MARKETING REPORT:

PRESENTED BY:

M.SAAD.KHAN

(STUDENT OF MBA IN FEDERAL URDU UNIVERSITY)

SUBMIITED TO:

SOHAIL PASHA

DEDICATE OF THIS REPORT:

1. THIS REPORT IS DEDICATED TO MY ALLAHA AFTER THE DEDICATION TO MY ALLAHA.

2. THIS REPORT IS DEDICATED TO THE HOLY PROPHET “HAZRAT MUHAMMED [P.B.U.H]”. HE IS GREAT PHILOSPHER AND LEADER HAVE NEVER CAN SEE TO THE WOLRD

3. ALSO DEDICATED TO MY PARENTS, ALL TEACHER & ALL MY FRIENDS.

4. AND ALSO DEDICATED TO “DOCTOR ABDUL QADIR KHAN”. HE IS GREAT SCIENTIST HEVER PRODUCE TO PAKISTAN.

ACKNOWLEDGEMENT:

HELP ME TO MAKE THIS REPORT TO DIFFERENT ASPECTS.THIS DIFFERENT ASPECTS ARE FOLLOWING BELOW:

1. www.wikipedia.com 2. www.RAFAHAAN FOOD.com 3. www.solidpaper.com 4. www.bussinessweak.com 5. www.reportlinker.com

EXECUTIVE SUMMARY

This report is “RAFAHAN FOOD” which is one of the largest company in the PAKISTAN .

IMPORTANCE:

IN this report me as a researcher .I try to find the what is the key which have selected to coca cola company and the success has fell in his feet. I thing as a researcher I guess the coca cola company have work this 6 question. These questions is defined as given world:

1. What is plan have choose the rafhan food company ? 2. Which is method to choose to achieving the plan? 3. Where is the marketing activity now days of rafhan food? 4. Who is monitoring of financial aspects of rafhan food? 5. When at the present time the goodwill of rafhan food? 6. How the grow the market share of company? TABLE OF CONTENT:

NAME OF TOPIC: PG NO NO

1 INTRODUCTION OF COMPANY

2 MISSION STATEMENT

3 VISION STATEMENT

4 MANGERIAL LEVEL

5 SWOT ANALYSIS

6 DEMOGRAPHICAL ENVIROMENT

7 FINANCIAL CONDITION

8 PRODUCT AND SERVICE

9 PRODUCT PORT FOLIO

10 CATER PLAN

11 IMPORTANCE OF DEPARTMENT

12 PRODUCTS

13 OFFERD BY RBFL

14 PRODUCT LAUNCHING

15 MARKET SHARE

16 CONCULSION&RECOMMANDATION

REPORT:

INTRODUCTION OF ORGANIZATION The company was established in early 50’s by Munno Family. RAFHAN was named from the combination of their two sons, Rafiq & Farhan. At that time the company used to deal both with industrial goods & consumers goods. In 90’s a multinational company CPC purchased it from Munno Family & named it CPC Rafhan. Then there came a change & CPC divided into two parts, i.e.:  Industrial Goods  Consumer Goods The sector that produced industrial goods was named as Rafhan Naize Products & the sector that produced consumer goods was named as Rafhan Best Foods.

MISSION STATEMENT: In October, 2000, Best Foods was purchased by Lever Brothers /Unilever all over the world. The deal will be the latest in a series of acquisitions for Unilever, which has pursued Best Foods in order to capture more top-name brands and boost revenue growth. It comes at a time when Unilever is streamlining its massive food, detergents and personal products business. The five-year plan calls for increased operating margins, job cuts and revenue enhancements. Niall FitzGerald, Unilever chairman, said, "We are very excited about the combination of Unilever and Best-foods. This transaction creates the pre- eminent global food and Consumer Goods Company. Together we will have a portfolio of powerful worldwide and regional brands, with strong growth prospects." VISION STATEMENT: Unilever said the Best Foods management team would play an "important role" in the combined company but gave no specifics. "In addition to creating a premier portfolio of foods brands, the combination will bring together two of the world''s top management teams, creating one which is capable of realizing the growth and synergy opportunity and leading the category agenda," FitzGerald said. Already ranked No. 3 among world food companies, Unilever will now jump ahead of Philip Morris Kraft Foods and challenge Nestle AG for the top spot. Unilever''s stable of brands includes Lipton teas, Close Up toothpaste and Calvin Klein fragrances. The transaction is expected to be completed in the fourth quarter of fiscal 2000. It was also reported in June that Best Foods was assessing a potential acquisition of Campbell Soup Company.

