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LEINER PAK GELATINE LIMITED
Annual Reports 2002
CONTENTS
COMPANY INFORMATION
NOTICE OF MEETING
DIRECTOR'S REPORT
STATEMENT OF THE COMPLIANCE WITH BEST
PRACTICES OF CORPORATE GOVERNANCE
AUDITORS' REVIEW ON COMPLIANCE OF
CORPORATE GOVERNANCE
AUDITORS' REPORT
BALANCE SHEET
PROFIT AND LOSS ACCOUNT
CASH FLOW STATEMENT
NOTES TO THE ACCOUNTS
PATTERN OF SHAREHOLDING
COMPANY INFORMATION
BOARD OF DIRECTORS
Khwaja imtiaz Ahmed
(Chief Executive & Managing Director)
Khwaja Mehboob llahi (Resigned)
Khwaja Ijaz Ahmed
Khwaja Ibrar Ahmed
Mr. Iqbal Dossa
Brig (Retd) Akhtar Hafeez
Khwaja Shafique Ahmed (Resigned)
Khwaja Muhammad Kamran
Khwaja Umer Riaz
AUDIT COMMITTEE
Khwaja IJaz Ahmed (Chairman)
Khwaja Ibrar Ahmed (Member)
Khwaja Muhammad Kamran (Member)
COMPANY SECRETARY
Khwaja Ibrar Ahmed
AUDITORS
Ali & Company
Chartered Accountants
67-D/1, Model Town, Lahore.
LEGAL ADVISOR
Khwaja Muhammad Akram
Advocate
1-Begum Road, MozangAdda, Lahore.
REGISTERED OFFICE
17/G, Gulberg-2, GPO Box 415,
Lahore-54660. Ph : 5756953-54. Fax : 92-42-5710604
PLANT
19th Kilometer,
Shahrah-e-Pakistan, Kala Shah Kaku,
District Sheikhupura.
Ph : 7980165-7980179
BANKERS
United Bank Limited
Bank AI-Habib Limited
NOTICE OF 19TH ANNUAL GENERAL MEETING
Notice is hereby given that the 19th Annual General Meeting of LEINER PAK GELATINE LTD., will be
held on Monday the 28th October, 2002 at 10:00 A.M. at the Registered Office of the Company, 17-G, Gulberg-
2, Lahore-54660 to transact the following business:
1.     Recitation from the Holy Quran.
2.     To confirm the minutes of the 18th Annual General Meeting held on 31 st December, 2001.
3.     To receive and adopt the Annual Accounts of the Company for the year ended 30th June, 2002
together with Directors and Auditors Report thereon.
4.     To approve Dividend as recommended by the Directors.
5.     To appoint the Auditors of the Company for the year ending 30th June, 2003. The present Auditors
M/s. Ali & Company, Chartered Accountants retire and being eligible offer themselves for re-
appointment.
6.      To transact or discuss any other business with the permission of the Chair.
BY ORDER OF THE BOARD
(KH. IBRAR AHMAD)
COMPANY SECRETARY
LAHORE:
Dated: 30th September, 2002
NOTES:
1.     The Share Transfer Books of the Company will be closed from 21st October, 2002 to 28th October,
2002 (both days inclusive). Transfer received at the Registered Office of the Company, 17/G, Gulberg-
2, Lahore-54660, at the close of business on Saturday the 19th October, 2002 will be treated in time for
the purpose of payment of Dividend to the transferees.
2.     A member entitled to attend and vote at this meeting may appoint another member as proxy to attend
and vote instead of him.
3.     The instrument of proxy must be received at the Registered Office of the Company not less than 48
hours before the time of holding the meeting.
4.     Some Dividend Warrants from 1st to 11th Dividends received back undelivered. Those who have not
yet received their Dividend Warrants may please contact the Company. The members are requested to
notify the change in their registered address, if any.
DIRECTORS' REPORT
The Directors are pleased to present the 19th Annual Report and the Financial
Statements of the Company for the year ended June 30, 2002.
TRIBUTE TO KH. MEHBOOB ILAHI (Ex-Chairman)
We take this opportunity to pay tribute to Kh. Mehboob llahi (Ex-Chairman) for his
leadership qualities and the contribution which be made for the last two decades to
establish the company.
Under his management the Company achieved many National and International
recognitions. We always pray for his good health.
OPERATIONS
During the year under review the Sales are registered at Rs. 165.176 million (2001:
Rs. 199.053 million) and Gross Profit stands at Rs. 43.135 million (2001: Rs. 57.702 million).
The decline in Sales was due to the after effects of event of 11th September, 2001-However,
the managment is putting their best to boost the export sales and Captured new
international markets for sale of Gelatine for both food and pharmaceutical grades.
