Shamim & co. (pvt) Ltd Multan

Internship report on

Submitted By: Zahid Bilal BAF-09-44

Department of commerceBZU, Multan.

Preface

This report is submitted in the practical acknowledgement of BS (A&F) program. This report is developed from internship and the data from internet in which I have defined about the Pepsi Cola ( Pvt) Ltd. It contains work done from June to August 2012.

Acknowledgement:

I am heartily thankful to my teacher and Pepsi management whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of the internship and in writing the report about my internship from I have learn a lot because it is a demonstration of my ability in research, analysis, and effectiveness of expression. After writing this report ideally adds to the store of human knowledge and serves as a contribution to future researchers.I am really thankful to Mr. Asif Bukhari and Mr. Javed Iqbal who have so much coordinated with me and gave me advices about career planning. I am also very thankful to Mr. Usman Butt, Mr. Tahir Ameen, Mr. Afzal, and Mr. Khuram Shehzad who gave me very valuable knowledge about the workings in their respective departments.Last but not least, all admirations for my parents without them I will be nothing.

Table of Contentspreface2Acknowledgements3Executive summery 6History of Pepsi Cola7History of Pepsi Cola in Pakistan8Introduction to Shamim & Co. (Pvt) Ltd Multan9Organizational structure10Departments of Shamim & Co. (Pvt) Ltd Multan11Currently Offering Products11Mission Statement..12Objective13My own activities...13-Finance Department13Insurance & supply chain department15Life insurance15General insurance15Supply chain16-Supplier17- Audit department..18- Accounts coordination department 18-Management Department19HRM department20Process of Recruitment and Selection Chart21-Financial Analysis23Liquidity Ratios23Current Ratios23

Average age of Inventory24 Accounts receiveable turnover in days24Profitability Ratio25Financial Leverage Ratios27Interst coverage Ratio28PESTEL Analysis30SWOT Analysis32Competitors33Market Share33Suggestions34

Executive Summary

This report contains my learning during my internship in Pepsi (Shamim & Co. (Pvt.) Ltd). Shamim & Co. is a franchise of PepsiCo International, in Multan and covering almost area from Okara to Rahim Yar Khan. Shamim & Co. have number of departments including HR, Marketing & Sales, Accounting & Finance, Production, Shipping & Logistics, MIS (Management Information system), IT, Insurance and Banking.I was sent to different departments during my internship; there I got exposure of corporate world and learned a lot how to use your learning at institution in the practical field. Although both are quite different at hand but learning always help at every step.In this report I also brief functions of different departments through which I have gone through and afterwards I have also mention, what I gain in every department. After departments overview I jot down the points of SWOT analysis and PEST Analysis. In the last suggestion which I thought that are good for the Shamim & Co. are given and then conclusion.Whole report is basically my learning on how to manage the work, decision making, leadership techniques, teamwork, and management of the organization.

History of Pepsi Cola:

Pepsi cola started in the January 1898, from a small drug store in the city of North Carolina. The owner of the Drug store Mr. Caleb Bradham prepared a drink, which the customer called the Bred Drink. Bred registered this drink, with the name of Pepsi cola in 1903. Then he started his own production at Marco level and establishes his own company. The business expanded and this drink got fame time. In 1909 this company reached to 24 states of America with more than 250 dealers. The very first packing of Pepsi was in 16.5 ounce.

In 1932 Pepsi cola has introduced its new packing in 12 ounce. In 1950 Pepsi cola started has its new Advertising Campaign with the name of Refresh without Filling. It also changed the chemical formula and decreased its sweetness and calories.

With the effort of the Sales & Marketing Department, Pepsi got so much fame that it established new plants at a rate of thirty per annum. In 1985 the design of the bottle has been changed after 20 years and a new and attractive packaging has been offered with two new flavors i.e. Teem & Mirinda.

