Indian Acrylics Ltd Management Discussions

Management Discussion and Analysis Report for the year under review was stipulated under Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is presented as under. a) Acrylic Fibre Industry – Global and Indian Perspective Your Company is producing and selling Acrylic Fibre & Acrylic Yarn and cater to Textile Industry. The textile industry plays a vital role in the Indian economy. It is one of the largest employers, providing employment to over 45 million people. The sector contributes around 14% to the countrys GDP and is also a major source of foreign exchange earnings.

The textile industry is an important part of the Make in India initiative as it has a huge potential for growth and job creation. The government has taken several steps to promote the sector, including providing financial assistance and subsidies, setting up special economic zones, and simplifying regulations.

It is critical for Indias development as it generates vast amounts of revenue and provides employment to millions of people. The sector holds great potential for further growth and can play a significant role in achieving the governments development goals.

Current outlook of the global and Indian textile & apparel industry

As per the market estimates, overall demand in India of Acrylic fibre has decreased this year also appox. 10% over previous year. Textile

Industry in the year has been hit badly by continuous dumping by foreign suppliers.

The import of Acrylic Fibre into India have increased during the year and local Industry has faced challenge of sale and margins due to increased imports. The surplus capacity in China, Thailand and Peru due to their lower sales prompted them to push their surplus materials into Indian Market this year.

The export of Acrylic fibre from India has decreased this year. Company exported 1918 MT of acrylic fibre and 1400 MT of Acrylic yarns as against export of 4173 MT fibre and 2182 MT yarn during last year. The overall exports from India has decreased during this year.

Production & Sales of Acrylic Yarn have gone down during the year as huge imports of knitted goods and hair yarn 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 Acrylic yarn. The erosion of demand and margins is being suffered across yarn spinning & knitted goods industry also. 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 Knitted 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 quantity of Import of Fabrics coming from China at undervalued prices and increase of local demand Acrylic Yarn by Indian knitted fabric producers. The Forum of Acrylic Fibre (FAFM) has taken up with the Govt. for levy of anti dumping duty against import of Fibre from Thailand, China and

Peru. The Government (DGTR, Commerce Ministry) has initiated investigation and issued notification on 30.06.2024. DGTR has completed ORAL HEARING on 21.01.2025 and 23.05.2025 giving opportunity to all stakeholders. This application is under process with DGTR for final findings and relief dumped imports by imposing anti-dumping duty.

Indian GDP growing strongly and domestic demand likely to increase in the range of 3-5% in the current year. The focus of the Company is to increase sale of fibre as well as yarn in export markets of African region and South American markets and service domestic customers with vast range of products mix. The recently started trade war by USA and increase tariff may cause temporary trade disruptions and increased risk of dumping from foreign suppliers.

Your Company has a well-designed Internal Audit programme and dedicated team for independent review of all systems, procedures and financial controls of the Company to bring in the best industry practices, compliance with internal systems & procedures and statuary laws.

The Companys overall internal control system is adequate given size and nature of operations. All important issues are regularly presented to the Audit committee of the Company. Senior management of your Company places emphasis on taking proper actions on the significant issues, findings and recommendations of internal audit, and systems are strengthened appropriately. Internal Financial Controls: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. a) Management Perception Of Risk & Concerns: Risk Management

The Risk Management Committee ensures compliance of all the fiscal, industrial, labour and environments laws by using adequate internal control measures and through regular monitoring by the respective departmental heads in the company.

The following table gives the key risks faced by the Company, and the steps taken to mitigate the same:

As such, the Company is monitoring and taking steps to mitigate the risks, if any, which may threaten the existence of the Company.

Statements in this report on Management Discussion and Analysis describing the Companys Objectives, projections, estimates, expectations or predictions may be "forward looking" within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied.