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Unilever Pakistan by Alam Zeb Khan
From reports1 (reports)
Processed on 2014 06 26 18:48
PKT
ID: 436790496
Word Count: 6280

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paper text:
Chapter 1 Introduction to the Report 1.1 background of the Study The largest Multinational Fast Moving
Consumer Goods company in Pakistan that have six operating companies inside the company in different
areas of the country. Unilever serve the day by day

1needs of the consumers for foods, hygiene and good looks through
well-known products and services that deliver

to their consumers best worth and value. The quality of products and services maintain the interest of their
consumers. Unilever Pakistan has developed the Research and Development department to maintain and
improve the quality of goods. They always ready to accept the challenge and established excellent
competent environment in the market that develop my interest to do internship with them. 1.2 Purpose of the
Study Purpose of doing internship is requirement of degree program for BBA, where students are supposed
to do the practical analysis of what they studied in their specialization subjects and all these analysis are
then supposed to submit in the form of report. Finance is an important field to study, because it deals with
the supervision of the money, a subject of central concern to every business, government agencies, or
nonprofit & non government organizations and indeed every individual, knowing how the financial world and
Businesses operates. 1.3 Scope of the Study Internship time allowed me to join Unilever Pakistan is of six
weeks. During this short period, I deeply studied how to manage financial records within different
departments. Financial records are very important for any multinational company. Having idea to manage the

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different departments financial records provide me the best opportunity to learn and made me able to join
any company with experience of Unilever Pakistan. 1.4 Limitations of the Report Lack of time is the biggest
limitation, because 6 weeks are not enough to analysis big organization like Unilever, employees are much
engaged with their work, much work load on them its difficult to extract information from them in limited time.
As a student internee lack of knowledge in technical field is another big constraint to tackle with the
professional. Another big problem for me in my time period of internship is that they are transforming their
system from MFG to SAP; it creates more difficulties for me. Internship students are not allowed to retrieve
and used any confidential material for any purpose, as it is against the company policy. The study may not
include the broad experience of facts and figures due to the nature of the study. 1.5 Merits of the Report
This report consist of financial analysis of Unilever Pakistan, inside financial analysis the horizontal and
vertical analysis are done along with analysis of ratios that makes the report helpful for any student to study.
Financial analyses show the vertical and horizontal analyses. In the vertical analyses each asset is shown
as the percentage of the total assets and liabilities. Horizontal analysis provides with a way to judge against
numbers from one period to the next, using financial statements from at least three different periods. Each
line item has an entry in a existing period column and a period column. Those three entries are comparing to
show both the dollar differentiation and gain change between the three periods. At the end of the report the
details is compiled and give some recommendations. 1.6 Methodology of the Report 1.6.1 Secondary
Sources In secondary source, I have taken information for report writing from annual reports of Unilever
Pakistan and other information from the following; ? Annual Reports 2011, 2012, 2013 ? Interne 1.7 Scheme
of the Report This internship report Contain five chapters as; ? Chapter one includes backdrop, function,
range, boundaries and tactic of the Report. ? Chapter two includes background and the past of Unilever
Pakistan, roles, functions, branches and the goods create by the company. ? Chapter three includes myself
as an internee in Unilever Pakistan ? Chapter four includes the financial analysis and the SWOT analysis of
the company. ? Chapter five includes the conclusion and recommendation section of the study based on the
analysis in previous chapters. Chapter 2 Introduction to Unilever Pakistan The Unilever Pakistan Limited
was established in Pakistan in 1948, in the township of Rahim Yar khan was the site chosen for setting up a
vegetable oil factory. The company is devoted to assembly the everyday needs of people all over in
Pakistan.

1Around the world Unilever foods and home personal care brands and
other goods are chosen by many millions of entity clients every day. Earning

their

belief and collecting

1their daily needs are the domestic tasks of Unilever local branches. They

bring to the service of their consumers, the best in brands and both
Unilevers local and

worldwide knowledge. The Unilever

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2head office was shifted to Karachi from the Rahim Yar khan site in the

mid 60s. The

company keeps the top position in most of its core home and personal care and food items. The company
operates throughout five area offices, four wholly owned and one third party developed sites across
Pakistan. 2.1 Historical Background of Unilever Unilever Pakistan limited

