INTRODUCTION

What the UniLever Is?

Unilever is dedicated to meeting the everyday needs of people everywhere. Around the
world Unilever foods and home & personal care brands are chosen by many millions of
individual consumers every day. Earning their trust, anticipating their aspirations and
meeting their daily needs are the tasks of Unilever local companies. They bring to the
service of their consumers the best in brands and both Unilever’s international and local
expertise.

For more than 70 years Unilever has been providing consumers with quality products and
services. Unilever has a portfolio of global, regional and local brands. Some, such as
Dove, Hellmann’s, Lipton, Lux, Magnum, and Vaseline, are popular around the world.
Others are the first choice for consumers in particular countries. As traditional structures
and lifestyles around the world are being rapidly transformed, Unilever continues to
respond to consumers’ present needs and, at the same time, to anticipate their future ones.
Our strength lies in the deep understanding we have of local culture and markets.
Unilever’s strategy is to focus research and development and marketing on our top
performing brands, that is, those that are most in demand from consumers. Through our
extensive knowledge of trends identified today, we will continue to develop our brands to
meet the needs of our consumers tomorrow. , feel and smell great.

Unilever products are at home everywhere: favorites with consumers throughout the
world, from the emerging markets of Asia and Latin America to the developed economies
of Western Europe and North America.

Unilever meets the needs of consumers around the world, in both new and established
markets. Consumers vary from country to country in their preferences and habits and
Unilever adapt many of its brands to suit local tastes. For example, among Unilever’s
many teas, it produces around 20 separate brands of black tea specifically tailored for
consumption in over 20 different countries and Unilever is constantly sharpening the
flavors to suit all its local markets. In some societies, consumers have traditionally
washed up by sponging ash, sand or detergent onto their dishes, before rinsing. Learning
from these established practices, Unilever developed Vim dish wash bar, to bring
improved cleaning to existing washing routines. Shopping habits also vary and the
availability of Unilever’s brands is a key concern of local managers. Unilever adapt the
distribution of its brands to suit local realities. In Europe, customers benefit from swifter,
easier dispatch through online ordering of frozen foods. While, in Tanzania, Unilever has
piloted bicycle delivery of products to villages inaccessible to motor transport. Building
on a presence that in places stretches back nearly a century, it keeps closely in tune with
local consumers. Unilever is, in every sense, a multi-local multinational.

Unilever’s research and development teams help to anticipate and meet consumer needs.
Unilever’s research and development expertise allows to anticipate the evolving needs of
consumers and to create the innovations to meet them. Internet technology is improving
the way Unilever share best practice and innovation around the world.

Unilever’s R&D activity is focused on six major laboratories and a network of innovation
centers around the world. Recent successes have demonstrated Unilever’s practical
ability to respond to consumers and bring innovations to the marketplace. They include
laundry tablets, which it has rolled out in more than 30 countries; Lipton Cold Brew tea
bags, which take away the need to boil water when making ice tea; and its cholesterol-
owering spreads, which have been widely rolled out under the Take Control, Becel and
Flora brands. Unilever continues to look for new innovation opportunities. For instance,
Unilever research into the human genome means they can now decode the make-up of
skin. This can reveal such secrets as an individual’s tendency for dryness or their skin
protein mix. Such knowledge forms the foundation for new, more personal products.

Unilever’s global IT system helps them to share information around the business and to
use their scale and scope to meet consumer needs and reduce their costs. Unilever drives
to provide better value for customers and consumers; they have always valued the sharing
of information across product sectors and geographical locations. IT has boosted this
knowledge-sharing culture, allowing us to make the most of the vast amount of
Information held by our people around the world. Unilever’s computer networks provide
over 90,000 employees worldwide with common tools for sharing information –allowing
them to deal with millions of electronic messages every working day. They also have a
Unilever Intranet, which helps them to manage innovation and best practice around the
world. Global teams, for example, pool information, marketing success stories and
knowledge via dedicated sites, making this knowledge available to Unilever’s people
locally, wherever they are.

Unilever is committed to doing business in a responsible and sustainable way. In

partnership with organizations around the world, Unilever works to reduce their impact
on the environment and to act as a responsible corporate citizen.

Unilever believes in sustainable development – meeting the needs of the present without
compromising resources for future generations. This commitment begins and ends with
their consumers. Unilever believes that by constantly evolving to meet their changing
needs, they can continue to develop their business in both a profitable and an
environmentally sustainable way. In working towards sustainable development, they
focus on three areas that are directly relevant to their business. These are fish
conservation, clean water stewardship and sustainable agriculture. An example of their
work in the area of fish conservation is the Fish Sustainability Initiative, which aims to
meet their objective of sourcing all supplies from sustainable fisheries by 2005. Filegro,
an Alaskan salmon-based dish, was our first product to come from a sustainable fishery,
as certified by the Marine Stewardship Council. In clean water stewardship, as in other
areas, Unilever joins with partners to achieve maximum impact. For example, through
their sponsorship of the Global Nature Fund’s Living Lakes initiative, they work with a
network of private and government organizations to help communities better manage
their local lakes and wetlands. In sustainable agriculture, Unilever has set up of an expert
external advisory board. Its task is to advise and inform its business and suppliers on new
sustainability standards.

Unilever’s commitment to corporate social responsibility is an integral part of their

operating tradition. It is outlined in their Corporate Purpose and in their Code of Business
Principles. It finds practical expression in the worldwide standards they have set their
selves: to ensure the health and safety of Unilever people at work, to secure the quality
and safety of products and to minimize the environmental impact of their operations.
Unilever aims to be as professional in their management of its social responsibilities as
they are in any other area of business. Unilever recognize the need to be explicit about
what their social commitment means in practice: to articulate their policies, and to
demonstrate its performance. Unilever reports on their approach and progress in its Social
Review. Unilever has a tradition of support for the local community wherever it operates,
in particular in the areas of education, environment and health. For example, in India
access to oral care is limited, with few dentists per head of population. In 2000,
Unilever’s oral health and hygiene education programme brought advice and care to over
2.5 million schoolchildren. In China, Unilever has sponsored Qinghai province’s first Art
Hope School. In a region where few can afford the cost of basic schooling, it offers the
opportunity of a general education and free tuition in traditional dance, music and modern
art.

Internet technology is providing a two-way communication channel, helping Unilever to

get to know its consumers better.

Competition in markets is intense. To further develop their relationships with consumers

and communicate the benefits of their brands, Unilever uses a variety of media, not only
highly creative television advertising campaigns but also new one-to-one communication
via the internet. Unilever brand communication has always made the news. In the 1950s,
they produced the first ever television commercial in the UK. As the 21st century began,
they screened the UK’s first interactive TV commercials, marketing their Colman’s and
Olivio brands.

Unilever Pakistan Limited

Unilever Pakistan Limited is largest fast moving consumer Products Company in

Pakistan. Unilever Pakistan Limited is a part of Unilever- a global company. Unilever
Pakistan Limited is producing more than 50 brands in Pakistan.

　
Company information

Unilever Pakistan limited is a wholly owned subsidiary of Unilever Overseas Holding,

UK, Unilever PLC (A company incorporated in the United Kingdom.)

The Company is incorporated in Pakistan and listed on the Karachi, Lahore, and
Islamabad Stock Exchanges. It manufactures and Markets foods, beverages, detergents &
personal Products.

BOARD OF DIRECTORS

Ms. Musharaf Hai (Chairman & Chief Executive)

Mr. Soomro Mohammad Ibrahim

Mr. Mohammad Abid Javeed

Mr. Perwaiz Hasan Khan

Mr. Fatehali W. Vellani

Mr. Syed Baber Ali

Mr. Omar H Karim

Mr. Irtiza Husain

Mr. Robert Zoon

COMPANY SECRETARY

Mr.Amar Naseer

AUDITORS

Messrs. A.F. Ferguson & Co

State Life Building No. 1-C

I.I.Chundrigar Road

Karachi.

　
REGISTERED OFFICE

Avari Plaza

Miss Fatima Jinnah Road

Karachi.

SHARE REGISTRATION OFFICE

C/o Ferguson Associates (Pvt.) Ltd.

State Life Building No. 1-A

I.I. Chundrigar Road

Karachi.

COMPANY’S BANK

Grindlays Bank Ltd. Karachi.

Grindlays Bank Ltd. Lahore.

Muslim Commercial Bank Rahim Yar Khan.

National Bank of Pakistan Ltd. Rahim Yar Khan.

PRODUCTION UNITS

Different factories of Unilever Pakistan Limited are operating in different areas of

Pakistan. Brief information about theses units is given below:

RAHIMYAR KHAN (RF)

The largest and the oldest unit of Unilever Pakistan Limited is situated in Rahim Yar
Khan. Basically at this factory personal products, soaps, glycerin and dish wash bar are
manufactured.

KARACHI TEA FACTORY (KF)

This factory was established in 1950 and it is situated in west Wharf area. Formerly it
was owned and managed by Lipton Pakistan Ltd. In the last 43 years many modifications
are made here. And the factory has expanded considerably. In this factory only tea is
produced and packaged.

KARACHI EDIBLE FACTORY

It is situated on Hub River in S.I.T.E. A&B Oil Industries established the factory in 1958
and the production of the vegetable oil began in 1962. In 1965 Lever acquired the
factory. Banaspati, cooking oil and margarine are produced here and distributed all over
the country.

ICE CREAM FACTORY

This is recently established on Multan Road in district Kasur. The plant was
commissioned in 1994 having the most modern and latest machines installed. Walls Ice
cream is being manufactured here. LBPL, when acquired the Polka, also purchased its
two factories, one in Lahore and other in Karachi.

BEST FOODS FAISALABAD

Recently Unilever has acquired Rafhan Maize Products from Best Foods International.

Tea processing plant (Mansehra)

The new Lever Black Tea Processing Plant has been set up at Dhodial, 12 km north of
Mansehra on the main Karakoram Highway on 2.5 acres of land with the Processing
Plant built-in area of 11,800 sq. ft. The plant is expected to process 50 kg per hour or
approximately a ton of made tea a day.

The plant has cost Rs. 11 million whereas Rs. 12 million has been spent on the building
and infrastructure. The plant has been inaugurated on 7th of September, 2001.

　
　

Product line

Followings are the product line of the Unilever Pakistan Limited:

Personal wash

Fabric & home care

Oil & dairy best foods

Tea

Ice cream

PERSONAL WASH

TOILET SOAPS

Lux toilet soap (4 varieties)

Lifebuoy (carbolic soap)

Lifebuoy Gold (2 varieties)

Rexona (3 varieties)

Breeze
　

FABRIC AND HOME CARE

FABRIC WASH

Ultra Surf

Surf micro

Surf Excel

Power Surf

Sunlight Washing Powder & Soap

Wheel Washing Powder

HOME CARE

Vim Dish Washer/Scourers

Vim Bar

Vim Powder

PERSONAL PRODUCTS

HAIR CARE

Sunsilk Shampoo (4 varieties)

Lifebuoy health Shampoo

SKIN CARE

Fair & Lovely skin cream and lotion

Ponds skin cream

Ponds talc
DENTAL CARE

Close-up Tooth paste

Pepsodent Tooth Paste

OIL AND DAIRY BASED FOOD

BANASPATI

Dalda banaspati

COOKING OIL

Dalda Cooking Oil (Soya Bean)

Dalda Sunflower oil

Planta cooking oil

MARGARINE

Blue Band margarine

INDUSTRIAL FATS

A whole range of products for the bakery & oils for the industry.

TEA

LEAF TEA

Yellow Label

Yellow label Danedar

Richbru

Top Star

Taaza Leaf

Supreme
DUST TEA

Pearl Dust

Ruby Dust

A1

MIXTURE TEA

Taaza

ICE CREAM

Cornetto (3 varieties)

Feast (2 varieties)

Feast Stickless

Top Ten

Star Cup (4 varieties)

Callipo

Split

Fruiti

Peddle Pop (3 varieties)

3-D

Solo (3 varieties)

Polka Cup

Panda
Dracula

Family Packs

Product line of Rahim Yar Khan factory

Lux toilet soap

Lifebuoy toilet soap

Lifebuoy gold

Sun silk shampoo

Fair & lovely fairness cream

Vim dish bar

Close up toothpaste

HISTORY

Unilever Pakistan Ltd (one of the largest multinational companies) is the member of
Unilever PLC London. Unilever was formed in 1930 when the Dutch Margarine
Company Margarine Unie merged with British soap maker Lever Brothers. Both
Companies were competing for the same raw materials, both were involved in large-scale
marketing of household products and both used similar distribution channels. Margarine
Unie grew through mergers with other margarine companies in the 1920s.

Unilever was founded in 1885 by William Hesketh Lever. Unilever established soap
factories around the world. In 1917, he began to diversify into foods, acquiring fish, ice
cream and canned foods businesses.

In the Thirties, Unilever introduced improved technology to the business. The business
grew and new ventures were launched in Latin America. The entrepreneurial spirit of the
founders and their caring approach to their employees and their communities remain at
the heart of Unilever's business today.

Unilever NV and Unilever PLC are the parent companies of what is today one of the
largest consumer goods businesses in the world. Since 1930, the two companies have
operated as one, linked by a series of agreements and shareholders that participate in the
prosperity of the whole business.
Margarine Unie and Lever is taken for Unilever. Its head quarter was established at
England and Rotterdam. Unilever has 500 operating companies in 100 countries. It has
0.3 million employees and turnover of sales in 23000 million pounds. The global
business proportion is 60% in Europe, 20% in North America and 20% in rest of the
world. An identical board of directors controls the activities of subsidiary companies
throughout the world

Unilever Pakistan Ltd was incorporated in1948 under the name of Sadiq vegetable oils
&Allied industries in the state of Bahawalpur. Rahim Yar Khan factory begun to work in
1949. The first cotton seed was crushed in1951. The production of Vanaspati Ghee and
Lux Toilet soap was started in 1952 and 1954 respectively.

Unilever Pakistan Ltd was incorporated as an independent Unilever operating company

in 1958. In 1966 a vanaspati and vegetable oil factory was established in Karachi and
Unilever Pakistan Limited moved its main office from R.Y. Khan to Karachi.

In 1989 LBPL and Lipton Pakistan Ltd were merged as a result of the international
merger of both the multinationals. In 1995 it started another big business of Ice Cream.

Being a multi national company Unilever Palistan Ltd. is listed in all the three stock
exchanges Karachi, Lahore and Islamabad. The 69% shares of this company are held by
the parent Unilever Company and the remaining 31% are owned by financial institutions.
Unilever Pakistan Limited has more than 3000 employees in Pakistan. Unilever Pakistan
Limited has the following wholly owned and subsidiary companies;

LEVER CHEMICALS (PRIVATE) LIMITED

LEVER ASSOCIATED PAKISTAN TRUST

SADIQ (PRIVATE) LIMITED

Lever chemicals (Pvt) limited manufactures and sells sulphonic Acid. Lever Associated
Pakistan Trust (Pvt) Limited and Sadiq (Pvt) Limited act as trustees of Union Pakistan
Provident Fund (lever Provident Fund). All subsidiary companies are incorporated in
Pakistan.

UNILEVER PAKISTAN LIMITED

 RAHIM YAR KHAN

TOTAL AREA = 95 ACRES

FACTORY = 27 ACRES ( 28% )

ESTATE = 60 ACRES (63%)

EVAPORATION BEDS AND SOLID WASTED DUMPING SITE

= 08ACRES (9%)

RAHIM YAR KHAN FACTORY

TOTAL AREA = 110,237 M2

BUILT UP AREA = 23998 M2

OPERATIONAL AREA = 5317 M2

STORAGE AREA

MAIN HANGER (3 NOS) = 2665 M2 /HANGER

OLD PRODUCTION STORE = 711M2

VIM FLOOR = 725M2

ONE HANGER AS MASTER WAREHOUSE,CAPACITY,SOAP = 100MT

MOOSAC STORAGE = 208.4M2

RAW MATERIAL STORAGE CAPACITY

SUNFLOWER OIL = 114MT

CNO/PKO = 600MT

TALLOW 1.5R = 1400MT

TALLOW 0.5R = 1240MT

LIQUID C/SODA = 300MT

LIQUID C/SILICATE = 155MT

 OBJECTIVES

Every company is formed to accomplish certain objectives. There is no company that has
no goals. So the Unilever Pakistan Limited has also targets before it.

At the heart of the corporate purpose, which guides Unilever Pakistan Ltd. in their
approach to doing business, is the drive to serve.

The objectives of the Unilever are;

• To meet the everyday

needs of people everywhere –
to anticipate the aspirations
of consumers and customers
and to respond creatively and
competitively with branded
products and services, which
raise the quality of life.

• Total commitment to
exceptional standards of
performance and
productivity, to working
together effectively and to a
willingness to embrace new
ideas and learn continuously.

• To maintain highest
standards of corporate
behavior towards employees,
consumers and the societies
and world to acquire success.

Company deals only in those products that are profitable. If there is any indication that
any product is not profitable company analyzes the reasons and step are taken to
overcome the reasons. Company introduces different marketing strategies if there are
problems in marketing. Company also takes into consideration the welfare of the
consumers. It takes into account the taste and habits of the consumer.

It also works for the welfare and interest of Pakistan in the following terms:

Contribution to GDP

Less dependence on import through local

manufacturing
 Foreign exchange earnings through
exports

MISSION STATEMENT

The following is the Mission statement of the Unilever Pakistan Limited:

We are the leading consumer products company in Pakistan, a

multinational with deep roots in the country.

We attract and develop highly talented people who are excited,
empowered and committed to deliver double-digit growth.

We serve the everyday needs of all consumers everywhere for

foods, hygiene and beauty through branded products and services
that deliver the best quality and value.

We strive to remain an ever simple and enterprising business.

We use our superior consumer understanding to produce

breakthrough innovation in brands and channels.

Our bands capture the hearts of consumers through outstanding

communication.

Through managing a responsive supply chain, we maximize

value from suppliers to customers

We are exemplary through our commitment to business ethics,

Safety, Health, Environmentalist and involvement in the
community.

CORPORATE CONTROLLER’S DEPARTMENT MISSION STATEMENT

We will help the company achieve its targets by constantly improving
the quality of management information, achieving the standard demanded
by our customers and maintaining flexibility to meet changing business
needs.

Corporate Controllers team will continuously enhance its service level

and meet the demands and expectations of its customers.

Timely and error free reporting to Unilever (Business group and

Financial group) and other local /statutory Reporting will be maintained.
 Risk will be reduced by further strengthening controls to the level
expected and required.

To achieve this, standard of performance of personnel will be improved

through training, motivation and recruitment.

COMMERCIAL MISSION STATEMENT

The commercial team of Unilever Pakistan Limited will drive the

business performance to achieve corporate targets; constantly improving
the level of service and meeting the demands of the business.

We will take the lead in cost control, achieving and maintaining relative
cost advantage against competition by radical improvement in supply
chain and perusing the cost effectiveness plan including application of
new technology.

Through focused attention and leveraging Unilever best practice in Risk

Management a high standard of operational control will be achieved to
protect the business.

Management information system will be constantly updated to meet

changing business needs, providing optimal Quality Of management
information.

MANAGEMENT OF THE COMPANY

The company is headed by the chairman who is assisted by a team of 7 members known
as the manage committee, which is responsible for initiating policies and overall
planning. As well as their general management duties the MC members are each
responsible for a specific function. Reporting to MC members are the Departmental
heads who are responsible for advising the MC for planning, implementation of policies
and for ensuring that targets are reached.

The management of the company is composed of a mix of international and Pakistan’s

business professionals. The management of the company includes SYED BABER ALI as
a director, who is also involved in many other organizations like Packages and other
industries. One member from each province attends the meeting. The top management of
the company is fully professional specially marketing department that is headed by Mr.
JEFF LEE who has wide experience in this field.

