Internship Report

EXECUTIVE SUMMARY
Nestle is the world's leading nutrition, health and wellness company today and was
founded in 1866 by Henri Nestl. It has employed around 250,000people and has
factories or operations in almost every country in the world. Nestl Pakistan has
been serving Pakistani consumers since 1988. Nestl take over the running of the
company and develop its milk collection networks in 1992.Nestle are now in all
seven continents & having more than 522 factories in 83 countries.
In this report I have started with the introduction of NESTLE throwing highlights
on its most important features of development and progressive mode. After
companys introduction I have given some detail about
Vision statement, Mission statement,how NESTLE is perfroming in pakistan ,its

brands and products,, Organizational Structure of NESTLE Ltd, Benefits provided
by NESTLE limited to its employees, key success features of NESTLE,and
recommendations for NESTLE and IBIT. This report also consists of financial
analysis of 2010 and 2011.I have worked under NEFAM section as assistant of
supervisor and my activities include complaint analysis,employes feedback,monthly
requirment analysis,insertion and upgradation.
I have completed my internship for the period from august 06, 2012 to october 6,
2012 and worked in various departments on the valuable instructions of my
Supervisor.If one wants to enhance his/her knowledge about NESTLE this report
will serve as a guide.
1|Page Internship Report

CHAPTER 1 (INTRODUCTION OF NESTLE)
(1.2) HISTORY:
Nestle is the world's leading nutrition, health and wellness company.it is

founded in 1866 by Henri Nestl. Nestl Corporate Business Principles will
continue to evolve and adapt to a changing world, their basic foundation is
unchanged from the time of the origins of their Company, and reflects the basic
ideas of fairness, honesty, and a general concern for people.The Nestl is
multinational company it is doing business not only in Pakistan but many
other countries of the world. Nestl Pakistan has been serving Pakistani
consumers since 1988. Nestl take over the running of the company and
develop its milk collection networks in 1992. Between 1988 and 1992, 100 milk
tanks were installed.Nestle are now in all seven continents & having more than
522 factories in 83 countries.
(1.3 )BACKGROUND
Henri Nestl, a pharmacist, developed a food for babies who
w e r e unable to breastfeed. His first success was a premature infant who could
not tolerate his mother's milk or any of the usual substitutes which
eventually became the first Nestls customer. After Nestl's new
formula saved the child's life and soon, FarineLacte was being sold in much of
Europe. After the major invention in 1874, Jules Monnerat purchased Nestle and
collectively they launched the condensed milk. In 1905 Nestle merged with
Anglo-Swiss which was an condensed milk company. Soon after
N e s t l e established its roots all over Europe to cater the need of the
customersof Europe, as Nestle fame was on the top,
s o N e s t l e t h o u g h t t o s t a r t t h e production function all over the world
to increase the customer demand and meet or capture more markets. Decision to
go multinational was a fruitful idea, so as now nestle has operations in
America, India, England, Brazil, Australia, Pakistan, Hungary, France,
Belgium, Italy, Spain and various other countries around the globe.
NATURE OF THE BUSINESS
Nestle Pakistan is the FMCG company.
MAJOR INDUSTRY:
Food & Beverages

S U B IN D U S T RY :
Diversified food
(1.4) CORE VALUES

People
Quality
Brands
Consumer
Customer
Performanc
(1.5) GOALS AND OBJECTIVES OF NESTLE
To be the best & quality brand in Pakistan

To meet the needs & requirements of the consumers
To capture the desired market share
To dwell in to the life of people & consumers
To be the number one nutritious company of Pakistan
To be the social responsible company & be helpful in bad times.
Nestle aims to be proactive innovation and renovation culture, which is the key to Nestls
success in the marketplace.
(1.6 )PRESENT BOARD OF DIRECTORS
Name Member Nationality

Syed Yawar Ali Chairman Pakistani
Jan J. Donald Managing Director South African
Frits Van Dijk Director Dutch
Pierre Director Swiss
Schaufelberger
Giuseppe Bonanno Director Italian
Syed Baber Ali Director Pakistani
Syed Hyder Ali Director Pakistani

(1.7) MISSION STATEMENT:
Nestl is dedicated to providing the best

foods to people throughout their day,
Throughout their lives,throughout

the world. With unique experience of
anticipating consumers needs and
creating solutions, Nestl contributes to
peoples well-being and enhances quality
of life.

(1.8) VISION STATEMENT:
The Nestl global vision is to be the

leading health, wellness,
andN u t r i t i o n C o m p a ny i n the w o rd .N
e s t l P a k i s ta n s u b s c r i b e s fu l l y to h i s
vision. In particular, envision to: Lead a
dynamic motivated and professional
workforce proud of its heritage and bullish
about the future.
Deliver shareholder value through profi
table long-term growth,while continuing
to play a significant and responsible role in
the social, economic and environmental sectors
of the country. contributes to peoples well-being
and enhances quality of life.

(1.9) NESTL BRANDS
Baby foods Cerelac, Gerber, Gerber Graduates, NaturNes, Nestum

Bottled water Nestl Pure Life, Perrier, Poland Spring, S.Pellegrino
Chocapic, Cini Minis, Cookie Crisp, Estrelitas,
Cereals Fitness, Nesquik Cereal
Chocolate & Aero, Butterfinger, Cailler, Crunch, Kit Kat, Orion,
confectionery Smarties, Wonka
Nescaf, Nescaf 3 in 1, Nescaf Cappuccino, Nescaf
Classic, Nescaf Decaff, Nescaf Dolce Gusto, Nescaf
Coffee Gold, Nespresso
Culinary, chilled Buitoni, Herta, Hot Pockets, Lean Cuisine, Maggi,
& frozen food Stouffer's, Thomy
Dairy Carnation, Coffee-Mate, La Laitire, Nido
Drinks Juicy Juice, Milo, Nesquik, Nestea
Chef, Chef-Mate, Maggi, Milo, Minors, Nescaf,

Food service Nestea, Sjora, Lean Cuisine, Stouffer's
Healthcare
nutrition Boost, Nutren Junior, Peptamen, Resource
Dreyers, Extrme, Hagen-Dazs, Mvenpick, Nestl
Ice cream Ice Cream
Alpo, Bakers Complete, Beneful, Cat Chow, Chef
Michaels Canine Creations, Dog Chow, Fancy Feast,
Felix, Friskies, Gourmet, Purina, Purina ONE, Pro
Petcare Plan
Sports nutrition PowerBar
Weight
management Jenny Craig

NESTLPRODUCTS

(1.10)Nestl principles of Business Operations
1. Nutrition, Health and Wellness

Our core aim is to enhance the quality of consumers lives every day,
everywhere by offering tastier and healthier food and beverage choices
and encouraging a healthy lifestyle. We express this via our corporate
proposition Good Food, Good Life.
2. Quality assurance and Product safety

Everywhere in the world, the Nestl name represents a promise to the
consumer that the product is safe and of high standard.
3. Consumer communication
We are committed to responsible, reliable consumer communication that
empowers consumers to exercise their right to informed choice and
promotes healthier diets. We respect consumer privacy
4. Human Rights in our business activities

We fully support the United Nations Global Compacts (UNGC) guiding
principles on human rights and labour and aim to provide an example of
good human rights and labour practices throughout our business
activities
5. Leadership and Personal responsibility

Our success is based on our people. We treat each other with respect
and dignity and expect everyone to promote a sense of personal
responsibility. We recruit competent and motivated people who respect
our values, provide equal opportunities for their development and
advancement, protect their privacy and do not tolerate any form of
harassment or discrimination
6. Safety and health at work

We are committed to preventing accidents, injuries and illness related to
work, and to protect employees, contractors and others involved along
the value chain.
7. Supplier and customer relation

We require our suppliers, agents, subcontractors and their employees to
demonstrate honesty, integrity and fairness, and to adhere to our non-
negotiable standards. In the same way, we are committed to our own
customers.

8. Agriculture and rural development
We contribute to improvements in agricultural production, the social and
economic status of farmers, rural communities and in production
systems to make them more environmentally sustainable.
9. Environmental sustainability
We commit ourselves to environmentally sustainable business practices.
At all stages of the product life cycle we strive to use natural resources
efficiently, favour the use of sustainably-managed renewable resources,
and target zero waste.
10. Water
We are committed to the sustainable use of water and continuous

improvement in water management. We recognize that the world faces a
growing water challenge and that responsible management of the worlds
resources by all water users is an absolute necessity.

CHAPTER 2(NESTLE IN PAKISTAN)
(2.1) NESTL IN HISTORY IN PAKISTAN
Nestl has been serving Pakistani consumers since 1988, when parent
company, the Switzerland-based Nestl SA, first acquired a share in Milk pak
Ltd. Today Nestl is fully integrated in Pakistani life, and is recognized
as the producer of safe, nutritious and tasty food, and leaders in developing
and uplifting the communities in which they operate. N e s t l P a k i s t a n
e n s u r e s t h a t t h e i r p r o d u c t s a r e m a d e a v a i l a b l e t o consumers
wherever in the country they might be. Convenience is at the heart of
the Nestl philosophy, and there aim is to bring products to people's door
steps.Through the following below given detail we can come to know that how
NESTLE make progress with the passing of time.
1912
Nestl begins its long relationship with South Asia when the Nestl Angel-Swiss
condensed Milk Company starts importing and selling finished products in the
Indian market.
1979
This year Milkpak Ltd is founded by Syed Yawar Ali currently Chairman of
Nestl Pakistan Limited. Milkpak Ltd is manufactures UHT milk, butter and
cream.
1981
Production develops it product in long shelf life UHT milk begins at Milkpak
Limited in Sheikhupura factory.
1988
Nestl SA acquires a 40% shares in Mikpak Limited.
1990
The Sheikhupura factory starts the production of powder milk Nido and
cereals. A new plant acquired formerly named KDL (Kabirwala Dairy Ltd) in
Punjab.
10 | P a g e Internship Report
1992
Nestl takes over the running of the company and begins to develop its milk
collection network to develop direct source. A Maggi Noodles plant is installed
at the Kabirwala factory.
1996
In is year Milkpak Ltd was renamed Nestl Milkpak Ltd.
1997
The Kabirwala plant becomes a fully owned unit of Nestl Milkpad Ltd formerly
KDL (Kabirwala Dairy Ltd).
1998
Nestl Pure life bottled water is premiered in Pakistan. Within a few years it
becomes one of the worlds leading brands of bottled water. Meanwhile, Nestl
Milk Collection system matures in the Punjab and the company is able to buy
all its raw milk from farmers directly instead of relying on contractors as an
indirect source. Farmer milk payment entry was started in MMS (Milk
Management System).
2001
Nestl Pakistan acquires the Fontalia and AVA water companies which
specialize in supplying water to homes and offices.
2004
Afghanistan becomes the fourth sales zone of Nestl Pakistan Limited.
2005
Nestl Milkpak Ltd renamed Nestl Pakistan Ltd. The GLOBE project
introduced and launched successfully. The main purpose to launch said
project is intended to further cooperation and information sharing with Nestl
companies around the world.
Nestl Pakistan responds swiftly to Octobers devastating earthquake, using its
own distribution channels to bring aid to the worst affected areas.
(2.2) NESTL PAKISTAN TODAY
Nestl becomes totally different form as passing 145 years (1867-2012) now
become a leading company not only in Pakistan but doing business in many
countries of the world. Now its products are available everywhere we want. The
aim of this company is to bring product to people on their doorsteps. Nestl
Pakistan now operating the biggest Milk collection system in Pakistan,
collecting the milk from farmers over the Punjab and Sindh directly estimated
190,000 farmers over 146,000 Sq KMs.
(2.3) FACTORIES IN PAKISTAN
Nestl has four factories, producing many products in Pakistan, situated in

