Alfa Ica (India) Ltd Management Discussions.

1. GLOBAL ECONOMIC OVERVIEW

In the year 2018-19, the global economy saw significant volatility. It saw a range-bound global economic growth, largely supported by the continued strong momentum in the US economy. The US economy has accelerated at its finest pace in last four years due to monetary stimulus and tax cuts during the current year. The growth trend, coupled with tight labour market participation, pushed the US Fed to increase its policy rates four times during the year, each time by 25 bps. At the same time, growth in the Euro zone slowed down due to the high deficit concerns in Italy and political uncertainties around Brexit. The biggest risk facing economies is the growing evidence that global growth and trade are weakening.

The cyclical global growth phase appears to be slowing down and this could potentially impact the export sectors in the economy. Moreover, the consequences of the ongoing US-China trade talks as well as the final outcome of the now-delayed Brexit will have ramifications on supply chain networks and financial markets across the globe. As always, a lot would also hinge on the crude price stability as well as stable foreign exchange markets to support the global growth.

2. INDIAN ECONOMY

On the domestic front, the full-year GDP growth rate is pegged at 7% for FY2018-19. This was due to the waning effects of the demonetization exercise, the disruption in supply chains following the implementation of the Goods and Services Tax (GST) and Insolvency and Bankruptcy Code (IBC). However, the growth trends continued to remain choppy throughout the year. Industrial activity across sectors showed only a marginal improvement as labour-intensive sectors such as textiles, gems and jewellery, leather etc. continued to struggle throughout the year. Crude prices saw a significant uptrend in the first half of the year, rising by more than 40% before retracing back during the second half. However, overall inflation in the economy remained contained on the back of low food prices resulting from higher agriculture output and low global food prices.

The Governments Make in India initiative for the Defense sector continues to progress slowly due to bureaucratic inertia and complex procurement procedures. Consumer sentiments remained suppressed for most part of the year with urban consumers feeling the overhang of inadequate job/income growth and high oil prices. At the same time, persistent deflation in food prices and lack of Minimum Support Price (MSP) realizations adversely impacted rural demand. In addition, credit growth was severely affected in the second half of the financial year with the non-banking financial sector under stress from defaults by a few large players in the sector. Investment by private sector saw significant traction, with pick up in award of large value contracts in airport expansion and health sector. Also ome momentum was seen in private sector capacity expansion. However, the overhang of bad debt, rising policy uncertainties and low capacity utilization continue to impact the Indian industry capex. The Indian currency saw a significant depreciation, falling to lows of 74.3 per USD mark mid-year before recovering. The last month of FY2018-19 saw the Rupee recover sharply to 68-69 per USD range on the back of renewed portfolio inflows as well as revised views on a likely long pause from the US Fed on its interest rates.

3. BUSINESS OVERVIEW

Your company is in the business of High Pressure Laminate (H.P.L) Sheets & Compacts .Alfa ranges are available in several Colours, Designs and Textures consisting of more than 400 design decors and more than50 textures. With more decors and more finishes, our innovation brings you beautiful, high quality environmental friendly decorative solutions.

Alfa High Pressure Laminates are recognized and appreciated by architects, interiors and fitters. We confirm all our produce is as per strict requirements of EN438 (European Standard).To ensure European quality, all decorative papers are sourced from worlds best European printers.

In changing world, we are changing faster. We are relentless in our pursuit of discovery and innovation, bringing in technologies that empower us to enhance your environment, constantly opening the door to a world of possibility. Alfa Laminate sheets are used for various applications in many areas such as Furniture Covering, Wall Paneling, Partitions, Door Covering, Shower Panels, Interior Wall Paneling, Exterior Wall Cladding, Green Chalk Board, White Marker Board, Kitchen Top and Backsplash, Table Top, Anti-bacterial laminate, Anti-fingerprint laminate, Cubicle partition panel and more other things.

Your company assures highest commitment of consistent innovation by introduction of new designs as well as finishes to feed the creative mind of interior decorators and furniture designers. The companys philosophy is to attain transparency and accountability in its relationship with all its stakeholders, ensuring a high degree of regulatory compliance.

4. DISCUSSION ON COMPANYS PERFORMANCE

Your Company continues to sustain with its overall performance in the financial year 2018-19 driven by the average performance in existing business. Currently the Company is running well in decorative laminates segment. Your Directors have been making efforts on all fronts viz. production, marketing, finance and cost control etc. and these efforts have been yielding good results. The outlook for the companys products appears to be good and the company is confident of achieving improved operational performance.

The Profit before Tax amounted to 178,52,003 as against 15,957,324 in the previous year. The net profit after tax was 124,54,939 as against 11,778,840 in the previous year.

Your company has continued to put in all possible efforts to boost exports, during the year under review achieved Export sales of 430,148,173.

5. INTERNAL CONTROL SYSTEM

The Company has in place robust internal control procedures commensurate with its size and operations. Company has the internal controls Department headed by Internal Auditor of the company. The Board of Directors is also responsible for the internal control system, sets the guidelines, verifying its adequacy, effectiveness and application. The Companys internal control system is designed to ensure management efficiency, measurability and verifiability, reliability of accounting and management information, compliance with all applicable laws and regulations, and the protection of the Companys assets so that the companys main risks (operational, compliance- related, economic and financial) are properly identified and managed overtime.

6. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Company maintained healthy, cordial and harmonious industrial relations at all levels. The Board of Directors and management wish to place on record their appreciation of the efforts put in by all employees to achieve good performance.

Some of the companys core developments on the HR front and imitative planned during the year under review included the following:

• Standardized recruitment through creating robust systems and processes to ensure that only those qualified whose skill sets matched with the requirements;

• Focused on training to establish a professional e-learning module

• Focus on capabilities enhancement through structure interventions, bothon functional and behavioral side

• With a view to professionalize payroll, to outsource the service to ensure that all statutory and regulatory compliances are met to the highest level

There was not any case pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 was reported during the year.

7. RISK MANAGEMENT

Your Company has adopted a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks elements associated with the businesses and functions of the Company have been identified and will be systematically addressed through mitigating actions on a continuing basis. These are already discussed at the meetings of the Audit Committee and the Board of Directors of the Company. Risk Management forms an integral part of the Companys planning process. There are no risks, which in the opinion of the Board threaten the existence of your Company.

8. FUTURE OUTLOOK

Exports shall remain the core growth area and a lot depends on overseas economic recovery. In the domestic sector, the outlook seems to be stable in long term, with the economy expected to perform better in the years to come. Though inflation is a worry which may dampen real spends in the economy, but an emphasis on infrastructure and housing shall push the demand for companys products.

9. SEGMENT-WISE AND PRODUCT-WISE PERFORMANCE

The Company is engaged primarily in manufacturing of Laminated Sheets and there are no separate reportable segments.

10. CAUTIONARY STATEMENT:

Certain statements in this Annual Report more particularly in the Management Discussion and Analysis Report describing the Companys strength, strategies, objectives, predictions, expectations and estimates may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include global and domestic financial market conditions affecting the interest rates, availability of resources for the financial sector, market for lending, changes in regulatory directions issued by the Government, tax laws, economic situation affecting demand / supply, price conditions in the domestic markets in which Company operates, significant changes in political and economic environment in India, applicable statues, litigations, labour relations that may impact the Companys business as well as its ability to implement its strategies. Further, market data and product information contained in this Report are based on information gathered from various published and unpublished reports, and their accuracy, reliability and completeness cannot be assured. The Company does not undertake to update these statements.