Project Report on Mitchell's Fruit Farm Ltd.

 Mitchell’s Fruit Farms Ltd 

PROJECT REPORT On MITCHELL’S Presented To: SIR RIAZ HUSSAIN ANSARI

Presented By: MUHAMMAD IRFAN MBA 2 ND

DEPARTMENT OF BUSINESS ADMINISTRATION Bahauddin Zakariya University SAHIWAL CAMPUS

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 Mitchell’s Fruit Farms Ltd 

HISTORY OF THE COMPANY A BRIEF BACKGROUND Phase I: BEFORE INDEPENDENCE

Francis J. Mitchell arrived in Bombay, from Scotland, at the end of World War I. He had   been invited by his brother who was already established in Northwestern India as contractor to the government for construction of the railway network in this part of the Subcontinent. At that time, when Francis was already an old man of over sixty years, an opportunity came his way in the form of the emerging irrigation system being laid out in the canal colony districts of West Punjab. He was successful in obtaining the lease of 720 acres of agricultural land in the then Sahiwal district. The area allotted to him extended over nearly seven miles, from Renala Khurd Khu rd to KISSAN, sandwiched between the arterial Lower Bari Doab Canal and the Lahore- Karachi railway. He initiated the business of growing grapes, for eventual sale as dried raisins, and sent the younger of his two sons, Richard, to Australia for training at Mildura which was wellknown as a center of specialization in the field of horticulture. The company, with Francis Mitchell as its governing Director and his two sons, Leonard and Richard, as Directors, was incorporated in 1933 and given the name Indian Mildura Fruit Farms Ltd. The Northwestern railway had opened to traffic a few years before the acquisition of the land by the Mitchell family. Francis Mitchell was asked by the railway authorities to propose a name for the adjoining station. Hence, the word “KISSAN”, which subsequently became a familiar brand name.

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 Mitchell’s Fruit Farms Ltd 

The trial planting of grapes, which began in 1921 and lasted until 1924, unfortunately, did not prove to be a success. The vines suffered serious damage from pests during the rainy season, just when the grapes needed dry weather for ripening. The entire plantation was replaced by citrus, which fortunately, proved to be profitable. The elder son, Leonard, was sent especially to South Africa to look for good Rootstock, which was the foundation of Valencia Orange Trees; these are well established on the farms today. With the outbreak of World War II, demand for canned fruit and vegetables, for the Allied Troops stationed in India, began to grow rapidly. To cater this growing demand costeffect effective ively, ly, a factor factoryy was establ establish ished ed in Banglo Banglore, re, Sou South th India. India. A new jointjoint-sto stock  ck  company, by the name of KISSAN Products Ltd., was registered. PHASE II: AFTER INDEPENDENCE.

As a sequel to independence in 1947, India Mildura Fruit Farms Ltd lost nearly 75% of its Indian market. The company’s name was changed to Mitchell's Fruit Farms (Pvt), and the brand name “Mitchell's “ became the exclusive property of the Pakistani company. Likewise, the Indian company acquired exclusive use of the “KISSAN” brand name. Francis Mitchell died in 1933 and his elder son, Leonard, became Chairman. After  his brother’s tragic death in an air accident, Richard took over the Chairmanship, in 1949, and continued in this capacity until his own death in 1987. The family sold their shares gradually, having inducted Pakistani shareholders in 1957, and retired to Eastbourne, U.K., in 1959. Richard’s wife, Betty, retained her links with the company in the capacity of Director, until 1991. She died in 1995.

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 Mitchell’s Fruit Farms Ltd 

COMPANY INFORMATION BOARD OF DIRECTORS

S.M. Mohsin (Chairman & Managing Director)

Mehdi Mohsin (Executive Director)

Syed Babar Ali Syed Faisal Imam Sitwat Mohsin Umme Kulsum Imam Anis Wahab Zuberi NIT Nominee COMPANY SECRETARY

Amir Sattar  AUDITORS

A.F. Ferguson & Company Chartered Accountants BANKERS

ABN Amro Bank N.V. Citibank N.A. Emirates Bank International PJSC Muslim Commercial Bank Limited

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 Mitchell’s Fruit Farms Ltd 

SHARE REGISTRAR 

Corplink (Private) Limited, Wings Arcade, 1-K (Commercial) Model Town, Lahore.

.

REGISTERED OFFICE, FACTORY & FARMS

Renala Khurd, District Okara, Pakistan. Phones: (0443) 622907-8 &635416 Fax: (0443) 621416 E-mail: [email protected]  CORPORATE OFFICE

3-B, LDA flats, Mian Muhammad Shafi Road, Lahore. Phones: (042) 6307410-13 Fax: (042) 6307414-15 E-mail: [email protected] 

Website: www.mitchells.com.pk  REGIONAL SALES OFFICE, (NORTH)

Block No. 1-A, Sector G-7/4, Street No. 40, Islamabad. Phones: (051) 220961-62 & 2872669 E-mail: [email protected] 

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 Mitchell’s Fruit Farms Ltd 

REGIONAL SALES OFFICE, (CENTRAL)

Syed House, Canal Berg, 13 K.M. Multan Road, Lahore Phones: (042) 5419350, 5423732 & 5425478 E-mail: [email protected]  REGINIOL SALES OFFICE, (SOUTH)

Mehran VIP II, Ground Floor, Plot 18/3 Dr. Dawood Pota Road, Karachi Phones: (021) 5212112, 5212732, & 5216975 Fax: (021) 5673588 E-mail: [email protected] 

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 Mitchell’s Fruit Farms Ltd 

Vision Statement

To be a Company which optimally combines its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair  returns to its investors.

Mission statement

To be a Leader in the markets we serve by providing quality products and efficient services to our consumers while learning from their feedback to set even higher  standards for our products.

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 Mitchell’s Fruit Farms Ltd 

ANALYSIS OF FOOD INDUSTRY In Global World

Globally, in the organized agriculture industry, 2,219 million metric tons of “cereal” grains, including wheat and rice, were projected to be produced in the 2009/2010 growing season. This represents a slight decrease from the previous season. This number  is from the UN’s Food and Agriculture Organization, publisher of an annual “Food Outlook.” World meat production was projected to climb 1.3% during calendar year 2009, to 285.6 million tons. Dairy production was projected to climb 1.6% in 2009 to 699.0 million tons of milk equivalents. Aquaculture, or the raising of fish on special farms, has become a massive global industry. According to the U.N., aquaculture would provide 36.6% of the world’s fish   produc productio tionn during during 2009 2009 (142.0 (142.0 mil milli lion on ton tons), s), wit withh tradit tradition ional al commer commercia ciall fisher fisheries ies  providing the balance. The The glob global al proc proces esse sedd food food and bever beverag ages es indus industr tryy is domi domina nate tedd by a handf handful ul of  multinational corporations. Among the leaders are Unilever, Cadbury Schweppes, H. J. Heinz, Kraft Foods, General Mills and Nestlé. Unilever, for example, estimates that 150 million people per day purchase its products in 150 nations around the globe, ranging from Knorr soups to SlimFast diet meals. The entire food industry, from growing to processing to retailing, is an extremely competitive field where profit margins are typically so low that it is often challenging to maintain profitability. The processed food industry worldwide has been challenged by low growth rates, high-energy costs and changing consumer tastes. High feed costs have  been extremely damaging to poultry and livestock firms, and fertilizer, which is typically manufactured from petrochemical sources, has seen very high costs in recent years.

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 Mitchell’s Fruit Farms Ltd 

While extremely high prices for many commodities, including foods, brought a cash windfall in much of 2006-2008, commodities in general declined dramatically during the global recession, and the agricultural sector has felt the change. Pilgrim’s Pride, a major  U.S. poultry processor, took bankruptcy in 2008. Smithfield Foods, the world’s largest  pork producer, in February 2009 announced plans to shut six plants and cut production by 10%. Profit margins have been off and exports have been lower at such firms. The global financial crisis has created vast new challenges to all parts of the food industry. Restaurant sales have been dismal in developed countries, as consumers cut   back on discretionary purchases and return to simpler, made-at-home meals. Large numbers of U.S. restaurant firms have taken bankruptcy in recent months, including national chains such as Bennigan’s, Steak & Ale and Buffets Holdings, Inc., owner of the Country Buffet and Ryan’s restaurants. Throughout much of the world, technology and globalization have revolutionized the way that we grow food, as well as the way that we transport, transport, process, process, package, purchase purchase and cook it. Waste and spoilage are reduced (but still a problem) thanks to innovations like flash freezing, interstate highways and refrigerated trucks. Furthermore, it’s an everyday occurrence for consumers in the U.S., Asia or Europe to pick up strawberries from New Zealand or mangos from Mexico in the fresh produce section of the local supermarket. Globalization has led to the rise of massive multinational food processing companies like  Nestlé and Kraft, which often sell their foods under local names in local languages, after   producing them in regional factories worldwide.

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 Mitchell’s Fruit Farms Ltd 

In Nort Northh Amer Americ ica, a, Asia Asia,, Euro Europe pe and else elsewhe where re,, produ produce cers rs and and reta retail iler erss of food foodss (including restaurants) are now faced with the challenge of positioning their brands to represent consistent quality and safety. Companies that rise to this challenge will have significant competitive advantage. This food “safety” positioning will go hand-in-hand with growing demand to satisfy additional consumer concerns about environmentallysound food production methods, fair trade, fair use of labor and humane treatment of  agricultural animals. All food processors, grocery distributors and retailers, including supermarkets and restaurants, would do well to study the practices of the handful of  companies that have boosted their brands in this regard with superior results, particularly Whole Foods and Starbucks. Health and convenience were the buzzwords driving the global food industry in 2009, according to an article in April 2009’s Food Technology magazine, published by the Institute of Food Technologists, a non-profit group of food scientists. One of the top 10 food trends for the world was “low fat,” which regained its place as the most influential food label claim. 63% of consumers chose products promoted as low fat, while 55%  bought foods labeled low in saturated fat. These compared with 40% purchasing items labeled as low carb. The article also pointed out that 71% of consumers most frequently checked food labels for total fat content, compared with 40% checking for total carbs. Top 10 trends in the World Quick Fix: People want to eat at home:

77% of all dinners in 2004 were eaten there,

 but people want less hassle in the kitchen. Easy to prepare and ready to eat are key ingredients for most of us. We should expect to see more ultra-quick foods, bagged salads and side dishes. Drive-and Drive-and Go:

More of us are ordering take-out from full-service restaurants like

Applebee’s. Take-out sales from these restaurants account for almost 10% of sales. More than half of Americans eat this way during the week.