Islam Abad and Sheikhupur cities in north of the Pakistan and Karachi in
south of Pakistan. Two factories producing dairy product and other threes are
bottled water plant. Nestl is a customer and profit oriented organization rather
than system and strategy oriented. The mechanics of generating profit are low-cost
production and high-price sales.
SHEIKHUPUR FACTORY
In heart of Punjab a milk products processing factory situated at Sheikhupur
running business of Nestl Pakistan Ltd. The products which are producing in
it are Milkpak UHT milk, low fat NESVITA, Pure Life water, Cerelac and yogurt
in several flavors. The factory starts in 1981 as a part of Milkpak Ltd. That time
the factory was producing only UHT milk, but after this in 1988 its expand to
produce cream, butter and Desi Ghee, as well as many other drinks. After this
it also begin producing powder milk. On the demand of Pakistani consumers
its capacity was expanded for new product. It also started supply of dairy mixes
to McDonalds. In recent year its capacity also has been expanded. Now it is
producing flavor base yogurt, tea whitener, raita and
cream, as well as high calcium low fat dairy products, sold as NESVITA brand.
KABIRWALA FACTORY
Nestl Milkpak acquired Kabirwala Factory formerly KDL in 1990 which is
situated in Kabirwala district Khanewal Punjab after this in 1997 fully owned
by Nestl Pakistan Ltd. In 1992 it expand to produce Maggi Noodles and in
1996 expand more to produce
powder milk. Kabirwala factory
producing Everyday tea whitening
powder started in 2002. In year
2005 a project for extension done
by a cost of Rs.4.0 billion, the
extension was milk processing
capacity at triple its current size, both milk products powder and liquid.
Currently factory is producing Nido was started in 1998 and Milkpak UHT
started in 2006.
ISLAMABAD FACTORY
Nestl acquired the AVA water factory situated in Islamabad in 2001. It was
fully owned unit in 2003, after
this it is continuously improving
the brand as per international
standards. Islamabad factory has
been providing women workforce,
and Nestl is giving opportunity
to work at the same location to
women alongside men in its
production departments
Ref: 1. http://www.Nestl.pk/Pages/Nestl.aspx
2. RaheelAslam, Amir Nawaz Employees and supervisor
CHAPTER 3 (GENERAL ANALYSIS)
(3.1) PEST ANALYSIS:Analysis Of External Environment
Political Environment
Government regulations to protect interest of society and from unfair
business practices.
Unstable political conditions
Economic Environment
If inflation rate high then rate will decrease in purchasing power, so
inflation rate directly affect the companys sale
Changes in major economical variable such as income, cost of living,
interest rate and savings have a large impact on market place.
Social/culture environment:
Consumption behavior of Pakistani people is high so they consume more
goods.
As Pakistan is a Muslim country so company cannot add any ingredient
which is prohibited in Islam or which is not Halal
.
Technological environment:
Technological environment is rapidly changing.
Company must keep up with technological changes to match up with its
environment.
(3.2) SWOT ANALYSIS
Analysis Of Internal Environment:
STRENGTHS:
PARENT SUPPORT
Nestle Pakistan has a strong support from its parent company, which is the worlds
largest processed food and beverage company, with a presence in almost
every country. The company has access to the parents hugely successful
global folio of products and brands.
COMPANY IMAGE:
Nestle company has a great image in the mind of people. Nestle
company has worldwide reputation which helps them to retain the market
even in bad situations & unfavorable conditions.
HIGH QUALITY PRODUCT:

Nestle produce a good quality products. Nestle cannot compromise on quality
because people are more quality conscious now a days, with the best quality they can
attain customer loyalty.
WELL DEVELOPED STRATEGY:

Nestle has recognizes there is a right time and place for their product;
therefore, their strategy makes room for adjustments, nestle captured
a market with great sweep with the developed strategy.
MARKET SHARE:
Nestle juices has a highest market share almost in every SBUs line,
such as in Milk pack & Nestle pure life.
GOOD MARKETING SKILLS AND SERVICES:

Nestle is now a days working on this on this concept because they want to
increase their market share. They are providing quality products to the
customers that include their service and product.
BRAND STRENGTH:
In Pakistan Nestle has some very strong brands like Nescafe, Maggie, Cereals,
Nestle water and these brands are almost generic to their product categories.
RESEARCH & DEVELOPMENT TEAM
Research and development department keeps Nestle in continuous knowledge about itself
and competitors. It has a competitor advantage because many local companies have no
research & development departments.
PRODUCT INNOVATION:
The Company has been continuously introducing new products, thus
expanding its product offerings.
HR DEPARTMENT:
Nestle company has a strong HR department which Nestls strong
committed management of the company.
WEAKNESSES:
LESS PROACTIVE:
Nestle being a company is less proactie
t h e y c r e a t e c h a n g e s b u t usually unless
competitor doesnt change they doesnt adopt change.
LESS DISTRIBUTION CHANNEL:

Nestls major & bad factor is the limited
distribution channel because they distributes
their products to whole seller in their own factory
vehicles.
NO OUTLETS IN PAKISTAN:
They dont have direct outlets to whole sellers to
create less burden on
the factory distribution channels however
their competitors give them a major threat by
this.
MORE CONCERNED ON PROFIT:

As being less proactive they are more concerned about profits, & their market
share the main objective of every company is to gain profits but as compare to
competitors its a drawback.
OPPORTUNITES:
SUPPORT FROM FOREIGN INVESTORS:

Government support foreign investors to invest in Pakistan whi
c h eventually is the opportunity for Nestle.
ENHANCE DISTRIBUTION CHANNEL:

Nestle should be working on the distribution network to enhance the
companys network against its competitor.
CHANGING SOCIAL TREND:

Consumers in urban areas now adopt Western lifestyles, especially the younger
generation which is hugely influenced by the Western media. Younger
consumers tend to follow Western life style. There was an increase in demand for
Nestle products over the review period.
HEALTH CONSCIOUS:
Increasing health and hygiene awareness among Pakistanis has greatly increased sales of
nestle products.
MARKET GROWTH:
Nestle market expands very fast. A new research proves that in future every
person use 85.5 liters juices per years & uses more hygienic products
because of the low hygienic conditions of the environment.
THREATS:
GOVERNMENT REGULATIONS:
They face problem if government employ taxes on them which force
them to raise the price of their product.
INCREASE IN COMPETITION AMONG COMPETITORS:

Competition among competitors is major threat to Nestle which can be
controlled by the help to retaining more customers & making more
loyal ones.
NO ENTRY BARRIER:
There are no many entry barriers so a large numbers of local companies enter
in various Nestls product market.
INFLATION RATE:
Increase inflation rate very fast so inflation is very true bad factor which can affect
Nestle.
UNFAVOURABLE CHANGES IN COSUMER DEMAND:

With the increase in the competitors there will be increase in the
number of related products which eventually harm the Nestls market. Due to
which the consumers demand pattern fluctuate.
LOSS OF MARKET SHARE:

When the market saturates the loss of the market share of Nestls
products is there major threat to Nestle.
(3.3) NESTLE COMPETITORS:
Engro foods
Haleeb foods
Cadbury
IBL
Mitchells
Candy land
COMPETITIVE STRATEGY
WHAT MAKES COMPETITIVE
The hallmark of the nestle is the quality of the products which the company offers.
COMPETITIVE EDGE OF NESTLE
The companies all over the world get some competitive edge based on some features which
other companies dont have. For example, as the Dell has the competitive edge over other
computer manufacturer companies, because they use Built-to-order Strategy while no
other company in computer industry use this strategy. Similarly in Pakistan nestle has
their Competitive edge basedon these Strategies:
Product Differentiation
Customer Oriented
PRODUCT DIFFERENTIATION STRATEGY
Nestle is using the product differentiation strategy by providing the superior quality
products. Their main focus is to keep the customers loyal. They bought shelve space in
differentdepartmental stores to attract the customers. They tried to reach each group of
people in which theyhave succeeded.
CUSTOMER ORIENTED
Customer satisfaction is the focal point for the company. They provide hygienic productsto
their customers. Products are also verified by health and safety measures and
international qualitystandards.
(3.4) ORGANIZATIONAL STRUCTURE
Organizational structure is the formal framework by

which jobs tasks are divided, grouped, and
coordinated. Nestl is a function-based organization.
The tasks are divided into separate jobs and then
these jobs are grouped together under different
departments i.e. functional departmentalization is
found in organization. Each major area is kept under
the manager who is specialist in that concerned field and is responsible for all
activities, which that department performs.
ORGANIZATIONAL STUCTURE OF NESTLE IS HIRARICHAL:
CHAPTER 4(DISCRIPTIONS OF VARIOUS DAPARTMENTS)
(4.1)HUMAN RESOURCE DEPARTMENT OF NESTLE PAKISTAN:
HR is dedicated to their employees, and ensures that they have all the right
people with the right skills, in the right places at the right time.
Understanding that their people are the bedrock of all their business strategies,
it is their mandate to enhance their skills with cutting-edge training and
provide them with world-standard facilities
They select flexible, innovative people who are ready to confront new challenges
and make a difference. Their groundbreaking Management Trainee
Programmed aims to develop talented young men and women and help them
achieve their potential in a dynamic and enabling environment.
Over a hundred people travel out of the country every year to take advantage of
their international training and development events.
The Human Resource Department is subdivided into three branches:
Shared Services
Centre of Expertise
Business Partner
HR IMPORTANCE:
The main objective of HR department in Nestle is to meet company needs of the

human resources and the needs of the people hired by the company. The
management of Nestle considers that in order to stay competitive and to meet
the needs of their customers they should focus on their employees. They
consider employees the main assets of organization and focusing on providing
them the better facilities.
HUMAN RESOURCE PRACTICES
For nestle, Business Partnership is not a new concept. Back in 2001, they
created centers of expertise in Recruitment Services, Talent Management and
International HR, Learning and Development, Information and
Administration, Reward and Employee Relations. Since then Theyve come a
long way and have contributed a huge amount to the business. Today They are
really proud to be recognized one of the most advanced HR functions within
Nestl globally.
(4.2)SUPPLY CHAIN DEPARTMENT
The concept of having a Supply Chain Department is a new one in Pakistan.

