Agarwal Float Glass India Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to SEBI (LODR) Regulations, 2015, your Directors have the pleasure in presenting the Management Discussion and Analysis Report for the year ended on March 31, 2023.

INDUSTRY OVERVIEW

Glass is one of the most useful materials in our daily life. Today glass is so commonly used that its presence often goes unnoticed. The Indian glass industry consists of seven segments namely, sheet and flat glass (NIC1-26101), glass fibre and glass wool(NIC-26102),hollow glassware (NIC-26103), laboratory glassware (NIC- 26104), table and kitchen glassware (NIC- 26105), glass bangles (NIC- 26106) and other glass wares(NIC 26109). India is among the top15 markets for glass packaging globally and is 3rd fastest growing market after Turkey and Brazil. The global market for Indian glassware is fragmented and spread across several countries. Most of the glass demand in the country comes from container glass which accounts for 50%of the countrys glass consumption by value. Apart from few big manufacturers, it is estimated that there are more than1000 manufacturers in MSME segment. There is no specific glass sector related policy in the country. The energy consumption by glass industries is quite significant for different group companies and a number of plants involved in the production of float glass and container glass would qualify to be ‘Designated Consumers(DCs).

The Indian glass industry has been growing across all segments. Sheet and float glass have recorded the fastest growth, at nearly 67 per cent CAGR (Compound Annual Growth Rate) between 2001 and 2005. Other glassware such as bottles and fibre glass has recorded more modest growth rates of about 5-6 per cent CAGR, over the same period.

COMPANY OVERVIEW

Agarwal Float Glass India Limited is engaged in the business of trading of glass and specialised glass products by procuring quality products from manufacturers and selling it either through our sales managers or directly to our customers. Our valued customers are spread across the country and work across varied industry segments such as, office buildings, hotels, institutions, banks, insurance companies, shopping malls, diplomatic residences, etc. Our products cater to a range of end use industries including construction, automotive, and industrial sectors, with a variety of applications such as exterior and interior spaces of residential and commercial buildings. Our product portfolio largely consists clear glass, different kinds of value-added glass products and processed glass products, of varying thickness. We also trade a range of value added glass products including clear frosted glass, clear sheet glass, mirror, tinted glass, reflective glass which have a wide range of applications. We also offer processed glass, which includes, toughened glass, frosted glass, frosted design glass, leaguered glass, figure glass, heat-strengthened glass, insulated glass, PVB laminated glass, and bullet-resistant glass and all building glasses among others.

Besides this, the Company is also planning to expand its offset capacity by venturing into manufacturing of glass processing units and adding a new plant and machinery. With these capacity additions your company is well prepared to manage the high demand for sustainable packaging solutions that is expected to grow going forward. While continuing to enhance the Companys capabilities to achieve growth, your Company is focusing on strengthening its facilities and making the best use of them.

FINANCIAL PERFORMANCE

Our revenues from operations for the year ended 31.03.2023 were 4818.51 lakhs as compared to previous year ended 31.03.2022 were 4210.22 lakhs. Your company is taking all the possible steps to increase the profitability.

OUR COMPETITIVE STRENGTHS

? Enhance customer base by entering new geographies to establish long-term relationships ? Experienced Promoters and a well-trained employee base ? Strong Balance Sheet and Financial Condition ? High-quality at competitive prices ? Improved operational efficiencies ? Leveraging our Market skills and Relationships

THREATS

? Market trends making other assets relatively attractive as investment avenues ? Short term economic slowdown impacting investor sentiments and business activities ? Market & Economic condition, Logistics and transportation ? Increased intensity of competition from local and global players

SEGMENT-WISE & PRODUCT-WISE PERFORMANCE

The company operates in only single segment, hence segment reporting is not applicable. The Company is mainly engaged in the Trading of Glasses and other allied activities.

The Highlights of the Companys performance are as under:

During the year, the Company earned Total Revenue of 4818.51 Lakhs as against 4210.22 lakhs in corresponding previous year and earned a net profit of 249.36 Lakhs.

FUTURE OUTLOOK

The Company is looking for the new Business opportunities to give the best to stakeholders of the Company. The outlook for the Company appears bright on a long-term basis. The Company is hopeful that its performance in the years to come would be encouraging, as the Company is planning to enter into new segments. Your Company will endeavor to maintain and enhance its position in the furniture market.

RISKS AND CONCERNS

Every Company is prone to internal and external risks, including risks around compliance, operational, strategic and many others. Many of these risks are inherent in the enterprise structure of any organization and may interfere with an organizations operations and objectives. Further as our Company is looking for the new Business opportunities the Following Risk associate for doing any business:

? Market Risk

? Reputation Risk ? Competition Risk ? Technological Risk

? Changes in the policies of the Government of India or political instability may adversely affect economic conditions in India generally, which could impact our business and prospects.

? New and changing regulatory compliance, corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

The board of directors also reviewed the key risks associated with the business of the Company, the procedures adopted to assess the risks, efficacy and mitigation measures.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control systems for the business processes in respect of all operations, financial reporting, compliance, with laws and regulations etc. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters. Internal check is conducted on a periodical basis to ascertain the adequacy and effectiveness of internal control systems. The system also helps management to have timely data on various operational parameters for effective review. It also ensures proper safeguarding of assets across the Company and its economical use.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Industrial relations continue to remain cordial during the year and estimated around 15 employees are on the Companys payroll as on 31 March, 2023 as compared to 14 employees on the Companys payroll as on 31st March, 2022.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE.

Details of Significant Accounting Ratios are as follows:

*Reasons for Variation more than 25%:

Current Ratio increased because of increase in assets.

2. 1. Debt-Equity Ratio decreased because company increase profitability, improve inventory management

and restructure debt compared to previous period.

3. Debt Service Coverage Ratio increased because increase in net operating income compared to the previous period.

4. Return on Equity Ratio increased because increase in net operating margin compared to the previous period.

5. Trade payables turnover ratio increased because company started taking the advantage of early payment discounts, cash discount and required to make quick payments because of market trends and futuristic approach compared to the previous period.

6. Net profit ratio increased because increase in net operating income compared to the previous period.

7. Return on Capital employed increased because increase in net operating margin compared to the previous period.