1is the member of Unilever PLC London. It was formed in 1930; when the

Dutch margarine company margarine Unie merged with British soap make
Lever brothers. Companies were opposing for the same raw material, both
were concerned in large scale advertising of household products and both use
similar supply channels. Margarine Unie grew through mergers with other
margarine companies in the

1920s. Company

1established soap factories around the world in 1917, began to expand into

foods, acquiring fish, ice cream and canned foods

dealing. Unilever Pakistan Limited was built-in in 1948

1under the name of Sadiq vegetable oil and Allied industries in the state of

Bahawalpur, Rahim Yar khan. The factory begun to work in 1949. The first
cotton seed was made in 1951. The production of Banaspati Ghee and Lux
toilet soap was started in 1952 and 1954

correspondingly. Being a worldwide company, it

1is listed in all three stock exchanges Karachi, Lahore and Islamabad. The

69% shares of the company are detained by the mother Unilever and the
remaining 31% are owned by financial institutions. The company has more
than 3000 employees in Pakistan

and a high professional administration that leads the company unbeaten in Pakistan. 2.1.1 Present Status

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Unilever

2brands are trusted all over and by listening the people who buy them, they
are grown into one of the world most successful consumer s goods

company around the world.

2In fact, 150 million times a day, somebody someplace chooses a Unilever

product.

Unilever creates the marketplace and give out the product

2that people choose to provide for their families and keep themselves and

their homes clean and

bright. The company

2aim to help people in their daily lives, so they keep developing new

products and keep changing and

updating their

2products improving tried and experienced brands and promoting better,

more professional ways of working. Unilever has a collection of brands that are
popular around the globe; as well as local products and local varieties of
famous name goods and services. This diversity of

the company in their products

2comes from two of their key strengths; ? Strong family tree in the local market

and first hand knowledge of the local culture

and understanding the local needs. ? World class expertise applied and one of the best supply chains to
serve consumers everywhere in the world. Focusing on routine and output, Unilever persuade their

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2people to develop new ideas and put fresh ways into practice.

The company

2work hard to conduct their business with honesty, regarding employees,

consumers and the surroundings around

the company. 2.2 Management of the Company In the management line up of Unilever, the company led

1by the Chairman who is follows up by a team of seven members known as

the Managing Committee (MC), which is accountable for initiating policies and
on the whole planning.

Reporting to Managing Committee

1are the departmental heads that are answerable for advising the Managing
Committee for arrangement, accomplishment of policies and for ensuring that
goals are properly achieved. The administration of Unilever is collected of mix

international and Pakistans business professionals. In Pakistan, the


company management includes

Mr. Ehsan A Malik as a chairman and CEO,

1who is involved in many other sections like correspondence and other

industries. One member from each territory of Pakistan attends the annual
meeting. The top management of the company is fully professional and
experienced specially marketing department that is leaded by Mr. Jeff Lee,

who has the wide experience in the field of

marketing. 2.3 Vision and Mission Statements 2.3.1 The Mission Statement We have some of the worlds
best known and more trusted brands, with leadership positions in many of the fast moving consumer goods
categories in which we struggle. Dedicated to attractive the quality of life of the people of Pakistan, we aim
to offer a broad range that appeal to diverse consumers year on year. 2.3.2 The Vision Statement We
work to create a better future every day 2.4

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3Company Information Board of Directors Mr. Ehsan A Malik Mr. Ali Tariq

Mr.

Faheem Ahmad Khan

3Mr. Amir R Paracha Mr. Fariyha Subhani Mr. Zaffar A Khan Mr.

Khalid Raffi Audit Committee Mr. Zaffar A Khan Mr. Khalid Rafi Mr. Faheem Ahmad Khan Mr. Azhar Shahid
Company Secretary Mr. Amar Naser Registered Office Chairman & CEO Executive Director/CFO Executive
Director Executive Director Executive Director Non-Executive Director Non-Executive Director Chairman
Member Member Secretary & Head of Internal Audit Auditors Messrs A.F. Ferguson & Co. Chartered
Accountants Avari Plaza Fatima Jinnah Road Karachi -75530 Share Registration Office C/o Famco
Associates (Pvt) Limited State life Building No. 1-A I.I Chandigarh Road Karachi NTN No: 0912725-9 State
Life Building Chandigarh Road Karachi Company Registration No: 0000140 Website
www.unileverpakistan.com.pk 2.5 Unilever Branches in Pakistan Different undergrowth and

1factories of Unilever are working in different regions of Pakistan.