This trend ismostly prevalent in the developed markets. Nestl Milkpak has
recently introduced thisconcept in its company functions and the supply chain
department is passing throughvarious stages of completion. Nonetheless, it has
started working and performing vitalfunctions for the organization.
Functions of the Supply Chain:
The supply chain department performs a range of functions, starting from the
procurement of raw and packaging material, the manufacturing process and
thedistribution of the finished goods to the consumers. Purchase, logistics,
production planning are different issues but Nestl Milkpak has undertook the
concept of getting the hurdles attached with these resolved under one
umbrella.
Structure:
There are five support departments for the Supply Chain. Theseare
ExportMarketing
DemandPlanning
CustomerOrder
ServicesTransportation
National Distribution Center
Out of these five departments, four are headed by the Supply Chain Manager
with threeworking at the Head Office and the National Distribution Center at
the SheikhupuraFactory. The fifth department i.e. Export Marketing, falls
under the FCM and works atthe Head Office.
(4.3)MARKETING DEPARTMENT
The Marketing Department is responsible for all sort of activities

including the promotion,advertising and tools used for generating
demand.The Marketing department is also responsible for arranging
stalls and functions for the promotional and official reasons
respectively.Concerned Group Brand Managers or Brandmanagers
were contacted to gather first handinformation.The Marketing
Manager or more popularly known as MM at Nestl heads this
division. After him, follow the Group Brand Managers. Each Group
Brand Manager is responsible for a variety of products. Group Brand
Managers are assigned Brand Managers for each single brand of
product. This kind of setup, has been arranged so that there is no
extra burden on any person.
(4.4)TREASURY DEPARTMENT
Treasury Department comprises of three sections, the first looking after all the
daily transactions with the Financial Institutions, the second sub-section is of
Share Registration and the third deals with the Insurance concerns of the
organization. The Treasury Department is a new department at Nestl Milkpak
Limited. It is a comprehensive department handling various kinds of jobs. It
has been structured in a way to deal with all external financial relationships.
External financial relations for Nestl Milkpak are:
Shareholders
Suppliers or Vendors
FinancialInstitutions
As repeatedly mentioned that Nestl Milkpak has divided the country into three
zones for its convenience. The Treasury Department also has links with all the
three zones. It works in co-ordination with them to know about the actual cash
requirements in each zone and their respective regions.
Following is the structure of the Treasury Department at Nestl Milkpak

Limited
The Treasury dealing with the payments and receipts connected with every
zone.
The Share Registration dealing with the investor relations i.e. keeping all
knowledge about the Stock exchange and the Central Depository Committee
ofwhich Nestl Milkpak is a member.
The Insurance section dealing with the area of risk management for the
assets of the organization i.e. both physical and material assets.
These three sections fall under the Treasury Manager who is responsible to
coordinate and look after the workings of each section. The Treasury Manager
is directly reporting to the Finance and Control Manager.
The main Treasury receives Sale Receipts from the north, south and central
zones on a daily basis. These sale receipts are adjusted at one bank account.
Nestl maintains approximately 80-90 bank accounts in various banks located
at different places. But as the company follows a policy of being net borrowers
so the inflows are adjusted against the borrowings. This means that as soon as
the inflows reach any bank account, they are transferred to a single specified
account for adjustment against the borrowed funds. A minimum level of cash is
maintained at all the accounts for every region and zone.
Nestl makes all its payments on 30 days credit basis. Except for the Milk
collection areas where payments are made on cash basis. Nestl has recently
restructured its policy of making credit sales and now almost all the sales are
on cash basis. Therefore, the Treasury Department has to be very efficient in
order to keep track of all these transactions.
(4.5)CORPORATE PURCHASE DEPARTMENT
Corporate Purchase department at Nestl Milkpak Limited responsible for

purchase and Purchase can be of two types either raw and packing material
purchase or technical purchase.it is headed by the Corporate Purchase
Manager. This department has got two sections
Local Purchase Departmen

Imports department
LOCAL PURCHASE DEPARTMENT

This department has two sub sections, namely:
Raw and Packing Material Department
Technical Purchase Department
These departments are headed by Purchase Managers.
IMPORTS DEPARTMENT
This department is responsible fot imports of products.
(4.6)TAXATION DEPARTMENT
It deals with the sales tax, excise duty and income tax of the employees of the
organization.TaxationDepartment at Nestl Milkpak Limited also falls under
the Finance andControl Division. The taxation department has to deal in three
different kinds of taxes
Sales Tax
Excise Tax
Income SALES TAX
Sales tax is levied on certain items produced by Nestl Milkpak.
The taxable itemsinclude:Juices,CulinaryWater,ConfectioneryCoffee
The non taxable items include:Milk PowdersCereals
It is the responsibility of the Sales Tax department to calculate the figures
according tothe rates implied by the government. This amount is then added to
the price of an item and it is sold at profit to the distributor. The distributor in
turn, includes the amount of sales tax in his final price and sells the product to
the end consumer. So, the endconsumer has to bear the burden of the tax
eventually and this is a form of indirect tax for the producer and the
distributor. The rates of sales tax in case of registered to registered firms is
15% and 3% for non-registeredfirms.The sales tax department calculates these
figures and sends them to the Budget and Control section to enable them in
calculating the distributor and retailer margins
(4.7)INFORMATION SYSTEMS DEPARTMENT
Information Systems (IS) Department has a very important role in any

organization of the modern century. Especially, for such a large scale
Multinational Corporation like Nestl Milkpak limited that has to maintain
contact not only with its establishments in the country which it is operating
but also with Nestl Headquarters and Nestl setups in other countries,
Information Systems play a vital role.The exchange of information is a
continuous function and the decision making process is based on this
information.Proper hardware and software is necessary to
maintaineffectiveness and efficiency. The Information Systems Department
comes under the Finance and Control Division at Nestl Milkpak Limited.
(4.8)THE LEGAL AFFAIRS DEPARTMENT
It deals in all the legal matters of the organization, and Nestl has employed its
Own lawyer to look after its best interests.
AzeemNaqvi, who handles the Legal Affairs Department at Nestl Milkpak

Limited, provided me the information on the legal affairs department
ESTABLISHMENT OF AN IN HOUSE COUNCIL Nestl Management took

control of Milkpak Limited in 1992, by a majority of shareholding in the
company. They entered into transactions with third parties. By 1995,most of
these contracts were getting mature. With time disputes arose with respect to
these business transactions. Legal complications started arising. Nestl
Milkpak had employed a couple of external lawyers to look after its legal
matters, but they were not being sufficiently taken care off. Top managers
weretoo busy in their own activities and coordination was lacking greatly.
Multinational corporations like Nestl employed foreigners who were easily
exploited by the locals. Therefore an In House Council was established in 1995,
to improve co-ordination and tolook after the day to day legal affairs of the
company; such as drafting of opinions, salary matters and litigation of external
lawyers.
Following major functions are performed by the Legal Affairs Department

at NestlMilkpak Limited:
Opinion writing
Drafting of legal documents.
Wetting of agreements
Co-ordination with external parties.
Explaining the company stand to external parties
Providing information and documents in legal procedures.
Co-ordination with the Nestl Headquarters at Vevey
Ensuring compliance with the legal policies.
Ensuring compliance with the local laws
Providing periodic guidelines.
Providing legal opinions to various divisions like Finance, Marketing, Sales and
HumanResource.
(4.9)BUDGET AND CONTROL DEPARTMENT
The Management Accounting Department is responsible for preparing budgets

for each department and for every product. This department not only has to
prepare the budgets but also to control those estimates. That is why, this
department is also known as Budget & Control Department. All the work is
being performed at brand level in this department. Therefore, this department
is close in co-ordination with both the brand managers in the marketing
division and the people working in the factory on budget estimates. It is a
managerial accounting department making all important decisions like "make
or buy", decision by taking strict estimates of the products to be produced. It
is working close in co-ordination with the financial accounting department
whereas they are working with the actual figures and the budgeting
department analyzes the estimates
REPORTS PREPARED BY THE BUDGET AND CONTROL SECTION
This department prepares the Long Term Plan, which is an estimate for the
next three years, and it is for all the brand groups.
On the basis of long term plan, an Operational Plan is prepared which provides
estimates for the next one year
This process continues and the operational plan is prepared annually.
It prepares the product-wise Profit & Loss Accounts and verifies the costs.
This department controls factory costs through variance reports.
The Selling Price Calculations are also made in this department which verify
the ones already made at the factory level.
CONTROLS IMPLEMENTED
The budget and control section is responsible for the control of the following
expense items of the company.
Pricing structure
The pricing structure is prepared in collaboration with the Accounts Receivable
Section of the Finance and Control department. This pricing structure should
take into account the distributor and retailer margin.
Variance reports
Variance reports are prepared at the brand level and the differences between
the actual values obtained from the Financial accounting department and the
ones estimated in this section is measured.
Product fixed Marketing expense
Every brand is allocated an acceptable budget for making ,marketing expenses.
The budget and control department sets up suitable limits for these expenses,
so that the brands have an idea of how much expenditure they can sustain on
marketing.
(4.10)FINANCIAL ACCOUNTING DEPARTMENT
THE FINANCE AND CONTROL DIVISION at Nestl Milkpak is headed by the

