The Directors'' have pleasure in presenting the Twentieth Annual Report
of the Company and the Audited Financial Statements of Accounts for the
year ended 31st March 2014.
The main Financial Highlights of the Company are given below:
Particulars As on 31/3/2014 As on 31/3/2013
Total Income 61,362,845 88,455,089
Increase or Decrease in stock 109,184 2,722,252
Operating & Admn. Expenses 52,115,240 80,198,580
Depreciation 8,913,984 8,484,970
Profit for the Year 373,872 1,663,986
REVIEW OF OPERATIONS:
During the year under review the Company could earn Income of Rs. 6.14
Crores as compared to Rs. 8.85 Crores, whereas profit of the Company
after taxation is Rs. 0.04 Crores as compared to 0.17 Crores last year.
In view of the inadequate profits, your Directors do not recommend any
MANAGEMENT DISCUSSION AND ANALYSIS REPORT About Company Introduction
This is only a summary. Investors should read the following summary
with the Risk Factors mentioned and the more detailed information about
us and our financial statements included elsewhere in this Information
Memorandum Summary of Industry The global pulp and paper industry
consists of about 5000 industrial pulp and paper mills, and an equal
number of very small companies. The annual global paper and paperboard
production was approximately 382.0 million tonnes in 2006. It is
expected to increase to 402.0 million tonnes by 2010 and 490.0 million
tonnes by 2020. USA is the largest market for paper products and
commands high per capita consumption of 260 Kgs. Asia''s main markets
are China, Japan, India, Malaysia, Singapore and Thailand.
(Source: Websites of global consulting group ''Pyory'' and International
Council of Forest and Paper Association)
The paper and paperboard industry has witnessed a radical shift in the
last decade. Due to the strong economic growth in both China and India,
the demand for paper and paperboard is increasing rapidly and they are
expected to emerge as an important market for pulp & paper. The share
of fast developing Asian markets, excluding Japan, in global
consumption has increased to 34% by 2010 from 32% in 2006.
The share of mature markets like North America and Europe would fall to
50% by 2010 from 52% in 2006. It is expected that Asian market would
account for 60% of global incremental production during the period
Indian Paper Industry
The Indian Paper Industry accounts for about 1.6% of the world
production of paper and paperboard. The estimated turnover of the
industry is Rs 25,000 crore (USD 5.95 billion) approximately and its
contribution to the exchequer is around Rs. 2918 crore (USD 0.69
billion). The industry provides employment to more than 0.12 million
people directly and 0.34 million people indirectly. The industry was
from July, 1997 by the Government of India; foreign participation is
permissible. Most of the paper mills are in existence for a long time
and hence present technologies fall in a wide spectrum ranging from
oldest to the most modern. The mills use a variety of raw material viz.
wood, bamboo, recycled fibre, bagasse, wheat straw, rice husk, etc.;
approximately 35% are based on chemical pulp, 44% on recycled fibre and
21% on agro-residues. The geographical spread of the industry as well
as market is mainly responsible for regional balance of production and
With added capacity of approximately 0.8 million tons during 2007-08
the operating capacity of the industry currently stands at 9.3 million
tons. During this fiscal year, domestic production of paper and
paperboard is estimated to be 7.6 million tons. As per industry
guesstimates, over all paper consumption (including newsprint) has now
touched 8.86 million tons and per capita consumption is pegged at 8.3
Demand of paper has been covering around 8% for some time. During the
period 2002-07 while newsprint registered a growth of 13%, Writing &
Printing, Containerboard, Carton board and others registered growth of
5%, 11%, 9% and 1% respectively. So far, the growth in paper industry
has mirrored the growth in GDP and has grown on an average 6-7 per cent
over the last few years. India is the fastest growing market for paper
globally and it presents an exciting scenario; paper consumption is
poised for a big leap forward in sync with the economic growth and is
estimated to touch 13.95 million tons by 2015-16.
The futuristic view is that growth in paper consumption would be in
multiples of GDP and hence an increase in consumption by one kg per
capita would lead to an increase in demand of 1million tons. As per
industry estimates, paper production are likely to grow at a CAGR of
8.4% while paper consumption will grow at a CAGR of 9% till 2013-14.
The import of pulp & paper products is likely to show a growing trend.
