Your Directors hereby present the 63^rd Annual Report of your
Company along with the financial results for the year ended
31^st March, 2025.

State of affairs of the company

a. Financial results (' In lakhs)

b. Dividend and Transfer to reserves

The Board has recommended a dividend of ' 3/- per share (30%
on face value of ' 10/-each) for the financial year 2024-25 which
is subject to the approval of shareholders at the Annual General
Meeting (AGM). The Directors have not recommended any
transfer to the reserves.

Industry Overview

FY 2024-25 saw a marginal improvement in the performance of
the spinning industry. Demand for yarn from the domestic market
was stable while export demand continued to be muted. Cotton
prices remained stable for most of the year, although there was a
drop of around 7% from the closing price of the previous season
compared to the opening price of the 2025 season. The Cotton
Corporation of India was a major player this year as cotton prices
dipped below the MSP. CCI purchased just over 100 lac bales,

accounting for almost one third of the total crop. Despite this
quantity being held in the hands of one buyer, there was no dearth
of availability as mills were in no hurry to procure given the fact that
there was abundant availability globally with Brazil, US, West
Africa and Australia all registering bumper crops. Even today, CCI
continues to hold around 70 lac bales in stock. Despite
maintaining good operating efficiency throughout the year, the
profitability of the spinning division improved only marginally
compared to the previous year.

Indian textile and apparel exports registered a growth of 6.3% in FY
24-25, increasing to $ 36.6 Billion. This growth was driven primarily
by apparel which grew at 10% while growth in textile exports was
3.6%. Bangladesh continued to be the largest market for Indian
yarns while USA was the major market for garments and made ups.

Review of operations

During the year under review, your Company had to take the
difficult decision to discontinue operations of our spinning unit
situated in Hindupur, Andhra Pradesh. Although this unit has been
operating since 1983, its performance over the past seven to eight
years has not been satisfactory and has resulted in continuous
losses. Despite improvements in productivity and yarn realization
over the past two years, losses continued to mount, primarily due
to high power tariffs and wage costs. Given the situation, this
decision was taken keeping in mind the best long term interests of
the Company and to ensure the sustainability and viability of the
spinning division going forward. The Company has reached an
agreement for a full and final settlement with its employees and
will utilize some of the machinery and other fixed assets to
modernize and strengthen its other spinning units. As part of this
plan, the Company will add 8400 spindles in its A unit in Kanjikode,
Kerala during the current year.

The technical textile division performed well for the year, aided by
good orders and strong operational performance. The planned
capacity expansion was held back due to delays in receiving key
machinery. The new capacity was commissioned in the fourth
quarter and production and quality has stabilized.

The Company registered revenues of ' 87,251 lakhs in
FY 24-25 compared to ' 84,982 lakhs in the previous year
FY 23-24. This is the total revenue of the Company of ' 98,992
lakhs less the revenues from discontinued operations of the
Hindupur unit amounting to ' 11,741 lakhs. Comparable figures
for the previous year are ' 98,791 lakhs and ' 13,809 lakhs
respectively.

EBITDA earned by the Company was ' 11,525 lakhs in FY 24-25
compared to ' 7,906 lakhs in FY 23-24. This is the total EBITDA of
the Company of ' 9,840 lakhs less loss of ' 1,685 lakhs
from discontinued operations. Comparable figures for
the previous year EBITDA was ' 7,312 lakhs and loss of
' 594 lakhs respectively. Closure expenses incurred in our
Hindupur unit including an amount of ' 1,119 lakhs towards
settlement of employees have been accounted for.

Outlook for the current year

The year began with significant uncertainty because of the threat
of US tariffs. As expected, all financial markets reacted sharply
and were in turmoil due to the higher-than-expected tariffs levied
on nearly all countries that supply goods to the US. However, the
global outcry and spike in US treasury yields forced the US
government to react and they responded by announcing a 90-day
hiatus while retaining only a 10% tariff for most goods and
countries. Various countries, including India, are now in talks with
the US government in the hope of securing trade deals which will
keep tariffs in abeyance for the medium and long term. Despite
this, there are clear signs that the US economy is headed towards
a recession. This is certain to weigh down consumer spending and
business sentiment in the US going forward.

FY 25-26 will be a year of consolidation for your Company. The
technical textile division will start to derive the additional revenues
and benefits of the expanded capacity while the spinning division will
benefit from the asset shifting from the Hindupur unit which will bring
about a degree of modernization and cost optimization to our
spinning operations. A good monsoon and improved rural economic
demand will hopefully spur consumer confidence and consumption
in the domestic market. Coupled with interest rate cuts on the
horizon, this should lead to higher GDP growth in the coming year.