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 Mitchell’s Fruit Farms Ltd 

Inherently Healthy:

Consumers are increasingly choosing naturally healthy foods such

as fruit, vegetables, salads, nuts and yogurt. Fruit is now America’s second-favorite snack. Fancy:

People People are choosing premium, gourmet foods. Fish, in particular particular,, is undergoing

something of a gourmet makeover. Farm-Friendly:

Organic and natural are hot, so is fair trade. Expect cocoa to follow on

the heels of coffee and tea. Layering of Flavors:

Flavored oils and vinegars, pairings of fruity and tangy flavors,

Asian, Central American and Latin American flavors are in vogue. Grazing:

Healthier snacks in vending machines, single-serving snacks, nutrition bars,

diet bars, energy drinks and mineral waters are “in.” Low, No, and Less:

Low fat trumps low carb in what people seek in labels. Trans fats

are on their way out. Demand for low calorie and light products will continue to grow. Watch for allergen-free claims on food labels. Doctoring Doctoring Through Through Diet:  Nearly

two-thirds of shoppers tried to manage or treat a

condition through diet. 72% of this effort addressed heart health. Next to low fat, whole grains were the most influential food label claim, influencing 62% of shoppers. Dairy   products with cholesterol-lowering sterols, antioxidant-rich chocolate are making an appearance. Expect more functional foods to appear. Global Gangbusters:

Many of the same issues affecting Americans affect overseas, too.

Health and convenience loom just as large. These trends are promising, so long as the food industry remains willing to offer  convenience without compromising on the demand for healthier food. Fads will come and go, and the government will continue to scrutinize health claims made by food manufacturers. The ageing of baby boomers is driving the food.

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 Mitchell’s Fruit Farms Ltd 

In Asia Region

Posses Possessin singg over over half half the world' world'ss popula populati tion on and some some very very robust robust econom economies ies,, the Asia/Pacific region has become a linchpin for many of the world's top food and beverage companies. Top Asia/Pacific food and beverage companies are imbuing a decidedly Western taste, look and feel onto their respective markets. They're doing so with the people that know the West the best - the leading U.S. and European food and beverage processors. Alliances between the leading Asia/Pacific companies and top U.S. and European food and beverage companies - largely through product licensing agreements - continues to help shape the future of this vast region. The result: A consistent shift in consumption and shoppin shoppingg habits habits for Asia/P Asia/Paci acific fic consum consumers ers.. Wester Western-s n-sty tyle le foods foods brough broughtt about about by changing lifestyles are being woven into the culture, underpinned by the impact of  developments in retailing, merchandising, packaging and advertising. According to a report by Data-monitor, the London-based independent management consulting firm, cultural changes taking place in eating habits include the steady growth of breakfast cereal consumption and expansion into dairy manufacturing despite lactose intolerance throughout the region. Beer, wine and spirits has been a prevailing market in the region. In scanning the top 10 companies in Prepared Foods Asia/Pacific Leading 50 food and  beverage companies, just about all have forged distribution and/or licensing agreements to market and sell such Western stalwarts as Budweiser, Coors, Early Times, Beefeater, Miller Genuine Draft, Nabisco and Kellogg.

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 Mitchell’s Fruit Farms Ltd 

1. Kirin Brewery Co.

Tokyo, Japan - Wines and liqueurs, brewing, dairy processing KEY BRANDS: Jive,  Nippon Blend, Koiwai Kirin is the largest brewer in Japan with a domestic market share of about 50%, and is the third largest brewer in the world. It sells whiskies through a joint venture with KirinSeagram Ltd. 2. Asashi Breweries Ltd.

Tokyo, Tokyo, Japan Japan - Beer, Beer, whisky whisky,, breadc breadcrum rumbs, bs, fruit fruit drinks drinks KEY BRANDS BRANDS:: Birele Bireley's y's,, Horoniga, Asashi Pure Gold The company is pursuing expansion into the food sector more actively than its beer  market rivals. Has begun licensed production of Coors beer (USA) and has strengthened its diversification with a recent alliance with Pedigree Petfoods of the UK. 3. Suntory Ltd.

Tokyo, Japan - Beer, whiskey, wine, coffee KEY BRANDS: Boss, Akadama, Pekoe, Ginjo Founded in 1899, Suntory launched Japan's wine and whiskey industries and pioneered a new era in the domestic beer industry, establishing itself as a leading beverage maker in Japan and a prominent participant in the world market. 4. Sapporo Breweries

Tokyo, Japan - Soft drink, beer, wine, vodka KEY BRANDS: Black Label, Baisen Draft, Sapporo Magnum, Ginjikomi Sapporo was the first Japanese company to market draft beer for home consumption and is leading other beer producers in this field. It is also diversifying into soft drinks, wine, imported liquors. 13

 Mitchell’s Fruit Farms Ltd 

5. Taiyo Fishery Co.

Tokyo, Japan - Fish, sugar, processed foods Taiyo is Japan's second largest fisheries company with diversified interests in feed stuffs, sugar, farm and livestock products. Like other fisheries in Japan, Taiyo is engaged in  producing fish pasta through a U.S. subsidiary. 6. Nippon Heat Packers

Osaka, Japan - Ham, sausage, dairy Created in 1963 through the merger of Tokushima Ham and Torise Ham, the company specializes specializes in premium premium quality ham and sausages. In addition addition to meat products, products, Nippon Meat Packers is strong in fresh meat and processed food such as hamburgers. The company has also formed an alliance with U.S. processor Swift. 7. Yamazaki Baking Co.

Tokyo, Japan - Cakes, chocolate confectionery, bread, frozen dough KEY BRANDS: Double Soft, Maragoto Banana, Nabisco Nab isco (licensed) The largest producer of confectionery and bread products in Japan also has interests in convenience stores and cafeterias. Until 1988, the company had an agreement with  Nabisco  Nabisco to manufacture manufacture confectionery confectionery products, but after a reorganizat reorganization, ion, it's involved involved only in the distribution of Nabisco products. 8. Ajinomoto Co.

Tokyo, Japan - Meat, poultry, fish, biscuits, soup, seasonings KEY BRANDS: Cook Do, Calpis, Chuka-Aji, Knorr, Maromi The company is one of Japan's largest integrated food processing companies. In Asia, the company has joint venture distribution and manufacturing businesses with many major  companies, most notably CPC International. 14

 Mitchell’s Fruit Farms Ltd 

9. Snow Brand Milk Products

Tokyo, Japan - Butter, cheese, ice cream, edible oil KEY BRAND: Snow Brand Japan's largest manufacturer of dairy products (butter and cheese), Snow Brand is advancing into frozen foods and expanding its investment in biochemicals. The company has joint ventures with Pillsbury (U.S.) and a technological tie-in with Quaker Oats. 10. Itoham Foods

Hyogo, Japan - Ham, sausage, general dairy KEY BRAND: Itoham A major player in the sale of processed meat to department stores and meat shops, the company - Japan's largest and oldest producer of processed meats - is planning a diversification into the dairy products and frozen foods sectors and has recently formed a subsidiary with Carnation and Nestle. The company is noted for sound financial decisionmaking and steady growth. Food Industry in Pakistan

According to the Census of Manufacturing Industries there were 822 units engaged in the manuf manufac actu ture re of Food Food and and Beve Bevera rage ges. s. Accor Accordi ding ng to the the UNID UNIDO O it is the the larg larges estt manufacturi manufacturing ng industries industries of the country. Value of production stood at Rs.46.170 Rs.46.170 billion and manufacturing value added stood at Rs.12.187 billion. Food processing is a relatively capital intensive industry. The share of food in the manufacturing industry of Pakistan is 22.66 percent approximately.

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 Mitchell’s Fruit Farms Ltd 

The growth rate in the food industry has been estimated at 7.46 per cent per annum. The most rapidly growing items are dairy products fish processed, bakery items, sugar,  biscuits and confectioneries, fruit juices and other soft beverages. Rapid export growth has characterized fish preparation, fruit preserves, dry fruits, some beverages and sugar, and honey honey prep prepar arat atio ion. n. Food Food prod produc ucts ts (exc (except ept rice rice)) do not not howe however ver,, make make up a significant proportion of Pakistani exports and there is a considerable potential for  expanding such exports, especially to Europe and the Gulf region. As many as 79 food manufacturing companies are on the list of Karachi Stock Exchange out of total 707 companies. The paid-up capital of these companies stood at Rs.6.054   billion. They include, some of the biggest groups in the market such as Bawany, Crescent, Habib, Fecto, Premier, Lakson, Burma Oil (producing vegetable oils), Brooke Bond, Clover Foods, Uniliver, National Foods, Mitchells fruit farms and Shezan. The food manufacturing manufacturing firms have generally generally performed well on the stock exchange exchange in with capitalization registering an above average increase. Net profit as percentage of share holder's equity has averaged at about 22 percent during for the sugar and allied group, and about 25 per cent for the vegetable oil groups. The net profit ratio for the tobacco sub-sector has been 30 per cent. This compares well with the overall net profit ratio for  KSE companies during this period, and averages to about 19 per cent. Thus, there is a significant scope for investment expansion in the food manufacturing sectors. Domestic demand is buoyant and export prospects are bright - although they are yet yet to be adeq adequat uatel elyy expl explor ored. ed. Sever Several al majo majorr comp compan anie iess incl includi uding ng well well know knownn multi mul tinati national onalss have substa substanti ntial al inv invest estmen mentt commit commitmen ments ts and there there are also also a large large number of middle sized upward mobile domestic firms. Scope, thus exists both for the establishment of wholly owned subsidiaries. There is also a need for technology transfer  agreements which can facilitate the access of Pakistani companies, to modern technology and know know-h -how ow in the the area areass of proc proces essi sing ng,, pres preser erva vati tion on and and packa packagi ging ng of food food manuf manufac actu ture res. s. Seve Severa rall Paki Pakist stan anii firm firmss have have deve develo lope pedd ambi ambiti tiou ouss mo mode dern rniz izat atio ionn  programmes.

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 Mitchell’s Fruit Farms Ltd 

MITCHELL’S CORPORATE VISION An Insight

Mitchell’ Mitchell’ss corporate corporate vision, a very vast and strategic strategic topic and all concerned shall have their own viewpoint. My viewpoint on this is as under. Mitchell’s is playing a vital role in the Pakistan’s economy. For the last two years, the company is receiving The Top 25 Companies Award. Mitchell’s has been in the market long before independence and still enjoys a good repute. This is the evidence of the company’s dedication, trust and commitment to provide the best quality products in the market. Despite all the odds, Mitchell’s is still the Market Leader in Squashes, Preserves, Sauces and Countlines.

Current Market Position

Mitchell’s products are highly appreciated by the trade and the relevant consumers  because of its high quality standards. Mitchell’s is the Market Leader in the abovementio mentioned ned segmen segments ts for the last last many many years. years. Many Many MultiMulti-Nat Nation ional al and Nation National al Compani Companies es have have entere enteredd the compet competiti ition. on. Ther Therefo efore, re, the quantit quantity-w y-wise ise differ differenc encee   between the Mitchell’s and its close competitor has squeezed. Although, the annual growth rate of grocery product is 9% (approx.), but the quantity wise share of Mitchell’s  products has not appreciated much in the last five years.

The Company’s Philosophy

The managem management ent of the compan companyy is hig highly hly mot motiva ivated ted,, dedicat dedicated ed and is inv invest esting ing aggressively to achieve the desired results. The company is keen to invest in the manufacturi manufacturing ng of quality products to achieve the desired desired results. Looking Looking at the local market condi nditions, the com omppany keeps on adding new pro produc ducts for the customers. Addition of different flavors of Preserves, Diet Preserves, Cooking Paste, Kasaundi, Countlines and Molded Chocolate is an evidence evidence of this. In addition to this the the company is also eager to upgrade its equipments and the human resources.