MANAGEMENT HIERARCHY OF unilever rahim yar khan

WORKS MANAGER

SAEED MUSTAFA

MATERIAL STORE MANAGER

 PLANNER HPC

DEV. & Q.A MANAGER

OPERATIONAL MANAGER

ASSISTAN.MANAGER ADMIN.SERVICES

FACTORY ENGINEER

CONTROLLER HPC

EMPLOYEES RELATION MANAGER

ERM

EMPLOYEES RELATIONMANAGER

RIZWAN HAIDER NAQVI

JUNIOR MANAGER RD

SAEED AHMAD

JUNIOR MANAGER FLAD

AMIN SHAH

A.E R.MANAGER

ISMAIL TAHIR

　
PLANNING

PLANNER HPC

FAHEEM SHAH

JUNIOR MANAGER

ABDUL QADIR

JUNIOR MANAGER

SOHAIB MALIK

JUNIOR MANAGER

FAROOQ CHOHAN

ASSISTANT MANAGER

NAVEED RIFFAT

CONTROLLER HPC

A .MANAGER FINANCE

YAQOOB KHAN

CONTROLLER HPC

WASEEM AHMAD

A . MANAGER BUYING

M. MUSLIM

A. MANAGER SYSTEM SUPPORT

 A. MANAGER COSTING

TARIQ YOUSEF

A.MANAGER APV

FAHIM SHAH

JUNIOR MANAGER

SYSTEM SUPORT

JUNIOR MANAGER

ASHFAQ AHMAD

COSTING

ASSISTANT MANAGER

COSTING

JUNIOR MANAGER

GHAFFAR ASIF

JUNIOR MANAGER

AHMAD SHEIKH

JUNIOR MANAGER

SAEED AHMAD

JUNIOR MANAJOR

Mr. ASHFAQ

FINANCE
 ASSISTANT MANAGER FINANCE

JUNIOR MANAGER

SHAFIQ AHMAD

JUNIOR MANAGER

ARIF AZIZ

JUNIOR MANAGER

NIAMAT ULLAH

APV

ASSISTANT MANAGER

APV

CASHIER

ABDUL LATIF

JUNIOR MANAGER

IFTIKHAR AHMAD

JUNIOR MANAGER

SHAFATULLAH

JUNIOR MANAGER

ABDUL RAZZAQ

　
　

FACTORY ENGINEER

SHAHAB M ALI

A. MANAGER STORE

AHMAD MURAD

A. MANAGER PROJECT

IJAZ AHMAD

AREA ENGINEER

M. AMJID

A.MANAGER TECHNICAL

ALI RAZA BAIG

OPERATIONAL MANAGER

A. MANAGER NSD / ENG.

MUDASSAR CHEEMA

A.MANAGER PP/NSD

MUMTAZ JAVEED

JUNIOR MANAGER

NOOR MUHAMMAD

JUNIOR MANAGER
 M .H. SOOMRO

JUNIOR MANAGER

SALIM IQBAL

JUNIOR MANAGER

MUNIZ VAHIDY

JUNIOR MANAGER

IJAZ NADEEM

OPERATIONAL MANAGER

NOMAN AHMAD LUTFI

JUNIOR MANAGER

M. NAZIR

ASSISTANT MANAGER

SALMAN GOHAR

MANAGER SOAP/ FINISHING

SHAHID RAFIQ

JUNIOR MANAGER
 GENERAL

JUNIOR MANAGER

PAN ROOM

JUNIOR MANAGER

SOAP / FINISHING

JUNIOR MANAGER

FINISHING T/ S

MUKRAM ALI

ALLAH DITA

SABIR HUSSAIN

MEHBOOB BAIG

ADNAN WARSI

SALEEM RAFI

TARIQ WAHAB

MEDICAL

FACTORY MEDICAL OFFICER

DOCTORS

(JUNIOR MANAGER)

MEDICLE CENTRE

　
　

COMPANY STRUCTURE

EXECUTIVE COMMITTEE

The Executive Committee is responsible for agreeing priorities and allocating resources,
setting overall corporate targets, agreeing and monitoring business group strategies and
plans, identifying and exploiting opportunities created by Unilever's scale and scope,
managing external relations at the corporate level and developing future leaders.

Leading the team are the chairmen of Unilever PLC and Unilever N.V., the parent
companies. Other members are the global division directors for Unilever Best foods and
Home and Personal Care; the Corporate Development Director; the Finance director and
the Personnel director.

REGIONAL PRESIDENT

The regional presidents are responsible for delivering business results in their respective
regions. Regional presidents report to either the director of the Foods division or the
director of the Home and Personal Care division.

As members of either the Unilever Best foods or Home and Personal Care divisions, they
play an important role in shaping divisional strategy and ensuring that regional strategies
and plans are consistent with overall objectives.

ADVISORY DIRECTORS
The advisory directors are the principal external presence in Unilever's government. One
of their key roles is to assure that government provisions are adequate and reflect best
practice. The advisory directors comprise a majority of the members of certain key
committees of the Boards. They attend the key quarterly meetings, committee meetings,
conferences of the directors and the Executive Committee, as well as meetings with the
Chairmen.

SENIOR CORPORATE OFFICERS

Unilever's senior corporate officers are responsible for ensuring that board meetings and
board committee meetings are supplied with the information they need. So, for example,
the chief auditor ensures that the audit committee has the necessary information, while
the head of the corporate relations department keeps the external affairs and corporate
relations committee informed.

Different Management Styles OF

UNILEVER PAKISTAN LIMITEDever Limited

　
NO OF EMPLOYEES IN UNILEVER RAHIM YAR KHAN FACTORY

MANAGEMENT STAFF

Managers 11

Assistant Managers 22

Juniors Managers 53

Total management staff 86

NON-MANAGEMENT STAFF

SOA 21

OA 07

Technical Grade A 60

Technical Grade B 87

Technical Grade C 57

Technical Grade D 145

Technical Grade E 42

Technical Grade F 29

448

General Grade A 08

General Grade B 20

General Grade C 09

General Grade D 12

Total Non-management Staff 497

　
　

EMOLOYEES IN VARIOUS SECTIONS

　
NON-MANAGEMENT MANAGEMENT
SECTIONS

General 00 02

Soapery / Operation-1 224 18

PP / NSD-II 120 10

Material Store 22 02

Engineering 45 15

Lab 16 05

IRD / Flad 18 04

Establishment 15 01

Administration 09 01

Security 11 00

Distribution 07 07

Buying 00 02

Account 01 17

Medical 09 02

Total Employees 497 86

　
　

The Working Environment And Accountability

With the world fast becoming a Global Village and the Internet Information Technology
Revolution, the issues of HUMAN RIGHTS and Working Condition are becoming
significant important with each passing day.

Unilever can pride itself in having one of the most congenial and professional working
environments of any company operating in Pakistan. Unilever is an equal opportunity
employer and there is no discrimination on the basis of sex, caste or creed. All hiring and
promotion decisions are taken on merit. All local laws are adhered to regarding different
matters. Extreme emphasis is placed on worker safety and health

Selection & Career ladder

Personnel Department makes arrangements for the recruitments of the employees. For
this purpose it collects information about the desired employee’s functions and then
defines the job requirements and job profile. The Personnel Department makes all the
arrangements for the report meant of new employee, It sees better such employee is
available in the organization or not. In case of no, it gives the advertisement in the
newspapers. It also collects all the applications of the applicants. It also makes
arrangements for test. The Personnel Department uses different tests for different
applicants. After that it arranges the interviews for the succeeded applicants. Usually the
interviews are bland of different types of interviews. These interviews include panel
interview, structured questions etc. The background information about the succeeded
applicants is also gathered by the Personnel Department

Promotion Of Persons At UNILEVER

On the basis of experience and performance, they are promoted to higher managerial
level; at higher level I have seen various MBA, CA, ICMA and also people who have
spend years at Unilever. In order to provide incentives to employees at Unilever, cash
rewards are also granted. The head of the department, on job basis gives bonuses. The
function of promotion of the workers is also performed by ERD after consulting with the
top management and analyzing the past record of the workers.

Job Assessment

At Unilever Pakistan Limited Performance Appraisal is prepared to check the

performance of workers. It is like ACR (annual confidential report) in the government
sector.

The basic Objectives of job assessment are

• Check the overall performance of employees

• Whether the job assigned is fully done or not

• Integrity, honesty

• Loyalty

• Devotion and commitment of the part of employee to achieve

organizational objectives

Measures To Check Overall Performance

Higher manager to check the performance of employees adopts following measures,

• Standards are established first

• Measure the individual as well as collectively performance

• Compare actual performance with planned

• Taking corrective action

• Reviews of job are made.

• Superior management assesses accuracy of work.

On the basis of performance appraisal awards and rewards or punishments are given.

Accountability
Employees have to face inquiries or suspensions, if they are involved in activities which
are not according to the goal of Unilever Pakistan Limited. They are often terminated
from their jobs, if they are not performing well. They can be demoted from their ranks. In
Unilever, promotion is granted on performance basis so they are also accountable if they
are performing poorly.

If the employees are not obedient to their superior or involved in unethical activities, they
have to face the circumstances. Severe punishment like demotion, firing and suspensions
are given to non-performing or low-performing employees.

Satisfaction Of Employee

Employees have a high morale. Top management is maintaining very cordial

relationships with union leaders. Actually employees feel a part in the organization and
its achievements.

COMPENSATION AND ADMINITRATION

The Unilever Pakistan Limited conducts the wages survey in the market and of the major
competitors after every two years and compares the results with its own package and
there is any difference then adjustment is made. The desire of Unilever R.F. is that its
employees must be satisfied in every aspect because it has the opinion that satisfied
employees are more productive as compared to dissatisfied. The Unilever gives 30
different types of allowances to its employees. Some of these are annual, some are semi-
annual, and some are monthly while some are once in the whole employment period.

HEALTH AND SAFETY

Unilever R.F. is much conscious about the health and safety. Proper equipments are
available in all areas of the production where sensitive machinery is in operation.
Furthermore, the organization has a well equipped Medical Center where MBBS doctors
are available in order to meet with emergency cases.

The Personnel Department provides all possible instruments to all workers and it has the
desire that every worker should use those instruments in order to avoid losses.

Following are the Instruments which are provided to the workers:

Long shoes

Helmets
 Gloves

Fire Instruments

BENEFITS & SERVICE

Unilever R.F. also provides certain benefits and services to all its employees. A list of
some benefits and services is given below:

Attendance Allowance

Good attendance award

Death Compensation

Canteen allowance

Tea Expenses

Conveyance Allowance

Family medical allowance

Family medical care

House rent Allowance

Utilities allowance

Meal Allowance

Rehabilitation Allowance

Retirement

Jersey

Shoes

Tonga Allowance

Traveling Announce

Hajj

Marriage Assistance To minorities

The organization has a club for the employees of the organization. Indoor and outdoor
facilities are also available. The company also celebrates Annual Sports Day on which
different games are played and prizes are given to the succeeded players by the company.

Personal Development And Training

Junior-level courses are frequently held in-house for personal training. Various courses
organized in the past include the following,

1. Executive Development Course

This course was specially designed for middle management to enhance their principle-
centered leadership qualities so that they could meet the emerging challenges of the
global world. Neuro-linguistic programming was part of the course to help the employee
in day-to-day activities to improve proficiency and effectiveness in their attitude and
work style.

2. Basic English Language Course

This course was for those staff that is not proficient in written and verbal English
language. An external instructor whose services were especially hired for this purpose
conducted the course.

3. Basic Labor laws of Pakistan

Professionals from Labor Department organized this course. The main purpose was to
give acquaintances to the staff of their rights. Wage rates, vacations, working hours, child
& bonded labor etc, were the main topics covered.

4. In-Housing Training School

Unilever has also established an in-house Training School for unskilled labor so that they
may be trained. Unskilled manpower is hired from the market for training. And during
this period they are paid as per the prevailing wage rules.

HUMAN RESOURCES PLANNING

The most important function performed by the ERD is the Human Resource Planning.
For a smooth production there must be an effective Human Resource Planning. For This
purpose it makes long term and short term plans to make the labor available for
production. Short term Plans are made for those places where workers have gone on
holidays or absent.

Under these plans it has two types of recruitment:

Badli

Temporary

For long term plans workers are recruited from the temporary workers who have become
skilled one.

MOTIVATION

The organization has the opinion that motivated workers are more productive than
unmotivated workers. To motivate its employees the organization uses both intrinsic and
extrinsic approaches for motivation its employees.

o Intrinsic Approach

o Extrinsic Approach

INTRINSIC APPROACH

Job rotation

XTRINSICE APPROACH

Training

Appreciation letters

Bonuses

Cash awards

Gifts

Shields

Clocks

Put the name of the workers on the notice board who perform an excellent performance.
To motivate the employees the organization has introduced a program name OFI
(Opportunity for Improvement).
　

COMPANY’S POLICIES

We updated Unilever's Code of Business Policies because we believe that our reputation
for high corporate standards is a key asset which needs to be fresh and living throughout
our business. The Code is published in full below.

Unilever has earned a reputation for conducting its business with integrity and with
respect for the interests of those our activities can affect. This reputation is an asset, just
as real as our people and brands.

Our first priority is to be a successful business and that means investing for growth and
balancing short-term and long-term interests. It also means caring about our consumers,
employees and shareholders, our business partners and the world in which we live.

To succeed requires the highest standards of behavior from all of us. The general
principles contained in this Code set out those standards. More detailed guidance tailored
to the needs of different countries and companies will build on these principles as
appropriate, but will not include any standards less rigorous than those contained in this
Code.

We want this Code to be more than a collection of high-sounding statements. It must

have practical value in our day-to-day business and each one of us must follow these
principles in the spirit as well as the letter.

STANDARD OF CONDUCT

We conduct our operations with honesty, integrity and openness, and
with respect for the human rights and interests of our employees.
 We shall similarly respect the legitimate interests of those with whom
we have relationships.

OBEYING THE LAW

Unilever companies are required to comply with the laws and regulations of the countries
in which they operate.

EMPLOYEES

Unilever is committed to diversity in a working environment where

there is mutual trust and respect and where everyone feels responsible for
the performance and reputation of our company.

We will recruit, employ and promote employees on the sole basis of
the qualifications and abilities needed for the work to be performed.

We are committed to safe and healthy working conditions for all
employees.

We will not use any form of forced, compulsory or child labor.

We are committed to working with employees to develop and enhance

each individual’s skills and capabilities.

We respect the dignity of the individual and the right of employees to
freedom of association.

We will maintain good communications with employees through

company based information and consultation procedures.

CONSEMRS

Unilever is committed to providing branded products and services which consistently

offer value in terms of price and quality, and which are safe for their intended use.
Products and services will be accurately and properly labeled, advertised and
communicated.

SHAREHOLDERS

Unilever will conduct its operations in accordance with internationally accepted

principles of good corporate governance. We will provide timely, regular and reliable
information on our activities, structure, financial situation and performance to all
shareholders.

BUSINESS PARTNERSE
Unilever is committed to establishing mutually beneficial relations with our suppliers,
customers and business partners. In our business dealings we expect our partners to
adhere to business principles consistent with our own.

COMMUNITY INVOLMENT

Unilever strives to be a trusted corporate citizen and, as an integral part of society, to

fulfill our responsibilities to the societies and communities in which we operate.

PUBLIC ACTIVITIES

Unilever companies are encouraged to promote and defend their

legitimate business interests.

Unilever will co-operate with governments and other organisations,

both directly and through bodies such as trade associations, in the
development of proposed legislation and other regulations which may
affect legitimate business interests.

Unilever neither supports political parties nor contributes to the funds

of groups whose activities are calculated to promote party interests.

THE ENVIRONMENT

Unilever is committed to making continuous improvements in the management of our

environmental impact and to the longer-term goal of developing a sustainable business.

Unilever will work in partnership with others to promote environmental care, increase
understanding of environmental issues and disseminate good practice.

INNOVATION

In our scientific innovation to meet consumer needs we will respect the concerns of our
consumers and of society. We will work on the basis of sound science, applying rigorous
standards of product safety.
COMPETITION

Unilever believes in vigorous yet fair competition and supports the development of
appropriate competition laws. Unilever companies and employees will conduct their
operations in accordance with the principles of fair competition and all applicable
regulations.

BUSINESS INTEGRITY

Unilever does not give or receive, whether directly or indirectly, bribes or other improper
advantages for business or financial gain. No employee may offer, give or receive any
gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer
of, a bribe must be rejected immediately and reported to management.

Unilever accounting records and supporting documents must accurately describe and
reflect the nature of the underlying transactions. No undisclosed or unrecorded account,
fund or asset will be established or maintained.

CONFLICTS OF INTERESTS

All Unilever employees are expected to avoid personal activities and financial interests
which could conflict with their responsibilities to the company. Unilever employees must
not seek gain for themselves or others through misuse of their positions.

COMPLIANCE-MONITORING-REPORTING

Compliance with these principles is an essential element in our business success. The
Unilever Board is responsible for ensuring these principles are communicated to, and
understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and

operating companies. They are responsible for implementing these principles, if
necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the Code is
subject to review by the Board supported by the Audit Committee of the Board and the
Corporate Risk Committee.
Any breaches of the Code must be reported in accordance with the procedures specified
by the Joint Secretaries. The Board of Unilever will not criticize management for any loss
of business resulting from adherence to these principles and other mandatory policies and
instructions.

The Board of Unilever expects employees to bring to their attention, or to that of senior
management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no
employee will suffer as a consequence of doing so.

Management Activities in UnileverPakistan Limited

Path to Growth

Introduced in 2000, path to growth is Unilever’s corporate strategic agenda which aims to
double the size of the business in seven years and to grow profits faster than the
competition, thereby ensuring that we are the leaders in similar type companies in
providing top value to our shareholders.

Six Strategic Thrusts

The six strategic thrusts that make up the path to growth are;

1. Reconnect with Consumer

By having real insights into consumer needs, preferences and future needs. This means
knowing and understanding consumers’ lifestyles, habits and attitudes and creatively
adapting brands to their changing needs.

2. Brand Focus

Grow their leading international brands by concentrating our resources behind them
while still supporting ‘golden’ regional brands and local jewels. Innovation will be the
keystone to ensuring our brands are attuned to consumers’ future needs.

3. Pioneer New Channels

Widen their means of ‘going to market’ i.e. reaching consumers and customers. This
means developing new channels such as direct selling, home-vending, fashion outlets,
travel, food service and out-of home.

4. World Class Supply Chain

To close the gap to global world class within three years by establishing brand synergies,
superior logistics and supply chain and by establishing a world program.

5. Simplify

Everything that they do by reducing complexity, duplication and by making the best use
of I.T. to provide high quality information once.

6. Enterprise Culture

By creating a culture which shapes the mindset and actions among all employees towards
winning in the market-place by building an organization fit for growth.

TPM

Total productive maintenance is global standard of efficient production, which cuts

waste, save money and make factories safer places to work. It gives machine operators
the knowledge and confidence to investigate and eliminate root causes of machine error
or breakdown as well as the chance to work in teams with managers to achieve
improvements on product lines.

Unilever started introducing TPM sometimes known as Total Perfect Management or

Total People Motivation in Japan in 1989 ahead of global roll-out program. Today,
around 200 sites are using TPM techniques. The level one ‘excellent’ award applies
simply to the factory floor, ‘consistently excellent’ is for sustained performance and the
‘special’ award, much harder to achieve, also includes innovation, manufacturing,
sourcing and distribution.

5 S’s of Workplace Organization.

The 5 S’s are a group of techniques to promote workplace organization, ensure adherence
to standards and foster the spirit of continues improvement.
The 1st S: Sort
Objective: To get rid of unwanted items. Decide what is needed to be kept, and what is not needed and to be discarded.

The 2nd S: Set Location and Limits

Objective: To locate a specific place for specific items of a specific quantity, where needed. Determine addresses for materials and equipment. Put them
in that place and keep them there.

The 3rd S: Shine and Sweep

Objective: To use cleaning to identify abnormalities and areas for improvement. Clean the workplace and at the same time visually sweep for
abnormalities or out or control conditions.

The 4th S: Standardize

Objective: To consolidate the first 3 S’s by establishing standard procedures. Determine the best work practices and find ways of ensuring everyone does
it the same “best” way.

The 5th S: Sustain

Objective: To sustain improvements and make further improvements by encouraging effective use of the ‘Check-Act-Plan-Do’ cycles. Keep all current
improvements in place and develop an environment for future improvements.