History of Pepsi Cola in Pakistan:

Pepsi cola is being produced and consumed 1n 48 countries of world including Pakistan.At present, Pepsi Cola is No. 1 in Pakistan in terms of sales wise and in market share. In Pakistan pepsi Cola is the market leader. But overall in the world Coca-Cola is No. 1.In Pakistan, there are nine territories where the franchised unit produce and sell Pepsi-Cola. Some of these territories are:1. Lahore2. Karachi3. Rawalpindi4. Peshawar5. Multan6. Gujranwala7. Sakhar8. Faisalabad9. Baluchistan

Introduction to Shamim & Co. (Pvt) Ltd Multan:

Shamim & company (Pvt.) Ltd. is a franchise of Pepsi Cola International. The company established in 1964. Mr. Allah Nawaz Khan Tareen was the founder of the company and also chairman. It is a great pleasure of Shamim & Company that it was Second Beverage Company of Pakistan that time, and this time one of famous Beverage Company of South Asia. There are 9 franchise of Pepsi cola international in Pakistan, Shamim & co. is one of them that is situated at District jail road Multan. Other franchise of Pepsi cola are situated in Lahore, Faisalabad, Karachi, Islamabad/Rawalpindi, Gujranwala, Sakhar, Peshawar and Baluchistan that are describe above. The company was started 1st production in 1967 that time brand was 7-up 270ml that is why it is also known as 7-up factory. It is deal in CSD (carbonated Soft Drinks). Pepsi cola international franchise Shamim & company covering 18 districts & 135 stations.Shamim & Co. Multan has very committed staff and this is the reason that it captures more than 85% share of market share. Company has now serviced new experienced & competent sales staff & increases this share to 90% and above.As the distribution channel is conserved company has a very well-establish distribution network covering whole of the franchise areas.Depending on the potential of the town we have one and more than one distribution in each town. Sales supervisor, sales officer is responsible for all the activities of the entire distributor. Salesman training is also a main responsibility of sales supervisor.Company has invested too much money in shape of coolers, counters and cabins.These are offered to those shops which are producing good sales to promote sales.All the services matters of coolers and maintenance and look after of these assets are also the responsibility of our sales force.Every salesman the distribution network is covering a specified area in which all the points and shops are listed in a Route Card salesman is bound to fill that.

Route card with the sales figures of every point on that specified day.

Organizational structure:

Departments of Shamim & Co. (Pvt) Ltd Multan:

There are seven main departments of Shamim & Company. Production Department Management Department Research & SIS Department Finance Department Cash Department Sales & Marketing Department Human Resource Department Accounts coordination department Audit department

Currently Offering Products:The first product of Shamim & Company was 7-up. But the Company is producing 4-products: Pepsi Cola Mirinda 7-up Diet Pepsi Mountain Dew sting175 ml 250 ml1000 ml1500 ml2250 ml

All the products are available in these Quantities

We aspire to make Pepsi Company the worlds premier consumer Products Company, focused on convenient beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrityMISSION OF COMPANY:

Objectives:

The company operates through well experienced, loyal and hardworking employees. The first and the most basic plan it to train them according to the changing technology and computerized environment, and satisfying their needs and requirements. Upgrading the plant structure and installation of the new machinery are other plans. The company is planning to increase its sales force and development in its infrastructure in the coming time period.

My own activities:

Finance Department:

Finance department deals with the money and how it is used. The main objectives of the Finance department are to manage the cash flows and how to generate the finance. Mr. Asif ali Bukhari is the head of the finance department. Mr Asif says that Finance considers the relationship of money to time and risk. One of the main subordinate of finance is the study of credit and banking, as this involves money, time, and risk all together. Finance also deals with the personal or corporate issues, like how will an individual or a company acquires the money needed to perform a certain act.

Operations:Department of banking and finance involves in different type of operations Short term financing Long term financing Letter of credit. Short term Cash finance is a type of short term financing. Running finance and working finance are also involves in short term financing. Long term Leasing and term financing are dealing in long term. Two parties are involved i.e. lease (to take) and leaser (to give). Two types of leasing Operating leasing Financial leasing In operating lease the ownership title is renewed mean after maturity the ownership is not converted. In financial leasing case the ownership title is converted mean at the end of maturity ownership is converted. In Pepsi all the activities are on financial leasing. How to make the schedule? Date, installments, markup rate, principal and ending principal are important. Principal portion and markup portion make the rent. Securities, pledge and collateral terms are used in leasing. Lease schedule should be per day, monthly and quarterly basis. On the size of the company the terms and conditions are varying for approving the lease e.g. Pepsi have more than 1000 million for approving the lease.