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 Mitchell’s Fruit Farms Ltd 

The Trends

In today’s dynamic and rapidly changing world, the trends and the norms of the business have changed. Local companies are joining hands with the Multi-Nationals Multi-Nationals for additional suppo support rt,, longlong-te term rm busi busines nesss deve develo lopm pmen ent, t, shar sharin ingg of mark market et benef benefit its, s, techn technic ical al assist assistance ance,, up-gra up-gradat dation ion of the equipme equipments nts and the human human resour resources ces,, acquiri acquiring ng the  potential foreign markets. In addition to this, the customers have developed more trust in the Multi-Nationals.

An Analysis with the Other Companies

Multi-National Companies like P&G, Reckitt Benckizer, Shell, Pepsi, Coke, McDonalds,  Nestle, Lever, Sony and several others have developed a strong footing in Pakistan. Apart from their good network, their aggressive marketing is the driving force behind their  success.

Success Story

Marketing team of any company is its driving force. This team should be dynamic enough to lead the company to achieve its objectives. Most marketing professionals mistakenly think of marketing marketing only as selling and promotion. promotion. That is why, when they are are asked to undertake a marketing activity they present an advertising expense or talk about advertising as the only marketing marketing tool. Marketing is much more than than the advertising. These companies do not just sell the products; they identify the consumer needs and satisfy them better than the competitors. I believe that companies like Coca Cola, Microsoft, Lever and many others have attained this position due to the strong marketing and not sales. Sell Selling ing is one of the several marketing marketing functions functions and often not the most important one.

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 Mitchell’s Fruit Farms Ltd 

If the marketer does a good job of identifying consumer needs, developing good  products; and pricing, distributing and promoting them effectively, the products will sell very easily. Thus, marketing is a key factor in the business success. The term marketing marketing mean “satisfying “satisfying customer customer needs”. There is a stiff stiff competition competition in the market and only those companies shall succeed who can best read customer wants and deliver the greatest value to their target consumers. Quality Policy

“We, at MITCHELL’S Fruit Farms Limited, are committed to produce best qualit qualityy produc products ts meeti meeting ng our custom customers ers’’ requir requireme ements nts at compet competiti itive ve prices prices,, stren strengt gthe heni ning ng ou ourr po posit sitio ionn as a Quali Quality ty Mana Manage gedd Comp Compan any. y. To meet meet this this obligation, the company will continue: •

Updating of employee skills by training.

•

Acquisition of new technology.

•

Re-evaluation of its quality control and quality assurance systems.”

Social Responsibility Responsibility

Community Service

Mitchell's has joined hands with the village communities as well as the British Council, the Department for International Development (UK) and Voluntary Service Overseas (UK) in an effort to promote education in rural areas. Twenty-five girls' schools have been set up in the Okara district in an endeavour to boost the levels of female literacy. Also a Teachers Training Institute has been set up to provide quality teaching staff to the local schools. Mitchell's assures that it will continue to work towards its aim - promoting education amongst future generations.

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 Mitchell’s Fruit Farms Ltd 

Anjuman Khuddam-e-RASOOL ALLAH (AKRA)

Anju Anjuma mann Khud Khudda damm-ee-Ra Raso sool ol Alla Allahh is a comm commun unit ityy base basedd Non Non Gove Govern rnme ment ntal al Organisation (NGO), established in 1976 in Shergarh, at the heart of District Okara. AKRA has a reputation in the surrounding area for providing high quality education to   boys and girls from Nursery to Matric. The Anjuman is also well known for its free dispensary, and its role as a social welfare organization in and around Shergarh. AKRA aims to improve life for the rural community, and to this end it has founded a free dispensary, a coeducational primary school, with class 6 to 10 for girls, a boys secondary school and now 18 village primary schools with adult literacy centres in the surrounding district. district. Work is continuing continuing to open further further village schools and to expand those already already running. Aims of AKRA

Children in rural areas have little access to schools and girls have less than boys. Women involved in agriculture and family work have often had no chance to learn to read and write. write. The project aims to help a particularl particularlyy disadvantage disadvantagedd section section of the community community rural girls and women - by provinding access to basic literacy, numeracy and health education. We aim to train groups of young women throughout Okara District, so that they can develop teaching skills and set up schools in their own villages to provide this  basic primary education for boys and girls as well as adult literacy classes. ISO Award

Mitchell’s is the only major food company in Pakistan today with fully integrated operations having its own growing and processing facilities at one location. Modern highvolume vol ume ind indust ustria riall equipm equipment ent,, profes professio sional nal managem management ent and a traine trainedd workfo workforce rce all combine to ensure that Mitchell’s continues its dominance as the innovator, market leader  and trend setter. In this regard a major step was taken in 1998, when Mitchell’s Mitchell’s became the first food company in Pakistan to achieve ISO 9001 accreditation, thus becoming more

competitive

on

the

international

stage

also.

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 Mitchell’s Fruit Farms Ltd 

DEPARTMENTS OF MITCHELL’S FRUIT FARMS LIMITED 

HUMAN RESOURCE DEPARTMENT



COMMERCIAL DEPARTMENT



SYSTEM DEPARTMENT



FINANCE DEPARTMENT



PRODUCTION DEPARTMENT



PLANNING AND STORES DEPARTMENT



TECHNICAL SERVICES DEPARTMENT



QUALITY CONTROL DEPARTMENT



MARKETING DEPARTMENT

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 Mitchell’s Fruit Farms Ltd 

HUMAN RESOURCE DEPARTMENT

Objective

To provide such human resources that will helpful for run the operations of the company in effective and efficient manner, and look after the benefits and interests of personnel of  the company so that they can become more productive for the company. Scope

The whole Factory, Head Office and Regional Sales Offices of the company are included in the scope of human resource department. Duties and Responsibilities Responsibilities

1. Appr Approv ovee traini aining ng agen agenci cies es,, whic whichh give give the the trai traini ning ng to the per personn sonnel el of  MITCHELL’S Fruit Farms Limited. 2. Ensure Ensure hygiene hygiene conditi conditions ons and and housekeepi housekeeping ng of the factor factory. y. 3. Approv Approvee job job contr contract act contra contracto ctors. rs. 4. Conduct Conductss and arrange arrangess traini training ng progra programs. ms. 5. Implement Implement measures measures that that are helpful helpful to to motivate motivate the personnel personnel of of the company. company. 6. Operat Operation ional al inchar incharge ge of the the facto factory. ry. 7. Sele Select ct cand candid idat ates es for for inte intern rnsh ship ip in diff differ eren entt depar departm tment entss for for the the peri period od of  maximum three month.

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 Mitchell’s Fruit Farms Ltd 

COMMERCIAL DEPARTMENT

Importance in Mitchell’s Fruit Farms

Commercial Department in every organization is very important. The importance of  commercial department is increased in the case of manufacturing organization. As we know that MITCHELL’S Fruit Farms Limited is a manufacturing company, so there is much importance of commercial department in the company. Without proper functioning of commercial department, company has to bear huge losses,  backlogs, stock out and various unnecessary costs. When company faces many brakes in his production process, this leads company to shortage of supply as well as severe losses in shape of idle time of labor and delay in the  production. When the company faces such circumstances, it will be unable to fulfill the demand of  the market. The customers of the company will also dissatisfy from the company and may switch to the brands of the competitors. The company has to face not only the shortage of inputs items that are used in the production but also shortage of inventories of  finish goods. To avoid such problems and costs, the commercial department has to play vital role in the organization for ensuring the continuous production process in the factory. Objective

As we all know the importance of the commercial department in any organization. The functions of the commercial department are related to the Supply Chain Management. Scope

Whole factory, offices particularly all stores.

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 Mitchell’s Fruit Farms Ltd 

The commercial department in the company sells out scrap material and any wastage’s. Any contract regarding installation, the commercial department signs construction, repair, maintenance and other services requirements. Functions of Commercial Department

The commercial department in the Mitchell’s is performing the following functions. 1.

Procurement of all raw and packing material of prime quality at competitive prices.

2.

Find out new suppliers having good market repute.

3.

Procurement of all components parts for engineering stores.

4.

Procurement of general items for general.

Duties and Responsibilities Responsibilities Commercial Manager

1.

Selection and continuous assessment of suppliers.

2.

Preparation and approval of purchasing documents.

3.

Maintenance of an approved suppliers listing.

Assistant Manager (Commercial & Farming)

1. Procure Procure services, services, raw raw and packing packing material materials, s, plant, plant, and equipments/ equipments/spare sparess of high qual qualit ity, y, with with advi advice ce of comm commer erci cial al mana manage gerr and and rele releva vant nt exec execut utiv ives es at competitive costs and quality as per the company’s requirements and to ensure that no shortage occurs at any time. 2. Fore Foreca cast st and and plan plan purc purcha hase sess of mate materi rial al with with mini minimu mum m bloc blocka kage ge of the the company’s funds, in stock, while ensuring uninterrupted supply to the works. 3. To explore explore and develop develop new sources sources of supply supply for economy economy.. 4. Verificati Verification on of materials materials and of of clearin clearingg bills. bills. 5. Nego Negoti tiat atee pric prices es,, term termss and and cond condit itio ions ns with with suppl supplie iers rs in cons consul ulta tati tion on with with Executive Director, Commercial Manager And Incharge Operations Division. 6. Issu Issuan ance ce of pur purch chas asee order orders. s. 7. Approv Approval al of purcha purchase se requ requisi isiti tions ons..

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 Mitchell’s Fruit Farms Ltd 

SYSTEM DEPARTMENT

Objective

Objective of the System Department of the company is to computerize the business operations of the MITCHELL’S Fruit Farms Limited. Scope of System Department

In the scope of system department, all Regional Sales Offices, the Head Office, Factory and Farms of the company are included. Functions of System Department

1. Foll Following owing are are the the major major functions functions of the system system departm department. ent. 2. The control control on inventor inventoryy through through computerized computerized system system 3. Provision Provision of new computer computerss and other other accessori accessories es for the the company company 4. It keeps link link between between the Regional Regional Sales Sales Offices Offices with Marketi Marketing ng Departme Department nt of  the company. 5. Maintenance Maintenance of compute computerr networking networking at MITCHEL MITCHELL’S L’S Fruit Fruit Farms Farms Limited Limited 6. 5.

Keep the back up of all confidential confidential and necessary necessary data for future future

needs.

Recent Achievement of System Department

Following are the recent achievements of system department: Computerized Accounting System

MITCHELL’S Fruit Farms Limited has its own computerized accounting system that facilitates the finance department make the company’s co mpany’s procedures more efficient.

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 Mitchell’s Fruit Farms Ltd 

This accounting system is according to the requirement of finance department and is facilitating finance people in a marvelous way. It cause reduction in corruption, delays in  payments and make easy the documentation of the accounting transactions.

