WILWAYFORT INDIA LIMITED
ANNUAL REPORT 2006-2007
MANAGEMENT DISCUSSION AND ANALYSIS
The sales revenue including other income for the financial year ended 31st
March, 2007 was Rupees 1493.56 lacs as compared to the last year sales
revenue of Rupees 1670.90 lacs. The Company made losses of Rupees 299.65
lacs in the financial year 2006-2007 compared to Rupees 154.00 lacs in the
previous financial year 2005-2006.
Margins were under pressure due to volatility & higher raw material prices
due to lack of working capital availability, Company could not utilize
installed capacity at optimum level. During the year under review, higher
capacity installation by the captive users as well as unorganized sector in
the market also affected the business opportunities in domestic as well as
INDUSTRY STRUCTURE AND DEVELOPMENT:
Metallising and Coating of Polyester Film segment of the packaging industry
made a significant expansion & capacity enhancement during the year. The
polyester film producers themselves to avail the opportunity of the higher
demand from domestic as well export market installed the fresh capacities
in metallising and coating. The metallising and coating segment of
packaging industry grew at the rate of 12% as compared to the growth of
20% of overall Packaging Industry. Metallising and Coating of Polyester
Film segment is contributing 40% market share with the organised sector in
which your Company is operating and rest 60% market share is controlled by
OPPORTUNITIES AND THREATS:
The demand of the product in the domestic as well as international market
is growing gradually which provide an opportunity to the Company to make an
aggressive marketing with the available resources.
Last year the installed capacity of Polyester Film in the domestic market
was approximately 1,50,000 Metric Ton. With the hike in overall capacity in
the industry by way of modernisation and expansion during the current
financial year, the demand and supply of raw material i.e. Polyester Film
has been disturbed which has resulted into instability in the raw material
prices. The Company is exposed to the risk of fluctuating interest rates
and Polyester Film prices, The Company being a 'Sick Industrial Company'
also facing cash flow problem in day to day affairs.
SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:
The Company's operating business is organised and managed according to the
nature of product with Single Primary Reportable Segment comprising of
manufacturing and supply of Metallising, Coating and Embossing of Plastic
Film and Papers. The detail of segment reporting is given at Schedule XVI
(25) of the Annual Accounts.
With the good economic and industrial scenario in the Country, which is
reflected with the higher GDP indication, we expect a reasonable growth in
product demand in the domestic as well as international market. In view of
growing organized retail market in India, the demand of FMCG will increase
significantly which may have positive impact on overall packaging industry.
The Company will make a' efforts to take advantage of every opportunities
within its constrain and resource available.
INTERNAL CONTROL SYSTEMS:
The Company has evolved a system of internal control to ensure that the
assets are safeguarded and transactions are authorized, recorded and
correctly reported. Planned periodical reviews are carried out resulting in
identification of control, deficiencies and opportunities for bridging gaps
with best practices. The Audit Committee reviews the adequacy of the
internal control systems.
Based on the compromise proposal submitted by the Company to Vijaya Bank
(lending bank) for One Time Settlement (OTS), the lending bank has agreed
to accept the sum of Rs. 500 lakhs (Rs. Five Crores only) in full and final
settlement of the dues payable in quarterly installment excluding interest
@ 5% per annum of the offer amount on reducing balance basis and other
terms and conditions mentioned in their letter of acceptance.
However, due to acute financial problem in the Company, the Company could
not make payment of OTS amount to Vijaya Bank on schedule time.
Consequently, the lending bank took action for the possession of properties
of the Company under the Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest Act 2002 (54 of 2002). The
management is taking all possible steps to replace dues of Vijaya Bank with
other scheduled Bank / financial investor / body corporate. Part payment of
OTS amount has been made to Vijaya Bank. The management is committed to
liquidate the liabilities of secured and unsecured creditors with all
HUMAN RESOURCE DEVELOPMENT:
The industrial relations remained cordial during the year under review.
Mapping of jobs has been initiated to ensure that the right person is
allocated the right job. The Company reviews manpower need and allocation
of job from time, to time to ensure the best utilization and growth of the
Statements in this report, describing the Company's objectives,
expectations and/or predictions, 1, may be forward looking within the
meaning of applicable securities law and regulations. Actual results may
differ materially from those stated in the statement. Important factors
that could influence the Company's sales revenue, includes global and
domestic supply and demand conductions, affecting selling prices of
finished goods, availability of inputs and their prices, changes in the
government regulations, tax laws, economic development within the country
and outside and other factors such as litigation and industrial relation.