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table of contents
Founders' Philosophy Vision & Mission Core Values Brand Pillars Company Information Chief Executive's Review A Food Company Human Resources Social Responsibility and Community Welfare Notice of Meeting Directors' Report to the Shareholders Value Addition Operating and Financial Highlights Key Financial Ratios Pattern of Shareholding Statement of compliance with the code of corporate governance Auditors' review report on compliance with best practices of code of corporate governance Auditors' report on financial statements Financial statements Form of proxy
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National Foods must focus on Customers needs and serve them with Quality Products at affordable prices at their doorsteps. Our products must be pure conforming to international standards. Our Research must produce continuously new adventurous products scientifically tested, Hygienically produced in safe and attractive packages We must create environment in our Offices and Factories where talents are groomed and have opportunity to advance in their careers. We must prove to be recognized as good corporate Citizens, support good causes-charity and bear fair share of Taxes Reserves must be built New Factories create sound profit made and fair dividend paid to our Stock Holders. Through building a reliable Brand, National Foods Ltd, Must get itself recognized as Leader in Pakistan and Abroad. With the help of Almighty God, the Company can achieve its targets in years to come.
VISION AND MISSION
To be a Rs. 50 billion food company by the year 2020 in the convenience food segment by launching products and services in the domestic and international markets that enhance lifestyle and create value for our customers through management excellence at all levels.
core v alues
Passion We act with intense positive energy and are not afraid to take risks. We challenge ourselves continuously and have pride for what we do and are good at it. People-centric We put our people first. Treat them with respect and actively contribute towards their development. Customer Focus We see the world through the eyes of our customers. We do everything possible that makes them happy. Leadership We are part of the solution never the problem. We act like owners and have a positive influence on others. Teamwork Our roles are defined, not our responsibilities. We believe in going the extra mile to accomplish our goals. We coach and support each other ensuring everyone wins. We have a WE versus I mindset. Ethics We dont run our business at the cost of human or ethical values. Excellence in execution We say we do we deliver. We talk with our actions. We strive for nothing but the best. Execution is the key to winning! Accountability We see, we act. We take full responsibility for our actions and results. We dont blame others for our mistakes; we analyze them and correct them.
brand pillars White is the colour of Purity Purity is our first value. a colour of life that for us means Convenience for our customers All our products aim to enhance convenience for our customers and our trade partners Convenience is a NFL value Yellow signifies brightness & for us brightness means Innovation Innovation is a key NFL Value Innovation drives our ability to remain contemporary in response to our consumers needs 5 . Purity of thought and of action Purity as an uncompromising standard. Purity as a way of life The colour Red in our logo stands for Trust Trust placed in us by our customers. our shareholders and our employees A Trust that National Foods Limited has upheld for the past 37 years The colour Orange in our logo represents our rich Heritage A proud heritage of striving for excellence handed down by our founding generation to the present generation A belief in our Heritage is the strong foundation on which our business continues to grow Purple. our trade partners.
Jawaid Iqbal Mr. Waqar Hasan Mr. Waqar Hasan Mr. M. Muhammad Kashif Iqbal 6 Chairman Managing Director / Chief Executive Director Director Director Director Director Chairman Member Member Member Secretary Chartered Accountants Managing Director / Chief Executive Chief Operating Officer General Manager Human Resource Sales and Marketing Manager Kitchen Foods Division Sales and Marketing Manager Family Foods Division Sr. COMPANY MANAGEMENT Mr. Zahid Majeed Mr. Muhammad Kashif Iqbal INTERNAL AUDITORS Messrs. Fayyaz Abdul Ghaffar COMPANY SECRETARY Mr. Azher Ali Mr. Ford Rhodes Sidat Hyder & Co. Shakaib Arif Mr. Jawaid Iqbal AUDIT COMMITTEE Mr. Ebrahim Qasim Mr. Fayyaz Abdul Ghaffar CHIEF FINANCIAL OFFICER Mr. Abrar Hasan Mr. Zaheer Ahmed Mr. Business Unit Manager PQ Plant Business Unit Manager SITE Plant Manager Supply Chain and Planning Head of Quality. Abrar Hasan Mr. Muhammad Iqbal Mr. Saleem Khilji Mr. Khawaja Munir Mashooqullah Mr. Waqas Abrar Khan Mr.company information BOARD OF DIRECTORS Mr. Zahid Majeed Mr. Zahid Marghoob Shiekh Mr. Arif Shaikh Mr. Ahmed Iqbal Mr. Research & Development Head of Information Technology Head of Finance . Ebrahim Qassim Mr. Abdul Majeed Mr.
Civil Lines.E Branch. 15509 Phone: 5662687. Ferguson & Co. Abdullah Haroon Road. F.I. Federal B. Claremont Road. Chundrigar Road.) Limited 2nd Floor.O. Karachi Clifton Corporate Branch. Karachi-75950 Phone: 6801880 -82 (3 Lines) Fax: 6801129 Email: nsl@noble-computers.T. Karachi SITE Branch.I. 1-C.Box No. Karachi 75530 P. Lahore. 5670540.I. Karachi S.AUDITORS A. Karachi New Garden Town Branch. Karachi SHARE REGISTRATION OFFICE Noble Computer Services (Pvt.com PRINCIPAL BANKERS Bank AL-Habib Limited I. Sohni Centre. 5670585. Block-4. I. Karachi Hub River Road Branch. Karachi Shaheen Complex Branch. BS 5 & 6 Karimabad. Karachi 12/CL-6. Chartered Accountants State Life Building. 5670793 & 5672268 Fax: 5684870 ABN AMRO Bank Muslim Commercial Bank Habib Bank Limited Citi Bank Limited REGISTERED OFFICE 7 . Area. Chundrigar Road Branch.
0 billion plus turnover for the year including USD 4. and hefty investments were made by them. This trend is expected to be continued in foreseeable future. thus providing us with opportunities to grow beyond expectations. 8 . The entire management has upheld the values set two year ago for Vision 20/20. Depite all contests and debates. 3. which has transformed to a more aggressive execution from an objective or goal oriented approach. The biggest change is the approach towards doing business. The results have been encouraging and an all round discipline for doing business has set in. * * * Excessive demand pressures on money.Chief Executives Review I am very proud to state that NFL has closed the year very strongly in terms of all round performance. as well as. because of high fiscal deficit and foreign inflows manifest itself in rise in inflation rate could impair our efforts towards controlling operational cost. targeting Human Resource Development and promotion of rewards and recognition programs for boosting employee morale.64 million of export Innovative SKUs launched to target an economic segment New markets being developed for enhancing horizontal penetration across various segments All sales targets including volumetric and quantitative have been met despite inflationary trends in both local and international divisions * * Launch of NFL products in India through an authorized distributor Middle East performing well through the efforts of the international division in enhancing distribution Clear leadership of our products in the Canadian market Innovative HR programs launched. This promoted the confidence of foreign. The momentum has been set. a new approach and era is rolling in. which directly and indirectly contributed towards well being of a common man and per capita GDP. The following achievements have been made: * * * Rs. new products are being developed. local investors. systems are being modernized. Pakistani economy has done well in past five years and achieved 7% plus GDP on average.
with these mixes being very popular with the consumers. Chinese salt and Vinegar This category launched in 1988. Turmeric.to develop pure. National Foods is one such company. Basic Recipes Launched in 1982. launched in 1970 with the company. is produced on one of the most modern plants in Pakistan. Basic Recipes consist of Garam Masla and Curry Powder. Ingredients Ingredients category consisting of Khatai Powder. Though it is a basic category. Plain Spices Chilli. we are one of the largest food companies in the business. Salt has the highest customer recognition in terms of National Foods. National Salt is the market leader of the branded market. Our Plain Spices are market leaders in the branded market segment. Pakora Mix and Fruit Chat Masala. especially in the month of Ramzan. Ketchup Launched in 1997.A Food Company Food! What we eat defines our personality. a growing category for NFL. dedicated to improving lives through providing healthy. Dahi Bara Powder. National Foods is the dominant market leader in this category also. Snacks This category includes Chat Masala. Recipe concoction Launched in 1986 and today the market leader. Garlic Powder and Kasuri Methi enjoys the leadership position in the branded market. innovative foods items that excel in quality and provide value for money. Black Pepper and Cumin Seeds comprise this category. shapes our way of living and chalks out our physical appearances. Jams. Coriander. currently enjoying a leadership position in the branded market. Jelly Crystals and a complete Kheer range were launched last year and are performing well in the market. hygienically packed plain spices to counter generally available loose spices of doubtful quality. This category has three sub-brands National is homely/motherly food. 9 . Jellies and Marmalades It performed extremely well since the launch in 1998-99. Yet again National Foods is leading the market in this category. Salt Refined Tablet Salt was launched in 1978 and Iodized Salt in 1990 with the UNICEF. Pickles Launched in 1988-89 as one of the first wet products to be launched and National Pickle is the clear market leader for many years now. National Foods enjoys the market leadership for the past 4 years. it enjoys popularity with everyone who cooks. The objective was consumer focused . Desserts This include Custard Powder. With a range of over 110 products in 12 major categories. popularly knows as Salan Masala. Ginger. while Ronaq is a Chatkila Restaurant taste and Rivaaj is a cooking paste. Recipe Masalas are available throughout urban Pakistan.
