INTERNSHIP REPORT ON

STANLEY FOODS PRIVATE LIMITED (SWAAD)

PESHAWAR

SAMINA IQBAL BANGASH

BBA (Hons)

INSTITUTE OF MANAGEMENT STUDIES

UNIVERSITY OF PESHAWAR
Session: 2014-2018
 INTERNSHIP REPORT ON
STANLEY FOODS PRIVATE LIMITED (SWAAD)
PESHAWAR

This Internship Report submitted to the Institute of Management Studies,

University of Peshawar in partial fulfillment of the
requirement for the Degree ofBBA (Hons)

November 2018
 INTERNSHIP REPORT ON
STANLEY FOODS PRIVATE LIMITED (SWAAD)
PESHAWAR

APPROVAL SHEET

Supervisor:

Certified that Miss Samina Iqbal Bangash has carried out the work contained in this
Internship report under my supervision.

Signature: _______________________________

Name: Mr. Naveed Ahmad.

Designation: Lecturer.

Organization: IMS, University of Peshawar.

Examiner:

Signature: _______________________________

Name: ________________________________

Designation: ______________________________

Organization: _____________________________

Date: ______/_______/_________

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 ACKNOWLEDGEMENTS

First of all I will pay my gratitude to the Allah Almighty for enabling me to complete
this Internship Report and guided me through every single step of this internship. It is
because of Him that I mustered up the courage to write and compile the internship
report myself.

Although it is an academic requirement for getting a degree, I would like to thank

Peshawar University in general and Institute of Management Studies (I.M.S) in
particular to ask the students to undergo an internship for a specific period of time in
any organization of their interest to get a practical exposure of the theoretical
knowledge that they have gained up till now.

I am grateful for having a chance to meet so many wonderful people and professionals
who led me though this internship period. So I am especially thankful to Major
(Retired) Mr..Riaz Muhammad (Director Operations Stanley FoodsPvt limited) who
gives me the opportunity to join his organization.

I will also thank Mr.Fayaz Muhammad (Manager H.R and Administration) and Mr.
Kamran Ali(Finance Manager) who despite of being extraordinarily busy with their
duties, took time out to listen to, guide and keep me on the right track during my
internship.

I am also thankful to my supervisor Mr. Naveed Ahmad for guiding me and providing
proper direction in completion of this report.

In last, I thank all the people who assisted me in any way during my internship.

SAMINA IQBAL BANGASH

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 TABLE OF CONTENTS
ACKNOWLEDGEMENTS........................................................................................i
LIST OF ACRONYMS..............................................................................................ii
EXECUTIVE SUMMARY:.....................................................................................vii
CHAPTER-1.................................................................................................................1
INTRODUCTION TO THE STUDY.........................................................................1
1.1 BACKGROUND OF THE STUDY.....................................................................1
1.2 SCOPE OF THE STUDY....................................................................................1
1.3 PURPOSE OF THE STUDY...............................................................................2
1.4 DATA SOURCES................................................................................................2
1.4.1 Primary data sources......................................................................................2
1.4.2 Secondary data sources..................................................................................2
1.5 LIMITATION OF THE STUDY.........................................................................2
1.6 SCHEME OF THE STUDY.................................................................................3
CHAPTER-2.................................................................................................................4
INTRODUCTION OF FOOD AND SPICES INDUSTRY......................................4
2.1 HISTORYOF FOOD INDUSTRY.......................................................................4
2.1.1 History of Food Spice Industry...................................................................6
2.2 INTRODUCTION OF FOOD INDUSTRY IN PAKISTAN...............................7
2.2.1 History of Food Spice Industry in Pakistan...................................................7
2.3 REVIEW OF FOOD INDUSTRY IN PAKISTAN..........................................8
2.3.1 REVIEW OF FOOD SPICE INDUSTRY IN PAKISTAN.....................10
CHAPTER-3...............................................................................................................15
ORGANIZATIONAL REVIEW OF STANLEY FOODS PRIVATE LIMITED
......................................................................................................................................15
3.1VISION STATEMENT OF STANLEY FOODS...............................................15
3.2 MISSION STATEMENT OF STANLEY FOODS........................................15
3.3 VALUES OF STANLEY FOODS..................................................................15
3.4 BUSINESS OBJECTIVES OF STANLEY FOODS......................................16
3.5 ORGANIZATIONAL STRUCTURE OF STANLEY FOODS......................16
3. 6PRODUCT LINE OF SFPL...............................................................................17
3.6.1 Rice recipes..................................................................................................17
3.6.2 Meat recipes.................................................................................................18

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 3.6.3 BBQ.............................................................................................................18
3.6.4 Plain Spices..................................................................................................18
3.6.5 Other products..............................................................................................18
3.7 DEPARTMENTALIZATION OF STANLEY FOODS PVT LIMITED....18
3.8 FUNCTIONS OF DIFFERENT DEPARTMENT OF STANLEY FOODS...
.......................................................................................................................19
3.8.1 Finance Department.....................................................................................19
3.8.1.1 What I Learned….....................................................................................20
3.8.1.1.1 Vouchers................................................................................................20
3.8.1.1.2 Types of Vouchers.................................................................................21
3.8.1.1.2.1 Journal Vouchers................................................................................21
3.8.1.1.2.2 Bank/Cash Payment Vouchers............................................................22
3.8.1.1.2.3 Bank/Cash Receipt Vouchers.............................................................22
3.8.1.1.2.4 Booking of Vouchers..........................................................................23
3.8.1.1.2.5 Posting of Entries to Ledger...............................................................23
3.8.1.1.2.6 Bank Reconciliation............................................................................24
3.8.1.1.2.7 Monthly Statements............................................................................24
3.8.2 Roles and Responsibilities of Finance Department.....................................24
3.8.2.1 Bookkeeping.............................................................................................25
3.8.2.2 Management of a company’s cash flows..................................................25
3.8.2.3 Budgeting and Forecasting.......................................................................25
3.8.2.4 Advising and sourcing long-term financing.............................................25
3.8.2.5 Management of Taxes...............................................................................26
3.8.2.6 Management of company’s investments...................................................26
3.8.2.7 Financial Reporting and Analysis.............................................................26
3.8.2.8 Assist managers in key strategic decisions...............................................26
3.8.3 Some other Functions of Finance Department of SFPL..............................27
3.8.4 Functions of Some other Department of Stanley Foods..............................27
3.8.4.1 Functions of HR or Admin......................................................................27
3.8.4.2 Functions of Procurement Department.....................................................28
3.8.4.3 Functions of Production Department........................................................29
3.8.4.4 Functions of Sales and Marketing Department.........................................29
3.8.4.5 Functions of Quality Control Department................................................30

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CHAPTER-4...............................................................................................................31
ANALYSIS OF STANLEY FOODS PVT LIMITED.............................................31
4.1 FINANCIAL RATIO ANALYSIS.....................................................................34
4.1.1 Purpose of Financial Ratio...........................................................................34
4.2 TYPES OF FINANCIAL RATIOS....................................................................35
4.2.1 Liquidity Ratios...........................................................................................35
4.2.1.1 Current Ratio.............................................................................................35
4.2.1.1.1 Interpretation..........................................................................................36
4.2.1.2 Quick Ratio...............................................................................................36
4.2.1.2.1 Interpretation..........................................................................................38
4.2.2 SOLVENCY RATIOS.................................................................................38
4.2.2.1 Debt ratio..................................................................................................38
4.2.2.1.1 Interpretation..........................................................................................39
4.2.2.2 Debt to Equity Ratio.................................................................................39
4.2.2.2.1 Interpretation..........................................................................................40
4.2.3 Profitability Ratios.......................................................................................40
4.2.3.1 Net profit margin......................................................................................41
4.2.3.1.1 Interpretation..........................................................................................42
4.2.3.2 Gross margin ratio....................................................................................42
4.2.3.2.1 Interpretation..........................................................................................43
4.2.3.2 Return on Assets (ROA) Ratio.................................................................43
4.2.3.3.1 Interpretation..........................................................................................44
4.2.3.4 Return on Equity (ROE) Ratio..................................................................45
4.2.3.4.1 Interpretation..........................................................................................46
4.2.4 Activity Ratios.............................................................................................46
4.2.4.1 Inventory turnover Ratio...........................................................................47
4.3 SWOT ANALYSIS............................................................................................48
4.3.1 Strengths......................................................................................................48
4.3.2 Weaknesses................................................................................................49
4.3.3 Opportunities............................................................................................50
4.3.4 Threats......................................................................................................51

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CHAPTER-5...............................................................................................................53
RECOMMENDATIONS...........................................................................................53
5.1 RETAIN THE CURRENT PRICES FOR SOME TIME...................................53
5.2 INNOVATE NEW ITEMS AND REVISE SOME OLD ONES.......................53
5.3 RAISE SALARIES AND WAGES TO POSSIBLE EXTENT TO
CONTROL HIGH TURNOVER RATE.......................................................53
5.4 ADVERTISE AND PROMOTE THROUGH INTERNET...............................54
5.5 TAKE ADVANTAGE OF ITS PREFERENCE IN KPK AND TARGET
THE UN-TARGETED AREAS OF KPK.....................................................54
5.6 USE ADVANCED TECHNOLOGY AND SOFT WARES.............................54
5.7 HIRE AN EXPERT CONTENT WRITER......................................................55
5.8 SORT OUT EFFECTIVE STRATEGIES TO INCREASE MARKET
SHARE IN PUNJAB AND SINDH..............................................................55
BIBLIOGRAPHY....................................................................................................56

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 LIST OF TABLES
Table 2.1 – Spices Imports and Exports............................................................11
Table 2.2 - Classification of Spices Industry of Pakistan.................................11
Table 2.3 - Market Share of Branded Spices....................................................12
Table 4.1 Simplified Balance sheet of SFPL (2015-2017)...............................32
Table 4.2 Simplified Balance sheet of SFPL (2015-2017)...............................33
Table 4.3 Simplified Income Statements..........................................................34
Table 4.4 Current Ratio.....................................................................................36
Table 4.5 Quick Ratio.......................................................................................37
Table 4.6 Debt Ratio.........................................................................................39
Table 4.7 Debt-to-Equity Ratio.........................................................................40
Table 4.8Net Profit Margin...............................................................................41
Table 4.9 Gross Margin Ratio...........................................................................43
Table 4.10 ROA Ratio.......................................................................................44
Table 4.11 ROE Ratio.......................................................................................46
Table 4.12 Inventory turnover...........................................................................47