Inventory System

The system department department of the company company recently introduced introduced the inventory inventory system system of the compan company. y. This This syst system em agai againn incr increas eases es the the effi effici cienc encyy of Pl Plann annin ingg And And St Stor ores es Department. Sales System

To facilitate the Marketing Department and all Regional Sales Offices, the system department introduces a sales system. This system is working very well within the company. Human Resource System

 Now the system department of the company is working on the preparation of human resour resource ce syste system. m. It wil willl be a comput computeri erized zed system system.. It wil willl includ includee the record recordss of  attenda attendance, nce, salari salaries, es, the retir retireme ements nts,, promot promotion ionss and all oth other er inform informati ation on about about  personnel matters. All All thes thesee syst system emss are are Orac Oracle le base basedd and and prep prepar ared ed by the the syst system em depa depart rtme ment nt of  MITCHELL’S Fruit Farms Limited.

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 Mitchell’s Fruit Farms Ltd 

FINANCE DEPARTMENT

Objective

The main objective of the Finance Department in the company is to arrange the finance for the business operations from various sources, control the activities that are related with the finance, maintain and update the company’s accounts. Scope

In the scope of finance finance department, department, all the the Regional Sales Sales Offices, Offices, the Head Office Office of  the company, factory and farms are included. All firms raise money and control the financial aspects of their business. The account assistants deal with the following sections 1.

Wages and payroll system

2.

Production expense system

3.

Ledger section

4.

Variable cost section

5.

Cash and excise section

Functions of Finance Department

The following are the main functions of the finance department 1.

To link all departments with each other financially

2.

Arrange monetary resources at proper time

3.

Allocate resources throughout the organization

4.

Deals with banks investment firms, Govt. agencies and tax department.

5.

Carry out final auditing and financial records prepared

27

 Mitchell’s Fruit Farms Ltd 

6.

Details of calculations of salaries, income tax and funds for loans

7.

Calculate different expenses of the company

PRODUCTION DEPARTMENT

Objective

The major objective of the Production Department is to produce quality goods at minimum cost by utilizing the company’s resources in an efficient manner. Labor Force

In the production department, there are round about 350 workers are working including females laborers. In the department, there are two types of labor force is working for producing the high quality products. 1.

Permanent work force

2.

Contract work force

1. PERMANENT WORK FORCE

This kind of work force is working in the factory on the permanent bases and has pension and other fringe benefits during service and an d after their service. 2. CONTRACT WORK FORCE

This kind of work force is working in the factory on the contract bases. They have less facilities and incentives than the permanent work force. The have not right of any kink of   benefits after their retirements. Their pay is also less than that of permanent workers of  the factory. Sections of Production Department

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 Mitchell’s Fruit Farms Ltd 

The production department of MITCHELL’S Fruit Farms Limited is divided into two sub sections. These sections are 1.

Groceries

2.

Confectionery

1. Groceries

In this section of production department, different groceries products are produced. Preserves, Ketchup, Sauces, Squashes, Pickles, Apple Processing, Tomato Processing Juice, Tomato Puree, Kimb Oil Extraction, Strawberry Fruit Processing, Sweet Corn Processing, Garden Peas Processing, Syrups, Fruit Cocktail, Vinegar, Salsa, Lemon Juice  bottled, Apricot processing is done in the groceries section of production department. Shifts of Groceries Section

Generally, there are two shifts working in the groceries section. But it can be increased or  decreased according to the order of the planning and stores department. 2. Confectionary

This section of production department is sub divided into further three sections. 1.

Countline Section

2.

Sugar Confectionery Section

3.

Molded Section

A. Countline Section

In the Countline section of confectionery, six products is produced that are Jubilee Maxi, Jubilee Mini, Jubilee Junior, Discoveree, Unitee and Twentee-1. B. Sugar Confectionary Section

In this section, there are two types of candies can dies are produced. High boiled candy Low boiled candy 29

 Mitchell’s Fruit Farms Ltd 

1. High Boiled Candy

In this type of candy, there are hard candies cookers are used for the production of these candies. The main ingredients of high boiled candy are sugar and glucose. During the processing of high boiled candy, the high temperature is used for cooking. 2. Low Boiled Candy

The production of such type of candy is exercise under the much lower temperature as compare to high boiled candies. The major ingredients of low boiled candies c andies are sugar, glucose, and milk. In Sugar Confectionery Section, Milk Toffee, Butterscotch, Éclairs, Mangoman and Fruit Bon Bons are made. C. Molded Section

In this section, the products are produced produce d that are based on purely milk chocolate. This milk chocolate is made of sugar, Cocoa Powder, Cocoa Butter, FCMP, SMP, Lecithin and Flavors. Duties and Responsibilities Responsibilities Management Executives

1.

To plan production for both grocery and confectionery sections.

2.

To keep all the machinery in running order.

3.

To proper material handling.

4.

To formulate requirement of new material

5.

To control all factory overhead costs in the sections.

6.

To plan for maximum efficiency of quality products. 30

 Mitchell’s Fruit Farms Ltd 

7.

To control labor.

8.

To identify and addressing the training needs of all the personnel.

Production Supervisors

1.

To train the workers.

2.

To ensure machines that they are in working orders.

3.

To execute the daily production as per program.

4.

To control and allocate the responsibilities to workers in their respective sections.

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 Mitchell’s Fruit Farms Ltd 

PLANNING AND STORES DEPARTMENT

Objective

To ensure hygience, and arrangements of all materials in stores and successful execution of orders. Scope

In the scope of planning and stores department, following stores are included. 1.

Juice/peel store

2.

Raw and packing material store (grocery)

3.

Raw and packing material store (confectionery)

4.

Finished goods store

5.

Engineering store

6.

Returns store

Production Planning

Production planning is the very major duty and responsibility of the planning and stores department. This department department advises advises to production department department about the production production planning on the regular bases. Planning and stores department receive monthly indents from the marketing department, head office and in the light of these above mentioned indents and current situation of  inventories in the stores, make production plans for the next month. These plans are on monthly as well as daily bases.

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 Mitchell’s Fruit Farms Ltd 

Dispatches

Other main function of this department is the dispatches of stocks to all regional sales offices. All the RSO’s are communicate their requirements by “order for supplies of  stocks”. Duties and Responsibilities Responsibilities Management

1. Prompt Prompt settlem settlement ent of claims claims from carriers carriers for for any damage. damage. 2. Proper Proper main mainten tenance ance and and care care of vehicle vehicles. s. 3. See trade trade return returnss at workshop workshop and sorte sortedd in time to decreas decreasee wastage wastage of raw and  packaging materials. 4. Dispat Dispatchi ching ng goods, Accordi According ng to orders orders of RSO’s RSO’s and custom customers ers promptl promptlyy and company goods. 5. Ensuri Ensuring ng proper receip receipt,t, storage storage and recordin recordingg of all raw and packing packing materia materials, ls, machinery, spares and all other stocks bought by the company. 6. Drawing Drawing plans for daily daily and monthly monthly bases bases accordin accordingg to indents indents received received from the the RSO’s. Dispatch Superintendent

Provide assistance to Assistant Manager (planning and stores.)

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 Mitchell’s Fruit Farms Ltd 

TECHNICAL SERVICES DEPARTMENT

Objective

To facilitate facilitate the production production department and ensure ensure the continuity continuity of production production process process on regular basis. Scope

All production plants of MITCHELL’S Fruit Farms Limited are included in the scope of  technical services department. Functions of Technical Service Department

1. To keep keep the the plan plantt in runn runnin ingg cond condit itio ionn by prov provid idin ingg effi effici cien entt and and time timely ly maintenance and repair. 2. Do the the preventiv preventivee maintenan maintenance ce for avoiding avoiding any damage. damage. 3. To repa repair ir the the faul faults ts if if is occurr occurred. ed. 4. To assess assess and arrang arrangee the require requiremen ments ts of materi materials als,, equipm equipment ent,, resour resources ces and manpower for executing its maintenance activities. 5. To have close close liaison liaison with with inventory inventory managem management ent and commerci commercial al department department to to maintain the necessary level of spares required.

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 Mitchell’s Fruit Farms Ltd 

QUALITY CONTROL DEPARTMENT

Objective

To ensure that all the products, make by MITCHELL’S Fruit Farms Limited are of  standard quality by inspection and testing of incoming material, in-process and outgoing  products. Scope

Grocery, confectionery, Countline, praline, raw material and packaging pa ckaging material. Samples for supplier evaluation, evaluation, raw material, material, and packing packing material, material, juice, peel and finish goods stores. Sub Sections

The quality control department in MITCHELL’S Fruit Farms Limited is divided into five sub sections. These are the following. 1.

Main lab.

2.

Line control lab of grocery section

3.

Line control lab of confectionery section

4.

Incubation lab.

5.

Microbiological lab.

1. Main Lab

This section of quality control department is used for the lab-scale product development and the testing of incoming raw material; packaging material is done in this section of the department.

35

 Mitchell’s Fruit Farms Ltd 

2. Line Control Lab. For Grocery

This section is used to do in-process inspection and testing of grocery as per quality plans and documented procedures. 3. Line Control Lab. For Confectionery

This section is used to do in-process inspection and testing of confectionery as per quality  plans and documented procedures. 4. Incubation Lab

This lab is very important section of the quality control department. This section keep representative samples as per documented procedures from production for monitoring of  shelf life of the products. This section is also responsible for keeping reference samples of products for comparison of colors, flavor, set for comparison as per documented procedures. 5. Microbiological Lab.

This section of the department is used for the testing purposes of canned juices, tomato  puree, ketchup, and Chilli garlic sauce and for hygiene purpose. Criteria for Approving the Input Material

As MITCHELL’S Fruit Farms Limited deals with the food products and the major input items are several fruits. Although the company uses the farms fresh fruit that are cultivated in the Mitchell’s own farms. But these fruit are not enough for fulfilling the demand of the market. So the commercial department purchases the fruits from the farmers. First of all, the quality control department inspects these fruit. The vegetables and fruit are test by the random sampling methods. In more than 30% defective items, the quality control department rejects the whole supply.

36

 Mitchell’s Fruit Farms Ltd 

Duties and Responsibilities Responsibilities Quality Control Manager

1. Prepar Preparati ation on of qual quality ity and desi design gn plan. plan. 2. Managing Managing testing testing in, out out and before before the the manufactur manufacturing ing of the the products. products. 3. Mana Manage ge segr segreg egat atio ion, n, ident identif ific icat atio ionn and and handl handlin ingg of non-c non-con onfo form rmit itie iess as per  per  documented procedures. 4. Identify Identify training training needs needs of of the the entire entire Lab. Lab. Assist Assistant. ant. 5. Approv Approval al of inspe inspecti ction on report reportss and recor records. ds. 6. Appr Approv oval al of reci recipe pes. s. 7. Implements Implements the stati statistica sticall techniques techniques to control control defects defects.. 8. Evaluate Evaluate supplier supplier by their products products and and by the visits visits of their producti production on facilities. facilities. Assistant Manager (QC)

1. Study and and understand understand quality quality plans, plans, work work instructio instructions ns and maintenance maintenance of qualit qualityy records. Assistant Manager also suggests the recommendations and modifications in quality plans and formats of ISO forms. 2. He is also also resp respon onsi sibl blee of doin doingg micr microb obio iolo logi gical cal testin testingg of vari variou ouss type typess of  materials. 3. Identify Identify all criti critical cal control control points in in the processes processes and establis establishh hazard analyses analyses of  critical points. Lab Assistant

1. Perfor Performin mingg tests an inspecti inspection on of incomi incoming ng raw and packaging packaging materia materials ls as per  documented procedures. 2. Fill Filling, ing, mainte maintenance nance of tests tests and inspection inspection records. records. 3. Report Reporting ing to quality quality control control manager manager or Assitt Assitt.. Manager Manager (QC) in case of nonconformities. 4. Keep Keep mainte maintenan nance ce of represe representa ntativ tivee and referen reference ce samples samples as per documen documented ted  procedures. 5. In the absence absence of executive executives, s, they can can approve all all tests tests and inspectio inspectionn reports. reports.