Plant Capacity and Utilization The company''s output in Energile/Glucose/Glaxose D division was 5,119 metric tons as compared to last year''s production of 2,529 Tons. In the other products division, the company produced 4,048 metric tons as against 3,793 metric tons last year. The installed capacity of the plant per8 hour shift stands at 15 metric ton. ORGANIZATIONAL STRUCTURE Rafhan Best Foods Limited is a multinational company headed by 11 Boards of Directors. The Board of Directors has appointed a full time general manager of all the departments of the organization.

DEPARTMENTS OF ORGANIZATION Followings are the departments working in the organization.  Production Department  Human Resource Department  Sales Department  R & D (Research & Development) Department  Supply Chain  Marketing Department  SIS (Sales Information System) Department  Food Solution/Cater Plan Department All the General Managers of these departments are answerable to the board of directors.

PRODUCT PORTFOLIO RBL''s diversified portfolio includes full product lines of Knorr, desserts, dextrose and dressings. During the year under review, the company continued its growth momentum in the Knorr range. Three new variants in ''Yakhni'' and two spicy variants in noodles were introduced to expand customer base. Additionally, by introducing the "Chili-Garlic Sauce", company expanded its sauce range. A major portion of the dessert business was lost owing to government restrictions on marriage parties. However, this declining effect was reversed by introduction of the new products, flavors and smaller pack sizes. To increase product penetration, Rafhan Custard was introduced in sachet packs. Variants were launched in pudding and custard range to cater growing popularity of chocolate and strawberry flavors. Among dressings, new flavors of chicken, vegetable and chili garlic sandwich spreads were introduced.

CATER PLAN Cater plan was launched in by Rafhan in 1993 in Pakistan which is entirely for institutions in commercial and social sector. Cater plan offers a special range of products including mayonnaise, tomato ketchup, salad dressings, soups, cooking aids, oils and desserts. The main reason behind the healthy growth of Cater plan during this year was the increase in "eating out" trend in the country and the emergence of international fast food chains like Pizza Hut, McDonalds, TGIF, Subway, KFC and Dunkin Donuts etc.

IMPORTANCE OF MARKETING DEPARTMENT Best Foods as compared to other Multinational Companies is a smaller one. Their main focus is toward growth orientation of Novel Products. Marketing plays an important role in the prosperity of the organization. But unfortunately for the last two to three years, marketing department did not play any major part in Best Foods. From this year management is focusing more on the marketing activities, which increase the existence of marketing department in the organization.

MARKETING RESEARCH Company itself is not engaged in the marketing research. For marketing research the company hired the services of different agencies and they do the research work for the company. They used Focused-based Research Group method for marketing research. In this method the agency’s employees are required to go to each and every house of their target area and examine the usage or the requirement of their customer and reported to the company. The company then makes their strategy according to the data provided by that agency.

TARGET MARKET Target market defined by the company is based on income level, age and behavior of the people. The target market is different for different products. For example, for corn-oil the target market is upper and middle class. The target market for the Knorr cubes is lower class.

PRODUCTS OFFERED BY RBFL There are six major products offered by Best Foods. These are: 1. Rafhan 2. Knorr 3. Energile 4. Glaxo-D 5. Agro (Laundry Starch) 6. Shahi (Laundry Soap) 1. RAFHAN

The products under this brand name are:  Rafhan Corn Oil  Rafhan Cannola Oil  Rafhan Carnola Oil  Rafhan Custard  Rafhan Jelly  Rafhan Pudding  Rafhan Ice cream Rafhan products are one of the major consumer products offered by Best Foods in the market. They are the only producer as well as the market leader of these products. The companies such as Kinza, which produces Ketchups, Fauji, which produces custard and jellies, are not considered as their competitors due to their low market shares. These products are basically for upper class. 2. KNORR

The products under this brand name are:  Knorr Chicken Cubes  Knorr Pulao Cubes  Knorr Noodles  Knorr Soups  Knorr Ketchup  Knorr Spreads Best Foods are the only producers of Knorr products in the market. There is no competitor of the Best Foods in the Knorr products. These products are basically for the middle class. 3. ENERGILE

The products under this brand name are:  Energile  Rasbhare  Sporty  Rooh-e-Summer Energile is one of the major brands of Best Foods. These are basically for the sportsman. Tang is the only competitors of this brand but due the low market share they are not consider as a major competitor. 4. GLAXOSE-D

The products under this brand name are:  Glaxose-D  Glaxose-D Multi vitamin  Glucose Best Foods purchase this brand from Glaxo-Wellcome Company. These are mainly for patients who use glucose for recovering their energy after doing some hard work. There is no competitor of this brand in the market. 5. AGRO & SHAHI

The company has two small brands as well. They are Agro & Shahi. These are used for laundry purpose. These products are not very much renowned due to less or no promotion of these products. These products are basically for middle & lower class.