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 LIST OF GRAPHS
Graph 4.1 Current Ratio................................................................................36
Graph4.3 Debt Ratio......................................................................................39
Graph 4.4 Debt to equity Ratio......................................................................40
Graph 4.5 Profit Margin................................................................................41
Graph 4.6 Gross Margin................................................................................43
Graph 4.7 ROA Ratio....................................................................................44
Graph 4.8 ROE Ratio....................................................................................46
Graph 4.9 Inventory Turnover.......................................................................47

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 LIST OF ACRONYMS:

IMS – INSTITUTE OF MANAGEMENT STUDIES

UOP – University of Peshawar
HR – Human Resource
SWOT – Strength Weakness Opportunity Threat
USDA – United States Department of Agriculture
SFPL – Stanley Foods Private Limited
AJK – Azad and Jammu Kashmir
DH – Department Head
R&D – Research and Development
BOD – Board of Directors
UK – United Kingdom
MBA – Master in Business Administration
M.Com – Master in Commerce
QC – Quality Control
WAPDA – Water and Power Development Authority
EOBI – Employees Old-Age Benefit Institution
ESSI – Employees Social Security Institution
ISO – International Standards Organization
SMEDA - Small and Medium Enterprises Development Authority
ROA - Return on Assets
ROE - Return on Equity

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 EXECUTIVE SUMMARY

I composed and compiled this report after spending six weeks of my internship at
Stanley foods private limited. It was a great source of learning for me as I was
provided with firsthand knowledge of how management activities are carried out in an
organization practically. I got particular information about Finance as well as general
information about all the functions of the company including human resource,
procurement, production, quality control and sales and marketing. On the first day, I
was given visit of the factory. Then, for five weeks I worked under the supervision of
the finance department. In the sixth week, I learned about the functions and activities
of the other departments.

While concluding my internship report, I came to know that Stanley foods, commonly
known as, Swaad is an emerging name in the business of spices. It is constituted of
hardworking and dedicated workers, who along with their employers, are striving
hard to establish a good name and gain repute for their company in the concerned
industry as Stanley pharmaceuticals has done. Stanley pharmaceutical is the parent
company of Stanley foods. In a small period of time it has achieved great success
because of its day and night hard work and is listed as one of the best pharmaceutical
companies of Pakistan. Stanley foods also aim at achieving the same success and
much more.

Apart from being an academic requirement, this report is also very useful for other
students and stakeholders (e.g. internal and external managers, potential investors and
creditors, fresh starters’ etc.) who are interested in food and spice business. Although
I have done all efforts to gather as much relevant data as possible, still, limitations
exist due to the fact that much of the office work is done manually and company lacks
use of updated software’s. I have used both primary and secondary sources to gather
information for this report. Stanley foods is doing quite well in a few areas of the
business like it is keeping a close and continuous check on quality. It has a very
cooperative sales team and head office. It is focusing more on establishing its brand
name all over the country rather than earning profit only. But there are a lot of aspects
which needs to be addressed effectively. Still it has got some lacunas which are

ix
addressed at the end of the report along with possible suggestions and
recommendations.

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CHAPTER-1

INTRODUCTION TO THE STUDY

1.1 BACKGROUND OF THE STUDY

Institute of Management studies (IMS) University of Peshawar requires its student of

business administration to undergo six to eight-weeks internship. Selection of
organization depends upon the interest of the student as well as the field of
specialization. This six week practical experience is then documented in the written
form known as “Internship Report” which is based on theoretical and practical
learning of the internee.

Nowadays professional fields are becoming more and more challenging. To survive
and get success in any field, you should have the deep knowledge and appropriate
skills of the concern field. In fact this is very true about the field of management
studies. Knowledge and skills of a person can be polished, if he goes through some
practical experiences. Internship provides an excellent opportunity to students of
professional field especially management studies, to polish their skills and concrete
their theoretical knowledge. Student gets the opportunity to match their knowledge
with the actual happening of the fields. Internship program is the exposure for the
students to the real working condition, and the chance to learn the practical work and
know about the culture, working conditions, processes, and procedures of an
organization to fulfill the demand of a job. All these things are very important for the
student to pursue a good career.

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1.2 SCOPE OF THE STUDY

The scope of the study is only Limited to Stanley foods pvt limited (SFPL) and its
financial position. It encompasses the various departments of Stanley Food (pvt.)
limited, like finance, audit, HR (Human Resource), procurement, marketing and sales,
production, that how they conduct their work.The report limits itself to understanding
the activities of various departments rather than aiming for an extensive analysis of
the entire performance of SFPL. It was beyond the scope of this report to study the
entire process of each department because of feasibility and time considerations.As in
six weeks of work it is not possible to fully understand all the procedures.

1.3 PURPOSE OF THE STUDY

The purpose of the study is to know about the management practices, processes and
procedures followed by Stanley foods. Various types of analysis are done to know the
position of the company from different aspects. Findings are stated at the end of the
report along with the possible recommendations and suggestions.

1.4 DATA SOURCES

No study is completed without using the scientific and systematic ways to get latest
knowledge about the study. For collection of the data, both primary and secondary
sources are used.

1.4.1 Primary data sources

 Personal observation and study

 Discussion with the respective manager and others during the internship
 Informal interviews of the workers and employees

1.4.2 Secondary data sources

 Office documents
 Brochures
 Information from internet

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1.5 LIMITATION OF THE STUDY

Limited information in some aspects partly because of restriction to share information

particularly the financial one and partly because of non-availability of data due to
more use of manual way and less of computer technology and different software to
maintain the data was a real challenge and difficult to overcome indeed.

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1.6 SCHEME OF THE STUDY

The study is arranged in the following sequence;

Chapter1

This chapter is an introductory chapter which describes the background, scope,

purpose, data sources and limitation of the study.

Chapter2

This chapter is about history of food industry worldwide, history of food industry in
Pakistan, review of food industry in Pakistan and finally history of Stanley foods
private limited.

Chapter3

This chapter includes organizational review of Stanley foods.

Chapter4

This chapter is about the analysis of financial statement in terms of different financial
ratios and SWOT analysis of the organization.

Chapter5

This chapter is about recommendations.

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CHAPTER-2

INTRODUCTION OF FOOD AND SPICES INDUSTRY

2.1HISTORYOF FOOD INDUSTRY

Since prehistory times, when life on earth began, human beings have fought and
struggled for food. With the passage of time, humans started to cultivate the land, to
farm and to raise animals in order to make eating easier and less laborious.

Eventually people started to barter, andlater to sell their products, to exchange food
for other goods or to earn profits from them. The sources of food have increased
dramatically and continued to change over time. While people in the past had to fight
to find their daily meals, nowadays we who live in the modernworld are continuously
surrounded by promotions and advertisements for food products of different types,
qualities and prices.

Although it might seem contradictory, in the distant past it was very simple for people
to make decisions about what they would or could eat they just hunted whichever
animal was easily available to provide the most nutritious meal.

Human beings, without knowing it, had an optimal diet rich in lean proteins, fruits
and vegetables. With civilization, industrialization, technological innovations,
mechanization, the economic growth and increasing welfare of people, especially in
the 20thcentury, the situation has changed drastically.

People are spoilt; they no longer looking for food with healthy nutrients, instead they
are attracted by those foods that seem more attractive and tasty.

Often these products are high in carbohydrates, sugars and trans-fats and are low in
vitamins and proteins.

Indeed, during the twentieth century, the food industry underwent the biggest
transformation in its history. Food distributors started to look for faster and more
convenient ways to produce their products standardization, concentration, automation
and simplification seemed to be the key to success. It was during these years, in 1922,

5
the food industry was not stable and the world was facing the hardships and problems
of shortage of materials and of employees in the wake of WWII and only the most
structured and flexible firms managed to survive. Firms continued to increase the
level of processed foods, using synthetic fertilizers and mechanization in order to
maximize profits, and to reduce the costs and maximize the outputs. At that time this
seemed the best way to feed people and to make both consumers and producers
happy, by introducing low prices and high profits.

Today food industry is a complex, global collective of diverse businesses that supplies
most of the food consumed by the world's population. The food Industry includes:

 Agriculture raising of crops and livestock, and seafood.

 Manufacturing agrichemicals, agricultural construction, farm machinery and
supplies, seed, etc.
 Food processing preparation of fresh products for market, and manufacture of
prepared food products.
 Marketingpromotion of generic products (e.g., milk board), new products,
advertising, marketing campaigns, packaging, public relations, etc.
 Wholesale and food distribution logistics, transportation, warehousing.
 Foodservice(which includes catering).
 Grocery, farmers' markets, public markets and other retailing.
 Regulation local, regional, national, and international rules and regulations for
food production and sale, including food quality, food security, food safety,
marketing/advertising, and industry lobbying activities.
 Education academic, consultancy, vocational.
 Research and developmentfood technology.
 Financial services credit, insurance.

It is challenging to find an inclusive way to cover all aspects of food production and
sale. The UK Food Standards Agency describes it thus

"...the whole food industry – from farming and food production, packaging
and distribution, to retail and catering."

6
The Economic Research Service of the USDA uses the term food system to describe
the same thing:

"Thefood system is a complex network of farmers and the industries that link to them.
Those links include makers of farm equipment and chemicals as well as firms that
provide services to agribusinesses, such as providers of transportation and financial
services. The system also includes the food marketing industries that link farms to
consumers, and which include food and fiber processors, wholesalers, retailers, and
foodservice establishments.”

The term “food industries” covers a series of industrial activities directed at the
processing, conversion, preparation, preservation and packaging of foodstuffs. The
food industry today has become highly diversified, with manufacturing ranging from
small, traditional, family-run activities that are highly labor intensive, to large,
capital-intensive and highly mechanized industrial processes.

The organization mentioned here in this report is a food processing company dealing
in manufacture of spices and recipe mixes. Food processing includes the methods and
techniques used to transform raw ingredients into food for human consumption.