2.5.1 Rahim Yar Khan The major and one of the oldest components of Unilever are located

1in Rahim Yar khan. In this factory special products like Soap, glycerin and

other products are artificial in this factory. 2.5.2

1Karachi Tea Factory This factory was recognized in 1950 in Karachi, and it is

situated in west wharf area. in earlier times it was owned and managed by
Lipton Pakistan Ltd. In the last 43 years many changes and modifications are
made and the factory has

stretched by a long way. In this unit of Unilever Pakistan only Tea is formed and packaged. 2.5.3

1Ice Cream Factory This factory is recently established on Multan road in

district Kasur. The plant was made to order in 1994 having the most modern
and latest machines installed. Walls Ice Cream is being

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made up in this plant. 2.5.4 Best Foods Faisalabad In recent times

1Unilever has acquired Rafhan Maize products from best Foods

International.

In this plan it was packaged and delivers to the different regions of the country. It is also one of the old plat
of the Unilever Pakistan. 2.5.5

1Tea Processing Plant Mansehra The new Lever Black Tea dealing out plant

has been set up in Dhodial, 12 Km north of Mansehra on the core Karakorum


Highway on 2.5 acres of land with the dealing out plant built-in area of
11,800 sq ft. The plant is expected to process 50 kg per hour or
approximately a ton of made tea a day. This plant has charge eleven million
whereas Rs. Twelve Million has been spent on the building and
infrastructure. The plant has been inaugurated on 7th of September, 2001.

2.6 Strategies 2.6.1 Product Development Unilever constantly work on humanizing product behavior and
facial appearance to detain the market. They evaluate the demand to check whether the product is gainful or
not, so that if the product is not, it should be modify or discontinued. The Research and Development sector
keep an eye on the opponent products in organize to grow to be the market leader of definite product. 2.6.2
Corporate Strategies Unilever is the chief in end user market. It manages regime relationships to control
duty on import of raw material and countering smuggling competitors consignment. 2.6.3 Human Resource
Strategies Unilever managing the employee staffing and position to put the accurate person for the accurate
place. in the interior, the company and the employee regular change in the departments and give their
employee regular promotion and keep his enthusiasm to the job. Employees are educated in a way that they
are conscious of their culture and give them a proper training in the company about their culture. 2.6.4
Finance Strategies The most successful strategy of Unilever is that, they maintain the finance operations
within the resources. Keeping stock debtors low and strictly adhere ICAP accounting practices and laws.
The other strategy of Unilever is that, the tax management to gain legitimate advantage and Lessing the
burden. The company has the internal audit committee that ensures that every thing is going well and on the
track. 2.6.5 Acquisitions & Mergers Unilever has fruitfully completed an achievement of Pakistan Industrial
Promotional (Pvt) Limited, manufactures of Polka in 1999. They also completed a joining with Brooke Band
(BB) Pakistan last year, where each Brooke Band shareholder expected to receive one share for every 4.3
Brooke Band shares. The merger has result in consolidation of division channel, thus dropping in
commission cost for the company. 2.7 Accountable to Stakeholders In view of the fact that the moment
Unilever begun its operations and starting in Pakistan, the company has been strongly associated to the
Pakistani people and its brands have been an fundamental feature in their daily lives. In fact, the nature of
the business enables company brands to be the thump and heartbeat of the 164 million people in Pakistan.
This is a huge promise which makes the management accountable and responsible to all their stakeholders
and the general public as a whole and strengthens them to determination to; ? Create new opportunity for

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growth ? Makes a positive difference to the lives of the low income people ? Improve the overall quality by
promoting education, health and hygiene 2.8 Unilever Management Activities 2.8.1 Path to Growth

1Path to growth is Unilevers commercial planned agenda which aims to twice

the size of the business in seven years and to grow profit faster than the

competitors, by this means

1ensuring that they are the Leader in similar type companies in given that top

value.

This agenda introduced in the year 2007. 2.8.2 Six Strategic Thrusts ?

1Reconnect with Consumer By having accurate insights into consumer


desires, partiality and potential needs. This means meaningful and

considerate consumers way of life, routine,

1attitudes and productively adapting brands to their varying needs. ? Brand

Focus Grow their foremost international brands by focused wealth behind


them, while still

at the bottom of golden local

1brands and local charms. Improvement will be the milestone to ensuring

brands is used to

to consumers prospect needs. 11 ?