PRICING STRATEGY The pricing of the product is made on the basis of G.P Margin, comparative market prices and market shares at different price levels

PLACEMENT While placing their products the company’s main focus is on retail not on whole sale. The 70% distribution of Energile and Glaxose-D is on whole sale while 30% is on retail. For getting more success it is necessary to distribute 80% on whole sale and 20% on retail. But the situation in inverse in the company’s prospective.

PROMOTION There are two methods from which a company can promote its products. These are:  ATL (Above the Line)  BTL (Below the Line) ATL includes promotion through media. Media can be of any kind i.e. T.V. Radio, News papers etc. BTL includes promotion through sales level activities. They emphasis mainly on BTL promotion from the past few years. But from the recent year they are more concerned with ATL promotion. RBL enhanced marketing investment to further strengthen its brands and increase consumer pull for products. The focus was continued on the recipe oriented educational cooking program "Knorr kay zaiqay" which helped the company to educate the consumers on multiple product usage. The effective consumer promotions also helped to achieve double-digit volume growth in dessert business during the year under review. An effective "village marketing" program was initiated to generate healthy sales of dextrose. Trade discounts are also offered in the nearby future on many of their products to attract the customers. Further emphasize is on pull not on push.

PRODUCT LAUNCHING The company is not emphasizing on proper launching of product. Their strategy is just to throw the product in the market and it will be sold on its own. This cause failure of the product. For example, Rooh-e-Summer is the product of summer season and it should be launched in March-April for better results. But the company launches that product in the rainy season in which people do not like or they do not go for Lal Sharbat. Similarly, Sporty is a drink which is glucose based and sugar free. It is especially for the sportsman and it be launched when there is more sports activities. But the company launched that product in the month of Ramadan when there is used to less spots activities. In such kind of competitive no company use to go for launching their three products at the same time. But they launched there three products, Rasbhare, Shahi and Agro at the same time. This cause the failure if the product because the company can not properly concentrate on one particular product. Now the company has changed its strategy. All these products are relaunched with a proper plan in the coming future. SWOT ANALYSIS STRENGTH 1. INNOVATIVE:

The strong point of the company is they have many innovative ideas which make them the market leader of the food industry. This is the main strength of the company that they always presented the things with new ideas. 2. ENTERPRENEURAL CULTURE:

The company has enterpreneural culture. It helps the company to take the decision on the spot. Less time is used for the innovation of products. 3. FLEXIBILITY:

The company has very much flexibility. It has the tendency to adopt the changes quickly. So the company molds according to the circumstances. 4. NO COMPETITION:

The company has no competition in some of its products. For example, in Glaxose-D, Custard, Jelly, Pudding, Corn oil and Cubes. The company earns much more from these products.

WEAKNESSES 1. PROMOTION:

The company has not properly emphasized on the promotional activities. ATL activities are very low.

2. NO EQUAL EMPHASIS:

The company has not equal emphasis on all the products. Seventy to eighty percent of the company revenue depends on three products. These three products are Energile, Glaxose-D and Rafhan corn oil. The company can generate more profit if it emphasizes more on other products. 3. SALES ORIENTED:

The company is more sales oriented. But this era is not fit for sales oriented. All the companies go for marketing activities but they are emphasized more on sales oriented. 4. WEAK IN COMPETITION:

The company is very weak in competition. The company is performing very well in the areas of monopoly, but where there is competition company is not up to the mark.

OPPERTUNITIES 1. GROWTH:

Twenty percent of company’s goods have the opportunities in growth. There is not much growth in these twenty percent products. The company can earn more if the growth of these twenty percent is increased. 2. LEVER BROTHER’S PRACTICES:

Lever Brothers is a very large consumer goods producing company. Its best practices must be used to take the advantage and to have competitive edge on the company’s competitors.

