Karachi, January 04, 2007: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has maintained the medium to long-term entity rating of A+ (Single A Plus) and short term entity rating of A-2 (A Two) of National Foods Ltd. (NFL). The outlook on the medium to long-term rating has been revised from ‘Negative’ to ‘Stable’.

The assigned rating takes into account the company’s strong brand value and effective diversification of the product portfolio in terms of both variety of products and different pack sizes. The impact of these key factors has been demonstrated due to the ability of the company to maintain a healthy growth rate in sales over the past five years. The outlook has been revised on the basis of the record high cash flow levels achieved by the company in FY2006 on the back of an over 20% increase in sales as well as significantly improved margins. The company is currently undertaking major capital expenditure in order to set-up an integrated production facility at Port Qasim, which would help the company streamline operations and provide much needed space for expansion of the current production capacities.

Going forward, the company’s performance is expected to continue to show some cyclical behavior on account of the nature of the raw materials used by the company, fluctuations in the prices of which can be significant year on year. On the other hand, product pricing remains more inflexible due to pressure of competition. However, since after completion of the ongoing capital expenditure project, no major funding requirement is foreseen at least over the medium-term, the long-term debt level of the company is gradually expected to reduce over the next few years.

For further information on this rating announcement, please contact Mr. Safdar Kazi (safdar@jcrvis.com.pk / Ext: 221) or Mr. Saad Ahmed Madani (saad@jcrvis.com.pk / Ext: 219) at 5671822/5671833/5680996 or fax to 5681105/5671600.

Faheem Ahmed President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS Credit Rating Company Limited is paid a fee for most rating assignments. This rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. Copyright 2007 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS Credit Rating Company Limited.

JCR-VIS Credit Rating Company Limited Affiliate of Japan Credit Rating Agency, Ltd.