37

 Mitchell’s Fruit Farms Ltd 

MARKETING DEPARTMENT Objective

The Marketing Department is responsible for planning and developing products and executing their sales at an affordable price through promotional activities. SCOPE

The office of marketing department, all the regional sales offices of MITCHELL’S Fruit Farms Limited. Role of Marketing Department

All functions of marketing department are very much important to the MITCHELL’S Fruit Farms Limited. “To create the favorable image of the brands and company in the minds of the customers which results in sales on which company exists”. Introduction

The Marketing Department comprises of the Marketing Office (situated at Head Office) and thre threee regi regiona onall Sale Saless Offi Office cess term termed ed as RSOs RSOs.. The The Mark Market etin ingg Depa Depart rtme ment nt is resp respon onsi sibl blee for for plan planni ning ng and and devel developi oping ng prod produc ucts ts and exec execut utin ingg thei theirr sale saless at an affordable price through promotional activities. The Marketing Department is headed by Marketing Manager – MM, who is further assisted by Assistant Brand Managers and Assistant Manager Channel Development- AM (CD).

38

 Mitchell’s Fruit Farms Ltd 

The three Regional Sales Offices situated in Islamabad, Lahore and Karachi - known as RSO (N), RSO(C) RSO(C) and RSO (S), respective respectively. ly. A Regional Sales Sales Manager termed termed as RSM supervises each RSO. In RSO (S) and RSO(C), an Assistant Assistant Sales Manager termed as ASM assists each RSM. The goods are sold to the consumer in the local market by the RSMs through the following intermediary bodies:

•

Distributors

•

Institutional Customers

The The Mark Market etin ingg Offi ffice and and RSOs RSOs func functi tion on for for proc procur urem emen entt of orde orderrs and and execution execution of these within within stipulated stipulated time. time. The RSOs RSOs direct directly ly procure procure and execute execute local orders (only from from Pakistan). Pakistan). The Marketing office procures and executes e xecutes export orders besides supervising the RSOs. The Marketing office is responsible for the preparation of annual sales forecasts. The Market Marketing ing office office to Managem Management ent Represe Representa ntati tive ve for prevent preventive ive and correc correctiv tivee actions also communicates the quality complaints and observations of the customers. RSMs are responsible for the maintenance of stocks & stores. RSMs check returns of the products from the local market in order to keep these at a lower level. Duties & Responsibilities Responsibilities Marketing Manager

1. Pl Planni anning ng new produ products cts and and their their marketi marketing. ng. 2. Formulati Formulating ng and and implem implementing enting the marketing marketing plan. 3. Dete Determ rmin inee suit suitab able le pric prices es for for the the prod product ucts, s, which which shoul shouldd meet meet comp compan any’ y’ss objectives and should be affordable for the consumers. 4. Develop Develop campaigns campaigns for promoting promoting sales sales of the the company’s company’s product products. s. 5. Make Make the the prod produc ucts ts avai availa labl blee to the the plac placee of cons consum umer er’s ’s conv conven enie ienc ncee and and  preference. 6. Dealing Dealing with Export Export customer customerss determinin determiningg prices and and systems systems for export export.. 7. Preparing Preparing capital capital expenditu expenditure re requiremen requirements ts of the marketi marketing ng department. department. 39

 Mitchell’s Fruit Farms Ltd 

Assistant Manager

Assist the MM in the following activities: 1. Preparing Preparing agenda agenda of Annual Annual sales Confer Conference ence or other other conferences conferences and and meetings. meetings. 2. Monitoring Monitoring Sales and taking taking measure measuress for for increase increase in sales. sales. 3. Foreca Forecast st sale saless of the the natio national nal mark market. et. 4. Monitor Monitor competit competitors’ ors’ promot promotional ional activi activities ties in in the market market.. 5. Sug Sugges gesti ting ng new new marke markets ts and and produc products. ts. 6. Other Other jobs jobs relat related ed to Mark Marketi eting ng and Sale Saless Regional Sales Managers

1. Prepar Preparati ation on of Annual Sales Sales Foreca Forecasts sts – product product-wi -wise se and region region-wi -wise, se, of their  their  respective regions. 2. To obtain obtain and and execute execute orders orders from the local local market market.. 3. To report report loca locall quality quality compl complain aints ts to AM (M). (M). 4. To maintain maintain stocks stocks and and stores stores within within their their respecti respective ve offices. offices. 5. To take take care of prod product uct retur returns ns from from the the market. market. Assistant Sales Managers

1. To assist assist RSMs RSMs in in all matters matters relate relatedd to Sales Sales Managem Management. ent. 2. To make make regu regula larr visi visits ts to the dist distri ribu buto tors rs of loca locall and and out out-s -sta tati tion on town townss of  respective regions. 3. Monito Monitorr the perform performanc ance; e; stock levels, levels, sales sales & return returnss etc. etc. of the distribu distributor torss through Sales Representatives. 4. To monitor monitor performa performance nce & activi activitie tiess of sales officer officerss (sales (sales,, servic services, es, coverage, coverage, distribution & merchandising) in the market and identify the week areas and  providing them training for improvements. 5. To monitor monitor the reportin reportingg system system of sales sales officers officers & Distri Distributors butors.. 6. To update update and and maintain maintain their own reporti reporting ng system. system. 7. Coordi Coordinat nation ion in mark marketi eting ng activi activitie ties. s.

40

 Mitchell’s Fruit Farms Ltd 

Products of Mitchell’s Fruit Farms Limited

It is our aim at Mitchell's to provide you with healthy, innovative and best quality food that will tempt your appetite at all times. Above all, we also promise convenience & variety variety at affordable affordable prices. prices. With With nine categories categories encompassin encompassingg over 140 products, products, we are proud to present the Mitchell's family - products to grace your dining table on the  breakfast and dinner occasions as well w ell as products to appease your sweet tooth. These products are divided into two sections which are: •

Grocery Products

•

Confectionery Products

41

 Mitchell’s Fruit Farms Ltd 

GROCERY PRODUCTS Jams & Jellies

Mitchell’s produces certain flavors of jams and basically it is used in the breakfast and certain other. These flavors are mango, orange, apple, strawberry, and mixed fruit.

Squashes & Syrups

Pure fruit juices and pulp go into the Mitchell's Squashes and Syrups. Extracted from fruits carefully selected from the farm in Renala, these squashes come in a range of  rich natural flavors. These are available in different flavors.

42

 Mitchell’s Fruit Farms Ltd 

Ketchups & Sauces

Tomato Tomato Ketchup Ketchup made from ripe of red tomatoes, tomatoes, Mitchell's Mitchell's tomato ketchup add zest to snacks, burgers or sandwiches, kababs or samosas, and in a ready to to use foods. Mitchell's Tomato Ketchup, Chilli Garlic Sauce, Chilli Sauce, Chilli Ginger Sauce and Mexican Salsa are rapidly gaining a market abroad.

Canned Food

Mitchell’s produced high quality of canned fruits and vegetables that have natural taste and favorite among the the customers. These ready-to-use products bring convenience along with taste to every Kitchen.

43

 Mitchell’s Fruit Farms Ltd 

Fruit drinks

 Natural drinks have great demand and replace the carbonated soft drinks consumption. So Mitchell’s launched Fruit Drinks (Ready-to-Drink). (Ready-to-Drink). These Fruit Drinks are available in Mango, Lemon, Orange, Apple and Lychee flavours.

Pickles and vinegar

Mitchell's pickles are made in the true traditional way. Fruit and vegetables are processed through through natural natural processes processes.. Mango, Mango, green chilly, chilly, mixed pickle pickle and fruit fruit vin vinega egarr is available in this category.

44

 Mitchell’s Fruit Farms Ltd 

Bottled Water

With changing needs of consumers and an d their shifting towards hygienic products, like  bottled drinking water, Mitchell's launched Natural Drinking Water, Balance.

CONFECTIONERY PRODUCTS Sugar Confectionery

1. Mil Milk Toff Toffee eess 2. But Butter terscot scotch ch 3. Frui ruit Bon Bon Bon Bons 4. Milk Milk Choco Chocola late te Ecla Eclair irss Toffees, Sweets and Éclairs made from the freshest and purest ingredients are the favorites of young and old alike.

45

 Mitchell’s Fruit Farms Ltd 

Chocolates Countline Chocolate

1. Jubilee 2. Discoveree 3. Unitee 4. Twentee-1 A vari variet etyy of count count li line ness made made from from the the mo most st delic delicio ious us and and mo mout uthh-wa wate teri ring ng ingredients are sweet snack for any time.

Molded Chocolate

1. Festival 2. Top Milk  3. Golden Heart Molded chocolates are especially made for special occasions. These products are delightful selection of finest selected chocolate and creamy chocolate.

46

 Mitchell’s Fruit Farms Ltd 

FINANCIAL ANALYSIS

47

 Mitchell’s Fruit Farms Ltd 

Mitchell’s Fruit Farms Limited Profit and Loss Account For the year ended September 30, 2009

48

 Mitchell’s Fruit Farms Ltd 

2009 Rupees

Saless Sale Cost of Sales

1,27 1,278, 8,67 678, 8,61 6100 1,03 1,038, 8,63 637, 7,29 2966 (1,043,682,073) (848,823,705)

Gross Profit

Administration expenses Distribution an and ma marketing ex expenses Other operating expenses Other operating income Profit from operations

Finance cost Profit before tax

Taxation Profit for the year

Earning per share

2008 Rupees

234,996,537 (49,669,971) (124,290,843) (1,947,763) 12,962,644

189,813,591 (40,779,924) (108,184,873) (1,535,470) 6,123,349

72,020,604 (53,487,027)

45,436,673 (32,323,268)

18,533,577 (4,481,935) 14,051,642

13,133,405 (4,775,865) 8,337,540

2.79

1.65

Mitchell’s Fruit Farms Limited

49

 Mitchell’s Fruit Farms Ltd 

Balance sheet As at September 30, 2009 2009 Rupees

2008 Rupees

100,000,000

100,000,000

50,400,000

50,400,000

9,635,878 209,806,010

9,635,878 200,794,368

269,841,888

260,830,246

0 50,478,690

7,368,418 49,607,813

50,478,690

56,976,231

0 307, 307,67 671, 1,56 5644 87,816,200 12,099,523

14,736, 36,842 288, 288,71 711, 1,02 0255 89,805,848 10,311,523

407,587,287

403,565,238

727,907,865

721,371,715

Equity & Liabilities

Capital & Reserves Authorized capital 10,000,000 ordinary shares of Rs. 10 each Issued subscribed & paid up capital 5,040,000 Ordinary shares of Rs. 10 each Reserves Inappropriated Profit Non-Current Liabilities

Long term loan- secured Deffered liabilities Current Liabilities

Current por portion of long term loans- secured Shor Shortt term term runn runnin ingg fina financ nces es-- secu secure redd Trade & other payables Accured finance cost Contigencies & Commitments

2009 Rupees

2008 Rupees

321,687,827

322,282,388

Assets Non-current assets

Property,plant & equipment

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 Mitchell’s Fruit Farms Ltd 

Intangible assets

1,325,725

1,657,156

Long term loans & deposits

1,110,482

716,334

Biological assets

5,397,600

5,132,000

329,521,634

329,787,878

12,7 12 ,781 81,2 ,281 81

13,3 13 ,305 05,7 ,761 61

260,382,527 58,674,183

288,698,972 39,067,739

receivables

53,330,558

39,601,514

Cash & bank balances

13,217,682

10,909,851

398,386,231

391,583,837

727,907,865 Mitchell’s Fruit Farms Limited Cash Flow Statement For the year ended September 30, 2009

721,371,715

Current Assets

Stor Stores es,, spar spares es & loos loosee tool toolss Stock in trade Trade debts Advances, Advances, deposits, deposits, prepayment prepayments& s& other  other 

51

 Mitchell’s Fruit Farms Ltd 

2009

2008

Rupees

Rupees

118,255,880

(20,151,348)

(49,992,135)

(25,296,527)

(23,535723)

(2,120,815)

Cash flows from operating activities

Cash generated from / (used in) operations Finance cost paid Net income tax paid Retirement benefits paid

(8,054,172)

(3,444,636)

Net cash inflow / (outflow) from operating activities

36,673,850

(51,01 ,013,326)

Cash flows from investing activities

(36,263,479)

Fixed capital expenditure Sale proceeds of property, plant and equipment  Net increase in long term security deposits Proceeds from sale of biological assets Net cash outflow from investing activities

9,375,961 (394,148) 815,999

(84,627,733) 1,421,672 (339,111) 769,300

(26,465,667)

(82,775,872)

(22,105,260)

(14,736,842)

(4,755,631)

(10,080,000)

Net cash outflow from financing activities

(26,860,891)

(24,816,842)

Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the

(16,652,708)

(158,606,040)

(294,453,882)

(277,801,174)

Cash flows from financing activities

Repayment of long term loans Dividend paid

(277,801,174)

(119,195,134)

year Cash and cash equivalents at the end of the year

Mitchell’s Fruit Farms Limited

52

 Mitchell’s Fruit Farms Ltd 

Statement of changes in equity For the year ended September 30, 2009

Share

Share

General

capital

premium

reserve

Balance as at September 30, 50,400,000 9,335,878

300,000

Accumulated profit

Rupees Total

202,536,828

262,572,706

(10,080,000)

(10,080,000)

8,337,540 200,794,368

8,337,540 260,830,246

(5,040,000)

(5,040,000)

-

14,051,642

14,051,642

300,000

209,806,010

269,841,888

2007 Fi Fina nall divi divide dend nd for for the the year  year  ended

-

September 30, 2007 Profit for the year ended

-

-

-

-

September 30, 2008   balance as at September 30, 50,400,000 9,335,878 2008 Fi Fina nall divi divide dend nd for for the the year  year  ended

-

September 30, 2008 Profit for the year September  30, 2009 Balance as at September 30, 2009

-

-

300,000

-

-

50,400,000 9,335,878

Horizontal Analysis of Profit and Loss Account 2009

2008

2007

53

 Mitchell’s Fruit Farms Ltd 

Sales Cost of sales Gross profit Administration expenses Distribution and marketing expense Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year

147.55% 147.77% 146.55% 148.37% 184.96% 73.08% 323.11% 118% 251.47% 46.61% 31.79% 54.75

119.85% 120.18% 118.37% 121.81% 160.99% 57.61% 152.63% 74.45% 151.98% 33.03% 33.87% 32.49%

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

1

Horizo ntal analysis analysis 20

2 3 4 5 6 7 8 9

1

Horizontal analysis 200

2 3 4 5 6 7 8 9

Vertical Analysis of Profit and Loss Account 2009

2008

2007

54

 Mitchell’s Fruit Farms Ltd 

Sales Cost of sales Gross profit Administration expenses Distribution and marketing expense Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year Vertical analysis 200

100% 81.62% 18.38% 3.88% 9.72% 0.15% 1.01% 5.63% 4.18% 1.45% 0.35% 1.1%

100% 81.72% 18.28% 3.93% 10.42% 0.15% 0.59% 4.37% 3.11% 1.26% 0.46% 0.8%

100% 81.5% 18.5% 3.86% 7.75% 0.31% 0.46% 7.04% 2.45% 4.59% 0.16% 2.96%

1 2 3 4 5 6 7 8 9

vieriecal analysis 2009

1 2 3 4 5 6 7 8 9

55

 Mitchell’s Fruit Farms Ltd 

Horizontal Analysis of Balance Sheet Equity & Liabilities

2009

2008

2007

100%

100%

100%

10,000,000 ordinary shares of Rs. 10 each Issued subscribed & paid up capital

100%

100%

100%

5,040,000 Ordinary shares of Rs. 10 each Reserves

100%

100%

100%

Unappropriated Profit

103.59% 99.14%

100%

102.77% 99.34%

100%

Long term loan- secured

0

100%

Deffered liabilities

124.07% 121.93%

100%

80.39%

100%

Capital & Reserves Authorised capital

Non-Current Liabilities

33.33% 90.74%

Current Liabilities

56

 Mitchell’s Fruit Farms Ltd 

Current portion of long term loans- secured

0

100%

100%

Sho hort rt term term run runnin ning fina financ ncees- secu secure redd

210 10.9 .944% 19 197. 7.994%

100 00% %

Trade & other payables

98.51%

100.74%

100%

Accured finance cost

368.35% 313.92%

100%

161.09% 159.5%

100%

125.85 % Total Equities

100% 124.72%

Assets

2009

2008

2007

Property, plant & equipment

121.36%

121.6%

100%

Intangible assets

64%

80%

100%

Long term loans & deposits

294.38%

189.9%

100%

Biological assets

102.79%

97.73%

100%

%

120.92%

100%

Store tores, s, spar spares es & loo loose too oolls

117 17.2 .211%

122. 12 2.02 02% %

100 00% %

Stock in trade

140.72%

156.02%

100%

Trade debts Advances,

127.74%

85.06%

100%

143.66% 49.57%

106.67% 40.91%

100% 100%

Non-current assets

120.83

Current Assets

deposits,

receivables Cash & bank balances

prep repaymen ments&

other 

57

 Mitchell’s Fruit Farms Ltd 

130.34%

128.11%

100%

125.85%

125.85%

100%

2009

2008

2007

5,040,000 Ordinary shares of Rs. 10 each Reserves

6.92% 1.32%

6.99% 1.34%

8.71% 1.67%

Unappropriated Profit

28.82%

27.84%

35.02%

37.07%

36.16%

45.4%

Long term loan- secured

0

1.02%

3.82%

Deffered liabilities

6.93%

6.88%

7.03%

6.93%

7.90%

10.86

Current portion of long term loans- secured

0

2.04%

2.55%

Short term running finances- secured

42.27%

40.02%

25.22%

Total Assets

Vertical Analysis of Balance Sheet Equity & Liabilities

Capital & Reserves Issued subscribed & paid up capital

Non-Current Liabilities

Current Liabilities

58

 Mitchell’s Fruit Farms Ltd 

Trade & other payables

12.06%

2.45%

15.41%

Accured finance cost

1.66%

1.43%

0.57%

55.99%

55.94%

43.75%

Total Equities

100%

100%

100%

Assets

2009

2008

2007

Property, plant & equipment

49.19%

44.68%

45.82%

Intangible assets

0.18%

0.23%

0.36%

Long term loans & deposits

0.15%

0.1%

0.07%

Biological assets

0.74%

0.71%

0.91%

45.27%

45.72%

47.15

Stores, spares & loose tools

1.76%

1.84%

1.89%

Stock in trade

35.77%

40.02%

31.99%

Trade debts Advances,

8.06%

5.42%

7.94%

7.33%

5.49%

6.42%

Non-current assets

Current Assets

receivables

deposits,

prep repaymen ments&

other 

59

 Mitchell’s Fruit Farms Ltd 

Cash & bank balances

Total Assets

Verticle Verticle ana lysis lysis of Equ ities ities 2008

1.82%

1.51%

4.61%

54.73%

54.28%

52.85%

100%

100%

100%

1 2 3 4 5 6 7 8 9

Verticle analysis of Equities 2009

1 2 3 4 5 6 7 8 9

60

 Mitchell’s Fruit Farms Ltd 

Verticle Verticle ana lysis of Assets 20

1 2 3 4 5 6 7 8 9

Verticle analysis of Assets 2009

1 2 3 4 5 6 7 8 9

RATIO ANALYSIS Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firm’s performance. Categories of financial ratios

Financial ratios can be divided for convenience into five basic categories: 1)

Liquidity 61

 Mitchell’s Fruit Farms Ltd 

2)

Activity

3)

D ebt

4)

Profitability

5)

M ar ke t

Liquidity Ratios

A firm’s ability to satisfy its short-term obligations as they come due is called liquidity. Liquidity Liquidity refers to the solvency of the firm’s overall overall financial financial position __ the ease with which which it can pay its bill. bill. These These ratios ratios are viewed viewed as a good indicato indicatorr of cash cash flow  problems. Current ratio

It measures the ability of firm to meet its short-term obligations. Its formula is Current ratio

= Current asset Current liabilities

2009:

Current ratio =

398,386,231 407,587,287 = 0.9774 times

2008:

Current ratio = 391,538,837 403,565,228 Current ratio = 0.9703 times 62

 Mitchell’s Fruit Farms Ltd 

Quick (acid–test) ratio

It shows the least liquid current asset. Quick ratio = Current assets – inventory

Current liabilities

2009:

Quick ratio = 398,386,231 - 260,382,527 407,587,287 Quick ratio = 0.34 times 2008:

Quick ratio = 391,583,837 – 288,698,972 403,565,238 = 0.25 times

63

 Mitchell’s Fruit Farms Ltd 

1.4

LIQUIDITY RATIOS

1.2 1 0.8

RATIOS

0.6

CURRENT RATIO: 0.4

CURRENT RATIO: RATIO:

2009

2008

2007

0.98

0.97

1.21

0.34

0.25

0.47

QUICK(ACID QUICK(ACID TEST) TEST ) RATIO :

0.2 0

QUICK(ACID :007 2009 TEST) 200RATIO 8 2

64

 Mitchell’s Fruit Farms Ltd 

Activity ratios:

It measures the speed with which various accounts are converted into sales or cash--inflows or outflows.