THREATS 1. COMPETITION:

The company’s biggest threat is the competitors in some of its product. The company emphasizes more on those products in which they are the market leaders but they are not emphasizing more on those products in which they are facing a strong competition. 2. CUT RATES:

Company is a threat for itself. It can not properly promote and place its products in the market. They are just throwing their products which cause abundance of the product and ultimately the prices of the product go down due to excess of supply. This cause the company to cut back its prices which is not acceptable by distributors.

FINANCIAL CONDITION: OVERVIEW (December 24 2009): Unilever Pakistan Foods Limited, formerly known as Rafhan Best Foods Limited (RBL) has been one of the leading producers of consumer food products in the country. The spectrum of RBL s product range contains some of the leading brands like Rafhan, Knorr, Energile, Glaxose-D, Bestfoods etc.

The majority of RBL s shares are held by Bestfoods, USA, which is engaged in producing a vast range of food products in 63 countries across 5 continents. RBL was incorporated in Pakistan 1997 and is listed on Karachi and Lahore stock exchanges in Food and Allied sector.

On 24th April, 2007 Rafan Best Foods Limited was renamed Unilever Pakistan Foods Limited, after Unilever s acquisition of Bestfoods. In Pakistan, Unilever made its debut in 1948 and now, it is one of the most prominent multinationals in the country operating by two affiliated companies, viz. Unilever Pakistan and Unilever Pakistan Foods. The two public listed limited companies have 5 wholly- owned and 7 third party manufacturing sites across Pakistan with 1,500 employees on their payroll and many thousands indirectly. Currently, Unilever Foods Pakistan has 5 major brands: Knorr, Rafhan, Energile, Glaxose-D and Unilever Food Solutions.

RECENT RESULTS 1H09

The company delivered a sales growth of 7.4% during the period under review on account of aggressive price growth. Despite this, Sharp increase in raw material prices has led to a 3% decline in gross margins over last year. There was a 33% increase in advertising expense due to heavy investment in launching new categories. Net sales were recorded at Rs 1808 million. PAT was recorded at Rs 124 million, a decline of 39.2% due to the above mentioned reasons. EPS was recorded at Rs 20.2 as compared to Rs 33.14 in the same period last year. Economic slowdown has also hurt the demand for Unilever Pakistan Foods products and the coming times pose more difficulty for the organization.

FINANCIAL PERFORMANCE (DEC 03-DEC 08)

The company sales continue to grow consecutively for the 5th year, registering a growth of 29.5% in FY08, compared to 22.53% in FY07 as the company continues to built on the growth momentum starting in 2004 after the loss occurred in 2003. Since 2004 the company grew at a rate of 24.97% CAGR. Good marketing strategies and the company s bold venture into new products like Knorr meal maker, Rafhan Magic Jelly and Energile ready to drink yielded positive results. Furthermore, two new variants of Knorr noodles were introduced and the Energile range was re launched; both ventures proved successful and significant value was generated.

The export business, aimed at traditional taste and halal markets mainly in Asia and Europe region registered inspirational growth, with revenues from exports for the FY08 increased more than twice from those in FY07. Significant investment in Pakistani factory to overcome capacity constraints has also been made. The impressive growth in sales was however mitigated by rising COGS, on the back of the peaking food inflation, energy crisis and other situational externalities in the country coupled with competitive pricing, thereby maintaining pressure on the gross margins. The COGS for FY08 showed almost a proportionate increase of 29% from the FY07. Operating Profit growth was around 56% compared to FY07. Gross Profit Margin showed more of a steady stage since FY05.

The company showed a loss in 2003 but was able to recover till recent times with a CAGR of 89.75%. The profit margin growth was 11.31% in FY08 (2007: 37.38%). ROA showed an incline as the growth in profits (56% in FY 08) was much higher than the growth in assets. In FY08 equity shows a recovery from the big drop in FY07 as the company had dividends of Rs 75 and Rs 25 per share, causing a big drop in reserves, and spiking the FY07 s ROE. The liquidity ratios of the company had shown a decline since FY05, due to massive amount of short- term borrowings taken by the company in 2006 and 2007.

In FY08 the liquidity ratios project a stable pattern, showing no significant change. The finance cost showed a sharp rise in FY08 of 227% changed during the year (2007 growth rate being 56%). These short term borrowings are causing the company s current liabilities to surge and the laggard growth in current assets have caused a decline in Company s ability to pay off its short-term obligations, as shown in the accounts of 2007. The quick ratio, a better measure of liquidity showed a steady trend from FY03 to FY06 and then plunged downward, depicting that like the Current Assets, Quick Assets growth also lagged behind that of current liabilities.