and on the job performance. This program is to reward our star performers during each month on factors such as discipline. The HAMSAB program was put in place to help us cascade our Vision 2020 and Core Values to every level of the organization. personality assessment and numerical perception. HAMSAB is an activity-based learning program that helps explain our corporate identity and the right behaviors to demonstrate it. However an equal importance is given to the hard numbers that drive our business today. We set very clear goals and KPIs (key performance indicators) for our Team which in turn generates a tremendous focus towards being a results-driven organization. 10 . The Star of the Month program was initiated to reward workers and supervisors from all production sections. behavior with others employee. This year we celebrated the opening of our brand new production facility in Port Qasim. We are proud of the empowerment culture at National Foods which gives our team both the responsibility as well as accountability to be the best that they can be. The change over to the new plant was brilliantly carried out by our production and development teams and their dedication was much appreciated and recognized by all. grooming and staff training. We plan on creating an organizational culture that truly sizzles and is uniquely National Foods. We not only encourage people to work hard but play hard as well. punctuality. It is the mechanism to ensure that our vision and values are cascaded down to every single rung of our organization. personal hygiene. The purpose of this program is to continuously reinforce the principles of hygiene and food safety to ensure the application of GMP standards. In order to recruit the best salespeople.human resources As National Foods moves ahead with a growing confidence. A fun filled recognition ceremony was held to present the Star Performer Awards to recognize the outstanding performances of our management team during 2006-07. the development of human resources becomes all the more imperative for incessant growth. GMP standards. Talented people are at the heart of our quality driven culture. To ensure a proper training audit for the Food Safety Training Program and gauge its implementation a contest was organized by the name of NFL Olympics. The Sales Team Competency Exam (CompEx) consists of a series of questions linked to each applicants likely job performance followed by situational analysis and quick math and the Structured Interview Guide (SIG) which consists of a series of questions to ask candidates which will allow you to explore further the results of the CompEx. The Quality Team played a pivotal role in executing this contest between all production facilities and rating them on Food Safety. The HR and Production teams have jointly launched a Food Safety Training Program for all factory workers and their supervisors. The winning team as well as their supervisor gets cash rewards. personal hygiene. Having a focus on the soft side of our business is critical for the long term health of our organization. therefore we actively recognize their ability and provide wholesome and continuous opportunities for learning. we have developed a new team member selecting process based on mental aptitude.
including Gadap. Orangi Town and Rasheedabad. 334 students got enrolled in the third phase of the program. which will help to educate and bring a better future to the underprivileged of Pakistan. as well as to substantially improve her own quality of life and that of her children.social responsibility and community welfare Education is key to women empowerment. Education increases womens potential to become agents for social change Believing in the Chairmans dream to eradicate illiteracy from the nation. 11 . especially females for poverty alleviation and progression in a modern. Remarkably. society and beyond. Inspiring with the passion of National Foods. which started simultaneously in 15 centers in Karachi. National Foods in collaboration with The Citizen Foundation and Literate Pakistan Foundation started Adult Literacy Program. Literacy enables women to find her voice in the family. Mangopir. The Citizen Foundation is planning to start this program in all their schools. This is a significant increase when compared to last two years registration which stood at 235 students. The overall objective of the program is to achieve a sustainable literacy program in the remote areas to aid the development of local communities and provide opportunities to individuals. moderate and developed society.
an instrument proxy and the power of attorney or other authority under which it is signed. 2007 to October 5. To confirm the minutes of the 35th annual general meeting held on October 31. 2. * Three (3) bonus shares for every ten (10) ordinary shares held. the Board of Directors resolution / power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the meeting.per ordinary share of Rs. A member who has deposited his/her shares into Central Depository Company of Pakistan Limited. To appoint auditors for the year 2007-2008 and to fix their remuneration. All members are entitled to attend and vote at the meeting.) A. Karachi. 2007. Federal B.10. Block 4. 3. 2007 Notes: 1. in case of corporate entity.m. Karimabad. 3.Notice of Meeting Notice is hereby given that the 36th annual general meeting of National Foods Limited will be held at the registered office situated at 12/CL-6. Noble Computer Services (Pvt. The share transfer books of the Company will remain closed from September 26. October 5. or a notarially certified copy of such power of authority. 2007 at 10:00 a. By order of the Board of Directors Karachi. 6. b. a. Any change of address of Members should be notified immediately to the Companys Share Registrar. in case of individuals. 2. speak and vote for him/her. 2nd Floor. September 13. 4... to transact the following businesses: ORDINARY BUSINESSES: 1. In order to be valid. consider and approve the audited accounts for the year ended June 30.2/. A member may appoint a proxy to attend. Claremont Road. Civil Lines Karachi. BS 5 & 6. To approve appropriation of profits of the Company The directors have recommended following: * Final cash dividend of Rs. To receive. on Friday. 2007 (both days inclusive). Majeed Chairman Ltd. 2006. Area. 4. Sohni Center. must bring his/her participants ID number and account/subaccount number alongwith original Computerised National Identity Card or original Passport at the time of attending the meeting. A proxy must be a member of the Company. must be deposited at the office of the Companys Share Registrar not less than 48 hours before the time of the meeting. 12 . Members who have not yet submitted photocopy of their Computerised National Identity Cards to the Company are requested to send the same at the earliest. 5.
Innovative measures have to be adopted to combat these rapid changes to maintain and deliver a value proposition for our customers. 2007. Currently there is buoyant growth in the consumer market with increased spending in direct relation to the overall vibrant positive GDP growth of the economy. R&D projects and technological improvements to the processes have been responsible for the above average net sales growth of 29% (2006: 20%) attained in the year under review.321 106.292 30. 13 . has significantly invested in brand registration both in local as well international markets.847.364 16.301 191.722 129.391.058 818.471 70. are now giving gross returns with an encouraging growth rate of almost 30% (2006: -3%). Aggressive strategic and operational changes along with appropriate investments in infrastructure.263 131. The Company. inflation remains to be a cause of concern and challenge for the government and business enterprises across the country.484 200.700 571. Investments in terms of product listing fees at various well known supermarkets and hypermarkets.Directors Report to the Shareholders I take great pleasure in presenting before you the Annual Report along with the audited financial statements and management accomplishments for the year ended June 30. KEY FINANCIALS A brief financial analysis is presented as follows: 2007 2006 (Rupees in thousand) Sales Gross profit Profit from operations Profit before tax Profit after tax Earning Per Share 2. in order to accomplish its vision.55 BUSINESS REVIEW The above healthy performance is in line with the dynamic objectives set in the Vision 2020 of the company. especially in the Middle East region.41 1. There is a definite increase in the purchase power despite inflationary trends witnessed across the supply chain. However.
60% EXPENSE CONTROL Distribution Cost Advertising and Sales Promo Administrative Expenses Other Operating Expenses Financial Expenses 243.33% 0.311 2.38% 0.61% (0.81% 1.147.04% 11.99% 24.292 131.753 24.01% 2.49% 10.87% 118.321 6.23% 30.471 70.11% 0.17% 10.633.391.82% 0.339 1.75% 8.71% 3.325 73.058 2.96% 0.00% 80.681 106.251.297 19.769 91.34% 0.26% 1.55%) 100.364 52.27% (0.722 129.465.66% 29.700 27.31% BOTTOM LINE GROWTH Operating profit Other income Claim recovery against raw material supply Pre-tax profit Net profit 200.675 185.13% 1.10%) 1.096 191.02% 5.14%) 0.28% 34.26% 1.385 2.47% 1.582 27.850 31.85% 24.125.12% 50.37% 9.263 29.14% 31.FINANCIAL PERFORMANCE The financial performance of the company has been continuously improving and presenting a satisfactory outlook as compared to last year.53% (8.36% 5.01% 8.433 179.030 265.847.76% 3.07% 83.869.11% Export sales Gross sales Net sales Gross Profit 278.301 6.112 8.133 270.41% 7. A detailed analysis of the key financial figures is as under: % of Net Sales Jul 2006 to June 2007 Jul 2005 to June 2006 Growth Jul-June 2007 2006 Variance (+/-) TOP LINE GROWTH Corporate sales Gross Sales Net Sales 3.457 1.45% 30.03% 14 .673 818.110 24.341 2.094 32.484 214.80% 1.08% 43.118 214.92% 3.118 571.32% 3.41% Local Sales Gross sales Net slaes 2.
000 31.00% 30.000 41.00% 0.00% 2002 2003 2004 2005 2006 2007 YEARS 15 .3 billion. as well as.000 43.162 45.00% NET SALES GROWTH PERCENTAGE 15.000 37.000 40.732 39. in both export and local markets.TOP LINE PERFORMANCE This year the company has achieved landmark sales of Rs.000 33. and registered the robust growth in value.00% 5. quantity. Sales growth Value Quantitative Export 29.5% 16.00% 10.7% ANNUAL SALES VOLUME IN METRIC TONNES 44.00% 20.00% 25.5% Local 27.8% 27.174 37.000 35.000 2007 2006 2005 35.
850.00% 3. the Company has now started to recoup the market share with absolute focus on the mass grocery retail sector.000 Export Local 1.363 220.338 214.869.030 RUPEES IN MILLION 2.3.311 With new distribution partners in the Middle East and Gulf region the quantitative growth of 27% in international markets has outweigh the local market.498 1. MARGIN ANALYSIS This year.000 250.661 1.366.250.000 2.417 2.501 146.251.554. the Company has achieved the highest ever gross and net margins in the recent history of National Foods.000.500.00% 5.501 145.750.000 3.000 1.850.000.500.869.000 750.000 gross sales 278.00% 2002 2003 2004 2005 2006 2007 PERCENTAGE YEARS 16 .097 1.886 1.030 2.016 187.000 500.338 278.00% 1.498 1.016 187.554.000 2.000 1.00% 6.363 214. including super markets and convenience stores.000 3. Through such strategic alliances.750.366.251.000 1.661 145.417 1.500.118 2. through the operational efficiencies and process automation.250.00% 4.00% 2.187. NET MARGIN 7.000.886 220.00% 0.097 1.187.000 2.250.118 2002 2003 2004 2005 2006 2007 146.000 1.311 2.
