DIRECTORS' REPORT

The Directors of your Company have pleasure in presenting the 38th
Annual Report of the Company together with Audited Accounts for the
financial year ending 31st March, 2025.

1. FINANCIAL HIGHLIGHTS

(Rs. In lacs)

Note: The financial statements of the Company for the year ended 31st
March, 2025 has been prepared in accordance with Indian Accounting
Standards (Ind AS).

Production & Sales Review:

The Company has achieved production of 16592 MT of Acrylic Fibre and
sale of 11877 MT, during the year under review as against production of
24751 MT and sale of 16541 MT respectively during the previous year.
The Company has also achieved production of 6275 MT and sale of 6867
MT of Acrylic Yarn during the year under review as against production of
9959 MT and sale of 10373 MT during the previous year.

The total revenue from operations during the year under review was
Rs.38933.14 lakh as against Rs.54616.29 lakh during the previous year.
Export Sales have gone down this year to Rs.7554.49 lakh as against
Rs.13305.93 lakh in the previous year. Domestic Sale have also gone
down to Rs.31378.65 lakh against Rs.41310.36 lakh in the previous year.
Production & Sales of Acrylic Fibre and Acrylic Yarn have gone down dur¬
ing the year as huge imports have landed this year at undervalued prices
affecting local producers in India adversely. This material is coming at
undervalued rates and substituting demand of domestic industry of Acryl¬
ic yarn. The erosion of demand and margins is being suffered across
the fibre, yarn spinning & knitted goods industry. Government has taken
steps of fixing minimum import price and testing of imported materials to

stop undervalued imports. This is positive step for improving demand of
domestic yarn spinners. This was valid upto 30.09.2024. Government
has further extended validity of minimum import price notification of Knit¬
ted Fabrics upto 31.12.2024.

In the Union Budget announced on 01.02.2025, the tariff rate has been
revised from 10%/ 20% to 20% or Rs.115 per kg, whichever is higher” on
knitted fabrics. The revised duty rate will help in reduction of huge quan¬
tity of Import of Fabrics coming from China at undervalued prices and
increase of local demand Acrylic Yarn by Indian knitted fabric producers.
Profitability:

The Company incurred profit before depreciation, interest, exceptional
item and tax of Rs.134.94 lakh as against EBIDTA loss of Rs.625.45
lakh in the previous year. After providing for depreciation of Rs.1366.66
lakh (Previous Year Rs.1529.29 lakh), Interest and Financial charges of
Rs.1854.39 lakh (Previous Year Rs.3250.35 lakh), the net loss from op¬
erations after comprehensive income worked out to Rs.3058.43 lakh as
compared to net loss of Rs.5150.74 lakh in the previous year.

2. Segment-wise/Product wise Performance:

Over the last few years, your company has been successful in its goal of
diversifying revenues, to tap new opportunities and reduce any risks of
an overly concentrated portfolio. Company is manufacturing both acrylic
fiber and yarn. The treatment for the same is enunciated in the Indian
Accounting Standard on segment reporting (Ind AS-108) and is explained
under Para no. 6 of the Note No.26 on Notes on Accounts, forming part
of Annual Report.

3. DIVIDEND

As Company does not have any distributable profits computed under
provisions of Companies Act, 2013, no dividend is being recommended.

4. RESERVES

There is no change in Capital Reserves, Securities Premium Reserves
and General Reserves during the year, which stands at Rs.1764.44 lakh,
Rs.39.23 lakh and Rs.80.00 lakh respectively.

5. RESEARCH AND DEVELOPMENT

The Company has an In-House R & D centre registered with the Ministry
of Science & Technology, Govt. of India.

During the year, the Company has focused on new varieties on dyed
yarns. This will help in growth of sales in the current year. The Company
is also working for energy conservation and reduction in the fuel cost with
the help of in-house R&D.