Unfortunately the Government of Pakistan Ministry of Finance Economic Affairs,
Statistics and Revenue has reduced the Customs duty on import of Gelatine from 25% to 5%
through their notification dated August 10, 2002. This reduction in customs duty would entail
the bulk import of PIG GELATINE in the country which is HARAM. However, we have filed a
protest before honorable Finance Minister Mr. Shaukat Aziz and requested for the
restoration of previous duty structure. On his advise, the Finance Ministry has called for a
report from the Central Board of Revenue on this issue.
This year Company experienced a bad event of embezzlement of cash by the
Cashier, which is properly reflected in the financial statements under the head of Extra
Ordinary Items. F.I.R. has been registered with Gulberg Police Station against the accused
cashier. To avoid any unpleasant event in future the Audit Committee has been formed.
EFFECTS OF SKIN GELATINE
Our foreign Customers are shifting from Bone Gelatine to Pig Skin Gelatine due to the
Mad Cow disease (BSE) that is why our product demand is decreased and it is difficult to
fetch our desired prices.
The availability of Skin Glue in local market is attracting the manufacturer of Yogurt,
Jelly, and Sweets for the Children due to their lower prices. The laboratory tests revealed
that Skin Glue carries very harmful contents and is injurious to health especially for Children.
As per laboratory tests Skin Glue contains following harmful contents:
ANALYTICAL TESTS :-
ARSENIC
MERCURY
POOR SOLUBILITY
BACTERIOLOGICAL TESTS
COLIFORMS
CLOSTRIDIUM
THERMOPHILE
CORPORATE AND FINANCIAL REPORTING FRAMEWORK.
The borad is fully conversant with the responsibilities as established by the recently
issued code of Corporate Governance by the SECP.
In order to follow the SECP code, the following statements are given :-
(a)   The financial statements, prepared by the management of the Company, present
fairly its state of affairs, the results of its operations, cash flows and changes in equity.
(b)   Proper books of accounts.have been maintained.
(c)   Appropriate accounting policies have been consistently applied in preparation of
financial statements and accounting estimates are based on reasonable and prudent
judgment.
(d)   International Accounting Standards as applicable in Pakistan have been followed in
preparation of financial statements and any departure there from has been
adequately disclosed.
(e)   The system of internal control is sound in design and has been effectively
implemented and monitored.
(f)    There are no significant doubts upon the Company's ability to continue as a going
Concern.
(g)   There has been no material departure from the best practices of Corporate
Governance, as detailed in the listing regulations.
KEY OPERATING AND FINANCIAL DATA OF LAST SIX YEARS:-
Years Ending on June:	2001	2000	1999	1998	1997	1996
	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees
	(000)s	(000)s	(000)s	(000)s	(000)s	(000)s
Turnover	199,053	185,200	152,244	148,789	141,990	104,558
Profit after Taxation	22,430	21,570	24,710	22,305	14,400	15,130
Assets	89,439	87,696	82,650	82,320	76,413	74,991
Dividend	11,250	10,500	9,750	9,000	6,050	3,750
Loans (long term)	8,700	12,000	—	—	—	5,000
During the year three (3) Meetings of the Board of Directors were held. Attendance
by the Directors were as follows:
DATE OF MEETING
03-12-2001
ATTENDANCE BY THE DIRECTORS
Khwaja Mehboob Illahi
Khwaja Imtiaz Ahmed
Khwaja Shafique Ahmed
Khwaja ijaz Ahmed
Brig (Retd) Akhtar Hafeez
Khwaja Ibrar Ahmed
Mr. Iqbal Dossa
DATE OF MEETING
25-02-2002
Khwaja Mehboob Illahi
Khwaja Imtiaz Ahmed
Khwaja Ijaz Ahmed
Brig (Retd) Akhtar Hafeez
Khwaja Ibrar Ahmed
Mr. Iqbal Dossa
DATE OF MEETING
29-04-2002
Khwaja Mehboob Illahi
Khwaja Imtiaz Ahmed
Khwaja Shafieque Ahmed
Khwaja Ijaz Ahmed
Brig (Retd) Akhtar Hafeez
Khwaja Ibrar Ahmed
APPROPRIATION OF CURRENT PROFITS :-
Subject to Contingent Liabilities (Note. 12 A), the current profits have been
appropriating as follows:
			Rupees
			(in 000s)
Profit before Taxation			2,340
Provision for Taxation			1,300
Profit after Taxation			1,040
Profit brought forward			57,145
			58,185
Proposed Dividend			3,995
Profit carried forward			54,190
EARNING RATIO :-
The earning per share after tax works out to Rs. 0.138 (last year Rs. 2.99)
DIVIDEND :
The Board has recommended Dividend of Rs. 1.00 per share i.e., 10% (last year
15%) to the public and decided to recommend Dividend of Rs. 0.40 per share i.e., 4% to the
Directors and their family.
This decision is taken keeping in view the Cash Flow Constraints.
APPOINTMENT OF AUDITORS :
The retiring Auditors M/s. Ali & Company, Chartered Accountants, Lahore, being
eligible have offered themselves for re-appointment.