00% 2002 2003 2004 2005 2006 2007 YEARS Exuberant performance in the year under review has now set the momentum for the Vision 20/20. 300 250 MARKET SPENDING RUPEES IN MILLION 200 150 100 50 0 2007 2006 2005 Advertising and Sales Promotion Rebates and allowances YEARS 17 .00% 10.00% 0.00% GROSS MARGIN PERCENTAGE PERCENTAGE 15.179 million to Rs.00% 25.00% 5. purely focusing on brand building in line with the vision.00% 30.271 million. enormous investments were made and companys total marketing and promotional spending increased from Rs. For that purpose. during the year. Massive promotional activities were performed.35. thereby recorded an increase by 51% in total advertising and sales promotion expenditures as compared to last year.00% 20. the management had objectively changed the composition of marketing spending with increased emphasis on brand building and customer demand pull strategy. BRAND PROMOTION SPENDING Last year.
two years in a row. With strong quality checks and control systems and the determination to provide only the best available quality to its customers. After a number of hearings both at the High Court and the Supreme Court.CASH FLOWS Rs. the Company preferred filing a suit in the Honorable High Court of Singapore. with costs and damages to be assessed.(2006: Rs. the Company rejected the whole lot of the said imported material valuing more than US$240. APPROPRIATION OF PROFIT Your directors have recommended followings for the approval by the shareholders. our appeal was allowed.2/.and lodged a claim with the foreign supplier.45 0. the liquidity ratio registered a decline. however.30 0. Demand of Sales Tax / Additional Tax The honorable Supreme Court of Pakistan dismissed the appeal of Central Board of Revenue for sales tax levied on table salt and other spices amounting to Rs. First phase of the project was 18 .87. The outlook on the medium to longterm rating has been revised from Negative to Stable. and further to provide infrastructure to support Companys future growth. despite the cash inflow from operations. LIQUIDITY RATIO RUPEES 0.40 0. net cash flows were under pressure due to 0. INVESTMENT PROJECTS PORT QASIM State of the art factory in Port Qasim is part of the overall plan of the Company for simplification and automation of its processes.10 2002 2003 2004 2005 2006 2007 YEARS LEGAL CLAIMS / CASES Claim against supply of sub-standard material In 2004.10 each * Three (3) bonus shares for every ten (10) shares held CREDIT RATING JCR-VIS.35 0.20 0. has maintained the medium to long-term and short-term entity ratings of A+ (Single A Plus) and A-2 (A Two) respectively. subsequent to the balance sheet date an out of court agreement is made of US$400. It is indeed a historical victory for the Company. Due to this.8 million on technical grounds. However. * Final cash dividend of Rs. vendor of raw material supplied ginger slices of an inferior quality. a net deficit of Rs.000/. and has duly been received by the Company in August 2007.101 million was generated through operations.80 million was recorded in net cash flows.2/-) per share of Rs.for a full and final settlement of the claim amount.15 0. Accordingly.25 repayment of loans and large expenditures on capital projects. Following its rejection to acknowledge our claim.000/.
We are hopeful that the growth momentum set by the management in the last couple of years will further be improved in the years to come. therefore. The Company has adopted the Code and is implementing the same in letter and spirit. a realistic growth model has been derived and all futuristic goals will be determined and implemented in line with the said model.443 million (2006: Rs. Pakistani economy is still supposed to be in Golden Age. PATTERN OF SHAREHOLDING The pattern of shareholding of the company is annexed. COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE The stock exchange have included in their listing rules the Code of Corporate Governance (Code) issued by Securities & Exchange Commission of Pakistan. it is expected that production capacity will get increased by 2 to 3 times for certain product categories.326 million) to the government and its various agencies on account of various government levies including custom duty. remain a cause for concern as far as material sourcing and management is concerned. On the other hand the rampant increase in inflation along with natural events of rains and floods which have a direct impact on the performance of agricultural sector. FUTURE OUTLOOK In coming years bullish trend in economy is expected to be continued with high consumer spending and good macro economic conditions subject to political stability and consistency in trade and economic friendly government policies. growth prospects are fairly promising. On completion of the Port Qasim project. The last phase of the project is in the last stage of its completion and will be operational in the upcoming season. However. Once completed it is also expected to generate operational efficiencies and will reduce the cost of production. During the year the company paid over Rs. the project is now designed to provide its workers excellent working environment keeping in view the Good Manufacturing Practices. AUDIT COMMITTEE The Board has constituted an Audit Committee consisting of three members including Chairman of the Committee. CONTRIBUTION TO NATIONAL EXCHEQUER NFL is one of the largest tax payers in Pakistan. the management is determined to provide a deserving value to its customers' purchasing power by offering quality products at affordable prices. The Committee assists the Board in reviewing Internal Audit Manual and Internal Audit System. Despite the element of uncertainty. sales tax and income tax. Significant part of second phase of the project is also completed and operational. Chief Financial Officer.266 million was also generated through export of products. Apart from following transactions. With an additional investment of more than 40 million. further reflecting our participation in the national economy. the Chief Executive. The Committee regularly meets as per requirements of the Code.completed last year and is fully operational. Directors. After taking all such economic facets into account. foreign exchange of Rs. Moreover. Company Secretary and their spouses and minor children did not carry out any transaction in theshares of the Company during the year: 19 .
A. Khwaja Munir Mashooqullah 1 3 1 3 - Resigned on February 9. A. Waqar Hasan Mrs.. the Board of Directors in its meeting held on February 9. 2007 Appointed in place of Mr.239 · International Accounting Standards as applicable in Pakistan have been followed in preparation of financial statements and any departure there from has been adequately disclosed. cash flows and changes in equity. Attendance by each Director was as follows: Name of Director No. 5.371 840 210 630 635.693. present fairly the state of affairs of the Company. Jawaid Iqbal Mr. Jawaid Iqbal Nature of transactions Gifted Gifted Gift received Purchased Sale Purchased Gifted No. 6. has reappointed Messrs. as detailed in the listing regulations. F. Abdul Majeed Mr. offer themselves for re-appointment. The value of investments of Provident Fund based on respective audited accounts was Rs. Khawar M. EXTERNAL AUDITORS The present auditors Messrs. Ford Rhodes Sidat Hyder & Co. 4. Chartered Accountants as the auditor until the next Annual General Meeting · · During the last business year five meetings of the Board of Directors were held. 2007. 2007 . The outstanding duties. Butt On behalf of the Board of Directors 20 Abrar Hasan Chief Executive Karachi: September 3. Chartered Accountants as internal auditors of the Company CORPORATE AND FINANCIAL REPORTING FRAMEWORK · The financial statements. Waqar Hasan Mr. · Accounting policies as stated in the notes to the financial statements have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. 8. 3. 7. Jamila Waqar w/o Mr. Abrar Hasan Mr. of shares 180. Chartered Accountants are retiring and being eligible. the results of its operations. Abrar Hasan Mr. proposes the appointment of Messrs. Ebrahim Qasim Mr.137/- · · · · All statutory returns in this connection were filled. statutory charges and taxes. Mr. A statement regarding key financial data for the last six years is annexed to this report. Ferguson & Co.842 279. Khawar M. The Board of Directors on the recommendation of the Audit Committee. Waqar Hasan Mr. Zahid Majeed Mr. if any. Abrar Hasan Mr. F. Butt Mr. 1.Name Mr. There are no significant doubts upon the companys ability to continue as a going concern. Abrar Hasan Mr. There has been no material departure from the best practices of corporate governance.24. of meetings attended 5 5 4 5 4 1 2 Leaves granted INTERNAL AUDITORS On the recommendation of the Audit Committee.· Proper books of account of the Company have been maintained. The system of internal control is sound in design and has been effectively implemented and monitored. Ferguson & Co. have been duly disclosed in the financial statements. Zahid Majeed Mr. 2..529 98..
72%) (19.364 2.324 573.67%) (20.768.292 2.110 24.35% 100.949 % 98.092.894 % 99. 2006 Rupees in '000' 2.098.00% June 30.23% 10.22% 0.781 215.098.213 6.87% 100.738.015 303.096 2.95% 20.00%) Cost of materials and services Government Lievies Employees remuneration and benefits Other cost Profit after tax (12.23%) Cost of materials and services Government Lievies Employees remuneration and benefits Other cost Profit after tax 21 .741 416.619 129.00% 100.91% 0.28% 19.417 70.00% 10.591 256.66%) (10.768.00% June 30.67% 100.72% 4.29%) (13.949 50. 2006 (3.00% 1.68% 0.84%) June 30.699 360.84% 3. 2007 June 30. 2007 (4.681 2.402. 2007 Value addition Net sales including sales tax Other operating income Claim recovery against raw material supply Value distribution Cost of materials and services Government Levies Employees' remuneration and benefits Other costs Profit after tax 1.66% 13.v alue addition FOR THE YEAR ENDED JUNE 30.35%) (50.139.30% 12.95%) (10.32% 0.894 54.00% Rupees in '000' 2.28%) (54.743 6.
368 476.505 140.413 825.289 3.055 46.700 1.491 708.710 967.375 367.011 126.014 20.505 325.505 126.865 2.936 1.766 689. Selling & Other Operating Financial Charges Other Income Claim recovery against raw material supply Profit before Tax Taxation Profit after taxation 994.518 967.653 1.572.234 233.596 183.879 1.753 446.637 1.152 51.903 54.089 206.498 42.727 397.110 24.850 30.713 286.960 42.941 379.082 26.758 8.293 32.763 626.642 741.693 225.584 247.564 1.450 33.282 353.168 18.697 231.722 62.373 16.767 42.847.842 288.815 1.470 213.139 475.273.959 287.533.623 24.574 818.618 30.458 Fixed Assets & CWIP Other Non current assets Current Assets TOTAL 138.436 187.437 571.854 24.727 708.188.850 6.817 564.924 275.006 4.958 68.027 10.996 1.430 129.271 11.223 366.952 1.675 6.714 11.161 514.299 1.135.747 366.890 564.505 84.136.640 1.323 4.292 2003 2004 2005 2006 2007 BALANCE SHEET Share Capital Reserves Shareholders' Equity Long Term Obligations Current Liabilites & Provisions TOTAL 42.364 2.069 185.391.518 1.471 36.094 624.354 22.484 91.514 21.101 90.945 169.555 253.112 364.927 3.188.843 4.opera ting and financial highlights 2002 PROFIT AND LOSS STATEMENT Sales Cost of Sales Gross Profit Administration Distribution cost Other operating cost Administration.467 229.681 106.223 2.505 204.505 93.491 16.454 310.891 182.880 193.902 19.276.398 135.767 230.188 30.013 1.096 191.982 266.107 70.469 1.731 42.263 73.436 42.032 919.242 343.458 22 .500 361.275 476.516 8.952 1.960 496.139 435.504 595.731 369.750 41.938 2.058 1.891 42.297 513.