PLANT LOCATION

Unilever Pakistan Limited (Rahim Yar Khan Factory) is situated at Leghari road near the main city. The factory deals in major three types of products,
which are categories as under:

• Personal Wash

• Personal Products

• Laundry and Detergents

Personal wash has a wide range of soaps and the main soap of Unilever Pakistan Limited is Life Buoy, Lux, Rexona and Fair & Lovely soap.

Personal product include Oral (Close Up tooth paste), Hair care (Sun Silk, Life Buoy) and Creams (Fair& Lovely and Ponds).

Laundry and Detergents includes Laundry (Surf Excel and Wheel) and Detergents (Vim bar and Wheel magic bar)

LOCATION
Location is the process of determining a geographical site for a firm’s operation. Organizations must weigh many factors when assessing the desirability of
a particular site that can be

Proximity to customers

Proximity to suppliers

Labor costs

Transportation cost

Unilever Rahim Yar Khan Factory is situated in the middle of the city. It was established in 1948.

The main reason for choosing this location for the factory was:

• The land for the factory was donated by the NAWAB of the Bahawalpur State.

• It was the ideal location to cover the Indo-Pak border areas.

• It was the central location of Pakistan so it was a convenient location from the distribution point of view.

• Availability of the cotton seeds because south Punjab is cotton area.

• Government tax free area

• Availability of inexpensive labor

PROXIMITY TO MARKETS

The site of R.Y. Khan Plant was chosen in 1948. The main reason was its central location. This location is the middle of Lahore and Karachi that were the
main markets at that time. So the company can easily cover whole market fro Karachi to Lahore.

PROXIMITY TO SUPPLIERS AND RESOURCES

At that time the company was only producing oil for which cotton area was suitable. This site was suitable for processing the raw material that was cotton
and R.Y. Khan was main cotton area.

TAXES AND REAL ESTATE COST

It was the tax-free area. The land was gifted by the ABBASI family, so there was no real estate cost.
TRANSPORTATION COSTS

Transportation cost is also a major determinant, which directs the location decision. Transportation cost is a major factor not only in terms of the raw
material but also in terms of raw material. As R.Y Khan is situated at the center of Pakistan, the movement of finished goods cost minimum here across
Pakistan. R.Y. Khan Railway Station is situated along with the factory so transportation through rail is very easy.

PRODUCTS

BUSINESS

In respect of the business company divided into the following groups;

TEA

ICE CREAM

HOME CARE & FABRIC WASH

OIL & DIARY FATS

PERSONAL WASH & PERSONAL CARE

TEA

LIPTON
Lipton Yellow Label is the leading brand in Pakistan and is preferred by all who enjoy good tea. It’s growing sales attests to the facts that the Pakistan is
very quality conscious and is in fact a tea connoisseur. To cater to this growing awareness of quality, Lever Brothers Pakistan Limited have always lived
up to its quality No.1.

To keep the tea fresh and flavorful, major initiative has been taken by introducing hermetically sealed packs. This has been appreciated tremendously by
consumers and sales are continuing to grow. For every Lipton Yellow Label Tea consumer, the brand offers a rich, bright, fresh cup of tea that resounds
‘The Sign of Good Tea’.

BROOKE BOND

Millions across Pakistan enjoy supreme. A wide mix of people belonging to all walks of life loves its distinctive taste and flavor. The Red Supreme Pack
with the bold yellow logo stands out at virtually all retail outlets across the country.

Supreme is also popular in both the urban and rural segments. The launch of the sachet made it accessible to many more consumers. Its new improved
blend has further fine-tuned the brand with the requirement of the target segment and hence the claim ‘The taste we call our own’.

ICE CREAM

WALL’S

In March 1995, history was made in Lahore. The launch of wall’s ice cream created a new benchmark for successful FMCG launches in Pakistan. On
August 14, the same year, Wall’s came to Karachi and the city by storm. The success has now been repeated across the country. From a marketing point of
view Wall’s brought to Pakistan, the concept of branding consumer now ask for Cornetto, Feast, Max, and other brands, not simply for ice cream Products.

In July 1996, Polka, an established local name, representing the only national ice cream business was acquired by Unilever. At this time a rationalized
plane is being finalized. In broad term, Walls will emerge as the “impulse brand” whiles the “Polka from Wall’s brand will offer a new level of excellence
in take home or desert ice cream.

POLKA

In 1996 Polka was acquired by Unilever and thus became an associated company of lever, the beginning of second year of Wall’s in Pakistan. Polka as a
brand had been a 25 year old ice cream of Pakistan, offering consumers dependable quality at value pricing. It was the only national ice cream, with
production facilities or depots in various parts of the country, offering consumers several ice cream flavors and formats.

The acquisition of polka provides Unilever ice cream business in Pakistan the best of both worlds. The clear synergy arising out of the two distinct Brands
is sure to move Unilever into the position of market leader, offering consumers an even stronger relationship with Unilever ice cream brands in Pakistan.

HOME & FABRIC WASH

Home & Personal wash includes;

 Super Active Surf

Surf Excel

Wheel Washing Powder

Sunlight Washing Powder

Vim Dish bar

Vim Scourer

VIM

Vim range of products, Vim Bar and Vim Scourer, offer Pakistani consumers quality dish washing in line with international standards. Over the year, Vim
has developed strong equity with its consumer by providing powerful cleaning at affordable prices.

Initially, Lever entered the NSD bar market with Rin that become an instant success in a short period of time, However, in order to harmonize and
strengthen the portfolio, the name Rin was changed to Vim in 1996. Today Vim stands for a superior quality dish wash brand that is environmentally
friendly and in line with international quality standards. Plans to further strengthen the vim portfolio are being implemented.

SURF

Dominating the washing powders markets in Pakistan for four decades; Surf has continued to change according to consumer needs. Being a pioneer, Surf
had to work hard to gain acceptance in the early days. To educate housewives about its use, house to house demonstration were organized in Lahore and
Karachi. Free sample and coupons were also distributed to recruit consumer. There has been no looking back since the brand has undergone numerous
product quality improvements to offer best cleaning results. Over the year, there has been a shift from cartons to poly ags and emergence of low unit price
packs.

With continuous technological innovations, the brand has always managed to fight off competition. Surf Excel, which hit the shops recently, has already
gained a reputation for the best in the market.

OIL & DAIRY FATS

Oil & Dairy Fats includes;

Dalda Cooking Oil

Dalda Banaspati

Dalda Sunflower Oil

 Planta Cooking Oil

Blue Band Margarine

DALDA

It has been over 50 year since DALDA was introduced in this part of the world. Since then, It has gained a tremendous consumer franchise through out the
sub continent, especially in Pakistan. Today, Dalda has under its umbrella a whole host of products aside from the healthiest Banaspati i.e., Dalda Cooking
Oil and Dalda Sunflower Oil.

During 1998, Lever Brothers continued to pioneer in the Edible Oils and Fats category, by introducing Dalda VTF (Virtually Trans Free) Banaspati.

BLUE BAND

Unilever ioneered in 1985, by introducing margarine in Pakistan, under the brand name Blue Band. Since then, Blue Band has remained as locally
produced margarine. Keeping in tune with consumer needs, a number of changes have been initiated in the past 14 years; in terms both the products as
well as the marketing mix

During 1998, Blue Band was able to grow over and above the market growth rate, and clearly suggest that consumers in Pakistan are finally switching
over from butters to a healthier alternative.

PERSONAL WASH & PERSONAL CARE

Personal wash

Lifebuoy

Lifebuoy Gold

Lux

Rexona

Personal Care

Skin Care

Fair & Lovely

Ponds
Hair Care

Lifebuoy Health Shampoo

Sunsilk Shampoo

Dental Care

Close-up

Pepsodent

LUX

The undisputed leader market for over a decade. Lux has gone from strength to strength since 1954. That was the year when local production of this
remarkable successful toilet soap began. Lux happens to be the largest Lever brand globally, with its glamorous association with film stars providing a
common link across the world. The secrets of the brand’s success are that movie with the time and remain contemporary in every area.

The international compaign featuring popular film star has added the touch of glamour Lux has always been associated with.

LIFEBUOY

Incredible thought it may sound, seven Lifebuoy bars are sold in Pakistan every second. The brand has long legendary status in the country.

Recently, Lifebuoy has widened its range of products. The introduction of Lifebuoy Plus and Lifebuoy Gold has played upon the association with health to
capture a more upmarket segment. The latest addition to the Lifebuoy range is a shampoo, which is also marketed in sachets to capture an entirely new
market.

PRODUCTION UNITS

Different factories of Unilever Pakistan Limited are operating in different areas of Pakistan. Brief information about these units is given below:

RAHIMYAR KHAN (RF)

The largest and the oldest of Unilever is situated in Rahim Yar Khan. Basically at this factory personal products, soaps, glycerin and dish wash bar are
manufactured.
KARACHI TEA FACTORY (KF)

This factory was established in 1950 and it is situated in west Wharf area. Formerly it was owned and managed by Lipton Pakistan Ltd. In the last 43 years
many modifications are made here. And the factory has expanded considerably. In this factory only tea is produced and packaged.

KARACHI EDIBLE FACTORY

It is situated on Hub River in S.I.T.E. A&B Oil Industries established the factory in 1958 and the production of the vegetable oil began in 1962. In 1965
Lever acquired the factory. Banaspati, cooking oil and margarine are produced here and distributed all over the country.

ICE CREAM FACTORY

This is recently established on Multan Road in district Kasur. The plant was commissioned in 1994 having the most modern and latest machines installed.
Walls Ice cream is being manufactured here. LBPL, when acquired the Polka, also purchased its two factories, one in Lahore and other in Karachi.

BEST FOODS FAISALABAD

Recently LBPL has acquired Rafhan Maize Products from Best Foods International.

Tea processing plant (Mansehra)

The new Lever Black Tea Processing Plant has been set up at Dhodial, 12 km north of Mansehra on the main Karakoram Highway on 2.5 acres of land
with the Processing Plant built-in area of 11,800 sq. ft. The plant is expected to process 50 kg per hour or approximately a ton of made tea a day.

The plant has cost Rs. 11 million whereas Rs. 12 million has been spent on the building and infrastructure. The plant has been inaugurated on 7th of
September, 2001.

QUALITY CONTROL
Quality is the use of techniques and activities to achieve sustain and improve quality. It involves integrating the following related techniques and activities:

1. Specification of what are needed.

2. Design of the product or service to meet the specifications.

3. Production or installation to meet the full intent of the specification.

4. Inspection to determine conformance to the specification.

5. Review of usage to provide information for the revision of specification if needed.

6. Utilization of these activities provides the customer with the best product or service at lowest cost.
The aim should be continuous quality improvement.

OBJECTIVES

• OFI – Opportunity For Improvement

• Always looking for improvement.

• The continuous improvement of all services through total involvement of all employees.

• The developing and the strengthening of partnership with external and internal customers and suppliers.

• Providing innovative and higher quality products and services to achieve total customer satisfaction by

understanding their requirements and anticipating their future expectations or needs.

FUNCTIONS

• Monitoring annual targets for quality improvements in all areas.

• Creating a culture of customer focus striving to become the lowest cost producer through agreed annual cost

reduction program.

• Value people by understanding and drawing upon their strength i.e. abilities and knowledge and make efforts for

their training and development.

STAGES

RAW MATERIAL:
When raw material is received the quality of raw material is inspected according to the standards. According to these standards if the personnel of
receiving department will inspect according to the standards. If there are a lot of 500 and they choose 13 samples from the whole lot then they select the
sample from the upper and lower and right and left side of the whole packet. It means that they select the sample by way of diversifying the area. If the 2
units of the sample are rejected then the whole lot will be rejected and if the lot is rejected then they call back the vendors and vendor check that lot again.
If the lot is very much needed by the production department then they place a written request. The 100% inspection is done on it. In this case, they call the
vendors or their inspectors and they check it on 100% basis. But this happens in very rare cases.

On the other hand if the lot is accepted then it is remarked as GRL (good received lot) and sent to the store. While four copies of GRL are made and sent to
the following four departments:

1. Purchase Department

2. Quality Control Department

3. Store

4. For computer entry

DURING THE PROCESS:

When the product is in-line then quality inspector check it at every stage of process. If these inspectors will sign it for next process then product will go for
next process. If they do not sign it then the work will stop. Then for the accepted and rejected production, the quality inspector will give report. This report
has also included the sign of supervisor of process area. So that analyzing the rejection and acceptance %age for next rectification and improvement.

Then report will pass to the production manager so on this base they can make the weakly and monthly report. And it will pass to the top management. In
this inspection is done at every stage and will pass towards the top management. The ISO has given them standard for the whole process. It also includes
the initial cost but the running cost is more safe and effective because the chances of rejection are reduced. We can say that the chances of rejection will be
controlled. In this way the quality level is much improved and it reduces the customer complaints. Monthly charts are also made and management also
takes correction actions.

If there is a need of corrective action then they will request. The immediate action will be taken on that form and until the corrective action will not be
taken they production level will be ceased.

Quality control department has given their dimensions. And if there is any deviation from these dimensions then even the MD of the company cannot start
the production. And charts are also following these dimensions everywhere in the production area.

MAIN SUPPLIERS
 Unilever Pakistan Limited is associated with Packages Pakistan in terms of Packaging Boxes.

Unilever Pakistan Limited is associated with I.C.I. in terms of chemicals and seeds.

Unilever Pakistan Limited is associated with BLAZON ADVERTISING, ADSERVICE in terms of Television Adds.

Unilever Pakistan Limited is associated with ITTEHAD CHEMICALS in terms of chemicals supplies.

Unilever Pakistan Limited is associated with NEW KHAN GOODS FORWARDING & GODOWNS in terms of

Transportation and over Flow Depot. (OFD).

Unilever Pakistan Limited is associated with AVARI TOWERS in terms of offices of Directors in Karachi.

Unilever Pakistan Limited is associated with HENERY OILS & FATS OF AUSTRALIA in terms of Soybean Oil, Animal

fats.

marketing mix

MARKETING MIX

4 P’s of Unilever Pakistan Limited.

• Product

• Price

• Place

• Promotion

Product

Product is what is perceived to be. Thus a product is more than something with physical characteristics. In a very narrow sense a product is set of tangible
physical assembled in an identifiable form.

Unilever has a wide range of its product. Unilever conduct a regular research and surveys on the changing habits of the taste of the customer. Results are
then given to special research and development department and accordingly new product are lounged and even alternations in the existing products are
done. Their policies are usually between innovative and initiative categories of new products developments

This company has a unique product and a no of product and here are the some details for them.
Product line of the Unilever Pakistan Limited:

Personal wash

Fabric & home care

Oil & dairy best foods

Tea

Ice cream

PERSONAL WASH

TOILET SOAPS

Lux toilet soap (4 varieties)

Lifebuoy (carbolic soap)

Lifebuoy Gold (2 varieties)

Rexona (3 varieties)

Breeze

FABRIC AND HOME CARE

FABRIC WASH

Ultra Surf

Surf micro

Surf Excel

Power Surf

Sunlight Washing Powder & Soap

Wheel Washing Powder

HOME CARE

Vim Dish Washer/Scourers

Vim Bar

Vim Powder

PERSONAL PRODUCTS

HAIR CARE

Sunsilk Shampoo (4 varieties)

Lifebuoy health Shampoo

SKIN CARE

Fair & Lovely skin cream and lotion

Ponds skin cream

Ponds talc

DENTAL CARE

Close-up Tooth paste

Pepsodent Tooth Paste

OIL AND DAIRY BASED FOOD

BANASPATI

Dalda banaspati

COOKING OIL

Dalda Cooking Oil (Soya Bean)

Dalda Sunflower oil

Planta cooking oil

MARGARINE

Blue Band margarine

INDUSTRIAL FATS
A whole range of products for the bakery & oils for the industry.

TEA

LEAF TEA

Yellow Label

Yellow label Danedar

Richbru

Top Star

Taaza Leaf

Supreme

DUST TEA

Pearl Dust

Ruby Dust

A1

MIXTURE TEA

Taaza
ICE CREAM

Cornetto (3 varieties)

Feast (2 varieties)

Feast Stickless

Top Ten

Star Cup (4 varieties)

Callipo

Split

Fruiti

Peddle Pop (3 varieties)

3-D

Solo (3 varieties)

Polka Cup

Panda

Dracula

Family Packs

Product line of Rahim Yar Khan factory

Lux toilet soap

Lifebuoy toilet soap

Lifebuoy gold

Sun silk shampoo

Fair & lovely fairness cream

 Vim dish bar

Close up toothpaste

TEA

LIPTON

Lipton Yellow Label is the leading brand in Pakistan and is preferred by all who enjoy good tea. It’s growing sales attests to the facts that the Pakistan is
very quality conscious and is in fact a tea connoisseur. To cater to this growing awareness of quality, Unilever Pakistan Limited has always lived up to its
quality No.1.

To keep the tea fresh and flavorful, major initiative has been taken by introducing hermetically sealed packs. This has been appreciated tremendously by
consumers and sales are continuing to grow. For every Lipton Yellow Label Tea consumer, the brand offers a rich, bright, fresh cup of tea that resounds
‘The Sign of Good Tea’.

BROOKE BOND

Millions across Pakistan enjoy supreme. A wide mix of people belonging to all walks of life loves its distinctive taste and flavor. The Red Supreme Pack
with the bold yellow logo stands out at virtually all retail outlets across the country.

Supreme is also popular in both the urban and rural segments. The launch of the sachet made it accessible to many more consumers. Its new improved
blend has further fine-tuned the brand with the requirement of the target segment and hence the claim ‘The taste we call our own’.

ICE CREAM

WALL’S

In March 1995, history was made in Lahore. The launch of wall’s ice cream created a new benchmark for successful FMCG launches in Pakistan. On
August 14, the same year, Wall’s came to Karachi and the city by storm. The success has now been repeated across the country. From a marketing point of
view Wall’s brought to Pakistan, the concept of branding consumer now ask for Cornetto, Feast, Max, and other brands, not simply for ice cream Products.

In July 1996, Polka, an established local name, representing the only national ice cream business was acquired by Unilever. At this time a rationalized
plane is being finalized. In broad term, Walls will emerge as the “impulse brand” whiles the “Polka from Wall’s brand will offer a new level of excellence
in take home or desert ice cream.

POLKA

In 1996 Polka was acquired by Unilever and thus became an associated company of Unilever, the beginning of second year of Wall’s in Pakistan. Polka as
a brand had been a 25 year old ice cream of Pakistan, offering consumers dependable quality at value pricing. It was the only national ice cream, with
production facilities or depots in various parts of the country, offering consumers several ice cream flavors and formats.
The acquisition of polka provides Unilever ice cream business in Pakistan the best of both worlds. The clear synergy arising out of the two distinct Brands
is sure to move Unilever into the position of market leader, offering consumers an even stronger relationship with Unilever ice cream brands in Pakistan.

HOME & FABRIC WASH

VIM

Vim range of products, Vim Bar and Vim Scourer, offer Pakistani consumers quality dish washing in line with international standards. Over the year, Vim
has developed strong equity with its consumer by providing powerful cleaning at affordable prices.

Initially, Unilever entered the NSD bar market with Rin that become an instant success in a short period of time, However, in order to harmonize and
strengthen the portfolio, the name Rin was changed to Vim in 1996. Today Vim stands for a superior quality dish wash brand that is environmentally
friendly and in line with international quality standards. Plans to further strengthen the vim portfolio are being implemented.

SURF

Dominating the washing powders markets in Pakistan for four decades; Surf has continued to change according to consumer needs. Being a pioneer, Surf
had to work hard to gain acceptance in the early days. To educate housewives about its use, house to house demonstration were organized in Lahore and
Karachi. Free sample and coupons were also distributed to recruit consumer. There has been no looking back since the brand has undergone numerous
product quality improvements to offer best cleaning results. Over the year, there has been a shift from cartons to poly bags and emergence of low unit
price packs.

With continuous technological innovations, the brand has always managed to fight off competition. Surf Excel, which hit the shops recently, has already
gained a reputation for the best in the market.

OIL & DAIRY FATS

DALDA

It has been over 50 year since DALDA was introduced in this part of the world. Since then, it has gained a tremendous consumer franchise through out the
sub continent, especially in Pakistan. Today, Dalda has under its umbrella a whole host of products aside from the healthiest Banaspati i.e., Dalda Cooking
Oil and Dalda Sunflower Oil.

