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PAKISTAN PAPER PRODUCTS LIMITED
CONTENTS
Company Information
Notice of Meeting
Key Operation and Financial Data
Director's Report
Corporate Governance
Statement of Compilance and Auditor's review Report
Auditor's Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Enquity
Notes to the Accounts
Pattern of Shareholding
NOTICE OF MEETING
Notice is hereby given that the 40th Annual General Meeting of the Shareholders of Pakistan
Paper Products Limited, will be held at the registered office of the Company at D-58,
Estate Avenue, S.I.T.E., Karachi on Saturday the 12th October, 2002 at 12:15 p.m. to transact
the following business:
1. To confirm the minutes of the Extra Ordinary General Meeting held on 15th May, 2002.
2. To receive and adopt the Audited Accounts of the Company for the year ended on 30th
June 2002 together with the Directors report and Auditors report thereon.
3. To approve the Payment of Dividend at the rate of Rs. 2.50 per share (25%) & issue
of Bonus Share in the ratio 4:1 (1 Bonus share for every 4 Shares) as recommended
by the Directors.
4. To appoint Auditor for the year 2002-2003 and to fix their remuneration.
5. To transact any other business with the permission of the Chair.
Special Business:
(i) To consider to increase the authorised capital of the Company from Rs. 20 million to
Rs. 40 million and if thought fit to pass the following resolution as a special resolution.
Resolved that the authorized capital of the company be and is hereby increased to Rs.
40 million by creation of 2 million ordinary shares of Rs. 10/- each and the relevant
phrase in clause V of the Memorandum of Association be and is hereby substituted by
the following new phrase.
The authorized capital of the company is Rs. 40 million (Rupees: Forty Million) divided
into 4 Million ordinary Shares of Rs. 10/- each.
Resolved further that the Article 4 of the Article of Association of the company be and
is hereby amended to read as under:
Authorized capital of the Company is Rs. 40 Million (Rupees: Forty Million) divided into
4 million ordinary Shares of Rs. 10/- each.
(ii) To consider and if thought fit, pass the following resolution for capitalization of profit.
"Resolved that a sum of Rs. 5,000,000/- out of the company's current year profit be
capitalized for issuing fully paid up ordinary shares to Rs. 10/- each to those Shareholders
whose names appear in the register of members on 4th October, 2002 in proportion
of one share for every 4 Shares held and that the Bonus Share when issued shall Rank
COMPANY INFORMATION
BOARD OF DIRECTORS
Chairman /  Chief Executive
Mr. HASHIM B. SAYEED
Directors
Mr. MOHAMMAD ALI SAYEED
Mr. KH. MANSOOR MUKHTAR SHAH
Mr. ABBAS SAYEED
Mrs. MULEIKA SAYEED
Mr. ABID SAYEED
Dr. ASADULLAH SAYEED
Chief Financial Officer Mr. MOHAMMED HANIF
Company Secretary Mr. M.Z.B. CHUGHTAI
BOARD OF AUDIT COMMITTEE
Chairman Mr. ABBAS SAYEED
Members
Mr. ASADULLAH SAYEED
Mr. ABID SAYEED
Secretary
Mr. M.Z.B. CHUGHTAI
Auditors
M/s. Z. LAKHANI & CO.
Chartered Accountants
Bankers
• HABIB BANK LIMITED
• MUSLIM COMMERCIAL BANK LIMITED
• STANDARD CHARTERED BANK
Registered Office &  Factory
D-58, ESTATE AVENUE,
S.I.T.E., KARACHI.
SUMMARISED STATEMENT OF KEY OPERATING AND
FINANCIAL DATA OF LAST SIX YEARS
Years at a Galance		RUPEES IN THOUSAND
		2002	2001	2000	1999	1998	1997
Sales-Net		111,918	83,980	72,104	69,469	65.34	57,535
Other Income		382	201	88	43	142	300
Profit before Taxation		17,293	11,650	6,540	4,691	5,760	6,463
Taxation		4.065	5,102	2,165	1,559	1.923	1,977
Profit after Taxation		13,228	6,547	4,375	3,132	3,838	4,486
Cash Dividend (%)		25%	25%	25%	20%	20%	25%
Bonus Shares (%)		25%	33.33%	-	50%	-	-
Earning per Share (Rs.)		6.61	4.36	2.93	3.14	3.84	4.49
Paid up Capital		20,000	15,000	15,000	10,000	10,000	10,000
Shareholder Equity		50,667	42,439	39,642	34,017	37,995	36,157
Total Assets		78,067	66,846	55,542	54,885	53,823	44,391
Working Capital		29,723	24,867	27,172	22,759	27,147	26,901
Numbers of Employees		88	96	99	94	105	107
Production
Ammonia Paper (Rolls 10 yds)		89,127	103,982	119,926	109,981	118,988	100,238
Exercise Books (Gross)		47,761	36,641	38,199	34,096	44,447	39,618
Pro-Labels (Sq. Meters)		516,134	242,000	125,200	158,538	-	-
Pari-Passu in all respect with the existing ordinary shares of the company".
