aktiengesellschaft,
Germany.
2.2.2 BOARD OF DIRECTORS
 The Board of Directors presently comprises of eight individuals
out of which six are non-executive.
 The Chairman of the Board is other than the CEO and non-
executive Director.
Name of Directors No. of Meetings attended
Mr. Tonjes Cerovsky 4
Mr. M. Masud Akhtar 4
Mr. Sajid Mahmood Awan 4
Dr. Matthias Beth 4
Ms. Rahat Kaunain Hassan 2
Mr. Jamal Nasim 4
Mr. Hasan Aziz Bilgrami 3
Syed Hyder Ali 2

37
2.2.3 ORGANIZATIONAL STRUCTURE
Customer-focused and flexible
KSB has designed the organizational structure in order to implement the
group strategy responsibly and successfully:
 Regional units for Sales and Operations have brought KSB closer to the
customer from an organizational point of view.
 Six Business Units assess the opportunities for KSB products and
services across all markets and industries. This drives new
developments and innovations.
 Clear responsibilities in the value creation chain reduce complexity and
costs.

38
2.3.0 MANAGERS RESPONSIBILITY
KSB managers are responsible to distribute responsibility and authority to
job holders. Job Descriptions of each employee is approved by Managers and
then the employees work according to their laid down job descriptions.
Activities are organized in such manner that there are minimal chances of
deviation.
KSB Managers structure:
• Division of labor
• Delegation of authority
• Departments
• Span of control and
• Co-ordination among departments.
KSB Pakistan departments are flexible and can be changed as per business
requirements. For example a new department called strategic marketing has
been recently introduced based on market demand. One good thing that was
observed is that before the commencement of operations all functions of the
new department were explicitly planned.
One important factor for the success of KSB Pakistan has been delegation of
authority. This process is strongly encouraged as KSB wants its employees
not to feel constrained in any way. Employees are encouraged to take as much
responsibility that they want to take as long as it is in line with KSB policies.
This decentralization approach has improved the employees’ performance and
has given them the motivation that they are in control of their respective
domains.

39
Co-ordination within departments and with other departments is also very
important. KSB Pakistan encourages open communications between and
within departments as long as it is not related to politics or any other anti
company activities. KSB Pakistan has benefited immensely with this
approach as employees get vital information first hand from others instead of
waiting for an email to arrive. Over the years KSB has organized a sound
management structure resulting in company’s success. Though there have
been mistakes as well but the best thing for the company has been that it has
learned from its mistakes and has moved on with positive vibes.
2.3.1 MANAGEMENT HIERARCHY
The company has a centralized management structure which is headed by a
“Management Committee”. This “Management Committee” reports to “Board
of Directors” which meets as per statuary requirements. Company
management is headed by its Chairman who is also regional controller of the
company. Operations of the company are headed by the Chief Executive
Office / Managing Director. Composition of the Board of Directors is given
as under.
2.4.0 CAREER LADDER
Career ladder is a metaphor for job promotion. In business and human
resources management, the ladder typically describes the progression from
entry level positions to higher levels of pay, skill, responsibility, or authority.
Career at ksb:
They are always interested in skilled and experienced people, No matter how
many years work experience you already have.. After all, KSB prides itself on
being a global specialist in pumps, valves and systems. And a specialist
requires specialists, experts and managers alike.

40
KSB offers Systematic initial and continuing training, strategic career
planning and targeted support for employees- these are the key cornerstones
of our human resources policy, no matter what position you are in.
HR team of KSB said when I asked a question: how much career development
in KSB?
They replied:
“As an employer, we are keen for each and every one of our employees to think
and act beyond his or her area of specialisation. We offer targeted continuing
training opportunities and interesting career perspectives. All those who work
well can be sure they won’t be left to languish in the same position. We
support our employees’ professional ambitions and promote their
development, also from the point of view of international strategic career
planning. After all, we want to bundle our combined skills and thus achieve
great things the world over.”
KSB is a multinational firm so it is a global player, they find a expert people
in their specialized field. When I was getting training in KSB I observed that
every person is specialized in their specific job task, their jobs are as diverse
as the products So if you have sound specialist know-how and above-average
dedication, people skills, cultural insight and
a willingness to take on responsibility for both yourself and others, then this
is the best firm that u join and they always welcome your skill set.
Their HR department said:
“We need people like you because your skills will drive our company forward“
 Reliable products that enjoy an excellent reputation on the market

41
 A pleasant corporate culture that provides plenty of scope for personal
development
 And colleagues who you can rely on
These are just some of the many factors that their employees value about their
company and why they cherish the opportunity to work for KSB.
Worldwide contacts and challenges are perfectly normal in KSB.
2.4.1 ORGANIZATIONAL STRUCTURE:
Despite their global operations, you’ll find a transparent organisational
structure at every one of their locations, a structure characterised by a
friendly, relaxed atmosphere. Every single employee at KSB is valued and
promoted individually – because they know that these are their future.
2.4.2 DIVERSITY AT KSB
As a global player, they have a particular responsibility towards their
employees and the countries in which they operate. And they fulfill their
responsibility they always welcome diverse culture so that variety of brains
and technology meet together and innovate something.

42
2.5.0 HIERARCHY OF FINANCE DEPARTMENT
CFO
MR. SAJJID MAHMOOD AWAN
DGM
MISS. FRYAL ZAFAR
MANAGER
MR. NAVEED
EXECUTIVE ACCOUNT
MR. SHEHRYAR
NAVEED
EXECUTIVE
ACCOUNTS
MR. AHMAD BILAL
DEPUTY MANAGER
MR. ANAYAT
HUSSAIN
DEPUTY MANAGER
MR. HAFIZ M. ZIA
ULLAH
EXECUTIVE
ACCOUNTS
MR. ALI RAZA
DEPUTY MANAGER
MR. KHALID
MEHMOOD
SENIOR MANAGER
MISS. ADAN SULTAN
ACCOUNT
EXECUTIVE
MR. TARIQ
DHAMSI
DEPUTY MANAGER
MR. BADDAR
MUNIR
MANAGER PROJECT
ACCOUNTS
MR. AMIR ILLAYAS
ACCOUNT
EXECUTIVE
MR. SOHAIL

43
2.6.0 POLICIES:
policies are standing plans that provide guidelines for decision making. They
are guides to thinking that establish the boundaries or limits within which
decisions are to be made. Within these boundaries, judgment must be
exercised. The degree of discretion permitted will vary from policy to policy.
Some policies are quite broad and allow much latitude, whereas others are
narrowly constructed and leave little room for judgment. To illustrate, a policy
of selecting the best qualified candidate for a managerial position permits
more discretion than a policy of promoting the best qualified candidate from
within the organization. The latter is a narrower policy because it limits the
choices to current employees. A policy of promoting from within the
organization based on standardized test scores and seniority would, of course
be an even more restrictive policies.
2.6.1 FUNCTIONS OF POLICIES:
Policies perform several important functions in organizations. First and
foremost, they simplify decision making. They delimit the area of search for
possible alternatives. Consequently, they promote efficiency in the utilization
of managerial time.
Policies also permit managers to delegate to subordinates more decisions and
more important decisions than they would otherwise. Thus, if a manager
establishes a policy governing a specific class of decisions, he or she will feel
more comfortable delegating these decisions to subordinates because they will
have set guidelines within which to make choices.
Finally, policies help secure consistency and equity in organizational
decisions.
2.6.2 HIERARCHAL STRUCTURE OF POLICIES:
Policies are found at all levels of organizations. At the very top, key policies
may be important elements of the company's overall strategy and help define

44
how it differentiates itself from its rivals and competes in the marketplace.
Such policies are commonly called functional strategies because they guide
strategic decision making at the functional level. High-level policies typically
must be interpreted and narrowed at lower organizational levels. This reality
results in a hierarchical structure of policies within organizations. At the sales
manager level, this policy might be refined to state that the company will meet
competitors' prices on all of the firm's nonproprietary products. And, at the
district level, the policy might be narrowed again to read that district sales
managers can make price concessions up to 10 percent on their own authority
but, beyond that, they must get approval from upper authority.
2.7.0 MANAGEMENT OF KSB PUMPS COMPANY
LIMITED
1.Mohammad Masud Akhtar
Managing Director & CEO
Mohammad Masud Akhtar has been a member of company’s Management
Committee as Managing Director & CEO since 2006. He is M.S in
Manufacturing Systems Engineering from Lehigh University, Pennsylvania.
U.S.A. He has a diversified professional experience of 30 years in the areas of
Management, Sales & Marketing and Production & Operations. He has
worked on various senior management positions in renowned multinational
companies and put them on course to profitability and growth. He is member
of Board of Directors of Technology Up-gradation & Skill Development
Company and Lahore Stock Exchange. He is a member of Board of Governors
of National Management Foundation, LUMS and Vice President of Pakistan
Foundry Association. He is Director of Pakistan German Business Forum and
the Chairman of PGBF Northern Chapter. He is also a Certified Director of
Pakistan Institute of Corporate Governance.