Letter of credit (LC) It is issued by a bank at the request of an importer and states that the bank will pay a specified sum of amount to a beneficiary, normally the exporter, on presentation of particular, specified documents.

In Shamim and Co. two types are used1. At maturity it is used in land. It is also known as documents acceptance.2. At sight. It is used in foreign. It is also known as documents presented.Insurance & supply chain department Insurance mean to secure the assets. In Shamim and Co, there are two types of insurance1- Life insurance2- General insurance

Life insurance To claim on death. Co. did not responsible on health causes.Employee name, father name, date of birth and designation are filed. Checked these details and send to state life. State life proofed all information and gives the claim amount. Claim is renewal after 365 days. Group insurance policy having the information like NIC, death certificate, physicians claim form about outgoing and new employees and give it to the state life(bank).Pepsi cola mentioned 2 categories A & B. In A category, guards, supervisor, line manager etc. are here and their premium is less. In B category, executives, middle and generals managers here. Their premium is high.

General insurance

Two types are here; marine insurance and fire insurance. Marine insurance is basically used for those goods that are in transit. In special conditions the premium rate will be differed. E.g. premium value is calculated as; sum which is insured, rate and 17% duty. In marine insurance, do not take discount. Fire insurance having the premium payment receipt (policy), rate and conditions are changed while all the others things are same. Take the discount. Leasing is not mature the insurance will be given by the bank. Safe from any risk bank take 110% or 120% premium.Supply chain

There are two concepts of supply chain in Shamim and Co.1. Input supplies2. Output suppliesThe input supplies procedure is planned for annually and then divided in monthly and weekly within economic scale. The planning depends upon: - Production and sale - forecasting on previous basis - Current conditionsThe output supplies are linked with sales and marketingIn Shamim and Co. basic dealing in supply chain is raw material i.e. - Crown corks - Caps (liter, pet) - Carbon dioxide gas - Chemicals For packaging- Pet bottles- Pet packing material- Label- Glue Supply chain department maintain the documents: Goods receivable notes Invoice Online payment receipt Quality certificate Payments receipt Purchase order

Suppliers:The main suppliers for different materials are

MaterialSupplier

CapsImran (Karachi)Continental (Karachi)

Pet BottlesPlasto Bag Hattar (Islamabad)Mehran Karachi

Glass BottlesToyo LahoreGhani Glass Karachi

CO2Al-Khair gasPAK-Arab gasSupreme Gas

Plastic ShellsMehran / Blow Plast KarachiPlasco Pack Hattar (Islamabad)

TOTWaves Lahore LtdVarioline Pak Ltd

CrownsImran Traders KarachiJillani Traders Karachi

Audit department: The head of audit department is Mr. Javiad Iqbal sahib. The Basic purpose of this department is is to verify the glass of 250ml and 1,000ml.It prepares five different types of reports.Shipping report: In shipping report all the details about empty stock (bottles), filled stocks that are takes and given by the distributers. Production report:It prepares at the time of production process. EB4: In EB4 report all empty bottles are filled and available in EB4 (excise before duty). There is no charge the duty when stock in factory. DPG: After paying the duty the stock is stored in warehouses of Pepsi like DPG1, DPG2 and DPG3. And RGI is a running godown.Distribution Load:This report is prepared when the stock is loaded for the distribution.

Accounts co-ordination department:

Mr.Khuram sahab is the head of Accounts co-ordination department. This department works on purchasing the goods, making the bills and payments. All the claims are in written form. Fuels, daily allowance and phone expense allowances are the main payments. They make the purchase order and check that the goods are received then approve the cash bill for payments.The main purpose of this department is to make the budget. Because it having all the information about income and expenses of the company. Budget is very important for controlling the expenses of company. For this purpose minimize the expenses as department wise.