2.1.1 History of Food Spice Industry

According to the American Spice Trade Association, today spices have become
known as any dried plant product used primarily for seasoning purposes.

This all-inclusive definition seems to cover a wide range of plants like herbs, spice
seeds and even dehydrated vegetables and spice blends.

There has always been demand for spices all over Indian sub-continent, China and
other civilized nations of the past. Spice was one of the major commodity traded
between 800AD and 1200AD globally and was bought by Arabians and other traders
visiting India and in those days Indian sub-continent was one of theonly places
growing spices which are now being grown by many countries of the world. Spices
were greatly introduced by British during their rule over Indian sub-continent and
were exported to Britain and other parts of the world.

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Today this business has attained the shape of a huge industry operating worldwide in
many different countries around the globe. In this global spice industry, some
countries are playing the role of exporters, some are importers and some are both.

2.2 INTRODUCTION OF FOOD INDUSTRY IN PAKISTAN

Pakistan, the country which is renowned as an agricultural country, is contributing its

70% population to agricultural sector. The remaining 30% population contributes to
different sectors, but within this 30%, 20% belongs to the Food Industry. Pakistan’s
current population is approximately around 20.77 million, out of which 20% are
contributing towards food industry in the form of employment. The other 70% as it is
already stated belong to agriculture sector working as a farmer, fishermen, cattle men,
etc.

Food Industry is the 2nd largest industry in Pakistan. It accounts for 27% of its value
added production and 16% of the total employment in manufacturing sector with an
estimated 180 million consumers. Pakistan holds the world’s eighth largest market.
More than 1000 large scale food processing enterprises are operating in Pakistan.

Pakistan Food Industry comprises of many International and local food companies
which are continuously providing quality taste and food to Pakistani people. Pakistan
Food Industry is classified under a major head on Karachi Stock Exchange which is
named as “Food & Personal Care Products”. There are total 20 companies which are
listed under this head.

2.2.1 History of Food Spice Industry in Pakistan

In Pakistan spices were mainly wholesaled and retailed at Jodia Bazaar after
independence as it was onlywholesale market at that time till 1970s, till companies
like Shan, National Foods and small tradersbecame active whereby they started
delivering the spices directly to the shops. 60% of markets controlled by Jodia Bazar
and National markets where loose spices are being sold and 40% of the spicemarket is
ruled by the branded spice processor. The traders from Jodia Bazar were also actively
involvedin import and export of spices to world, including India and Middle East.

8
Today Pakistan has around Rs.20 Billion of Market in Spice trading comprising of
40% of packed spice and 60% loose spices (or other less known brand spices).
(SMEDA ± Feasibility Report)

Spice got modern forms in the name of Recipe Mix, Ketchups and other forms, which
substitute the waywe cook food, these makes life lot more easy by keeping 40
difference spices in kitchen and using it tocook the food or using ketchup to make fast
food at home.

The industry has growing demand locally and globally and various spice plantations
has been cultivated to earn high yield, perhaps there is less awareness about high
earning a farmer can get through organics pice farming which is in high demand in
the west.

2.3 REVIEW OF FOOD INDUSTRY IN PAKISTAN

Pakistan Food Industry consists of a lot of contributors, from local companies to

International Companies. All of the contributors are striving hard to provide quality
food products to the end consumers.

The focus mainly here is on those contributors which are listed on Karachi Stock
Exchange. Some of the major contributors which are taken from the list are; Engro
Foods Limited, Mitchells Fruits Farm Limited, Nestle Pakistan Limited, National
Foods, Murree Brewery Company Limited, Unilever Pakistan Foods Limited.

For having a better knowledge about the contributors towards the food industry we
must have a bit of knowledge about each of them.

Engro Foods Limited

Engro Foods is considered as the major contributor due to its diverse offering of
products to the consumers. Engro Foods is an owned subsidiary which is involved in
the process of manufacturing, processing and distribution of products, like dairy
products, desserts and drinks. Engro Foods has currently established so many brands
in the market like, Olper, Omore, Tarang and Dairy Omung. Engro Foods Limited
currently holds 71% share of the Food Industry.

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Mitchells Fruits Farm Limited

Mitchells Fruits Farm Limited is another company that is considered as a major

contributor towards the Food Industry of Pakistan. Mitchells was established in 1933
and since then its providing numerous numbers of products to the Pakistani market in
the form of grocery products and confectionary products. Mitchells Fruits Farm
Limited currently offers 140 products subbed under 9 different categories. Mitchell’s
major products includes, Mitchells Tomato Ketchup, Mitchells Fruit Jams, Mitchells
Pickle (Achar). Mitchells Fruits Farm Limited currently holds 1% share of the Food
Industry.

Nestle Pakistan Limited

The third contributor towards Food Industry of Pakistan is Nestle Pakistan Limited, a
renowned name which everyone is familiar with. Nestle Pakistan is operating in
Pakistan since 1988 and from then it has offered so many products which have almost
become a need for everyone. Nestle Pakistan main products include Mineral Water,
Dairy Products, Maggie Noodles, Nescafe, etc. All of these products possess high
quality. Currently Nestle Pakistan Limited holds 4% share of the Food Industry.

National Foods

The fourth contributor towards Food Industry of Pakistan is National Foods. National
Foods began its journey in 1970 and from then on it is progressing. National Foods
offers numerous products but it is mostly recognized due to its spices, jams and
pickles (Achar). Along with these products National foods also offers variety of
products to the Pakistani market like, Ketchup, Rice, Snacks, Salt, Desserts, etc.
Currently National Foods holds 9% share of the Food Industry.

Murree Brewery Company Limited

The fifth contributor towards the Pakistan Food Industry is Murree Brewery Company
Limited, it was established in 1860 and it is recognized as the oldest serving company
to Food Industry of Pakistan. Murree Brewery offers beverages to the Pakistani
market, it provides wide variety of beers, liquor and non-alcoholic beers. Murree

10
Brewery is recognized mostly due to Malt drink of different flavors and juices.
Currently Murree Brewery holds 2% share of the Food Industry.

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Unilever Pakistan Foods Limited

The Fifth and the last contributor discussed of Pakistan Foods Industry is Unilever
Pakistan Foods Limited. Unilever is ranked as the world largest supplier of Fast
Moving Consumer Goods (FMCG’s). Unilever Pakistan Foods Limited was
established in 2007 when it acquired Rafhan Best Foods Limited. Unilever in the
section of Food provides a numerous number of products to the Pakistani market, but
its main offerings are Energile, Knor, Rafhan Custards, etc. Currently Unilever
Pakistan Foods Limited holds 1% share of the Food Industry.

2.3.1 REVIEW OF FOOD SPICE INDUSTRY IN PAKISTAN

Pakistani Food is famous for its taste around the world due to the addition of special
spices which enhances the taste of food mostly making it spicy. The Food Industry all
over the world represents a small niche, named as spices. Spices now-a-days have a
lot of importance due to change in the trends. People around the world and especially
in Pakistan prefer more spicy food. The Spices not just only make the food spicy but
it also takes the food cuisine to a new level. According to Gilani Research
Foundation, 22% people living in Pakistan prefer eating very spicy foods, 26% people
prefer eating less-spicy foods and remaining 52% people of Pakistan like moderately
spicy food.

Spices all over the world are made through a wide range of plants, these plants
include herbs, spices seeds, dehydrated vegetables and spice blends. According to an
American Research Institute related to Spices, it quoted that “Spices are considered as
dry plants which are now-a- days used mostly for the seasoning purpose”. In Pakistan
spices are used for enlightening the taste of traditional cuisine. The Food spices
industry of Pakistan is categorized in two dimensions, branded and non-branded
industry. Branded Spice Industry means that industry in which the spices sold are
branded and they do come under a company or a brand, whereas unbranded spice
industry means the industry in which the spices are openly sold in packets, there is no
name means no affiliation or no recognition. In Pakistan, According to Small and
Medium Enterprise Development Authority (SMEDA) currently there are 8,500
spices and salt grinding units that are working. The figure of 8,500 have grown over
years, in 2010 the unit’s operating in Pakistan were almost 7,000. Out of 8,500 units,
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55% spices and salt grinding units are operating in rural areas of Pakistan whereas the
rest 45% of belong to the urban areas. Interestingly, as the technology is being
modernized around the world and in Pakistan, like newly equipped operating units are
being imported from the world. It is helping the Spices Industry towards growth and
even the trend which was first towards the rural areas is shifting towards urban areas.
The Spices Industry of Pakistan not only contributes towards the local market but it
also contributes towards Pakistan Economy in the form of Imports and Exports. Even
though spices are considered as a small portion of imports and exports but the
numbers are increasing as years are passing. According to State Bank of Pakistan,
following are the figures of Import and Export of Spices shown in table 1;

Table 2.1 – Spices Imports and Exports

Yea Spices Exports (in Thousand US $ Spices Imports (in Thousand US $

r Dollar) Dollar)
2010 26,582 78,414
2011 36,203 69,208
2012 36,718 74,403
2013 44,537 65,550
2014 63,771 79,489

Source Spices Imports and Exports Data according to State Bank of Pakistan
Publication

According to Small and Medium Enterprises Development Authority (SMEDA),

statistics related to Branded Spices Industry and Non-Branded Spices Industry are
shown in table 2;

Table 2.2 - Classification of Spices Industry of Pakistan

Spices Business Volume Estimated Market Share

Branded and Packed Rs. 14 Billion 45%
Non-Branded (Loose Rs 16-18 Billion 55%
Spices)

Source Estimated Market Share of Spices according to SMEDA Pakistan

13
Pakistan’s Branded and Packed Industry currently holds 45% of Spice Industry, of
this 45% the major portion is achieved through the urban areas. Urban areas where
people prefer more towards the buying of packed spices rather than loose spices.

In the Branded industry there are some major players which are recognized by the
market, they are;

 National Foods
 Shan Foods
 Mehran Foods

Along with them there are even other players which are considered as second priority
by the people of Pakistan, the players are;

 Chef’s Pride
 Habib Foods
 Zaiqa Foods
 Ahmed Foods

The above-mentioned names are those names which may be found in the market most
often. Moving towards their prices the branded spices are expensive than the loose
spices, they are 30% more expensive.