45
2. Sajid Mahmood Awan
Director Finance & Company Secretary
Sajid Mahmood Awan has been a member of the Management Committee
since 2006. He has about 23 years of experience in Finance & Accounting,
Corporate Governance and Compliance. He holds the office of Director
Finance & Company Secretary at KSB Pakistan and is also the Regional
Officer Finance for Middle East & Africa Region. He is FCMA, FCIS and a
Certified Director.
3. Syed Tariq Ali
Director Operations
Syed Tariq Ali has been a member of the Management Committee since 2012
and currently holds the office of Director Operations at works. He is a
Mechanical Engineer from NED University of Engineering & Technology,
Karachi with a Masters Degree in Business Administration from University of
Texas, USA. He has about 25 years of experience in the areas of Operations
and Sales & Marketing.
4. Muhammad Imran Malik
Director Sales & Strategic Marketing
Muhammad Imran Malik joined the Management Committee in 2013. An
Engineer by profession and holding a Masters Degree in Business
Administration, he has a professional experience of more than 12 years in
national and multinational organizations in Sales, Strategic Marketing and
Project Management.
5. Muhammad Omar Seljouk
General Manager Customer Service
M. Omar Seljouk became a member of the Management Committee as General
Manager Customer Service in 2013. He is an Engineer by profession and holds
a Masters Degree in

46
Business Administration. He has 21 years of experience with him in the areas
of Customer Service and Project
6. Mamoon Riaz
Director Projects
Mamoon Riaz joined the Management Committee in 2011 as General Manager
Projects. He has done his Masters in Mechanical Engineering & Quality
Management. He has an experience of 22 years in the area of Project
Management.
7.Matraf Rasul
General Manager Materials
Matraf Rasul became a member of Management Committee in 2011 and is
currently serving as General Manager Materials. He holds a Master Degree in
Manufacturing & Industrial Engineering with an MBA from LUMS. Matraf has
a professional experience of 22 years in the areas of Supply Chain,
Manufacturing, Planning and ERP System Implementations.
8. Shahzad Saleem
Head of Human Resource
Shahzad Saleem has been a member of the Management Committee as Head
of Human Resource since 2012. A Business graduate by profession, he has
more than 10 years of HR experience with renowned national and
multinational companies in Pakistan and Middle East market.
9. Shahzad Umer
Deputy General Manager Quality, Health, Safety & Environment (QHSE)
Shahzad Umer Heads the QHSE Department and has been the member of the
Management Committee since 2010. He is an Engineer by profession having
professional experience of 17 years. He has worked with a number of national
& multinational organizations in various capacities of Quality Assurance,
Quality Management and HSE Systems.

47
10.Saeed Hussain
Head of Internal Audit
Saeed Hussain joined as a member of the Management Committee since 2013
as Head of Internal Audit. He is a Management Accountant by profession and
holds around 15 years of work experience. He has worked on different
positions in the areas of Finance, Accounts & Internal Audit.

48
MANAGEMENT STYLE
AND
PRODUCTION FACILITIES

49
3.0.0 MANAGEMENT STYLE
3.1.0 PROCECSS OF CONTROLLING
These are some processes of controlling that every company should adopt to
successfully manage organization:
 Administrative control
 Financial control
 Purchase control
 Control over employees
3.1.1ADMINISTRATIVE CONTROL:
Administrative control is the most important factor in the success of any
organization. No compromise is made on any policy or principle no matter
who gets affected. For example “coming on time” to work places in KSB is
strictly followed and even the MD has to punch his card. Company vehicles
are used under strict administrative control with proper permission. No
employee is allowed to sit late without getting approval from his immediate
boss.
3.1.2 FINANCIAL CONTROL:
KSB Pakistan also has a strong financial control system in place. All expenses
are according to approved budget layouts and no one is allowed to exceed
budget. Day to day spending is properly accounted and any discrepancies are
immediately reported to Financial Controller who takes necessary action. In
addition the company has an “Internal Audit” department which does spot
checks of financial information.

50
3.1.3 PURCHASE CONTROL:
KSB Pakistan purchases are also strictly controlled. The purchases are done
through approved vendors who have to pass stringent requirements. The
suppliers are regularly audited against their promised delivery dates and if
there is a delay in deliveries they are penalized. Supplier rates are also
regularly checked against competitors and it is ensured that the rates are not
above market prices. Furthermore if there is any problem in terms of quality
of supplies, the shipments are returned and the supplier is penalized. All
purchases at KSB Pakistan are through the central purchase department.
3.1.4CONTROL OVER EMPLOYEES:
Employees are also controlled by measuring their performance against some
strict qualitative benchmarks. Employees who cannot perform as per
expectations are simply asked to leave by KSB Pakistan management. It is
evident that KSB Pakistan has got a strong control mechanism in place which
is one of the reasons for its success over the years.
3.1.5 CONTROL OVER THE YEARS
Over the years up till now the organization has not faced any kind of problems
over control. The organization has a very friendly environment where all the
employees are at ease so there are hardly any problems of controlling.
3.2.0 ORGANIZATIONAL CULTURE
Organization Character is an aspect of organizational culture that refers to
"behind the scenes personality" of a company. These are the explicit or implicit
protocols that soon become apparent to all employees. KSB Pakistan has an
Entrepreneurial Organizational
Culture with a system of shared values, beliefs and norms of its members.
The organization values creativity, creative people believing that innovating

51
and seizing market opportunities are appropriate behaviors to deal with
problems of survival and prosperity, environmental uncertainty and
competitor threat.
Innovation has been the main reason for the growth of this company and
innovation is brought by people. KSB Pakistan has always encouraged
innovation and creativity. In market the only way to survive is to come up
with new products.
Since the culture takes into account how an individual's perception of his/her
company is shaped to a large extent by day-to-day experiences, the
Management has an open door policy where by anyone can walk into any
senior manager’s office and can speak his mind. Good ideas are appreciated
both in terms of economics as well as socially. Promotions are mostly
dependent on how much an employee has added value to the organization
during a fiscal year.
Major events are celebrated in the shape of monthly dinners and tea parties.
These events are attended by are regularly attended by Senior Management.
The company also has a weekly intercompany publication which highlights
the achievements of different employees or departments. New employees and
birthdays of employees are also a regular feature of this publication. Thus this
publication gives the feeling to everyone that they are part of a family and
everyone’s efforts are appreciated.
3.2.1 LEADERSHIP STYLE
KSB Pakistan believes that an organization has the greatest chance of being
successful when all of the employees work toward achieving its goals. Since
leadership involves the exercise of influence by one person over others, the
quality of leadership exhibited by supervisors is a critical determinant of
organizational success. Thus, supervisors study leadership in order to
influence the actions of employees toward the achievement of the goals of the
organization.
That company believes in hiring the best people and is fully supportive of their
efforts to lead their respective domains. One important thing I observed at

52
KSB is everyone has to show leadership qualities. This is necessary because
the company believes that a good
leader can not only improve quality of work but can also bring dividends to
the company in terms of an effective work force which is totally motivated.
At KSB Pakistan Leadership skills are also measured by checking the
motivation level of different employees working under a particular leader. If
the employees are found to be un-satisfied with the leader then either the
leader is changed or is given the opportunity to attend some professional
leadership trainings so that his deficiencies are removed. The Management at
KSB wants its employees to lead things and wants to pass on the message to
the employees that it is their company.
One important factor that has been observed is that the Management at KSB
believes in leading by example. For example GM level people have been
observed doing field work during installation of pumps along with workers.
This not only shows their commitment to the organization but also exemplifies
their leadership qualities. It also shows that the management is willing to go
to any lengths to motivate its employees.
3.2.2 HUMAN FACTOR AND MOTIVATION
For an organization which is solely dependent on product sales, keeping the
employees motivated is crucial for its survival. Like any organization KSB
Pakistan has had its fair share of ups and downs. There have been times in
its history when due to Pakistan’s economic conditions, sales have nosedived.
The strength of the organization becomes evident when it not only survives
such hard times but also emerges out of the crisis more powerful than ever.
Studying different financial statements that were made available, today the
company stands at an annual sales intake of more than 2 Billion Pak Rupees.

53
EMPLOYEES ARE REWARDED
KSB Pakistan keeps its employees motivated in a number of ways. For
example recently all sales executives were given brand new laptops which
were a long standing demand from them. Besides these types of short term
benefits there are a number of long term benefits as well. All employees’
performance is benchmarked against quantitative indicators. The company
uses “Balanced Score Cards” to measure performance.
Sales staffs which form the life line of the company are motivated through a
special “Sales Incentive” program. Under this program targets are given to
each sales executive which is tied to some big financial incentive. Bonuses
which include cash payment, cars, and trips to foreign countries are some of
the incentives which are on offer through this program. Further motivating
factors include trainings in Germany on rotation basis as well as participation
in all relevant local trainings and research seminars. These perks and benefits
are not limited to sales staff only.
All departments are kept on equal ground. For example purchase department
benefits are benchmarked against the percentage of savings they make every
year in purchases. Similarly for stores departments the benefits are
benchmarked against reduction of stock in hand. All departments are
required to give an annual training requirement for their. All these trainings
help the employees motivated as they are all the time learning new things
without the need to change their job.
One surprising thing during the study was that despite an exhaustive list of
motivating programs, the company has one of the highest turnover rates in
Pakistan which stands at 25% on an annual basis. The main reason for this
high rate is that employees of KSB are readily accepted by competitors on
higher salaries and this is something that the company is seriously looking
into these days.

54
TRAINING PROGRAME
There are two types of training being carried on:
 Internal
 External
Internal trainings are in-house training which are conducted within the
organization for the upgrading of the employee. External trainings are
conducted outside the organization these are in form of seminars and
workshops conducted both nationally and internationally.
FACILITIES
KSB company provide some facilities to employees, so that their morale and
motivation does not go down. These facilities are:
 Medical
 Provident fund
 Gratuity
 Car policy
 Loans
 Telephone
 Bonuses
 Scholarships in training
PERFORMANCE STANDARDS
KSB Pakistan being a manufacturing company has to follow strict industry,
quality, financial, administrative and safety controls. The effectiveness of
these controls is measured and reported to KSB AG and to external auditors
who regularly perform quality audits. The company cannot be complacent in
controlling as it is also in export business in which representative of foreign

55
buyers does snap inspections of factories and related areas. On the
production side each and every component, assembly and even sub
assemblies are properly labeled, dispatched with proper verification and their
usage is properly accounted. Wastages in raw materials or due to faulty
production are taken into account and guilty party is penalized. Furthermore
all production activities are ensured to be according to plan because if
production plans are not properly followed it may lead to loss in terms of
workers sitting idle or simply no work because of materials not coming on
time.
SOCIAL RESPONSIBILITY PROGRAM
KSB Pakistan although does not run any full time social programs but
contributes on and off in different social events. Some of its contributions over
the years have been :
 Donation of computers to orphanages
 financial assistance to lower grade employees,
 support of next of kin after death of an employee and provision of
medical facilities in best hospitals in case of accident
The company also gives a percentage of its annual profits to different Non
Government Organizations (NGOs’).
3.3.0 PRODUCTION FACILITIES
1964 marked the coommencement of production at KSB Pakistan's factory
located in Hassanabdal. The employee strength at the foundary was
approximately 200 employees.