41% 9.87 1.43 83.11% 16.80% 7.55 34.16 0.64% 15.30% 4.22% 21.47 19.22% 8.79% 3.32% 10.75 2.53 3.44% 5.51 29.33% 17.69 14.92% 3.64% 6.04 27.21 30.49 16.20 16.32% 97.41 INVESTMENT UTILIZATION Collection period days Creditors payment days Inventory Turnover days Inventory Turnover Ratio Asset turnover (Times) 14.71 27.76% 4.81% 39.31% 15.18% 13.26 49.61 2.15% 4.00 0.34 14.53 2.50% 25.64 103.65% 17.42% 30.23% 5.07 76.59 31.88% 23.28% 10.23% 3.89 25.00% 3.87 86.02% 39.45 81.56 25.73 2.79 95.28 58.53% 97.59% 14.97 1.77% 6.22% 11.67% 6.05% 2003 2004 2005 2006 2007 PROFITIABILITY MEASURES Gross margin percentage Net margin Operating margin Earnings per share 25.84 4.87% 2.39% 94.90 14.84% 30.31% 1.82 2.41 17.25% 94.98 3.76 1.29 4.25% 10.key financial ratios 2002 PERFORMANCE MEASURES Efficiency ratio Return on assets (ROA) Return on net assets (RONA) Return on capital employed (ROCE) Return on equity (ROE) 97.85 101.37 31.28 19.50 3.87 39.55 23 .81 14.05 0.95% 42.81% 7.98 0.89% 2.21 6.08 1.33 52.13 1.44 15.18 97.24 3.38% 30.44% 2.49 2.46% 11.71% 92.52% 28.91% 18.26 40.10 0.97% 32.17% 5.57% 15.26% 2.09 0.22 FINANCIAL CONDITION Current ratio Quick ratio Debt to equity ratio Interest coverage ratio Book value per share 0.64 43.16% 22.
96% 33.900 14 5 6 7 8 9 10 11 12 13 1 1. 2007 Category No.548 1 1 2 1.409. Modarabas & Mutual Funds Foreign Investors Co-operative Societies Charitable Trusts Others Totals Number of shares held Category-Wise No. Mr.787 30.01% 33.873.548 2.Majeed W/o.02% 0.009 72. Jamila Waqar Mr. Butt Mr. of share holders 1. Abdul Majeed Mr.307 958.08% 24 .000 2. Zahid Majeed Mr. NBFIs.100 1.960 1. of shares held Percentage Mr. Jawaid Iqbal Mrs.872 500 500 419.16% 0.250.053 Shares Description No. Iqbal Ali Mohammad Associated Textile Consultants (Pvt. Mr.E.pattern of shareholding Combined pattern of CDC & physical share holdings as at June 30.55% 324. Abdul Majeed Mrs.861 1. Khawar M.250.542. Chief Executive Officer and their spouses and minor children Mr. M.) Limited Falls in Category # 1 Falls in Category # 1 Falls in Category # 7 Totals 465.111 384 1.96% 14. Ebrahim Qassim Mr.09% 0.983 667.211 86.647 6. Kulsum Banoo W/o.05% 22. Ebrahim Qassim Khawaja Munir Mashooqullah Executives NIT/ICP Associated companies.00% Share-holders holding ten percent or more voting interest in the listed company Total paid up capital of the Company 10% of the paid up capital of the Company Name(s) of shareholder(s) 4.09% 0.352 500 16.03% 100.631 10.409. Abrar Hasan Mr.200 4.084 1 7 Category-wise shares held 1. Insurance Companies.) Limited Public Sector Companies and Corporations Banks.409. Waqar Hasan Mrs. 1 2 3 4 Category of shareholders Individuals Investment Companies Joint Stock Companies Directors. DFIs.548 3. undertakings and related parties Associated Textile Consultants (Pvt.538 0.16% 59.278 Percentage % 44.538 Shares 425.
404 43.000 395.500 216.000 15.222 419.335 167.000 670.pattern of shareholdings cdc and physical as on 30 june.000 25.000 30.087 45.872 394.000 63.001 10.410.000 1.001 25.014 50.998 163.167 37.000 20.000 40.000 5.985 86.001 60.211 667.938 26.409.001 1.000 90.009 324.001 45.001 20.552 51.405.001 To 100 500 1.001 5.000 65.000 420.001 390.001 15.001 320.001 35.000 75.000 21.001 665.878 33.548 Number of Share Holders Total Share Held 25 .000 10.001 85.001 415.000 50.100 1.001 70.000 325.718 28. 2007 Share Holding From 755 216 38 72 6 2 2 2 6 1 1 1 3 1 1 1 1 1 1 1 101 501 1.
3. 2. 20. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. 9. have been taken by the Board. which has been signed by the directors and employees of the Company. 7. The Board has developed a vision/mission statement. being a member of a stock exchange. 13. 2007 This statement is being presented to comply with the Code of Corporate Governance contained in the Listing Regulation No. The Board has outsourced the internal audit function to M/s Ford Rhodes Sidat Hyder & Co. 15. as determined by CEO. were circulated at least seven days before the meetings. 12. There were no new appointments of CFO and Company Secretary during the year..statement of compliance with the code of corporate governance FOR THE YEAR ENDED JUNE 30. 4. 17. CEO and executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. overall corporate strategy and significant policies of the Company. 2007 Abrar Hasan Chief Executive 11. 18. A casual vacancy occurring in the Board on February 9. At present the Board includes four (04) non-executive directors. 16. The minutes of the meetings were appropriately recorded and circulated. along with agenda and working papers. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company. All the powers of the Board have been duly exercised and decisions on material transactions. The directors have confirmed that none of them is serving as a director in more than ten listed companies. 6. 10. The Company has applied the principles contained in the Code in the following manner: 1. their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan. has been declared as a defaulter by that stock exchange. 8. Chapter XIII of Lahore Stock Exchange and Chapter XI of Islamabad Stock Exchange for the purpose of establishing a framework of good governance. It comprises four (04) members. The Board has formed an audit committee. 37 of Karachi Stock Exchange. 5. Karachi Dated: September 3. whereby a listed company is managed in compliance with the best practices of corporate governance. The directors. including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors. 14. The Board arranged orientation course for its directors during the year to apprise them of their duties and responsibilities. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. The Board has approved appointment of Internal Auditors including their remuneration and terms and conditions of employment. Written notices of the Board meetings. The directors report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. 19. The meetings of the Board were presided over by the Chairman and the Board met at least once in every quarter. The Company has prepared a Code of Business Ethics. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan. We confirm that all other material principles contained in the Code have been complied with. The Company has complied with all the corporate and financial reporting requirements of the Code. The meetings of the audit committee were held at least once every quarter prior to approval of interim and final results of the Company and as required by the Code. a DFI or an NBFI or. 2007 was filled up by the directors on the same day. Chartered Accountants. who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Company and they are involved in the internal audit function on a full time basis. 26 . that they or any of the partners of the firm. The Company encourages representation of independent non-executive directors and directors representing minority interests on its Board of Directors. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board. The terms of reference of the committee have been formed and advised to the committee for compliance. including this Company. of whom three (03) are non-executive directors.
whether the Statement of Compliance reflects the status of the Companys compliance with the provisions of the Code of Corporate Governance and report if it does not.review report to the members on st atement of compliance with best practices of code of copporate governance We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of National Foods Limited to comply with the Listing Regulation No. Chartered Accountants Karachi Dated: September 3. Based on our review. to the extent where such compliance can be objectively verified. A. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. 2007 27 . where the Company is listed. Chapter XIII of Lahore Stock Exchange and Chapter XI of Islamabad Stock Exchange. Our responsibility is to review. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Companys compliance. F. Ferguson & Co. 2007. 37 of Karachi Stock Exchange. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Boards statement on internal controls covers all controls and the effectiveness of such internal controls. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. in all material respects. with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended June 30. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code.
1984. were necessary for the purposes of our audit. F. 2007 and the related profit and loss account. 1984. as well as. An audit includes examining. for the year then ended and we state that we have obtained all the information and explanations which. 1980 (XVIII of 1980) was deducted by the company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. Ferguson & Co. in our opinion: the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. evidence supporting the amounts and disclosures in the above said statements. and the business conducted. Our responsibility is to express an opinion on these statements based on our audit. Chartered Accountants Karachi Dated: September 3. proper books of accounts have been kept by the company as required by the Companies Ordinance. and are in agreement with the books of accounts and are further in accordance with accounting policies consistently applied. in our opinion and to the best of our information and according to the explanations given to us.auditors report to the members We have audited the annexed balance sheet of National Foods Limited as at June 30. It is the responsibility of the companys management to establish and maintain a system of internal control. after due verification. we report that: (a) in our opinion. give the information required by the Companies Ordinance. 1984. 1984. profit and loss account. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. and in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance. An audit also includes assessing the accounting policies and significant estimates made by management. to the best of our knowledge and belief. the balance sheet. 2007 (b) (i) 28 . cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. We believe that our audit provides a reasonable basis for our opinion and. (c) (d) A. evaluating the overall presentation of the above said statements. 2007 and of the profit. investments made and the expenditure incurred during the year were in accordance with the objects of the company. in the manner so required and respectively give a true and fair view of the state of the company's affairs as at June 30. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. (ii) (iii) the expenditure incurred during the year was for the purpose of the company's business. cash flow statement and statement of changes in equity together with the notes forming part thereof. on a test basis. its cash flows and changes in equity for the year then ended. and.
financial statements .
