Indian Acrylics Ltd Directors Report

DIRECTORS REPORT

To The Members,

Your Directors have pleasure in presenting the 39th Annual Report of Indian Acrylics Limited (the Company or IAL) together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended 31st March 2026, along with the reports of the Statutory Auditors and the Secretarial Auditor thereon.

1. FINANCIAL HIGHLIGHTS

			(INR Lakhs)
	Standalone		Consolidated
	2025-26	2024-25	2025-26	2024-25
Revenue from Operations	35168.47	38933.14	35168.47	38933.14
Other Income	573.22	509.60	573.22	509.60
Total Revenue	35741.69	39442.74	35741.69	39442.74
Profit/ (Loss) before Exceptional item, depreciation, interest & Tax (PBDIT)	442.09	134.94	441.86	133.60
Interest & other financial expenses	1727.59	1854.39	1727.59	1854.39
Profit/ (Loss) before depreciation & Tax (PBDT)	(1285.50)	(1719.45)	(1285.73)	(1720.79)
Depreciation and amortization expenses	1123.01	1366.66	1123.01	1366.66
Profit/ (Loss) before Tax (PBT)	(2408.51)	(3086.11)	(2408.74)	(3087.45)
Tax Expenses- Current & Deferred
Profit/(Loss) after Tax (PAT)	(2408.51)	(3086.11)	(2408.74)	(3087.45)
Other Comprehensive Income	162.99	27.68	162.99	27.68
Total Comprehensive Income/	(2245.52)	(3058.43)	(2245.75)	(3059.77)
(Loss) for the period
Earnings per share-Basic	(1.78)	(2.28)	(1.78)	(2.28)
Diluted	(1.78)	(2.28)	(1.78)	(2.28)

Note: The financial statements of the Company for the year ended 31st March, 2026 has been prepared in accordance with Indian Accounting Standards (Ind AS).

Production & Sales Review:

The Company has achieved production of 14116 MT of Acrylic Fibre and sale of 8728 TMT during the year under review as against production of 16592 MT and sale of 11877 MT respectively during the previous year.

The Company has also achieved production of 7056 MT and sale of 7141 MT of Acrylic Yarn during the year under review as against production of 6275 MT and sale of 6867 MT during the previous year. The total revenue from operations during the year under review was Rs.35168.47 lakh as against Rs.38933.14 lakh during the previous year. Export Sales have increased this year to Rs.12143 lakh as against Rs.7555 lakh in the previous year. Domestic Sale have gone down to Rs.23026 lakh against Rs.31378 lakh in the previous year.

Production & Sales of Acrylic Fibre and Acrylic Yarn have suffered during 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 Acrylic yarn. The erosion of demand and margins is being suffered across the fibre, yarn spinning & knitted goods industry. The policy of Minimum Import price fixation and compulsory testing of imported knitted fabrics to stop undervalued imports issued by Govt. of India is continuing.

However, Antidumping duty recommended by DGTR (Commerce & Industry) after detailed investigation against Thailand, China & France but Ministry of Finance has not issued antidumping duty notification to implement these recommendations causing huge dumping continuing in India.

Profitability:

The Company earned profit before depreciation, interest, exceptional item and tax of Rs.442.09 lakh as against profit of Rs.134.94 lakh in the previous year. After providing for depreciation of Rs.1123.01 lakh (Previous Year Rs.1366.66 lakh), Interest and Financial charges of Rs.1727.59 lakh (Previous Year Rs.1854.39 lakh), the net loss from operations after comprehensive income worked out to Rs.2245.52 lakh as compared to net loss of Rs.3058.43 lakh in the previous year. Accumulated losses as at the end of current year has increased to Rs.14767.64 lakhs (Previous year Rs.12522.12 lakhs) exceeded the paid up share capital of the Company.

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 Manufacturing 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 statements of the subsidiary Company forms part of the Annual report in the prescribed Form AOC-1 in compliance with Section 129 and other applicable 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 Company.

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 clearly 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 Committee 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:7www.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 undertake any activity under CSR Rules.

8. CORPORATE GOVERNANCE

Your Company is continuously taking steps to attain higher levels of transparency, accountability and equity in order to enhance customer satisfaction 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 Committee, a Stakeholder Relationship Committee and Nomination and Remuneration 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, 2026 on its website at www.indianacrylics.com. By virtue of amendment 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 Boards report.

10. DIRECTORS RESPONSIBILITY STATEMENT

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

a. in the preparation of the annual accounts for the year ending 31st March, 2026 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. the 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:

-As per the provisions of Companies Act, 2013, Shri Dheeraj Garg (DIN: 00034926) 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 documents/ policies/ internal procedures to get them familiar with the practices of the Company. Directors get an opportunity to visit Companys 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 criteria 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 prescribed by Securities and Exchange Board of India ("SEBI") under Regulation 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 nonindependent directors, performance of the board as a whole and performance 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 Directors, 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 30th May 2025, 13th August 2025, 13th November 2025 and 13th February 2026.

13. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATON AND OTHER DETAILS

The Companys policy on Directors appointment, 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 Virdi 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 concerns. The policy on "Vigil Mechanism and Whistle Blower" may be accessed on the Companys 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 compensation 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 Companys 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 RELATED PARTIES:

All contracts/ arrangements/ transactions entered by the Company during the Financial Year with related parties were in the ordinary course of business and on an arms 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 arms 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 Boards report.

20. BUSINESS RISK MANAGEMENT

The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company The Risk Management 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 reappointment.

b. Secretarial Auditor:

Pursuant to recent amendments made to Regulation 24A of the SEBI Listing Regulations, M/s S.K. Sikka & Associates, practicing Company Secretaries, Chandigarh, were appointed as the Secretarial Auditors of the Company for a period of five years commencing from 01.04.2025 to 31.03.2030 with the approval of shareholders in its meeting held on 29.09.2025 & his report in Form No. MR-3 under Section 204 of the Companies Act for the Financial Year 2025-26 is attached & forms part of this Report.

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 V. Kumar & Associates, Cost Auditor, to be re-appointed as a Cost Auditor for the Financial Year 2026-27, 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 professional 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 2026, a total of 1266.54 lakh equity shares comprising 93.59% of equity 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 environment in consonance with its belief that the real strength of its organization 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 salary of Rs.102 lakh. per annum or Rs.8.50 lakh per month or more during the Financial Year 2025-26, 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 standards, environment laws and labour laws and has been taking all necessary 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 2025-26, the Company has not received any complaint on sexual harassment and hence no complaints remain pending as of 31st March, 2026.

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

The optimal utilization of energy remained a major focus area and a number 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 otherwise.

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 operations of the Company.

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

6. No unclaimed Dividend is required to be transferred to Investor Education 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 Company.

Your Directors express their deep appreciation for the devoted and sincere efforts put in by the employees at all levels of operations in the Company during the year. The Company feels confident of continued cooperation and efforts from them in future also.

	On Behalf of the Board of Directors
Place: Chandigarh	ALOK GOYAL	DHEERAJ GARG
Dated: 29th May 2026	Executive Director	Addl. Managing Director
	DIN :08049515	DIN : 00034926