56
3.3.1 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 to have 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.

57
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

58
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 TEMP SPEED
65-
300
/hrup to
1900 m
up to
120 m
up to -
30 ºC
to 250
ºC
up to
2900
rpm

59
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 H TEMP
200-
350
/hrup to
2900 m
up to
100 m
up to 105
ºC

60
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 SPEED
65-
125
/hrup to
370 m
up to
600 m
up to
200 ºC
up to
2900 rpm
SUCTION PRESSURE
DISCHARGE
PRESSURE
up to 25 bars up to 63 bars

61
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.
Energy
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. Their 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.

62
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 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

63
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.
FINANCE DEPARTMENT
The goal of any finance function is to achieve three benefits: business
support service, lowest costs and effective control of the environment.
Money is the lifeblood of a business and finance is the nerve center.
Finance is required to promote or create a business, gain assets, develop
products, run market surveys, advertise. The conventional view of
finances focuses on being reactive, efficient, quantitative and risk averse.
New innovative views focus on being vision-oriented, opportunity and
growth focused, intuitive and risk-taking.
DUTIES:
 Budget And Forecasting
 Bookkeeping
 Reporting
 Manage payables And Receivables

64
3.4.0 RESOURCES AND CAPABILITIES
LABOUR PRODUCTIVITY
In KSB Productivity can be defined as how efficiently and effectively we
use our resources at lowest possible cost. Labour plays a very important
role and consider as a basic unit for the productivity of any organization.
There are many factors that influence on the labour productivity and it
is very difficult to measure. There are many factors that increase the
efficiency and effectiveness of any organization but labour is consider as
one of an important element. Labour efficiency depends upon their skills
and knowledge towards their job. If their attitude towards job is positive
and they are internally satisfied with their job they will do their work
honestly and they will be loyal with their jobs and their attitude at the
work place will be better than those who are not internally satisfied with
their jobs. So there should be right people at right place. Experience
makes the labour skills high, the high experience in field leads to high
performance at workplace. More experience and high skilled employees
play a very important role in the productivity of any organization. Attitude
also consider a lot... if any employee has high skills but has poor attitude,
his performance and output will be low and this will produce a negative
effect on the overall performance of any organization. So there should be
always positive attitude towards work for better performance.
Training also counts a lot. If employees have not accurate knowledge
about their work then the organization's productivity can be low. If the
employees do not know how to use the new technology or new machinery
and they have no knowledge to handle the new technology and they are
not trained how to use this, then this can produce a negative effect on
the efficiency of the organization and the organization can not compete
in the market.
Motivation is also another factor in the productivity of KSB organization.
If employees are motivated by their manager their performance level is

65
limited level. Managers keep their employees motivation level high they
can motivate them by fulfilling their basic needs, their safety need, he
can motivate them by increase their salary by giving them bonus on their
work. They should reward their employees and treat them equally and
eliminate the discrimination among them. He should show sympathy
with their personal problems, promote their work level and should
increase their wages etc. So these are the factors to enhance the efficiency
of the labors and decrease the efficiency of the labors. By eliminate the
negative factors and increase the positive factors KSB increase overall its
performance.
MACHINE PRODUCTIVITY:
In the past KSB System for purchasing and delivering used the comet
software but analysing the in future that won’t work they move to more
advance level software called SAP. Machine productivity, in today's
working environment, is something we all must strive for. Software
systems aim to improve efficiency through advanced monitoring of
machinery and removing the reliance on additional personnel who would
normally be required to do perform that monitoring.
CAPITAL PRODUCTIVITY:
A way of measuring a company's efficiency by comparing working capital
with sales or turnover. I have done this analysis in chapter five.
ENERGY PRODUCTIVITY:
Like labour or capital productivity, energy productivity measures the
output and quality of goods and services generated with a given set of
inputs. The ratio of value added to energy inputs, which is the inverse of
energy intensity of GDP, measured as a ratio of energy inputs to GDP.
Energy productivity is a useful tool with which to analyze the public-
policy aims of demand abatement and energy efficiency because it
encapsulates

66
both. By looking in terms merely of shrinking demand, there is a danger
of denying opportunities to consumers particularly those in developing
economies that are an increasingly dominant force in global energy
demand growth. Rather than seeking to reduce end- user demand and
thus the level of comfort, convenience, and economic welfare demanded
by consumers there should be a focus on using the benefits of energy
most productively. The concept of energy productivity provides an
overarching framework for understanding the evolving relationship
between energy demand and economic growth.
Energy-productivity improvements can come either from reducing the
energy inputs required to produce the same level of energy services or
from increasing the quantity or quality of economic output.
3.4.1 NATURALLY CLOSE TO 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.
Innovative technology, efficient solutions and highest quality standards
are essential in competitive business.
Choose KSB and you will be choosing integrated system solutions!

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“KSB & you…..flowing together, growing together”
They 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
throughout the country with sales, services and dealer network supported
by over 400 employees. KSB said:
"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 its 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.
3.5.0 BRANDS AND PRODUCTS
The KSB umbrella brand comprises a number of brand names which
represent high-quality products and services of the KSB Group. KSB
Pakistan, too, supplies brands which offer the KSB quality customers can rely
on.
KSB Pakistan not only offers a wide range of brand pumps, valves, systems
and further accessories. In order to be able to provide bespoke services, in-
depth technical knowledge and tailored solutions, KSB company also supplies
products of other manufacturers, which round off the range of KSB products.
Trademarks of KSB

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DIAPHRAGM VALVES
Under the SISTO brand, KSB sells its diaphragm valves. They perform shut-
off duties in building services, industrial, water management and power
generation applications. Under this brand name, KSB offers special valves for
sterile processes including biotech applications.
CONTROL VALVES
The MIL brand represents control valves manufactured by the Indian
subsidiary MIL Controls Ltd. MIL valves are most common in the Asian
market.

69
PUMPS AND FIRE PROTECTION SYSTEMS
Under the ITUR brand, KSB ITUR Spain, S.A., manufactures pumps for use
on ships as well as fire protection systems for building services and industry.
PUMPS, CONTROL CABINETS AND EMERGENCY POWER GENERATORS
With KAGEMA ,KSB offers a complete range of electrically driven and diesel
pumps, control cabinets and emergency power systems for fire fighting.

70
MARKETING MIX

71
4.0.0 MARKETING MIX
4.1.0 CATEGORY OF PROUCTS, APPLICATIONS AND
NAME
4.1.1 WATER
WATER EXTRACTION
Applications covered by KSB water extraction products:
 Extraction of water from rivers and seas
 Water extraction from wells, shafts and discharge tubes
 Water extraction from dams and lakes
 Groundwater management
WATER TREATMENT
 Seawater desalination
 Water treatment
4.2.2 WATER TRANSPORT
Its applications are:
 Raw water transport
 Pressure boosting
 Water distribution
 General irrigation and spray irrigation
 Flood control
 Polder pump stations
 Drainage
 Systems and rehabilitation

72
4.2.3 WASTE WATER
Applications:
 Municipal Waste Water Transport
 Municipal Waste Water Treatment
 Industrial Waste Water
4.2.4 CHEMICAL INDUSTRY
 Oil / Gas
 Special processes
 General Processes
 Marine
 Steel
 Biofuels
 Pharmaceutical/ Biotechnology
 Food and beverages
4.2.5 ENERGY:
 Power station> 100 MW
 Power station<100 MW
 Nuclear power stations
overall product line is:
 Submersible motor pumps for surface drainage
 Axially split pumps
 Centrifugal pumps
 Multi-tech high-pressure pumps
 HPK hot water circulating pumps, sewage lifting units

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 Isoria butterfly valves
 CPK, KWP, Etanorm and Tyachem industrial pumps plus Isoria and
Danais
 LSA slurry pumps
 RDLO pipeline pumps
 Sal-Tech energy recovery system with pressure exchanger, high-
pressure pumps and controls
 Zero-leakage pumps type Secochem
 Boiler feed, condensate and cooling water pumps for efficient use of
fuel
KSB produce a large variety of pumps to serve various sectors of the economy.
The new pumps for local production have been selected to particularly meet
the 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. The latest additions have been
pumps of large capacity which are specifically meant for irrigation and
drainage applications.
Pumps are produced in various metallurgical executions including cast iron,
Ni-resist cast iron, bronze and stainless steel. 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

74
automotive components apart from pump and valves castings and is a leading
supplier of tractor components castings in the country.
4.3.0 POTER’S FIVE MODEL
Poter’s five forces have been analysed to develop KSB successful marketing
strategies. By focusing and analysing the structure of and dynamics between
the Five forces :
 Competitor
 Potential new entrants
 Customer
 Supplier
 Substitute
KSB is working on to find the opportunities for improving upon its marketing
strategies.
These forces are identified as follows:
4.3.1 COMPETITOR
 Price
 Flexibility
 Quality Service
 Differentiation
 Time.
These five identify the real competitor of the business. As in chapter one I
discuss one Indian competitor KBL (Kirloskar Bros) that KSB has faced. Both
companies have achieved their reason of competitive advantage as well as
quality in terms of product services and innovation.