The Market shares of these major players in Pakistan Branded Industry of Spices are
shown below in Table 3;

Table 2.3 - Market Share of Branded Spices

Brands National Foods Shaan Foods Mehran Other

Foods
Market 45% 40% 10% 5%
Share

Source Market Share of Branded Spices according to SMEDA Pakistan

National Foods is currently leading the market with a share of 45%.This is related to
the branded and packed spice industry. National Foods is operating in Pakistan since

14
1970. It has created a lot of brand loyalty in spices industry by providing its customers
with high class and hygienic taste. National Foods was mainly responsible for
changing the trend, they changed the mind of consumers that packed spices are much
better as compared to loose spices.

Mehran Foods is another name in the branded spices industry which is operating since
1975. Mehran Foods currently has a market share of 15% and it is growing. The
reason behind their growth is the taste which they have been providing to their
customers, Mehran Foods has also created their brand loyalty which considered as
very important in the field of spices.

The Major players of the branded industry are even operating at International level;
they have created repute of Pakistan Spice Industry all over the world by providing
quality taste.

Pakistan’s Unbranded Spice Industry or in other words industry of Loose Spices

currently holds 55% share, which is greater than the Branded Spice Industry.
According to Small and Medium Enterprises Development Authority (SMEDA) in
2011 the market share of Loose Spices was 60% whereas in 2014 it has decreased to
55%. This change shows that Loose Spices industry in Pakistan is decreasing.

Loose Spices Industry is the industry which does not have any kind of affiliation with
major brands. Spices in this industry are independently sold by businessmen. To work
in this industry, one does not need to have any kind of documentation and this was the
main reason behind the progress of loose spices, but later-on due to changes by
Government in their regulations the trend started decreasing. Along with this reason
another major reason is the taste and brand loyalty which is being created by major
players of branded industry.

These Non-branded or Loose spices companies or individuals setup were and are
involved in unethical practices. These setups prefer earning profits instead of
providing quality taste, even though their prices are low as compared to the Branded
Industry. For Non-Branded Spices Industry low prices are an edge but in the recent
time period they have to fail to capitalize on this edge.

15
2.4 HISTORY OF SFPL

Stanley foods (pvt.) limited is a subsidiary of Stanley Pharmaceuticals (pvt.) limited,

which is one of the most reputed enterprises in Pakistan with more than 17 years of
business operation in the area of Pharmaceutical. The company claims that it has a
leading market share in its categories.

Management vision to diversify their business five years back and decided to
introduce new business area to group. Stanley Foods started it’s infra structure
development and it took 3 years to complete it as per required plan-o-gram.

Stanley Foods, in association with one of the most experienced families in the field of
spices “SULTANIA” are proud to present its premium recipe mix, “Swaad”. A
Perfect blend of modern infrastructure and conventional methods, “Swaad” offers a
taste as authentic as it can be.

Consumer’s panel feedback on developed recipes from selective main cities of

Pakistan like, Karachi, Lahore, Islamabad, Peshawar and Muzafarabad (A.J.K) were
taken and then on the basis of that formulations were readjusted as per regional
authentic taste. Marketing team put their die hard efforts to complete the brand
design, the desired packaging along-with final formulations as per taste of consumers.

Stanley’s quality policy is based on a simple principalQuality inputs -> Quality

outputs

A Self-administered Quality assurance facility guarantees only the use of best and the
most hygienic ingredients to prepare “Swaad”. Stanley Foods started its business
operation in October, 2012 in 35 major cities in Central and Northern areas of
Pakistan with the successful launch of Recipe Mix Masala under the brand name of
“SWAAD”.

We believe that our recent commitment to introduce the new recipe mixes as per the
requirement of different regions and commitment to deliver best to our consumers

16
will take us to our goal to be one of the major players in the recipe mix Masala in
Pakistan and after few years will be having note able share at international level.

CHAPTER-3

ORGANIZATIONAL REVIEW OF STANLEY FOODS

PRIVATE LIMITED

3.1VISION STATEMENT OF STANLEY FOODS

Vision Statement

“To be the 1st Business organization with global reach based at western Pakistan.
Passionately developing the new recipe mix spices along with other food products to
become a leading food’s company and keeping in mind the benefits for all
stakeholders”.

3.2 MISSION STATEMENT OF STANLEY FOODS

Mission Statement

Our mission is to take care of health of human beings by providing them best quality
tasty Recipe Masala mixes which give them their authentic regional taste and also put
the new learning in grinding, packaging, and delivering them hazard free spice masala
to use in their day to day cooking.

3.3 VALUES OF STANLEY FOODS

Values
Integrity

All our business activities / transactions are transparent and have open disclosure
policy.

Our People

We have an experienced team in all functions / departments and DHs are not less than
20 years of experience in their respective field. They are passionate, intelligent and

17
have firm business approach to grow. To facilitate them and their supporting team’s
performance a conducive working environment, proper training to groom and give
challenging opportunities to prove their talent / capabilities. Every significant
achievement is publically recognized.

Innovation

We encouraged and valued innovation/opportunity for improvement in all areas of

operation despite in Research & Development and most of the time awarded /
rewarded.

3.4 BUSINESS OBJECTIVES OF STANLEY FOODS

We believe that our recent commitment to introduce the new recipe mixes as per the
requirement of different regions and commitment to deliver best to our consumers
will take us to our goal to be one of the major players in the recipe mix Masala in
Pakistan and after few years will be having note able share at international level.

3.5 ORGANIZATIONAL STRUCTURE OF STANLEY FOODS

The organizational hierarchy of Stanley foods is given below.

18
Stanley foods private limited is run by a Board of Directors consisting of three
members i.e. Dr. Tila Muhammad, Mr. Zia Muhammad and Mr. Riaz Muhammad.
Mr. Tila Muhammad is the Chairman of the board and Director Finance and
Procurement. Mr. Riaz Muhammad is Director Operations. Mr. Zia Muhammad is the
Director Sales and Marketing.Mr. Abdullah is the secretary BOD.

All of the members of the board have vast experiences in a variety of business fields.

Mr. Fayaz Muhammad is the admin/HR manager. He has done MS in management

sciences from University of Sheffield U.K. He has twenty five years of diversified
experience in management and administration.

Mr. Kamran is the manager Finance with ten years’ experience. He did M.Com from
Peshawar University.

Mr. Imtiaz Ahmed Siddiqui is the head of R&D department. He has forty years of
experience in traditional recipe formation.

Mr. FazalWahab is the Marketing manager. He possesses MBA Marketing with

nineteen years of experience in different national and multi-national companies.

19
Mr. Saqib is the Production manager. He did MS food sciences from Agriculture
University.

Miss Zarmina is the in-charge of QC lab. She also did MS in food sciences from
Agriculture University.

3. 6PRODUCT LINE OF SFPL

SFPL mainly offer the spices they are having variety of products that have captured a
lot of market. The main products they are offering are

3.6.1 Rice recipes

In rice recipes they have Biryani masala, Bombay Biryani and DegiPulao. These
masala mix are mostly used by the people and there is major demand for their
Degipulao.

3.6.2 Meat recipes

For meat recipes they are offering Quorma, Chicken, AcharGosht, Chicken Karahi,
KarahiGosht, Kofta and Nihaari masala mix. Their meat recipes also having its
market and people like all of them.

3.6.3 BBQ

In BBQ SFPL have ShamiKabab, Angaari Chicken Tikka, AngaariTikkaBoti,

AngaariSeekhKabab, PeshawriChapliKabab, Chicken Tandoori, Fish Fry and
ShahiSalanMasala.shahisalan Masala is mostly used by the families and SFPL has a
big market for it.

3.6.4 Plain Spices

Here in this they have Black Pepper Powder, Ginger Powder, MethiPatta,
ShahiGaram Masala Powder, Coriander Powder, Cumin Powder, Garlic Powder,
Turmeric Powder and Red Chilli Powder.

3.6.5 Other products

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SWAAD also offer some others products as well likeHaleem Masala, KadhiPakora
Masala, Easy Cook Haleem Mix, ShahiKheer Mix, Chutni Powder, ShahiPakora
Mix, ChaatmasalaandGajarkheer mix

3.7 DEPARTMENTALIZATION OF STANLEY FOODS PVT

LIMITED

To perform each and every function of the organization efficiently and effectively
SFPL is organized into departments based on the respective functions each performs
for the organization. SFPL create functional departmentalization because all related
activities are performed in one place by one group of people that specialize in that
activity. It is usually done to simplify the process and operations of the organization
and to maintain control. Following are some of the departments of SFPL;

Finance

HR and Admin

Production

Sales and Marketing

Quality Control

Procurement

3.8 FUNCTIONS OF DIFFERENT DEPARTMENT OF

STANLEY FOODS

3.8.1 Finance Department

Finance is one of the major pillars of any organization and an essential ingredient to a
successful business. Nowadays, a finance department has a broad range of roles to
carry out within or outside an organization. The performance and success of any
company greatly depend on how well the finance is handled. Keeping a close watch
on the financing function is very important for the smooth operation of a company. In
this write-up, therefore, I will be reviewing the roles and responsibilities of a finance
department of Stanley foodspvt limited.

21
The term, finance has to be understood clearly as it has different meaning and
interpretation in various contexts. In the words of Howard and Upton, “finance may
be defined as that administrative area or set of administrative functions in an
organization which relates with the arrangement of cash and credit so that the
organization may have the means of carrying out its objectives as satisfactorily as
possible”.

Finance Department is the part of an organization that is responsible for acquiring

funds for the firm, managing funds within the organization and planning for the
expenditure of funds on various assets. It is the part of an organization that ensures
efficient financial management and financial control necessary to support all business
activities.

It is the part of an organization that manages its money. The business functions of a
finance department typically include planning, organizing, auditing, accounting for
and controlling its company's finances. The finance department also usually produces
the company's financial statements.

3.8.1.1 What I Learned…..

During my internship process in the SFPL I worked in Finance department of the

company and had an overview of other departments as well. I worked with Mr.
Kamran Ali the finance Manager who helped me to work in different areas of
accounting and finance. He provided me the platform which helped me in utilizing my
personal skills and to do practical work.