Foreign funds interest in the Indian paper sector is growing. IFC, the
investment arm of the World Bank is already associated with at least
three of the IPMA member mills. The increasing demand for paper brings
with it new challenges of economies of scale, efficient usage of
resources, need to develop and expand sustainable use of fibre, and
value chain management, etc. Despite the fact that the Indian Paper
Industry holds its importance to the national economy, unfortunately it
stands fragmented. Paper sector is dominated by small and medium size
units; number of mills of capacity 50000 tons per annum or more is not
more than 25. Less than half a dozen mills account for almost 90%
production of newsprint in the country. There is a growing need to
modernize the Indian mills, improve productivity and build new
Demand for Kraft paper
With increased economic activity the demand for paper especially Kraft
paper, industrial paper, duplex boards, and corrugating material is too
poised for healthy growth. Industrial paper is the highest value
segment in the paper industry and accounts for 41% of the total market
Kraft paper is usually the brown paper that is commonly used for
manufacturing brown bags, cartons, etc. It is largely used to
manufacture corrugated boxes, bags, sacks, etc. However, corrugated
boxes account for 85-90 per cent of the total demand for Kraft paper.
Demand for Kraft paper depends on the growth in consumer durables, the
manufacturing industry, horticulture, FMCG etc. Strong growth in
end-user sectors such as pharmaceuticals, horticulture, ready to eat
foods, marine products, textiles, consumer durables and other
industrial products is expected to result in a buoyant growth for Kraft
paper. Duplex boards which are mainly used as primary packaging for
various products such as pharmaceuticals, cigarettes, matchboxes,
agarbattis, toothpastes and other similar consumer items is witnessing
robust demand. Growing agro-based sector, including horticultural
products, fresh and canned fruits, etc. This, together with the
Government policy to replace wooden crates by containerboard boxes
particularly in fresh fruit packaging, will create new demand for
corrugated boxes Demand Drivers for Kraft paper Consumption of
industrial paper is closely linked to growth in the packaging industry,
industrial production and development in packaging technology and
substitution by other materials. Following are other important factors
contributing to demand growth in industrial paper:-
a) The growing popularity of ready-to-eat products, liquid products and
other perishable products will result in higher demand for attractive
and durable packaging, thus increasing demand for Kraft paper and
b) Branding is a big driver of packaging, as manufacturers try to
create identifiable and attractive brands. With more and more
consumers opting for branded goods, demand for Kraft paper and duplex
boards is expected to remain strong in the future.
c) With increase in malls, departmental stores and other such modern
retail formats, manufacturers use innovative packaging solutions to
increase their sales.
d) The fastest-growing end-use segments for duplex boards are
foodstuffs, consumer durables, garments, pharmaceuticals, cigarettes
and matchsticks. Gradual shift in population from rural to urban as
well as change in lifestyle due to improvement in the standard of
living, demand for duplex boards is expected to explode.
Bio Green Papers Limited is in business of Kraft Paper Production and
Duplex Board Production. The Kraft Paper produced by the Company is of
70 GSM to 180 GSM quality range and used to make corrugated boxes,
paper tubes, cones, match boxes, shoe boxes and cosmetic containers.
The Duplex Board has 150 to 400 GSM range and used for Gift Boxes,
Shoes Boxes, Product and Food Packaging and Flat Files.
The line of business in which BGPL is engaged in are manufacturing of
Kraft Paper board, Duplex paper board and Bio Fuel plantation.
Kraft Paper:- Manufacturing Process of Kraft & Duplex Board:
Manufacturing process of Kraft & Duplex paper consists of the following
2. Paper Making
3. Finishing & Storage PULPING:
The waste paper is so chosen that no deinking process is involved.
Waste Paper is fed into the high speed hydra pulper filled with plain
water and rotated to form a mass known as water turbulence. The mass is
discharged over the wire mash. Water collected is taken away. This will
give the paper higher bursting strength.
Paper can be defined as a sheet or continuous web of fibers. The
strength of the paper is obtained by interlacing of fibers. The fibers
in water suspension with requisite consistency are allowed to pass over
the endless wire from where the drained away and the paper after
pressing and drying are reeled. The strength of paper is determined
largely by the length, diameter and thickness of wall and flexibility
and bonding characteristics of fiber used. The bulk density, porosity,
uniformity and other properties are dependent on the inherent qualities
of fibers as well as on the treatment given in the process of
manufacture. Mixing, Cleaning and Refining are done in this stage.
Waste paper pulp is properly mixed in a Beater. Any dust if remaining,
is thoroughly removed. This pulp is passed through Vibrating Screen,
Centrifugal Cleaner and refined in Disc Refiners.
The refined slurry, treated with additive chemicals and binding agents
is pumped into Head Box of Paper Machine and couched on to the moving
moulds which takes it to Press Rolls and paper is formed. The excess
water has been squeezed out and paper formed is taken to MG Drier for
drying by steam and reeling.
TRIMMING & PACKING:
The dried paper is trimmed in slitter for required width - usually 48
and packed on reels for selling.