Personnel

The Company has been able to continue maintaining cordial
relations with its labour force in all its units. The Company has
1608 permanent employees on the roll as on 31^st March, 2025.

Internal Control Systems & Risk Management

The Company has adequate internal control systems to monitor
business processes, financial reporting and compliance with
applicable Regulations. The systems are periodically reviewed by the
Audit Committee of the Board, for identification of deficiencies and
necessary timely corrective actions were taken to improve controls at
all levels. The committee also reviews the statutory auditors’ report,
key issues, significant processes and accounting policies.

The Audit Committee of the Board constantly reviews internal
control systems and their adequacy, significant risk areas,
observations made by the internal auditors on control mechanism
and the operations of the Company and recommendations made
for corrective action through the internal audit reports. The
Directors confirm that the Internal Financial Controls are
adequate with respect to the operations of the Company. A report
of Statutory Auditors reporting on the adequacy of Internal
Financial Controls is annexed with the Auditors Report.

The Company adopted a policy on risk management for
identifying and managing risk under section 134(3)(n) of the
Companies Act,2013. The Board identifies and reviews the
various elements of risk which the company has to face and has
laid out the procedures and measures for mitigating those risks.
The elements of risk threatening the company’s existence
are minimal.

The company does not face any risk other than those that are
prevalent in the industry and has taken all possible steps to
overcome such risks. The main concerns are volatility in raw
material prices and fluctuations in foreign exchange rates.
Effective planning in raw material purchase and the ability to pass
on raw material price increases to its customers has minimised the
risk relating to the volatility in raw material prices.

Foreign exchange fluctuation risk is minimised through proper
planning and natural hedging of export receivables and foreign
currency borrowings. As a part of the overall risk management
strategy, all assets are appropriately insured.

Number of meetings of the Board

Details of the number of meetings of the Board and Committees
thereof and the attendance particulars of the Directors in such
meetings are provided under the Corporate Governance Report.

Declaration by Independent Directors

The Independent Directors have submitted their disclosures to the
Board confirming that they fulfill the requirements enumerated
under Section 149(6) of the Companies Act, 2013 (hereinafter “the
Act”) and Regulation 25 of The Securities Exchange Board of
India (Listing Obligations and Disclosure Requirements)
Regulations,2015.

Directors and Key Managerial Personnel (KMP)

Appointments, Retirements and Resignations

There is no cessation of office by any Director due to death or
resignation. However, Mr. Prashanth Chandran, Vice Chairman
and Managing Director retired by rotation, and being eligible,
offered himself for reappointment and was reappointed as
Director at the AGM held on 20^th August 2024.

Shareholders have appointed Mrs. Suguna Ravichandran and
Mr. V Prakash as Independent Directors of the Company for a
term of 5 (five) consecutive years effective from 01^stJun 2024.

Mr. Ravi Kumar Abburu has been appointed as Director -
Technical Textiles by the shareholders of the Company.

The Board of Directors at their meeting held on 23^rd May, 2025, on
the recommendation of the Nomination and Remuneration
committee, re-appointed Mr. Ashwin Chandran, as the Chairman
and Managing Director, Mr. Prashanth Chandran as Vice
Chairman and Managing Director, Mr. T Kumar as Executive
Director and Mr. Ravi Kumar Abburu as Director - Technical
Textiles of the company for a term of three years effective from
01^st April 2026. Necessary resolutions are being moved at the
ensuing annual general meeting for shareholders’ approval.

The following are the whole-time key managerial personnel of the
Company as per Section 203 of the Act as on 31^st March,2025,

(i) Mr. Ashwin Chandran, Chairman and Managing Director

(ii) Mr. M.K.Ravindra Kumar, Chief Financial Officer &

(iii) Mrs. S Kavitha, Company Secretary.

Performance Evaluation

The Board of Directors at their meeting held on 12^th February,
2025, had carried out an annual evaluation of its own performance
and the performance of the Committees of the Board and the
individual Directors pursuant to the provisions of the Act and the
corporate governance requirements as prescribed by Securities
and Exchange Board of India (Listing Obligations and Disclosure
Requirements), Regulations 2015 (hereinafter "Listing
Regulations").

The performance of the Board was evaluated by the Board of
Directors after seeking inputs from all the Directors on the basis of
criteria such as Board composition and structure, effectiveness of
the Board meetings and process and contributions made by the
Directors.

