NATIONAL FOOD LIMITED.
Annual Reports 2003.
CONTENTS
Company Information
Our Vision
Six years at a Glance
Financial Ratios
Notice of Meeting
Report of Directors to the Shareholders
Performance at a Glance
Statement of Purchase & Sale of Shares
Review Report to the Members on Statement
of Compliance with best practice of
code of corporate governance
Auditors' Report to the Members
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
COMPANY INFORMATION
BOARD OF DIRECTORS
Mr. A. Majeed		Chairman
Mr. Abrar Hasan		Managing Director / Chief Executive
Mr. Waqar Hasan		Director
Mr. Khawar M. Butt		Director
Mr. Zahid Majeed		Director
Mr. Ebrahim Qassim		Director
Ms. Jamila Waqar		Director
Ms. M. E. Majeed (Appointed)		Director
Mr. Firasat AM (Resigned)		Director (N.I.T. Nominee)
Mr. Habib A. Ismail Khairani		Company Secretary
AUDITORS		Riaz Ahmad, Saqib, Gohar & Company
		Chartered Accountants,
		5-Nasim Co-operative Housing Society Ltd.
		Major Nazir Bhatti Road,
		Off Shaheed-e-Millat Road, Karachi.
		Phone : 4945427 - 4946112 Fax: 4932629
REGISTRAR		Noble Computer Services (Pvt.) Limited
		14-Banglore Town Housing Society,
		Sharea-e-Faisal, Karachi-75350.
		Phones : 4546978-4520121 Fax: (92-21) 4314962
BANKERS		Bank AI-Habib Limited
		Mackinnons Building. I.I Chundrigar Road, Karachi.
		Phones : 2412986 (10 Lines) Fax: 2419752
		S.I.T.E. Branch,
		Plot # B/76 S.S Chambers S.I.T.E., Karachi.
		Phones : 2571710-11 (92-21) 2571522
		Garden Town Branch
		Lahore City.
		Phone : 5869366-8
		Bank Al-falah Limited
		B.A. Building. I.I Chundrigar Road, Karachi.
		Phones : 2414030 (10 Lines) Fax: 2417006
		Muslim Commercial Bank Limited
		Clifton Corporate Branch, Kulsom Court,
		Clifton, Karachi.
		Phones : 5872286 - 5831835 Fax: 5872058
		Habib Bank Limited
		Hub River Road Branch, Karachi.
		Phone: 2572 197
REGISTERED OFFICE		12/CL-6, Claremont Road, Civil Lines, Karachi - 75530
		P.O. Box No. 15509
		Phones : 5662687, 5670540, 5670585,
		5670646, 5670793 & 5672268 Fax No. 5684870
AUDIT COMMITTEE
Mr. Waqar Hasan		Chairman
Mr. Khawar M. Butt		Member
Mr. Ebrahim Qassim		Member
Mr. Habib A. Ismail Khairani		Secretary
INTERNAL AUDITORS
M/s Feroz Aziz & Co.
Chartered Accountants
CHIEF FINANCIAL OFFICER
Mr. Abdul Rahim
COMPANY MANAGEMENT
Mr. Abrar Hasan		Chief Executive
Mr. Habib A. Ismail Khairani		General Manager Corporate Finance
Mr. Abdul Rahim		General Manager Finance
Mr. S.M.H. Wasti		General Manager Material Management
Mr. Shaikh Irfan Aziz		Exec. Manager Human Resource
Mr. Abdul Razzaq Kodvavi		Exec. Manager Logistics
Mr. Nasir Hameed		Exec. Manager Engineering & Development
Mr. Noman -ur-Rehman		Exec. Manager Quality & Process Engineering
Mr. M.Azhar Ali		Manager Production
Mr. Shoib Siddiqui		Marketing Manager
Mr. Zaheer Ahmed		Trade Marketing Manager
OUR VISION
Vision Statement
•      To   be   an    INNOVATIVE,      MARKETING   and   RESEARCH      oriented   company
•      To be a leader and take advantage of our leadership position in all product categories
•      To develop products with market potential through the means of indigenous technology and
Research & Development
•      To market our products globally
•      To target new, emerging segments of the food market
•      To become a global brand
Company Mission
•      To deliver consistent quality to our customers using pure ingredients, authentic recipes and the
best available technology
•       Dedicated to continuous improvement through active alliances with international companies by
expanding technological and product horizons
•      To maintain close and direct contact with our customers through consumer insights and
dedicated service
•      To provide external and internal customer service by excelling in functional management
•      To promote professionalism at all levels through education, training and development of human
resources
•      To deliver a fair return to our valued investors and shareholders, annually, in line with industry
norms and economic conditions
SIX YEARS AT A GLANCE
		1998	1999	2000	2001	2002	2003
PROFIT AND LOSS STATEMENT
Sales		503,645	644,352	765,675	915,136	994,637	1,135,642
Cost of Sales		390,437	513,323	578,472	675,226	741,555	825,454
Gross Profit		113,208	131,029	187,203	239,910	253,082	310,188
Administration & Selling Expenses		89,430	103,998	148,338	189,975	212,021	264,186
Financial Charges		8,042	12,776	12,614	14,149 .	16,518	18,843