Kraft Paper is used in:
1) Packaging of
Consumer Durables (TV, Fridge/AC/Washing Machine), Oil Packaging,
Textile Industries, Yarn Industries, Engineering Goods, Fruits /
vegetables / Flowers, Pharmaceutical Companies, Foods & Beverages
Companies, Glass Industries, Ceramic Industries, Auto Part, Garment
Industries, Cosmetic Industries.
2) Tubes & Cones
Cone Tubes for Paper Mills, Core Polly Films/Plastic, and Textile
3) Wrapping Purpose
Wrapping of paper rolls/sheets, Wrapping of laminate, Furniture
wrapping, Bags Manufacturing. Also to make corrugated boxes, / Match
Boxes /Shoe Boxes, etc.
Kraft Paper Range:
GSM BF Deckle Size Cobb Die. of Reel Color
70 to 170 12 to 25 2.5 m As per req. 48 Max. As per
Duplex Paper is generally manufactured by using bleached and unbleached
paper together to form duplex paper. One side of the duplex paper will
be cleaned and bleached and the other sides are unbleached and rough.
In India there are few manufacturers in organic sector. Duplex paper
largely used in paper bags like cement bags and paper shopping bags and
even also for food packaging industry, Also used for Gift Boxes / Shoe
Boxes / Product Packaging Boxes/ Food Packaging/ Flat Files. There is
good market growth of paper bags.
Duplex Board Range
GSM Deckle Size Cobb
150 to 400 30-450 As per requirements
The Bio-Diesel production involves mainly two steps:
1) Extraction of oil from the seeds.
2) Conversion of vegetable oil to bio diesel.
The extraction of oil can be done in any suitable oil extraction unit.
Commonly used oil extraction units can be used for extraction of oil
from Jatropha as well. The second step of conversion of vegetable oil
to bio diesel requires chemical processing plant. The operation of this
plant requires specific training and this can be done by well trained
engineers/ diploma holders/chemists.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
Industrial relations continue to remain peaceful at the manufacturing
plant. All the employees are working with the Company for a common
objective. Industrial relations of the Company were cordial during the
SHAREHOLDING OF DIRECTORS
The shareholding of the directors as on March 31,2014 is as under:
No Name of the Director No. of Shares held
1 V. Jagdish 8,25,000
The observations made in the Auditors'' Report are self-explanatory and
therefore do not call for further comments under Section 217 of the
Companies Act, 1956.
M/s. D.M.Rao & Co, Chartered Accountants, Visakhapatnam, have given
their consent for appointment as Statutory Auditors of the Company, if
appointed at the ensuing Annual General Meeting. The Company has
received a letter from M/s. D.M.Rao & Co,, Chartered Accountants, to
the effect that their appointment, if made would be within the
prescribed limit under Section 224(1-B) of the Companies Act, 1956.
Yours Directors recommend their appointment.
The company has been proactive in following the principles and
practices of good Corporate Governance. The company has taken adequate
steps to ensure that the conditions of Corporate Governance as
stipulated in clause 49 of the Listing Agreements of the Stock
Exchanges are complied with.
A report on Corporate Governance, along with a certificate of
compliance from the Auditors, forms part of this report.
The Company is registered with both National Securities Depository
Limited and Central Depository Services (India) Limited. The
shareholders can take advantage of holding their scrips in
The Company has not accepted fixed deposits from public during the year
All the assets of the Company wherever necessary and to the extent
required have been insured. PERSONNEL:
There was no employee employed during the year or part of the year
drawing remuneration, which falls within the purview of the provisions
of section 217(2A) of the Companies Act, 1956. Therefore the statement
for the same is not attached.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
The information as required under section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in Report
of the Board of Directors) Rules, 1988, with respect to conservation of
energy, technology absorption and foreign exchange earnings is given
Part B. Consumption per Unit of Production:
Particular Consumption per Unit of Production
Electricity 370 units
Coal/Rice Husk 0.85 tons
B. Technology Absorption Adaptation and innovation:
The research and product development activities are primarily directed
towards product development.
DIRECTORS RESPONSIBILITY STATEMENT:
In Compliance of Section 217 (2AA), as incorporated by the Companies
(Amendment) Act, 2000 in the Companies Act, 1956 your Directors confirm
(a) The Company has followed the applicable standards in the
preparation of the Annual Accounts and there had been no-material
(b) The Directors had selected the accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for the aforesaid period.
(c) The Directors have taken proper and sufficient care for maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
(d) The Directors have prepared the Annual Accounts on a going concern
The Board of Directors expresses their deep gratitude for the
co-operation and support extended to your Company by its customers,
Bankers and various Government agencies and looks forward to their
For and on behalf of Board of Directors
Place: Hyderabad Velamala Jagadish Venkateswarlu Velamala
Date: 30/05/2014 Managing Director Director