6. DETAILS OF SUBSIDIARY, JOINT VENTURES OR ASSOCIATE
COMPANY

The Company has a Wholly Owned Subsidiary Company, Carlit Trading
Europe, S.L.U (Spain) for sale of its products in the European market.
Company suffered losses in this year also due to weak demand. High
energy prices & input costs are cause of concern for European Manufac¬
turing Industry. Due to losses and lack of clear future outlook, Company
has decided to suspend its operations temporarily. It is continuing as an
Inactive Company since Sept. 2021 as per Spanish Law.

A separate statement containing the salient features of financial state¬
ments of the subsidiary Company forms part of the Annual report in the
prescribed Form AOC-1 in compliance with Section 129 and other ap¬
plicable provisions, if any, of the Companies Act, 2013. Further in line
with the SEBI (LODR) Regulations, 2015 and in accordance with Indian
Accounting Standard 110, Consolidated Financial Statements, including
financial information of its Subsidiary, forms part of this Annual Report.
The Company is not having any other Joint Venture or Associate Com¬
pany.

7. CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE
COMMITTEE

Vision & core areas of CSR:

Your Company is committed to and is fully aware of its Corporate Social
Responsibility (CSR), the guidelines in respect of which were more clear¬
ly laid down in the recently overhauled Companies Act, 2013.

Corporate Social Responsibility and Governance Committee (CSR&G
Committee) comprises of Shri Rajinder Kumar Garg, as its Chairman,
Shri Dheeraj Garg and Shri Surinder Singh Virdi as members. This Com¬
mittee has framed the CSR Policy for the Company, which is approved by
the Board and may be accessed on the website of the Company at http:/

www.indianacrylics.com

Since the Company does not have net profits in accordance with Section
198 of the Companies Act, 2013, the Company is not required to under¬
take any activity under CSR Rules.

8. CORPORATE GOVERNANCE

Your Company is continuously taking steps to attain higher levels of trans¬
parency, accountability and equity in order to enhance customer satisfac¬
tion and stakeholders’ value. The Company not only complies with the
regulatory requirements but is also responsive to the stakeholders’ as
well as customers’ needs. The Company already has an Audit Commit¬
tee, a Stakeholder Relationship Committee and Nomination and Remu¬
neration Committee duly constituted by the Board to look after various
activities. The Corporate Governance practices followed by the Company
are enclosed as Annexure to this report. A certificate from the Statutory
Auditors of the Company regarding compliance of governance norms,
stipulated under SEBI (LODR) Regulations, 2015, is also annexed to the
Corporate Governance report.

9. ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act,
2013, the Company has placed a copy of the Annual Return as at March
31, 2025 on its website at www.indianacrylics.com. By virtue of amend¬
ment to Section 92(3) of the Companies Act, 2013, the Company is not
required to provide extract of Annual Return (Form MGT-9) as part of the
Board’s report.

10. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors
confirm that:

a. i n the preparation of the annual accounts for the year ending 31st
March, 2025 the applicable accounting standards had been followed
along with proper explanation relating to material departures;

b. the Directors had selected such 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 and loss of the
Company for that period;

c. the Directors had taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;

d. t he Directors had prepared the annual accounts on a going concern
basis; and

e. the Directors had laid down internal financial control to be followed by
the Company and that such internal financial controls were adequate and
were operating effectively.

f. the Directors had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.

11. DIRECTORS

A) Changes in Directors and Key Managerial Personnel

Since the last Annual General Meeting, following changes have taken
place in the Board of Directors:

-Appointment of Shri Surinder Singh Virdi (DIN: 00035408) as Independ¬
ent Director of the Company for a term of five years commencing from
01/10/2024 to 30/09/2029.

-Cessation of Shri Ajit Singh Chatha (DIN: 02289613) and Shri Madan
Mohan Chopra (DIN: 00036367) as Independent Directors on the Board
of the Company on completion of their term at the close of business hours
of 30.09.2024.