Finance and Control Manager or popularly known as the FCM.
The FCM has six furture sections reporting to him. I was injected in it on the
first day after we took our letters from Human Resource Department. The Ist
remarkable achievement I found there was that customers were paying there
debts in advance. Which is not prevalent any where. It means that who
ever(TheDistributor) wants any product must pay for it, and inventory is
dispatched only on confirmation from the bank about the availability of
funds.The first achievement is amazing in itself because this phenomenon is
not taking place anywhere in the world..The financial accounting department
at Nestl was further subclassified in to threedepartments. These departments
work in close collaboration with other departments.The details regarding those
are on the coming pages.
(4.11)THE ACCOUNTS DEPARTMENT
Itis headed by the Financial Accounting Manager
The Accounts Department has three further Sub-sections namely the General
Ledger Department (GLD), Accounts Payable (ACP) and the
AccountsReceivable(ACR).
(4.12)SALES DEPARTMENT
The Sales Department is responsible for carrying out the sales of

Nestl confectionary covering the whole of Lahore. To conduct the
sales efficiently and effectively, there are some t e r r i t o r i e s t h a t h a v e
been assigned some area of Lahore. The area managers
a d m i n i s t e r t h e s e territories. Monthly, the Area Sales Managers are
assigned with the targets by the upper management.
MAIN STRATEGY OF NESTLE
Every organization has forms some strategy to follow. Therefore, strategies

adopted by Nestlthat have proved fruitful are as follows:
Consumer communication
Product availability and development
CONSUMER COMMUNICATION
With the help of electronic media, advertisements boards, banners, advertising

on newspapers, pamphlets, brochures, handouts and by the stall activity of
marketing department; tasteof the customer is developed and awareness is
brought among people about the healthy living thatcan be achieved by healthy
and delightful eating.
PRODUCT AVAILABILITY
From time to time activities such as area storming, discovering new places or
areas are beingdone. Thus, making the distribution equally available
everywhere
(4.13)GENERAL LEDGER DEPARTMENT
(GLD) the General Ledger Department at the Finance and ControlDivision of

Nestl Milkpak Limited. This is the most important sub-section of theFinancial
Accounting Department
FUNCTIONS PERFORMED BY THE GLD
This department performs a variety of functions, which are All Control

Accounts of the subsidiary ledgers of the creditors of ACP and the debtors of
ACR are handled at General Ledger Department (GLD), which acts as the
monitoringagent.All Inter Company Control Accounts are maintained at the
GLD. The Inter CompanyAccounts show the transactions being made at the
Sheikhupura Factory, KabirwalaFactory and the Milk Collection Centers.It
consolidates all accounts to make the final Balance Sheet and the Profit and
LossAccount for the company.It acts as the monitoring agent for the customer
allowances, product discounts andvolume discounts being offered on different
brands.
Nestl Fixed Assets Management, is handled at this section of the Financial
AccountingDepartment. A module called NEFAM (Nestl Fixed Assets
Management) is usedspecifically for this purpose. I will explain the fixed asset
management in detail in next coming pages.The transactions relating to the
fixed assets such as the calculation of the Insurance Valueand the Tax Written
Down Value is the responsibility of this department.Reconciliations are made
for the Product Fixed Marketing Expenses (PFME) and the Customer
Allowances (CA) etcVouchers are received from different departments like the
Treasury, the ACP and ACR for final posting and monitoring at the General
Ledger Department. Ledgers of all thesevouchers are maintained at the
GLD.Monthly statements are prepared.
CHAPTER 5(FINANCIAL ANALYSIS)
(5.1) BUSINESS REVIEW
MILK COLLECTION
The core raw material of Nestle Milkpak is milk. Over the last twelve years, the
Company's prime concern has been to improve the quality and volume of milk
for UHT processing and for other milk based products. Driven by its
commitment to quality and having realized that only self-collection could
eliminate its dependence on poor quality milk available from outside sources,
the Company successfully established its own collection system and expanded
its operations over a very large milk shed area in Punjab. Owing to this
tremendous growth in the volume of an extremely high quality raw milk, Nestle
Milkpak now produces a superior quality and better tasting UHT milk, with
longer shelf life. Today, Nestle Milkpak can boast of the largest milk collection
network in the country, unmatched in size, productivity and efficiency. Milk is
collected through a vast network of village milk centers (VMCs), sub-centers
and centers. At these centers, chillers have been installed to lower milk
temperature to 4C for preventing bacteria development during long hauls to
the factories, which are undertaken by a large fleet of specially insulated
tankers.5
In terms of quality, the milk collected by Nestle Milkpak is low in sodium, high
in fat and solid-non fats (SNF) and very low in Total Plate Count (TPC) which,
stated simply, means the bacteria count. This was achieved through a
comprehensive strategy and sustained efforts to overhaul the milk collection
process, intensive education program for the farmers and the milk collection
staff,up gradation of milk loading and transportation system, increase in the
chilling capacity and aboveall, adherence to the highest acceptance standards
at all milk collection points, including thefactories.As a service to farmers,
Nestle Milkpak has established an Extension Service, staffed byqualified
veterinary doctors, who assist them in vaccination and treatment of livestock,
improved breeding, good animal husbandry practices, provision of high yield
fodder seed etc. By taking professional help and guidance to their doorsteps,
which they otherwise find difficult to access,coupled with incentives and a good
and prompt return for their milk, Nestle Milkpak has created mutually
beneficial relationship with the farmers, which translates into opportunities of
economicuplift for the rural population. To promote milk production, Nestle
Milkpak is successfully promoting the use of molasses toenrich the fodder and
has arranged its distribution to farmers at cost.
PRODUCTION
As a consequence of joint venture arrangement between Nestle S.A. of

Switzerland and Milkpak Ltd. in 1988, the existing production facility of
Milkpak in Sheikhupura became a part of Nestle Milkpak.The Milkpak
Sheikhupura factory commenced operations in 1981 as a producer of UHT
milk.
By 1988, it had expanded its operation and was also producing butter, cream,
desi ghee allunder the brand name of MILKPAK and juice drinks under the
brand name FROST. To meet the demands of the large food market that
Pakistan offered, Nestle Milkpak reorganized and reinforced the production of
existing brands and gave shape to new production lines.The first to come was a
milk powder plant, which not only began producing NIDO in 1990 but was also
critical to the production of several milk-based products in the future. With the
installation of the roller dryer in 1990, the first such product to come was
CERELAC - an internationally recognized brand of infant cereal. This was
followed by LACTOGEN 1 & 2 in 1991.
The year 1992 saw the introduction of tea whitener EVERYDAY and milk
powder in bulk packing named GLORIA. MILO and NESLAC came under
production in 1994 and MILO RTD in1995. Local packing of imported coffee
under the name of NESCAFE 3 in 1 commenced the sameyear. In 1996, Nestle
Milkpak's first confectionery plant of POLO Mint was installed and the
production of NESTLE PURE ORANGE JUICE commenced. Packaging of coffee
under the brandname of NESCAFE CLASSIC was undertaken the same year.In
1997 NESTLE WHEAT and two variants of POLO viz. Strawberry and Orange
were introduced.
In 1998 a substantial capital investment was made to launch several products
and install two new state-of-the-art technologies. SWEET TREETS were
launched in early 1998. The addition of two flavors of POLO: Blackcurrant and
Strong Mint, increased the number of POLO variants to five. A new variant
Lemony was added to the range of popular FROST fruit drink flavors and a
new1-liter packing of FROST was introduced. Flavored milks under the brand
FRESH & FRUITY came under production on the new Tetra Filling Machine
equipped with the modern "slim" format. MILORTD and UHT Cream were also
shifted over to this new format.
A new flexible confectionery line enabled the manufacture of a wide range of
high and low boiled sweets and toffees, including TOFFO and two variants of
SOOTH- ERS' Menthol Eucalyptus and Honey Lemon. Nestle Milkpak also
contracted to supply dairy mixes to McDonald's, for its popular soft serves and
milk shakes. And to top it all, the most prestigious project, NESTLE PURELIFE
was also commissioned in December. Based on the latest water treatment and
bottlingtechnology, this marked the entry of Nestle Milkpak in the Pakistan
water market and that of Nestlein the world water market.The expansion of
high boiled sweet line continued in 1999 with the introduction of FruitDrops
and BUTTERSCOTCH.
The year 2000 saw the production of some exciting products. First came
NESCAFE FrothedOriginal, followed by its two other flavors: Mocha and French
Vanilla. NESCAFE Frappe RTD wasto come next. The fruit juice range was
expanded by the production of Mango and Orange- MangoMix. On the
confectionery side, TuttiFruiti was added under the umbrella of POLO and Wild
Cherrywas added to the SOOTHERS range.
The success of NESTLE PURE LIFE in PET bottlesencouraged the
commissioning of 5-gallon bottles production line for home and office in June.
Andthe last product line of the year to be commissioned in November was that
of NESTLE Plain Yogurt, a high quality product with special Stay-Fresh Seal.
To meet the needs of safe and quality storage for the ever expanding product
range and their volumes, a National Distribution Center (NDC) was completed
and became functional in June, 2000.Spread over 6614 square meters, it has
the capacity to store up to 8300 pallets (approximately 8000tons).
NESTLE POLICIES
Business policies will continue to evolve and adapt to a changing world,

NESTLE basic foundation is unchanged. The time of origin of their company,
and reflects the basic ideas of fairness, honesty anda general concern for
people. Nestl is committed to the following business policies in all countries,
taking into account local legislation
cultural and religious practices.
Nestls business objective is to manufacture and market the companys
product in such away as to create value that can be sustained over the long
term for shareholders, employees,consumers, and business partners. Nestls
does not favor short-term profit at the expense of successful long-term
business development. Nestls recognize that its consumers have a sincere
and legitimate interest in the behavior, beliefs and actions of the company
behind brands in which they place their trust, and that without its consumers
of the company would not exist.
Nestls believes that, as a general rule, legislation is the most effective
safeguard of responsible conduct, although in certain areas, additional
guidance to staff in the form of voluntary business policies is beneficial in order
to ensure that the highest standards are met throughout the organization.
Nestls is conscious of the fact that the success of a corporation is a reflection
of the professionalism, conduct and the responsible attitude of its
managements and employees. Therefore recruitment of the right people and
ongoing training and development are crucial.13
Nestls continues to maintain its commitment to follow and respect all
applicable local lawsin each of its markets.The policies formed by the Nestl are
for every employee of Nestl around the world. The Nestl brands follow these
above mentioned policies and does not make their ownpolicies. Members of
Nestl are strongly committed to the company, its development, its culture and
its policies. Apart from professional skills and insight, the capacity and
willingness to apply these policies are the main criteria for progressing in the
organization, regardless of origin, nationality, religion, race, gender or age
(5.2) NESTLE CONTRIBUTION TO OTHER SECTOR
ECONOMIC
Nestl Milkpak Ltd makes a significant contribution to the economic sector of