393 37.925 26.458 SHARE CAPITAL AND RESERVES Issued.505 6.586 4.442 3.406 35.000 626. 967.188.585 11. subscribed and paid-up capital Capital Reserve .505 6.960 244.874 4.763 CURRENT LIABILITIES Trade and other payables Accrued interest / mark up Short term borrowings Current maturity of: Long term financing Liabilities against assets subject to finance lease Provision for income tax 16 17 18 13 14 315.710 189.161 42. plant and equipment Intangibles Long term deposits CURRENT ASSETS Stores.272 46.Balance Sheet As A JUNE 30.279 83.463 367.815 COMMITMENTS 19 1.794 2.989 5 6 7 8 9 10 11 4. spare parts and loose tools Stock in trade Trade debts Advances Trade deposits and prepayments Accrued interest / mark up Other receivables Tax refunds due from / adjustable with the government Cash and bank balances 3 4 493.000 5.306 37. 2007 t Note June 30.102 319.779 2. 2007 June 30.357 193.469 1.467 206. 2006 (Rupees in thousand) ASSETS NON-CURRENT ASSETS Property.322 477.458 The annexed notes form an integral part of these financial statements.491 195.000 514.482 247.290 1.880 NON-CURRENT LIABILITIES Long term financing Liabilities against assets subject to finance lease Deferred tax 13 14 15 143.025 595.235 101.518 967.694 11.041 38.102 198.184 211.940 13.702 18.063 19.000 6.988 8.007 112.520 25.318 10.504 372.000 15.089 365.273 367.766 498.146 689.Share premium Unappropriated profit 12 42.188.064 2.960 30 Abrar Hasan Chief Executive Zahid Majeed Director .444 2.637 1.000 2.
058 (1. 2007 Note June 30.1 24.574) 818.55 Abrar Hasan Chief Executive Zahid Majeed Director 31 .301 (32.391.753) 6.430) 129.107) 70.096 191.112) (8.572.094) 6.297) (19.722 (62.471 106.profit and loss account FOR THE YEAR ENDED JUNE 30.626 Claim recovery against raw material supply Profit before taxation Taxation Profit after taxation Earnings per share .484 (513.847.292 30.41 1.850) 106.675) 167.263 (364.321 (24.758) (73.681 131.basic and diluted .700 (1.364 16. 26 25 9. 2006 (Rupees in thousand) Sales Cost of sales Gross profit Distribution cost Administrative expenses Other operating expenses Other operating income Operating profit Finance costs 24 21 21 22 23 20 21 2.276.902) (91.471 (36.437) 571.110 200.Rupees The annexed notes form an integral part of these financial statements. 2007 June 30.
plant and equipment Sale proceeds on disposal of property.900) (193.cash flow statement FOR THE YEAR ENDED JUNE 30.958 (150.782) (13. 2007 Note June 30.126) 133.193 (1.316) 1.420) 31 185. 32 Abrar Hasan Chief Executive Zahid Majeed Director .900) (147.913) (80.654) 123.463) (40.899) 6.598 (28.272 (599) 1.174) (365) 179.637 (140.139) (112.239 (265.589) (155. 2007 June 30.255) 4. 2006 (Rupees in thousand) CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Finance cost paid Income tax paid Net increase in long term deposits Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property.534 (28.000 (2.033) (55.382 152. plant and equipment Purchase of intangible assets Return received on term deposits Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Repayment of)/ net proceeds from long term financing Payment of finance lease liabilities Dividend paid Net cash (used in) / from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 32 (26.226) (112.277 The annexed notes form an integral part of these financial statements.963) (262) 101.964) (6.276 221.000) (6.450) (8.
50 per share ) Profit for the year ended June 30.376) 70.501) 129.482 (8.292 367.364 198. 2006 Final dividend for the year ended June 30. Abrar Hasan Chief Executive Zahid Majeed Director 33 .880 The annexed notes form an integral part of these financial statements.292 319. 2007 Issued subscribed and paid up capital Capital reserve Share Unappropriated premium profit (Rupees in thousand) Total Balance as at June 30.101 (6.505 42.102 6. 2006 Balance as at June 30.273 183.364 247.089 (8.494 (6. 2006 (Rs 2 per share) Profit for the year ended June 30.505 6. 2005 Final dividend for the year ended June 30.102 6.102 134.376) 70.505 42.501) 129. 2007 42. 2007 Balance as at June 30. 2005 (Rs 1.statement of changes in equity FOR THE YEAR ENDED JUNE 30.
Lahore and Islamabad Stock Exchanges. 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards. 34 . Estimates and judgements are continually evaluated and are based on historical experience and other factors. Civil Lines. 1984. 1984 by special resolution passed in the extra ordinary general meeting held on March 30. Karachi. Approved accounting standards comprise of such International Financial Reporting Standards as notified under the provisions of the Companies Ordinance. ii. 1984 or the requirements of the said directives have been followed. Standards or interpretations not yet effective but relevant Following amendments to existing standards have been published that are mandatory for the Companys accounting periods beginning on the date mentioned below: i. cooking pastes and salt. including expectations of future events that are believed to be reasonable under the circumstances. Wherever the requirements of the Companies Ordinance. 2007 effective from January 1. amendments and interpretations effective in 2006 but not relevant The new standards. THE COMPANY AND ITS OPERATIONS The Company was incorporated in Pakistan on February 19. jellies.6. sauces. are disclosed in respective notes to the financial statements. 1988. ketchup. 1984. jams. 2. Claremont Road. Standards. The preparation of financial statements in conformity with the above requirements requires the use of certain critical accounting estimates.1 Basis of preparation These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance. pickles. The registered office of the Company is situated at 12 / CL . The Company is principally engaged in the manufacture and sale of spices. or areas where assumptions and estimates are significant to the financial statements. 1913 and subsequently converted into a public limited company under the Companies Ordinance. IAS 1 IAS 23 Presentation of Financial Statements Capital Disclosures Borrowing Cost effective from January 1. 2006 are considered not to be relevant or to have any significant effect to the Companys financial reporting and operations. The matters involving a higher degree of judgement or complexity. There have been no critical judgements made by the company's management in applying the accounting policies that would have the most significant effect on the amounts recognised in the financial statements. 1970 as a private limited company under the Companies Act. 2009 Adoption of the above amendments may only impact the extent of disclosures presented in the financial statements. It is listed on Karachi. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of these financial statements are set out below: 2. amendments and interpretations that are mandatory for accounting periods beginning on or after January 1. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. the requirements of the Companies Ordinance.notes to the financial st atements FOR THE YEAR ENDED JUNE 30. 2007 1.
plant and equipment Property.4 Intangibles . are recognised as intangible asset. plant and equipment is included in income currently. Major renewals and improvements are capitalised and assets so replaced.2 Overall valuation policy These financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The Company and the employees make equal contributions to the fund. Depreciation on additions is charged from the month in which the assets are put to use and on disposals up to the month of disposal.6 Employee benefits Retirement benefit . cost that are directly associated with identifiable software and have probable economic benefit exceeding the cost beyond one year. Others . on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements.computer software These are stated at cost less accumulated amortisation and impairment. Generally. plant and equipment are stated at cost less residual value if not insignificant and accumulated depreciation except capital work in progress which is stated at cost. 2. Maintenance and normal repairs are charged to income as and when incurred. ii) Deferred Deferred income tax is provided in full. if any. However. Amortisation charge is based on the straight-line method whereby the cost of an asset is written-off over its estimated useful life of three years. Depreciation on property. Profit and loss on sale or retirement of property. 35 .3 Property. Direct cost includes the purchase cost of software and related overhead cost.defined contribution plan The Company operates an approved provident fund for all permanent employees.2.compensated absences The Company accounts for these benefits in the period in which the absences are earned. using the liability method. are retired. 2. 2. cost associated with developing or maintaining computer software programmes are recognised as an expense as incurred. plant and equipment is charged to income applying the straight-line method over the estimated useful lives of related assets.5 Taxation i) Current The provision for current taxation is based on taxable income at the current rates of taxation. 2. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. if any.
2.13 Trade and other payables Trade and other payables are carried at the fair value of the consideration to be paid for goods and services. direct cost of labour and production overheads. 36 . Items in transit are valued at cost comprising invoice values plus other charges incurred thereon.7 Stores. spares and loose tools. Impairment losses are recognised as expense in the profit and loss account.11 Impairment losses The carrying amount of the Company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. 2. Financial charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability.2. Net realisable value signifies the estimated selling price in the ordinary course of business less cost necessarily to be incurred in order to make the sale. Cost of work in process and finished goods includes direct cost of materials. The outstanding obligation under the lease less finance charges allocated to future periods is shown as a liability. 2. Cost is determined by weighted average method except for those in transit where it represents invoice value and other charges incurred thereon.8 Stock in trade All stocks are stated at the lower of cost and estimated net realisable value. If such indication exist. 2. cash and cash equivalents comprise cash in hand. with banks and short term borrowings.12 Finance Leases Leases that transfer substantially all the risks and rewards incidental to ownership of assets are classified as finance leases. if no impairment loss had been recognised. Finance leases are capitalised at the inception of the lease term at the lower of fair value of the leased assets and the present value of minimum lease payments. 2. if any. 2. Debts considered irrecoverable are written off and provision is made against those considered doubtful of recovery. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 2. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined. are capitalised as part of the cost of that asset.9 Trade and other debts Trade and other debts are stated at original invoice amount. construction or production of the qualifying asset.10 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. net of depreciation or amortisation.14 Borrowing costs Borrowing costs are recognised as an expense in the period in which these are incurred except to the extent of borrowing costs that are directly attributable to the acquisition. if any. the asset's recoverable amount is estimated in order to determine the extent of impairment loss. For the purposes of the cash flow statement. spares and loose tools These are valued at weighted average cost less provision for slow moving and obsolete stores. if any.