During 1998, Unilever continued to pioneer in the Edible Oils and Fats category, by introducing Dalda VTF (Virtually Trans Free) Banaspati.

BLUE BAND

Unilever pioneered in 1985, by introducing margarine in Pakistan, under the brand name Blue Band. Since then, Blue Band has remained as locally
produced margarine. Keeping in tune with consumer needs, a number of changes have been initiated in the past 14 years; in terms both the products as
well as the marketing mix.

During 1998, Blue Band was able to grow over and above the market growth rate, and clearly suggest that consumers in Pakistan are finally switching
over from butters to a healthier alternative.
 PERSONAL WASH & PERSONAL CARE

LUX

The undisputed leader market for over a decade. Lux has gone from strength to strength since 1954. That was the year when local production of this
remarkable successful toilet soap began. Lux happens to be the largest Unilever brand globally, with its glamorous association with film stars providing a
common link across the world. The secrets of the brand’s success are that movie with the time and remain contemporary in every area.

The international compaign featuring popular film star has added the touch of glamour Lux has always been associated with.

LIFEBUOY

Incredible thought it may sound, seven Lifebuoy bars are sold in Pakistan every second. The brand has long legendary status in the country.

Recently, Lifebuoy has widened its range of products. The introduction of Lifebuoy Plus and Lifebuoy Gold has played upon the association with health to
capture a more up market segment. The latest addition to the Lifebuoy range is a shampoo, which is also marketed in sachets to capture an entirely new
market.

Price

The product’s price varies from product to product. Here the firms have to consider many factors for determining the price.

• Selecting the price objective

• Determining demand

• Estimating costs.

• Analyzing competitors costs,

• Prices and offers.

• Selecting a pricing method.

• Selecting the final price.

Price is simply the cost plus profit of the firm. There are many competitors in the market. So the firms have to consider about the competitive price while
selecting new price and schemes.
PRICING OBJECTIVES

Pricing is based on the following objectives

Profit Oriented Goals

Unilever prices its product to achieve a certain percentage of return on its investment. The base of
pricing is the time consumed in the production process and target revenue per day.

Sales Oriented Goals

Unilever sets its prices in such a way to increase the volume of sales.

Unilever usually has the policy of setting high prices since it is a leader in food market. They have
fixed prices products due to the reliability of consumers towards price. Prices are decided keeping in
view the prices of other products of same size, category and types.

Pricing Strategies

Unilever uses the following pricing strategies:

Geographical Pricing Strategy

Uniform Delivered Pricing Strategy

The company uses the same delivered price to be charged from all distributors.

Freight Absorption Pricing Strategy

Under this policy, the company bears all the freight out cost for FOB only.

Cash vs. Credit Strategy

All the sales of the company are on the cash basis and no credit facility is given to its customers i.e.
distributors.

Basic Method of Setting Prices

Unilever is using the following methods for price setting.

 Price to Distributors

The company provides products to the distributors for the prices decided keeping in view the cost, the
target revenue and competitors prices.

Prices Charged by Distributors to Retailers

Unilever gives margin of certain percentage to distributors so in this way prices to be charged by
distributors to retailers are fixed.

Prices Charged by Retailers to Ultimate Consumers

Company influences prices charged by retailers. So retailers are bound to charge fix price to ultimate
consumer

How to set the price of the product.

Prices are set by taking into consideration into the prices of the competitors.

• As there products are highly quality.so usually they charge high prices.

• What they belive is.high price high quality.

• There price are high.because they believes in zero defects.

• They charge different prices to registerd and unregistered retailers.

• There prices are fixed because there products are reliable.

• Prices are set by taking into considertion the size,type of product.

Price discounts and Allowances.

Cash discounts.

A cash discount is a price reduction to buyers who pay their bills promptly. A typical example is 2 /10 net 30. Which means that payment is due within 30
days and that the buyer can deduct 2 percent by paying the bill within 10 days. Such discounts are customary in nature.

Quality discounts.

A quantity discount is price reduction to those who buy large volumes. This is given to increase company sales. So that firm can have more revenues.

Functional discounts.
 These are also called trade discount which is offered by this particular firm. It will be given to those who perform certain function Such as storing, selling
book keeping.

Seasonal discounts.

A seasonal discount is a price reduction to buyer who buys merchandise out of season. They offer different discount on springs and on summer.

Allowances.

Allowances are extra payments designed to gain reseller participation in special programs. Trade discount is price reduction granted for turning in a old
item when buying a new one. Trade in allowances is most common.

Promotional pricing.

Company use different pricing techniques to stimulate early purchase.

Special event pricing.

It is given to increase sales, like in the month of Ramzan.

Low interest financing.

Instead of cutting its price, the company offer customer low interest financing.

Prices of some products of Unilever Pakistan Limited.

Lux 135 gms Rs.22/-

Fair & Lovely Cream 25 gms Rs.28/-

Close up Tooth paste 50 gms Rs.28/-

　 　 　

Place

Registered office
Avari plaza,

Fatima Jinnah Road,

Karachi.

Rahim Yar Khan Factory

Unilever Pakistan limited

Laghari road

Rahim yar khan

Placement / Promotion

Promotion consist of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and greater purchase of particular
product/services by consumer as the trade.

Unilever Pakistan Limited places their products in local as well as in foreign market. They export directly and indirectly. Unilever promote their products
through media, and other trade incentives to distributors and wholesalers.

Company logo and labeling.

Company logo type is one of the major products. But not on products with the small levels where the space is needed to present both information required
by the government and other information they believe is helpful to the consumer.

Company name or the logo type is usually shown in most prints add in magazines and newspapers.

LABELING

Unilever is using two types of labels:

Brand label

Descriptive label

ADVERTISING STRATEGY

MEDIA USE

Unilever Pakistan Limited use radio, TV and Billboards and newspapers for advertising purposes.

FACTORS FOR DECIDING MEDIA STRATEGY

Which one is more effective

 Cost benefit

More access

PROMOTION CAMPAIGN

Promotional activities provides chance to company to communicate with the potential consumer to “Beat the drum” about it products.

Unilever uses the following promotional methods.

The company sets up the store displays and sales officers make sure that items displayed are properly arranged so that they can

look attractive on eye contact level.

Company arranges their stalls in the exhibition at which the products are displayed and sold at discounts.

Sometimes the company enters in the cooperative advertisement with other companies and the logos of
such companies are printed on Unilever gifts that are given free along with the product of those other
companies.

The company gives off seasonal schemes of discount to distributors with an objective that the benefit
of discount should be passed to retailers and wholesaler.

There are different methods of promotions which are used by Unilever.

Promotion methods.

Advertising.

Newspaper .

Magazines.

Television.

Radio.

Road display.

Sales promotion

Coups.

Premiums.

Samples.
Trade shows.

Co-operative.

Personal selling.

Order gelter.

Order takes.

Sport sales.

People sales force.

Publicity.

News.

Features.

Others.

MARKET SEGMENTATION

The management of a company has differentiated its product through its prestigious brand name as compare to other local companies.

It launched uniform and standardized product therefore, there is no need for market segmentation because the wants and other characteristics (i.e.
geographic, demographic and buying behavior) of their target market are somewhat similar.

TARGET MARKET OF UNILEVER

Unilever has adopted the strategy of market aggregation. It views its target market as a single unit i.e. one mass marketing strategy for its product line.
Unilever’s target market includes Middle Class, Upper Middle Class and Upper Classes of the population of Pakistan.

MARKETING RESEARCH

Infact there is no separate department for marketing research. The marketing executives are responsible for the research work. Every executive have
assigned one brand, for the purpose of research and is responsible to report their research work about any modification of their respective product.

MARKETING POSITIONING
Unilever is considered to be a trusted and premium brand because of its unique association. Unilever is positioning their product in the best of their
customer satisfaction which also differentiate from their competitors.

BRANDING STRATEGIES

Marketing entire out put under producer brands. Unilever is marketing all of its products under its own brand name.

BRAND NAME

Unilever’s popular brands include:

Sunsilk

Lifebuoy

Lux

Bestfoods

Dalda

BRAND EQUITY

Unilever’s products image building features includes:

Colour

Unilever’s colour by itself is a selling advantage. For the sake of variety they have full coloured products. Like lux is available in
different colours.

Quality

Unilever maintains the high standards of quality of its products for the entire target market, which creates a strong image in the
consumer’s mind.

Warranty

It is the policy of the company that it replaces the products damaged due to manufacturing or quality fault whenever claimed.

PACKAGING
 In Unilever packaging the product line is done according to the product nature. In order to have attractive and impressive
packaging, company uses the services of various packaging agencies such as Packages. For the benefit of the consumers, care
instructions are also given on the package. Unilever also uses multiple packaging strategies for its products.

LABELING

Unilever is using two types of labels:

Brand label

Descriptive label

COMPETITION

Major competitors of Unilever are;

Zulfiqar industry- Capri Soaps factory located in Karachi.

Loigate Palmolive, Express, Brite, Bonus, Max factory located in Hyderabad.

Procter & Gambler located in Karachi.

CAMAY Transpark industry with the name of Sparkle tooth paste.

Kohinoor detergent industry.

Tapal Tea factory located in Karachi.

Ispphahani tea factory located in Karachi.

COMPETITIVE STRATEGIES

Unilever Pakistan Ltd. provides trade incentives to distributors and customers against competitors. They also provide various schemes to attract the
customer.

QUALITY CONCEPT IN MARKETING

Unilever act on a strategy of producing and selling large quantities of quality products, that’s why they are able to keep the unit costs low and offer need
satisfying products at attractive prices. Unilever develop produces and deliver affordable products with enough variety and uniqueness that nearly every
potential customer can have exactly what he wants, Unilever is a quality conscious firm, they never compromise on quality that’s why their products are
No. 1 in the market and they are market leader.

Distributors

Distributors are the institution through which availability of products is possible. Unilever’s distributors have a very good relationship with them. and the
important thing is that they must integrated into total marketing mix because of time and money required to setup an efficient channel.
The main procedure of distribution of distribution is that first it goes to warehouse and then to distributor and at last to ultimate consumer.

While the selection of channel company considers customer buying patterns and the nature of the market. However company should follow the creation of
three control market coverage and cost that is constant with the desired level of consumer service.

DISTRIBUTION STRATEGIES

Unilever uses the following multiple channel of distribution.

Consumer

Retailer

Distributor

Company

Retailer

Consumer

Wholesaler

Company

INTENSIVE DISTRIBUTION STRATEGY

Unilever uses a lot of distributors and retailers to supply its products in each market where the final customer might reasonably look for it. While
appointing a distributor for a particular area, management uses its own judgment to select such a person that has a potential to operate effectively.
 FNANCIAL ANALYSIS

Objectives of Financial Analysis

The particular objectives sought to the served by financial analysis determine the type of ratios as well as the extent and depth of ratio analysis to be
carried out to draw conclusions. Financial analysis is carried out by;

Business Concern:

For assessment of profitability of the business.

For assessment of stability and financial strength of the business entity.

Management:

Assessment of efficiency of resources utilization.

Assessment of potentials of profitability.

Evaluation of different management controls.

Investors:

Assessment of earnings and divided prospects.

Growth in economic value of investments vis-à-vis risks undertaken.

Bankers/Creditors Concern:

Assessment of the ability of the business to service its debt obligations.

Debt coverage.

Proper utilization of assets financed.

 Government Concern:

• Evaluation of the economic contributions of the business entity

1999 2000 2001

SHARE CAPITAL AND RESERVES

Share capital authorized 800000 800000 800000

Issued, subscribed and paid up capital 669477 669477 669477

Reserves 433124 437507 436089

Unappropriated profit 358071 154618 94392

1460672 1258602 1189958

SURPLUS & REVALUATION OF FIXED ASSETS 104708 103325 101743

REDEEMABLE CAPITAL

Long term finance under mark-up arrangement 300000 1000000 200000

Liabilities against assets subject to finance lease 2870 000 000

DEFERRED LIABILITIES

Deferred taxation 65394 92493 57943

Staff retirement benefits 89164 56376 81086

154558 148869 139029

CURRENT LIABLITIES

Current maturity of redeemable capital 000 300000 1000000

Current maturity of liabilities against assets subject to finance lease 3796 2371 000

Finance under mark-up arrangement 626399 194062 52727

Creditors, accrued and other liabilities 3555605 2352947 3828883

Dividends 355438 1142906 841488

 4541238 3992286 5723098

CONTINGENCY & COMMITMENT 000 000 000

6564046 6503082 7363828

UNILEVR PAKISTAN LIMITED

BALANCE SHEET (Rupees in Thousands)

(Rupees in Thousands)

1999 2000 2001

TANGIBLE ASSETS

Operating assets 1726334 1753313 1541313

Capital work -in –progress 101209 35837 50416

1827543 1789105 1591729

INTANGIBLE FIXED ASSETS

Trade marks 34 34 34

LONG TERM INVESTMENT –at cost 95202 95202 95202

LONG TERM LOANS 32800 30161 35865

LONG TERM DEPOSITS AND PREPAYMENT 81031 214629 171253

DEFERRED COST 000 343000 274400

STAFF RETIREMENT BENFITS-prepayment 000 000 52534

CURRENT ASSETS

Store and spare 187486 177273 120464

Stock in trade 2843762 2331757 1995793

Trade debts 217501 253041 186806

Loan and advances 89914 68659 106800

Trade deposits and short term prepayment 312643 93322 77733

Other receivable 187240 216870 262217

Taxation-payment less provision 619381 393173 147540

Cash and bank balance 69509 496811 2245458

4527436 4030906 5142811

6534046 6503082 7363828

PROFIT AND LOSS ACCOUNT (Rupees in Thousands)

1999 2000 2001

　
Sales 19366254 20508216 20025445

Cost of goods sold 15001028 15390723 14660491

Trading profit 4365226 15117493 5364954

Administration and selling expenses 2705767 2721116 2953195

Operating profit 1659459 2396377 2411759

Other income 35885 44306 141775

1695344 2440683 2553534

　
Financial expenses 247135 141660 195087

Auditors remuneration 6230 2154 10435

Amortization of deferred cost 000 000 68600

Workers welfare funds 23322 43620 43987

Workers profit participation funds 62816 114790 103301

339503 308224 421410

　
Profit before taxation and restructuring cost 1355841 2132459 2132124
Restructuring cost 190000 000 225906

Profit before taxation and restructuring cost 1165841 2132459 1906218

Taxation 401881 792345 683347

Profit after taxation 763960 1339114 1222871

Unappropriated profit brought forward 259044 358071 154618

1023004 1697185 1377489

　
Appropriation
　 　 　
On accumulative preference share 239 478 239

Interim dividend on ordinary shares 332347 438698 498520

Purposed final dividend 332347 1103391 784338

664933 1542567 1283097

　
Unappropriated profit carried forward 358071 154618 94392

A number of different approaches might be used in analyzing a firm’s financial performance in a particular period. To analyze the performance of
UNILEVER PAKISTAN LIMITED. I adopted following three method of

1. Ratio Analysis

2. Common Size and Index Analysis

3. Trend Analysis

RATIO ANALYSIS

Ratio Analysis is an important and age-old technique of financial analysis. It simplifies the comprehension of financial statements. Ratios tell the whole
story of changes in the financial condition of business. Ratios highlight the factors associated with successful and unsuccessful firm. They also reveal
strong firms and weak firms, over- valued and under valued firms.

It helps in Planning and forecasting. Ratios can assist management, in its basic functions of forecasting, planning, co-ordination, control and
communication. Ratio analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in decision
about their efficiency of otherwise in the past and likely performance in future. Ratios also help in Investment decisions in case of investors and lending
decisions in the case of bankers etc.

Types of Ratios
Following the main types of ratios that we are going to calculate in this assignment,

Liquidity Ratios

Leverage Ratios

Activity Ratios

Profitability Ratios

Coverage Ratio

LIQUIDITY RATIOS

Liquidity ratios are used to measure a firm’s ability & solvency of the firm to meet short-term obligations. They compare short-term obligations to short-
term resources available to meet these obligations

The Liquidity Ratios Include :

Current Ratio.

Acid Test Ratio.

Current Ratio:

Current ratio shows a firms ability to cover its current liabilities with its current assets.

Current Ratio = Current Assets

Current Liabilities

Years Current Ratio

1999 = 4527436 = 0.99

4541238

2000 = 4030906 = 1.00

3992286

2001 = 5142811 = 0.89

5723098

INTERPRETATION:
 Current ratio shows the liquidity position of the company. It represents a margin of safety or cushion available to the creditors. It
is an index of the firm’s financial stability. It is also an index of technical solvency and an index of the strength of working
capital. The ideal Current ratio is 2.1 but this condition is applicable only when demand is very high, inflation is zero, default
risk is low & economic conditions are better. It was observed that current ratio in 2001 was 0.89, in year 2000 was 1.00, , & in
year 1999 was 0.99. It was increasing over the year but this ratio was decreased in 2001. So a relative low value of the current
ratio is considered as an indication that the firm will find difficulty in paying its obligations.

Acid Test Ratio: Or Quick Ratio:

Acid test ratio shows a firms ability to meet current liabilities with its most liquid (quick) assets.

Acid Test Ratio = Current Assets – Inventories – Prepayments

Current Liabilities

Years Acid test ratio

1999 = 1183545 = 0.26:1

4541238

2000 = 1428554 = 0.35:1

3992286

2001 = 2948821 = 0.52:1

5723098

INTERPRETATION

Quick ratio is very useful in measuring the liquidity position of the firm. It measures the capacity of the firm to pay off current obligation immediately and
is a more rigorous test of liquidity than current ratio.

The acid test ratio of Lever Brother was 0.26 in year 1999 & 0.35 in 2000 & 0.52 in year 2001 .The industry average ratio is 1:1 so it shows that company
has very ways liquidity position because its liabilities are greater than its assets.

FINANCIAL LEVERAGE RATIO:

Financial Leverage Ratio includes:

 Debt to equity ratio

Debt to total assets ratio

Long term debt to total capitalization ratio

Debt - Equity Ratio:

Debt to equity ratio indicates the relationship between the external equities or outsider finds and the internal equities or shareholder fund. It is calculated to
assess the extend to which the firm is using borrowed money.

Debt - equity ratio = Total debts

Shareholder’s equity

Years Debt - Equity Ratio

1999 300000 = 21%

1460672

2000 1000000 = 79%

1258602

2001 200000 = 16%

1199958

INTERPRETATION

The debt to equity ratio indicates the investment by outsiders in the company with relation to the equity of shareholders. The industry average ratio is
60:40, so from this point of view, Unilever’s debt to equity ratio was 21% in year 1999 and 79% in 2000 and 16% in 2001. Unilever have excellent debt
to-equity ratio in year 2000 but this ratio decreased in year 2001 which is not good for the company. So it has much impact on the financial position of the
company. The creditors would generally like this ratio to below because lower the ratio, the higher the level of firm’s financing that is being provided by
shareholders & the larger the creditor – cushion in the events of shrinking assets values or outright loss.

Debt to Total Assets Ratio

This shows a debt financing to a firm by showing a percentage of assets that are supported by debt financing. This ratio servers a similar purpose to debts
to equity ratio. It highlights relative importance of debt financing to the firm by showing the percentage of the firm’s that is supported by debts financing.

Debt to total assets ratio = Total Debts

Total Assets

Years Debt to Total Assets Ratio

1999 300000 = 4.6%

6564046

2000 1000000 = 15.3%

6503082

2001 200000 = 2.72%

7363828

INTERPRETATION

It shows how much sufficient our assets are in retiring the total debts .The debt to total assets ratio of Unilever was 4.6% in year 1999 ,15.3% in the year
2000 and 2.72% in 2001. So it indicate that company’s debts had been increased in 2000 to a considerable extent & that was not a satisfactory condition
for company. but by using special policies company has controlled this ratio and it has been decreased in year 2001 from 15.3% to 2.72%.

In case, higher the debt-to-total assets ratio, greater the financial risk, so the lower this ratio, the lower the financial risk of the company that is good for
company.