Inventory Turnover (ITO) ratio depicts how quickly the company is able to sell off its inventory. Unilever s inventory turnover was slightly lowered in 2005 but since then has been on the rise. This shows that Unilever s efficiency in turning its inventory to sales is on the decline, but still it is in reasonable trend. The prime reason is due to the growth in sales being more than the growth in inventories (which actually showed a decline in FY08) Day s sales outstanding (DSO) shows how quickly the company is able to collect the dues from its debtors.

It should be enough for the company to avoid risks of bad debts. DSO for Unilever has been on the decline since 2003. It has shown a reduction from 36 days to 12 days in 2007 and in 2008, it further declined to 8 days. This shows that Unilever has a firm policy for debtors, but it should also be considered that the policy has not yet affected the sales of the company, which continue to grow. It is interesting to note that the Unilever food s inventories showed a decline of 6.77% in FY08.

The operating cycle of the company is seen following a similar trend to that of the inventory turnover days, with the FY08 rate being 69 days as compared to 81 days in FY07. TATO of Unilever Foods have been on a steady inclining trend over the years, reflecting that the assets and sales are growing at a steady rate and the growth of sales is higher than the growth of assets. This trend continues in FY08. This shows that the company is responding well with the sales in terms of asset management. Sales/equity had declined during 2004 due to low sales but since then has been on a steady rise and managed accordingly in 2008, the sales/equity stood at 10.23. The decline in FY08 as compared to FY07 has been due to the sharp growth in equity of about 56%.

Regarding debt management, both debt to equity and debt to assets ratios are following similar trend. From 2003 to 2005 they were showing a declining trend, whereas since 2005 to 2007, they were showing more of a rising trend. In FY08, the D/E shows a decline mainly due to a sharp rise in equity and a comparatively modest rise in liabilities. The company managed to keep the liabilities down till 2005. However, thereafter the liabilities show a consecutive rise for 3 years until 2008 mainly on back of rising finance charges. The increase in liabilities in FY08 is caused by a growth of 202% in the non-current liabilities whereas the current liabilities show a decline of 8% from the previous year because of the finance cost incurred during the current year.

Long-term debt/equity ratio had been almost near bottom at a very steady rate for the past few years, this year ie FY08, the Long term debt to Equity ratio stood higher (0.14) from previous year s low (of 0.07). Again, this can be attributed to the steep rise in non-current liabilities for FY08. The TIE ratio for Unilever Foods that showed a rising trend from 2003 with a spike in 2006, nose-dived in 2007 and continued to plunge in FY08, standing 24.85 this year. Looking at this, it can be inferred that Unilever Foods is being adversely affected due to higher markups and finance costs.

The EPS of Unilever Foods has been on an upward march since 2003. After the loss faced by the company in 2003, it has not lowered its EPS yet and the FY08 s figure stands at Rs 56.60. Any change in EPS is caused by the profits earned by the company, as number of shares has been the same for the five years. The increase in FY08 was more than the previous years because of the increase in profits. The (P/E) ratio shows, how much investors are willing to pay per rupee of the reported profits, depends on the company s price per share and its earnings per share (EPS).

The P/E for Unilever Foods have been on the downslide from 2004 to 2006 as the growth in EPS has been much higher than the share price. The yearend market prices have been on the increase over the five-year period, with 2007 showing major increases. In 2007 it was observed that the yearend market price of the company s share had been much higher than previous years (2006: Rs 414 to 2007: Rs 921), causing an increase in P/E multiple to 36.5x. In 2008, the P/E ratio again declined to stand at 29.31. This decline is mainly due to an increase of 25% in year-end price of the share whereas the earnings grew by 55%, the net effect being decrease due to the disproportionate nature of the growth.

Since 2003 to 2006, the company s book value has been almost steady, declining slightly in 2004 and then rising till 2006. The changes in book value are caused by the changes in equity of the company, as number of shares outstanding is the same throughout. The nosedive in 2007 was caused by decrease in equity on the back of decrease in reserves of the company. In 2008, the book value again showed signs of recovery and stood at 48.92 (FY07 Rs 32.31). The main reason for this is the FY08 growth in total equity of about 58.3% from FY07. The dividend payout has also shown a steady rising trend from 2004 to 2006 (dividend were not given in 2003 due to losses), followed by an extremely healthy dividend Payout of Rs 93/share in FY07, and in FY08, the Dividend Payout stood at Rs 36/share. The major beneficiary of which would be its associated companies and undertakings followed by the individual shareholders of the company.