Accounting is the art of recording financial transactions (exchange of one thing with
another but finance should involve in it). Every organization designs an accounting
cycle to keep record of financial transactions. The accounting cycle start with
transactions, after transactions there are journals for keeping the daily records. From
journal the entries are then posted to ledger then trial balance then adjusted entries are
passed and after all these balance sheet is prepared.

I learned the following things:

 Preparation of vouchers

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  Booking of vouchers
 Posting of entries to ledger
 Bank reconciliation month wise
 Various monthly Statement

3.8.1.1.1Vouchers

Avoucher is a documented record of transaction. It is usually prepared after

receiving a vendor invoice and that invoice is successfully matched to a purchased
order. Vouchers must be supported by source documents or transaction documents
e.g. GRR (goods receiving report), Gate pass and invoices etc.

23
3.8.1.1.2Types of Vouchers

In SFPL mainly five types of vouchers used that are; Journal vouchers, Bank receipt
vouchers, Bank payment vouchers, Cash receipt vouchers and Cash payment
vouchers.

3.8.1.1.2.1Journal Vouchers

It is the documented evidence of credit transactions of SFPL. It is used for the

following three purposes.

Adjustment entries

Sometimes it happen that company purchases one thing and passes its entry in the
head of the other thing for example SFPL purchase stationary and mistakenly it debit
travel expenses. So in the above case through journal vouchers the company made
adjustment. We do adjustment because cutting is not allowed in accounting.

Provision accounts

In provision accounts we create liabilities. For example we have to pay the salaries of
the month of June of employees and payment is made in July. But as we have to close
the accounts of a particular month at the end of that month so what we do we create
provision accounts in month of June for salaries.

Credit Transactions

When the SFPL purchases something on credit it creates vouchers of it. In this
voucher it uses to debit and credit the head of account. This type of voucher deals
with the daily transaction such as, receipt of raw material, sale, expense, etc. Before
an accountant open a new head of account the accountant determine the perspective
account of business by the introductory reference given at the time of opening of
account. Preliminary investigation is necessary in order to avoid frauds,safe guard
against unintended over draft, negligence and balancing account

24
3.8.1.1.2.2Bank/Cash Payment Vouchers

After the journal vouchers creations SFPL moves towards payment. Payment is either
made through cash or bank checque. The maximum cash in hand limit for the cashier
is up to Rs.400000. If the payment is more than Rs.75000 then cashier do payment
from the cash in hand, but at the same time he issue bank checque of the same amount
because he has to fulfill other payments as well for which he needs cash, as cash in
hand limit is low. If the payment amount is higher than they directly issue the bank
checque instead of paying from cash in hand.

The company prepares cash/bank payment vouchers through software known as

Quick book. Sometimes SFPL do payment without receiving invoices, in such cases it
prepared the vouchers, wrote paid on it and signed it in order to avoid fraud and twice
entry of a single transaction.

Stanley has different account in different banks. Each account of bank is used for
specific purpose. The salary of employee keep separate account in separate bank, the
transaction related to employee salary deal with this voucher. The Stanley keeps
separate account for supplier, equipment purchase and miscellaneous expenses.

TYPES OF CHEQUE USED IN SFPL

There are three types of cheques used in SFPL for payment purpose. These are
open/self cheque, simple cross cheque and special cross cheque.

Open/self cheque can be easily cashed on the counter. In simple cross cheque two
parallel lines are drawn at the corner and it cannot be cashed at the counter. It is
transferable. In Special cross cheque with parallel lines at corner payee account only
is also wrote. It is non-negotiable.

3.8.1.1.2.3Bank/Cash Receipt Vouchers

When we made collection from a party (debtor) we use cash/bank receipt vouchers. In
SFPL when the collection is made it is either occur through bank checks or cash. The
company supplies its product to the retailers and the retailers made payments
sometimes in cash and sometimes through checks. After receiving the particular

25
amount of credit (that SFPL own to the debtor) it prepare cash/bank receipt vouchers
for record keeping.

For receipts we check the sales department file and bank book and after it we post
entries in receipt book. From receipt book entries are then posted in bank position
beneath each and every particular bank.

3.8.1.1.2.4Booking of Vouchers

When all the vouchers are prepared (after the transactions occurred) then its entries
are passed in Journal, Bank book and cash book. The above mention vouchers entry
recorded at booking. The Journal vouchers recorded in Journal Book, the bank
vouchers entries transfer to bank book and the cash vouchers entries recorded in cash
book.

When we record entry of transaction in Journal then we give number to Journal

voucher which is known as voucher number. It is used for easy identification of
Journal voucher and avoids doubling. Similar is the case of Bank/cash receipt voucher
and Bank/cash payment voucher.

Booking of voucher is the one step in accounting cycle, through booking of voucher
we simplify the entry and the amount that goes to each head in main ledger.

3.8.1.1.2.5Posting of Entries to Ledger

After booking the entries in journal, Cash book and Bank book are then accurately
transfer (posting) to ledger. Each entry is posted under its own head of account.
There are different ledgers books maintain by SFPL for different suppliers. Each
ledger book is closed at the year end and starts a new book for the next year.

In posting of entries each entry is passed into main ledger under each head. The
entries posted to ledger are taken from the Journal, bank book, and cash book. There
is need of putting voucher number, booking number into ledger in the row of entry,
and the page number of ledger where entries were posting and that were used to be
noted at the journal, bank book and cash book. This process helped us to find errors
and errors of omission, with the help of this we trace each entry from ledger to
voucher. In order to have the total figure in respect of each head of expense or

26
income, asset or liability there is need to maintain different accounts. Each account
may have figures on the debit as well as on the credit side. Therefore the difference
between the debit and the credit sides, known as the “balance” would represent the
required total of the particular account. The total of all balances on the Debit side is
always equal to the total of all balances on the Credit side. This is called the balancing
of books of accounts. The balances come after every transaction in a third column,
calculated at the end of a specific time period (an accounting period). A debit balance
shown without brackets and a Credit balance is shown in bracket.

3.8.1.1.2.6Bank Reconciliation

At the end of each month SFPL receive bank statements and reconcile it with its own
record. The main purpose of this reconciliation is to check whether there is difference
in any record maintain by it and bank. In it we tally the bank Book and bank
statement. During the reconciliation we add the un-presented cheque and subtract the
un-credited cheque with Bank Book. Bank charges are also subtract from Bank book.
We also check if entry is passed twice and in last we check the total balance and it
must be equal of both.

3.8.1.1.2.7Monthly Statements

Periodic Monthly statement is a feature of Stanley that simplifies the processing of

duties and fees and promote account based processing. Additional features of periodic
monthly statement include supplier, distributor, etc. streamlines accounting and
reporting processes by providing the capability to make the periodic payments on a
monthly basis. Move from transaction by transaction or daily payment process to an
interest free periodic monthly process.

3.8.2 Roles and Responsibilities of Finance Department

The contributions of finance department to any company and how these contributions
positively affect organizational performance will greatly depend on factors such as the
extent to which the owner/ manager is involved in his company. The roles and
responsibilities of a finance department of SFPL include;

27
3.8.2.1 Bookkeeping

This most basic function of the finance department of SFPL is performed by the
bookkeeper who is analyzed by the manager on daily basis. It involves the day-to-day
recording, analysis and interpretation of a company’s financial transactions. This will
include the tracking of all expenses (purchases, payments etc.) and sales of finished
products. As SFPL is a Startup Company, so this role is carried out by a bookkeeper
who might be replaced by more specialized payables and receivables clerks. In SFPL
there are ledger books, vouchers and invoices that are keeping the record on daily
basis of each and every transaction.

3.8.2.2 Management of a company’s cash flows

Finance department of SFPL is responsible to manage all cash flows into and out of a
company and ensure that there are enough funds available to meet the day-to-day
running of the company. The finance manager also encompasses the credit and
collections policies for the company’s customers, to ensure that vendors and creditors
are paid correctly and on time; and that the company is also paid correctly and as
when due. SFPL has a cashier that is managing its cash flows activities.

3.8.2.3 Budgeting and Forecasting

To perform this function, the finance department of SFPL works with managers of
other departments as well to prepare the company’s budgets and forecasts and also
give feedback with regards to the financial standing of the company. The information
they get while conducting this function is used to fulfill the cash needs of each
department, Plan Company staffing levels, plan asset purchase and expansions at
minimum cost before they become necessary.  The finance department is also using
the past records from respective departments to make better budget and forecast over
long-term and short-term time horizons. Finance manager Mr. Kamran provide all
requirements and with admin and overall boards of directors perform this function.

3.8.2.4 Advising and sourcing long-term financing

SFPL finance department also advise the company to use the best financing mix that
could yield the company the best profit and also help it source longer-term financing

28
at the lowest cost such that there is a profit level of liquidity. There are many varied
paths a company can source funds to finance their business. SFPL finance department
is also performing this function very carefully.

3.8.2.5 Management of Taxes

SFPL is paying many taxes like income taxes on salaries, sales taxes, at source taxes,
withholding taxes and many more.SFPL has good corporate relationship with
government as it is the regular tax payer. It has ensured to the tax department that
implementation of tax matters are done within the framed policies

3.8.2.6 Management of company’s investments

Apart from analyzing and selecting new investments, the finance department of SFPL
also manages company’s existing assets. Together with the fixed assets the finance
department is concerned with current assets as well. Because the company’s working
capital needs to be managed efficiently in such a way as to maximize profitability
relative to the amount of funds tied up since it has more implication on the firm
liquidity than its fixed asset.

3.8.2.7 Financial Reporting and Analysis

Financial reporting and analysis is the function that takes raw accounting entries and
transforms them into meaningful, usable and comparable financial statements. The
finance department of SFPL contributes to organizational growth by measuring and
reporting on regular bases, key numbers that are vital to the success of the company.
Finance manager provide a summary of all funding sources, expenditures and reserves
available for future use (excluding those already committed and budgeted for current
period) some non-financial information are also communicated by finance manager in
a logical and understandable format.

3.8.2.8 Assist managers in key strategic decisions

The finance department provides company management with information necessary

to make strategic decisions such as which markets or projects to pursue, the payback
periods for large capital purchases, decision on what should be given out as dividend
out of the company’s earnings and what to plough back into the business, the best

29
financing mix that could yield the company the nest profit, decision on how to
allocate funds to investment etc., thus, making sure that money is being used in the
best way.[6]

3.8.3 Some other Functions of Finance Department of SFPL

It is led by Mr Kamran being finance manager.