Long Term Debt To Total Capitalization Ratio:

This ratio tells us the relative importance of long-term debt to the capital structure of the firm.

Long-term debt to total Long term debt

Capitalization Ratio = Total capitalization

Total capitalization = Long Term Debt + Shares holders security

Year Long term debt to total capitalization ratio

1999 300000 = 17.01%

1760672
 2000 1000000 = 44.28%

2258602

2001 200000 = 14.29%

1399958

INTERPRETATION

The long term debt to total capitalization ratio show the percentage of long term debt to the total capitalization of the company.

The company ratio was & 17.0% in year 1999, 44.3% in the year 2000, and 14.29% in 2001. By analysing these ratios. I can say that company’s ratios
were satisfactory in 1999 & 2001 years but it has increases in 2000 year due to heavy debts taken by the company.

ACTIVITY RATIOS

Activity Ratios are also known as the efficiency ratios & turnover ratios that measure how effectively the firm is using its assets.

The activity ratios include:

Receivables turnover.

Inventory turnover.

Average collection period.

Total assets turnover.

Receivable Turnover

The receivable turnover ratio provider insight into the quality of the firms receivables & how successful the firm is in its collection so

Receivable Turnover = Annual Net Credit Sales.

Receivables

Years Receivable Turnover Ratio

1999 19366254 = 48

404741

2000 20508216 = 44

469911
2001 20025445 = 45

449023

INTERPRETATION

A receivable turnover of Unilever was 48 in 1999 year and 44 in 2000.and 45 in 2001. The turnovers of Unilever was satisfactory because this showed the
number of terms, accounts receivable have been turned over during the year. The higher the turnover, the shorter the time between the typical sale & cash
collection.

Average Collection Period

The average collection period tells us the average number of days that receivables are outstanding before being collection.

Average Collection Period = Days in the year

Receivable Turnover

Years Average Collection Period

1999 365 = 7 days

48

2000 365 = 8 days

44

2001 365 = 8 days

45

INTERPRETATION

The average collection period of Unilever was 7 days in 1999 and 8 days in 2000 and 2001. which shows that company
collection its funds, aversely within a week. It means chances of bad debts is lower. Although too high an average collection
period is usually bad, a very low average collection period may not necessarily be good. A very low average collection period
may be a symptom of credit policy that is excessively restricted.

The days’ receivable figure shows the average number of days’ sales remain uncollected. This ratio reflects both the efficiency
of management in collecting receivable and the credit policy, which the company maintains with its customers. For many
companies, there will be one to two month’s receivable outstanding. When the amount gets higher than two months, the quality
(that is, the likelihood of collection) of the receivable may be affected and the company may have to raise additional funds to
carry the larger amount of outstanding.
 It is also important to estimate if there is a large sum of receivables outstanding, which is uncollectable. This may that the
management is poorly organized and unable to collect receivables when due. It may show that the industry is very competitive;
or, it may show that the company does not have a proper distribution net work and is giving credit to all distributor it can find to
carry its product. or, it could mean that some of the customers are in financial difficulty. Furthermore, if some receivables are
uncollectable, it means that the company’s profits have been overstated unless a reserve for bad debts is created.

Inventory Turnover

Inventory turnover ratio is used to determine how effectively the firm is managing inventory.

So

Inventory Turnover = Cost of goods sold

Average Inventory

Years Inventory Turnover

1999 15001028 = 5times

3031248

2000 15390723 = 6times

2509030

2001 14660491 = 7times

2116257

INTERPRETATION

The inventory turnover of Unilever was 5 times in years 1998, 6 times in 2000 and 7 times in year 2001This shows that company averagely maintains is
inventory 6 time in a year. The inventory turnover of company is satisfactory.

Generally, the higher turnover, the more efficient the inventory management of the firm. Relatively low inventory is often a sign of excessive, slow
moving, & obsolescent items in inventory.
Inventory turnover in days

Inventory turnover in days = Days in year

I
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v
e
n
t
o
r
y
T
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r
n
o
v
e
r

Years Inventory Turnover in days

1999 365 = 73 days

2000 365 = 61 days

2001 365 = 52 days

INTERPRETATION

The inventory turnover of company was 73 days in 1999,61 days in year2000 and 52 days in year 2001. This shows that average inventory turnover of
company is 62 days. That is sufficient to the company to take & hold the inventory & later used it more effectively.
Total Assets Turnover

This ratio tells us the relative efficiency with which a firm utilized its total assets to generate sales.

Total assets turnover = Net Sales

Total Assets

Years Total Assets Turnover

1999 19366254 = 2.95

6564046

2000 20508216 = 3.15

6503082

2001 20025445 = 2.72

7363828

INTERPRETATION

It shows that firms must manage its total assets efficiently and should generate maximum sales through their proper utilization. As the ratio, increases there
are more revenue generated per rupee of total investment in asset. The firm ability to produce a large volume of sales on a small total asset based is an
important part of the firms overall performance in terms of profits. This ratio is satisfactory for company. It was 2.95 in year 1999, 3.15 in the year 2000
and 2.72 in year2001.

PROFITABILITY RATIOS:

Profitability ratios are of two types, those showing profitability in relation to sales to this showing profitability in relation to investment. These ratios
indicate the firms overall effectiveness profitability in relation to sales.

Gross Profit Margin

This ratio tells us the profit of the firms relative to sales.

Gross Profit margin = Net sales – cost of goods sold

 Net sales

Years Gross Profit margin

1999 4365226 = 22.54%

19366254

2000 5117493 = 24.9%

20508216

2001 5364954 = 26.79%

20025445

INTERPRETATION

Gross profit margin tells us the ratio of profit turned on sales. Unilever gross profit margin is quite fluctuating. Company’s gross profit margin has been
increased in 2000 and in 2001. It may be due to increased in sales. This ratio also tells us the profit of the firm relative to sales after we deduct the cost of
producing the goods. So it is a measure of the efficiency of firms operations as well as an indication of low products are priced. So company is doing very
good business.

Net Profit Margin

The net profit margin is a measure of the firms profitability of sales after taking account of all expenses to income taxes.

Net profit margin = Net profit after taxes

Net sales

Years Net Profit Margin

1999 763960 = 3.94%

19366254

2000 1339114 = 6.5%

20508216

2001 1222871 = 6.1%

20025445

INTERPRETATION
 Unilever net profit margin is quite fluctuating over the years. It was 3.94% in year 1999, 6.5% in year 2000 and 6.1% in
year2001.As net profit margin shows profit after paying taxes so it depended on better cost control, efficient margin, market
opportunity & determent of debts.

Profitability in relation to investment

These ratios include:

Return on total assets

Return on equity

Return On Total Assets

This ratio compares unfavourably of the industry. Higher profitability leads to lower return on assets.

Return on Total Assets = Net profit after taxes

Total Assets

Years ROA

1999 763960 = 11.64%

6564046

2000 1339114 = 20.6%

6503082

2001 1222871 = 16.6%

7363828

INTERPRETATION

The return on total assets tells us how efficiency assets have been used in carving income. Higher is the ratio, higher will be the profitability of
organization. So Unilever return on total assets is satisfactory though it is fluctuating.

Return on Equity
This ratio tell us the carving power on share holders book value inventory & is frequently used in comparing two or more firms in as industry.

Return on equity = Net profit after taxes

Shareholders equity

Years ROE

1999 763960 = 52.30%

1460672

2000 1339114 = 106.4%

1258602

2001 1222871 = 101.9%

1199958

INTERPRETATION

A high return on equity after reflects the firm acceptance of strong investment opportunities & effective expense management. However if a firm has
chosen to employ a level of debt that is high by industry standards, assuming exercise financial risk.

VERTICAL ANALYSIS

VERTICAL ANALYSIS

“The term vertical analysis refers to a static measure that is frequently used in referring to ratios for one year data or for one year of accounting period.
These analyses can be compared over a number of years”.
 UNILEVER PAKISTAN LIMITED

Balance Sheets

For the year 1999, 2000 2001

VERTICAL ANALYSIS (rupees in thousands)

1999 (%) 2000 (%) 2001 (%)

Assets:

Tangible fixed Assets:

Operating Assets 26.42 26.96 20.09

Capital work in Progress at cost. 1.54 0.55 0.68

Intangible fixed Assets:

Long term investment at cost 1.46 1.46 1.29

Long term Deposit & Prepayments 1.24 3.30 2.32

Long term loans 0.50 0.46 0.48

Current Assets:

Store & Spares 2.87 2.72 1.63

Stock in trade 47.26 35.38 27.10

Trade debts 3.33 3.89 2.54

Loans & advances 1.37 1.05 1.45

Trade deposit & short term prepayments 1.04 1.43 1.06

Other receivables 2.42 3.33 3.56

Taxation payments less provisions 9.48 6.04 2.0

Cash & bank balance 1.06 7.63 30.49

Interpretation Of Vertical Analysis Of

Vertical Analysis

Balance Sheets

In calculating the vertical analysis of “Unilever Pakistan Ltd’, total assets has been taken as base figure & all other items have been divided by total assets,
to show the percentage of that items to total assets. So from this analysis, I see that

LIABILITIES & SHARES HOLDERS EQUITY:

Share Capital & Reserves

Share Capital

The share capital was 10.24% in 1999, which means that company lacks cash to meet its debts. It has little increased in 2000 but in year2001 it has again
reduced.

Reserves

The reserves of company were increasing in previous two years, which was good for the company in paying of its debts. But in year 2001 the reserve has
decreased and it reduce the company’s ability to pay its debts.

Un-appropriated Profit

The un-appropriated profit of company was 5.48% in 1999 so it was better for company to increase it. But again in 2000 & 2001 it has decreased that is
not good for the company.

Surplus on Revaluation of fixed Assets

The surplus was decreasing over time, so it was good up to some extent for company.

Liabilities Against Assets Subject to Finance Lease

These were also decreasing so these were good for company. Because this liability is reducing and this will be result in solvency of company. So In 2000
& 2001 there were no liabilities against assets subject to finance lease.
DEFERRED LIABILITIES

Deferred Taxation & Staff Requirement

These were decreasing overtime so these were resort in greater profitability of the company. The major reason for a decrease may be that the company is
trying to increase its reserves, so that company can pay its debts at the time when it rises.

Current Liabilities

All the current liabilities of company were decreasing except the accrued liabilities which were increasing in 1999. The basic reason for a decrease in
liabilities may be that long terms as well as short term loans of the company are less.

Hence, in over all sense, we can say that liabilities are on decreasing part & assets are on increasing trend, although, some of the current assets such as
cash & Bank balance were decreasing but it has little increased. The main reason for a decrease in these assets may be that less assets are in progress as
well as the demand of some products is decreasing due to fluctuations in prices.

Assets

Tangible Fixed Assets

Operating Assets

The operating assets of company were 26.42% in 1999, 26.96% in 2000 & 20.09% in 2001.By analysing these figures. I can say that operating assets of
company were increased in 2000,but decreased in 2001.The basic reason for a decrease in operating assets in 2001 may be the terrorist attack on world
trade centre that have appeared in that year.

Capital Work in Progress

The capital work in progress of the company was increasing over the number of years, so it was good for company. It was decreased by in 2000 but due to
the good management policies it again increased in the year 2001.

Intangible Fixed Assets

Long Term Investment

The long term investment of company was 1.46% both in 1999 & 2000 &1.29 in 2001. As it indicates that investment of the company was good in the
previous years but it decrease in the year 2001.The main cause for a decrease in long term investment in 2001 may be the political instability so because of
this, the company was investing less in business.

Long Term Deposit & Prepayment

As company’s profitability is of major concern for the creditors and the long-term deposit & prepayments of the company was increasing over time, which
is a good sign for company’s profitability. In 2000 it was increased by 1.74% from the previous year.
Long Term Loans

The long-term loans of company were 0.50% in 1999 and in 2000 it was decreased to 0.46%. This shows that company’s long term loans are decreasing.
But in the year 2001ther is a slight increase in the long term loan of the company and these are 0.48%.

CURRENT ASSETS

Stores & Spares

The stores & spares of company were 2.87% in 1999, 2.72% in 2000 &1.63% in2001. In 2001 stores & spares decreased due to finances problems which
not a healthy sign for company.

Stock in Trade

The stock in trade was more in 1999 as compared to other two years so it leaded to the profitability of company. The main reason for an increase in stock
trade may be that fewer assets were used for carrying out the production but in 2001 & 2001 more assets were used so it started declining again.

Trade Debts

The trade debts were also the receivables of the company & it was increasing over time. But it decreased in 2001.So it is good for company. As the
investment is low so the company is giving credit to its customers so that cost can be recovered soon.

Loans & Advances

Loans & advances were decreasing in previous two years but in 2001company’s long term loan and advances has increased as compared to other two
years so it is not a healthy sign for company’s prosperity. because the debts of the company have increased decreasing.

Trade Deposits & Short Term Prepayments

The trade deposits & short-term prepayment were increased in 2000 as compared to the previous year, which means that the company had enough cash to
meet its debts. But it sudden decreased in2001.

Other Receivables

The receivables of the company were2.42% in 1999, 3.33% in 2000 and 3.56% in2001.These were increasing which shows that the company is giving
credit to its customers, in order to generate funds for carrying out the operations.

Taxation Payments Less Provision

These were also on increasing, which resorted in increased profitability of company, but in 2000 &2001 it was decreased by as compared to 1999 due to
weak profitability.

Cash & Bank Balance

 The cash & bank balance was 1.06% in 1999. It was decreasing overtime so it was not good for company because it reduced the solvency of the company.
But due to cash received from receivables it increased in 2000 (7.63%) and in2001 (30.49%) and company has more cash and bank balance.

UNILEVER PAKISTAN LIMITED

Profit and Loss Accounts

For the year 1999, 2000 & 2001

VERTICAL ANALYSIS (rupees in thousands)

1999 (%) 2000 (%) 2000 (%)

SALES 100 100 100

Cost of goods sold 77.4 75.04 73.21

Trading profit 22.54 24.95 26.79

Administration & Selling Expenses 13.94 13.26 14.75

Operating profit 8.57 11.68 12.04

Other income 0.18 0.21 0.70

Financial expenses 1.27 0.69 0.97

Auditors remuneration 0.03 0.04 0.05

Workers welfare funds 0.12 0.21 0.22

Workers profit participation Funds 0.32 0.56 0.51

Profit before taxation & Restructuring cost 7.0 10.4 10.6

Restructuring cost 0.98 - 1.13

Profit after restructuring cost 6.02 10.4 9.52

Taxation 2.07 3.86 3.41

Profit after taxation 3.94 6.53 6.11

INTERPRETATION OF VERTICAL ANALYSIS OF

PROFIT & LOSS ACCOUNTS

In calculating vertical analysis of profit & loss accounts, sales are taken as base and all other items are divided by the sales which show the percentage of
that item to the sales.

So from vertical analysis, I make the following interpretations of different item.

Sales

The sales of company was 100% in each year that means company sold all the things that it made with a particular period of time so it is a healthy sign for
company’s prosperity.

Cost of Goods Sold

The cost of good sold was 77.45% in 1999, 75.04% in 2000 &73.21 in 2001. The cost of goods sold was decreasing over time and it should be less
because purchasing in bulks provided economics of scale to manufacturers.

Trading Profit
 Trading profit of company was increasing and it was good for company. The basic reason may be that sales are more where as cost of goods sold is less
over the year.

Administration And Selling Expenses

These expenses were increased in 1999 but start on decreasing so these do not provide healthy sign for company’s prosperity, but it does mean that the
position of the company is not good. The basic reason for a decrease in these expenses may be the effective cost control of the company over these
expenses.

Operating Profit & Income

The profits of company & other income were increasing and it may be due to proper cost control. This is a very healthy sign for the company.

Financial Expenses

The financial expenses of company were decreasing over time so it is good for company. It means that the company has effective cost control over the
expenses. But in year 2001 company’s financial expenses have increased as compared to previous year.

Auditor’s Remuneration

Auditor’s remuneration is increasing over the year but there is a little increase every year which has no significant effect on the company position.

Worker’s Funds & Participation Funds

These were increasing which provided a healthy sign for company’s growth. Because when these funds would raise then more workers would satisfied,
and then productivity of the company would increase.

Profit Before Taxation & Restructuring Cost

Both of these were good because these are increasing over the year and it increased the profitability of company.

Taxation & Profit After Taxation

Profit after taxation was increasing but in the year 2001 it has decreased due to increase in the restructuring cost.

Hence I can say that the company is exercising effective cost control over its operations & it is also having increased profit over the years.

LEVER BROTHER’S LIMITED

Balance Sheets

For the years 1999, 2000 & 2001

Shares Capital & Reserves: 2000 (%) 2001(%)

Share capital - -

Reserves 0.30 0.36

Un-appropriated Profit (56.81) (38.95)

Surplus on Revaluation of fixed Assets (1.32) (1.5)

Deferred Liabilities:

Deferred Taxation 41.4 (37.35)

Staff retirement benefits (36.77) 43.83

Current Liabilities:

Current maturity of liabilities against assets subject to finance lease (37.5) 233

Finance under mark-up

(69.0) (72.82)
arrangements

Creditors, accrued & other liabilities (33.82) 62.7

Dividends 221 (26.37)

HORIZONTAL ANALYSIS (rupees in thousands)

2000% 2001%

Assets:

Tangible Fixed Assets:

Operating Assets 1.56 (12.09)

Capital work in progress at cost (64.59) 40.68

Intangible Fixed Assets:

Trade marks - -

Long term investment at cost - -

Long term deposits & prepayments 164.8 (20.21)

Long term loans (8.045) 18.91

Current Assets:

Stores & spares (5.44) (32)

Stock in trade (18.00) (14.41)

Trade debts 16.34 (26.17)

Loans & advances (23.63) 55.55

Trade deposits & short term prepayments (70.15) (16.70)

Other receivables 15.8 21

Taxation payment less provisions (36.52) (62)

Cash & bank balances 614.7 352

Interpretation of Horizontal Analysis of

Balance Sheets

In horizontal analysis of “Balance Sheets”, I calculated the change by subtracting the value of year 2000 to the value of year 1998 &, the difference is then
divided by the value of the year 1999 and finally he result is expressed as a percentage, the same procedure is used for calculating the (%) age change in
the year 2001.

ASSETS
Tangible Fixed Assets

The operating assets and capital, work in progress at cost are decreasing over the years, whereas the strong reason for a decrease in capital work in
progress may be that there are some strikes and lighting problems etc.

Intangible Fixed Assets

The long term investment has no change in its value over the year but long term deposits and prepayments of the company has increased in 2000 but it
decreased in the year 2001, long term loans of the company has also increased in the year 2001.

The basic reason for increase in long term loan may be that the company is giving less dividends to the shareholders.

CURRENT ASSETS

Stores & Spares

The stores and spares of the company were increased in 1999 year & 2001. The main reason for this may be that W.I.P was decreasing, so inventory was
not in used and because of this, sales were also decreasing over the years. But as sales increased in 2000 it started to decline again.

Stock In Trade

The stock in trade of the company was decreasing because of overall decrease in sales.

Trade Debts

The trade debts of the company are decreasing over years. The major for this may be that cash payment is increasing for paying to the creditors. So the
collection period is also decreasing.

Loans & Advances

The loans and advances of the company is decreasing due to decrease in sales.

Term Deposit And Short Term Prepayment

The trade deposit and prepayments of the company are also decreasing.

Other Receivables

The receivables of the company are increasing because the company is giving credits to its customers in order to increase sales.

Taxation Payment
The taxation payment is decreasing which means hat the company is giving its taxes on time.

Cash & Bank Balances

The cash and bank balance of the company was on increasing trend and it may be due to increased sales or company has recovered its receivables.

LIABILITIES & SHARES HOLDERS EQUITY

Share Capital & Reserves

Share Capital

The share capital of the company was same in 2000 and in 2001 it means that the company do not has increase it over time.

Reserves

The reserves of the company was increased only 0.33% in 2000 0.36% in 2001this means that company has not increased its reserves. The main reason for
a decrease in reserves may be no increase in share capital and sales etc.

Un-appropriated Profit

It is decreasing trend due to decrease in sales in 2001.

Surplus on Revaluation of Fixed Assets

These are also decreasing due to economic and political un-stability.

