Assumptions:

Trade Debts:

Receivable days have not been showing any significant pattern and we expect inflation to increase in
2020 and gradually decrease in future, so we assume it may reduce Receivable turnover in 2020 and
increase slightly in next financial years. We took average receivable turnover and increased it slightly
after 2020.

Stock in Trade:

Historically company is making and selling inventories 3.5x on average, so we take it forward as constant
average of inventory turnover.

Stores & Spares:

Historical Average.

Capital Expenditure:

We can assume that historically Capex is been increased along with value of sales, because NFL has been
investing in new products almost every year and increasing its packaging capacities bu installing new
machines. And as we see Noori Abad plant was a remarkable investment of NFL and they have to invest
in realignment of sourcing unit as they have planned in their reports, so we assume that CapEx will
increase as historical percent of sales and one effect can be of Imports we expect rupee value to
depreciate according to IMF so it can increase the value capex, so we assume it to remain constant as
% of Sales.

Private credit lending is all time high, private sector always borrows to do capex. Its not feasible to do
major expansions .

Major capex was recent so we don’t expect to increase much in future.

Payables:

If we see historically, then we see payable turnover is being managed to nearly average despite in rising
inflations. In last two years in highest inflation time, they had a significant decrease in payable turnover
which means inflation had a major impact on it. As we expect inflation to rise in 2020 and decrease in
future. So we decrease in payable turnover in first year and then increase slightly assuming that NFL will
start paying more of its creditors.

Long term Debt:

Historically % of Capex, capex is always financed with long term debt. So, if we are increasing capex, we
will increase Capex to some extent, but will decrease as seeing the historical pattern.

Accrued Liabilities:

We link it with Operating Expense, because these liabilities are not defined in annual reports and s we
assume they increase as % of Operating Expense. We took historical average and then dragged it.
Sales
Sales:
Export Sales:

For Export Sales, historical average is taken. Export Sales mainly depend on demand of National Foods in
US and other international markets and increase in international prices. So we assume USD export sales
growth same as Local Sales growth by using US inflation rates for price growth and volume growth is
assumed to grow by 8% and slightly decrease in future due to estimated decrease in US Real GDP
growth rate. As we see historically US Real GDP and volue growth had positive correlation.

PKR Export Sales has shown significant increase due to expected currency devaluation and exchange
rate has been forecasted through fisher effect using inflation rates of Pakistan and US.

Local Sales:

Local sales growth is estimated thorugh average food inflation and volume growth estimated with urban
to rural migration ratio and expected Real growth in household consumption. 0.5% increament in
volume growth is due to Punjab food authority ban on unpacked spices.

If we expect inflation to increase in 2020 and then decrease in future then it will have same impact on
CCI, Consumer confidence index is expected to decrease further in 2020 due inflation peak and it may
reduce in upcoming years. S we assume local volumes to be sold at lower growth rate and then increase
a little and become stable because as we historically volume growth is also linked with CCI. As CCI was
increasing volume had huge growth but in recent years volume growth and CCI is also increasing. This
consumer confidence index is expected to have 1% impact on growth rates of FY22,23,25.

Spices market regulatotory unbranded spices to be band by PRA, and so large number of population will
move towards packages spices volume growth, which is reflected as 1% increase in volume growth.

We cannot assume that National Foods product are inelastic because they produce products like
masalas jams ketchup which are not necessaties, so inflation will have impact on demand of these
products which is reflected in consumption growth rate of 2020.

Cost of Sales:

Packaging material is estimated through sales volume and inflation rates, if we see historical rates it was
best possible ssumptions another driver for packaging material will be Euro exchange rate as it mostly
imported from Europe.
Salaries & wages will be increased 10% per year as per company’s own assumption in annul report. And
Raw material cost will be on YoY growth which is estimated to be reflected by inflation rate and sales
volume growth, because as sales will increasing, to increase the production the cost of raw materials
needed will also increase.

Agriculture income should be taxed so taxes on agri produts are being increased ehich can increase raw
material cost so we included 0.5% increment due to it.

All other production cost will be linked expected inflation rate of Pakistan.

Cost of Work in progress and finished goods are also linked with inflation as they are production cost
which are dependent on inflation.

Distribution Costs:

Salaries & wages as per company policy and advertising and sales 6% of sales as analyzing historical
pattern of % of sales and company marketing campaigns are a key factor for national foods in the
market. So they will remain constant.

Outward freight and travel charges are grown with % increase in international oil prices

Others are linked with inflation rates.

Same assumptions for admin expenses, repairs & maintenance is linked to PPE

Finance Costs:

Finance costs are projected on basis of projected annual KIBOR rates(linked with inflation pattern as SBP
controls inflation through policy rates).

Debts:

Long Debts

Long term debt is taken forward by paying major maturities.

Short Debts:

Short term debts are forecasted as historical average.

Oil Prices:

According to US energy information administration foreast, oil price forecast is almost unpredictable
because volatility of less growth in global demand as expected and and foreign exchange volatility, but
still they predict it to be higher $81.73b in 2025. SO we take historical average growth and move it
forward for our model in a way that oil price reaches to $81.73b.

Accrued Markup Interest

Long term Deposits

Other income

Long term Debt