-Appointment of Mrs Surabhi Malik (DIN: 07607047), IAS, Managing Di¬
rector of Punjab State Industrial Development Corporation Ltd. (PSIDC),
as Nominee Director and Chairperson on the Board of the Company in
place of Smt. Parampal Kaur Sidhu.

-As per the provisions of Companies Act, 2013, Shri Sanjay Krishan Ahuja
(DIN: 00399501) Director, retires by rotation at the forthcoming Annual
General Meeting and being eligible offers himself for re-appointment.
Familiarisation programmes for Board Members:

The Board members are from time to time provided with necessary docu-
ments/ policies/ internal procedures to get them familiar with the practices

of the Company. Directors get an opportunity to visit Company’s plant
which helps them to understand business operations & working of the
Company. The business strategies, performance, global developments,
legal & other updates, compliance reports and other relevant information/
reports etc. are being periodically provided to the Board of Directors.

B) Declaration by an Independent Director(s) and re-appointment,
if any

A declaration by Independent Directors stating that he/ they meet the cri¬
teria of independence as provided in sub-section (6) of Section 149 of the
Companies Act, 2013 has been taken at the time of their appointment.

C) Formal Annual Evaluation of Board

The Board of Directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act and the corporate governance requirements as pre¬
scribed by Securities and Exchange Board of India (“SEBI”) under Regu¬
lation 4(f)(ii) of SEBI (LODR) Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the Board
composition and structure, effectiveness of board processes, information
and functioning, etc.

The performance of the committees was evaluated by the Board after
seeking inputs from the committee members on the basis of the criteria
such as composition of committees, effectiveness of committee meetings,
etc.

The Board and the Nomination and Remuneration Committee (“NRC”)
reviewed the performance of the individual directors on the basis of the
criteria such as the contribution the individual director to the Board and
committee meetings like preparedness on the issue to be discussed,
meaningful and constructive contribution and inputs in meetings etc. In
addition, the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors, performance of non-in¬
dependent directors, performance of the board as a whole and perfor¬
mance of the Chairman was evaluated, taking into account the views of
executive directors and non-executive directors, the same was discussed
in the Board meeting that followed the meeting of the Independent Direc¬
tors, at which the performance of the Board, its committees and individual
directors was also discussed.

12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, 4 Board Meetings were held, one each
on 06th May 2024, 13th August 2024, 13th November 2024 and 13th
February 2025.

13. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATON
AND OTHER DETAILS

The Company’s policy on Directors’ appointment and remuneration and
other matters provided in Section 178(3) of the Act has been disclosed
in the corporate governance report, which forms part of the Directors’
Report.

14. AUDIT COMMITTEE

The Audit Committee comprises of three non-executive Directors viz.
Smt. Tejinder Kaur, Raja Shivdev Inder Singh, Shri Surinder Singh Vir-
di and one Executive Director Shri Dheeraj Garg. During the year, the
committee held four meetings. Other details of the Audit Committee are
included in the Corporate Governance Report which forms part of this
report.

The Board had accepted all recommendation of the Audit Committee.

15. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE
BLOWER POLICY FOR DIRECTORS AND EMPLOYEES

Pursuant to provisions of Section 177 (9) of the Companies Act, 2013,
the Company has established a “Vigil Mechanism” incorporating Whistle
Blower policy in terms of Regulation 22 of SEBI (LODR) Regulations,
2015 for employees and directors of the Company, for expressing the
genuine concerns of unethical behavior, frauds or violation of the codes
of conduct by way of direct access to the Chairman/ Chairman of the
Audit Committee. The Company has also provided adequate safeguards
against victimization of employees and Directors who express their con¬
cerns. The policy on “Vigil Mechanism and Whistle Blower” may be ac¬
cessed on the Company’s website at http//www.indianacrylics.com.

There are no cases reported during the year.