FUTURE OUTLOOK

The global recession has set in with global decline in consumer spending and weak demand for consumer goods due to reduced buying power and inflation, which has plagued almost all major economies of the world. The full impact of the global downturn is slowly impacting Pakistan and consumers are now more discerning in making buying decisions and are spending more prudently. Despite a challenging environment, Unilever Foods have managed to remain profitable and maintain a positive outlook, which is an essential thing for any company under the current situation.

The pressure on the company s margins is expected to continue and the company remains unfazed and committed to face competition and deliver better quality at cheaper prices. Another major concern to Unilever Foods is of increasing markup rates that it is currently facing for past two years as they are causing some troubles in managing. The company needs to effectively manage its short term borrowings at its earliest. Keeping in view, Unilever s strong competitive edge of continuous innovation, delivering cost advantages and deep local roots, the company has the potential to steer out of these troubled waters and outperform the competition.

Balance sheet 2003 2004 2005 2006 2007 2008 ======In PK 000 s ======Property, plant and equipment 152,516 117,971 103,067 102,310 196,350 307,707 Other non-current assets 204,809 216,737 212,874 187,126 197,780 191,469 Inventories - - - 279,859 378,002 352,394 Trade debts - - - 64,279 88,101 49,976 Cash and cash equivalents at the end of the year (148,941) 83,931 100,834 172,096 (346,216) (234,569) Current assets 641,991 400,560 426,277 597,016 552,418 516,437 Quick Assets - - - 317,157 174,416 164,043 Total assets 999,316 735,268 742,218 886,452 946,548 1,015,613 Ordinary share capital 61,576 61,576 61,576 61,576 61,576 61,576 Preference share capital ------Reserves 442,470 433,213 463,849 497,888 137,406 239,647 Total equity 504,046 494,789 525,425 559,464 198,982 301,223 Surplus on revaluation of fixed assets ------Non-current liabilities 14,984 8,124 8,248 12,606 13,926 42,079 Current liabilities 480,286 232,355 208,545 314,382 733,640 672,311 Total liabilities 495,270 240,479 216,793 326,988 747,566 714,390 Total equity and liabilities 999,316 735,268 742,218 886,452 946,548 1,015,613 ------Profit and loss 2003 2004 2005 2006 2007 2008 ------in PKR 000 s ------Net sales 1,556,623 1,217,507 1,489,952 1,939,515 2,376,408 3,081,879 COGS 1,127,273 874,068 964,296 1,208,264 1,488,073 1,924,766 Gross profit 429,350 343,439 525,656 731,251 888,335 1,157,113 Operating profit / EBIT -5,290 42,540 167,017 294,461 352,872 552,544 Finance Cost 16,278 5,794 6,111 4,345 6,798 22,233 Profit before tax -21,568 36,746 160,906 290,116 346,074 530,311 Taxation -4,250 15,215 62,536 102,137 121,582 181,765 Profit after tax -17,318 21,531 98,370 187,979 224,492 348,546 ------2003 2004 2005 2006 2007 2008 ------PROFITABILITY RATIOS ------Profit Margin -1.11% 1.77% 6.60% 9.69% 9.45% 11.31% Gross profit margin 27.58% 28.21% 35.28% 37.70% 37.38% 37.55% Return on Assets -1.73% 2.93% 13.25% 21.21% 23.72% 34.32% Return on Equity -3.44% 4.35% 18.72% 33.60% 112.82% 115.71% ------LIQUIDITY RATIOS ------Quick Ratio 1.00 1.00 1.00 1.01 0.24 0.24 Current Ratio 1.34 1.72 2.04 1.90 0.75 0.77 ------ASSET MANAGEMENT RATIOS ------Inventory Turnover(Days) 67.00 86.00 60.00 65.00 81.00 69.00 Day Sales Outstanding (Days) 36.00 27.00 17.00 13.00 12.00 8.00 Operating cycle (Days) 103.00 113.00 77.00 78.00 93.00 77.00 Total Asset Turnover 1.56 1.66 2.01 2.19 2.51 3.03 Sales/Equity 3.09 2.46 2.84 3.47 11.94 10.23 ------DEBT MANAGEMENT RATIOS ------Debt to Asset 0.50 0.33 0.29 0.37 0.79 0.70 Debt to Equity Ratio 0.98 0.49 0.41 0.58 3.76 2.37 Long Term Debt to Equity 0.03 0.02 0.02 0.02 0.07 0.14 Times Interest Earned -0.32 7.34 27.33 67.77 51.91 24.85 ------MARKET RATIOS ------Earnings per share (2.81) 3.50 15.97 30.53 36.46 56.60 Price/Earnings Ratio (87.12) 82.94 21.91 16.18 36.35 29.31 Dividend per share - 10.00 11.00 25.00 94.88 39.99 Book value per share 81.85 80.35 85.32 90.85 32.31 48.92 No of Shares issued 6,158,000 6,158,000 6,158,000 6,158,000 6,158,000 6,158,000 Market prices(Year end) 245.00 290.00 350.00 494.00 1325.00 1659.00 ======