Pakistan. Through generation of tax revenue, import substitution of milk
powder, export and infusion of over 2.3 billion rupees in the rural economy
through milk purchases, the company plays an active role in promoting
economic growth.
Nestl Milkpak Ltd continues to make investments in expanding its production
lines as well as bringing in new technologies, affirming its faith and confidence
in the country's future.
SOCIAL
In the social sector, the company has created over 1200 permanent job
opportunities for the skilled, unskilled and professional manpower, apart from
hundreds of contractual jobs. It has also played a remarkable role in expansion
and vitalization of the dairy and livestock sector.
ENVIRONMENT
Another key area where the company is proud to have made a contribution in
the environment.By making available the processed and packaged dairy.
Nestl Milkpak has switched over its fuel supply from heavy fuel oil to gas, as
gas burns cleaner than heavy fuel oils. This drastically reduces gases such as
carbon di oxide and carbon monoxide from being emitted into the atmosphere
and keeps the emissions well below the legal limits.
Steps have also been taken to reduce raw water consumption for cleaning and
other purposes.
This positively impacts on the efficiency of waste water treatment plant, of
which BOD & COD is continually monitored by the engineering department.
All waste packaging material is weighted and this information is sent to the
management to challenge all departments and suppliers to improve the
operations. For example, engineering & production is encouraged to improve
the performance of the packaging machines and the supplier to improve the
quality of their material supply. Efforts to reduce the quantity of packaging
material used for our products, without compromising their quality of their
quality, have yielded remarkable results over the years.
Investments has also been made in a new waste incinerator in Sheikhupura
factory, which is environmental friendly and fitted with a gas burner that gives
off very low gas emissions into the atmosphere. This way tons of material is
converted into ash which is safer and easier to dispose off.
(5.3) NESTL RATIO ANALYSIS
Name of Ratios INTERPRETATION / COMPARISON OF RESULTS
Overall liquidity position of the company is not satisfactory as

LIQUIDITY its current, quick and cash ratios are far behind the level which
POSITION is considered to be the satisfactory level.
Current Ratio Measures the ability to meet current obligations in a timely

manner. A healthy current ratio is greater than 2 (Two)
Improve by: Increase current assets by increasing profit, selling
2011 0.94 additional capital stock, borrowing additional long term debt, or
disposing of unproductive fixed assets and retaining Proceeds.
Reduce current liabilities by retaining a greater portion of
2010 1.29 allocated savings. Avoid Financing non-current assets with
current liabilities.
Quick Ratio This ratio provides more secure position of companys current
assets available to discharge its liabilities in short period of
time. Quick ratio neglects the effect of inventories in current
asset as these are not readily convertible in cash. As
2011 0.56 inventories are sometime hard to cash so by subtracting their
effect from the current assets provide more realistic picture
regarding ability of the company to discharge its liabilities.
2010 0.76 Calculated ratio shows unsatisfactory result as 1:1 is
considered to be an idealistic ratio in this case.
Cash Ratio This ratio is the safest and pure form which indicates the extent
of companys cash can meet its current obligation. Cash ratio
considered only cash and bank balances + Cash equivalents
2011 0.27 and short term investments.
Nestle is far behind the satisfactory level. A good cash ratio is

2010 0.54 considered to be 0.50:1.
PROFITABILITY This section discusses the different measures of
RATIOS: corporate profitability and financial performance. These ratios,
much like the operational performance ratios, give users a
good understanding of how well the company utilized its
resources in generating profit and shareholder value.
The long-term profitability of a company is vital for both the

survivability of the company as well as the benefit received by
shareholders. It is these ratios that can give insight into the all
important"profit".
In this section, we will look at four important profit margins,
which display the amount of profit a company generates on its
sales at the different stages of an income statement. We have
calculated Return on Assets, Return on Equity and net profit
margin in this category.
Return on Asset This ratio indicates how profitable a company is relative to its
total assets. The return on assets (ROA) ratio illustrates how
well management is employing the company's total assets to
make a profit. The higher the return, the more efficient
2011 8.59% management is in utilizing its asset base. The ROA ratio is
calculated by comparing net income to average total assets,
and is expressed as a percentage
2010 8.13%
Return on Equity This ratio indicates how profitable a company is by comparing
its net income to its average shareholders' equity. The return
on equity ratio (ROE) measures how much the shareholders
earned for their investment in the company. The higher the
ratio percentage, the more efficient management is in utilizing
2011 16.80% its equity base and the better return is to investors.
Widely used by investors, the ROE ratio is an important

measure of a company's earnings performance. The ROE tells
2010 14.45% common shareholders how effectively their money is being
employed. Peer company, industry and overall market
comparisons are appropriate; however, it should be recognized
that there are variations in ROEs among some types of
businesses. In general, financial analysts consider return on
equity ratios in the 15-20% range as representing attractive
levels of investment quality
But ROE cannot be alone interpreted as debt effect on

company may produce results which are more volatile even
having high return on equity. Nestle ROE is satisfactory as it
falls in the ideal range of 15-20% in 2011 and almost in 2010.
Profit Margin Assuming a constant gross profit margin, the operating profit
margin tells us something about a company's ability to control
its other operating costs or overheads
Measures operating performance It can be improved by
increase margins, increase service fees, or reduce expenses.
In this Case Nestle has profit margin but profit margin indicates
that company should control its operating, selling, admin and
2011 11.72% cost of production expenses.
2010 9.73%
DEBT RATIOS: The third series of ratios in this tutorial are debt ratios. These
ratios give users a general idea of the company's overall debt
load as well as its mix of equity and debt. Debt ratios can be
used to determine the overall level of financial risk a company
and its shareholders face. In general, the greater the amount of
debt held by a company the greater the financial risk of
bankruptcy.
Overview of Debt will give a good idea of the different

classifications of debt. While it is not mandatory in
understanding the individual debt ratios, it will give some
background information on the debt of a company. The ratios
covered in this section include the debt ratio, which is gives a
general idea of a company's financial leverage as does
the debt-to-equity ratio while the interest coverage ratio shows
how well a company can meet its obligations.
Debt Ratio The debt ratio compares a company's total debt to its
total assets, which is used to gain a general idea as to the
amount of leverage being used by a company. A low
percentage means that the company is less dependent on
leverage, i.e., money borrowed from and/or owed to others.
The lower the percentage, the less leverage a company is
using and the stronger its equity position. In general, the higher
the ratio, the more risk that company is considered to have
taken on.
2011 48.92% The easy-to-calculate debt ratio is helpful to investors looking
for a quick take on a company's leverage. The debt ratio gives
users a quick measure of the amount of debt that the company
has on its balance sheets compared to its assets. The more
debt compared to assets a company has, which is signaled by
2010 43.93% a high debt ratio, the more leveraged it is and the riskier it is
considered to be. Generally, large, well-established companies
can push the liability component of their balance sheet
structure to higher percentages without getting into trouble
However, one thing to note with this ratio: it isn't a pure

measure of a company's debt (or indebtedness), as it also
includes operational liabilities, such as accounts payable and
taxes payable. Companies use these operational liabilities as
going concerns to fund the day-to-day operations of the
business and aren't really "debts" in the leverage sense of this
ratio. Basically, even if you took the same company and had
one version with zero financial debt and another version with
substantial financial debt, these operational liabilities would still
be there, which in some sense can muddle this ratio
Debt to Equity Ratio The debt-equity ratio is a leverage ratio that compares a
company's total liabilities to its total shareholders' equity. This
is a measurement of how much suppliers, lenders, creditors
and obligors have committed to the company versus what the
shareholders have committed
2011
0.95:1 or 95% To a large degree, the debt-equity ratio provides another
vantage point on a company's leverage position, in this case,
comparing total liabilities to shareholders' equity, as opposed to
total assets in the debt ratio. Similar to the debt ratio, a lower
2010 0.78:1 or the percentage means that a company is using less leverage
78% and has a stronger equity position.
The debt-equity ratio appears frequently in investment
literature. However, like the debt ratio, this ratio is not a pure
measurement of a company's debt because it includes
operational liabilities in total liabilities.
Nevertheless, this easy-to-calculate ratio provides a general
indication of a company's equity-liability relationship and is
helpful to investors looking for a quick take on a company's
leverage. Generally, large, well-established companies can
push the liability component of their balance sheet structure to
higher percentages without getting into trouble.
Nestls debt ratio of 95% seems less onerous which means

that creditors have more than one and half as much money in
the company than equity holders. Debt equity ratio of 1:1 is
considered good.
Interest Cover The ability to stay current with interest payment obligations is
absolutely critical for a company as a going concern. While the
non-payment of debt principal is a seriously negative condition,
a company finding itself in financial/operational difficulties can
2011 23.60 stay alive for quite some time as long as it is able to service its
interest expenses
The interest coverage ratio is used to determine how easily a