1Pioneer New Channels Broaden their means of going to market i.e.

reaching clients and consumers. This means to develop new channels such as
direct selling, home-vending, fashion outlets, travel, and food service and
out of home

services to catch customers. ?

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1World Class Supply Chain To close up the gap to global world class

within three years by establishing product synergies, finer logistics and


supply chain and by establishing a world class program

of supply chain to reach product on time in the market. ? ? Simplify The whole thing Unilever do to dropping
difficulty, doubling and

1by making the best use of IT to provide high quality information once

to the people.

1Enterprise Culture By creating a culture which shapes the frame of mind

and procedures among all staff towards engaging in the market place by
structure an organization fit for growth.

2.9 Unilever Pakistan Sustainable Living Plan Highlights The

3Unilever sustainable living plan sets out to decouple the growth from

environmental impact. While at the same time increasing positive social


impact, In order to realize sustainable growth, Unilever integrated
sustainability into strategy.

Unilever

3working with their customers and suppliers engaging employees and

fostering new partnerships. Unilever

Pakistan works with

3UNICEF, United Nation world food programme, save the children and

Oxfam

in order to execute its sustainability agenda. Improving Health and Well Being ? Lifebuoy inculcated hand
washing habit in more than 610,000 consumers. ? Over 33,000 households reached through brush day and

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night campaign. ? Communicated health benefits to tea to 13,690 doctors and 47,000 households. ?
Knoors healthy snacking programme benefited 200,000 children. ? Blue Band school programme impacted
600,000 children. Reducing Environmental Impact ? 7.7% less CO2 emitted through manufacturing
initiatives. ? Office energy consumption reduced by 8.6%. ? 11% reduction in water consumption during the
manufacturing process. ? 55% reduction in waste through more efficient manufacturing processes.
Enhancing Livelihoods ? More than 900 women in 85 villages benefited from the Guddi Baji programme. ?
500 small salon owners trained. 2.10 Products and services of Unilever Pakistan From the business point of
view, the company is

1divided into the following groups; ? Beverages ? Ice Cream ? Home&


Personal care

? Blue Band (BB) 2.10.1 Beverages

1Lipton Yellow Label is the leading and most famous brand in Pakistan and

is number one by all who want to enjoy a good tea.

The demand of Lipton in the market proves

1to the facts that the Pakistan is very quality conscious and a

very good judge of Tea. To create

1to this growing awareness of quality, Unilever Pakistan Limited always

lived up its quality No.1. To keep the tea fresh and

appetizing, key initiatives have

1been taken by introducing hermetically sales packs. This has been valued
extremely by consumers and the company sales are continuing to grow up. For

every Lipton Yellow Label consumer, the brand offers a rich, bright and
fresh cup of Tea that re mind the sign of good tea.

2.10.2 Ice Cream Unilever introducing Walls Ice Cream in the market that creates a new bench mark for
successful Unilever FMCG products that launches in Pakistan in 1995. On august 14, 1995

1Walls came to Karachi and the city by storm. The success has now been

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continual across the country

and consumers

1now ask for Cornetto, feast max and other brands not simply for Ice

Cream products, but branded products. In July 1996, Polka a well-known local
name representing the only national Ice Cream business was owned by
Unilever.

In broad term Walls will come into view as the desire brands, while

1the Polka from Walls brand will offer a new level of superiority in take

home or desert Ice Cream.

2.10.3 Home & Personal Wash In this section of Unilever products include; wide

1range of products, vim bar and vim scourer that offer Pakistani peoples

quality dish washing in line with global principles. Over the past and now, vim
has made strong fairness with its consumers by given that powerful cleaning at
reasonably priced prices. In the beginning, Unilever has entered the NSD bar

market with Rin that becomes an instant achievement in a tiny period of time.
However, in order o correspond and build up the collection of the brand, the name
of Rin was altered to Vim in 1996. Now Vim stands for better quality dish
washing brand that is environmentally responsive and in line with global

standards.

On the other hand Surf prefers the washing powder marker

1in Pakistan for four decades; it has been unbroken to change according to

consumer needs.