The performance evaluation of each Director was done by the
entire Board of Directors, excluding the Director being evaluated,
taking into consideration inputs received from the other Directors,
covering various aspects of the Board’s functioning such as active
participation and contribution during discussions, effective
deployment of knowledge and expertise towards the growth and
betterment of the Company, impact and influence on the growth of
the Company and performance of specific duties, obligations and
governance.

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

In a separate meeting of Independent Directors held on
24^th March, 2025 performance of the non-independent Directors,
performance of the Board as a whole and performance of the
Chairman were evaluated, taking into account the views of the
executive Directors and non-executive Directors.

The Board also carried out an evaluation on the performance of
the Independent Directors and also verified the fulfilment of the
criteria for independence as specified under listing Regulations
and their independence from the management. This evaluation of
Independent Directors was done by the entire Board, excluding
the Independent Directors being evaluated.

Policy on Director's appointment and remuneration and
other details

The Company’s policy on Director’s appointment and
remuneration and other matters provided in Section 178(3) of the
Act has been disclosed in the Corporate Governance Report.

Auditors' report and Secretarial Auditors' report

The auditors’ report and secretarial auditors’ report do not contain
any qualifications, reservation or adverse remarks. During the
year under review, neither the Statutory auditors nor the
Secretarial Auditor have reported to the Audit Committee, any
instances of fraud committed against the Company by its officers
or employees.

The report of the Secretarial Auditor is furnished as Annexure A
and forms part of this report.

Receipt of any commission by Whole Time Directors from the
Company or receipt of commission/remuneration from
subsidiary Company

During the year under review all the Executive Directors have
received commission from the Company. They have not received
any commission/ remuneration from subsidiaries during the year
under review.

Annual Return

The extract of the annual return pursuant to Section 92 read with
rule 12 of the Companies (Management and Administration)
Rules, 2014 is available on the website of the Company
https://www.precot.com/wp-content/uploads/2025/07/Annual-
Return-2025.pdf.

Secretarial Standards

The Company complies with all the applicable mandatory
secretarial standards issued by the Institute of Company
Secretaries of India.

Particulars of Employees

The particulars as required under rule 5 of Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is provided in Annexure B.

Consolidation of Accounts

The Company has control over "Suprem Associates", a
partnership firm by holding majority of the Capital in the firm. The
accounts of the said firm are consolidated as per the requirement
of Indian Accounting Standards (IndAS).

Maintenance of Cost Records

The Company is maintaining the cost records as specified under
Section 148(1) of the Companies Act, 2013.

Audit Committee

The Company has constituted an Audit Committee as per Section
177 of the Act and Listing Regulations.

The details pertaining to vigil mechanism, composition and
meetings of the Audit Committee are included in the Corporate
Governance Report.

Energy Conservation, Technology Absorption and Foreign
Exchange Earnings and Outgo

The details as required under Section 134(3)(m) of the Act read
with Rule 8 of the Companies (Accounts) Rules, 2014, is detailed
in Annexure C.

Corporate Governance

A report on corporate governance is furnished as Annexure D
and forms part of this report. This includes other disclosures as
required under the provisions of the Act. The Company has

complied with the conditions relating to corporate governance as
stipulated in Regulation 34 of the Listing Regulations.

Corporate Social Responsibility (CSR)

The CSR Committee comprises of 1. Mr. Ashwin Chandran,
2. Mr. Prashanth Chandran and 3. Mr. Vijay Raghunath. This
committee takes care of CSR policy execution to ensure that the
CSR objectives of the Company are met. The CSR policy deals
with allocation of funds, activities, identification of programmes,
approval, implementation, monitoring and reporting.

For the financial year 2024-25, the Company spent ' 79.09 lakhs
on CSR activities as per the provisions of the Companies
Act. Annual report on Corporate Social Responsibility is provided
in Annexure E.

The CSR policy is available on the Company’s website
http://www.precot.com/investors.

Particulars of Loan, Guarantees or Investments

Details as per the provisions of Section 186 of the Act, is given
under notes to financial statements.

Related Party Transactions

None of the transactions with related parties falls under the
scope of Section 188(1) of the Act. Information on transactions
with related parties pursuant to Section 134(3)(h) of the Act read
with rule 8(2) of the Companies (Accounts) Rules, 2014 are given
in Annexure F in Form AOC-2 and the same forms part of
this report.