16. NOMINATION AND REMUNERATION COMMITTEE

The committee has been constituted to review and recommend compen¬
sation payable to the whole-time directors including Managing Director
and senior management of the Company. The committee reviews the
overall compensation structure and policies of the Company with a view
to attract, retain and motivate employees, reviewing compensation levels
of the Company vis-a-vis other Companies and industry in general. The
“Nomination & Remuneration Policy” may be accessed on the Company’s
website at http//www.indianacrylics.com

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
UNDER SECTION 186

There were no Loans/ Guarantee given or Investments made by the
Company during the year exceeding the limits prescribed under Section
186 of the Companies Act, 2013.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RE¬
LATED PARTIES:

All contracts/ arrangements/ transactions entered by the Company dur¬
ing the Financial Year with related parties were in the ordinary course of
business and on an arm’s length basis, during the year, the Company
had not entered into any contract/ arrangement/ transaction with related
parties which could be considered material in accordance with the policy
of the Company on materiality of related party transactions. A statement,
in summary form, of transactions with related parties in ordinary course
of business and arm’s length basis is periodically placed before the audit
committee for review.

The policy on materiality of related party transactions and dealing with
related party transactions as approved by the board is uploaded on the
website of the Company.

Disclosures as required under Indian Accounting Standards (Ind AS-24)
have been made in the financial statements of the Company, enclosed
with this report.

19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review
as stipulated under Regulation 34(2)(e) of SEBI (LODR) Regulations,
2015, forms part of the Board’s report.

20. BUSINESS RISK MANAGEMENT

The risk management includes identifying types of risks and its assess¬
ment, risk handling and monitoring and reporting, which in the opinion of
the Board may threaten the existence of the Company. The Risk Manage¬
ment Committee constituted by the Board comprises of Shri R K Garg,
Shri Dheeraj Garg, Raja Shivdev Inder Singh and Shri Surinder Kansal as
members. The Committee has formulated the Risk Management Policy
which was subsequently approved by the Board of Directors. The Risk
Management Policy may be accessed on the website of the Company at
http://www.indianacrylics.com

21. AUDITORS:

a. Statutory Auditors:

As per the Provisions of Section 139 of Companies Act, 2013, M/s
AKR & Associates, (Firm Registration No. 021179N), Chartered
Accountants were appointed as Statutory Auditors of the Company
to hold office till the conclusion of the Annual General Meeting to
be held during the year 2027.

The Company has received a certificate from them pursuant to
Companies (Audit & Auditors) Rules 2014 read with Section 139
& 141 of the Companies Act, 2013, confirming their eligibility for
reappointment, and that they were not disqualified for reappoint¬
ment.

b. Secretarial Auditor:

M/s S.K. Sikka & Associates, practicing Company Secretaries,
Chandigarh, was appointed as Secretarial Auditor & his report in
Form No. MR-3 under Section 204 of the Companies Act for the
Financial Year 2024-25 is attached & forms part of this Report.
Pursuant to recent amendments made to Regulation 24A of the
SEBI Listing Regulations, M/s S.K. Sikka & Associates, Company
Secretaries are appointed as the Secretarial Auditors of the Com¬
pany for a period of five years commencing from 01.04.2025 to
31.03.2030 subject to approval of shareholders.

c. Cost Auditor:

As per provisions of Section 148 of the Companies Act, 2013 the
Board of Directors of your Company has recommended M/s Ag-
garwal Vimal & Associates, Cost Auditor, to be re-appointed as a
Cost Auditor for the Financial Year 2025-26, subject to ratification
of his appointment and remuneration by the Shareholders in the
forthcoming Annual General Meeting.

d. Internal Auditor:

Pursuant to provisions of Section 138 of the Companies Act, 2013,
the Company has appointed Mr. Jasvinder Singh, a qualified pro¬
fessional duly authorized by the Board to conduct internal audit of
the functions and activities of the Company and maintain internal
control systems of the Company.