75
4.3.2 POTENTIAL NEW ENTRANTS
To be provided world class human resource with highly motivated and
empowerment to the new Entrants, which includes Local Training, Training
Abroad, Service Award, Leaves, Medical Insurance, Travelling benefits, salary
employment benefits, personal loans.
In 1970 Dawood engineering introduces new technology in the pumps and
valves business.
4.3.3 CONSUMER
Product is to be provided to consumers on economical cost prevailing in the
market. All facilities such as installation, commissioning, periodically repairs
& maintenance are to be provided by the Suppliers. Suppliers as and
demanded by them on Priority basis. KSB Operates in the field of Industry
and agriculture sector and industry sector is related with the industry of spare
parts which includes companies such as Toyota and Honda. but as far as
agriculture sector is concerned the actual consumer is the agricultural land
consumer.
4.3.4 SUPPLIER
As large organization KSB deals with lot of suppliers who are providing goods
and services to KSB as well as to its customers. There is a supply chain Model
Consumer KSB Supplier of component group and systems Supplier of
components systems, suppliers of c part, Supplier of un-machined semi
finished and standardized parts
4.3.5 SUBSTITUTE
The sector is in state of rapid growth and technological development, and
therefore new competitors are coming to the sector even though the sector is
dominated by KSB As far as other companies are in they are playing good role
in the market.
1. Products to be supplies on low case

76
2. High-performance design or high quality consistent quality.
3. Rapid delivery (on-time delivery)
4. Flexibility
5. Superior customer service.
6. Convenience.
4.4.0 SWOT ANALYSIS- KSB
In SWOT analysis you identify Strengths, weaknesses, market opportunities
for your company and threats to your business. The way to use the analysis
is develop marketing strategies that will minimize the affect of weaknesses on
the business, while maximizing the strengths. By that will help in matching
your strengths against the market opportunities.
4.4.1 STRENGTH
 Job Knowledge
 Productivity
 Job perfection
 Professional ability
 Sense of responsibility
 Initiative.
 Supervisory/Managerial skills
4.4.2 WEAKNESS:
All weaknesses to be pointed by the immediate
Supervisors/Foreman/Engineer/Managers of their subordinates so that
corrective measures such as training of the relevant job, discipline, co-
operation, attitude and behavior are to be adopted for improvement of quality
of products.

77
4.4.3 OPPORTUNITIES
 Opportunity in Industrial Engineering sector such as spare parts and
other components.
 They provide facility of after sale service infect KSB has a separate
department of after sale if any maintenance required than consult with
after sale department.
 KSB Pumps has a large number of sales offices around the country, so
they avail the opportunity of fast distribution network.
 Their public relations shows the true picture of company and with that
they attract new buyers.
 KSB has a global player, Increasing its physical and technological
capabilities are its opportunities.
4.4.4 THREATS
 Economic conditions. The current economical condition of the country.
 Legal environment. The laws conflicts in the business for the legal
framework.
 Technology. The technological changes in terms of innovation.
 Competition. More threats from the competitors with low pricing
strategy.
 Markets. Business condition and the market condition.
4.5.0 STRATEGY ANALYSIS:
For several years, the share pump-related services have taken in the value
creation chain has been on the increase. The term is used to describe the road
from the raw material to the consumer plus the value added at every station.
In KSB Pakistan the Structure in the designing of implementing and
evaluating strategies is based on the specific process of the organization’s
mission, Vision and objectives, developing policies and plans. A balance

78
scorecard is often used to evaluate the overall performance of the business
and its progress towards objectives.
4.5.1 PRICING STRATEGY
The pricing strategy used by KSB Pumps is confidential and done by
company’s top management.
PRICING OBJECTIVES
The objectives are:
 Profit maximization
 Revenue maximization
 Price stabilization
Estimate the demand curve
There is a relationship between price and quantity demanded. It is important
to understand the impact of pricing on sales by estimating the demand curve
for the product and after that cost calculation has been done

79
PRICING METHODS
To achieve the pricing objectives, managers use these pricing methods:
The company uses these strategies:
4.5.2 COST-BASED PRICING
Cost-based pricing refers to a pricing method in which some percentage of
desired profit margins is added to the cost of the product to obtain the final
price. In other words, cost-based pricing can be defined as a pricing method
in which a certain percentage of the total cost of production is added to the
cost of the product to determine its selling price. Cost-based pricing can be of
two types, namely, cost-plus pricing and markup pricing.
These two types of cost-based pricing are as follows:
4.5.3 COST-PLUS PRICING:
In cost-plus pricing method, a fixed percentage, also called mark-up
percentage, of the total cost (as a profit) is added to the total cost to set the
price. Cost-plus pricing is also known as average cost pricing. This is the most
commonly used method in manufacturing organizations.

80
4.5.4 DEMAND-BASED PRICING:
Demand-based pricing refers to a pricing method in which the price of a
product is finalized according to its demand. If the demand of a product is
more, an organization prefers to set high prices for products to gain profit;
whereas, if the demand of a product is less, the low prices are charged to
attract the customers.
The success of demand-based pricing depends on the ability of marketers to
analyze the demand. This type of pricing can be seen in the hospitality and
travel industries. For instance, airlines during the period of low demand
charge fewer rates as compared to the period of high demand. Demand-based
pricing helps the organization to earn more profit if the customers accept the
product at the price more than its cost.
4.5.5 COMPETITION-BASED PRICING:
Competition-based pricing refers to a method in which an organization
considers the prices of competitors products to set the prices of its own
products. The organization may charge higher, lower, or equal prices as
compared to the prices of its competitors. They react according to market
norms.
4.6.0 DISTRIBUTION
Distribution channels include:
 retailing direct to the public
 selling goods via wholesalers
 retailing online
 using distributors, consultants or agents to sell your product

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4.6.1 DISTRIBUTION METHODS
DIRECT SELLING
Many businesses choose the direct-sales channel, because you have access
to the customer and keep all revenue under the control of the company. Direct
sales let you do your market research and choose your own customers while
setting the selling price. The downside is that it takes a lot of time and focus
away from your main preoccupation: the production of high-quality goods.
Direct selling is a good match for a marketing plan that has identified,
researched and segmented the final customers.
WHOLESALE
When you have difficulties establishing who your retail customers will be and
don't have time to go out and sell, your marketing plan can focus on wholesale
distribution. This choice is especially valid if your potential customers are
widely dispersed or located far from your facilities. Wholesale distribution
leaves the selling to wholesalers and retailers specialized in
retail sales. Because they have the sales costs, you may receive only a portion
of the final sales price, but you can focus on manufacturing the best product
at the lowest cost.
MAIL ORDER
Mail order is a low-cost distribution channel that is convenient for the
customer. You can use mail order by buying mailing lists or placing ads in a
suitable publication. If you send out material to a mailing list, you need fliers
and other materials. The mailing list has to target the demographic groups
that you expect will buy your products, as described in your marketing plan.
With time, you can create your own mailing lists complete with customer
profiles and preferences.

82
ONLINE
A channel that is disruptive to the traditional ways of marketing and
distribution is the online channel. Harnessing social networks, online ad
campaigns and message boards to spread the word, you can achieve
substantial sales volumes quickly. Your marketing plan has to have an overall
strategy, because online sales can suffer from instability and large variations
unless there is a strategic direction to keep potential customers engaged.
You can place online order with detailed specifications on KSB Pumps profile
mentioned or you can buy products through vast network of distributors of
KSB Pumps and valves company limited.

83
ANALYSIS OF VARIOUS
ACCOUNTING
PROCEDURES

84
5.0.0 ANALYSIS OF VARIOUS ACCOUNTING
PROCEDURES
5.1.0 RATIO ANALYSIS
CATEGORIES OF RATIO ANALYSIS:

Liquidity ratios

Activity ratios

Debt ratios

Profitability ratios

Market ratio
5.1.1 LIQUIDITY RATIOS
CURRENT RATIOS
Current ratio is a financial ratio that measures whether or not a company has
enough resources to pay its debt over the next business cycle (usually 12
months) by comparing firm's current assets to its current liabilities.
Current Ratio 2015
Current ratio=
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒂𝒔𝑠𝒆𝒕𝒔
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒚
Current ratio=
𝟐𝟗𝟒𝟖𝟐𝟖𝟕
𝟏𝟗𝟖𝟕𝟐𝟗𝟐
=1.48
For every one current liability, there is 1.48 current asset.

85
Current Ratio 2014
Current ratio=
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒂𝒔𝒔𝒆𝒕𝒔
Current ratio=
𝟐,𝟓𝟑𝟎,𝟔𝟐𝟖
𝟏,𝟕𝟐𝟔,𝟔𝟖𝟎
=1.47
Current Ratio 2013
Current ratio=
Current ratio=
𝟏,𝟗𝟖𝟕,𝟑𝟖𝟕
𝟏,𝟑𝟎𝟕,𝟔𝟗𝟗
=1.52
Current Ratio 2012
Current ratio=
Current ratio=
𝟏,𝟗𝟐𝟏,𝟖𝟐𝟖
𝟏,𝟑𝟔𝟕,𝟐𝟐𝟖
=1.41

86
Year Times
2012 1.41
2013 1.52
2014 1.47
2015 1.48
Interpretation:
Current ratio is a useful test of the short-term-debt paying ability of any
business. A ratio of 2:1 or higher is considered satisfactory for most of the
companies .Current ratio must be analyzed over a period of time. Increase in
current ratio over a period of time may suggest improved liquidity of the
company .A decreasing trend in the current ratio may suggest a deteriorating
liquidity position of the business .
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 depends on the industry in which the firm operates. KSB is
involved in different project businesses so the current ratio of 1.48 is almost
acceptable.
In our case the current ratio is increasing from the year of 2012 to 2013 but
it has an decreasing trend between the year of 2013 to 2015.
QUICK RATIOS
Quick ratio specifies whether the assets that can be quickly converted into
cash are sufficient to cover current liabilities.