Long Term Deposits & Liabilities Against Finance Lease

The liabilities of the company are decreasing, which means that the company is paying its debt on time.
 DEFERRED LIABILITIES

The deferred Taxation was decreasing from, which indicates that payment had been done by company. The staff retirement benefits are increasing which
means that company wants to motivate to its staff.

Current Liabilities

The current liabilities of he company are decreasing over the years. This may be due to decrease in Creditors, Dividends and Short term loan etc. but in the
year 2001 it has increased due to the current maturity of redeemable capital. This is not a good sign for the company because the capital may be reduced.

1999 (%) 2000 (%) 2001%

Sales (29.97) 5.896 (2.35)

Cost of goods sold (34.04) 2.59 (4.75)

Trading profit (11.12) 17.23 4.84

Administration & Selling expenses (16.01) 0.567 8.53

Operating profit (1.81) 44.4 0.64

Other income (60.81) 23.4 219.99

Financial Expenses (17.68) (42.6) 37.71

Auditors remuneration (53.94) 30.88 27.94

Workers welfare funds (7.49) 87.03 0.84

Workers profits participation fund 0.69 82.7 (9.95)

Profit before taxation & restructuring cost (1.77) 57.27 (0.02)

Restructuring cost (17.86) - -

Profit before taxation & after restructuring cost 1.47 82.9 (10.61)

Taxation (2.14) 97.4 (13.86)

Profit after taxation 3.47 75.2 (8.68)

PROFIT & LOSS ACCOUNT

HORIZANTAL ANALYSIS (Rupees in thousands

Interpretation Of Horizontal Analysis Of

Profit & Loss Accounts

Sales

The sales of company were decreasing in 1999 & 2001 it may be due to two factors

Decrease in volume of production.

Increased in selling price.

In 1999, the sales of the company decreased to 29.97% & it indicated that volume of the company was going down. In 2001 it has also decreased to 2.35
%.

Cost of goods sold

The cost of goods sold was greater than sales of company in 1999 & 2001 it may be due to

Increased in selling price.

Increased in inflation not passed on the consumers.

Trading Profit

Change in the trading profit of the company was 11.12% in 1999 & 17.23 in 2000 & 4.84 in 2001. It may be due to the fluctuations in sales and cost of
goods sold.

Administration & Selling Expenses

The selling & administration expenses were low in 1999 but it has decreased to 0.56% in 2000 which means that company has better control over cost & it
was good for company. but in year 2001 these have slightly increased due to some unexpected expenses.

Operating Profit
The operating profit of the company is increasing over the year and it is a healthy sign for company that after meeting cost & selling expenses the
company was earning more profit but in 2001, company’s profit has reduced to a little but it was again good for the future prospects of company.

Other Income

The other income of the company was much decreased in 1999 due to decrease in sales etc. but in the following year company’s income has increased to a
greater extent that is a good sign for the company. Company can invest this amount in the business and can earn more profit.

Finance Expenses

Decreased in financial expenses in 1999 and 2000 was due to

Decreased in Borrowing

Decreased in interest rate was good for company

Auditors Remuneration

The auditor’s remuneration was decreasing in 1999 because a decrease in operating assets and sales etc. but in 2000 & 2001 it started to increase again.

Worker’s Welfare & Participation Fund

These were decreasing overtime. So it was not good for company. It was necessary for company to increase these funds to activate the employees. In 2000
company changed its policy and it has increased these funds by 82.7% and 0.84 %in year 2001 so more employees were satisfied in that year.

Profit Before Taxation & Restructuring Cost

Profit before taxation was decreased in 1999 due to decreased in tax & due to change in tax rates. But it again increased in 2000 due to decrease in tax and
in the year 2001 it has increased due to decrease in worker’s participation funds.

Profit after tax & Restructuring Cost

Profit was decreasing due to restructuring cost but as there was no restructuring cost in 2000 the company’s profit was increased but ion the year 2001
profit was decreased due to restructuring cost.

Taxation

Taxation was decreased to 2.14% in 1999 from 39.83% in 1998 & it may be due to tax advantages that the company have for his success. But it again
increased in 2000 to 97.4% it means that company have to pay a large amount of tax & decreased in the year 2001 by 13.86%.

Profit After Taxation

Profit after taxation decreased in the year 1999 & 2001 due to decreased in sale but it was good in the year 2000 due to high sales.
CONCLUSION

By analyzing the Financial Analysis of “UNILEVER PAKISTAN LIMITED”, I can conclude that although the sales of the
company was decreasing in the year 1999 & 2001. but it did not mean that the financial position of the company is back or weak.

The major reasons for a decrease in Sales may be

Decrease in Demand

Increase in Prices

So, I can say that in 1999 year due to decrease in sales, the cost of goods sold is also decreasing, which resulted in low trading
profit. But in 2000 due to increase in sales and in the cost of goods sold there was increase in the trading profit.

At the same time, Administration & Selling expenses of the company was also decreasing, which indicated that the company had
the effective control over the expenses. At the same time, due to decrease in profit, the taxation was also decreasing which
indicated that company is paying its taxes regularly. The dividend of the company are increasing due to increase in cash and
other current assets etc.

Hence, I can say that although some of the items of the “Financial Statement” are decreasing but the company is still earning the
profit. Now company is reviving its position and has changed its short-term debts into long-term debts as in that case cost of
funds is lower. The company is managing well its sales and receivables which reduced the possibility of bad debts.

The main reasons for a decrease in profit may be that company wants to shrink its business in Pakistan due to Economic and
Political stability. The major problem that most of the companies had to face in 1998 was he greatest fluctuation in Prices due to
“Automatic Bloats”.

So, it is necessary for our Govt. to provide the stability to our companies so that these companies can carry out its operations
peacefully and all of these efforts will result in increased returns of the organizations.

Internship Training Program

Theoretically students learn from books in universities but Internship programme provides a good practical training opportunity
to the students, which helps the students when they entered into their practical lives.

For the purpose of Internship Training, I choose world’s one of the largest Manufacturing organization named as “Unilever
Pakistan Limited” .This training programme at Unilever was very Interesting, learning and Challenging for me.

My Internship programme coordinator was “Mr. Nazir Ahmad” controller HPC. He took my interview first and then
recommends me in accounts department due to my own interest and due to my commerce back ground. Then he sent me to “Mr.
Yaqoob Khan”, a Assistant Manager of Accounts department, who designed a very interesting Internship Programme for me. He
 took my interview first, and then he gave me company profile so that I can understand the company structure, policies and roles
of executives. Then he introduced me very warmly with the persons of Accounts department.

The main purpose of this training was to introduce me with all facts of “Accounting process” in practicality.

The detail of various departments where I worked or introduced during my Internship is given below.

Following departments are in operation in Rahim Yar Khan Factory.

Financial department

Costing department

Payment department

Cash office

Planning department

Buying department

Personal department

Administration department

Distribution

Material Store

HOW WORK IS DONE IN UNILEVER

The departments of the organization like marketing, production, planning, buying, and distribution work together to fulfill the demand and to procuring.
The raw material that is required for production. Marketing department receive orders from the customers and necessary information which beneficial for
the organization. From marketing this data go to planning department and planning department determine the total demand and required raw Material for
the demand. Planning department is the center point of whole process.
Planning department says to buy to purchase raw material with considering the lead-time. Than buying department think about purchasing the raw material
and contact with suppliers and choose certified suppliers and check the quality the raw material and purchase the raw material if it is satisfy with all
specification.

Planning department also says to production department to produce required products at time, about categories and lot size which should fulfill the demand
and time when products are required. Then production department get the required raw material from the buying department which have been already
purchased that material .Now Production department start the work and manufacture all products as soon as required.

Planning department also says to distribution department to place the shipments and timing of that shipment. Then distribution gets the finished goods
from the production and ship the products at mention places and get the receive approval from the Customer. In this way all process continues and works
in the sequence.

Efficiency of the Organization depends upon all departments of the organization. Specifically planning, marketing, distribution, buying, accounts and
production departments play more important role to increase the efficiency of the organization.

During my internship in Unilever Rahim Yar khan I worked in the Accounts department that include;

Financial Section

Costing Section

Payment section

Cash Office

FINANCIAL DEPARTMENT

Following functions are performed by Financial Accounts Department of R.Y.Khan Factory:

Maintenance of fixed assets records including related reports

Calculation of depreciation, Gross Book value (GBV) and Net Book Value

(NBV)

Capitalization and other schedules on yearly basis

Allocation of manpower cost and depreciation to different location on

monthly basis

Maintenance of medical expenses, Traveling expenses vouchers and their

record up to management staff

Maintenance of working capital sheet on monthly basis

Month wise preparation of sheet of credit sales of estate Shop

 Overhead Expenditure statement on monthly basis

Month end work order report

To keep record about the details of debtors and creditors of the company

Preparation of various Debit and Credit notes, Journal Vouchers and their

records

Preparation of Reconciliation Statements

FIXED ASSETS

All items owned by a firm or company or individual like building, land, factory equipment, plant and machinery, furniture and fixture and other property
are called fixed assets.

The financial section maintains all the items of balance sheet except equity section, (Equity section is maintained by the head office).

Unilever R.Y. Khan Factory has a good system of taking the assets into accounts. Assets, when acquired are recorded in the ledgers. At the end of each
year these assets are capitalized and then GBV and NBV are calculated. These values are recorded on the cards which are called GBV cards.

DEPRECIATION

On The basis of above mentioned cards depreciation is charged according to their respective rates. The rates of depreciation applied by the Unilever R.F
for the calculation of depreciation on fixed assets are given below:

ASSETS LOCAL FINANCIAL

DEPRECIATION DEPRECIATION

Building 2.5% P.A 2.5 %P.A

Plant & Machinery 8 % P.A 8 %P.A

Furniture & Fixtures 8 % P.A 8 %P.A

Motor Vehicle 25 % P.A 25 %P.A

Computer 20 % P.A 20 %P.A

METHOD OF DEPRECIATION

Method, which is used by Unilever R.F. for calculating the amount of depreciation, is called Straight-line method.

The amount of depreciation is calculated on the basis of GBV of every item.

Calculation of NBV (Net Book Value)

Rs.

GBV (Gross Book value) XXXX

(Less) Depreciation for the year XXXX

NBV XXXX

CAPITAL PROPOSAL

Capital proposal means those requisitions that are used by the previous departments in order to purchase some fixed assets.

Unilever R.F. has a project department whose function is only to make the decision about the needed fixed assets. The project department makes the
proposals of purchase of fixed assets and sends to the Works Manager for approval. The record about the capital proposal and record of those assets, which
will be that purchased on the acceptance of such proposal, is kept by the financial section of the organization.

PROCEDUR

Works manager is the approving authority of all the Capital Proposals which are send by the project department. Sometimes, the Capital Proposals are
furnished directly by the concerned department which has the need of the assets. Some departments have been authorized to incur the capital expenditure
to a certain extent

After approval, Capital Proposal reaches to the Project Department which prepares the purchase requisition and sends it to the Buying Department. The
Buying Department makes arrangements for the purchase of particular capital item and then work on that Capital proposal begins.

After starting work on this approved Capital Proposal the Account Department watch that Capital Proposal is being done according to certain report which
is prepared on monthly basis. The name of that report is “Capital Expenditure Report”. This report helps the Account Department to watch that how much
the work has completed and how much is left. Work on certain Capital Proposal will be done on month wise and takes into capital expenditure control
account as per trial balance.

If the work is not started on any Capital Proposal then a report is prepared for that Capital Proposal. When the project of any Capital Proposal is completed
then a report for the completion of that Capital Proposal is also prepared.

Following documents are included in the Capital Proposal completion report:

 Bill Of third Party

Purchase Order

GRIR Accepted

CAPITALIZATION OF CAPITAL PROPOSAL

In a year four Times capitalization procedure is completed. At The end of each quarter capitalization of Capital Proposal is done by the Capital Proposal
Account Department. For various head of accounts, Company has mentioned various numbers of Capital Proposal just like as

91/L/101

92/L/301

93/L/306

94/L/308

ASSETS TRANSFERRED ADVICE

Assets transferred advice is that memorandum which is used to transfer various assets from one location to another location. So we may say that it is “inter
Unit advice”.

Four copies of ATA are prepared, of their authorization; one copy is send to Account Department and others to respective departments.

BOOKING AUTHORITY

It is the permission of journey. When any employee travels for company business or for personal matters then he or she has to take the permission from
some person who has been authorized by the company to give the permission to such person for business purpose. Traveling facility is provided to
Management and Non-Management staff (Junior Manager and above).

After this when certain person comes back, he sends a “Traveling Expenditure Statement” with his signature, to A.M. Accounts Department. Booking
authority is affiliated of this traveling approval from authorized person.

SUMMRY OF CREDIT SALES OF POD ESTATE SHOP

For factory employees including all management and non-management, certain company’s manufactured goods are sold to them on subsidy like as soaps,
Ghee, Wheat, tea etc on concision rates. For this purpose Company has opened one shop in Lever Estate named “POD or Estate Shop”.

From POD shop daily “Cash Sales Summary” is received with cash memo to the Accounts Department. At the end of each month one JV is passed for this
subsidy and charged to. This summary is prepared according to book month because it is internal transaction of the company.

LOCUM-TENSES AUTHORITIES
This is a memorandum, which means transfer of responsibilities to another responsible person. When one manager goes on leave then he sends a copy of
locum tenses authority to accounts department that now this person is responsible for my job.

WORKING CAPITAL

To know the financial position of the business each month of the financial year “working Capital report” is prepared. With the help of Working Capital
Report, company knows how much capital is circulated in business. And also know that how many accounts receivable, accounts payable and inventories
exist.

Two copies of Working Capital report are prepared. One is sent to head office monthly basis while second is for office use.

OVER HEAD EXPENDITURE REPORT

To control the repair expenses of the factory “Over Head Expenditure Report” is prepared on monthly basis. All locations mentioned in workshop, for
example Worker Administration Department, for their salary, traveling expense, building of the workshop administration department all revenue
expenditures are Called overhead Expenditure report.

After obtaining this report one JV Is passed by Accounts Department according to various a/c # and locations.

MONTH END WORK ORDER REPORT

This report is received from R.F. Engineering Department. It shows the detail of that work done on repair and maintenance, in other words those expenses
which incurred on repairs and maintenance up to at the end of each month. This final report is send by Engineering Department to Accounts department.
Against this report Accounts Department prepares two JVs; one for Capital Proposal Administration Department while second against various locations.

RECONCILIATION

Reconciliation functions are also performed in financial section. Following Reconciliation Statements are prepared in this department.

Reconciliation Statement between Wall’s Ice cream and Rahim Yar Khan

Factory

Reconciliation Statement between Engineering stores & Payment section

Reconciliation Statement between Karachi Tea Factory (KTF)

Reconciliation Statement between Karachi edible oil The & Ghee Factory
 Reconciliation Statement between Head office and R.F

Reconciliation Statement between Brook Bond and R.F

COSTING DEPARTMENT

This department provides very useful services to the company and is responsible for costing of the products. This department does the yield calculations of
the followings:

Soapery fatty acids

Crude glycerin

Refined glycerin

Edibles

For the calculation of yield, these elements are taken into consideration:

Storage loss/gain

Bleaching loss/gain

Packing loss/gain

Un-accounted loss

STORAGE LOSS/GAIN
When oil and fats are received by the material store, sample is taken for measuring percentage of Free Fatty Acids (FFA) and moisture. All these materials
are received by the stores and then issued to production department.

At the quarter end, cost department does the stock taking of all the tanks of oil and fats and also draws a sample for determining moisture. Now the cost
department see that what is the difference between the physical n = and book stock. This deference will be the loss or gain and charged to the production
account.

BLEACHING LOSS/GAIN

For the purpose of bleaching the Activated Earth is used. The Activated Earth absorbs some amount of tallow. This absorption is called bleaching loss.
Cost department calculates this loss.

PACKING LOSS/GAIN

When the finished products are packed some packing loss or gain took place at this stage. Some products are packed above the standard weight and some
less. Packing loss or gain is also determined.

UN-ACCOUNTED LOSS

Some losses are not seen in manufacturing process, these are called Un-accounted losses.

REPORT OF COST DEPARTMENT

Cost department looks into the yield and performance of the factory with the help of various reports. These are following:

Daily stock report

Production accounts

Daily production report

Power & Steam production report

DAILY STOCK REPORT

This report tells that how much raw material is transferred to plant, what is the weight of activated earth used, how much fats are spoon-fed, soap cleaned,
lye transfer to glycerin section, lye treated and refined glycerin effected into drums. With the help of these informations, this department takes care of
yield.

PRODUCTION ACCOUNTS OF THE PRODUCTS

Cost department makes production accounts of all products with the help of followings:

Raw material cost

 Chemicals

Packing material

Variable direct material

RAW MATERIAL COST

Value of material consumed is taken from consumption schedule and is charged to production accounts after making adjustment of opening and closing
stock.

CHEMICALS

Cost of chemicals and taken from consumption schedule and prorated on products pack wise and in these cases whose closing stocks are chemical mixed
value is charged to production accounts after adjustment in opening and closing stock.

PACKING MATERIAL

Packing material but is taken from consumption schedule and then total cost is charged to production accounts of the products.

VARIABLE MATERIAL

It is just as packing material but at present crude glycerin stock has accumulated hence we have to keep variable chemicals value equivalent to its weight
in stocks.

Steam and power are taken from variable direct schedule in total against their location but same case with crude glycerin, which has been explained, in
variable direct chemicals.

POWER & STEAM PRODUCTION REPORT

STEAM

Weekly steam production report is received and from these quarter reports are prepared. Meter reading of all steam main meter and sub-meter are done at
quarter end. Cost of steam is calculated and transferred to all the production departments where steam is used. Cost of burners used in factory is subtracted
from total Sui gas bill.

POWER

Meter reading of WAPDA main meter, and own generator and sub-meter in the factory are done at quarter end. Power is allocated on all factory location
on the basis of sub-meter; the technical management gives the standard bases. The cost of power is changed to production accounts.

DAILY PRODUCTION REPORT

he reports of daily production are submitted by the production department to cost department. This report helps in watching what is the production of
certain product on certain day, and how many transferred to warehouse and what is the present balance on department floor.
COST CONTROL PRODUCTION REPORT

Following documents are prepared for cost control purpose.

Standard yield vs. Actual yield

Standard chemical valuation vs. Actual chemical which is used in production

Standard stem & power vs. Actual steam & power

Standard man hours vs. Actual man hours

CALCULATION OF VARIBLE COST OF SALE

Cost department prepares daily, monthly and annual cost reports. The management for control purpose uses these reports whether the cost is according to
the standards or not. The area of difference is pointed out and a better control is exerted for the future. It is also important because if a company is able to
lower its production it works more than to increase the market share. It is easy for a company to lower its cost because it is in its own control while the
market is beyond the control of management.

In Unilever the cost of sales is calculated in a very simple way according to the standards of accounting.

The report starts with the opening stock of Material, Steam/Power and Distribution. In these opening stocks the cost of oil and fats which comes from oil
& fat consumption report, the chemical cost which is obtained form chemical consumption report, cost of packing material obtained of packing material
consumption report, cost of steam/power obtained from steam/power consumption report, for that day production is added and it gives variable cost of
production. From this variable cost of production the closing stocks of material, steam/power and distribution that day is deducted which gives total cost of
sales.

PAYMENT DEPARTMENT

Different department of Unilever Rahim Yar Khan factory is working under Commercial Department. Payment Department is one of them. Payment
Department is also called APV (Accounts Payable Vouchers). The purpose of this department is to make the arrangements for the payments of the factory
liabilities.

APV section is further classified into two sections:

APV 1

APV 2

APV1
APV 1 is classified into further three sections:

Packing and materials payment section

Local payment section

Chemicals and engineering stores payment section

FUNCTIONS OF APV 1

Following functions are performed by APV 1 department;

Local payment

Payment of oil & Facts

Payment of utilities bills

Payment of packing material

Payment of chemicals and perfumes

Payment of stationery and printing

Payment of medicine

Allocation of head office debt and credit notes.

Preparation and submission of weekly and monthly statements through

advance tax system.