Other Charges		947	939	1,667	2,257	1,470	1,982
Other Income		815	1,277	994	2,157	1,854	4,850
Profit before Tax		15,604	14,593	25,578	35,686	24,927	30,027
Taxation		6,100	3,150	7,075	8,459	3,514	10,014
Profit after taxation		9,504	11,443	18,503	27,227	21,413	20,013
BALANCE SHEET
Share Capital		36,961	42,505	42,505	42,505	42,505	42,505
Reserves		38,808	38,757	48,121	62,597	73,385	80,646
Shareholders' Equity		75,769	81,262	90,626	105,102	115,890	123,151
Long Term Obligations		5,995	7,583	14,209	13,811	8,697	54,713
Current Liabilities & Provisions		122,087	167,134	199,714	201,240	241,849	291,006
TOTAL		203,851	255,979	304,549	320,153	366,436	468,870
Fixed Assets - Tangible		75,128	78,299	84,938	109,210	138,996	187,564
Long Term Security Deposits		1,825	1,266	3,511	1,592	1,693	1,959
Current Assets		126,898	176,414	216,100	209,351	225,747	279,347
TOTAL		203,851	255,979	304,549	320,153	366,436	468,870
FINANCIAL RATIOS
		1998	1999	2000	2001	2002	2003
PERFORMANCE MEASURES
Return on Shareholders' Equity		12.54%	14.08%	20.42%	25.91%	18.48%	16.25%
Operating Return		7.65%	5.70%	8.40%	11.15%	6.80%	6.40%
PROFITABILITY MEASURES
Gross Profit Margin		22.48%	20.34%	24.45%	26.22%	25.44%	27.31%
Profit Margin		1.89%	1.78%	2.42%	2.98%	2.15%	1.76%
Earning per share (Rs.)		2.57	2.69	4.35	6.41	5.04	4.71
TESTS OF INVESTMENT UTILISATION
Asset turnover (Times)		2.69	2.8	2.73	2.93	2.9	2.72
Receivables (Days)		13.51	10.69	10.34	11.31	14.34	14.81
Days' Inventory		78.55	83.55	100.1	88.98	76.84	81.67
Receivable turnover		27.02	34.13	35.3	32.26	25.45	24.64
Inventory Turnover (Times)		4.65	4.38	3.65	4.1	4.75	4.47
TESTS OF FINANCIAL CONDITION
Current Ratio		1.04	1.06	1.08	1.04	0.93	0.96
Acid-test Ratio		0.26	0.22	0.19	0.29	0.27	0.24
Debt/Equity Ratio		7.91%	9.33%	15.68%	13.14%	7.50%	44.43%
Time Interest Earned		2.94	2.14	3.03	3.52	2.51	2.59
Book value per share		20.5	19.12	21.32	24.73	27.27	28.97%
Return on assets		5.07%	4.98%	6.60%	8.72%	6.24%	4.79
NOTICE OF MEETING
Notice is hereby given that the 32nd annual general meeting of National Foods Limited will be held at the
registered office situated at 12/CL-6, Claremont Road, Civil Lines Karachi, on Friday the 31st October
2003, at 11:00 a.m., to transact the following business:
Ordinary Business:
1.   To confirm the minutes of the 31st annual general meeting held on 30th October 2002.
2.   To receive, consider and approve the audited accounts for the year ended 30th June 2003.
3.   To approve payment of cash dividend @ 30% (Rs. 3.00 per share of Rs. 10 each) as recommended by
the directors.
4.   To elect Directors for a period of 3 years. The Board of Directors have fixed number of Directors to be
elected is 7 excluding any director(s) nominated by Development Financial Institutions. Following are
the retiring directors who are also eligible to offer themselves for re-election:
i)    Mr. A. Majeed		v)     Mr. Zahid Majeed
ii)    Mr. Waqar Hasan		vi)    Mr. Ebrahim Qassii
iii)   Mr. Khawar M. Butt		vii)   Ms. Jamila Waqar
iv)   Mr. Abrar Hasan		viii)  Ms. M. E. Majeed
Any person who seeks to contest the election of directors may file his consent to the Company in
accordance with the Companies Ordinance, 1984.
5.   To appoint auditors for the year 2003-2004 and to fix their remuneration. The retiring auditors Messrs.
Riaz Ahmad, Saqib, Gohar & Company, Chartered Accountants being eligible, have offered themselves
for re-appointment as auditors.
Special Business:
6.   To pass following resolution with or without modification:
Increase in Authorized Capital:
To increase the authorised capital of the company by Rs. 50 millions and to amend accordingly the
Memorandum and Articles of Association of the Company by passing the following resolution as special
resolution:
i)    "The authorized capital of the company be increased from Rs. 50,000,000 to Rs. 100,000,000 by
creation of 5,000,000 new ordinary shares of Rs. 10 each",
ii)    "The Memorandum of Association of the Company be altered by substituting for the figures and
words "50,000,000 (Rupees fifty millions) and 5,000,000 appearing in Clause V, with the figures
and words "100,000,000 (Rupees hundred millions)" and 10,000,000 respectively",
iii)   "The Articles of Association of the Company be altered by substituting for the figures and words
"50,000,000 (Rupees fifty million)" and 5,000,000 appearing in Article 4, with the figures and words