87
Quick ratio 2015
Quick ratio=
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒂𝒔𝒔𝒆𝒕𝒔−𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒊𝒆𝒔
Quick ratio=
(𝟐𝟗𝟒𝟖𝟐𝟖𝟕−𝟕𝟔𝟕𝟒𝟎𝟐)
𝟏𝟗𝟖𝟕𝟐𝟗𝟐
= 1.10(Times)
For every one current liability, there are 1.10 current asset minus inventories.
Quick ratio 2014
Quick ratio=
Quick ratio=
(𝟐,𝟓𝟑𝟎,𝟔𝟐𝟖−𝟓𝟑𝟖,𝟑𝟓𝟎)
𝟏,𝟕𝟐𝟔,𝟔𝟖𝟎
= 1.15(Times)
Quick ratio 2013
Quick ratio=
Quick ratio=
(𝟏,𝟗𝟖𝟕,𝟑𝟖𝟕−𝟓𝟎𝟓,𝟐𝟗𝟏)
𝟏,𝟑𝟎𝟕,𝟔𝟗𝟗
= 1.13(Times)
Quick ratio 2012
Quick ratio=
Quick ratio=
(𝟏,𝟗𝟐𝟏,𝟖𝟐𝟖−𝟔𝟑𝟖,𝟐𝟑𝟏)
𝟏,𝟑𝟔𝟕,𝟐𝟐𝟖
= 0.94(Times)

88
Year Times
2012 0.94
2013 1.13
2014 1.15
2015 1.10
Analysis:
Quick ratio measures the liquidity of a business by matching its cash and
near cash current assets with its total liabilities. It helps us to determine
whether a business would be able to pay off all its debts by using its most
liquid assets (i.e. cash, marketable securities and accounts receivable).
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 1.00 means that the most liquid assets of a business are equal
to its total debts and the business will just manage to repay all its debts by
using its cash, marketable securities and accounts receivable. A quick ratio
of more than one indicates that the most liquid assets of a business exceed
its total debts. On the opposite side, a quick ratio of less than one indicates
that a business would not be able to repay all its debts by using its most liquid
assets.
Thus we conclude that, generally, a higher quick ratio is preferable because
it means greater liquidity. However a quick ratio which is quite high, say 4.00,
is not favorable to a business

89
as whole because this means that the business has idle current assets which
could have been used to create additional projects thus increasing profits. In
other words, very high value of quick ratio may indicate inefficiency.
In the case of KSB Pumps our five year data explain that the quick ratio has
increasing and decreasing trends which means that company debt increasing
or decreasing in different years compared to its liquid assets. Ideally, quick
ratio should be 1:1.
1.34
1.36
1.38
1.4
1.42
1.44
1.46
1.48
1.5
1.52
2012 2013 2014 2015
1.41
1.52
1.47
1.48
CURRENT RATIOS

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5.1.2 ACTIVITY RATIOS
INVENTORY TURNOVER RATIO
Inventory Turnover Ratio is one of the efficiency ratios and measures the
number of times, on average, the inventory is sold and replaced during the
fiscal year.
Inventory turnover ratio 2015
Inventory turnover ratio=
𝒄𝒐𝒔𝒕 𝒐𝒇 𝒈𝒐𝒐𝒅𝒔 𝒔𝒐𝒍𝒅
𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
𝟑𝟎𝟗𝟗𝟔𝟓𝟐
𝟏𝟐𝟓𝟒𝟗𝟏𝟗
Inventory turnover ratio= 2.47 times
The inventory converted into sales is 2.47 times in a year.
Inventory turnover in days
0
0.2
0.4
0.6
0.8
1
1.2
2012 2013 2014 2015
0.94
1.13 1.15
1.1
QUICK RATIO

91
Inventory turnover in days=
𝒏𝒐 𝒐𝒇 𝒅𝒂𝒚𝒔 𝒊𝒏 𝒂 𝒚𝒆𝒂𝒓
𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓
𝟑𝟔𝟓
𝟐.𝟒𝟕
Inventory turnover in days= 148 days
The inventory is converted into sales after 148 days.
𝟐,𝟒𝟓𝟒,𝟒𝟓𝟏
𝟗𝟖𝟏,𝟕𝟖𝟎
𝟑𝟔𝟓
𝟐.𝟓𝟎
𝟏,𝟗𝟖𝟐,𝟔𝟗𝟕
𝟖𝟎𝟐,𝟕𝟏𝟏

92
𝟑𝟔𝟓
𝟐.𝟒𝟕
𝟐,𝟎𝟖𝟕,𝟖𝟏𝟑
𝟗𝟒𝟗.𝟎𝟎𝟔
𝟑𝟔𝟓
𝟐.𝟐𝟎

93
IN 2015 2014 2013 2012
TIMES 2.47 2.50 2.47 2.20
DAYS 148 146 148 166
Analysis:
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 between the year of
2014 to 2015 that is good for the company but it has a decreasing trend
comparable to year 2012.
RECEIVABLE TURNOVER RATIO
Receivable turnover ratio 2015:
Receivable turnover ratio=
𝒏𝒆𝒕 𝒄𝒓𝒆𝒅𝒊𝒕 𝒔𝒂𝒍𝒆𝒔
𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔
𝟒𝟎𝟎𝟕𝟐𝟒𝟒
𝟏,𝟒𝟑𝟕,𝟑𝟕𝟏
Receivable turnover ratio=2.79 times
The receivables are 2.79 times collected in a year.
Receivable turnover in days
Receivable turnover in days=
𝒓𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓
𝟑𝟔𝟓
𝟐.𝟕𝟗
Receivable turnover in days=131 days

94
The receivables are collected after every 131 day.
Receivable turnover ratio 2014
𝟑,𝟏𝟓𝟐,𝟎𝟔𝟐
𝟓𝟑𝟖,𝟑𝟓𝟎
𝟑𝟔𝟓
𝟐.𝟓𝟗
𝟐,𝟓𝟕𝟕,𝟔𝟖𝟔
𝟏,𝟎𝟑𝟕,𝟑𝟗𝟕
𝟑𝟔𝟓
𝟐.𝟒𝟖

95
𝟐,𝟔𝟑𝟎,𝟒𝟎𝟐
𝟗𝟐𝟎,𝟕𝟑𝟓
𝟑𝟔𝟓
𝟐.𝟖𝟔
IN 2015 2014 2013 2012
TIMES 2.79 2.59 2.48 2.86
DAYS 131 141 147 128

96
Analysis and interpretation:
Accounts receivable turnover measures the efficiency of a business in
collecting its credit sales. Generally a high value of accounts receivable
turnover is favorable and lower figure may indicate inefficiency in collecting
outstanding sales. Increase in accounts receivable turnover overtime
generally indicates improvement in the process of cash collection on credit
sales. In our case receivable turnover ratio is not consistent over time, in 2012
to 2015 the ratios are 2.86, 2.48, 2.59 and 2.79 respectively.
PAYABLE TURNOVER RATIO:
2015:
Payable turnover ratio=
𝒏𝒆𝒕 𝒄𝒓𝒆𝒅𝒊𝒕 𝒑𝒖𝒓𝒄𝒉𝒂𝒔𝒆𝒔
𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒑𝒂𝒚𝒂𝒃𝒍𝒆
/𝑪𝑮𝑺
𝟑,𝟎𝟗𝟗,𝟔𝟓𝟐
𝟏,𝟓𝟒𝟐,𝟔𝟗𝟐
Payable turnover ratio=2.01 times
The payables are 2.01 times paid in a year.
Payable turnover in days
Payable turnover in days=
𝒑𝒂𝒚𝒂𝒃𝒍𝒆 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓
𝟑𝟔𝟓
𝟐.𝟎𝟏
Payable turnover in days= 182 days
The payables are paid after every 182 day.

97
Payable turnover ratio 2014:
/𝑪𝑮𝑺
𝟐,𝟒𝟓𝟒,𝟒𝟓𝟏
𝟏,𝟏𝟑𝟎,𝟑𝟎𝟕
Payable turnover in days:
𝟑𝟔𝟓
𝟐.𝟏𝟕
/𝑪𝑮𝑺
𝟏,𝟗𝟖𝟐,𝟔𝟗𝟕
𝟏,𝟎𝟕𝟕,𝟐𝟏𝟔
𝟑𝟔𝟓
𝟏.𝟖𝟒

98
/𝑪𝑮𝑺
𝟐,𝟎𝟖𝟕,𝟖𝟏𝟑
𝟏,𝟎𝟖𝟔,𝟎𝟔𝟒
𝟑𝟔𝟓
𝟏.𝟗𝟐
IN 2015 2014 2013 2012
TIMES 2.01 2.17 1.84 1.92
DAYS 182 168 198 190
ANALYSIS AND INTERPRETATION:
Accounts payable turnover ratio indicates how quickly a company pays off its
vendors, it is used by supplies and creditors to help decide whether or not to
grant credit to a business.

99
As with most liquidity ratios, a higher ratio is almost always more favorable
than a lower ratio.
A higher ratio shows suppliers and creditors that the company pays its bills
frequently and regularly. It also implies that new vendors will get paid back
quickly. A high turnover ratio can be used to negotiate favorable credit terms
in the future.
In our 4 years data the payable turnover ratio is comparatively higher in the
year of 2015 comparable to 2012 but decreaseing trend from 2014 to 2015.
FIXED ASSET TURNOVER RATIO
The fixed asset turnover ratio measures the company's effectiveness in
generating sales from its investments in plant, property, and equipment. It is
especially important for a manufacturing firm that uses a lot of plant and
equipment in its operations to calculate this ratio.
Fixed asset turnover 2015
Fixed assets turnover=
𝒔𝒂𝒍𝒆𝒔
𝒏𝒆𝒕 𝒇𝒊𝒙𝒆𝒅 𝒂𝒔𝒔𝒆𝒕𝒔
𝟒𝟎𝟎𝟕𝟐𝟒𝟒
𝟒𝟏𝟕𝟕𝟗𝟓
Fixed assets turnover= 9.59
Fixes assets are converted into sales every 9.59 times a year.
𝟑,𝟏𝟓𝟐,𝟎𝟔𝟐
𝟑𝟔𝟒,𝟐𝟗𝟔

100
𝟐,𝟓𝟕𝟕,𝟔𝟖𝟔
𝟑𝟎𝟔,𝟗𝟒𝟐
𝟐,𝟔𝟑𝟎,𝟒𝟎𝟐
𝟑𝟏𝟏,𝟎𝟏𝟒
2015 2014 2013 2012
9.59 8.65 8.40 8.46
If the fixed asset turnover ratio is low as compared to the industry or past
years of data for the firm, it means that sales are low or the investment in
plant and equipment is too high.

