Acknit Industries Ltd Management Discussions

In terms of Regulation 34(2) read with Paragraph B of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report is attached hereto forms part of this Report.

GENERAL ECONOMIC STATE:

The Industrial Safety Equipment Market in India is on the rise. The increasing demand for protective equipment across industries has catapulted its growth. Additionally, businesses, nowadays, are complying with safety regulations and investing in safety equipment for their workers. Apart from building healthy relationships, it helps to reduce costs for medical emergencies and expenses.One can never emphasize enough the importance of industrial safety equipment. People felt it the most a few years back during the Covid pandemic. The shortage of personal protective equipment exposed health workers to deadly risks. The requirement for industrial safety equipment isnt just limited to the medical industry. Workers associated with mining, construction, and manufacturing should use these equipment.Researchers have noted that exposure to harmful environments, over-exertion, falls, slips and trips are some of the common causes of injuries. But, every organization should introduce measures safeguarding the health and well-being of their workers.While workers get the benefit of protection by following guidelines and wearing industrial safety equipment, companies can benefit from them as well. They minimize the chances of injuries, reducing medical expenses and compensation costs. The China plus one strategy being adopted by multinational companies, the Productivity Linked Incentives (PLI) schemes announced to enhance manufacturing of key products and funding by multilateral agencies for mega infrastructure projects has strengthened workplace safety in India said experts and safety gear manufacturers at an exhibition called OSH India 2023.

OPERATING SEGMENTS IN THE COMPANY:

The Company operates through four (4) broad segments. They are -

Manufacturing Hand Gloves of various materials and diverse qualities for industrial safety modules for both export and domestic markets;

Manufacturing of both industrial safety garments and readymade garments in bulk for both export as well as for domestic markets;

Power generation by operation of wind mills to supply on commercial base; and

Procurement, part processing and supply of nonconventional industrial safety gears in domestic market and in export.

CHALLENGES:

One of the primary hurdles in improving workplace safety within the Indian Manufacturing sector is the lack of adequate safety awareness and training among workers. Many employees, especially in smaller factories, are not sufficiently educated on the risks associated with their jobs nor trained in effective safety practices. This gap in knowledge can lead to unsafe handling of machinery and hazardous materials, increasing the risk of accidents and injuries. Moreover, the impact of insufficient safety education is profound, as it not only endangers the workers but also affects productivity and overall workplace morale. For many small and medium-sized enterprises (SMEs) that form a large part of Indias

manufacturing landscape, the economic burden of implementing robust safety measures is a significant challenge. The costs associated with purchasing modern safety equipment and conducting regular training sessions can be high, and balancing these expenses with maintaining competitive profit margins is a tough task for business owners. This financial strain often leads to compromised safety practices, as enterprises might opt for cheaper, less effective solutions to meet regulatory requirements minimally.The complexity and scope of governmental regulations regarding workplace safety pose another major challenge. While India has a comprehensive set of laws and standards aimed at ensuring worker safety, the actual enforcement of these regulations can be inconsistent. Variations in enforcement between different states and regions, coupled with bureaucratic delays and corruption, can undermine the effectiveness of these safety standards. This regulatory maze not only confuses employers but also hampers the consistent application of safety practices across the industry. Cultural attitudes towards safety in the workplace can significantly impact the implementation of effective safety measures. In many manufacturing settings, there is a prevailing mindset that prioritizes productivity over safety, leading to a workplace culture where safety protocols are often overlooked or ignored. Additionally, there is a considerable resistance to change among both management and workers, who may view enhanced safety measures as unnecessary or burdensome. Overcoming these cultural barriers is crucial for fostering an environment where safety is regarded as a fundamental aspect of workplace operations.

RISKS AND CONCERNS:

Risk is integral to any business and Acknit is no exception. The major areas of risks as envisaged by the company are as under:

• Ability to attract, hire, train and retain skilled employees

• Timely availability of raw materials (imported as well as locally sourced)

• Inadequate infrastructures like congested ports, lack of connectivity, etc

• High cost of finance and high collaterals

• Our continued understanding and prediction of consumers changing needs and preferences and timely customising of our offerings

• Currency value and interest fluctuations

• Any breach of our cyber security measures

The Board of Directors revises the Companys business risks and formulates strategies to mitigate those risks. The Senior Management team, led by the Managing Director, is responsible for proactively managing risks with appropriate mitigation measures and ensuring their implementation thereof.

INTERNAL CONTROL SYSTEMS AND ADEQUACY:

We have put in place internal control systems and a structured internal audit process vested with the task of safeguarding the assets of the organization and ensuring reliability and accuracy of the accounting and other operational data. The Internal Auditor reports to the Audit Committee of the Board of Directors. The Audit Committee and the Senior Management Team are regularly apprised of the internal audit findings and regular updates are provided of the action taken on the internal audit reports. The Audit Committee reviews the quarterly, halfyearly and the annual financial statements of the Company. A detailed note on the functioning of the Audit Committee and of the other committees of the Board forms part of the section on corporate governance in the Annual Report.

FINANCIAL PERFORMANCE:

The Company could achieve a turnover of 24,037.41 Lakhs and total comprehensive income of 894.46 Lakhs during the year under review.

Segment-wise performance:

PARTICULARS	2024-25	2023-24
Manufacturing of hand gloves:
Segment Revenue	13,750.94	12,605.81
Segment Results	1,554.85	1,349.70
Manufacturing of garments:
Segment Revenue	8,084.50	7,310.69
Segment Results	430.57	377.66
Power Generation - through windmill:
Segment Revenue	33.02	43.11
Segment Results	(37.72)	(5.88)
Others:
Segment Revenue	2,168.95	2,106.12
Segment Results	17.59	77.70

HUMAN RESOURCE:

Employees are the most important asset of the Company. The HR Policy of the Company aims to create a congenial, transparent and inclusive work environment for the overall growth and development of its talented workforce. Skill development and induction of fresh talents are key elements of your Companys human resource improvement activity. Industrial relations remain cordial throughout the year under review. The Company believes that employees well-being will be a crucial component in employees performance and retention and has a far reaching impact on the Companys growth journey in future with the motive to keep them engaged for the long term.

CAUTIONARY STATEMENT:

The statements in the Management Discussion and Analysis Report describe the Companys objectives, projections, expectations, estimates or forecasts which may be forwardlooking statements within the meaning of the applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied therein due to risks and uncertainties. Important factors that could influence the Companys operations, inter alia, include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic, political developments within the country and other factors such as litigations and industrial relations.

	For ACKNIT INDUSTRIES LIMITED
	Sd/-
Place: Kolkata	Shri Krishan Saraf
Date: 28th May, 2025	Managing Director
	DIN: 00128999