LOCAL PAYMENT INCLUDES:

Engineering stores items (spare parts)

Repair of building

Items of canteen, mess, entertainment etc.

Wash white of building

Medical bills of non-management staff

APV 2

APV 2 makes a payment of wages and salaries for the workers of Unilever Rahim Yar Khan Factory.
FUNCTIONS OF APV 2

Following function are performed by APV 2:

Payroll relating to permanent, temporary, badli and apprentices

Payments to all contracted employees

Payments to all transporters and other contractors

Wages & Salaries

Employees of the company are divided into two groups:

Management

Non-Management Staff

Every department of production sends a location sheet to account department in which it mention that how many hours have been spent on each location.
The APV 2 also receive information about the over time etc. on the bases of these information it prepares salaries sheet and submits to APV 1 for making
cheques. APV 1 prepares cheque or salary sheet and sends to Muslim Commercial Bank Limited RYK. That bank is situated within the premises of
Unilever R.F.

The MCB Rahim Yar Khan pays non-Management salaries and wages. MCB is rendering very useful services to the company and its employees.

For salaries of management, R.F. receives debit note from the head office because the head office pays salaries to the management. All management’s
salaries are transferred to manager’s bank accounts. Wages of workers are paid on 3rd, and management on 21st of every month.

PROCEDURE OF PAYMENT

All payments have the similar procedure. When any department of the factory want to purchase any item for production, repair etc. then it sends
requisition to the buying department. These items can be purchased from R.Y.K. as well as from other cities of the country and some items are also
imported.

Those items, which are purchase from RYK, are called “local purchases” and the payments of such items are known as “local payments”. When goods are
bought from outside R.Y.K. such purchases are known as “outside purchases” and payments of such purchases are called “out side payments”.

APV section makes the payment sheet at that time when it receives the following documents:

Purchase order

GRIR accepted

Invoice from supplier

Purchase order is send by the buying department to APV. The requisitioned department (Who requests to buying department for the purchase of item)
submits GRIR. Invoice is send by the supplier to the payment department. If the concerned department has accepted the GRIR then payment department
will prepare the payment sheet/payment voucher.

The payment sheet includes the following information:

Party code number

Reference number

If payment through cheque then the cheque number

Bank name

Classification number

Gross amount payable

Tax deduction (according to various rates)

Net amount payable

With the help of above information if amount is Rs.150 then payment is made on cash voucher. When this amount is more than Rs.150 then payment is
made through cheque. When payment is made through cheque then requisition for cash office is generated through system with the help of payment sheet.
The requisition is prepared by the computer automatically. The system also mentions the cheque # on the monitor that is also written down on the payment
sheet. After that payment sheet is submitted to the cash office. The cash office prepares the cheque through computer. The cheque is send to authorized
person for authorization of payment. After that if the payment is required to make through D.D/T.T then D.D/T.T is prepared. The cheque is posted or
given by hand to the respective supplier. The suppliers get the amounts from the banks of Unilever. In this way the payment is made to the respective
supplier

After making the payments to the concerned persons the cash office sends the payment sheet to APV. The payment department has various registers. One
for local purchases, one for outside purchases, and one for engineering sores items and so on. All the information is transferred to respective registers.

In register there is company’s name, company’s code, address, phone # etc. if there is no name of a company then its name is written down In the register
and then information are transferred to the register.

DEDUCTION OF ADVANCE TAXES U/S 50(4)

It is required by the law that every organization will deduct the advance tax from the amounts of the suppliers. This function is also performed by the
payment department carefully.

After deducting advance taxes from various parties payments, these amounts are deposited in national Bank of Pakistan Limited RYK branch on weekly
basis. Four copies of challan for “Tax Payment Receipts” are prepared through system. The details of these copies are gives below:

Original for office

 Second and third for Bank

Fourth is send to supplier with issuing certificate by the company

This certificate is evidence of the tax payments. At the end of the month a monthly tax payment report is also generated through system for reconciliation
purposes and to know the real position that how mush amount has been deposited during this month.

At the end of a year “Income Tax Deposited Report” is prepared by the payment department and is sent to the head office Karachi.

ADVANCE PAYMENTS AGAINST CONTRACTS

When oil contract is received to APV section then with in four hours 95% payment is made in advance. In the same way when wheat contract is received
to APV then 80% payment is made in advance.

PAYMENT OF MEDICAL BILLS OF THE WORKERS

Payments of medical bills of workers are also made by APB local payment section. For this purpose one medical bill after authorization from the doctor
and IRD is received to this section after that petty cash voucher is passed for the payment such expense.

ALLOCATION OF IMPORTED RAW MATERIALS’ AND ITEMS’ EXPENSES

Allocation of various expenses like as insurance, custom duty, handling charges, bank

charges and miscellaneous charges relating engineering stores items, this duty is performed by APV department.
PAYMENT OF MEDICAL, TRAVELING AND MEAL EXPENSES OF J.Ms

For the payment of the above expenses of junior managers the respective statements like “medical expenses statement” or “traveling expenses” or “meal
expenses statement” for medical, traveling and meal expenses is prepared by certain person and send to APV department. If it is a medical expenses
statement then it is compared with annexed approved bills and in case of traveling bills or meal allowance, approved booking authority compared with it,
after checking this document is sent to W.M of R.F for further authorization. When this returned back to APV thin APV makes petty cash voucher for cash
payments and journal vouchers for settlement of accounts.

ALLOCATION OF DEBIT & CREDIT NOTE

After receiving the raw material or capital items mentioned in debit note APV gives a credit note to head office. At the end of each month it compared
with its accounts with head office account. Account payable voucher section prepares debit and credit statement and furnished to head office Karachi for
reconciliation for both accounts.

CASH FORECAST OR ESTIMATES

To meet the payment requirement APV department also prepares “cash forecast statements” according to the company’s strategy on daily, weekly and
monthly bases and such statements are submitted to the dead office.

CASH FORECAST STATEMENT:

Particulars: Amount (Rs.)

Excise Duty XXX

Sales Tax XXX

Utilities Bill XXX

Wages XXX

Bonus XXX

Participation Fund 5% XXX

Total Amount Required up to XYZ XXX

 CASH OFFICE

Cash office is just like as commercial bank. The objectives of cash office are:

Provide payment facility to company’s employees and their parties

(suppliers)

Maintain the cash book and then reconcile it with bank statement

BOOKS OF ACCOUNTS

Generally cash office prepares the following books of accounts for records purposes:

Petty cash summer against petty cash vouchers

Cash book

Bank cards

Bank reconciliation statement

Distribution cheque file

Cash count sheet

PROCEDURE OF PAYMENT TO THIRD PARTIES

The cash office receives the payment voucher or requisition slip with supporting documents from the APV (Accounts Payable Voucher) or payment
department.

The requisition provides the following information:

Cheque number

Party name & party code number

Bank code number

 Amount of cheque

AUTHORIZATION OF CHEQUE

After preparing the cheque with computer cash office sends this requisition to the signing authority. The company has fixed a limit for responsible person
for signing a cheque.

If the amount is less than Rs. 5000 then sign of Mr. Abdul Latif junior manager of payment department is sufficient.

If the amount is more than Rs. 5,000 but less than Rs 100,000 then the sign of one A.M is necessary. In these days Mr. Muhammad Yaqoob Khan A.M. of
financial department and Mr. Tariq Yousuf A.M of costing department are signing all the cheques whose amounts are less the Rs. 100,000

If the amount is more that Rs.100, 000 then the sign of one authorized A.M and sign of one authorized Manager are necessary.

The cheque has two parts. One part remains with cash office for record and other parts delivered to the third party by hand or Bank D.D/T.T is prepared.

LIST OF CHEQUE SIGNATORIES OF UNILEVER PAKISTAN LIMITED R.Y.KHAN FACTORY

Mr. Saeed Mustafa Works Manager

Mr. S. Nazir-U-Din Manager

Mr. Shahab Muhammad Ali Manager

Mr. Mursalin Manager

Mr. Shahid Rafiq Manager

Mr. Ali Ahmad Zia Manager

Mr. Naveed Rifat Siddiqui Assistant Manager

Mr.Tariq Yousuf Assistant Manager

Mr.Yaqoob Khan Assistant Manager

OTHER TASKS PERFORMED BY CASH OFFICE

The cash office also prepares cash book at the end of every month and then reconcile it with bank statements. The cash office also makes the following
payments:

Salaries to employees

Medical expenses of employees

 Traveling expenses of employees etc.

Just like commercial bank, cash office provides loans and advance salary facility to the employees’ cash office also provides “Accommodation cheque
facility” to all management staff. They can drawn the cheque on cash office and receive cash at the counter. So we can say that cash office works also as
commercial band.

RECEIPT OF CASH

The cash office receives cash from the customers.

At the end of every day cash office prepares cash counting sheet which provide the following information:

Opening balance of cash

Cash received from the bank

Cash deposited by customers

Cash payments to various parties

After preparing the cash counting sheet and filed in a particular file and it is reconciled with band statement or cashbook.

BANKS

Now a days Unilever Pakistan Rahim Yar Khan Factory cash office deals with the following banks for business transactions:

Muslim Commercial Bank Rahim Yar Khan

National Bank of Pakistan Ltd. Rahim Yar Khan

Grindlays Bank Ltd. Karachi

Grindlays Bank Ltd. Lahore

 PLANNING DEPARTMENT

Planning is intellectually demanding process. It requires that we consciously determine courses of action and based our decisions on purpose knowledge
and considered estimates.

Before planning we set our goals and reach on a certain decision with the help of knowledge and estimates.

Planning in Unilever is being done in a systematic manner. Every activity is planned in such a way that it gives maximum results. Every organization has a
planning department and without it a good business cannot be carried on. This department coordinates the manufacturing activities taking into
consideration the other factors like sales, demand etc.

FUNCTIONS

Planning department in Rahim Yar Khan Factory is performing the following functions:

Production Plan

Material Management

Inventory Management

Product Data Management

Material Requirement Planning

MRS. - auxiliary production material

Follow-up Material Supplies

Production Reporting

Identification of obsolete material and their write off

PLANNING INPUTS

Sales Target

Capacities

Product Brand Activities

I.T Support

Finished Goods Available

Materials Availability

Production Capacities

Upcoming holidays

Naming Constraints

Actual Sales vs. Planned

Schedule Deliveries of material

Safety Stock

PLANNING PROCESS

Planning process starts when sales estimates come from the Sales Department.

These estimates are of three types:

One is the annual sales estimates for the next twelve months.

Second is a latest sale estimate which is based on actual sales of six

months and planned sales for next six months.

Third are rolling sales estimates which are monthly estimates.

This data is put into the system to prepare the Master Production Schedule. This MPS is prepared every month for the next twelve months. The MPS is
again feed into the system to get the Material Requirement Plan (MRP).

Following parameters are put into the system to get this MRP, on hand inventory, safety stock, safety time, lead-time and production quantity. This MRP
is prepared monthly to generate the purchase requisites.
The MPS is also used to prepare the long term capacity planning and short time capacity planning. Short-term plans are used to prepare the monthly
capacity plans of time station. From these plans weekly plans are prepared

The annual production plans are used to prepare quarterly and monthly plans. From monthly production plans weekly production plans are prepared. In
this plan manufacturing order status is prepared. This MOS states that how much quantity of product is planned and on what date it should be produced.

The monthly order status is multiplied to the usage sheet of product and a report “analysis of weekly short falls” for three months is generated on system.
In this report it is stated that how much quantity of an ingredient is required for a certain product.

Planning department prepares a “Manufacturing Stock Allocation” with the help of computers. Here it is mentioned that against each order how much
stock is available. The short falls are communicated to raw material buyer and packing buyer and they will arrange the supply of material

In accordance with the sales that come from weekly National Primary Sales Control final statement that is called weekly production plan is prepared. In
fact this is the plan according to which production is controlled. These weekly plans are sent to the production department, who arranges for production
according to this plan.

In order to see whether productions are according to plan or not, every department sent daily production reports to planning department which matches
these figures with the plans.

Planning department is following the MRP concept. This concept is meant for the planning of all the things related with the production. These are:

Production Planning

Material Planning

Labor Planning

Supplier Planning

Machine Planning

PLANNING CONSTRAINT

Followings are the Planning Constraints

Power Breakdown

Maintenance Shutdown

Variable Sales/Forecast

Non Scheduled Holidays

Capacity Constraints
 Productivity Factors

Lead Time

Supplies Level of Customer Service

BUYING DEPARTMENT

The word “buying” means purchase of any thing or any merchandise or item. This function is performed by buying department in any organization.

Buying or purchase is one of the major functions of any company of organization. Without it no one organization can run successfully in the field of
business. So we may say that buying is the soul of company. Without buying all departments of the company will be failed.

OBJECTIVES OF THE BUYING DEPARTMENT

The main objectives of any buying department is to purchase merchandise and services with the object of ensuring the specification, quality, price, time of
payment and timing of supplies are consistent with the overall need and objectives of the business.

FUNCTIONS

Following functions are performed by the buying department of RahimYar Khan Factory.

To buy all production raw materials including all types of material and

packing material.

To buy administration department requesting items.

To buy all engineering requesting items (all types of machinery & spare

parts).

Purchase of medicine for surgery.

Purchaser of W.C.S.O. seasonally for Karachi & Rahim Yar Khan Factory.

All types of factory purchases through buying department.

Sales of scraped or surplus items of various department relating capital

goods

PROCEDURE OF THE PURCHASE OF GOODS

The company has maintained a fine system of buying. In fact, buying department of R.Y. Khan Factory performs its functions on local basis. But imported
raw material & packing material is bought by the central buying department of head office. The procedure of buying can be explained with the help of
following charts:

Purchase requisition

Quotations calls

Summary of quotations is made

Purchase order

Goods receipt

GRIR is prepared

Store report

GRIR is accepted

Payment

PURCHASE REQUISTION

Any department which has a need of something sends purchase requisition regarding its requirement to buying department, who arranges for the purchase
of required items as soon as possible. Three copies of purchase requisition are prepared. These copies distributed as follow:

1st &2nd for buying

3rd for requisitioning department (request for purchase items)

SUMMRY OF QUOTATION & PLACING OF ORDE

First of all the buying department invite to general public and some particular parties for quotations. After receiving quotations summary of quotations is
prepared and comparison is made with price quality etc. After that the party is decided on which an order is to be placed according to the terms &
conditions. Then purchase order is prepared in the favor of succeeded party. All information regarding delivery and freight is mentioned in purchase order.

Five copies of purchase order are prepared and distributed as follow:

White for accounts department

 Pink for requisitioning department

Green for buying department

Blue for payment department

RECEIPT OF GOODS & PREPARATION OF GRIR

When goods are received from supplier then GRIR is prepared by material store department and sends to lab for inspection. If goods are accepted in the
laboratory then these are placed in the concern store other wise not.

Four copies of GRIR are prepared and distributed as follow:

1st for account department

2nd for buying department

3rd for concern department

4th for laboratory

In case if the material is not accepted then a sundry sales (SSA) advice or sundry sales credit will be made to return the goods to the supplier.

Three copies of SSA are prepared:

First for requisitioning department

Second for accounts department or distribution department

Third for buying department

PAYMENT

When GRIR is accepted then one copy of it is submitted to payment department, where the payment department prepares payment sheet and makes advice
to the cash office for payment after satisfying the other formalities.

SUNDRY DISPOSAL

Another function that is performed by the buying department is to sell the factory surplus of various departments like, as capital items, furniture, and part
of machinery and scrap items etc.

One memorandum is received for the disposal of sundry items from concerned departments, time to time, to buying department. The buying department
takes action on that memorandum as soon as possible. Buying department calls quotations from some particular parties, whose names and addresses send
by head office. After obtaining quotations a summary of quotations is prepared. Whose party’s rate is highest, its quotations are accepted. After that a
letter is issued to succeeded party about the acceptance of its quotations and instructed it to take delivery of the goods as soon as possible from the factory.
FRIEGHT PAYMENT

Often goods are received on trucks. The factory has to pay the freight charges to the carrier. For this purpose truck driver comes to the buying department
for the receipt of freight charges with the following documents:

Truck bilty

Suppliers challan (regarding supply of goods receipt)

Excise tax receipt

After receiving above documents, an advice is prepared by the buying department which is called “Freight payment advice”. This advice is forwarded to
APV department.

Two copies of freight payment advice are prepared and distributed as follows:

One for APV section

Second for buying department

CSO PURCHASE

SUPPLY CHAIN MANAGEMENT

The firm has segmented structure of supply chain Management. The purchasing, production control and distribution departments have responsibility for
material management.

SITARA CHEMICALS is the supplier of local raw material of soda ash, caustic soda etc. Supplier selection is based on price, quality and delivery.

SAFETY STOCK

2 to 3 weeks for basic (imported) material

2 weeks for packaging material

LEAD TIME

13- 20 weeks

FORECASTING
DEMAND FORECASTING

A forecast is the prediction of future events used for the planning purposes”.

FORECASTING TECHNIQUES

There the three forecasting techniques are available for the purpose of the forecasting of the demand, which are as under.

Judgment Method.

Causal Method.

Time Series Method

The usage of these techniques depends upon the availability of the data about the past.

FORECASTING AT UNILEVER

The forecasting technique, which is being followed by UNILEVER, is the qualitative technique.

SALES FORCE ESTIMATE

Sales force estimate of forecasts compiled by the members of the company’s sales force (their dealers in each region) about the future demand of the
product. They are using this technique because they believe that their estimates are correct since the dealers are much near to the market. Marketing
Department is actually involved much in forecasting. They observe the trend of the market and they set their target of sale then they tell to the production
that what is their target then production department make productions according to the target set by marketing department.

TIME SERIE

Demand for the future periods is also determined by the time series method. Historical data about the past demand is the basis for the time series. The data
is used for the demand projection for the coming periods.

MARKETING RESEARCH

Marketing research is also conducted by the firm. Data obtained is used to determine the customer demand pattern, and trends.

CAPACITY

Capacity is the maximum rate of output for a facility. Capacity planning is central to the long-term success of an organization. The operations manager
must provide the capacity to meet the current and future demand else the organization will miss opportunities for growth and profit. Capacity plans are
made at two levels:

Long-term capacity plans deal with investment in facilities and equipment.

 Short-term capacity plans focus on work force size, over time, budget,

inventories and decisions.

PEAK CAPACITY

It is the maximum output that a process or facility can achieve under ideal conditions. Peak capacity can be sustained for only a short time, such as a few
hours a day or a few days in a month. A firm reaches it by using extraordinary measures, such as excessive over time, extra shifts, temporarily reduced
maintenance activities, over staffing and sub contracting.

EFFECTIVE CAPACITY

It is the maximum output that a process or firm can economically sustain under normal conditions. When operating close to peak capacity, a firm can make
minimal profits or even lose money despite high sales levels.

Operations manager must examine the three dimensions of capacity before making capacity decisions:

Sizing capacity cushions

Timing and sizing expansion

Linking capacity and other operating decisions

The capacity cushion is the amount of reserve capacity that a firm maintains to handle sudden increases in demand or temporary loses of production
capacity it measures the amount by which the average utilization falls below 100 percent.

CAPACITY CUSHION = 100% - UTILIZATION RATE (%)

Another issue of capacity strategy is when to expand and by how much there are two extreme strategies:

The Expansionist Strategy, which involves large infrequent jumps in

capacity. In this strategy organization remains ahead-of-demand.

The Wait and See Strategy could be to follow the leader, expanding when

others do.

Management may choose one of these two strategies or one of closely linked to strategies operate between these extremes. Capacity decision should be
considered throughout the organization. When managers make decisions about location, resource flexibility and inventory, they must consider the impact
on capacity cushions.

Capacity cushion buffer the organization against uncertainty as do resource flexibility, inventory and longer customer lead times. If a system is well
balanced and a change is made in some other decision area, then the capacity cushion may need changes to compensate.
INVENTORY MANAGEMENT

“Inventory is a stock of anything held to meet the future demand of organization”.

For an organization Inventory Management is very important process.

There are different types of inventories from which Unilever use following types:

Cyclic inventory

Safety stock inventory.

Anticipation inventory.

CYCLIC INVENTORY

Cyclic inventory is used for both local and imported material. But only difference is in the length of cycle for both materials. Local material has small
cycle than imported material.