1There has been no chance to look back since the brand has undergone
several product quality improvements to propose best cleaning

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outcome. 2.10.4 Blue Band By introducing margarine in the market in 1985, Unilever comes in the market,
beneath the name of Blue Band. There are several changes made in the Blue Band in the past fourteen
years and the product is now very much popular across the different regions in Pakistan. Blue band give
consumer a final taste and the people are switching from butter to the branded quality products. During the
1988, Blue Band reached to the highest market share in the industry and people are more linked with it.
Chapter 3 Inside the Unilever Pakistan Learning as a student intern 3.1 Main Responsibilities Main
responsibilities during the whole period of internship are to maintain and keep updated financial record of
Finance Share Services department under the supervision of Mr. Ashraf Baig. Following are the main
responsibilities 15 ? Dealing indirect payment ? Dealing with Advertisement and promotion activities ?
Issues of direct payment 3.2 3.2.1 3.2.2 3.2.3 Branch Payments Supplier invoices Supplier invoices for
branch are directly received by CPD Shafi Courts for scanning SOA attached. Scanned images of specimen
signatures received. Cash Sheets Cash sheets from all branches except Karachi branch are received on a
weekly basis. Cash sheets are sent to CG for JV preparation, it must be ensured that all cash sheets are
received and forwarded to CG. Last week's cash sheets are recorded in next month. Utility Bills Utility bills
are paid by branches in MCB bank during the month. Detail of payment of utility bills is sent to HO by
branches on a monthly basis. MCB bank also provides detail of utility bills payments to the company via
Treasury. Information comprises of customer code # and date, amount, name and nature etc. Both the
information are sent to CG for comparison and JV preparation. 3.3 Manual pay order Sometimes pay order
is to be prepared for onetime payment of supplier not opened. Permission is to be taken from line manager.
Letter format is received. 3.4 Withholding Tax payments Request with detail is received from concerned
person/ department and duly approved by SSD Manager which is bar-coded and scanned for payment
process by CG Payment shall be made in the name of State Bank. 3.4.1 WHT Rates Services Goods
Transportation 6% 3.50% 2% 3.5 Advance Income Tax Email is received from Legal department with CC to
responsible staff members. Signed hard copy of that email is required for bar coding and payment
processing by CG. 3.6 Monthly Rent/Lease ISL BR On the first day of the month payment shall be
processed. Schedule with detail of rent proportion is signed by SSD manager and scanned for CG to
process payment. Detail already kept with concern staff member who updated the data on monthly basis.
Three prints of excel file were taken for three barcodes, these printout of CRG distribution were attached
with the request sign, and get it signed by concern staff member and scan for payment process. 3.7 Monthly
Rent/Lease Other BR and Guest Houses Advance payment is made as per agreement which is adjusted in a
schedule on a monthly basis. When any advance is fully utilized then a fresh request must be received from
Legal duly authorized by DH. 3.8 Car Lease Payment Request received from Treasury with copy of
agreement attached to it. Payment is made on term as per agreement. It is also adjusted in the lease/rent
schedule by treasury officer. 3.9 Inter Unit Activity Payment is done on a daily basis on CRGs, whenever
any factory payment is involved Respective inter unit CBT is charged. Email is received from Jawad (GFA)
for outstanding debit notes detail to be sent to Fact. List attached with email contains JV # to extract
information for DN/CN Some payments initiated from entity 10 but relates to entity 50, these payments are
charges to IU CBT account at entity 10 then it is journalized in CBT account at entity 50 and charge to
respective expense accounts at entity 50, all done by CG. If any such payment relates to entity 55 then it is
charged to IU CBT account at entity 50 after formalization. 3.10 Salary Payment Salary request received
from Salary admin (permanent / contractual) once in month with complete detail. Manual cheques are
prepared and the number is to be taken from cashier and written on the request sheet before scanning.
Supplier codes of all banks to be written on the request page to save time as this is an urgent payment.
Salary payment requests from employment providers are received from HR and buying. Supply codes are to