22. AUDITORS’ REPORT

The Statutory and Secretarial Auditors’ Reports are self-explanatory and
require no comments.

23. LISTING OF SHARES

Equity shares of the Company are listed on BSE Limited and Listing fee
has already been paid in pursuance to Regulation 14 of SEBI (LODR)
Regulations, 2015.

24. DEMATERIALISATION

Effective from 25th September 2000, the equity shares of your Company
are being compulsorily traded in dematerialized form. As on 31st March
2025, a total of 1266.26 lakh equity shares comprising 93.57% of of equi¬
ty share capital, have been dematerialized.

25. INSURANCE

All the assets of the Company have been adequately insured.

26. PARTICULARS OF EMPLOYEES

Relations with the employees continued to be peaceful and harmonious
during the period under review.

27. PERSONNEL & RELATED DISCLOSURES:

Your Company continues to lay emphasis on continued qualitative growth
of its human resources by providing a congenial and conducive work en¬
vironment in consonance with its belief that the real strength of its organ¬
ization lies in its employees.

The particulars required under Section 197 read with Rule 5(1), 5(2) &
5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, including statement of employees receiving sal¬
ary of Rs.102 lakh. per annum or Rs.8.50 lakh per month or more during
the Financial Year 2024-25, are annexed hereto and forms part of this
report.

28. INDUSTRIAL RELATIONS

Industrial relations continued to be cordial during the year under review.

29. HEALTH, SAFETY AND ENVIRONMENT PROTECTION

Our Company has complied with all the applicable health & Safety stand¬
ards, environment laws and labour laws and has been taking all neces¬
sary measures to protect the environment and provide workers a safe
work environment. Our Company is committed for continual improvement
in Health & Safety as well as Environmental performance by involving
all the employees to provide a Safe & healthy work environment to all
its employees.

30. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT
WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL)

ACT, 2013

The Company has zero tolerance for sexual harassment at workplace
and has adopted a policy against sexual harassment in line with the
provisions of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
During the financial year 2024-25, the Company has not received any
complaint on sexual harassment and hence no complaints remain pend¬
ing as of 31st March, 2025.

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The optimal utilization of energy remained a major focus area and a num¬
ber of steps were taken in this direction. The information required under
Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 are attached hereto and forms part
of this report.

32. GENERAL DISCLOSURE:

Your directors state that no disclosure or reporting is required in respect
of the following items as there were no transactions on these items during
the year under review:

1. Issue of equity shares with differential rights to dividend, voting or oth¬
erwise.

2. Details relating to deposits covered under Chapter V of the Act.

3. No material changes and commitments affecting the financial position
of the Company occurred between the end of the Financial Year to which
this financial statements relate and the date of this report.

4. No significant/ material orders have been passed by any Regulator/
Court/ Tribunal which could impact the going concern status & future op¬
erations of the Company.

5. No change in nature of Business of the Company.

6. No unclaimed Dividend is required to be transferred to Investor Educa¬
tion and Protection fund.

33 MATERNITY BENEFIT: Rule 8(5)(xiii) of Companies (Account)
Rules, 2014

The Company affirms that it has duly complied with all provisions of the
Maternity Benefit Act, 1961, and has extended all statutory benefits to
eligible women employees, if any during the year.

34. ACKNOWLEDGEMENT

Your Directors are pleased to place on record their sincere gratitude to the
Government Authorities, Financial Institutions & Bankers and Investors
for their continued and valuable co-operation and support to the Com¬
pany.

Your Directors express their deep appreciation for the devoted and sin¬
cere efforts put in by the employees at all levels of operations in the Com¬
pany during the year. The Company feels confident of continued cooper¬
ation and efforts from them in future also.

On Behalf of the Board of Directors

Place: Chandigarh ALOK GOYAL DHEERAJ GARG

Dated: 30th May 2025 EXECUTIVE DIRECTOR ADDL. MANAGING DIRECTOR
DIN: 08049515 DIN: 00034926