Management accounts department:

Tahir Ameen sahab is the managing director as well as the head of the management department. The main purpose of this department is that to see the operations of the company. They make the reports of all activities like Production report Amanat comparison report Raw material report High and low fill losses Daily co2 consumption report Useable caps status reportAll the brands like 7up, pepsi, marinda, dew and sting all are dealing in standard (regular) i.e. converted in 250ml.Management department prepares more than 50 repots per day to manage all the operations performed in the organization.

HRM department:

HRM is a bridge between employee and employer. Basic purpose is to co-ordination. The main functions are given belowRecruitment is the process of finding and attracting capable applicants to apply for employment. Although operating managers are often involved much of the recruitment responsibility is of the professionals in the HR department, these professionals are called recruiters. Recruiters should be aware of the constraints and challenges surrounding the recruitment process before they attempt to find suitable applicants.

Once new recruits are hired, they must be given adequate training and orientation, so that they have ample knowledge about their respective commitments. Mr.Taahir sahib and Afzal sahib are the head of this department.

Process of Recruitment and Selection Chart:

CV acceptanceQualification

Written TestIf Qualified RJP

Demand generation By respective deptExperience

3rd Interview2nd Interview 1st Interview

Panel interviewBy Mngr of By team tracking MngrWith GMRespected Dept

Final Selection Joining

A yearly training program is devised, which is mandatory for all sales personnel. This is done to develop the employee abilities to (a) Manage them (b) Work with others (c) Lead others. Few of the salespeople were also exposed to overseas training and 10 of then were sent on international assignments for developing their skills and experience. Incentives and gain sharing are compensation approaches that reward specified outcomes. Incentives usually link individual performance and rewards, whereas gain sharing unusually embraces groups of employees.

Financial Analysis:I was provided with some financial data of Pepsi (Shamim & Company Private Limited) and with the help of that financial data I have been able to analyze the financial condition of Pepsi (Shamim & Company) in terms of ratios. These ratios are as follows:

Liquidity Ratios

Working Capital:Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. Working capital is an indication of the short run solvency of business.= Current Assets-Current Liabilities17441-18154= (713)

Current Ratio:

It provides an indication of the liquidity of the business by comparing the amount of current assets to current liabilities. This ratio measures the short-term debt-paying ability of the company.

=Current Assets Current Liabilities= 17441 18154= 0.96This ratio is showing that the companys short term debt paying ability is not so good, as its current assets proportion to current liabilities is low, which is resulting in very low ratio as compared to the standard ratio of 2.Average Age of Inventory:It measures how quickly the inventory of company liquidates.= Average Inventory CGS/365=(3372+3877)/2 31953/365= 41.4This ratio is showing that the companys inventory is liquidating or converting into sales in 41 days.

Accounts Receivable Turnover in Days:It indicates the liquidity of receivables of the company in days.= Average Gross Receivables Annual Net Sales / 365= (6323+6912)/2 66504 / 365= 36.31This ratio is showing that the liquidity of companys receivables is 36 days i.e. the amount of receivables is collected within 36 days.

Profitability Ratios

Net Profit Margin:It is a measure of net income generated by unit of sales. The Profit Margin of a company determines its ability to withstand competition and adverse conditions like rising costs, falling prices or declining sales in the future. The ratio measures the percentage of profits earned per dollar of sales and thus is a measure of efficiency of the company.= Net Income Net Sales= 6462 66504= 0.097This ratio is showing that the companys efficiency is enough to continue the business as its net profit margin is 9% of its net sales.

Gross Profit Margin:It is the measure of an operating income generated by each dollar of sales. It indicates the relationship between net sales revenue and the cost of goods sold. This ratio should be compared with industry data as it may indicate insufficient volume and excessive purchasing or labor costs.= Gross Profit Net Sales= 9633 66504= 0.14This ratio is showing that the proportion of gross profit to net sales is 14% which might be good or not according to the trends of industry ratios. The ratio showing that the companys efficiency is enough to continue the business as its net profit margin is 14% of its net sales.