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be written on the request before scanning. Salary request from contractual consultants will be received from
individuals with detail and supplier code. 3.11 Online Authorization Online authorization means system based
approval of SRC/GRIR from the initiator. In this system invoices are directly received by CPD from the
supplier for scanning to CG. CG will enter the invoice detail in software and forward it to the person
responsible to enter the required data. Then it will go to the respective authorized at initiator's stage after
whose authorization it will go to CG for payment process. Both amounts entered by CG and initiator should
match otherwise it won't process payment. 3.12 Employee Rent/Lease Clearance For employees final
settlement an email from salary admin is received for verification of any amount due from the employee. In
indirect only rent advance is verified and confirmation send to JM employee payments for compilation and
send to sale admin 3.13 Rent Adjustment Detail received from salary admin and scanned copy is sent to CG
with the email for rent adjustment. CG takes the adjustment in schedule. 3.14 Dividend Account After six
months of dividend issuance all outstanding amount is transferred to CBT account. After expiry of dividend
warrants claims are coming in for payment' Request is received from Legal department with cancelled/
misplaces/undelivered dividend warrants that are paid from this CBT and that particular name and amount is
removed from the schedule. At the end of the month reconciliation is prepared for third CBT. This is on shore
activity only for reconciliation preparation. Take printout at month end and identify the particulars of each
entry by searching on omniflow and note down dividend number, name and warrant number. Then adjust it
from the schedule on the sheet of that particular dividend number. Then adjust the totals of each dividend
number from the list to match with GL. In UPFL "1" or "1st" means interim and "2" or "2nd" means final
dividend. 3.15 Month end Accruals At month end a list is received from Admin for travel and hired cars
payment due but not paid. List is to be forwarded to CG for accrual to be raised in CBT account and debit
respective expense. Next month this whole accrual is reversed to nullify the balance. For hired cars email is
received from Transport which is sent to CG for further action. Chapter 4 Analysis of Unilever Pakistan
Financial Analysis Financial investigation refers to an evaluation of the possibility, solidity and prosperity of
a business. The balance sheet analysis, profit & Loss and cash flow analysis simplify the business actions
weather the business is on the rise or on the way out. This analysis is based on earlier period performance
of the firm and help for taking decisions for prospect plans and other Investors. 4.1 Financial Highlights 2013
2012

3Sales 60,535 59,741 Gross profit 24,422 21,673 Profit from operations

9,223 8,495 Profit before tax 8,905 8,065 Profit after tax 6,117 5,502

Earning per Share (Rs.) 120.88 88.91 4.1.1 Horizontal Analysis of Balance Sheet The horizontal analyses
technique is on the other means of comparative analyses. It shows by giving the balance sheet, income
statement and reviews the cash flow statement and give us the changes made in the previous and the
current year. It conducts the assessment on the multi or three year basis. The horizontal financial analysis
tells us the current and the previous year difference and exact ratio of the multiyear analysis of the balance
sheet, income statement or cash flow statement. It is done by restating the amount of 21 each or group item
as percentage. The percentages are calculated by selecting a base year and assign a weight of 100 to the
amount of each item in the base year performance. Assets 2013(%) 2012(%) 2011(%) Horizontal Analysis
of Balance Sheet Table 4.1 Property, plant & equipment 164.39 104.61 100 Intangible assets 100 100 100
Long term loans 72.43 87.72 100 Stores & spares 2013(%) 133.10 2012(%) 101.69 2011(%) 100 Sales
Loans & advances 100 87.08 100 65.48 100 100 Other receivables 68.73 280.30 100 Sales tax refundable