The Board has approved a policy for related party transactions which is
available on the Company’s website http://www.precot.com/investors.

Directors' responsibility statement
The Directors confirm that:

In pursuance of Section 134 (5) of the Companies Act, 2013, the
Directors hereby confirm that:

a) In the preparation of the annual accounts, 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 the 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;

e) The Directors, had laid down internal financial controls to be

followed by the Company and that such internal financial
controls are adequate and 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;

Statutory Auditors

M/s VKS Aiyer & Co., Chartered Accountants (Firm Registration
No. 000066S), pursuant to the provisions of Section 139 of the
Act, were appointed as the statutory auditors of the Company for a
term of 5 years from the conclusion of the 61^st AGM till the
conclusion of the 66^th AGM to be held in the year 2028.

They have confirmed that they are not disqualified and are eligible
to continue in the office for the year 2025-26.

Cost Auditor

Pursuant to Section 148 of the Act, read with the Companies (Cost
Records and Audit) Rules 2014, the Board of Directors, on the
recommendation of the Audit Committee, appointed Mr. R Krishnan,
Cost Accountant (Associate regn. no. 7799), as the cost auditor of
the Company for the financial year 2025-26.

Accordingly, a resolution seeking member’s ratification for the
remuneration payable to Mr. R Krishnan, Cost Auditor is included
as Item No.10 of the AGM notice.

Secretarial Auditor

Pursuant to Section 204 of the Act and SEBI Listing Regulations,
the Board of Directors have recommended the appointment of
M/s KSR & Co Company Secretaries LLP, Coimbatore as
secretarial auditors of the Company for a term of 5 (five)
consecutive years from financial year 2025-26 till 2029-30 to
shareholders for their approval.

Resolution for the appointment of Secretarial is included as Item
No.9 of the AGM notice.

Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider
Trading) Regulations, 2015, the ’Insider Trading Code’ to regulate,
monitor and report trading by insiders and the ’Code of Practices
and Procedures for fair disclosure of Unpublished Price Sensitive
Information’ are in force.

Change in nature of business

There was no change in the nature of the business of the
Company during the year under review.

Closure of operations of Hindupur unit

Considering the unsustainable losses over the past several years
and no improvement in the outlook, the Board of Directors have
decided to close operations of spinning unit located at Hindupur,
Andhra Pradesh. This decision has been taken after due evaluation
and consideration of the profitability of other units in the Company.
While there will be a temporary reduction in operational revenues,
it will be compensated by shifting productive assets to other units.

The Company is confident that this decision will strengthen the
Spinning Division and improve its profitability going forward.

Deposits from public

The Company has not accepted any deposits from the public and
as such, no amount on account of principal or interest on deposits
from public was outstanding as on the date of the balance sheet.

Material Changes

No material changes or commitments affecting the financial
position of the Company occurred between the end of the financial
year (i.e.31^st March, 2025) and the date of this report.

Vigil Mechanism/ Whistle Blower Policy

The Company has formulated and published a Whistle Blower
Policy to provide Vigil Mechanism for employees including Directors
of the Company to report genuine concerns and to ensure strict
compliance with ethical and legal standards across the Company.
The provisions of this policy are in line with the provisions of the
Section 177(9) of the Act and Listing Regulations, are available on
the website of the Company at http://www.precot.com/investors.
The details of Whistle Blower Policy forms part of the Corporate
Governance Report annexed with this report.

Disclosure under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in
line with the requirements of the with the requirements of The
Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013 and constituted an Internal
Committee to address the complaints regarding sexual
harassment. All employees are covered under this policy.

a. Number of complaints filed during the - Nil

financial year

b. Number of complaints disposed of - Nil

during the financial year

c. Number of complaints pending as - Nil

on end of the financial year

The details relating to Complaints forms part of the Corporate
Governance report.

Details of Application made or any proceeding pending
under The Insolvency and Bankruptcy Code, 2016 during the
year

No applications have been made and no proceedings are pending
against the Company under the Insolvency and Bankruptcy Code,
2016 during the year under review.

Details of difference between amount of the valuation done at
the time of one time settlement and the valuation done while
taking loan from the banks or financial institutions along with
the reasons thereof

The disclosure under this clause is not applicable as the Company
has not undertaken any one-time settlement with the banks or
financial institutions during the year under review.

Unclaimed Shares

In accordance with the requirement of Regulation 34(3) and
Schedule V Part F of Listing Regulations, the details in respect of
equity shares lying in the suspense account is as follows. .