All monetary assets and liabilities in foreign currencies are translated into Pak rupees at the rates of exchange approximating those prevailing at the balance sheet date. The Company recognises revenue when the amount of revenue can be reliably measured. and a reliable estimate of the amount can be made. it is probable that future economic benefits will flow to the Company and specific criteria has been met for each of the Companys activities as described below: I. 2. Sale of goods Sales are recognised on despatch of goods to customers. 2. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. liabilities against assets subject to finance lease. 2. II Interest / Mark up income Income on bank deposits is recognised on accrual basis. 2. trade and other payables.19 Research and development Research and development expenditure is charged to profit and loss account in the period in which it is incurred. 37 .18 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Companys activities.21 Dividends Dividend distribution to the Company's shareholders is recognised as liability at the time of their approval. 2.17 Foreign currency transactions and translation These financial statements are prepared in Pak Rupees which is also the functional currency of the Company.15 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past event. Foreign currency transactions are translated into Pak Rupees using the exchange rates approximating those prevailing at the dates of the transactions. 2. long term finance. Exchange gains / losses on translation are included in income currently. or to realise the asset and settle the liability simultaneously.2. accrued interest / mark up and short term borrowings.20 Offsetting Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to set-off the recognised amounts and the Company intends to either settle on a net basis. cash and bank balances. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.16 Financial instruments Financial instruments include trade and other debts.
629 (1.589 38 3.455 172.893 3.014 59.1 2007 2006 (Rupees in thousand) 86.049 38-99 10-37 100.1 Borrowing costs of Rs 10.766) (11.2 2007 2006 (Rupees in thousand) 342.162) (225) 6.2.664 14.note 3.798 23.287) 7.630 29.880 6.495 16.011 99.099 10 21.511) (161.019) 13.285 173.256 27.887) (87.099 24.014) (4.45%) was used. 2006 Cost Accumulated depreciation Net book value Useful life (Years) 14.010 (3.882 122.724 (154) (374) (4.011 5-10 6.495 21.285 15.397 7.465 58.600 1.253) 16.763 (16) (3.883 (93) (374) (2.589 365.184) 13. .232 1.256 27.895 192.374 (3.833) 2.691) 9.636 (758) (32.737 6-7 6.146 87.159) 3.860) 14.564 (5.637 (730) (4.309 831 12.600 5 21.132) (36.124) 6.100) (5.048) (15.2.895 192.868) 24.406) (72.006 44.285 19.552) (1.at cost .099 2.641 (14) (1.745 3. 2007 Cost Accumulated depreciation Net book value Net carrying value basis Year ended June 30.011 7.920 230.73% to 10.748 140.285 3.285 532.748 493.416 (1.637 (3.745 4.157 10.note 3.402 30.160 386 (1.1 Capital work in progress .357 (1.893 1.476) 3.997 (16.485 (641) (3.077 6.780 (384) 4. 2006 Opening net book value (NBV) Additions (at cost) Disposals (at NBV) Depreciation charge Write-offs (at NBV) Closing net book value Gross carrying value basis At June 30.732 342.117) 7.732 342.312 (14.074 173.note 3.818) (5.572 38.419) 6.444 192.402 9. representing the borrowing cost of the loans used to finance the project.033 143.880 2.578 (1.678 603 (182) 2.074 150.933 182.403) (28.077 6.760) 6.397 3.081 824 25. Capitalisation rate of 9.218 10.625) 14.598 (2.712) 9.680) 3.897 190.696 150.1 Operating Assets Leasehold Building Plant and Furniture Office Computers Laboratory land on machinery and and other equipments leasehold including fittings equipments land generators (Rupees in thousand) Vehicles owned subject to finance lease Total Net carrying value basis Year ended June 30.280 (2.014 158.882 122.196) 4.737 6. PROPERTY.906 3.792 45.745 5 11. 2007 Opening net book value (NBV) Additions (at cost) Disposals (at NBV) Depreciation charge Closing net book value Gross carrying value basis At June 30.256 27.140 689 10.077) (22.3.470) (2.128) (11) 21.62 million) arising on financing arrangements entered into for the construction of Bin Qasim project were capitalised during the year and are included in the cost.696 15.922 4.212) 24.553) (189.033 143.693) (23.330) (36.839) 3.921) (12.688 7.2 Capital Work in Progress Civil works Plant and machinery Advances to suppliers Vehicles pending delivery Borrowing costs .181 39.91 million (2006: Rs 11.737 1.893 3 3.125 21.049 100.049 100. PLANT AND EQUIPMENT Operating assets .696 14.72% (2006: 7.798 6.600 6.895 5 192.481) (15.874 3.624) (2.976 (1.503 18.406 353.780 (2.
North Nazimabad. Karachi. 58 West Wharf. Muhammad Iqbal Employee Mr. Mr.3. Karachi.D. Bhangwan Das F-65. Block-F. plant and equipment sold. having net book value in excess of Rs. Mr. Suzuki Baleno 645 516 129 320 -do- Suzuki Cultus 502 395 107 310 -do- Suzuki Khyber 391 313 78 177 -do- Suzuki Pickup 295 232 63 165 -do- Suzuki Alto 504 109 395 430 Insurance Claim 39 . Nadeem Ahmed Employee Mr. Block-F.L.3 The details of property. Muhammad Riaz Ex-employee Mr.B. Karachi. Karachi. Muhammad Sajid Ex-employee Mr. Mr. M/s. 50. Karachi. Muhammad Arif 1730. Sohail Ahmed Ex-employee Mr. North Nazimabad. North Nazimabad. Block-F. Bhangwan Das F-65.000 are as follows: Cost Accumulated depreciation Book value Sale Mode of proceeds disposal Particulars of purchaser (Rupees in thousand) Motor vehicles Honda City EXi Hyndai Santro Suzuki Cutlus Suzuki Cutlus Suzuki Cutlus Suzuki Mehran Suzuki Cutlus Suzuki Alto VXR Suzuki Alto VXR Hero 125 Honda Civic 795 529 605 592 590 496 555 496 491 55 865 367 194 349 377 399 314 392 327 354 4 710 428 335 256 215 191 182 163 169 137 51 155 505 395 284 298 364 209 254 214 221 56 450 Company policy -do-do-do-do-do-do-do-do-doNegotiation Syed Asad Sayeed Ex-employee Mr. Karachi. Building.M. K. Serhad Road. Faisal Ishaq F-141/3. Adil Employee Mr. Amjad Niaz Employee Mr. Mr. S. Baldia Town. Jahangir Road # 2. Martin Quarters. EFU General Insurance Ltd. Zahid Marghoob Sheikh Employee Mr. 2nd Floor. Abdul Sultan Employee Mr. Bhangwan Das F-65.
computer software Net carrying value basis Opening net book value Additions (at cost) Amortisation for the year Closing net book value Gross carrying value basis Cost .744 (677) 101.468) 74.695 Finished goods Provision for obsolescence 105. 2007 2006 (Rupees in thousand) 4.007 6.611) 163.940 101.906) 112. 2006: Rs 17.219 102.939 122.940 101.553 (12.116) 98.357 (1.340 104.585 3.1 Due from related parties Premier Distributor Premier Agency 6.064 599 (1.779 4.312 40 .181 (5. INTANGIBLES.918 8.927 (5.278) 109.324) 97.1 Others Considered doubtful Less: Provision for doubtful trade debts 8.585 9.884) 2.501 Work in process Provision for obsolescence 141.988 (7.603 101.note 6.235 Packing materials Provision for obsolescence 86.290 1. STOCK IN TRADE Raw materials (including in transit Rs 0.779 9.316 (1.340 9.662) 139.Computer software and ERP System Accumulated amortisation Net book value June 30.969 (12.312 92.064 9.117) 4.33 million.940 6.064 5.780 (7.550 (2.542) 4.067 367.872 477.334) 59.491 (3.906 116.422 1.245 112.346 71.222 90 9. June 30.628 101.4.624 (13.84 million) Provision for obsolescence 166. TRADE DEBTS Considered good Related parties .001) 2.
However.1 36.096 841 456 25.000 for a full and final settlement of the claim and was duly received by the company in August 2007.note 9.payments Sales tax refundable . the department preferred an appeal against the order of the Tribunal and for the stay of refund claimed by the Company before the High Court of Sindh.279 1. 2007 2006 (Rupees in thousand) 7. June 30.794 8. As a result of the appeal the matter was set aside by the Tribunal by accepting the appeal.116 1. OTHER RECEIVABLES Claim recovery against raw material supply .000 37.279 10. 2007 2006 (Rupees in thousand) 10.702 1.1 This represents claim receivable by the company from litigation against the vendor for raw material supplied found unfit for consumption.586 9.176 11.385 1.290 12.520 9.393 447 606 10 1. The said court dismissed the appeal and held that the appeals under consideration filed by the Superintendent (Law) are not competent and consequently are not maintainable in law.000 19. TAX REFUNDS DUE FROM / ADJUSTABLE WITH THE GOVERNMENT Taxation .paid under protest .1 This represents sales tax paid under protest against arbitrary levy on table salt and other spices amounting to Rs 87. ADVANCES Considered good Employees .470 13. The appeal was subsequently relodged by the same petitioner with the honorable Supreme Court of Pakistan and was also dismissed on the same grounds.note 10. June 30.530 4.063 11 4 2. Case was decided in April 2007 in favour of the company by the Honorable Supreme Court of Singapore by allowing the appeal.646 1.702 18.8 million. June 30.June 30. TRADE DEPOSITS AND PREPAYMENTS Margin deposits Other deposits Prepayments 114 636 1. 41 . an out of court settlement has been done for USD 400. However.1 Employees' Provident Fund Export rebate Others 24. with costs and damages pertaining to the case to be assessed.against expenses Suppliers Others 233 10.770 2. subsequent to the balance sheet date.