"Further resolved that aggregate of the fractions of a share arising on such allotment
be sold and that net proceeds thereof be distributed prorata to the members according
to their entitlement".
"Also resolved that the Chief Executive be and is hereby authorised and empowered to
give effect to this resolution and to be done all acts deeds and things that may be necessary
for the issue allotment and distribution of company's shares and the payment of the sale
proceed of the fractions'.
Statement under section 160 of the Company's Ordinance 1984.
1. The Directors have recommended increase in the authorized capital from Rs. 20 million
to Rs. 40 million by creating 2 million shares of Rs. 10/- each.
2. The Directors have recommended capitalization of the reserve for issue of Bonus Shares
of Rs. 5 million in proportion 1 Share for every four shares.
By Order of the Board
M.Z.B. CHUGHTAI
Company Secretary
Date: 14th September, 2002
Karachi
NOTES:
1. The Share Transfer Books of the Company will remain closed from 05-10-2002 to 12-
10-2002 (both days inclusive).
2. A member entitled to attend and vote at this meeting, may appoint any other member
as his/her proxy to attend the meeting and vote instead of him/her. The Proxies in order
to be effective must be received by the Company not less than 48 hours before the
meeting.
3. The Share-holders are requested to promptly notify any change in their address.
4. The share-holders are further requested to quote their folio number in all correspondence
with the company and at the time of attending the Annual General Meeting.
				2002	2001
Profit before taxation				17,293,394	11,649,534
Taxation
Current				5,602,833	4,770,000
Prior Years				(2,225,268)	205,546
Deferred				687,919	126,598
				4,065,484	5,102,144
Profit after taxation				13,227,910	6,547,390
Un-appropriated profit brought forward				39,367	641,977
Available for Appropriation				13,267,277	7,189,367
Appropriation
Reserve for issue of Bonus Shares 4:1 (2001: 3:1)				(5,000,000)	(5,000,000)
Transfer to/from General Reserve				(3,000,000)	1,600,000
Cash Dividend 25%				(5,000,000)	(3,750,000)
Un-appropriated profit carried forward				267,277	39,367
Earning per Share
Earning per share after taxation comes to Rs. 6.61 per share (2001: Rs. 4.36 per share)
Dividend
Directors propose cash dividend at the rate of 25%.
Operating and Financial Data
Operating and Financial data and key ratios of the Company for last six years are annexed.
Employees Provident fund
The Company has maintained recognized provident fund for the employees.
Value of Investment Rs. 8.285 Million
Based on Audited Accounts as at 30th June 2001
Gratuity Scheme
Gratuity Scheme has been introduced for management staff and provision has been made
in accounts accordingly.
DIRECTORS REPORT
The Directors of your Company take pleasure in presenting their report together with the
Audited Accounts and Auditors' Report thereon for the year ended 30th June, 2002.
Company Operations
During the year under review your Company showed excellent progress with Net Sales growing
by 33.27% to Rs 111.92 million compared to Rs 83.98 million in the previous year. All
sections of the Company showed good growth levels with the Pro Labels section growing
by 92.5%, and the Exercise Book section by 20.53%. This was achieved by gearing up our
marketing and production resources to meet the increased demand. We are particularly pleased
with the growth seen in the Exercise Books section, as we continued to face stiff competition
from the unorganized sector which was dumping low price, substandard products in the market
and avoiding all government taxes and duties. The only area of the Company which did not
show good progress was the Ammonia Paper segment which saw a nominal decline of 10.04%
in sales. This product has witnessed a declining trend over the last several years due to the
fact that people are now shifting towards plotters and other plain paper products. The
management has taken note of this and has introduced alternative plain paper products which
have been well received in the market.
The Company plans to invest further in expansion and modernization of the Karachi Factory
during the next financial year. We have already added some equipment to our Printing De
partment which will enhance the production capacity of our Exercise Book section. We are
also looking towards expanding the capacity of our Pro Labels section, and for this your
management is devising a future strategy which will soon be presented to the Board of Directors
for their approval.
Financial Results
By the grace of Allah, your Company was able to earn a Net Profit after tax of Rs 13.23
million compared to Rs 6.55 million in the previous year, which is an increase of 102%.
This increase was made possible through better management of resources and favorable parity
of the Pak Rupee versus the US $ as a large portion of our raw materials are imported.