Return on Assets:The Return on Assets of a company determines its ability to utilize the Assets employed in the company efficiently and effectively to earn a good return. The ratio measures the percentage of profits earned per dollar of Asset and thus is a measure of efficiency of the company in generating profits on its Assets.

= Net Income Average Total Assets= 6462 (68153+72882)/2= 0.09This ratio is depicting that companys net income is .09 times of its total assets i.e. 9% profit is generated by its total assets.

Return on Investment:Measures the income earned on the invested capital.= Net Income Long-term Liability + Total Equity

= 6462 20568+20899= 0.15The ROI ratio is showing that the companys invested capital is generating 15% profit.

Return on Equity:Measures the income earned on the shareholder's investment in the business. The Return on Equity of a company measures the ability of the management of the company to generate adequate returns for the capital invested by the owners of a company. Generally a return of 10% would be desirable to provide dividends to owners and have funds for future growth of the company.

= Net Income Equity= 6462 20899= 0.30This ratio is good enough to pay out handsome dividends as 30% profit is generated by capital invested by the owners of the company.

Financial Leverage Ratio

Debt Ratio: It provides information about the company's ability to absorb asset reductions arising from losses without jeopardizing the interest of creditors.= Total Liabilities Total Assets= 51983 72882= 0.71This ratio is showing that in proportion to total assets, 71% is coming from creditors.

Debt to Equity:Indicates how well creditors are protected in case of the company's insolvency. This ratio indicates the extent to which debt is covered by shareholders funds. It reflects the relative position of the equity holders and the lenders and indicates the companys policy on the mix of capital funds.= Total Debt Total Equity= 51983 20899= 2.48This ratio is showing that the companys total debt is 2.48 times of its total equity which is reflecting that creditors are protected enough by the shareholders funds in case of insolvency.

Interest Coverage Ratio (Times Interest Earned):It indicates a company's capacity to meet interest payments. Uses EBIT (Earnings Before Interest and Taxes)= EBIT Interest Expense= 9690 856= 11.32This ratio is showing that the companys earnings before interest and taxes is 11.32 times of its interest expenses so it has enough capability to meet its interest expenses.

Cash Turnover:Measures how effective a company is utilizing its cash.= Net Sales Cash=66504 4067=16.35This ratio is depicting that the utilization of cash is effective as it is generating 16.3 times net sales.

Total Asset Turnover:Measuring activates of the assets and the ability of the business to generate sales through the use of the assets. The higher theTotal Asset Turnover is the more effective use of the company's investments. Total Asset Turnover can be very useful if you watch what actually makes up the Total Assets of the company. A company with low inventory and strict credit policies to keep Accounts Receivable low will help the Total Asset Turnover look even better. Of course it depends on all of the company's Total Assets.

=Net Sales Average Total Assets=66504 (68153+72882)/2=0.94This ratio is showing that the usage of companys total assets is enough to generate handsome sales i.e. 94%. The company is having good credit policies about the recovery of receivables, more liquid inventory, etc.

PESTEL Analysis:

POLITICAL FACTORIn Asia and especially in Pakistan where the political environment is not stable no Government has completed its tenure except the last and the politics also a great influencer on the different industries of the country. Now following are the effects on the beverages industry. The govt. decides that what will be the rates of sales tax The rates of main operating variables inputs such as the Electricity are also decided by the govt. ECONOMICAL FACTORS

The country like Pakistan whose economy is not strong enough is affected by so many economic variables which are the following. Low literacy rate is a problem due to which rural customers are not able to differentiate between PEPSI and Coke and etc. Employment opportunities will be higher. Increasing demand of PEPSI requires establishment of new production plants. Combined pricing decisions with mutual agreement between PEPSI and Coke.