Market share:

OVERVIEW : This subsidiary of US multinational has maintained impressive growth in sales, which registered 22% growth. Gross margin improved by 7 percentage points to 35.3% from 28.3%.

Gross margin improved due to volume growth in higher margin products, reduction in trade discounts, de-listing of low margin bakery business in Food solutions and improved pricing in exports.

Higher gross profit provided funds to invest in the key brands-Knorr and Rafhan. Advertising and promotion budget increased to build brands through TV media, brand activation and consumer promotions.

The company's innovative "Knorr Magic Chef" TV programme was extremely positive in building Knorr as informed by directors. During the year the company's Earnings Per Share (EPS) improved substantially from Rs 3.50 in the preceding years to EPS at Rs 15.97 for the year under review. The company invariably declares high cash dividends and for the year 2005 cash dividend was announced at Rs 16 per share.

Its shares are blue chips and at current market price of Rs 336 per 10-rupee share the PER (Price Earning Ratio) is 21 times of EPS signifying confidence of the stakeholders in the enterprise.

Rafhan Best Foods Limited is a public limited company incorporated in the province of Punjab having its registered office situated at 52 km, Multan Road, Peshawar, Bhai Pheru, Distt Kasur. The shares in the company are quoted on the Karachi and Lahore stock exchanges. Its principal office is in the province of Sindh at Avari Plaza, Fatima Jinnah Road Karachi.

The company was listed on the Karachi stock exchange in 1998. During the last 52 weeks, the market value of the share shot up to Rs 368 per share from Rs 285 per share. The latest market price of the share was quoted at Rs 336 on May 8 2006.

The paid up capital of the company is relatively small and has not changed since the year 2000. While the paid up capital is Rs 61.58 million but the present market capitalisation works out to 2,069 billion.

The company is subsidiary of Conopco Inc USA who owns 74% shares of the company but its ultimate parent company is Unilever N.V. Holland. The company directors, their spouse and children's aggregate holdings are 11% of its total 6.158 million shares. Its 719 individual shareholders own 14.99% its stock.

As regards profit distribution record, it can be seen from the six years statistics published in the Annual Report, that except for 2003, when its bottom line was in the red, the company regularly declared dividends. During the last six years the dividend payouts were highly attractive which ranged between 91% and 190%. The highest dividend of 190% was declared in 2001. For the year under review, cash dividend payout was announced at 160 percent as compared to 100 percent in the previous year.

Rafhan Best Foods Limited manufactures and sells consumer and commercial food products under brand names of Rafhan, Energile, Glaxose- D and Food solutions. Rafhan is one of the oldest and trusted brands in the country. Today Rafhan brand is 4 decades old and household name, signifying healthy corn oil and complete desert range.

Knorr came to Pakistan in 1992 with the launch of Knorr Chicken Cubes. Glaxose-D is a fifty year old brand which was acquired by the company from GlaxoWellcome in January 1999.

Energile is another popular brand of the company. This drink is available in flavours of mixed fruit, orange, pineapple, peach, mango and lemon flavours. During the year under review, Energile was relaunched with improved product and packaging.

It is interesting to visualise the company's directors perception about their customers and food solutions. It has been stated that their consumers are chefs and their customers range from caterers, restaurants fast food chains to five-star hotels. It has been also emphasized that the company works with them to create food solutions that help growth business. Their solutions vary as widely as their customers - products that add the right seasoning, flavour or texture, prepared ingredients that save time in a busy kitchen and new ways of serving food on a large scale at constant quality are just some examples.