 Supervision of all activities related to finance.

 Watching of vouchers (i.e journal, payment and receipt).
 Verifying account heads.
 Dealing with banks and suppliers.
 Task of bank reconciliation.
 Supervision of account receivables and account payables.
 Timely deduction and submission of tax.
 Preparing of financial statements and reporting to directors.
 Guiding and facilitating external auditors during external audit.
 Product costing.
 Product reconciliation.
 Weekly or monthly reporting of all these functions to the higher authorities.

3.8.4 Functions of Some other Department of Stanley Foods

3.8.4.1Functions of HR or Admin

HR department is led by Mr. Fayaz Muhammad as the HR/Admin manager.

 HR & Admin Manager is responsible to provide administrative and human

resource support in decision making, support and leadership.
 Responsible for the monitoring of overall factory operations administratively
and effective supervision of the performance of overall office and production
staff.
 To maintain strong relations with government agencies like Excise &
Taxation, Police, Wapda, EOBI, ESSI and relevant offices being a focal
person of the company.

30
  Preparation of human Resource and administrative budgets and keep a strong
check on the overall expenditure of the company on administrative side.
 Develop effective measures for the overall security of the factory and updating
the higher authorities on security situations of the area from time to time.
 Responsible for the recruitment and selection of the qualified technical and
non-technical staff to develop a winning team.
 To develop and improve HR planning strategies and administrative plans
including performance evaluation, manpower planning, training &
development, payroll, and other policies.
 To analyze the attendance and regularity of employees in the organization and
recommend personnel action. Implements the company rules of conduct and
other company policies and procedures and issuance of disciplinary measures
if necessary.
 Responsible for setting disputes, labor problems and counseling for any
employees grievances.
 Responsible for the implementation of ISO standards being Management
Representative of the company.
 Responsible to conduct the Internal Audit within the company as per ISO
9001-2015 requirements.
 Any other responsibilities assigned by the company from time to time as and
whenever required.

3.8.4.2Functions of Procurement Department

Procurement deals with three things namely;Raw materials, packing material and
General store (i.e. machinery, stationary etc.).

 Recording of opening and closing balances of these materials on daily basis.

 Recording of minimum and maximum balances.
 Purchase request plus application to higher authorities for materials that fall to
minimum level.
 Quotation (gathering information about different market prices for the same
material along with samples).

31
  Having approval for the purchase of material on most suitable market price
from the quotation by the higher authorities.
 Preparation of purchase order mentioning name of the selected supplier, nature
of the material and its quantity and finally sending it to the supplier to ask for
the delivery of the concerned raw materials.
 Then finally raw materials are received at the company gate and the bill is
received by procurement and sent to admin for approval and to finance
department for payment.

3.8.4.3 Functions of Production Department

Production department also deals with the things with which the procurement
department deals.

 Receiving of raw materials at the gate and checking them.

 Stocking of raw materials.
 Processing raw materials to produce the final product.
 Stocking of finished products.
 Recycling of old and defective products and destruction of products that are
not recyclable.

3.8.4.4 Functions of Sales and Marketing Department

 Coordinating between sales team and head office.

 Yearly and quarterly demand forecasting and communicating that to the
procurement department.
 Price reconciliation.
 Sales analysis.
 Assigning sales target to sales team.
 Promotional activities like offering different incentives to shopkeepers and
offering different schemes especially during peak time, offering free samples
to new shops, offering distributors various types of claims like Stanley’s
branded vehicles etc. Advertisement is done on a small scale keeping the size
of the company in consideration. It is done both through print and electronic
media.

32
33
3.8.4.5 Functions of Quality Control Department

 Keeping a check on quality.

 Ensuring cleanliness and safety everywhere in the organization particularly
the production hall.
 Conducting quality tests in the quality control laboratory.

The tests that are carried out in the Q.C .lab include;

o Ash test
o Moisture test
o pH test
o Iodized test

34
CHAPTER-4

ANALYSIS OF STANLEY FOODS PVT LIMITED

4.1 INTRODUCTION

Organizational analysis focuses on the structure and design of the organization and
how the organization's systems, capacity and functionality influence outputs.
Additional internal and external factors are also accounted for in assessing how to
improve efficiency. Undertaking an organizational analysis is helpful in assessing an
organization's current well-being and capacity, and deciding on a course of action to
improve the organization's long-term sustainability. A restructuring of an
Organization may become necessary when either external or internal forces have
created a problem or opportunity for improvement in efficiency and effectiveness.

When performing an organizational analysis of SFPL, many details emerge about the
functions and capacity of it. All of these details make pinpointing what is efficient and
inefficient difficult. Using theoretical organizational models help me to sort out the
information, and make it easier for me to draw connections. After working through
these theoretical models, the SFPL present situation is more adequately addressed,
and the trajectory of it can be more fully determined. Following are some of the
analysis tools that I have used to check the present performance of SFPL and propose
recommendations accordingly.

35
4.2 ASSETS

Given below is the table showing amounts of assets in simplified balance sheet.

Table 4.1 Simplified Balance sheets of SFPL (2015-2017)

ASSETS 2015 2016 2017

Current Assets
9,795,242 25,156,569 38,695,282
Investments

Loan and 593,546 1,122,436 1,391,791

Advances
Cash Balance 2,938,884 6,689,534 5,995,471
Total Current 13,327,672 32,968,539 40,686,544
Assets
Non-Current
Assets
Long Term 10,242,077 11,455,199 15,407,805
Assets
Total Non- 10,242,077 11,455,199 15,407,805
Current Assets
Total Assets 23,569,749 44,423,738 56,094,349

36
4.3 LIABILITIES AND EQUITY

The following table shows the liabilities and equity values in simplified balance sheet

Table 4.2 Simplified Balance sheet of SFPL (2015-2017)

Liabilities 2015 2016 2017

Total Current
13,408,002 24,153,903 25,822,956
Liabilities
Non-Current
Liabilities
Deferred
419,379 1,515,968 2,150,462
Liabilities

Total Non-
Current 419,379 1,515,968 2,150,462
Liabilities

Total
13,827,381 25,669,871 27,973,418
Liabilities
Equity 10,000,000 10,000,000 10,000,000
Total
Liabilities & 23,827,381 35,669,871 37,973,418
Equity

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4.4 NET INCOME

The table given below shows the sales and net income of SFPL.

Table 4.3 Simplified IncomeStatements

Income 2015 2016 2017

79,784,744
Net Sale 51,030,021 59,320,953

Cost of goods
32,130,501 36,551,931 49,863,230
sold
Gross profit 18,899,520 22,769,022 29,921,514
Admin/sales and
marketing
expenses/Incom 17,387,086 20,770,465 27,814,509
e tax/interest
rate
Net income 1,512,434 1,998,557 2,107,005

4.5 FINANCIAL RATIO ANALYSIS

Financial ratio analysis is the process of calculating financial ratios, which are
mathematical indicators calculated by comparing key financial information appearing
in financial statements of a business, and analyzing those to find out reasons behind
the business’s current financial position and its recent financial performance, and
develop expectation about its future outlook.

4.5.1 Purpose of Financial Ratio

Financial ratio analysis is very useful tool because it simplifies the process of
financial comparison of two or more businesses. Direct comparison of financial
statements is not efficient due to difference in the size of relevant businesses.
Financial ratio analysis makes the financial statements comparable both among
different businesses and across different periods of a single business.

There are different financial ratios to analyze different aspects of a business’ financial
position, performance and cash flows. Financial ratios calculated and analyzed in a

38
particular situation depend on the user of the financial statements. For example, a
shareholder is primarily concerned about a business’s profitability and solvency; a
debt-holder is concerned about its solvency, liquidity and profitability in the
descending order of importance; a creditor/supplier is worried mainly about the
business’ liquidity, etc.

4.6 TYPES OF FINANCIAL RATIOS

Financial ratios can be broadly classified into liquidity ratios, solvency ratios,
profitability ratios and efficiency ratios (also called activity ratios or asset utilization
ratios). Other categories include cash flow ratios, market valuation ratios, coverage
ratios, etc.

4.6.1 Liquidity Ratios

These ratios demonstrate a company's ability to pay their debts and other liabilities. If
they do not have enough short-term assets to cover short-term obligations, or they do
not generate enough cash flow to cover costs, they may face financial problems.

Liquidity ratios hold extra importance with penny stocks specifically since the smaller
and newer companies often have tremendous difficulties paying all of their bills
before their businesses become stable and established.

Some liquidity ratios include the current ratio, quick ratio, cash ratio, and operating
cash flow margin. For investors willing to gain an advantage by getting to know these
ratios, you can see summaries of the actual ratio calculations given below.

4.6.1.1 Current Ratio

Current Ratio is a liquidity ratio that measures company's ability to pay its debt over
the next 12 months or its business cycle. Current ratio is a measure of the current
adequacy of company's current assets to meet its current obligations. It must be
greater than 1. If it is less than 1, liabilities exceed current assets. It can be
found as;

Current ratio=Current Assets/Current Liabilities

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 Table 4.4 Current Ratio

Year Current Assets Current Liabilities Current Ratio

2017 40,686,544 25,822,956 1.57
2016 32,968,539 24,153,903 1.36
2015 13,327,672 13,408,002 1

4.6.1.1.1Interpretation

The current ratio of SFPL is 1 for the year 2015 and greater than 1 for year 2016 and
2017 which indicates that SFPL meets its current obligations through its current
assets.

4.6.1.2Quick Ratio

Quick ratio (also known as asset test ratio) is a liquidity ratio which measures the
dollars of liquid current assets available per dollar of current liabilities. Liquid current
assets are current assets which can be quickly converted to cash without any
significant decrease in their value. Liquid current assets typically include cash,
marketable securities and receivables. Quick ratio is expressed as a number instead of
a percentage.

Quick ratio is a stricter measure of liquidity of a company than its current ratio. While
current ratio compares the total current assets to total current liabilities, quick ratio

40
compares cash and near-cash current assets with current liabilities. Since near-cash
current assets are less than total current assets, quick ratio is lower than current ratio
unless all current assets are liquid. Quick ratio is most useful where the proportion of
illiquid current assets to total current assets is high. However, quick ratio is less
conservative than cash ratio, another important liquidity parameter.