SOCIAL FACTORS

The social factors of each society and culture are different from each other so these also influence the industries as well. Now it has become a trend that soft drink should be served in almost every gathering. Fast food popularity among teenagers has led to the increase in demand of PEPSI. Social welfare program is also active at PEPSI for example PEPSI donated 1 million Rs. For helping recent earth quake victims. They have been sponsoring different cricket events and Pakistan cricket team for almost 10 to15 years.TECHNOLOGICAL FACTORS

Today is the era of Technology whether it is Information Technology or Production Technology so the PEPSI is also affected by these. Following are some of these. Previously there were separate production plants for the production of specific brand size. Now they have installed a new production plant which is capable of producing different brand sizes at the same time. The plant which they installed at the time of establishment has now been grounded. The sixth production plant which is currently being installed is imported from Germany. The seventh production plant which is currently being installed is the latest that is imported from Italy. There is no institute in Pakistan providing engineering training regarding beverages production plants so PEPSI people have to arrange onsite training for its maintenance engineers to learn working with latest technology plants There is very limited automation to keep production record. Most of the record is maintained manually but currently they are trying to shift towards fully automated production control system.

ENVIRONMENTAL FACTORS

They are having an ammonia plant installed within the residential area of Multan so they have to follow environment safety laws imposed by govt. As they are having no solid waste but they have to make special drainage arrangements for the disposal of water used to wash empty bottles before filling them.

LEGAL FACTORS As there is no concept of profit repatriation so the govt. involvement in profit distribution is nil. Laws regarding working condition, working hours and child labor are also enforced by govt. Because of their location in residential and urban area they are not able to perform loading and unloading of trucks in day time because trucks cant enter in urban areas in day time. So they can only load and unload trucks between 10 PM to 6 AM.

SWOT Analysis

Strengths Quality in terms of product service Quality of people (trained, motivated, committed) Better sales planning Vital role in economic development High profit rate Rapidly increasing market share Strong image of PEPSI in consumers mind In time service of supplies and technical assistance More installation of post mix machine Strong financial position Rapidly increasing market shareWeaknesses Poor feedback from employees Insufficient salaries Monopoly of distributors cause harm to company No advertisement budgets for post mix. No signages of post mix in the market No promotional activities in post mix. No availability of spare parts. Opportunities New style management New brand introduction Low cost skilled person availability Opening of new outlets Strong consumer commitment with Pepsi.

Threats Coca- Cola is on its way to get market share Amrat and Makka cola also trying to get market share Changes in consumer purchasing power Increase in competition Inflation Due to blame of religious group No proper employees orientation programs

COMPETITORS

The major competitors Pepsi Cola are Coca Cola and RC Cola. Both of these are making little or no effort to put Pepsi down because they have accumulative share of only 20% in market. On the other hand Pepsi Cola is advertising and promoting their product so heavily that they have almost finished name of their competitors in the market.

MARKET SHARE

Pepsi hold 50-60% of the market share. The rest is held by RC and Coca Cola. Pepsi Cola 50-60%Coke & RC40-50%Others2.0-3%

Suggestions:

1. MIS Operation and MIS IT department should be separated to increase individual departments efficiency. As employees of IT requires complete silence in there work but in MIS Operations there is much noisy environment.2. The entrance of every department must have proper reception to deal the visitors.3. The problem of printers in MIS department must be solved.4. Internet facility must be provided to every employee in Finance and MIS department.5. Drink (Pepsi) should be provided to employees of MA and MIS department at least one time a day on daily basis.6. Lunch should be free for employees.7. Proper arrangements about the cleanliness of food should be done at the canteen.8. Supply chain department should be white washed properly.9. Steps should be taken to ensure cleanliness in each department. Each department should be well decorated.10. The role of HR Department should be enhanced and its function should be increased to all major departments.11. Transport facility should be provided to employees. It will act as a motivation tool and will ensure in time presence of employees in respected departments.12. Proper culture about internship should be developed and proper arrangements about internees should be developed so that internees can get proper knowledge about almost every department in the company.

5NameTitleManaging DirectorGeneral Manager TechnicalGeneral Manager SalesGeneral Manager FinanceGeneral Manager OperationsManager SIS & ResearchManager ProductionManager Quality ControlManager FinanceManager AccountManager Sales & MarketingManager AdminManager ShippingManager Personal