270 respectively.990 2.568 17.560 29.505 As at June 30. SHARE CAPITAL Authorised share capital Number of shares 10.682 978 4.631 and 2.660 83.45%) per annum. 13. Mark up is charged at the rate ranging from 10.000 Issued.61% (2006: 7. 2007 2006 (Rupees in thousand) 9. LONG TERM FINANCING Bank Al-Habib Limited .025 12.000) 143.000 4.25% to 11.000 189. 2007 and 2006 number of ordinary shares held by associates were 2.000 Ordinary shares of Rs 10 each 100.560 29. Mark up is charged at the rate ranging from 8% to 8.000 13. 2007 2006 (Rupees in thousand) 754 15.392 18.994.2 The facility is secured by way of equitable mortgage over land.000) 189.1 MCB Bank Limited .note 13.5% per annum (2006: 8% per annum). 2008. The loan is repayable in equal quarterly installments.11.548 4. 000 180.000 100. 2011.668 3. the last of which is payable on December 24.note 13. the last of which is payable on October 13.255. 42 .000.945 42.000 15.73% to 10. buildings.542.2 Less: Current maturity shown under current liabilities 13. subscribed and paid up capital Ordinary shares of Rs 10 each Number of shares 1. June 30.000 (26.250.146 697 73.000 215. June 30.538 Shares allotted: for consideration paid in cash as bonus shares 12. plant and machinery installed or to be installed at factory buildings.000 (46. CASH AND BANK BALANCES Cash in hand Cash in bank term deposits margin account current accounts local currency foreign currency June 30. June 30.505 12.511.945 42.824 1.1 The facility is secured by way of equitable mortgage over factory building.000 200. The loan is repayable in equal quarterly installments.
666 (9.447 (6.000 2.417 (1.406 21.7%) per annum which are used as discounting factor.1 The above represents finance leases entered into with modarabas for motor vehicles. June 30.467 43 .306 5.062 6.851) 21.406 8. 2007 2006 (Rupees in thousand) 21. 2007 2006 (Rupees in thousand) 15.041) 15.915 26.26% to 12.000 Minimum lease payments Not later than 1 year Later than one year but not later than 5 years Future finance charges on finance lease Present value of finance lease liabilities Present value of finance lease liabilities Not later than 1 year Later than one year but not later than 5 years 8. June 30.422) (1.972 (7.357 20.306) 5.43% (2006: 6.694 3.215) 1.694 8. June 30.298 (4.447 14. Monthly lease payments include finance charge ranging from 6.26% to 13.000 (2.383 17.417) 8. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE Present value of minimum lease payments Current maturity shown under current liabilities June 30.041 15. The balance of liability is payable by April 2011 in monthly installments.447 6.14.022 35.786) 587 11. DEFERRED TAX (Debit) / credit balance arising in respect of: Accelerated tax depreciation / amortisation Provision for slow moving stock Provision for doubtful trade debts Liabilities against assets subject to finance lease 42.355 9.
471 675 2.1 Workers' welfare fund Advances from customers Payable to provident fund Security deposits from customers Tax deducted at source Due to related parties .844 1.950 10.2 Due to related parties .718 1.915 93.2 Advances from employees Sales tax payable Unclaimed dividend Other liabilities 164.059 17.983 17.184 4.959 713 1.172 (2.315 128 16.718 191 8. 2007 2006 (Rupees in thousand) 16.long term financing 5.988 16.719 98.1 Workers' profits participation fund Balance as at July 1 Allocation for the year Interest on fund utilised in the company's business Amount paid during the year Balance as at June 30 5.263 5.318 16.315 4.693 8.234 4.others . June 30.June 30.161 (5.note 16.029 244.718 10.846) 10.short term borrowings .718 103.085 4.others Associated Textile Consultants (Private) Limited Precision Rubber Products (Private) Limited Pakistan Card Clothing (Private) Limited 872 40 912 17.610 69 973 28 912 10.458 315.961 5.798 3. TRADE AND OTHER PAYABLES Creditors Accrued liabilities Workers' profits participation fund .334 10.315 2.491 27 161 33 221 44 .193 69 853 11 221 9.129 8.454) 5.directors .note 16. ACCRUED INTEREST / MARK UP On .
685 2.05% ).911 38.513 2.954 67.1 The above facilities available from various banks amount to Rs 338 million (2006: Rs 340 million).244 1.3 The rates of mark up range between 6.521. 18.006.192 41. SHORT TERM BORROWINGS Running finance under mark up arrangements Export re-finance Short term loans 96.339 244.598 2. 2007 (2006: 5. 18.97 million (2006: Rs 53.030 2. June 30.2 The facilities for opening letters of credit and guarantee as at June 30. 2007 amounted to Rs 105.2% per annum as at June 30.700 45 .847. SALES Local sales Less: Sales tax Export sales 2.900 114.11% to 10.43 million (2006: Rs 63.826 214. June 30.656 Less: Discount / Commission Rebates and allowances Sales returns 285. 19.272 7.626 278.799.57 million (2006: Rs 29.869. COMMITMENTS Aggregate commitments for capital expenditure as at June 30.372 211.50 million).098 373. 2007 amounted to Rs 8.22 million) of which the amount unutilised at year end was Rs 76.220.501 195.25% to 10.118 2. 2007 2006 (Rupees in thousand) 18.925 18. June 30.200 408.09 million).311 347.251.944 264.058 2.June 30. 2007 2006 (Rupees in thousand) 20.487 84.724 96. The arrangements are secured by way of pari-passu charge against hypothecation of Company's stock in trade and trade debts. The facilities are payable by December 2007 and are renewable.391.700 91.
578 4.440 751 1.590 2.819 3.096 50.794 12.902 59.648 3.578 4.819 720 702.152 12 9.302.379 1. wages and other benefits Contribution of provident fund Advertising and sales promotion Auditors' remuneration note 22.158 5. OPERATING COSTS Cost of Sales 2007 2006 Raw materials consumed Packing materials consumed Provision for slow moving stock Salaries.508 1.224 41.189 1.571.740 (97.375 1.399) 1.536 91. rates and taxes Repairs and maintenance Travelling Fixed Assests written off Stock written off Others 916.769 730 38.219 2.019 5.896 2.770 2.941 346 972 13 12.178 2.552 270.407 560 5.21.612 122.146 18.712 5.754 1.978 364.798 10.219 8.603 (139.483 13.266 6.266 6.446 38.334 513.975 2.189 5.747 48.067) (1.387 298.942 6.769 5.896 138 5.387 154.188 4.755 1.744 2.870 2007 916.112 Total 2006 702.067 (98.044 730 7.379 16.164 386.000 Opening work in process Closing work in process Cost of goods manufactured Opening stock of finished goods Closing stock of finished goods Export rebate 97.063 320.331 1.799 1.892 24.324 9.695) 119.942 1.732 50.998 (Rupees in thousand) 1.482 180.437 46 .574 1.436 3.268 37.536 222 5.712 639 73.783 13.137 101.235 7.327 1.260 34.186 1.306 87.786 3.658 458 2.567 80.872) (1.758 Administrative Expenses 2007 2006 45.909 769 87.414 6.328) 76.896 8.417 19.404 1.281 179.911 2.612 211.211 461 30.453 47.164 386.576 441 Distribution Cost 2007 2006 97.717.603) 1.634 1.161 2.310 80.576 3.1 Depreciation / Amortisation Fuel and power Outward freight Forwarding charges Insurance Laboratory.343 784 886 461 5.166 33. research and development Legal and professional charges Postage and communications Printing and stationery Rent.449 3.456 8.428 9.673 14.429 1.058 1.063 320.766 (101.188 4.707 1.238 1.570 24.280.222 1.572.276.166 270.714 1.688 632 7.325 4.894 31.808 9.547 1.259 4.559 364 2.613.167 11.218.297 29.286 1.783 13.199 5.
043 6.430 37.983 8.689 932 752 472 6.110 10.net Profit on disposal of property.107 47 .681 2.718 1.850 23.June 30. 2007 2006 (Rupees in thousand) 2. TAXATION Current .889 24.315 4.258 7 1.949 32.1 Auditors' remuneration Audit fee Limited review and other certifications Out of pocket expenses 300 265 165 730 22.094 22.890 61.1 1.771 2. June 30.for the year Deferred Prior 38. June 30.note 22. 2007 2006 (Rupees in thousand) 21.000 (341) 36.198 6.903 7. OTHER OPERATING EXPENSES Provision against doubtful trade debts Debts written off Donations .753 200 165 96 461 The directors or their spouses do not have any interest in any donee's to which donations were made.772 1. FINANCE COSTS Mark up on long term finance Mark up on running finance under mark up arrangements Mark up on export re-finance Mark up on foreign currency import finance Mark up on finance lease Interest on workers' profits participation fund Bank charges 25.052 5.675 3.659 (552) 36.605 2.638 9.760 557 191 3. plant and equipment Sales tax refunded Insurance claim Scrap sales Interest on late payment by trade debtors Exchange gain Miscellaneous 24.126 19.121 128 2.1 Workers' profits participation fund Workers' welfare fund 3.890 540 62.906 547 200 10. June 30.000 23.595 943 222 864 241 14 778 24 6. OTHER INCOME Return on term deposits .