During the year under review, the company posted sales in the sum of Rs 1.490 billion (Rs 1.218 billion in 2004) and gross profit at Rs 525.66 million (Rs 344.12 million 2004) registering impressive growth of 22.4% and 52.8% respectively over preceding year's. Key drivers to the commendable sale growth were focus on retail trade to increase coverage, aggressive, on ground activities, effective communication and above all consumer-led focused promotions.

DEMOGRAPHICAL ENVIRONMENT:

Unilever understands the importance of diversity and that's why it is a critical component of our business strategy and an integral part of everything we value and do.

At Unilever, we have a diverse consumer base with a diverse array of needs. By mirroring that diversity within our own organization, we can develop powerful consumer insight and incorporate it throughout our business. We seek and welcome unique talents and perspectives at Unilever, because they strengthen us as a company and help us on our journey to add vitality to life in a variety of ways.

Unilever has created many avenues to enhance and expand the diversity of the company. Led by senior management, our diversity councils help shape the diversity and inclusion philosophy we deliver to employees. Through training and awareness efforts, employees appreciate the power of diversity and the need to leverage the unique ideas, experiences and abilities we all possess to build our business.

Our recruitment strategy continues to evolve to ensure that our workforce reflects the demographics of our consumer base and fulfills the talent needs that will keep Unilever competitive and successful now and in the future.

Diversity for growth

Unilever believes that working in an environment of openness and respect helps employees perform at their very best and ultimately succeed.

When employees express their own thoughts and ideas - and encourage others to do so - it contributes to a diverse marketplace of ideas that helps make Unilever a more robust organization with a better understanding of its markets. Because Unilever's diverse employee base reflects the broad backgrounds of our consumers, we're able to anticipate and respond to what they want more quickly.

Our employees express pride and satisfaction when we're first to market innovative products that meet consumers' evolving needs. The individual uniqueness of each and every employee, and our commitment to growing diversity, make that possible.

Diversity at Unilever

Unilever recognizes the strength of inclusion and diversity. Understanding, respecting and valuing our similarities and our differences are powerful and compelling concepts for today's business environment. They are also the tenets by which we have outlined a fundamental business strategy to assist in reaching our goals.

1. Recruit Recruit a diverse workforce that appropriately reflects the demographics of our consumer base and fulfills the talent needs that will keep Unilever competitive and successful. Diversity furthers our understanding of the marketplace by valuing the ideas and thoughts of all employees and other stakeholders in the business.

2. Retain

Retain employees by fostering an environment in which all employees understand and value each other - and our differences. We recognize that all businesses change over time. For our business to grow, we need employees who possess an in-depth understanding of the business and the flexibility to anticipate and respond to changes in the marketplace.

We can develop and retain employees by providing equitable opportunities, together with a challenging environment that rewards new approaches, risk- taking and novel points of view, thereby creating a culture that values diversity.

3. Grow the business & innovate

Continually grow our business and innovate by embracing diversity of thoughts and ideas. Create a work environment that fosters and supports enthusiasm, business risk and new ideas. Innovation is key to driving our business forward both now and over the long term and it hinges on a multiplicity of ideas and ways of approaching a problem. By building a diverse employee population that brings many different life experiences to the table, we vastly improve our prospects for innovation and growth.

4. Develop

Develop employees to help them reach their professional potential. As our customers and distribution channels continue to evolve, so too must our employee base. Investing in the development of employees is essential to our growth.

5. Hold accountable

Establish accountability. All employees are responsible for proactively supporting Unilever's goals, and they are evaluated accordingly. Specific behaviors and actions that promote an understanding and appreciation of diversity are incorporated into individual performance plans.

Diversity is one of the thrusts of Strategy Into Action, the plan that drives all aspects of our business. Employees are expected to contribute to the success of diversity goals just as they are expected to contribute to other priorities of the business

By focusing on our goals for diversity as part of our overall business strategy, we recognize that they are intertwined. Indeed, our success and prosperity are inextricably linked to our ability to embrace diversity in every part of the organization. Valuing diversity is the job of everyone - our employees, contractors, and vendors. It is the way we work and the way we do business, day in and day out. CONCULSION & RECOMMENDATION During our visit to the regional office of Best Foods Ltd. I found the company’s culture is not ordinary. Though it is not bureaucratic, but is unrealistic. The company is not system based. System is not strong in the company rather personalities are stronger. The company’s aim is that in every house any of its products must be used daily. So, to achieve this aim the company should realistic. It most adopts the strategies that help the company florish. More emphasize should be given on marketing and promotion activities.