LAHORE
Dated : September 28, 2002
KH. IMTIAZAHMED
Chief Executive
STATEMENT OF COMPLIANCE WITH BEST
PRACTICES OF CORPORATE GOVERNANCE
The Board of Directors of LEINER PAK GELATINE LIMITED are involved in
manufacturing business for the last 40 years. They have the spirit of true businessman and
always encourage the good Governance in Corporate Sector.
Many of the rules of Corporate Governance are already being followed by them.
However, they are fully committed to follow each and every practice mentioned in Code of
Corporate Governance.
Initially we have taken following steps:
1.   All Directors were fully educated about the revised Code of Corporate
Governance.
2.   The Board has prepared a statement of Ethics and Business practices, which is
duly signed by all Directors. The same is being circulated to the employees.
3.   The Board has already adopted a vision/mission statement in the shape of
quality policy of the Company and achieved ISO 9000 and ISO 14000
recognitions.
4.   Regular Annual General Meetings are being held by the Company where
business is conducted according to the Agenda of the meeting and question
answer sessions for the shareholders are also arranged.
5.   The Board Meetings are being held according to the requirement of Code of
Corporate Governance for the approval of quarterly and half-yearly accounts.
6.   The minutes of Meetings of Board of Directors are properly circulated to the
Board and entered in the minutes book.
7.   The Audit Committee has been formulated which shall ensure the proper
internal control in the Company.
8.   All the Directors representing the Board are fulfilling the requirements and
qualification as denoted by Code of Corporate Governance.
9.   Frequency of financial reporting is fully followed in terms of their time of
circulation.
10. Director's report to the shareholders is amended according to the requirement
of Code.
11. Material information as discussed in clause (XXiii) of the code is timely
disseminated to the Stock Exchange and other related departments.
12. The financial statements for the year ended June 30, 2002 were presented
before the Board duly signed by the CEO and CFO and the Board after
consideration and approval authorized the signing of the financial statements
for issuance and circulation.
By Order of the Board
KH.IMTIAZAHMED
(Chief Executive)
LAHORE
Dated : September 28, 2002
AUDITORS' REVIEW REPORT TO THE MEMBERS
ON STATEMENT OF COMPLIANCE WITH BEST
PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the statement of compliance with best practices contained in the
Code of Corporate Governance prepared by the Board of Directors of the LEINER PAK
GELATINE LIMITED to comply with Listing Regulation Nos. 37 and 40 of the Karachi and
Lahore Stock Exchange respectively where the Company is listed.
The responsibility for compliance of the Code of Corporate Governance is that of the
Board of Directors of the Company. Our responsibility is to review to the extent where such
compliance can be objectively verified, whether the Statement of Compliance reflects the
status of the Company's compliance with the provisions of Code of Corporate Governance
and report if it does not. 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.
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. We have not carried out any special review of the
internal control system to enable us to express an opinion as to whether the Board's
statement on the internal controls covers all controls and the effectiveness of such internal
controls.
Based on our review, nothing has come to our attention which causes us to believe
that Statement of Compliance does not appropriately reflect the company's compliance, in
all material respects, with the best practices contained in Code of Corporate Governance as
applicable for the period from May 02, 2002 to June 30, 2002.
All & Company
CHARTERED ACCOUNTANTS
Lahore
Dated : September 28, 2002
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed Balance Sheet of M/s. LEINER PAK GELATINE LIMITED as
at June 30, 2002 and the related Profit and Loss account, cash flow statement and
statement of changes in equity, together with the notes forming part thereof, for the year
then ended and we state that we have obtained all the information and explanations which,
to the best of our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the company's management to establish and maintain a system of
internal control, and prepare and present the above said statements in conformity with the
approved accounting standards and the requirements of the Companies Ordinance, 1984.
Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in
Pakistan. 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.
An audit includes examining, on a test basis, evidences supporting the amounts and
disclosures in the above said statements. An audit also includes assessing the accounting
policies and significant estimates made by management, as well as, evaluating the overall
presentation of the above said statements. We believe that our audit provides a reasonable
basis for our opinion and, after due verification, thereof, we report that:
(a)   in our opinion, proper books of account have been kept by the company as required
by the Companies Ordinance, 1984;
(b)   in our opinion
(i)    the Balance Sheet and Profit and Loss Account together with the notes
thereon have been drawn up in conformity with the Companies Ordinance,
1984 and are in agreement with the books of account and are further in
accordance with accounting policies consistently applied;
(ii)    the expenditure incurred during the year was for the purpose of the
company's business; and
(iii)   the business conducted, investments made and the expenditure incurred
during the year were in accordance with the objects of the company,
(c)   in our opinion and to the best of our information and according to the explanations
given to us, the Balance Sheet, Profit and Loss Account, cash flow statement and
statement of changes in equity, together with the notes forming part thereof conform
with approved