SAFETY STOCK INVENTORY

Unilever used safety stock both for base material and for package material. But only difference in time for which safety stock is required. Safety stock
inventory is used in following ways:

2-3 weeks safety stock for based material

And 2 weeks safety stock for package material.

ANTICIPATION INVENTORY

Anticipation inventory is mostly used for imported & not for local material.

PLACEMENT OF MANUFACTURING INVENTORY

Unilever used standard design to place the inventory. Not used special design in the Soapery. Because soap fall in standard products not in customize
products so standard design is better for placement.

INVENTORY MANAGEMENT METHOD

Unilever use following methods for different types of raw materials:

ABC method
 EOQ method

ABC METHOD

This method is used only for packaging material and for soda ash. This method is appropriate for the material which inexpensive.

EOQ METHOD

This method is used for expensive materials. Perfume and chemicals are managed by this method, because these types of materials are costly for over
stocking.

SYSTEM USED BY THE UNILEVER FOR INVENTORY MANAGEMENT

Following System is used by the Unilever to manage the inventory.

HYBRID SYSTEM

This System is the combination of Q- and P- System but have some extra features to manage inventory. Some time Unilever used fixed quantity order or
some time flexible quantities but fix time of period.

EMPLOYEES RELATIONS DEPARTMENT

According to the Personnel Department of Unilever R.F., there are things which are common between workers and machinery of the organization. For
examples:

Machinery requires repair where as workers required training.

Both are used for production purposes.

Both require improvement.

Both become inefficient if proper attention is not given.

There are many Departments which work for different areas. Such as Production Department works for the controlling of production. Sales Department
works for the sale of Products. Finance Department arranges the finance for the organization and so on. Therefore there must be a department for the
controlling, motivation and training of the employees. For this purpose Unilever R.F. has an Employees Relation Department. The Personnel Department
of Unilever R.F. performs the following functions:

FUNCTIONS

Employment

Transfer and Promotion

Training

Compensation Administration

Health and safety

Benefits and Services

Maintain relations with labor

Human Resource planning

EMPLOYMENT

Personnel Department makes arrangements for the recruitments of the employees. For this purpose it collects information about the desired employee’s
functions and then defines the job requirements and job profile. The Personnel Department makes all the arrangements for the report meant of new
employee, It sees better such employee is available in the organization or not. In case of no, it gives the advertisement in the newspapers. It also collects all
the applications of the applicants. It also makes arrangements for test. The Personnel Department uses different tests for different applicants. After that it
arranges the interviews for the succeeded applicants. Usually the interviews are bland of different types of interviews. These interviews include panel
interview, structured questions etc. The background information about the succeeded applicants is also gathered by the Personnel Department.

TRANSFER AND PROMOTION

The Personnel Department transfers the workers from one department to other department according to the circumstances. The function of promotion of
the workers is also performed by this department after consulting with the top management and analyzing the past record of the workers.

TRAINING

For smooth production and efficient work there must be some training programs for the workers, staff and management. Training function is also
performed by the Personnel Department. It provides on the job training to the existing workers and arranges programs for new employees.

The Personnel Department provides the following training facilities to management, staff and workers.
 On the job training

Lectures

Seminars

Conferences

The company has a full time training manager who conducts the different training programs according to circumstances. The management is also sent
abroad for certain training programs.

COMPENSATION AND ADMINITRATION

The Unilever Pakistan Limited conducts the wages survey in the market and of the major competitors after every two years and compares the results with
its own package and there is any difference then adjustment is made. The desire of Unilever R.F. is that its employees must be satisfied in every aspect
because it has the opinion that satisfied employees are more productive as compared to dissatisfied. The Unilever gives 30 different types of allowances to
its employees. Some of these are annual, some are semi-annual, and some are monthly while some are once in the whole employment period.

HEALTH AND SAFETY

Unilever R.F. is much conscious about the health and safety. Proper equipments are available in all areas of the production where sensitive machinery is in
operation. Furthermore, the organization has a well equipped Medical Center where MBBS doctors are available in order to meet with emergency cases.

The Personnel Department provides all possible instruments to all workers and it has the desire that every worker should use those instruments in order to
avoid losses.

Following are the Instruments which are provided to the workers:

Long shoes

Helmets

Gloves

Fire Instruments

BENEFITS & SERVICE

Unilever R.F. also provides certain benefits and services to all its employees. A list of some benefits and services is given below:

Attendance Allowance

Good attendance award

 Death Compensation

Canteen allowance

Tea Expenses

Conveyance Allowance

Family medical allowance

Family medical care

House rent Allowance

Utilities allowance

Meal Allowance

Rehabilitation Allowance

Retirement

Jersey

Shoes

Tonga Allowance

Traveling Announce

Hajj

Marriage Assistance To minorities

The organization has a club for the employees of the organization. Indoor and outdoor facilities are also available. The company also celebrates Annual
Sports Day on which different games are played and prizes are given to the succeeded players by the company.

HUMAN RESOURCES PLANNING

The most important function performed by the department is the Human Resource Planning. For a smooth production there must be an effective Human
Resource Planning. For This purpose it makes long term and short term plans to make the labor available for production. Short term Plans are made for
those places where workers have gone on holidays or absent.

Under these plans it has two types of recruitment:

Badli
 Temporary

For long term plans workers are recruited from the temporary workers who have become skilled one.

MOTIVATION

The organization has the opinion that motivated workers are more productive than unmotivated workers. To motivate its employees the organization uses
both intrinsic and extrinsic approaches for motivation its employees.

o Intrinsic Approach

o Extrinsic Approach

INTRINSIC APPROACH

Job rotation

XTRINSICE APPROACH

Training

Appreciation letters

Bonuses

Cash awards

Gifts

Shields

Clocks

Put the name of the workers on the notice board who perform an excellent performance. To motivate the employees the organization has introduced a
program name OFI (Opportunity for Improvement).
 ADMINISTRAITION DEPARTMETNT

Unilever Pakistan Rahim Yar Khan Factory has also an administration department that is controlled by the personal department.

Following functions are performed by the Administration Department:

Arrangements for providing for providing transport facility to management staff.

Arrangements for the journey of management & non-management staff.

Arrangements of stationery and printing.

Issuance and maintenance of stationery record.

To provide entertainment to management during working hours.

Receipts and dispatch of letters, documents etc.

TRANSPORT FACILITY TO THE MANAGEENT STAFF

Usually the management staff has to go to Head Office Karachi for business matters then they need transport. This arrangement is made by the
administration department. The company has its own transport for drooping and leaning of management staff at the AirPort, or Railway Station.

ARRANGEMENT OF JOURNEY

When a Manager, Assistant Manager or any Junior Manager wants to go outside the city either for personal or business purpose, they inform to the
administration department about their intention. They instruct to the department for making the arrangements of journey

An arrangement of journey includes reservation of seat in train or in airplane as the case may be. After making such arrangements the administration
department informs to the concerned person about the reservation and other information.

PURCHASE OF STATIONERY & PRINTING OF DESIRED DOCUMENTS

Stationery includes pen, paper, pencils, rubber, sharpener, etc. all these items are purchased by the administration department. It sends the purchase
requisition to the buying department for the purchase of desired items.

The administration department also prints all these documents, vouchers invoices sheets etc. which are used by various department of the company.

ISSUE OF STATIONERY

All stationery is issued by the administration department to various departments of the company. It also maintains the record of such stationery.
Administration department prepares reports about the issuance of stationery on monthly basis.
ENTERTAINMENT FACILITY

Tea is provided to all management during working hours in order to keep the staff fresh and to improve their efficiency. All arrangements for
entertainment are performed administration department. Arrangements for entertainment includes purchase of milk, sugar tea etc.

RECEIPT AND DISPATCH OF MAIL

The administration department receives mail and distributes it to the relevant person. In the same way it dispatches all the mail of the company. Mail is
made through OCS, TCS, or postal method.

DISTRIBUTION

Now a day’s business is extended to a great extent. Markets are widening briskly, so there is a great need to meet the requirements of this large market
successfully. There should be such a system of distribution that the supply of products to the markets should be according to the needs; this system should
be “sales loss proof”.

Unilever has a system, which gives maximum results. Supply of product is monitored in such a way that there are minimum chances of shortage in supply.

FUNCTIONS

In Unilever RYK Distribution department performs following functions:

Receives finished products from production departments.

Receives monthly or weekly Plans for distribution from Marketing & Sales
Department HO.

To makes daily dispatch plan.

To arrange transport facility for delivery of products.

To pay Excise Duty and arrange Provision for Excise Duty according to legal
Requirements.

To pay Sales Tax liability at the end each month up to 20th day of next
month.

And some Misc. General Functions.

DISTRIBUTION PROCEDURE

First of all production is transferred to distribution warehouse by the production department. Distribution department has two warehouses, which are
capacity wise 700+150 tons (for soap and personal products) and 500+200 tons (for cooking oil. Distribution department arranges the dispatch plan that is
provided by the consumer services head office. Therefore products are dispatched according to the dispatch plan.

Company has various sales depots located in different cities throughout the country. Such as:
 Faisalabad

Karachi

Wazirabad

Lahore

Rahim Yar Khan (central)

Rahim Yar Khan (south)

Dera Ismail Khan

Multan

Distribution department sends products directly to distributors or to sales depots as per instruction of sales department head office. Sales department makes
sales contracts with different parties and supply by advising distribution in Rahim Yar Khan Factory.

All sales depots are controlled by head office. Sales department send plans for despatch to these depots which take necessary action according to plan.

Rahim Yar Khan South depot covers the area of Baluchistan and Sind while Central covers the area of Punjab and NWFP. There is another depot named
“over flow depot” in Rahim Yar Khan. When there is shortage of space in factory warehouse, production is transferred to this depot.

Distribution department Rahim Yar Khan Factory sends despatch plans to over flow depots. This depot arranges the supply accordingly. For all the
despatches a despatch advice is prepared in which the full detail of the products are maintained. Five copies of despatch advice are prepared.

One copy is sent to consignee through transporter.

One copy of D.A is sent to customer service head office.

One copy is sent to accounts department.

One is for distribution department Rahim Yar Khan

One copy is given to transporter that is called acknowledgement.

DISTRIBUTION CHANNELS

Unilever has a centralized distribution system in which the products are distributed from one warehouse to the selected distributor of the company, and
then the distributor make the product available to the wholesalers and at the end the product is transformed to the retailers to be purchased by the final
customer.

The company had direct relations only with the distributors for making the product available to the target market. It deals with the distributors on net and
advance payment bases and does not give any credit facility to them. However the company provides different commissions incentives. There are many
certified distributors of Unilever operating in almost all major areas of the country.
 SKETCH OF DISTRIBUTION CHANNELS

Manufacturer

Company warehouse

Distributor

Wholesaler

Retailer

Customer

MATERIAL STORE

FUNCTION OF MATERIAL STORE

Two main functions of material stores are:

Receipt of Material

Issue of Material

MATERIAL RECEIPT PROCESS

Material store receive two type of material

Oil and Fat, DFA, Liquid Caustic

Packing and Raw Material

The process of receiving these materials is different from each other. We will discuss these processes one by one.

RECEIPT OF OIL AND FAT, DFA, LIQUID CAUSTIC

The process of receiving Oil and Fat includes following steps.

Step 1:

WEIGH BRIDGE

First step in material receipt system is Weigh Bridge where vehicles reach. Capacity of Weigh Bridge is 80 tons. There are two operators on the weigh
bridge.
.

Function of Weigh Bridge

Truck or other type of vehicle driver comes on Weigh Bridge and gives truck invoice to weigh bridge operator which is issue by the supplier of material.
The weigh bridge operator check the type of material load on truck and note the truck number and its timing of arrival. If material is packing and raw then
it is sent to material store for unloading. If material is Oil and Fat tankers are sent to sampling point. Lab assistant takes sample from tanker. Operator of
weigh bride makes a sample chit and then this chit is sent with sample of material to lab for inspection. The operator is informed by telephone from lab
that sample is ok. Then operator on weigh bridge take the first weight of loaded tanker and feed data in system with the help of software Weighbridge
which includes serial number, supplier name, truck number, material name, sample no and first weight. Print of this data is attached to truck invoice. Then
operator makes a weigh bridge slip and give it to driver and send driver to unloading point. One portion of weigh bridge slip is filled by the operator on
Weigh Bridge and other part is filled by the operator on receipt on material.

After unloading tankers come back to weigh bridge. Driver gives back the Weighbridge slip to operator and unloaded tankers are weighted. The operator
feed this weight in Weighbridge software and calculates net weight. Then print of data is attached to truck invoice. Operator checks the difference between
net weight and weight written on truck invoice. If it is minor difference than it is ignored. If it is major difference than it is mentioned on truck goods
receipt which operator makes after second weight. Two copies of TGR are given to driver and two for office.

Operator feed this data is daily sheet, which is made in excel. After it, the operator feed this data in MFG Pro.

Step 2:

UNLOADING OF OIL AND FAT, DFA,CAUSTIC

Oil and Fat, DFA and Liquid Caustic are unloaded on different point and process of unloading is different.

OIL AND FAT:

The point where oil and Fat is unloaded is call Tallow Decanting area. Following materials are unloaded at this point.

Tallow 1.5

Tallow 0.5

Coronal Oil

Cotton Seed Oil

If material loaded on tanker is coronal oil and cottonseed Oil than the oil is shifted to storage tank through pipeline and with help of pump. But before
shifting oil the operator on unloading clear the line with help of steam.

Tallow area uses following storage tanks store the material.

ST 65 and ST 12 is use to store tallow 0.5 which is use in Lux. ST 13 and ST 10 is use to store tallow 1.5 which is use for life buoy. ST 64 is use to store
PK Oil.

The capacity of ST 64,12,13,65 is 400 tons and capacity of ST10 is 500 tons. Temperature of storage tanks is maintained with help of hot water running in
pipelines inside the tanks. A meter gage shows the level of material store in tanks.

Tallow comes in two types of tankers. One is private company’s tanker and others are Unilever tankers. The process of unloading these tanks is different
with each other.

PRIVATE COMPANY TANKER:

Five tankers of 25 tons each can be unloaded at a time. Truck driver brings truck to tallow decanting area and give weigh bridge slip to operator on
unloading. Operator note the time when unloading start.

If tallow is in freeze condition in tanker than with the help of steam operator melt the tallow and then unload tallow in drop tank. From drop tank tallow is
shift to Decanters. Tallow area contains two decanters having capacity of 200 tons each. Temperature of these decanters is maintained according to
material. This material is than shifted to storage tank from decanters. Before shifting material to storage tank the operator on receipt clear the pipe line to
storage tank with help of steam and when line clear than material is shifted with help of pipe line. After unloading operator note time and fill the weigh
bridge slip and give it back to driver.

UNILEVERE’S TANKERS (Big Belly):

Company has its own tankers, which are called Big Belly. These tankers have facility to maintain the temperature of material. Material loaded in big belly
is directly stored in storage tank with the help of pump. But before unloading pipeline is clear with the help of steam.

DFA:

Truck loading DFA reach at unloading point. DFA is unloaded and store in storage tank directly from tanker with the help of pipeline and pump.

LIQUID CAUSTIC:

Truck loading caustic reach at unloading point. Driver gives weigh bridge slip to operator. Caustic is first unloaded in drop tanks and from drop tanks
caustic is shift to storage tank with help of pump. Two drop tanks are use to unload the tankers. Capacity of these two drop tanks is 25 tons each. Two
storage tanks ST 66 and ST 25 is use to store the caustic. Capacity of these tanks is 150 tons each. After unloading operator fill the weigh bridge slip and
give it back to driver.
RECEIPT OF PACKING AND RAW MATERIAL

Packing and raw material is unloaded in two hangers. One is hanger no 2 where personal product packing and soapry chemicals. Other is hanger no 3
where packing soapry and raw material is stored. Truck loading packing and raw material first reach to weigh bridge where operator on weigh bridge not
the truck number and time of arrival and send it to hangers for unloading.

Operator on receipt of packing and raw material check the truck invoice which contain name of material, type of material, purchase order number, and
quantity. Operator unloads the truck and keep material to their specific place. During unloading operator also take sample of material which is sent to lab
for inspection. Operator checks the material, count it and match the quantity received with quantity written on truck invoice. After unloading material
truck good receipt is prepared which contain supplier name, quantity received packing, and description of product and discrepancy. Tow copies of this
receipt is given to driver and two copies are keep in office. After TGR is issued the data is posted in Ledger. With the help on entries in ledger than data is
feed in MFG Pro.

MATERIAL ISSUE PROCESS

Issue process of oil and fat, DFA, liquid Caustic, packing and raw material is different with each other.
ISSUE PROCESS OF OIL AND FATS:

Storage tanks are kept full. Operator notes the level of material store in storage tank with the help of meter gage. Then he shifts oil and fat from storage
tanks to pan room tanks. During issue he takes sample of material and makes a sample slip and send sample with sample slip to lab. After issuing operator
note the level of tank. Then quantity of issue is calculated by subtracting last level noted from current level note. Then operator fills the issue sheet and
makes two copies of it. One is given to operator of PAN room who is present there. Other copies is sent to office where related officer with the help of this
sheet feed data in MFG Pro and makes a quality order and send it to lab.

ISSUE PROCESS OF DFA:

Operator notes the level of DFA storage tank. DFA is directly issue to PAN room from storage tank. After issuing operator check the level of storage tank
and notes the difference on issue sheet. One copy of issue sheet is given to PAN room operator and other copy is send to office. Next day pan room sends
an issue note to office and related officer feed data in MFG Pro.

ISSUE PROCESS OF LIQUID CAUSTIC:

Operator notes the level of storage tank. Level of tank is measured with help of measuring tape. After issuing operator check the level of storage tank and
notes the difference on issue sheet. One copy is issue sheet is given to operator of PAN room and other is send to office. Next day PAN room sends an
issue note to office where related officer feed data in MFG Pro.

ISSUE OF PACKING AND RAW MATERIAL

Issue of packing and raw material handle three operators. One operator issues packing material to personal product department. Second issues packing
material to soapry and raw material to NSD. Third operator issues chemicals to soapry and personal product department, perfumes and colors.

Issue note is sends to material store one day before issue from manufacturing departments. Related officer in store notes the name of material and quantity
of issue on notebook of related operator.

Next day operator note the quantity of issue on lot card from where he is issuing and notes this lot number in his notebook. With the help of fork lifter
material is send to manufacturing departments. After issuing material operator notes this lot number in issue note. Related officer post this data in MFG
Pro.

ISSUE OF MATERIAL

Issued material can be return to material store from manufacturing departments because of two reasons.

Goods not required

Rejected due to any problem.

If goods are returned on first base than manufacturing department send a return note with material to store. This material is stored near the lot from where
it was issued. A new lot number is posted on this material. Related officer post return note in system. This material will issue first on requirement.

If goods are return on second basis than first a lab assistant checks the material. If material is rejected than it is stored separate place specific for rejected
material.
A card, which contains lot number from where it was issued and number of issue note against which it was issued is posted on this material. Related
officer sends e-mail to Supplier Company. The Supplier Company inspects the material and if it is rejected than it send fresh material to company.

SWOT Analysis

Strengths

Largest producing company of consumer products in Pakistan

Enjoying economies of scale

Good will in the market

Strong financial position

Some of its brands have become the generic name for those products as Dalda in ghee & surf in detergents

Market leader in tea industry with Lipton & Brook Bond

Capture 70 percent market share of ice cream industry

Highly sales brands in skin care i.e. Ponds and Fair & Lovely

Have Strong distribution channel in Pakistan

Wide product line in home wash

Weakness

High rates of skin care products

Ratio of success of new product is low

Huge inventory stocks of raw material and finished goods

Few new products are introduce in the market

Opportunities

Capturing food industry by acquiring Raffan Best Foods

Wide scope of confectionery business for Unilever

 Unilever is looking to acquire Tapal tea

Threats

Facing tough competition in Ghee and Cooking Oil

Facing tough competition in ice cream.

Unilever is facing a very tough competition in personal care and detergents by P&G

There is very tough competition in detergents and soap markets

High inflation rate is increasing the cost of imported raw material day by day