Alfa Ica (India) Ltd Management Discussions

1. GLOBAL ECONOMIC OVERVIEW

The global economic landscape in 2024 was characterized by moderate growth with notable differences across regions. While overall expansion continued, it remained subdued, and the pace of growth varied significantly. Emerging markets remained a key driver of global growth, however these economies faced challenges, including managing inflationary pressures and addressing debt vulnerabilities. Key factors that shaped the 2024 economic landscape included the ongoing efforts by central banks to manage inflation, strong private consumption in key economies, the potential impact of geopolitical uncertainties on trade and supply chains, and the increasing focus on transitioning to sustainable energy sources. Consequently, inflation fell significantly. Despite challenges, global trade experienced a notable expansion driven by strong services trade. However, global manufacturing saw modest growth, mainly driven by China. According to the latest World Economic Outlook, global economic growth is projected to remain steady at 3.3% for 2025 and 2026, while inflation is expected to continue decreasing. This growth will likely be supported by an increase in employment and wages, as well as lower interest and savings rates. The labour market is expected to expand, driven by growth in services and manufacturing. Although the immediate future presents upward economic trend, long-term growth is susceptible to risks. Potential inflation resurgences could hinder planned interest rate adjustments, affecting government finances and financial stability. Moreover, protectionism and tariff wars between major economies may adversely impact the global business outlook. (source: : https://www.imf.org/en/Publications/WEO)

2. INDIAN ECONOMY

Against the backdrop of global uncertainty, India has emerged as a notable outlier. Now the worlds fifth-largest economy, it recorded real GDP growth of 6.5% in the financial year 2024-2025, and over 9% in 2023-2024. At a time when global growth is losing momentum, India is expanding at a pace unmatched by any other major economy This growth is supported by a combination of factors, including a notable resurgence in rural demand, which has propelled private final consumption expenditure. Furthermore, the services sector was a significant growth driver. In addition, higher government capital expenditure played an important role in strengthening the countrys economic performance. There was a considerable moderation in inflation, with retail headline inflation reaching a seven-month low, partly attributed to easing food price pressures, particularly in vegetables. The Reserve Bank of India (RBI) announced a repo rate cut in February 2025, the first in five years, aimed at encouraging borrowing and supporting consumption. Indias manufacturing has experienced considerable growth amid global economic uncertainties and fluctuating export demands. Data highlighted that the sector led the revival in industrial production, electricity, and mining. Additionally, the cumulative value of Indias external trade recorded healthy growth. Gross GST collections increased significantly compared to the previous year, reflecting increased economic activity, stronger consumer spending, and a potential revival of the economy. The economic outlook for India in FY26 appears favourable, as Fitch forecasts a GDP growth of approximately 6.5%. This growth is expected to be driven by increased government capital expenditure dedicated to infrastructure development and tax reductions aimed at enhancing disposable income for middle-class consumers. Furthermore, inflation is anticipated to decrease, thereby providing opportunities for additional interest rate cuts. Rising private and public investments are likely to support growth momentum. However, volatility in food prices and global geopolitical risks may impact the overall growth trajectory.

3. BUSINESS OVERVIEW

Your company was incorporated in the year 1991. 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 than 50 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 2024-2025 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 19232497 as against to 22292750 in the previous year. The net profit after tax was ‘14397118 as against ‘16793044 in the previous year. During the year under review achieved Export sales of Rs. 595950344..

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 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, both on functional and behavioral side With a view to professionalize payroll, tooutsourcetheservicetoensurethatallstatutoryandregul atorycompliancesare 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 are and a lot depends on overseas economic recovery. In the domestic sector, the outlook seems to best able 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.