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- - - Cash and bank balances 304.41 216.60 100 Total Assets 126.56 115.50 100 Liabilities 2013(%)
2012(%) 2011(%) Deferred taxation 131.70 131.05 100 Trade and other payables 166.57 117.73 100
Provision 61.75 29.08 100 Sales tax payable - 22.93 100 Short term borrowing 26.61 68.65 100 Total
Liabilities 126.73 115.43 100 4.1.2 Horizontal Analysis of Profit & Loss Statement Cost of sales 11.59
20.40 20.33 Gross profit 30.36 15.88 25.40 Distribution cost 24.25 16.92 8.06 Administrative expanses
5.09 6.97 170.04 Other operating expenses 42.48 14.91 36.50 Other operating income (1.72) (10.61)
250.28 36.35 14.03 41.71 Restricting cost - (100.00) 197.58 Profit from operations 36.35 17.80 39.30
Finance cost 12.11 17.53 (44.87) Profit before taxation 36.53 17.80 40.92 Taxation 33.77 16.96 40.81
Profit after taxation Other comprehensive cost 37.83 (230.85) 18.21 100.00 40.97 - Total comprehensive
cost 37.50 18.35 40.97 Table 4.2 4.1.3 Vertical Analysis of Balance Sheet In the vertical analyses of the
balance sheet, income statement or cash flow statement each item in the table calculated as a percentage
of a total. The tem vertical means that the analysis should be conducted vertically and each item in the
columns listed vertically on a financial statement. The total in the 24 income statement is used the term or
the value of the sales revenue, while on the other hand in the balance sheet, it is total assets. This approach
that is used in the vertical analysis is known as component percentage that produces Assets 2013(%)
2012(%) 2011(%) common size financial statements The vertical analysis is the technique to find out the
relationships between statements in the same financial terms by expressing all amounts as the percentage
of the total amount taken as 100. Vertical Analysis of Balance Sheet Table 4.3 Property, plant & equipment
43.87 32.38 100 Intangible assets 3.51 4.07 100 Long term loans 0.80 1.12 100 Stores & spares 0.96 0.85
100 Loans & advances 0.73 0.63 100 Other receivables 0.85 4.03 20 Sales tax refundable - - - Cash and
bank balances 12.20 10.07 100 Total Assets 126.56 115.50 100 Liabilities 2013(%) 2012(%) 2011(%)
Deferred taxation 4.63 5.14 100 Trade and other payables 73.79 60.49 100 Provision 0.69 7,508 100
Sales tax payable -1.08 4,640 100 Short term borrowing - 64,897 100 Total Liabilities 126.73 115.43 100
4.1.4 Vertical Analysis of Income Statement Table 4.4 Sales 2013(%) 100.00 2012(%) 2011(%) 100.00
100.00 Cost of sales (58.22) (61.94) (61.04) Gross profit 41.78 38.06 38.96 Distribution cost (17.75)
(16.96) (17.21) Administrative expanses (2.25) (2.54) (2.82) Other operating expenses Other operating
income (1.66) 1.04 (1.39) 1.26 (1.43) 1.67 21.17 18.43 19.18 Restricting cost - - (0.61) Profit from
operations 21.17 18.43 18.56 Finance cost (0.13) (0.14) (0.14) Profit before taxation Taxation 21.04 (6.60)
18.29 (5.86) 18.42 5.94) Profit after taxation 14.44 12.44 12.48 Other comprehensive cost Total
comprehensive cost (0.02) 14.42 0.02 12.45 - 12.48 4.2 Ratio Analysis The same kind of two magnitudes
and the relationship between them is called ratio analysis. In the ratio analyses the competitors ratio is
compared with the company ratio and the result between them finds the difference between the company
and its competitors. The major operating differences detect the comparison of two companies. On the other
hand the second analyses are the comparison of the financial ratio with the industry averages. The main
theme of the ratio analyses is to guide the management decision of the company. 4.3 Profitability Ratio
Table 4.5 Unit 2013 2012