101
In our 4 year data, fixed asset turnover ratio is comparatively high in the year
of 2015 that is 9.59, this shows that the sales of fixed asset is high.
TOTAL ASSET TURNOVER RATIO
The asset turnover ratio is an efficiency ratio that measures a company's
ability to generate sales from its assets by comparing net sales with average
total assets. In other words, this ratio shows how efficiently a company can
use its assets to generate sales.
Total asset turnover 2015
Total assets turnover=
𝒕𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕𝒔
𝟒𝟎𝟎𝟕𝟐𝟒𝟒
𝟑𝟑𝟖𝟏𝟐𝟕𝟏
Total assets turnover= 1.19 times
Total assets are converted into sales every 1.19 time in a year.
𝟑,𝟏𝟓𝟐,𝟎𝟔𝟐
𝟐,𝟗𝟎𝟕,𝟑𝟖𝟕
𝟐,𝟓𝟕𝟕,𝟔𝟖𝟔
𝟐,𝟑𝟐𝟒,𝟕𝟎𝟕

102
𝟐,𝟔𝟑𝟎,𝟒0𝟐
𝟐,𝟐𝟔𝟔,𝟒𝟏𝟕
2015 2014 2013 2012
1.19 1.08 1.11 1.16
This ratio measures how efficiently a firm uses its assets to generate sales, so
a higher ratio is always more favorable. Higher turnover ratios mean the
company is using its assets more efficiently. Lower ratios mean that the
company isn't using its assets efficiently and most likely have management or
production problems.
In our 4 year data the KSB company has ratios from 2012 to 2015 are 1.16,
1.11, 1.08 and 1.19 respectively. So a company has higher ratio in the year
of 2015 which means that the company is using its assets efficiently
comparatively.

103
1
1.05
1.1
1.15
1.2
2015 2014 2013 2012
7.8
8
8.2
8.4
8.6
8.8
9
9.2
9.4
9.6
2015 2014 2013 2012
FIXED ASSET TURNOVER RATIO

104
1.65
1.7
1.75
1.8
1.85
1.9
1.95
2
2.05
2.1
2.15
2.2
2015 2014 2013 2012
2015, 2.01
2014, 2.17
2013, 1.84
2012, 1.92
PAYABLE TURNOVER RATIO INTIMES
PAYABLE TURNOVER RATIO INTIMES
2.05
2.1
2.15
2.2
2.25
2.3
2.35
2.4
2.45
2.5
2015 2014 2013 2012
2015, 2.47
2014, 2.5
2013, 2.47
2012, 2.2
INVENTORY TURNOVER RATIO IN
TIMES
INVENTORY TURNOVER RATIO IN TIMES

105
Chart: 5.7
5.1.3 PROFITABILITY RATIO
GROSS PROFIT RATIO (GP RATIO)
It is a profitability ratio that shows the relationship between gross profit and
total net sales revenue. It is a popular tool to evaluate the operational
performance of the business .The ratio is computed by dividing the gross profit
figure by net sales.
Gross profit margin 2015
Gross profit margin=
𝒈𝒓𝒐𝒔𝒔 𝒑𝒓𝒐𝒇𝒊𝒕
* 100
𝟗𝟎𝟕𝟓𝟗𝟐
𝟒𝟎𝟎𝟕𝟐𝟒𝟒
* 100
Gross profit margin= 22.65
Gross profit margin is 22.65% generating from sales.
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2015 2014 2013 2012
2015, 2.79
2014, 2.59
2013, 2.48
2012, 2.86
RECEIVABLEABLE TURNOVER RATIO IN
TIMES
RECEIVABLEABLE TURNOVER RATIO IN TIMES

106
* 100
𝟔𝟗𝟕,𝟔𝟏𝟏
𝟑,𝟏𝟓𝟐,𝟎𝟔𝟐
* 100
* 100
𝟓𝟗𝟒,𝟗𝟗𝟎
𝟐,𝟓𝟕𝟕,𝟔𝟖𝟔
* 100
* 100
𝟓𝟒𝟐,𝟓𝟖𝟗
𝟐,6𝟑𝟎,𝟒𝟎𝟐
* 100
2015 2014 2013 2012
22.65 22.13 23.08 20.63

107
Analysis:
Gross profit is very important for any business. It should be sufficient to cover
all expenses and provide for profit. There is no norm or standard to interpret
gross profit ratio (GP ratio). Generally, a higher ratio is considered better.
The ratio can be used to test the business condition by comparing it with past
years’ ratio and with the ratio of other companies in the industry. A consistent
improvement in gross profit ratio over the past years is the indication of
continuous improvement.
In our 4 year data the company gross profit margin increases from 2012 to
2013 but decreasing in 2015 comparable to 2013.
OPERATING PROFIT MARGIN RATIO
Operating margin gives analysts an idea of how much a company makes
(before interest and taxes) on each dollar of sales.
Operating profit margin 2015
Operating profit margin=
𝑬𝑩𝑰𝑻
* 100
𝟒𝟕𝟏𝟓𝟑𝟔
𝟒𝟎𝟎𝟕𝟐𝟒𝟒
* 100
Operating profit margin= 11.77%
Operating profit margin is 11.77% generating from sales.
𝑬𝑩𝑰𝑻
* 100
𝟑𝟓𝟗,𝟒𝟖𝟖
𝟑,𝟏𝟓𝟐,𝟎𝟔𝟐
* 100

108
𝑬𝑩𝑰𝑻
* 100
𝟐𝟕𝟐,𝟑𝟗𝟑
𝟐,𝟓𝟕𝟕,𝟔𝟖𝟔
* 100
𝑬𝑩𝑰𝑻
* 100
𝟐𝟕𝟖,𝟕𝟎𝟗
𝟐,𝟔𝟑𝟎,𝟒𝟎𝟐
* 100
2015 2014 2013 2012
11.77 11.40 10.57 10.60
Analysis:
A high operating profit margin means that the company has good cost control
and/or that sales are increasing faster than costs. In our case the operating
profit margin increasing.

109
NET PROFIT MARGIN RATIO
Net profit margin is the percentage of revenue remaining after all operating
expenses, interest, taxes and preferred stock dividends (but not common
stock dividends) have been deducted from a company's total revenue.
Net profit margin 2015
Net profit margin =
𝑬𝑨𝑻
* 100
Net profit margin =
𝟐𝟕𝟕𝟑𝟔𝟔
𝟒𝟎𝟎𝟕𝟐𝟒𝟒
* 100
Net profit margin= 6.92%
Net profit margin is 6.92% generating from sales.
Net profit margin =
𝑬𝑨𝑻
𝒔𝒂𝑙𝒆𝒔
* 100
Net profit margin =
𝟏𝟖𝟔,𝟗𝟖𝟗
𝟑,𝟏𝟓𝟐,𝟎𝟔𝟐
* 100
Net profit margin =
𝑬𝑨𝑻
* 100
Net profit margin =
𝟏𝟓𝟖,𝟎𝟏𝟏
𝟐,𝟓𝟕𝟕,𝟔𝟖𝟔
* 100
Net profit margin =
𝑬𝑨𝑻
* 100

110
Net profit margin =
𝟏𝟔𝟐,𝟓𝟔𝟒
𝟐,𝟔𝟑𝟎,𝟒𝟎𝟐
* 100
2015 2014 2013 2012
6.92 5.93 6.13 6.18
Analysis:
Net profit (NP) ratio is a useful tool to measure the overall profitability of the
business. A high ratio indicates the efficient management of the affairs of
business. There is no norm to interpret this ratio. To see whether the business
is constantly improving its profitability or not, the analyst should compare the
ratio with the previous years ratio. In our five year data net profit margin is
comparatively higher in the year of 2015, this shows the efficient management
of KSB Pumps.
RETURN ON ASSETS
The return on assets ratio, often called the return on total assets, is a
profitability ratio that measures the net income produced by total assets
during a period by comparing net income to the average total assets.
Return on assets 2015
Return on assets=
𝒏𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕 𝒂𝒇𝒕𝒆𝒓 𝒕𝒂𝒙𝒆𝒔
* 100
Return on assets=
𝟐𝟕𝟕𝟑𝟔𝟔
𝟑𝟑𝟖𝟏𝟐𝟕𝟏
* 100
Return on assets= 8.20%

111
The return on total assets is 8.20%.
Return on assets=
* 100
Return on assets=
𝟏𝟖𝟔,𝟗𝟖𝟗
𝟐,𝟗𝟎𝟕,𝟑𝟖𝟕
* 100
Return on assets=
* 100
Return on assets=
𝟏𝟓𝟖,𝟎𝟏𝟏
𝟐,𝟑𝟐𝟒,𝟕𝟎𝟕
* 100
Return on assets=
* 100
Return on assets=
𝟏𝟔𝟐,𝟓𝟔𝟒
𝟐,𝟐𝟔𝟔,𝟒𝟏𝟕
* 100
2015 2014 2013 2012
8.20 6.43 6.80 7.17

112
Analysis:
The higher values of return on assets show that business is more profitable
in that year. So the higher value in our 4 year data is 8.20 in the year of 2015.
RETURN ON EQUITY RATIO
The return on equity ratio or ROE is a profitability ratio that measures the
ability of a firm to generate profits from its shareholders investments in the
company
Return on equity 2015
Return on equity=
𝑬𝑨𝑇
𝒔𝒕𝒐𝒄𝒌𝒉𝒐𝒍𝒅𝒆𝒓 𝒆𝒒𝒖𝒊𝒕𝒚
* 100
Return on equity=
𝟐𝟕𝟕𝟑𝟔𝟔
𝟏𝟑𝟏𝟎𝟐𝟓𝟎
* 100
Return on equity= 21.17%
The returns the company is earning for equity is 21.17%.
Return on equity=
𝑬𝑨𝑻
* 100
Return on equity=
𝟏𝟖𝟔,𝟗𝟖𝟗
𝟏,𝟏𝟎𝟏,𝟓𝟏𝟓
* 100
Return on equity=
𝑬𝑨𝑻
* 100
Return on equity=
𝟏𝟓𝟖,𝟎𝟏𝟏
𝟗𝟕𝟑,𝟏𝟒𝟗
* 100