2010 14.67 company can pay interest expenses on outstanding debt. The
ratio is calculated by dividing a company's earnings before
interest and taxes (EBIT) by the company's interest expenses
for the same period. The lower the ratio, the more the company
is burdened by debt expense. When a company's interest
coverage ratio is only 1.5 or lower, its ability to meet interest
expenses may be questionable
Nestle has a satisfactory level of paying interest expenses out
of revenue. The ratio is also high with relation to its competitor.
INVESTMENT When looking at the financial statements of a company many
RATIO: users can suffer from information overload as there are so
many different financial values. This includes revenue, gross
margin, operating cash flow, EBITDA, pro forma earnings and
the list goes on. Investment valuation ratios attempt to simplify
this evaluation process by comparing relevant data that help
users gain an estimate of valuation
Earnings per share This ratio describes the overall performance of the company
and let its shareholders to analyze how well company is
performing. EPS is calculated by dividing profit after tax to
2011 weighted average issued share capital of company. Value
2.97 gives us information that one share of the company is entitled
to how much profit of the company. Idealistic EPS depends
2010 upon various factors such as political and economic conditions,
10.16 future plans of the organization and market behavior.
Ref: http://www.Nestl.pk/About-Nestl/Pages/FinancialReports.aspx
CHAPTER 6(EXPERIENCE)
Description of activities
My experience
I did my training in the head office at Milk Collection dairy development,

located at Upper Mall Road Lahore. The Nestl milk collection was established
in 1999 and started milk collection operations for Kabirwala and Sheikhupura
factory. I done my internship under my supervise M.RahelAslam and Amir
Nawaz.
I was assigned to the Accounts fixed assets management department under the
Finance and Control Division. My training period was spent learning the work
of all the sub sections of this department. Mostly section of my report focuses
on my training program and all the details regarding the " fixed assets
management department"in milk collection and dairy devlopment would follow
In that section.During my training, with the help of my bosses I visited every
department to get briefings regarding their work. This was essential to
understand how the working of every department helps all the others. All these
departments work in collaboration with each other.
Starting and Ending date of Internship is:
august 6, 2012 to october 6, 2012
(6.1) BRIEF INTRODUCTION OF ACTIVITIES PERFORMED DURING
INTERNSHIP
Duties
Give me task of file sorting (files of receivable notes)
Make phone calls and update the status of repaired machines
(chillers, generators, and stabilizers water pumps borings).
On excel make tally sheets and dispatch notes.
Enter entries of fixed asset and their location codes in SAP.
Mail tags of fixed assets to different regions.
Make MCE (milk collection executives) complaints lists on
excel.
Make sheet on Excel about Tankers repair in July 2012.
Entre serial number of bikes in SAP.
Make data base of transfer goods (year 2009, 2010) on excel.
Sorting of transfer good receipts(year 2011, 2012) and make
data base on excel.
Sorting of delivery Challans (Candy, UniTech)
Update data base of bikes with reference to the employee
numbers.
Recheck and mark good receivable notes and make summary
on Excel
Update addition fixed assets at different location on SAP.
Update data base of out of order transformer, meter and
approved value to repair them.
Make summary of repaired Cars and vendors name
Make phone calls and update status of repaired machines
DETAIL
I will tell firstly about the Milk collection and dairy development department
because I spent my most of time in this department
(6.2) Milk Collection and Dairy Development:
The Milk Collection and Dairy Development

Section is charged with purchasing the
milk requirements of the two factories.
This activity is pivotal to the success of the
Company and we have a large team of
dedicated staff located throughout the
Punjab and Northern Sindh, to achieve
this.
Milk is received into 3,000 Village Milk
Centers and a similar number of Chilling
Centers from where it is collected and
trucked to the factories in Kabirwala and
Sheikupura.
Nestl places great importance on the quality of the milk purchased and
extensive tests are undertaken at all stages of the purchasing chain. Only the
purest, unadulterated milk can be accepted for processing, which is the first
step to ensuring that every Nestl product is of the quality our customers have
come to expect.
NESTLE network of milk collection centers draws milk from an estimated

190,000.Nestl Pakistan is strongly committed to the development of the dairy
sector in Pakistan and we place great importance on the training and
development of all farmers, from the smallest to the largest. NESTLEtwo Large
Scale training farms are further testimony to sincerity in this commitment.
They are keen to interact with our suppliers current and potential, and
welcome every opportunity to meet customer needs.
Introduction to all MCDD Departments
Milk collection operations
Agri Services
Finance and control
Human resource
Large farms divisions
Fresh milk transport
Milk collection operations:
Nestl is one of the leading Food, Nutrition, Health and Wellness Company.
Milk Collection Dairy Development Operational team is committed to
implement the guidelines and procedures in accordance with Nestl standard
to ensure workplace safety, food safety and regulatory compliances.
Consumer Trust and preference is their priority and team always work for
continuous improvement to keep continue our journey towards Zero Waste.
Agri services:
Achieving sustainable milk growth through happy producers while helping

country to become the best in class in dairy industry is their mission
continuous knowledge transfers to farmer families, implementation of best
farm practices, disease control, breeding and feeding are their strategic pillars
Knowledge transfer to farmer families through training at farms, farmer
meetings, farmer demonstration days, increase traditional farm size to large
dairy farms, encourage best farm practices implementation by coaching at farm
level, introduce commercial farm inputs through private channels (AI,
mechanization, etc.) are our tools.
It is all aimed in order to cater for the increasing demand and requirement of
better quality milk that will also help to make farming more economical and
sustainable. And not only this, but also help achieve sustainable milk growth
and build farmers trust in Nestl.
Finance & control:
The main roles of the Finance and Control team in Milk Collection & Dairy
Development are to provide co-pilot support to management on all aspects of
MCDD operations, monitor & control expenditures against budgets, ensure
accurate and timely payments to all vendors including milk suppliers &
transporters, enhance operational efficiencies through effective cost
optimization initiatives, ensure compliance to standard operating procedures
and standing instructions and do all this and more while ensuring that the
core function of the department, that is to fulfill the companys demand for
fresh milk is not impaired in the process.
Human resource:
The Human Resources Department is committed to developing employees,

the ability to deliver sustainable results while adhering to our values; to
strive for flawless execution and encourage a high performance culture. In
addition, through our Milk Collection trainee program they are actively
developing future leaders with an intensive and broad introduction to the
many facets of Nestl Pakistan Ltd.
Team of 514 permanent and 520 contractual staff is dedicated to collecting
quality Milk from an area of 146,000 square KMs. They recognize the great
efforts of this large field team to collect high quality milk, and to work to
encourage and develop our farmer suppliers on a daily basis. Nestl Pakistan
Ltd has a vital role in enhancing the quality of life of the people of Pakistan and
especially the lives of small farmers throughout the rural areas. The Creating
Shared Value (CSV) projects undertaken through Milk Collection are testimony
to our sincerity and commitment to development of the dairy production sector.
Large farms divisions:
In February 2007 Nestl Pakistan took the bold initiative to import 100 exotic
cows from Australia which set the trend for a new phase of dairy development
in the country. This was the birth of the Large Farm Development department
in Milk Collection and Dairy Development with the aim to encourage and
attract new investments into corporate dairy
farming. Although the main source of milk supply to factories is from the
traditional farmer, the local dairy industry is in great need of superior genetic
high milk yielding animals to satisfy the huge demand of the future. A
demonstration and training farm, called Sarsabz at RenalaKhurd, has been
established at the same time where four breeds of imported animals are kept to
demonstrate the potential, local experience and evidence of the successful
maintenance and management of exotic cows. This initiative has
simultaneously contributed to the establishment of a number of large farms
having more than 1000 animals producing more than 20 tons of milk per farm
per day.
Services provided by this department includes a range of assistance such as
land selection, feasibility studies, linkages with animal importers and dairy
equipment suppliers, shed layout as well as technical support regarding
nutrition, breeding, farm economics, monitoring and evaluation and many
more. They believe that with this foundation, large scale dairy farming will
become more attractive and successful which will not only provide new
business opportunities but also satisfy the needs of consumers for good quality
dairy products.
Fresh Milk transport:
NESTLE is committed to prove Fresh Milk Transport Operations as a

competitive advantage for milk procurement operations, with safety at number
one priority. Efficiency, reliability & sustainability are our strategic pillars for
continuous improvement
Their project Safar Bakhair which won the Nestls Global Gold Award for
safe journey in 2010 (Fatality free year) and has been declared a bench mark
for the worldwide Nestls supply chain operations in 2011. Pakistan has also
got the honor to host two absolutely successful internal workshops on road
safety in 2010 and 2011
In the meantime Fresh Milk Transport Team is engaged with various projects,
among them Sales Tax refund initiative was declared a Super Star initiative in
2010.
NESTLE is confident that their project of fleet management through Satellite

tracking is another revolutionary step towards efficiency and sustainable
savings and will make them proud in next year as well
(6.3) NESTL PAKISTAN HIERARCHY CHART(MCCD)
(6.4) FIXED ASSET MANAGMENT
In milk collection dairy development my major work was in fixed

assets management thats why I am going to explain fixed asset
management.
FIXED ASSET MANAGEMENT
NESTL FIXED ASSETS MANAGEMENT (NEFAM)
Definition of Assets
Assets are economic resources, which are owned by a company and

expected to provide benefit in future operations.
I. Replacement and Rationalization: This consists of replacement of

existing obsolete assets, rationalization, safety, protectionof the
environment, energy saving and similar motives.
II. Capacity Increase:Increase of the existing production capacity for
products already manufactured in themarket concerned are included
in this group of investment. The replacement of existing production
related equipment may bring an increase in capacity.
III. New Products: It consists of proposals for installations required for
the manufacture of products, whichare not yet manufactured by
Nestl Milkpak Limited. Additionally, it also includes proposals related
to products already manufactured that will undergo significant
changesin
the product quality
the packaging presentation/material
TYPE OF INVESTMENT
There can be six types of investments according to the Nestl Milkpak
guidelines. The NEFAM module has allotted numbers 1-6 for these
investments:
Land
Building
Machinery & Equipment
Tools & Furniture
Vehicles
Information System
LAND:
It includes the value of the following:

land, developed and undevelopedleveling and tracing of land
Land improvements such as roads, railway lines, parking lots, outdoor
illuminations, water treatment installations, walls, reservoirs, fences,
sewers etc. Land improvements such as roads, railway lines, fence,
etc. will be registered as buildings. The value of the land as such
must be separated from that of the buildings.
BUILDINGS
Under this type of fixed assets are recorded the following values:
Administrative buildings (head office), warehouses and sales offices
including the cost of sanitary, electric and sewerage installations.
Production centers (factories) including the cost of sanitary and
sewerage installations and sub structures to take production
machines. Housing including cost of electrical, sanitary and heating
installations. Buildings under construction including progress
payments to construction enterprises are also shown under this
heading. A building constructed on lease hold land is also included.
MACHINERY AND EQUIPMENT
This type of investment covers machinery and equipment for

production and general services as well as production equipment
including data processing equipment related to
process control systems and process management.
TOOLS, FURNITURE & OTHERS
It comprises in particular all the furniture of the administrative

buildings. Also tools, point of sale frozen food and ice cream cabinets,
cabinets for chilled products, forkliftsand indoor vehicles etc. the
furniture is capitalized in individual units.
VEHICLES
It Covers cars including those used for advertising, trucks, trailers,

railway wagons, boats,airplanes etc.
INFORMATION TECHNOLOGY
This concerns hardware i.e. data processing, information storage,

office information and professional workstations as well as
telecommunications located at Head Office, factories, warehouses,
sales offices and other sites. Software concerns purchases of computer
programs or packages in connection with a hardware investment. SUB
TYPE OF INVESTMENT/ ASSETS
1 = Land
1.1 Free Hold Land
1.2 Lease Hold Land
2 = Building
2.1 Industrial Building on F.H.L
2.2 Industrial Building on L.H.L
2.3 Office Building
3 = Plant & Machinery