3Gross profit margin % 40 36 Net profit to sales % 10 9 EBIT margin to sales


% 16 15 Operating leverage ratio

Times 8.55 2.36

3Pre tax return on equity % 291 153 Post tax return on equity % 200 104

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Return on capital employed

% 147 117 4.4 Liquidity Ratio Table 4.6 Unit 2013 2012 Current ratio Times 0.67 0.82 Quick/acid test ratio
Times 0.30 0.30 Cash to current liabilities Times 0.25 0.05 Cash flow from operations to sales Times 0.18
0.11 4.5 Activity/Operating Performance Ratio Table 4.7 Unit 2013 2012 Inventor turnover ratio Days 61 68
Debtor turnover ratio Days 9 10 Creditor turnover ratio Days 132 113 Total asset turn over ratio Times 3 3
Fixed asset turnover ratio Times 7 9 Operating cycle Days (163) (35) 4.6 Future Outlook In the end, a brief
summary of the above all analyses and the future outlook of the Unilever in Pakistan soil. The above
analyses shows that there is not much a big profit or the big way for the company in the country because of
the poor economic environment, inflation and other security issues inside the country. But after all the
overall perspective is very positive and the company makes their way to reach consumers and fulfill their
needs. The company is beating competitors in the market and made significant achievements towards stable
growth. 4.7 SWOT Analysis 4.7.1 Strengths of Unilever ? Large variety of consumer goods in the market ?
Enjoying Economies of scale ? Strong brand names in the marketplace ? Heavy financial position in the
market. ? Market principal in Tea production with Lipton & Brooke Band ? Wide product line in home wash ?
Strong distribution channel in Pakistan ? Sound and experience management ? Strong financial support from
parent Unilever 4.7.2 ? ? ? ? ? ? Weaknesses of Unilever High charge of covering care goods New
products are not much popular in the market Huge inventory stocks of raw material and finished goods Low
liquidity of stocks due to high pricing About 80% of the raw material is outsourced for the built-up consumer
goods out of control smuggling of Tea and detergent has critically affected Unilever sales and wages 4.7.3
Opportunities Of Unilever ? Capturing food industry by acquiring Raffan Best Foods ? Wide scope of
confectionery business for Unilever ? Unilever is looking to get hold of Tapal Tea ? Rapid getting higher
urban residents is the key chance ? Rural areas are educated and aware of the branded products 4.7.4 ? ?
? Threats for Unilever In the market of Ice Cream, facing competitors more P&G is the big competitor in the
market of personal care products. High competition in the soap and detergent market ? Inflation rate affect
the cost of raw material ? People purchasing power affect by depressed in inflation Chapter 5 Conclusion
and Recommendation 5.1.Conclusion At present Unilever Pakistan is one of leading company among other
multinational companies producing edibles and other products and promote their services and products
quality at a sustainable way. It is one of the best multinational company accommodating more than 3000
employees. The products of Unilever is operating all over the contry. Present report is the requirement of the
degree program and as a finance student; I was conducted three years financial analysis of the company.
As concern with financial analysis the short term debt paying ability is Days sales inventory in 2010 is 46
days, in 2009 to 58 days. It means that inventory sold out quickly day by day which is very fast it also helps
to pay their current obligations. Current ratio is lower than 1 but it does not affect their performance. Long
term debt analysis is currently debt ratio is 2% its means the organizations 98% investment is depends on
equity and also debt to equity ratio is below 1%. In Profitability ratios the average gross profit margin of
company is 33%. its means company is very highly profitable profit is 1/3 of its sales. Sales are three times
of the total assets, Average return on assets is 23%.and return on equity is 92%. In Investor analysis
earnings per share increased by Rs.81 in 2009 and price of share is increasing day by day and demand of
shares is very high due to high return. On the whole the financial record is maintained properly by the
finance share service department. 5.2. Recommendation: Cost Reduction Strategy ? Set up a cost fall board
This board draws its members and they take the decisions about the cost fall strategy and they have the
support of the senior management. ? Build up a cost fall structure Make a cost fall structure in the way that it
is profitable for the company as well as for the parent Unilever, so the committee needs the methodology to

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evaluate the cost fall alternatives to ensure the organization best result in the limited time. ? Keep the
process wide-ranging The stakeholders must provide the initiative and give their input to reduce the cost fall
strategy better and make profit more than the previous. ? Ask your suppliers for ideas Your existing suppliers
can be a great source of ideas for process and other improvements that can have a significant impact on
your costs. ? Prioritize your initiatives Get the first priority to the better idea, so that the idea will work better
and give back the measurable results to the company. 1. Up-to-Date Intelligence Company will benefit from
up-to-date market intelligence and global supplier network; because employees work with literally hundreds
of clients locally, nationally, and internationally, Up to date intelligence provide the latest market trends and
supplier developments. 2. Find the cheapest raw material The first remedy is to find which country has the
lowest price in the raw material you are seeking. High inflation rate is increasing the cost of imported raw
material day by day. Company should be reducing international purchases of raw material as Unilever
purchases 90% raw material from international suppliers. 3. Packaging Design/Redesign: Review new and
existing product packaging styles, sizes, and labor and shipping cost savings opportunities. 4. Technology:
Evaluate and recommend technology and equipment upgrades where process/production improvements and
savings can be realized. References 1. http://www.unileverpakistan.com.pk/aboutus/introductiontounilever
/UnileverP akistanLtd/ 2. http://www.unileverpakistan.com.pk/aboutus/introductiontounilever/ 3.
http://www.unilever.pk/Images/Unilever Pakistan Limited Uncons olitaded_tcm96-215205.pdf 4.
http://www.amcy5.com/Reports/internship/amcy43.htm 5. http://www.scribd.com/doc/43103863/UnileverInternship-Report 6. http://www.scribd.com/doc/13137660/UniLever-Pakistan 1 2 3 4 5 6 7 8 9 10 12 13 14
16 17 18 19 20 22 23 25 26 27 28 29 30 31 32 33 34 35 36

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