Inventory turnover

It measures the activity, or liquidity, of a firm’s inventory. Inventory turnover

=

cost of good sold Inventory

2009:

Inventory turnover =

1043682073 260382527

Inventory turnover =

4.01 times

2008:

Inventory turnover

═

848823705 288698972

Inventory turnover

=

2.94 times

65

 Mitchell’s Fruit Farms Ltd 

Average collection period:

It is the average amount of time needed to collect accounts receivable.

account receivable Average collection period =

Annual sales 360

2009:

58674183 Average collection period

=

1278678610 360

Average collection period

= 16.52 days

2008:

39067739 Average collection period = 1038637296 360 Average collection period =

13.54 days

Average age of inventory:

It is the average days of inventory that shows how many days inventory takes place. Average age of inventory =

365

66

 Mitchell’s Fruit Farms Ltd 

Inventory turnover  2009:

Average age of inventory

=

365 3.62 times

Average age of inventory =

100.83 days

Average age of inventory =

365_____ 

2008:

4.59 times =

79.52 days

Total asset turnover:

It indicates the efficiency with which the firm uses its assets to generate sales.

Total asset turnover =

sales Total asset

2009: Total asset turnover =

1278678610 727907865

Total asset turnover =

1.76 times

67

 Mitchell’s Fruit Farms Ltd 

2008: Total asset turnover

= 1038637296 721371715

Total asset turnover

=

1.44 times

68

 Mitchell’s Fruit Farms Ltd 

120

INVENTORY TURNOVER:

ACTIVITY RATIOS

100

AVERAGE COLLECTION PERIOD:

80 60

RATIOS

AVERAGE AGE OF INVENTORY:

2009

2008

2007

4.01

2.94

3.82

AVERAGE COLLECTION PERIOD:

16.52

13.54

19.08

AVERAGE AGE OF INVENTORY:

100.83

79.52

95.55

1.76

1.44

1.50

40 20 0

INVENTORY TURNOVER: 2009 2008 2007

TOTAL ASSETS TURNOVER:

TOTAL ASSETS TURNOVER:

Graphical Representation of Activity Ratios

Debts ratios:

It indicates the amount of other people’s money being used to generate profits.

Debt ratio:

Measures the proportion of total assets financed by the firm’s creditors.

Debt ratio

=

Total liabilities 69

 Mitchell’s Fruit Farms Ltd 

Total assets 2009: Debt ratio

=

458,065,968

= 0.629 = 62.9%

727,907,865 2008: Debt ratio

=

460,541,469 721,371,715

Debt ratio

=

0.638

Debt ratio

=

63.8%

Debt / Equity Ratio:

It measures the ratio of debt to the stockholders equity. Debt / Equity ratio =

Total Liabilities Stock holders equity

2009:

Debt / Equity Ratio = 458,065,977 269,841,888 = 1.70

70

 Mitchell’s Fruit Farms Ltd 

=

170%

2008:

Debt / Equity Ratio =

460,541,469 260,830,246 =

1.77

=

177%

Time interest earned ratio:

Measures the firm’s ability to make contractual interest payments some times called the interest coverage ratio.

Time interest earned ratio =

earning before interest and taxes Interest

2009: Time Time int interes erestt ear earned ned rati atio

=

72,0 72,020 20,6 ,604 04 53,487,027

Time interest earned ratio =

1.35 times

2008: Time Time int interes erestt ear earned ned rati atio

=

45,4 45,436 36,6 ,673 73 32,323,268

Time interest earned ratio

=

1.41 times

71

 Mitchell’s Fruit Farms Ltd 

72

 Mitchell’s Fruit Farms Ltd 

Debt Ratios

RATIOS DEBT RATIO:

DEBT TO EQUITY RATIO:

2009

2008

2007

62.9%

63.8%

54.6%

170 %

17 7 %

12 0 %

1.35

141

2.87

TIME-INTEREST EARNED RATIO:

180.00% 160.00% 140.00% 120.00% DEBT RATIO: RATIO:

100.00% 80.00%

DEBT TO EQUITY RATIO:

60.00% 40.00% 20.00% 0.00% 2009

2008

2007

73

 Mitchell’s Fruit Farms Ltd 

Graphical Representation Representation of Debt ratios

Profitability Profitability ratios:

These ratio measures enable the analyst to evaluate the firm’s profit with respect to given level of sales, a certain level of assets, or the owners` investment. Gross profit margin:

It measures the percentage of each sales dollar remaining after the firm has paid for its goods.

Gross profit margin =

gross profit Sale

2009: Gross profit margin =

234,996,537 1,278,678,610

Gross profit margin

= =

0.184 18.4%

2008:

74

 Mitchell’s Fruit Farms Ltd 

Gross profit margin

=

189,813,591 1,038,637,296

Gross profit margin

=

0.183

=

18.3%

Operating profit margin:

It measures the percentage of each sales dollar remaining after all cost and expenses other than interest, taxes, preferred stock dividend are deducted; the “pure  profits” earned on each sales dollar.

Operating profit margin =

operating profits Sales

2009: Operating profit margin =

72,020,604 1,278,678,610

Operating profit margin =

0.056 =

5.6%

2008: Operating profit margin = 45,436,673 45 ,436,673 1,038,637,296 =

0.044 = 4.4%

Net profit margin:

75

 Mitchell’s Fruit Farms Ltd 

It measures the percentage of each sales dollar remaining after all cost and expenses included interest, taxes, preferred stock dividends have been deducted. If it is higher, the firm is better.

  Net profit margin =

Earning available for common stock holders Sales

2009:   Net profit margin

=

14,051,642 1,278,678,610

Net profit margin

= =

0.011 1.1%

2008:   Net profit margin

=

8,337,540 1,038637,296

Net profit margin

=

0.0080

=

0.80%

Earning per share:

It represents the dollar amount earned on behalf of each share.

Earning per share

=

Earning available for common stock holders No. of shares of common stock outstanding

76

 Mitchell’s Fruit Farms Ltd 

2009: Earning per share

=

14,051,642 5,040,000 =

Rs. 2.79

2008: Earning per share =

8,337,540 5,040,000

Earning per share =

Rs. 1.654

Return on total assets:

It measur measures es the overall overall effect effective ivenes nesss of manage managemen mentt in genera generatin tingg profit profitss wit withh its available assets; also called the return on investment (ROI).

Return on total assets =

Earning available for common stock holders Total assets

2009: Return on total assets =

14,051,642 727,907,865

Return on total assets =

0.0193

Return on total assets =

1.93%

77

 Mitchell’s Fruit Farms Ltd 

2008: Return on total assets = 8,337,540 721,371,715 Return on total assets

=

Return on total assets

=

0.0116 1.16%

Return on common equity:

It measures the return earned on the common stockholders’ investment in the firm. Return on common equity = Earning available for common stock holders Common stock equity 2009 : Return on common equity =

14,051,642 50,400,000

Return on common equity =

0.2788

Return on common equity = 27.88% 2008:

78

 Mitchell’s Fruit Farms Ltd 

Ret Return urn on com commo monn equi equitty

=

8,33 8,337, 7,54 5400 50,400,000

Return on common equity =

0.1654

Return on common equity =

16.54%

GROSS PROFIT MARGIN:

60.00% 50.00%

PROFITABILITY RATIOS OPERATING

40.00%

PROFIT MARGIN:

30.00%

NET PROFIT MARGIN:

20.00%

RATIOS

2009

2008

2007

18.14%

18.3%

18.5%

5.6%

4.4%

7%

1.1%

0.80%

2.46%

RETURN ON ASSETS

1.93%

1.16%

4.4%

RETURN ON COMMON EQUITY

27.88%

16.54%

50.92%

10.00% 0.00% 2009

2008

RETURN ON ASSETS

2007

GROSS PROFIT MARGIN:

OPERATING PROFIT MARGIN:

NET PROFIT MARGIN:

RETURN ON

5.09 EARNING PER SHARE:

2.79

1.65

79

 Mitchell’s Fruit Farms Ltd 

Graphical Representation of Profitability Ratios

Market ratios: It relates the current market value, as measured by its current share price, to certain accounting values.

Price/Earning ratio:

It measures the amount that investors are willing to pay for each dollar (Rs.) of a firm’s earning. If it is higher, investors’ confidents is also higher.

Price/earning ratio =

Market price per share of common stock  Earning per share

2009: Price/earning ratio =

Rs. 73.90 Rs. 2.79

Price/earning ratio

=

26.49

2008: Price/earning ratio

=

Rs.58.75 Rs.1.65

80

 Mitchell’s Fruit Farms Ltd 

Price/earning ra ratio

=

35.61

Market/ Book ratio:

It provides an assessment of how investors view the firm’s performance.

Market/ Book ratio

=

Market price per share of common stock  Book value per share of common stock 

Book value per share =

Common stock equity No. Of share of common stock outstanding

=

269841888 5040000

=

53.54

2009:

Market/ Book ratio

=

Rs.73.90 Rs. 53.54

Market/ Book ratio

=

1.38

2008: Book value per share =

Common stock equity 81

 Mitchell’s Fruit Farms Ltd 

No. Of share of common stock outstanding =

260830246 5040000

=

Mark Market et// Book Book rat ratio

51.75

=

Rs.58. .58.75 75 Rs.51.75

Market/ Book ratio =

1.14

Dividend Yield: It provides information to stockholders about the dividend yield on their investment.

Dividend yield =

Dividend Per share Market price per share

2009:

Dividend yield

=

Rs. 2 Rs.73.90 82

 Mitchell’s Fruit Farms Ltd 

Dividend yield

=

0.027

2008: Dividend yield

=

Rs. 1 Rs.58.75

Dividend yield

=

0.017

83

 Mitchell’s Fruit Farms Ltd 

60 PRICE / MARKET RATIOS

50

EARNING RATIO:

40 30

RATIOS

20

MARKET / BOOK RARIO: DIVIDEND  YIELD:

10

PRICE / EARNING RATIO: 0

2009

2009

2008

2007

26.49

35.61

-

53.51

51.75

-

0.027

0.017

-

2008

MARKET / BOOK RARIO:

DIVIDEND YIELD:

Graphical Representation of Market Ratios

SWOT ANALYSIS OF MITCHELL’S FRUIT FARM

STRENGTHS

1. Mitchell’ Mitchell’ss fruit fruit farm limi limited ted is the the oldest oldest food processing processing company company of Pakista Pakistan. n. The company company was incorporated incorporated in 1933. This is a distinctive distinctive feature feature of the company  because all other food-processing companies start their operations at least after the independence of Pakistan. 2. In 1998, Mitchel Mitchell’s l’s achieve achieve another another destinat destination ion:: ISO 9001 certif certificat ication ion,, and at no   better time than the successful completion of sixty-five years of bringing quality  products to the consumers. It is a matter of human pride that the Mitchell’s has  become the first food company in Pakistan to achieve this prestigious distinction.