3.1 Machinery and Machinery Equipment
3.2 Milk Tanker
4 = Tools/ Furniture
4.1 Office Equipmen
t4.2 Air Conditioners and Refrigerators
4.3 Miscellaneous and Workshop Equipment
4.4 Electric Equipment
4.5 Laboratory Equipment
4.6 Furniture and Fixtures
5 = Vehicles
5.1 Motor Cars
5.2 Lorries, Jeeps, Pick-ups
5.3 Motor Cycles
6 = Information TechnologyEquipment
6.1 Computer and Software
6.2 Telephone and Communication
TEN DIGITS INVENTORYNUMBER

A ten digit inventory number is used for marking all the assets e.g.
First two digits used for year of purchase of particular assets.
Third digit used for type of investment
Fourth digit used for sub type of investment
Fifth digit is spare for future allocation.
Six to nine digits used for fixed assets inventory serial.
Tenth digit used for child assets.
PROCEDURE FOR ADDITIONS OF ASSETS
Capital Investment Budget
The ensuing departments or divisions will send their asset

requirements (including specifications, drawings and all technical
details) to their respective divisional heads. The divisional heads will
approve the asset requirements if they are essential to the proper
operation and growth of the business. The assets are presented to the
Managing Director for approval in a joint meeting of the MD, FCM, CE,
and MM. After being approved by the MD each individual asset
requirement will be termed as Investment Proposal. These approved
investment proposals will be consolidated in the Investment Budget by
the CEfor the presentation of the Capital Investment Budget
Capital Expenditure Proposal
Once the Zone Manager at the Center has approved the Investment
Proposal, it becomes a credit. The Zone Management will allocate a
number to each credit. This credit number will be called the Capital
Expenditure Proposal (CEP) number, which is to be used fromthen on
in the concerned reporting and requests for issuance, allocation and
consumptionof funds. MD will communicate the approved budget to
the CE. The CE sends theapproved CEP's to the concerned Divisional
Heads, who transfer the relevant CEPnumbers to the concerned line
managers.
Budget Release by Managing Director
The MD will officially release the approved budget against each CEP
number on a need basis. Purchase Orders will be considered valid
only when they are raised against a budget release, for which the MD
has issued a written authorization to this effect.
Purchase Proposal Request
For all fixed assets purchase an authorized Purchase Proposal

Request has to be issued bythe person in need or responsible for the
availability of materials as the case may be.
Cash Requirements Summary
For cash flow purposes, CE will prepare a summary of cash

requirements on a monthly basis and send it to the treasury manager
for arranging funds.
Completion Certificate
For a production related asset addition a Completion Certificate (CC)

will be used tosignify the closure of the physical and financial
requirement of a project on a given date.
For a non-production related asset addition a completion certificate
will be used tosignify the physical delivery and transfer of ownership
of an asset to the company. For alltypes of assets, the CC will provide
the allocation of the expenditure incurred, startingand completion
date and comments of the originating and executing department.
Asset Number Allocation
The asset numbers will be in accordance with the NEFAM software

requirement. TheGLD will be responsible for allocation of the asset
numbers to the additions in fixedassets. The material of different
types of Asset Number Tags (ANT's) and responsibilityfor their
purchase and physical tagging is also the responsibility of GLD.The
ANT's for machinery will be made of aluminum and riveted to the
machinery at aspot, which is safe from the environment and
maintenance point of view. The ANT's for furniture will be made of
adhesive laminated paper and pasted onto the furniture at a
spot,which is safe from the environment and maintenance point of
view.
Transfer Certificate
The transfer certificate will be used to signify the shifting of an asset

from one cost center to another or from one location to another. It will
provide the asset number,categorization of the investment, physical
location and reason for transfer of the asset. Allthe transfer
certificates will be prepared by the sending department or cost center.
Deletion Certificate
It will be used to signify the retirement of an asset from active

utilization and official book of accounts of the company. It will provide
the asset number, categorization of theinvestment, physical location
and reason for deletion of the asset. The Minimum ResidualValue is
suggested and verified by concerned authorities on the Deletion
Certificate. It is based on the expected market value of the deleted
asset.Sale of Production Asset in Cut Parts or Single UnitAt time of
deletion, it is also decided whether the asset will be sold by weight as
scrapafter having it cut in small parts or as single unit. If the nature
of the asset is such that itcan be used by the buyer to make a product
which can potentially compete with existing Nestl products available
in the market then it will be sold as scrap in the form of cut parts. On
the other hand, if the threat of production of a potentially competitive
product isnon-existent then the asset will be sold as a single unit.
Utilization of Part of Deleted Asset
At the time of deletion, it is also decided whether any part of the asset
(e.g. pipe, pump)which does not have any identifiable cost or book
value, can be utilized for anyoperational activity in the Company.
Sum Insured
Sum Insured represents the value calculated by the company for each
asset as to be provided to the Insurance Companies to get the asset
insured. This value should beappropriate enough to cover the market
price of an asset over its useful life.
Fixed Assets Register Structure
The fixed assets register in the NEFAM, has the following particulars,
regarding eachasset
Establishment Code
Cost Center
Line Number Assets Number
Type of Assets
Date of Purchase
Date of Completion
Purchase Price (Gross Book Value)
OVERALL APPRAISALS ABOUT MANAGEMENT
There are sets of policies which are uniform for everyone and strictly
enforced. The procedure for policy formulation is transparent; where
everyone is given a chance toexpress one's opinion. The ultimate
approval is given by the Chief Executive. Policies areformulated in the
various meetings as outlined below.Regular meetings are organized at
each level of the organization to keep the company moving in a
systematic manner. The main objective behind these meetings is to
bringforth the employees at a forum, where they can discuss their
problems, give suggestionsfor improvement and development. Also
they can share their experiences with each other.Some meetings are
held at periodic basis which are necessary to keep a check on the
a tough task of managing the people and making them adapt to the
culture the Nestlteam wants to incorporate in the company. No
formal data could be obtained on the managerial style for managers at
Nestl Milkpak, the following detail rests on my personal
observation.The relation observed by me, of the managers at different
levels with their sub ordinateswas that of an "open-door policy". The
key to success in managing a diverse work groups encouraging open,
two way communication. The employees of a particular department
and the organization as a whole knew that not only are they valued,
but their opinion is also welcome. The more they feel that their input
is valued, the greater the sense of ownership they'll have in their
department's mission..Therefore, it can be said that a "democratic
style" of leadership was observed at the organization. This style
describes a leader who tends to involve sub ordinates in decision
making, delegates authority, encourages participation in deciding
work methods and goals, and uses feedback as an opportunity for
coaching. The use of feedback was a very important element observed
by me during my training. Being an internee, I was also asked by one
of my department heads to give a feedback stating the good and bad
points of the employees I was working with including the
Inchargehimself.Such elements, go a long way in the success of a
large scale and diverse organization like Nestl Milkpak Limited and
the appropriate management style is mandatory in the achievement of
targets for the company. Managerial policy guidelines are made in
consultation with the senior executives of the company. "A Policy and
Procedure Forum" is held for the line managers who areresponsible to
implement the policies approved in their respective departments. If
anychanges are made regarding the policies or procedures, it is the
responsibility of theHuman Resources Manager to convey the change
to the line managers. Apart from the policies, the managerial styles
vary from person to person
CHAPETR 7(LEARNING)
(7.1) KEY LEARNING:
During my training session I learnt that Nestl organization is well organized

and having structure of working in line, job description and well experienced
employees.
Employees are living on HR base standards to meet a society of developed
country.
Here I learn the importance of Microsoft excel and SAP (systems applications
process) a data processing system in cooperate sector. Learn how to deal with
people and how to take work from them.
Also observe the office environment and learn many things like be punctual,
respect others ,done all given tasks in a given time period, make daily or weekly
objectives, have ability to work also out of your scope and be honest with your
duties.
(7.2) PERSONAL LEARNING
Personal learning is a moral and ethical obligation set by a person to

move in a smooth way to present and future.During the internship I
realized following duties.
Cohesiveness
Ever Ready For Challenges
Broad vision
Learning From Cradle To Grave
Always Create Opportunities
Open Communication With The Boss
Appearance
COHESIVENESS
A team player can achieve more than an individual. Good coordination

and cooperation with peers and other staff members can impulse a
person to perform better in difficult situations. Duringmy internship I
noticed that the degree of cohesiveness among the nestle employees is
high, that iswhy nestle is achieving its target quite efficiently
.
EVER READY FOR CHALLENGE
If a person can handle problems and challenge adequately, he can

grow especially inmarketing field where every thing is presently
dynamic.
BROAD VISION
THINK BIG
Think positively to avoid any kind of discrepancy and hurdle in your
task. Positive thinkingand broad vision helps you to achieve some
thing different and new.
LEARNING FORM CRADLE TO GRAVE
Latest researches and journals can be very helpful in order to
generate new ideas.At nestle, Sales department offers many new
courses to the employees to upgrade their knowledge.
ALWAYS CREATE OPPORTUNITIES
Dont wait for opportunities always create opportunities

Time & Tide Waite for None
If you are able to create opportunities, success is yours. Now the
question is how?The answer is very simple, by generating new and
useful ideas for the organization.
OPEN COMMUNICATION WITH YOUR BOSS
To avoid any kind of misunderstanding with your boss, communicate

freely with him. During my internship I analyzed that;
People dont leave the organizations they leave their bosses
So be friendly with your staff and boss and communicate freely to
avoid organizational switching.
APPEARANCE
Treat your self as a productAttractive appearance can be very useful to

impress others. A professional should be dressedup properly to influence
others
(7.3) PROFESIONAL LEARNING
My supervisor, AMIR SB , was so great during my internship. He gave

me tasks to work on and trusted me enough to complete them in a
timely manner without having to micromanage me. MY internship has
helped me figure out what type of management style I would like to
adopt for myself in the future. It was really refreshing being in a
professional environment where my supervisor was cool enough to
trust me to do the tasks laid out for me, without having to breathe
down my neck to make sure I was doing them. I had a lot of freedom
and it felt really nice.
Completing my internship NESTLE has helped me by showing me how