Quick ratio is calculated by dividing liquid current assets by total current liabilities.

The following is the most common formula used to calculate quick ratio

Quick Cash + Marketable Securities + Receivables

Ratio Current Liabilities

Table 4.5 Quick Ratio

Year Cash+MarketableSecurities+Recievables Current Quick

Liabilities Ratio
2017 39,294,753 25,822,956 1.52
2016 31,846,103 24,153,903 1.31
2015 12,734,126 13,408,002 0.94

4.6.1.2.1Interpretation

According to quick ratio SFPL is able to pay its current obligations through its most
liquid assets as its quick ratio is greater than 1 and is increasing yearly.

4.6.2 SOLVENCY RATIOS

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Solvency ratios assess the long-term financial viability of a business i.e. its ability to
pay off its long-term obligations such as bank loans, bonds payable, etc. Information
about solvency is critical for banks, employees, owners, bond holders, institutional
investors, government, etc. Key solvency ratios are the Debt ratio, Debt to equity
ratio, Debt to capital ratio, Times interest earned ratio, Fixed charge coverage ratio
and Equity multiplier.

4.6.2.1Debt ratio

Debt ratio (also known as debt to assets ratio) is a ratio which measures debt level of a
business as a percentage of its total assets. It is calculated by dividing total debt of a
business by its total assets.

Debt ratio finds out the percentage of total assets that are financed by debt and helps
in assessing whether it is sustainable or not. If the percentage is too high, it might
indicate that it is too difficult for the business to pay off its debts and continue
operations.

Debt ratio is calculated using the following formula

Debt Ratio Total Debt

= Total Assets

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 Table 4.6 Debt Ratio

Year Total Liabilities Total Assets Debt Ratio

2017 27,973,418 56,094,349 49%
2016 25,669,871 44,423,738 57%
2015 13,827,381 23,569,749 58%

4.6.2.1.1 Interpretation

From above calculation it is concluded that 58% assets in the year 2015 were financed
by debt, 57% in 2016, and 49% were financed in 2017. It shows positive progress as
debt financing of assets is decreasing from year to year.

4.6.2.2Debt to Equity Ratio

Debt-to-Equity ratio is the ratio of total liabilities of a business to its shareholders'

equity. It is a leverage ratio and it measures the degree to which the assets of the
business are financed by the debts and the shareholders' equity of a business.

Debt-to-equity ratio is calculated using the following formula

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 Total Liabilities
Debt-to-Equity Ratio =
Shareholders' Equity

Table 4.7Debt-to-Equity Ratio

Year Total Liabilities Shareholders’ Debt-to-Equity

Equity Ratio
2017 27,973,418 10,000,000 2.7
2016 25,669,871 10,000,000 2.5
2015 13,827,381 10,000,000 1.3

4.6.2.2.1 Interpretation

From above calculation it is concluded that most of the business assets are financed
by debt as debt to equity ratio is greater than 1. The debt financing of SFPL is
increasing yearly which is not good for the company over all repute.

4.6.3 PROFITABILITY RATIO

Profitability ratiosmeasure a company’s financial performance and its ability to

increase its shareholders value and generate profits. Profitability ratios provide insight
into the profits made by the company in relation to its size, assets, and sales and also
measure the company’s performance in relation to itself. Having past data as a
benchmark, the firm can start to make conclusions as to why profitability is increasing
or decreasing. While liquidity ratios and solvency ratios explain the financial position
of a business, profitability ratios and efficiency ratios communicate the financial

44
performance of a business. Important profitability ratios include thenet profit margin,
gross profit margin, operating profit margin, return on assets, return on capital
employed, return on equity and earnings per share etc.

4.6.3.1Net profit margin

Net profit margin (also called profit margin) is the most basic profitability ratio that
measures the percentage of net income of an entity to its net sales. It represents the
proportion of sales that is left over after all relevant expenses have been adjusted.

It can be calculated through following formula

Net Profit Margin Net Income

= Net Sales

Table 4.8Net Profit Margin

Year Net Income Net Sales Net Profit

Margin
2017 2,107,005 79,784,744 2.64%
2016 1,998,557 59,320,953 3.36%
2015 1,512,434 51,030,021 2.96%

4.6.3.1.1 Interpretation

In 2015 SFPL is able to convert 2.96% of its sales into net income. In 2016 it convert
3.36% of its net sales to net income which indicates a progress but again in 2017 the
ratio get decreased.

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4.6.3.2 Gross margin ratio

Gross margin ratio is the ratio of gross profit of a business to its revenue. It is a
profitability ratio measuring what proportion of revenue is converted into gross profit
(i.e. revenue less cost of goods sold).

Gross margin is calculated as follows

Gross MarginGross Profit

= Revenue

Gross profit and revenue figures are obtained from the income statement of a
business. Alternatively, gross profit can be calculated by subtracting cost of goods
sold from revenue.

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 Table 4.9 Gross Margin Ratio

Year Gross profit Revenue Gross margin

Ratio
2017 29,921,514 79,784,744 37%
2016 22,769,022 59,320,953 38%
2015 18,899,520 51,030,021 37%

4.6.3.2.1 Interpretation

Above calculation indicate that during 2015 and 2017 the production efficiency of
SFPL is 37% which means that 37cents are earned for each Dollar SFPL spent. While
in 2016 38% profit is generated from the given revenue which is a bit greater than the
one in 2015 and 2017.

4.6.3.2Return on Assets (ROA) Ratio

Return on assets is the ratio of annual net income to average total assets of a business
during a financial year. It measures efficiency of the business in using its assets to
generate net income. It is a profitability ratio.

The formula to calculate return on assets is

Annual Net Income

ROA =
Average Total Assets

47
Net income is the after tax income. It can be found on income statement. Average
total assets are calculated by dividing the sum of total assets at the beginning and at
the end of the financial year by 2. Total assets at the beginning and at the end of the
year can be obtained from year ending balance sheets of two consecutive financial
years.

Table 4.10 ROA Ratio

Year Annual net Average total ROA Ratio

Income Assets
2017 2,107,005 50,259,043 4.1%
2016 1,998,557 33,996,743 5.8%
2015 1,512,434 19,488,777 7.7%

4.6.3.3.1 Interpretation

As the ROA Ratio is declining from year to year that indicates the business profit is
deteriorating instead of improving. This show that SFPL is asset-insensitive because
comparing to an increase in assets its profit is declining.

48
4.6.3.4 Return on Equity (ROE) Ratio

Return on equity (also called return on shareholders’ equity) is the ratio of net income
of a business during a year to its average shareholders' equity during that year. It is a
measure of profitability of shareholders' investments. It shows net income as a
percentage of shareholder equity.

The formula to calculate return on equity is

ROE Annual Net Income

= Average Stockholders' Equity

Net income is the after tax income whereas average shareholders' equity is calculated
by dividing the sum of shareholders' equity at the beginning and at the end of the year
by 2. The net income figure is obtained from income statement and the shareholders'
equity is found on balance sheet. You will need year ending balance sheets of two
consecutive financial years to find average shareholders' equity.

49
 Table 4.11 ROE Ratio

Year Annual net Average ROE Ratio

Income stockholders’
Equity
2017 2,107,005 10,000,000 21%
2016 1,998,557 10,000,000 19%
2015 1,512,434 10,000,000 15%

4.6.3.4.1 Interpretation

SFPL is efficient in generating income on the investment as the ROE show a

continuous increase from 15% to 19% and 20%. But we cannot rely on it solely
because the Equity is same and income is increasing so definitely it will be showing
positive impact so we should check debt ratio along with it. Here in case of SFPL debt
ratio is also greater than 1 that indicates SFPL is efficient.

4.6.4 ACTIVITY RATIO

Activity ratios assess the efficiency of operations of a business. For example, these
ratios attempt to find out how effectively the business is converting inventories into
sales and sales into cash, or how it is utilizing its fixed assets and working capital, etc.
Key activity ratios are the inventory turnover ratio, days sales in inventory,
receivables turnover ratio, days sales outstanding, payables turnover ratio, days
payable outstanding, fixed asset turnover ratio and working capital turnover ratio.

4.6.4.1 Inventory turnover Ratio

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Inventory turnover is an efficiency ratio which calculates the number of times per
period a business sells and replaces its entire batch of inventories. It is the ratio of cost
of goods sold by a business during an accounting period to the average inventories of
the business during the period.

Dividing the total cost of inventories sold during a period (which equals cost of goods
sold) by the cost of average inventories balance maintained by a business gives us
dollars of sales made per dollar of cash tied up in inventories.

Inventory turnover ratio is calculated using the following formula

Inventory Turnover Cost of Goods Sold

= Average Inventories

Table 4.12 Inventory turnover

Year Cost of goods Average Inventory Ratio

sold inventory
2017 49,863,230 13,431,502 3.7
2016 36,551,931 10,848,638 3.3
2015 32,130,501 9,888,555 3.2

4.6.4.1.1 Interpretation

The inventory turnover of SFPL is increasing so every year it shows progress.

51
4.7 SWOT ANALYSIS

4.7.1 Strengths

 Quality conscious

The company is extremely committed to provide quality products to its customers and
therefore takes all the necessary measures to ensure high standard quality. All kinds of
hazardous chemicals are avoided that are used by other spice processing companies.
Cleanliness is maintained everywhere in the workplace. Hygiene and safety really
comes first for the company.

 Preferable within KPK

Due to the fact that most of the products of Stanley foods are moderately spicy, they
are preferable with in many regions of KPK because a vast majority of people of KPK
do not like very spicy food. It has third highest sale in KPK after Shan and National.
It has beaten Shan and National in many cities of KPK in terms of sales. With
continuous hard work, it can target other non-targeted areas of KPK as well.

 Cooperative sales team and head office

It’s a common practice in many business companies that the sales team and the head
office works opposite to each other although they have to achieve the same goal. It
happens mainly because of conflict of personal interests but Stanley foods is blessed
in this respect. Its sales team and head office work cooperatively with each other. If
the sales team faces any kind of problem, even the highest official of the head office
helps him to resolve it.Both had faced some tough times together but had overcome
them through their shared efforts

 Close supervision of the higher authorities

The CEO and director operations have close supervision of even the minutest detail of
the business which doesn’t let the employees to take anything for granted. They keep
on visiting the firm regularly and checking the reports of the activities of all the
departments weekly. This is also one of the reasons why everything is running so
smoothly.