The total profit available for appropriation is Rs 13.27 million. Your Directors recommend
a final dividend of 25% and issue of Bonus Shares of 25% which amounts to Rs 10 million,
while Rs 3 million will be transferred to general reserve, and Rs 0.27 million will be carried
forward as un-appropriated profit. The issue of Bonus Shares is based on the approval of
the shareholders to increase the Authorized Capital of the Company from Rs 20 million to
Rs 40 million, which in turn will increase the paid up Capital to Rs 25 million. The summary
of the accounts for the year ended 30th June, 2002 is given below:
Board of Directors
The Board comprises of two executive and five non-executive Directors including one inde
pendent Director. All the Directors keenly take interest in the proper stewardship of the
company's affair. The non-executive Directors are independent of management.
The Board has approved the remuneration of the Chief Executive at Rs. 1.5 million, and
Executive Director at Rs. 1.0 million inclusive of all benefits like telephone facility, medical
expenses etc., as per Company's policy for the year 2002-2003.
CEO, CFO, Company Secretary and their spouse and minor children have made no transactions
of Company's shares during the year. However, one Director Mrs. Muleika Sayeed has
purchased 9000 shares of the Company during the year. None of the other Directors have
made any transactions of the Company's shares.
During the year four Board Meetings were held and attended as follows:
Mr. Hashim. B. Sayeed	4
Mr. Abid Sayeed	4
Mr. Abbas Sayeed	4
Mr. Muhammad Ali Sayeed	3
Kh. Mansoor Mukhtar Shah	3
Mrs. Muleika Sayeed	2
Dr. Asadullah Sayeed	1	Appointed on 15-05-2002
Mr. Mehboob Rawjee	1	Retired on 14-05-2002
Corporate Governance
Compliance of Corporate Governance is annexed.
Pattern of Shareholding
The pattern of shareholding of the Company is annexed.
Auditors
The present Auditors M/s Z Lakhani & Co., retire and being eligible, offer themselves for
reappointment.
Special Resolution
The Board of Directors of your Company recommend increasing the Authorized Share Capital
of the Company from Rs 20 million to Rs 40 million.
Acknowledgments
The Directors would like to thank the staff and workers for their hard work and cooperation
during the year. We assure the shareholders that the management would do its best to maintain
the progress and keep them well informed with the developments.
For and on behalf of the Board of Directors
HASHIM B. SAYEED
Chief Executive Officer
CORPORATE GOVERNANCE
Statements of Directors' responsibilities
The Board regularly reviews the Company's strategic direction. Annual plans and performance
targets for business are set by the Chief Executive and are reviewed in total by the Board
in the light of the Company's overall objectives. The Board is committed to maintain the
high standards of good corporate governance. The Company is in process of implementing/
compliance with the provisions set out by the Securities & Exchange Commission of Pakistan
and accordingly amended listing rules of the Stock Exchange.
Presentation of Financial Statements
The financial statements, prepared by the management of the Company, fairly present its
state of affairs, the results of its operations, cash flows and changes in equity.
Books of Account
The Company has maintained proper books of account.
Accounting Policies
Appropriate accounting policies have been consistently applied in preparation of financial state
ments and accounting estimates are based on reasonable and prudent Judgment.
Application of International Accounting Standards
International Accounting Standards, as applicable in Pakistan, have been followed in preparation
of financial statements.
Internal Control System
The system of internal control is sound in design and has been effectively implemented and
monitored.
Going Concern
There is no doubt about the Company's ability to continue as a going concern.
Audit Committee
Audit Committee was established by the Board in its meeting on May 15, 2002 to assist
the Board in discharging its responsibilities for Corporate Governance. Financial Reporting
and Corporate Control. The committee consists of three members including the Chairman
of the committee who is a non-executive Director.
The Board Audit Committee is responsible for reviewing reports of the company's financial
results, audit and adherence to standards of the system of management controls. The committee
reviews the procedures for ensuring their independence with respect to the services performed
for the company and make recommendations to the Board of Directors.
Code of business Principles
As a leading Paper Converting Company, reputation for high ethical standards is central to
business success. Code of Business Principles has been developed and is now being com
municated and acknowledged by each Director and employee of the Company.
Communication
Communication with the shareholders is given a high priority. Annual, Half yearly and Quarterly
Reports are distributed to them within the time specified in the Companies Ordinance. There
is -also an opportunity for individual shareholders to attend and ask questions at the Annual
General Meeting.
Safety & Environment
The Company strictly complies with the standard and follows the safety rules & regulations.
The Company has held various sessions on safety awareness and no accident occurred.
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 the best practices contained in the Code
of Corporate Governance prepared by the Board of Directors of Pakistan Paper Products Limited
to comply with the Listing Regulation No 31-A, 31-B, 31-C and 37 of the Karachi Stock Exchange
(Guarantee) Limited where the Company is listed.
The responsibility for compliance with 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 the 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 internal control covers all controls