84

 Mitchell’s Fruit Farms Ltd 

3. Toda Today, y, in Paki Pakist stan, an, Mitc Mitchel hell’ l’ss is the the only only majo majorr comp compan anyy with with full fullyy- inte integr grat ated ed operations having its own own growing and processing facilities at one location. Modern, high-volume industrial equipment, professional management and a trained workforce ensure that Mitchell’s maintained its lead. 4. In 1983, 1983, Mitchell’ Mitchell’ss golden jubil jubilee ee was celebr celebrated ated with with great funfair. funfair. A chocolate chocolate bar, appropriately named jubilee, was launched to commemorate the event. Mitchell’s is the pioneer in Pakistan for chocolate production. p roduction. 5. Mold Molded ed chocol chocolat atee (pra (prali line) ne) is very very popul popular ar in all all over over the world world but till till 2001 no national company was producing molded chocolate in the country. So Mitchell’s launched molded chocolate with the successful commissioning of a molded line in 2001. 6. The pro process ess of toffee making was auto utomated in 200 2000 with PLC-bas based machin machines/ es/sys system tems, s, to ensure ensure uni unifor form m quality quality of product products. s. Mitche Mitchell’ ll’ss is the first first national company that takes this step. Thus, the modernization of operation has always been top priority with Mitchell’s. 7. Mitchell’ Mitchell’ss is the market market leader leader of chocolate, chocolate, toffee toffee making making and tomato tomato ketchup. ketchup. 8. Mitchell’ Mitchell’ss is the the single single national national company company that that has so so large product product mix.

WEAKNESSES

1. The managem management ent style style that that has adopted adopted by the company company is bureau bureaucra cratic tic.. Degree Degree of  formalization and centralization is high. 2. The promoti promotion on mix of the company company and advert advertiseme isement nt programs programs is not not very good. It is justifiable to say that that company is not so much serious in promoting its brands. The company only enjoying the good repute of the brand name Mitchell’s. 3. There There is lack lack of short term term and long-te long-term rm decision decision-ma -makin kingg regard regarding ing product production ion schedules, purchasing decisions and marketing programs. 4. As we know know that there there is seve severe re compet competit itio ionn in the food indus industr try, y, but still still the availability of Mitchell’s products is very poor.

85

 Mitchell’s Fruit Farms Ltd 

5. Company Company is offering offering less discount discount as compare compare to other other relevant relevant industry’ industry’ss companies companies like Shezan, National, Rafhan, Salman’s and Ahmed to retailers and distributors.

OPPORTUNITIES

1. Increasing Increasing proporti proportion on of working working women, school school going going children children and office office going men men increase increase the size of target market of the food industry. industry. These factors factors cause growing demand of jams, jellies, marmalades, sugar free products and caned vegetables and  juices open a wide window of opportunities for MITCHELL’S Fruit Farms Limited. Limited. 2. As the rural rural populations populations of the the country country tend to migrate migrate to cities cities for for multiple multiple purposes, purposes, for this trend enhanced the market size for the the food processing companies. It is also an opportunity for the MITCHELL’S Fruit Farms Limited to avail this opportunity and get benefits from this growing market. 3. Now people people are much conscio conscious us about their their health health and fitness fitness as before before the past. past. They have tendency to use the foods that are nutritious and best for their health. So this market trend is also create new horizons for the food processing companies. 4. It is fact that that the the mark market et size size of fast fast foods foods and snack snackss rema remark rkabl ably. y. As the the many many  products are the complimentary for these kinds of fast food and snacks item. This thing is growing the demand of tomato ketchup, sauces and preserves. 5. There is an an opportunity opportunity for for the company company to increase increase the depths depths of its existi existing ng products products categories. For example, company may introduce the squashes, sauces and tomato ketchup in more packaging like in buckets as this strategy has adopted by other  competitors of the company. The company may introduce the pet bottle of 1.50 ml like ike JamJam-EE-SSheer heeren en and and Rooh Rooh Afza. fza. It wil will expa expand nd the targe argett mar market ket of  MITCHELL’S Fruit Farms Limited. 6. Other very very open opportuni opportunity ty for the the company company is that that the company company may invest invest in new new  product categories like mineral water, cheese, snakes and other dairy products. THREATS

1. The competi competitio tionn in the food food processi processing ng industr industryy is much severe severe than the past. past. Now the many national national companies companies are joining hands with mult multi-nat i-national ional corporations corporations for 

86

 Mitchell’s Fruit Farms Ltd 

additional support in terms of marketing activities, production expertise and financial resources. 2. Additio Additional nal general general sales sales taxes taxes and tou tough gh economic economic condit condition ionss of the country country are are reducing the purchasing power of the people. So in case of food item, this fact is also applicable because GST is also imposed on food items.

FINDINGS AND SUGGESTIONS

1. The display display of Mitchell Mitchell’s ’s squashes squashes was not so good good versus its its competito competitors. rs. 2. Mitc Mitche hell ll’s ’s prod produc ucts ts are are high highly ly appr apprec ecia iate tedd by the the trad tradee and and the the rele releva vant nt cons consum umer erss beca becaus usee of it itss high high qu qual alit ityy stan standa dard rds. s. The The cust custom omer erss li like ke to  purchase the product labeled Mitchell’s. 3. The The comp compan anyy is trendse trendsett tter er and and mark market et leader leader in the the food food indu indust stry ry of the the coun countr try. y. Ot Othe herr comp compan anie ies’ s’ comp compet etin ingg the the Mitc Mitche hell ll’s ’s very very well well.. This This competition among the food companies has increase from last few years   beca because use some some nation national al compan companies ies are joi joinin ningg hands hands wit withh mul multiti-nat nation ional al comp compan aniies for for addi additi tion onal al supp suppor ort, t, bu butt this this fact fact is sati satisf sfac acto tory ry for for the the 87

 Mitchell’s Fruit Farms Ltd 

management of Mitchell’s fruit farms that Mitchell’s is still # 1. Although other competitors becoming closer and closer to Mitchell’s fruit farms. 4. The company company is the market market leader leader in squashes, squashes, countline, countline, preserves preserves,, toffees toffees and sauces. And giving tough time in other products categories. 5. The company producing quality products since its incorporation. The company

got ISO 9001 certification in 1998. It is a great honor for the company because Mitchell’s is the first food company that achieved ISO 9001 certification not in food industry but also other industries of Pakistan. The management of the compan companyy is hig highly hly mot motiva ivated ted,, dedica dedicated ted and is inv invest esting ing aggres aggressiv sively ely to achieve the desired results. The company is keen to invest in the manufacturing of quality products. 6. Mitchell’s is playing a vital role in the Pakistan’s economy. The company is

also receiving the top 25 Companies’s Award from last many years. Mitchell’s has been in the market long before independence and up till now is enjoying a good repute. 7. The The new new bran brands ds of squa squash shes es that that are are pine pineap appl plee and and gu guav avaa have have no nott get get excellent response from the customers just because of poor advertisement campaign. Proper advertisement was necessary to create awareness an interest for new brands. 8. In case of molde moldedd chocolates, chocolates, the the company company has got very very good respons responsee by the customers. The new brand of molded chocolate golden hearts got positive feedback from customers, whether it is the off-season of the chocolates. Although the company is pioneer in the production of chocolates and has good repute for its production, but seems unable to get desired results from thee launch of top milk. 9. The company company can can also expand expand its business business in other other product product ranges ranges like like butter, butter, cheese, mineral water, snacks etc. 10. It is the need of the hour to introduce introduce one product of the company in different different  packages. For example, Mitchell’s can introduce its squashes in other different 88

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weights. Mitchell’s can launch it in 1.5 ml like Rooh Afza and Jam-E-Sheeren. It can can be laun launch ched ed in 50 500m 0mll or 45 4500 ml ml.. Thes Thesee laun launch ches es shal shalll prov provid idee convenience utility, helpful for increasing the brand acceptance and expand the target market 11. In the same same way, way, the company company can launch launch tomato tomato ketchup ketchup and jams in bucket bucket like othe otherr comp compet etit itor ors. s. This This will will incr increa ease se the the sale sale of the the comp compan anyy and and helpf helpful ul for  for  competing the food market successfully.

PEST ANALYSIS

PEST analysis stands for “ Political, Economic, Social and Technological analysis” and describes a framework of macro level environmental factors used in the environmental scanning components of strategic management. It is the part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of  the the diff differ eren entt macr macroo envi enviro ronm nmen enta tall fact factor orss that that the the comp compan anyy has has to take take into into consideration. It is useful strategic tool for understanding market growth or decline,  business position, potential and direction of operations. Political Factors •

In Pakistan there is no government stability or political stability this also disturbs the working of Mitchell’s fruit farms because every coming government comes with its own agenda of taxation policies and etc.

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•

Import and Export policies are changing rapidly in Pakistan this also affects the working on company, because import raw material and export products in all over  the world.

•

  Now Govt. is democratic but it imposes lot of new taxes and increases the  percentages of existing taxes which effects on the company.

•

Pakistan is front line state in ware against terrorism so it has great effect on the  political decisions by Govt. which indirectly effect the company.

Economic factors

Such as interest rates, exchange rates and inflation rates are also affecting the working of  company . •

Interest Rates are at the highest peak now a days as KIBOR is in between 12% to 13%. Company has to obtain finance on higher rat of interest.

•

Exchange rates are changing on daily basis which also causes a major factor for  the profits and expenses of the company.

•

Inflation is also a major economic problem of Pakistan. Inflation also affecting the company because it exports product and import raw material, products prices are increased day by day.

Social Factors

Social factors like cultural aspects, health consciousness, population growth rate, career  attitudes and emphasis on safety also affect the working of an organization, company also affects from these factors. •

Mitchell’s, has a complete green environment.

•

It is conducting health programs for its employees. 90

 Mitchell’s Fruit Farms Ltd 

•

It is helping the victims of Swat, Balakot and other destroyed areas by giving them food, clothing and such other things with the name of Deutsche Bank  Foundation, Pakistan.

•

As its products are famous among clients so it keeps good relations with its customers.

•

It is also give benefits to the retiring workers.

Technological Factors •

Mitchell’s, is adopting the latest technologies to complete its operations.

•

Its offices are equipped with the latest hardwares and softwares to connect worldwide and to its customers and suppliers.

•

It has a IT professionals who are responsible to keep the company up to date in technology.

•

It is spending a huge amount in research & development department.

•

Rate of technological change is very fast.

Legal Factors

Legal factors include discrimination laws, consumer laws, antitrust laws, employment laws and health and safety laws. All these factors also can affect how a company operates, its costs and the demand for its products. Mitchell’s is completely following the all Pakistani Laws in this context. CONCLUSION

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There is no doubt in this fact that Mitchell’s fruit farms is one of few national companies that playing very important role in the economy of the country. Mitchell’s is known as trends trendsett etter, er, inn innovat ovator or and progre progressi ssive ve compan companyy in the food food ind indust ustry ry of Pakist Pakistan. an. Mitche Mitchell’ ll’ss recent recent achiev achieveme ements nts li like ke automa automatio tionn of toffee toffee making making proces processs mol molded ded chocolate plant, ISO 9001 and launch of several new products reveals the commitment and professionalism of the company management. The company set high standards of  quality and has experience of 68 years that help the company to successfully competing even multi-national companies.

References: History, Company information and Departments.

From: http://download-reports.blogspot.com/2009/10/report-on-mitchells-fruit-farms-page1.html Analysis of world food Industry.

From: www.ologopolywatch.com Analysis of food Industry Asia and Pakistan.

From: www.bnet.com/foods Products of Mitchell’s

From: www.mitchells.com.pk  Financial Analysis

Done by ourselves

SWOT Analysis and Suggestions.

From: http://download-reports.blogspot.com/2009/10/report-on-mitchells-fruit-farms-page2.html PEST analysis

Done by ourselves by using different websites and reports.

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