52
 More focus on strengthening brand name and image rather than making
profits

Stanley foods is working hard to strengthen its brand image in the targeted markets
and attract the attention of potential customers. Although, it has not reached its
breakeven point yet, still, it cares more about making people familiar with the brand
and gaining their loyalty for the brand rather than merely concentrating on making
profits.

4.7.2 Weaknesses

 Breakeven point not yet achieved

Stanley foods has not covered its breakeven point yet which means it is currently
going in losses. Due to this factor, they are facing many other serious problems like
less spending on advertisement, technology e.t.c. There is a long way for it to go and
achieve its ultimate goals.

 High turnover rate of workers

The salaries and wages given to the employees and workers are really low compared
to the market rate and compared to the work they do.Although, most of the employees
are loyal to the organization and don’t want to leave it because of the congenial and
conducive work environment provided to them, still a few employees and large
number of workers keep on leaving the organization when they are offered with better
salaries from other places.

 Less spending on advertisement and promotional tools

Because of lack of finance it can’t spend much on advertising and promoting its
products which, otherwise, will play an important role in creating awareness in the
general public regarding its products and grabbing the attention of the potential
customers.

53
 Lack of use of advanced technology

Nowadays, most of the successful companies are using state of the art technology to
cope with the needs and requirements of modern business environment. In Stanley
foods, although good technology and machineries are used in the production process
from grinding of raw materials till the packing of the finished products, most of the
office work is done manually which can become much more efficient if advanced soft
wares are used. It will also save a lot of time of the employees which they can utilize
in other more important activities.

 Little innovation (variety and taste)

Other spice processing and food companies like Shan and National are providing a
wider range of products to its customers and some of their products are unbeatable in
terms of taste. So, to compete with these kind of companies, Stanley foods needs a lot
of work in its research and development department not only to increase its product
range but also to provide extra ordinary taste.

4.7.3 Opportunities

 Rising brand awareness

Recently, people are becoming more and more brand conscious as brand awareness is
spreading in them. They can clearly feel the difference between quality of branded
and non-branded products. Also, because of more variety of branded products, more
customization and more convenience of use, people prefer branded spices and recipe
mixes to non-branded spices.

 Food industry is the second largest industry of the country

Food industry is the second largest industry of the country with the demand being
grown day by day. This demand, obviously, needs much more resources to be
satisfied. So it’s a good opportunity for Stanley foods to cash with the provision of
spices and recipe mixes to this expanding industry.

54
 Increasing trend of working women

According to the culture of our country, food is usually cooked by women.

Nowadays, more and more women are coming out of their homes to work. They have
to manage both their homes and offices which leaves them with reduced time to do
the choruses of home. Therefore, they are in more need of ready to use spices and
recipe mixes instead of the traditional way of doing things which needs much more
time.

 Rise in prices by competitors

Shan and National foods are soon going to rise the prices of their products which
provides Stanley foods with a golden opportunity to gain an edge over these two big
competitors and others as well if they retain their prices at the current level for some
period of time.

 Online advertising and marketing

Most of the successful companies nowadays are taking advantage of online

advertising and marketing. Stanley, also, needs to develop effective online advertising
and marketing strategies because traditional ways of advertising and marketing are
expensive for it as it has not achieved its breakeven yet. So use of internet will be
comparatively inexpensive and more effective way.

4.7.4 Threats

 Tough competition

The competition in this business is getting tough day by day as more and more
companies are entering this industry. Also, because of presence of companies like’
Shan and National which are not only well established but have also expanded their
sphere of business to many other countries.

 Increasing inflation

Inflation is a very big hindrance for almost every business in Pakistan to flourish
because people have less disposable income to spend on buying their products,

55
particularly, when they are branded. If inflation keeps on increasing without letting
the people to have enough disposable income, there is an increased possibility that
people will ultimately switch to non-branded spices which are much more cheaper
than the branded ones.

 Shortage of raw materials

Although, Pakistan is an agricultural country and most of its economy depends upon
agricultural output but still it is unable to extract maximum value out of its
agricultural land.Most of the agricultural land in Pakistan is non-cultivated due to old,
traditional and outdated ways and mechanisms of agriculture. If this situation persists
for a longer time, it will definitely get harder and harder to satisfy the needs of
growing food industry as enough raw materials won’t be available and they will, also,
have to be exported which will, further, rise the cost of production thus, increasing the
prices of spices and recipe mixes.

56
CHAPTER-5

RECOMMENDATIONS

5.1 RETAIN THE CURRENT PRICES FOR SOME TIME

As Shan and National foods are going to increase the prices of their products which
include fifteen to sixteen items, it presents a golden opportunity for Stanley foods to
retain their current prices for some period of time to gain an edge over its immediate
competitors. Using this strategy, it will not only penetrate deep into the already
targeted markets but it may also convert the non-users into users. This strategy may
also help it increase its market share in Punjab and Sindh.It is already difficult for a
larger part of the population to buy branded products. Increase in the prices of spices
and recipe mixes may make it even more difficult for users to buy them. So, they may
switch to other non-expensive brands.

5.2 INNOVATE NEW ITEMS AND REVISE SOME OLD ONES

Any firm dealing in spice and recipe mixes business continuously needs innovation
and creativity for being the most successful company in this industry. Because, the
more wider the range of products, the more users and, hence, market share of that
company.Because, the percentage of people using these products are increasing day
by day as their lives are becoming busier and people have less time to cook delicious
food. In Pakistan, food is usually cooked by women at homes. But, now an increasing
number of women who are going out of their homes to work professionally and earn
money is changing the trend of cooking through old and traditional time consuming
methods. Recently, after the successful launch of gajar kheer mix, it is obvious that it
will be better for Stanley to keep on introducing new items after regular intervals.
Also, it needs to revise some of its products in terms of taste and make them much
better to be successful like podina chatni and degi pulao.

5.3 RAISE SALARIES AND WAGES TO POSSIBLE EXTENT

TO CONTROL HIGH TURNOVER RATE

Stanley foods provide a congenial and conducive working environment to its workers
and employees which is an important factor of their commitment and loyalty towards
57
the firm. It also provides free of cost food and transport to all its workers and
employees on daily basis which compensate their low wages and salaries and decrease
the switching rate of employees to other organizations which don’t provide them these
facilities with a slight increase in salaries. Still, due to rising inflation rate, it gets
harder for the workers to manage their livelihood expenses within the low wages
provided to them by Stanley and a few employees but, many workers keep on leaving
the organization which affects the organizational performance. So, Stanley should
either raise their salaries and wages to the extent possible or find some other ways that
are effective in controlling this high turnover.

5.4ADVERTISE AND PROMOTE THROUGH INTERNET

As Stanley foods has not reached its breakeven point yet and it is still going into
losses so it is quite difficult for them to spend extravagantly on advertising and
promotional activities as done by other companies. But, nowadays businesses are
massively taking advantage of internet. Through internet, they can give a vast
exposure to their products without spending much. So, it is an opportunity for Stanley
to take benefit of internet promotion and advertisement which it has not capitalized
till now to a satisfactory level. With the help of internet, it can not only attract the
regional customers but national and international as well with spending lesser as
compared to the traditional methods of promotion.

5.5 TAKE ADVANTAGE OF ITS PREFERENCE IN KPK AND

TARGET THE UN-TARGETED AREAS OF KPK

Most of the people in KPK don’t like too much spicy food. This is one of the reasons
why Stanley foods has quickly captured a large part of the market in KPK because
products of Stanley foods are moderately spicy with a few exceptions like biryani
e.t.c. It has third highest sale in KPK even in some places it has beaten Shan and
National foods in terms of sales. Still there are some places where it hasn’t reached
yet. So it should try to reach out those untapped markets as well.

5.6 USE ADVANCED TECHNOLOGY AND SOFT WARES

Stanley foods is using good machineries and technology in its production area from
grinding of raw materials till packing of the finished goods but it lacks application of

58
advanced technology and software’s in its main offices as used by most of the
successful companies. Most of the work in offices is done manually by the
employees. Implementation of advanced technology will update the overall system
and make it more efficient. Slowing of the process will no more be a problem for the
employees and they will be able to give their spare time to other important activities.

5.7 HIRE AN EXPERT CONTENT WRITER

Progressive companies hire content writers who keep onregularly updating all of the
material that needs to be laid down. It lessens the burden of these extra activities on
the people who are responsible for achieving the main goals and objectives of the
business and makes them better able to focus on their core duties and functions.
Hiring an expert content writer will make needed and updated information available
for both internal and external users. He will organize the information in a much better
way. Above all, this step will enhance the positive image of the company in the eyes
of general public.

5.8 SORT OUT EFFECTIVE STRATEGIES TO INCREASE

MARKET SHARE IN PUNJAB AND SINDH

It has very little market share in Punjab and Sindh as compared to other well
established companies like Shan and National foods and a few others. It has to sort
out creative and effective strategies to penetrate the markets of Punjab and Sindh
deeply. It will help Stanley in achieving its ultimate goal of becoming a successful
national and then international company.

59
 BIBLIOGRAPHY

Books:

 Coulter.,Management 11th edition

 James C. Van Horne,Fundamentals of financial management 13th edition
 Fred. R. David.,Strategic management 12th edition

Web Resources:

 https://en.wikipedia.org/wiki/Food_industry
 https://tesi.luiss.it/15698/1/177941.pdf
 https://www.scribd.com/doc/37193856/Strategic-Management-
Comparision-of-Shan-Foods-and-National-Foods
 https://www.slideshare.net/abinaushahi/strategic-analysis-of-shan-food-
industries
 https://www.stanleyfoods.com/companyprofile.php
 https//www.pharmapproach.com/roles-responsibilities-finance-
department-pharmaceutical-industry/
 http//www.businessdictionary.com/definition/finance-department.html
 https://accountingexplained.com/financial/ratios/
 https://en.wikipedia.org/wiki/Organizational_analysis

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