673 634 1.251 30.709) (683) 61. Disclosure of transactions between the Company and related parties Relationship with the Company i) Associated Companies / Undertakings: Nature of transaction June 30.957 36.931 Sale of goods Compensation for use of trademark / marketing expense Reciprocal arrangements for sharing of services 48 .659 ii) Defined Contribution Plan: B.55 106.295 886 1. A. Australia National Foods Limited Provident Fund 129.890 26. June 30. EARNINGS PER SHARE There is no dilutive effect on the basic earnings per share of the Company.103 179 (4. which is based on: Profit after taxation attributable to ordinary shareholders Weighted average number of shares in issue during the year (in thousand) Earnings per share .364 4. 2007 2006 (Rupees in thousand) 541. 2007 2006 (Rupees in thousand) 25.41 70.basic (Rupees) 27.471 37.722 67.679) 1. RELATED PARTY DISCLOSURES Related parties with whom the Company had transactions i) Associated Companies / Undertakings: Associated Textile Consultants (Private) Limited Pakistan Card Clothing Company (Private) Limited Precision Rubber Products (Private) Limited Premier Agency Premier Distributor Raj Masala Pty Limited.1 Reconciliation between tax expense and accounting profit: Profit before taxation Tax at applicable tax rate of 35% Expense not deductible for tax purposes Effect of lower tax rate on export sales Others 191. June 30.470 400.251 16.292 4.265 116 (2.June 30.
330 233 388 1.564 256 427 1. Further.732 17.793 1 2. chief executive and executives of the Company are as follows: Directors 2007 Managerial remuneration and allowances Utilities Bonus / Variable pay Housing Travelling expenses Other expenses 2006 Chief Executive 2007 2006 (Rupees in thousand) 3.042 3 12.962 1.633 28.507 9 Number of persons 2 28. CHIEF EXECUTIVE AND EXECUTIVES 28.532 5.155 5.920 21.032 1.078 29. 28.298 The related party status of outstanding balances as at June 30.June 30.399 503 440 10.000 (2006: Nil).049 356 4. executive directors and certain executives of the Company are also provided with Company maintained cars and residential telephones. 28.241 927 36.2 Aggregate amount charged in these financial statements for the year for fee to non-executive directors was Rs 11.265 7. 2007 2006 (Rupees in thousand) Key management compensation: Salaries and other short-term employee benefits Post-employement benefits 35.025 23. PLANT CAPACITY AND PRODUCTION Spices Pickles Pastes Salt Installed 6.356 1 Executives 2007 2006 2. 2007 are included in trade debts.258 3. 49 .833 6. the Company's new production facility for pickles at Port Qasim became operational in November 2006.108 311 5.963 2.256 6.098 210 350 944 208 153 3.683 768 1.457 3. other receivables and trade and other payables respectively. 2007 29. REMUNERATION OF DIRECTORS.923 22.554 5.644 13.334 5.168 22.957 Utilised Installed Metric Tons 5.1 The actual production is based on consumer demand. June 30.062 19.268 4.296 2.154 450 191 5.3 The Chief Executive.341 16.273 1.787 5.1The aggregate amounts charged in the financial statements of the year for remuneration including all benefits to directors.264 4.879 16 7.554 2006 Utilised 3.
50 . the financial assets which are subject to credit risk amounted to Rs 116.429 10.30.332 633.48 million).516 25.754 46.925 261.766 2. The management limits its credit risk by an aggressive policy for approval of credit limits and by ensuring that sales are made to customers with an appropriate credit history.406 194.149 261.694 189.546 119.272 421.000 73.184 211.613 214. risk arising from the Company's financial instruments is limited as there is no significant exposure to price and cash flow risk in respect of such instruments. 2007 June 30.146 163.429 10.146 163. Concentrations of credit risk may arise from exposure to a single debtor or to a group of debtors having similar characteristics such that their ability to meet their obligations is effected similarly by changes in economic or other conditions.000 116.766 2.000 21.546 192.372 3.2 Financial risk management objectives and policies The Company finances its operations through equity.482 116. 2006 OFF BALANCE SHEET ITEMS Letters of credit June 30.184 271. 2007 June 30.1 Financial assets and liabilities Interest / Mark up bearing Maturity Maturity after up to one year one year FINANCIAL ASSETS Trade debts Deposits Other receivables Cash and bank balances June 30. 2006 25.447 211.491 750 25.504 116. 2006 FINANCIAL LIABILITIES Long term financing Liabilities against assets subject to finance lease Trade and other payables Accrued interest / mark up Short term borrowings June 30.719 418.272 693.516 25.978 2. Although the Company operates mainly in the consumer industry but the management believes that it is not exposed to significant concentrations of credit risk.000 15.000 6.429 10.55 million (2006: Rs 192.406 158.49 million (2006: Rs 101.184 271.94 million). 30. i) Concentration of credit risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed completely to perform as contracted. Out of total financial assets of Rs 163.393 18.491 3.111 30.041 211.613 214. FINANCIAL INSTRUMENT 30. 2006 Letter of guarantee June 30.393 18.754 3. Taken as a whole.231 143.313 224.146 160.149 189.447 261.000 21.482 Sub-total Non-interest / Non-mark up bearing Maturity Maturity after Sub-total up to one year one year (Rupees in thousand) Total The effective interest / mark up rates for the monetary financial assets and liabilities are mentioned in respective notes to the financial statements.393 18.074 73. borrowings and management of working capital with a view to maintain an appropriate mix between various sources of finance to minimise risk.491 3.780 116.272 263.
46 (2006:Rs 51. spare parts and loose tools Stock in trade Trade debts Advances Trade deposits and prepayments Other receivables Increase in current liabilities Trade and other payables 267.595) 13.534 (164) (29.770 (24. iii) Foreign exchange risk management Foreign exchange risk arises mainly where receivables and payables exist in foreign currency. June 30.292 185. 2007 2006 (Rupees in thousand) 31.792 1.726 75. 30.3 Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values.542 2.063) 443 (2.598 51 . Also.624 1.978) (10.330) (152. Company treasury aims at maintaining flexibility in funding by keeping committed credit lines available.170) 104.212 1.722 106. CASH GENERATED FROM OPERATIONS Profit before taxation Adjustments for non-cash charges and other items Depreciation on property.712 (943) (3.471 36.258) 6.808 221. short term loans include foreign currency import finance amounting to Rs 41.819 29. Financial assets of equivalent Rs 100.50 million (2006: Rs 71. which was exposed to foreign currency risk.576 20.93 million) were in foreign currency which were exposed to foreign currency risk.50 million).961 68.770 28.960 Profit before working capital changes EFFECT ON CASH FLOWS DUE TO WORKING CAPITAL CHANGES Decrease / (increase) in current assets Stores.612 5. plant and equipment Amortisation of intangibles Fixed assets written-off Profit on disposal of property.468) (150) (58. June 30.489 174.387 3.884 (2.492 (859) (119.768) (26.250) 70.645) 1.ii) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities. The company exports its products to various countries and is exposed to movement in foreign exchange rates. plant and equipment Return on term deposits Provision for slow moving stock Stock written off Finance costs 191.
These financial statements do not reflect these appropriations. 2007 by the Board of Directors of the Company.025 (195.126) 33.146 (211.00 per share (2006: Rs 2. 83. PROPOSED DIVIDEND At the Board Meeting on September 3.900) Abrar Hasan Chief Executive Zahid Majeed Director 52 . 2007 a cash dividend in respect of 2007 of Rs 2. 2007 2006 (Rupees in thousand) 32. Further.501 million is proposed (2006: Rs 8.00 per share) amounting to a total dividend of Rs 8.272) (193.June 30.925) (112. 34. DATE OF AUTHORISATION These financial statements were authorised for issue on September 3. the Board of Directors also proposed a transfer of Rs 12. 2008. CASH AND CASH EQUIVALENTS Cash and bank balances Short term borrowings 18. which will be accounted for in the statement of changes in equity as an appropriation from the unappropriated profit in the year ending June 30. June 30.501 million).752 million (2006: Nil) from unappropriated profit to reserve for issue of bonus shares for issuance of three bonus shares for very ten shares held.
/CDC A/c No. Attested copies of NIC or Passport of the beneficial owners and the proxy shall be furnished with the proxy form. For CDC Account Holders/Corporate Entitles: In addition to the above following requirements have to be met: (i) (ii) The Proxy form shall be witness by two persons whose names./Mrs. (iii) The proxy shall produce his/her original NIC or original Passport at the time of the meeting. As witness my/our hand seal this Signed by presence of (i) (ii) day of 2007. 3.5/Revenue Stamp (Signature must agree with the specimen signature registered with the Company) Important: 1. not later than 48 hours before the meeting. A Member entitled to attend and vote at the meeting may appoint any other Member as his/her proxy to attend and vote on his/her behalf except that a corporation may appoint a person who is a Member. address and NIC Numbers shall be mentioned on the form. (for members who have shares in CDS) hereby appoint Mr. This form of proxy. must be deposited at the office of the Companys Shares Registrar. 2007 and/or any adjournment thereof. duly completed and signed. 2. ./Mrs. the Board of Directors resolution/power of attorney with specimen signature shall be submitted (unless it has been provided earlier) alongwith proxy form. in the Signature on Rs./Miss (full address) Mr. (iv) In case of corporate entity.form of proxy 36th Annual General Meeting I/we of being a member of National Foods Limited holding Folio No. act and vote for me/us and behalf at the 36th Annual General Meeting or the Company to be held on October 5. This form should be signed by the Member or by his/her attorney duly authorised in writing./Miss (full address) Ordinary shares as per Registered of or falling him/her of (being member of the Company) as my/our Proxy to attend. its common seal should be affixed to the instrument. If the member is a Corporation.
Karachi-75950 .) Limited 2nd Floor. Sohni Centre. Area. BS 5 & 6 Karimabad.AFFIX POSTAGE Noble Computer Services (Pvt. Federal B. Block-4.
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