113
Return on equity=
𝑬𝑨𝑻
* 100
Return on equity=
𝟏𝟔𝟐,𝟓𝟔4
𝟖𝟕𝟒,𝟑𝟔𝟒
* 100
2015 2014 2013 2012
21.17 16.98 16.24 18.59
Analysis:
Return on equity measures how efficiently a firm can use the money from
shareholders to generate profits and grow the company. Unlike other return
on investment ratios, ROE is a profitability ratio from the investor's point of
view—not the company. In other words, this ratio calculates how much money
is made based on the investors' investment in the company, not the
company's investment in assets or something else. In our 4 year data the
highest return on equity is 21.17.
EARNINGS PER SHARE
The portion of a company's profit allocated to each outstanding share of
common stock. Earnings per share serves as an indicator of a company's
profitability.
Earnings per share 2015
Earnings per share=
𝒆𝒂𝒓𝒏𝒊𝒏𝒈 𝒂𝒗𝒂𝒊𝒍𝒂𝒃𝒍𝒆 𝒇𝒐𝒓 𝒄𝒐𝒎𝒎𝒐𝒏 𝒔𝒕𝒐𝒄𝒌
𝒏𝒐 𝒐𝒇 𝒔𝒉𝒂𝒓𝒆𝒔 𝒐𝒇 𝒄𝒐𝒎𝒎𝒐𝒏 𝒔𝒕𝒐𝒄𝒌
Earnings per share=
𝟐𝟕𝟕𝟑𝟔𝟔
𝟏𝟑𝟐𝟎𝟎

114
Earnings per share= Rs. 21.01
Every share holder will may get till Rs. 21.01 as dividend.
Earnings per share=
𝒏𝒐 𝒐𝒇 𝒔𝒉𝒂𝒓𝒆𝒔 𝒐𝒇 𝒄𝒐𝒎𝒎𝒐𝑛 𝒔𝒕𝒐𝒄𝒌
Earnings per share=
𝟏𝟖𝟔,𝟗𝟖𝟗
𝟏𝟑𝟐𝟎𝟎
Earnings per share=
𝒏𝒐 𝒐𝒇 𝒔𝒉𝒂𝒓𝒆𝒔 𝒐𝒇 𝒄𝒐𝒎𝒎𝒐𝒏 𝒔𝒕𝒐𝒄𝒌
Earnings per share=
𝟏𝟓𝟖,𝟎𝟏𝟏
𝟏𝟑𝟐𝟎𝟎
Earnings per share=
𝒏𝒐 𝒐𝒇 𝒔𝒉𝒂𝑟𝒆𝒔 𝒐𝒇 𝒄𝒐𝒎𝒎𝒐𝒏 𝒔𝒕𝒐𝒄𝒌
Earnings per share=
𝟏𝟔𝟐,𝟓𝟔𝟒
𝟏𝟑𝟐𝟎𝟎
2015 2014 2013 2012
21.01 14.17 11.97 12.32

115
Analysis:
The shares are normally purchased to earn dividend or sell them at a higher
price in future. EPS figure is very important for actual and potential common
stockholders because the payment of dividend and increase in the value of
stock in future largely depends on the earnings of the company. EPS is the
most widely quoted and relied figure by investors. In most of the countries,
the public companies are required to report EPS figure on the income
statement. It is usually reported below the net income figure. There is no rule
of thumb to interpret earnings per share. The higher the EPS figure, the better
it is. A higher EPS is the sign of higher earnings, strong financial position and,
therefore, a reliable company to invest money.
The higher EPS in our four year data is on the year of 2015, it means this year
is good for common stock holders.
19
19.5
20
20.5
21
21.5
22
22.5
23
23.5
2015 2014 2013 2012
2015, 22.65
2014, 22.13
2013, 23.08
2012, 20.63
GROSS PROFIT MARGIN
GROSS PROFIT MARGIN

116
5.4
5.6
5.8
6
6.2
6.4
6.6
6.8
7
2015 2014 2013 2012
2015, 6.92
2014, 5.93
2013, 6.13 2012, 6.18
NET PROFIT MARGIN
NET PROFIT MARGIN
0
1
2
3
4
5
6
7
8
9
2015 2014 2013 2012
2015, 8.2
2014, 6.43
2013, 6.8
2012, 7.17
RETURN ON ASSET
RETURN ON ASSET

117
2015 2014 2013 2012
21.17
16.98
16.24
18.59
RETURN ON EQUITY
RETURN ON EQUITY
2015 2014 2013 2012
21.01
14.17
11.97 12.32
EPS
EPS

118
5.1.4 LEVERAGE RATIOS
DEBT RATIO
Debt-to-assets ratio or simply debt ratio is the ratio of total liabilities of a
business to its total assets. It is a solvency ratio and it measures the portion
of the assets of a business which are financed through debt.
Debt ratio 2015
Debt ratio=
𝒕𝒐𝒕𝒂𝒍 𝒍𝒊𝒂𝒃𝒍𝒊𝒕𝒊𝒆𝒔
Debt ratio=
𝟐𝟎𝟕𝟏𝟎𝟐𝟏
𝟑𝟑𝟖𝟏𝟐𝟕𝟏
Debt ratio= 0.612
0.612 Of total assets are financed with total liabilities.
Debt ratio 2014
Debt ratio=
𝒕𝒐𝒕𝒂𝒍 𝒍𝒊𝒂𝒃𝒍𝒊𝒕𝒊𝒆𝒔
Debt ratio=
𝟏,𝟖𝟎𝟓,𝟖𝟕𝟑
𝟐,𝟗𝟎𝟕,𝟑𝟖𝟕
Debt ratio= 0.62
Debt ratio 2013
Debt ratio=
𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑙𝑖𝑡𝑖𝑒𝑠
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
Debt ratio=
1,351,559
2,324,707
Debt ratio= 0.58

119
Debt ratio 2012
Debt ratio=
𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑙𝑖𝑡𝑖𝑒𝑠
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
Debt ratio=
1,392,053
2,266,417
Debt ratio= 0.61
2015 2014 2013 2012
0.612 0.62 0.58 0.61
Analysis:
Debt ratio ranges from 0.00 to 1.00. Lower value of debt ratio is favorable and
a higher value indicates that higher portion of company's assets are claimed
by it creditors which means higher risk in operation since the business would
find it difficult to obtain loans for new projects. Debt ratio of 0.5 means that
half of the company's assets are financed through debts.
In our 4 year data, the value of debt ratio is higher than 0.5 it means that
more than half of the company's assets are financed through debts.

120
DEBT EQUITY RATIO
Debt to equity ratio is a long term solvency ratio that indicates the soundness
of long-term financial policies of the company. It shows the relation between
the portion of assets provided by the the stockholders and the portion of
assets provided by creditors. It is calculated by dividing total liabilities by
stockholder’s equity.
Debt equity ratio 2015
Debt equity ratio=
𝑙𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡
𝑠𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟 𝑒𝑞𝑢𝑖𝑡𝑦
Debt equity ratio=
2071021
1310250
Debt equity ratio=1.58
The long term debt is 1.58.
Debt equity ratio=
Debt equity ratio=
1,805,873
1,101,515
Debt equity ratio=
Debt equity ratio=
1,351,559
973,149

121
Debt equity ratio=
Debt equity ratio=
1,392,053
874,364
2015 2014 2013 2012
1.58 1.64 1.39 1.59
Analysis:
A ratio of 1 or 1 : 1 means that creditors and stockholders equally contribute
to the assets of the business.
A less than 1 ratio indicates that the portion of assets provided by
stockholders is greater than the portion of assets provided by creditors and a
greater than 1 ratio indicates that the portion of assets provided by creditors
is greater than the portion of assets provided by stockholders. Creditors
usually like a low debt to equity ratio because a low ratio (less than 1) is the
indication of greater protection to their money. But stockholders like to get
benefit from the funds provided by the creditors therefore they would like a
high debt to equity ratio.
Our 4 year data show that our ratios are greater than 1 so it is not preferable
for creditors.

122
COVERAGE RATIO /INTEREST COVERAGE RATIO:
Interest Coverage Ratio, also known as Times Interest Earned Ratio (TIE),
states the number of times a company is capable of bearing its interest
expense obligation out of the operating profits earned during a period.
Coverage ratio 2015
Coverage ratio=
𝐸𝐵𝐼𝑇
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
Coverage ratio=
407,834
39,156
Coverage ratio= 10.42
The interest earned 10.42 times a year.
Coverage ratio 2014
Coverage ratio=
𝐸𝐵𝐼𝑇
Coverage ratio=
299,535
47,435
Coverage ratio 2013
Coverage ratio=
𝐸𝐵𝐼𝑇
Coverage ratio=
224,236
23,274
Coverage ratio 2012
Coverage ratio=
𝐸𝐵𝐼𝑇

123
Coverage ratio=
232,063
30,405
2015 2014 2013 2012
10.42 6.31 9.63 7.63
Analysis:
Loans and borrowings are cheap source of finance primarily because the
interest cost is usually tax deductible in most jurisdictions unlike dividend
payments. However, interest costs are obligatory payments unlike dividend
payouts which are discretionary upon management's intent. Therefore, the
level of debt financing must be at an acceptable level and should not exceed
the point which exposes an organization to unacceptably high financial risk
as might be reflected in a low interest cover.
Generally, companies would aim to maintain an interest coverage of at least
2 times. Interest cover of lower than 1.5 times may suggest that fluctuations
in profitability could potentially make the organization vulnerable to delays in
interest payments.