I act when put in a professional environment. I have a great work
ethic and it was nice to put that to use. It also helped me by
confirming that a management position would be great for me, since
its been so hard for me to choose what Im really interested in doing
for a career.. Ive always had a general idea of the area I want to go
into, but never specifically what I would excel at. Now that Ive gotten
the amazing opportunity to test out all of the skills Ive learned while
being in school, the idea of being a manager has proved itself to be a
great idea for me. Im organized, my ideas are well thought out, and
Im now confident that I would be a good candidate for any Financ
position in industry.
The internship program at NESTLE has also been such a wonderful

experience. I was always informed of what was expected from me
throughout the process, and was never kept in the dark about when or
what assignments were due. Both the internship coordinators at
NESTLE and my internship supervisors have helped make this
experience relaxed, insightful, and an all around great experience to
prepare me for my future in the music industry
CHAPTER 8(RECOMMENDATIONS)
(8.1) RECCOMENDATIONS FOR NESTLE
Following recommendations are based on my observation during my tenure of

internshipat the organization and others have been given after talking to people
over there and after several discussions to my mates from IBIT.
Basically we were Finance Internee and spent our most of time in

finance section, but I am thankful to Mr.Amir because of him we made
several visits to Marketing division. I found that people working in the
finance divisions are bit depressed about there career ladder and their
promotional incentives. Although generally the employee satisfaction
was observed to be at a higher level in both the Finance and Marketing
and Sales Division. Still people at marketing are more well off than
people working in finance department.
Finance department is ok as far as employee turnover is concerned,

marketing is goodas well, just as I have mentioned that employee
satisfaction is higher at marketing side. The problem I found was the
human resource coordinator dontwant to talk to anyone whom he has
hired or recommended to be hired. To me the HR should is responsible
for not just hiring them but keep a close eye on the working of
employees, their satisfaction, their problems and about their every
requirement. Thereshould be a close feedback mechanism for seeking
what the employee is thinking.I have talked to almost all of the brand
managers, to my surprise they are just targeting the A class consumer.
And they are not thinking of lower classes. I wonder why? My suggestion
is to target B, C and D classes. By this I mean that they should inject
this thinking in product design phase not just in marketing planning
phase. You can earn more by increasing volumes and turnover
Nestls products are accepted all over the world, but it doesnt mean
that there is no threat of extinction; well most of the products which are
launched in Pakistan are in the same form as in any European country.
I mean to say that there is lack of research on part of people who make
feasibility study for launching a product. One example of such products
is Maggi Noodles, the product is doing very badly in market, and it is
anticipated that the plant might will be complete in year or two. Another
example is of Fruit yogurt, although the Nestl brand has attracted
initial boost for the product, still the response from the repeat buyers is
very bad, that is there are mostly one time buyers for this particular
product. Well the Nestl says that it has targeted children with this
product,one should come up with that why would a child should opt for
Yogurt if he can get WallsIce cream from Unilever?
Nestl has launched products which are under the same product
category and thuscreating competition among themselves. Like Frost,
values added fruit juices and PureLife.
Although the employees in Finance and Marketing department are quite

satisfied with the work environment, the problem is in their financial
incentives. Along with their monetary compensation for good
performance there should be a continuous raise in basic pay so that
they feel more attracted towards their job. I suggest the incentive wage
system for the marketing people so that they hit targets more regularly
then they are doing now. Employees should be trained according to
the changing standards of the organization.
Company should conduct survey from time to time to according to which

changes can be introduced in the organization to stay updated in the
market.
They should introduce creativity into the work, so that the employees can
do their work active mindedly.
Employees should be given compensation in order to keep them loyal.
Employees should be more involved in decision making to become more

differentiated.
Company should provide incentives to shop keepers.
More effort needs to be put in to capture a greater share of the milk

market in Pakistan.The ratio of processed milk to the whole milk market
is extremely low. The existing system of milk collection and the services
being provided to farmers should be expandedto build the market share
in the milk market
Prices of dairy products, I admit that there is very little room for
improvement but still it can be lowered down. Pakistan is a market of 20
billion liters in which only 3 billion liters is covered by all companies
providing tetra pack milk (Nestl covers 60-70 %). So we should improve
our markets, in such a way that we can cover our reduced profits by
increasing our volume
(8.2) RECOMMENDATIONS FOR IBIT
The method of teaching is more practical based rather than theoretical.

By doing this students gain more and more practical knowledge of
business and IT world. Students learn more easily from practical
approach and it is long lasting knowledge.
Hire more good faculty of IT so that students attract towards IT.As BBIT
is the combination of business and IT so both are equally important for
the department but there are just few teachers of IT which teach all
courses. So by hiring new It teachers raises the standard of our
department in IT.
Also hire more permanent faculty in department. Permanent faculty

increases the worth of department and teaching standard as permanent
faculty is well aware of the department and all the students so they
understand the students more rather than visiting faculty. So there is
more permanent faculty.
IBIT must make better links with companies, as most of the students
couldnt find internship by themselves and even if they found, they were
not well reputed companies.
It must advertise their institute and should struggle to make it a brand
IBIT must have better relation with their alumni so that they can help
students in their careers.
It must have diversity in its faculty as one batch is taught by the same
teacher almost in every second semester.
It must encourage its students to participate in extracurricular activities

like in intra-universities competition.
The evaluation system of teachers must be taken seriously as teachers

know that no one will bother about it.
(8.3) RECOMMENDATIONS FOR INSTITUTE (NEXT INTERNSHIP
IN ORGANIZATION)
I recommend this organization for the next upcoming internees on following

reasons:
Very friendly learning and competitive atmosphere of organization. By

working in this organization I feel so good and learn so many things of
business and practical world which are so fruitful for me and also to
upcoming internees in this organization. So this is very good organization
for internship.
All employees are so cooperative and ready to tell everything about their
work. Doing work in NESTLE is really a good experience as all employees
are always ready to answer all your questions frequently and give you
more and more work so that you can handle all this. So this is good for
upcoming internees there as they clear all their ambiguities.
In these organizations different small tasks or assignments are given to

group of internees so that they can themselves solve it and present it in
front of top management. By doing this confidence and courageness
increases in the students and they start believing on them that they can
do good in business worlds it is another very good thing for the upcoming
internees.
CONCLUSION
Last of all I must THANK IBIT once again for providing me the golden
opportunity of spending 9 weeks in such a wonderful place where most people
can only dream of. I have talked to almost all of my class fellows about their
internship experiences and I have concluded that I am most fortunate to be at
Nestl.It was an experience of life time. For the first time I got the chance for
applying what Ihave learned over the years. I got the chance of sitting among
the ideal sort of people, professionals whose names are engraved as pioneers
and geniuses of the field. This internship program is the SPIRIT of all the
courses at IBIT. I learned about meeting and dealing with people. Working in a
group is itself a very thrilling experience because it makes you feel more
important. I learned here will definitely will be significant improvement in my
future professional life.I end my report here by again thanking Allah Almighty
who gave ability to complete this tedious task and all other people who have
helped me in this venture.
REFERENCES AND SOURCES FOR REPORT:
I have collected all the data from the following sources,
http://www.Nestl.pk/Pages/Nestl.aspx
http://www.Nestl.pk/About-Nestl/Pages/About-Nestl.aspx
http://www.Nestl.pk/Brand/Pages/brands-main.aspx
http://www.Nestl.pk/ABOUT-NESTL/Pages/MilkCollection.aspx
http://www.Nestl.pk/About-Nestl/Pages/AgriServices.aspx
http://www.Nestl.pk/About-Nestl/Pages/FinancialReports.aspx
Zindagi monthly magazines
Supervisor and employees RaheelAslam& Amir Nawaz
http://www.nestle.com/Pages/Nestle.aspx

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EXECUTIVE SUMMARY

Vision statement, Mission statement,how NESTLE is perfroming in pakistan ,its

1|Page Internship Report

Nestle is the world's leading nutrition, health and wellness company.it is

Food & Beverages

(1.4) CORE VALUES

(1.5) GOALS AND OBJECTIVES OF NESTLE

To be the best & quality brand in Pakistan

(1.6 )PRESENT BOARD OF DIRECTORS

Name Member Nationality

3|Page Internship Report

Nestl is dedicated to providing the best

Throughout their lives,throughout

4|Page Internship Report

The Nestl global vision is to be the

5|Page Internship Report

Baby foods Cerelac, Gerber, Gerber Graduates, NaturNes, Nestum

Chef, Chef-Mate, Maggi, Milo, Minors, Nescaf,

6|Page Internship Report

7|Page Internship Report

1. Nutrition, Health and Wellness

2. Quality assurance and Product safety

4. Human Rights in our business activities

5. Leadership and Personal responsibility

6. Safety and health at work

7. Supplier and customer relation

8|Page Internship Report

We are committed to the sustainable use of water and continuous

9|Page Internship Report

(2.1) NESTL IN HISTORY IN PAKISTAN

(2.3) FACTORIES IN PAKISTAN

Nestl has four factories, producing many products in Pakistan, situated in

(3.1) PEST ANALYSIS:Analysis Of External Environment

Analysis Of Internal Environment:

HIGH QUALITY PRODUCT:

WELL DEVELOPED STRATEGY:

GOOD MARKETING SKILLS AND SERVICES:

RESEARCH & DEVELOPMENT TEAM

LESS DISTRIBUTION CHANNEL:

MORE CONCERNED ON PROFIT:

SUPPORT FROM FOREIGN INVESTORS:

ENHANCE DISTRIBUTION CHANNEL:

CHANGING SOCIAL TREND:

INCREASE IN COMPETITION AMONG COMPETITORS:

UNFAVOURABLE CHANGES IN COSUMER DEMAND:

LOSS OF MARKET SHARE:

WHAT MAKES COMPETITIVE

COMPETITIVE EDGE OF NESTLE

PRODUCT DIFFERENTIATION STRATEGY

Organizational structure is the formal framework by

ORGANIZATIONAL STUCTURE OF NESTLE IS HIRARICHAL:

(4.1)HUMAN RESOURCE DEPARTMENT OF NESTLE PAKISTAN:

The main objective of HR department in Nestle is to meet company needs of the

HUMAN RESOURCE PRACTICES

The concept of having a Supply Chain Department is a new one in Pakistan.

Functions of the Supply Chain:

The Marketing Department is responsible for all sort of activities

External financial relations for Nestl Milkpak are:

Following is the structure of the Treasury Department at Nestl Milkpak

(4.5)CORPORATE PURCHASE DEPARTMENT

Corporate Purchase department at Nestl Milkpak Limited responsible for

Local Purchase Departmen

LOCAL PURCHASE DEPARTMENT