124
0.56
0.57
0.58
0.59
0.6
0.61
0.62
0.63
2015 2014 2013 2012
DEBT RATIO
DEBT RATIO
1.25
1.3
1.35
1.4
1.45
1.5
1.55
1.6
1.65
2015 2014 2013 2012
DEBT EQUITY RATIO
DEBT EQUITY RATIO

125
0
2
4
6
8
10
12
2015 2014 2013 2012
COVERAGE RATIO
COVERAGE RATIO

126
5.2.0 VERTICAL ANALYSIS
5.2.1 BALANCE SHEET
2015
RS. In
000’s
%age 2014
RS. In
000’s
%age
Net worth / shareholders
equity
1,310,250 38.75% 1,101,515 37.89%
Non current liabilities 83,728 2.48% 79,193 2.72%
Short term running
_nances/bank borrowings
381,372 11.28% 529,272 18.20%
Creditors, accrued and
other liabilities
1,605,920 47.49% 1,197,407 41.18%
Total liabilities and equity 3,381,271 100.00% 2,907,387 100.00%
Fixed Assets 417,795 12.36% 364,296 12.53%
Long Term Loans and
Deposits
15,188 0.45% 12,463 0.43%
Deferred Taxation - 0.00% - 0.00%
Current Assets 2,948,287 87.19% 2,530,628 87.04%
Total Assets 3,381,271 100.00% 2,907,387 100.00%

127
5.2.2 INCOME STATEMENT
2015
RS. In
000’s
%age 2014
RS. In
000’s
%age
Sales 4,007,244 100.00% 3,152,062 100.00%
Cost of sales (3,099,652) -77.35% (2,454,451) -77.87%
Gross Profit / (Loss) 907,592 22.65% 697,611 22.13%
Distribution and
marketing costs
(328,342) -8.19% (243,578) -7.73%
Administrative expenses (188,149) -4.70% (184,984) -5.87%
Other operating
expenses
(36,911) -0.92% (29,673) -0.94%
Other operating income 53,644 1.34% 60,158 1.91%
Operating Profit / (Loss) 407,834 10.18% 299,535 9.50%
Finance Cost (39,156) -0.98% (47,435) -1.50%
Profit / (Loss) before tax 368,678 9.20% 252,099 8.00%
Taxation (91,312) -2.28% (65,110) -2.07%
Profit / (Loss) for the
year
277,366 6.92% 186,989 5.93%

128
5.3.0 HORIZONTAL ANALYSIS
5.3.1 BALANCE SHEET
2015
RS. In
000’s
2014
RS. In
000’s
%age
Net worth / shareholders equity 1,310,250 1,101,515 18.95%
Non current liabilities 83,728 79,193 5.73%%
Short term running _nances/bank
borrowings
381,372 529,272 -27.94%
Creditors, accrued and other
liabilities
1,605,920 1,197,407 34.12%
Total liabilities and equity 3,381,271 2,907,387 16.30%
Fixed Assets 417,795 364,296 14.69%
Long Term Loans and Deposits 15,188 12,463 21.87%
Deferred Taxation - - 0.00%
Current Assets 2,948,287 2,530,628 16.50%
Total Assets 3,381,271 2,907,387 16.30%

129
5.3.2 INCOME STATEMENT
2015
RS. In
000’s
2014
RS. In
000’s
%age
Sales 4,007,244 3,152,062 27.13%
Cost of sales (3,099,652) (2,454,451) 26.29%
Gross Profit / (Loss) 907,592 697,611 30.10%
Distribution and marketing costs (328,342) (243,578) 34.80%
Administrative expenses (188,149) (184,984) 1.71%
Other operating expenses (36,911) (29,673) 24.39%
Other operating income 53,644 60,158 -10.83%
Operating Profit / (Loss) 407,834 299,535 36.16%
Finance Cost (39,156) (47,435) -17.45%
Profit / (Loss) before tax 368,678 252,099 46.24%
Taxation (91,312) (65,110) 40.24%
Profit / (Loss) for the year 277,366 186,989 48.33%

130
MY TRAINING PROGRAMME

131
6.0.0 TRAINING PROGRAMME
During my training at KSB Pumps and valves company limited, head office,
16/2, Sir Agha Khan road, Lahore, Pakistan in finance department, I studied
several documents of company along with other documents describing
regulations and guidelines which are necessary for the effective working of
multinational company.
These documents include:
 Profoma invoice
 Invoice
 Packing note
 Certificate of origin
 House bill of lading (HBL)
 Master bill of lading (MBL)
 Form E (Export form)
 Purchase order
 Acceptance order
 Goods description (GD)
 Annual report 2015
 SAP ( Systems, Applications and Products)
 Sales tax invoice

132
WEEK ONE & TWO
I was start working under the command of sir. Zia Ullah, he is a deputy
manager of finance and control, in spite of being extraordinarily busy with his
duties, took time out to hear and guide me in my queries.
On the third day of my internship I was started working on SAP I was not
used SAP before so it was completely a new thing for me I was very excited to
learn SAP. I know learning on SAP is very useful for me because now a day’s
most of the companies used that software.
What is SAP?
“A German software company whose products allow businesses to track
customer and business interactions. SAP is especially well-known for its
Enterprise Resource Planning (ERP) and data management programs. SAP is
an acronym for Systems, Applications and Products.”
These days, the reality is that most larger businesses have multiple facets of
operation, all of which must communicate with each other in order to keep
things moving in the right direction.
Today, however, SAP systems are used all over the world–in small businesses
and Fortune 500 companies alike. There are numerous benefits of SAP
software that any business can enjoy,

133
Advantages:
WEEK THREE & FOUR
I have done entries of receipts in SAP and analyze the ledgers of different
customers. There are different terms used in SAP.
VA03 : It is a SAP code to view customer detail.
FBL5: It is a SAP code to view customer ledger by adding PO number of a
specific party.
FBL3: SAP code to view expense ledger.
SAP
Easier
customization
and extension
Extended
core
functions
Improved
integration
Greater
industry focus
Faster
implemantion

134
I have also done entries of commission.
 Foreign commission
 Local commission
WEEK FIVE & SIX
I had also learn these terms and their documents during my internship at
KSB Company
SALES TAX:
A sales tax is a consumption tax imposed by the government on the sale of
goods and services. A conventional sales tax is levied at the point of sale,
collected by the retailer and passed on to the government.
TYPES OF SALES TAX:
 Input tax
 Output tax
Goods and Services Tax (GST) is a consumption based tax. It is charged at
each point of supply in the production chain from manufacturing stage to
distribution to retailing stage, including imported supplies.
Input tax is the GST charged on the purchase of goods and services used in
the business activity.
Output tax on the other hand, is GST charged and collected on sales/supplies
of goods and services. Input tax credit means tax input claimable by
businesses registered under GST.
TYPES OF SALES IN SALES TAX:
 Taxable supplies/ non exempted supplies
 Non taxable supplies/ exempted supplies

135
 Zero rated (export) supplies
Filer and non filer taxpayer:
Filer defined as a taxpayer whose name appears in the active taxpayers list
or a holder of taxpayer card.
Non filer defined as a person who is not a filer.
For company filer rate is 8% and non filer rate is 12%.
For AOP filer rate is 10% and non filer rate is 15%.
Supplies
Taxable
Standard
rated (15%)
Zero rated
(0%)
Exempted
no VAT

136
Purchase Cycle in KSB:
SOME ADDITIONAL LEARNING AS AN INERNEE:
It is difficult to write about what I learned at KSB Pumps and valves company
limited Because when I entered within such a big organization, I was
bombarded with lot of things at the same time that I could not realize
suddenly. But with the passage of time I got realized that my thinking style,
my punctuality, and my routines are just got better. I became a committed
person. Some of the skills that I have internalized at KSB PUMPS are
discussed below;
Requistion
(requirment
request)
PO
(purchase order)
generate
GR
(goods receipts)
Invoice record
generated
Document
number
generated

137
 Commitment:
I was kept rotated by my instructor to different persons within the department
so that I could get the maximum exposure to their working tasks, their
abilities their commitment to the work. They also assigned sometimes the task
of their own to perform and I took them as my boss is giving me orders and
performed them with commitment. So I learnt the skill that how to be
committed to my seniors and to my work.
 Teamwork experience:
When I entered the organization I considered myself as a part of team. Large
organizations are built by the teamwork efforts of the individuals. I learnt
there how to perform tasks within a team, where lots of other people are also
connected to you.
 SAP learning:
The company has given me a separate computer, with that I learned SAP and
professional EXCEL. There were certain restrictions about using this network.
But my instructor properly guide me first and then allowed me to perform
tasks. And I also I learned how information flows through different levels
within the departments and how can a relevant person use that information.
 Managerial skills exposure:
I got exposure to other different skills that can be helpful in my future that
how to manage work, relations with officers, putting pressure in subtle ways
to get work done in time. I observed that you can’t be too lenient or too harsh
to your employees. A manager has to make relations to such a level that no
feels that my manager is too lousy to control his personnel nor too harsh to
keep atmosphere stressful.

138
Conclusion and recommendation

139
7.0.0 CONCLUSION AND RECOMMENDATION
7.1.0 ACTS OF SUCCESS
1. Empowerment:
Empowerment refers to increasing the spiritual, political, social or economic
strength of individuals and communities. It often involves the empowered
developing confidence in own capacities.
2. Communication:
Communication is a process of transferring information from one entity to
another.
3. Transparency:
Transparent procedures include open meetings, financial disclosure
statements, the freedom of information legislation, budgetary review, audits,
etc.
4. Synergy:
Synergy is where different entities cooperate advantageously for a final
outcome. If used in a business application it means that teamwork will
produce an overall better result than if each person was working toward the
same goal individually.

140
7.2.0 CONCLUSION
KSB is one of the old companies in the world with the major business
enterprise. KSB has a responsibility to shareholders, employees, customers
and the nation to continually improve the performance of the company and
its business. Doing the works with responsible way will lead the prosperity in
the industries and communities in which it participate, there are
plenty of bigger challenges to be face yet, the way the company is growing to
innovation of technology will provide the cutting-edge technology with less
cost in internally and investment. The competitive improvement mentioned
earlier gives Ksb confidence that if it’s prepared to take the lead in the new
world. It can be seen that various strategies are used by ksb in order to gain
advantages over its competitors. In a competitive market a company must
identify its strengths, weaknesses, opportunities and threats to strengthen
the company and achieve its objectives and target different market. With
technological changes comes innovation and innovation can be good or bad
for a company and in the case of KSB innovation was perceived through
vigilance.

KSB INTERNSHIP PROJECT

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