Prakash Woollen & Synthetic Mills Ltd Directors Report

KEY HIGHLIGHTS/ REVIEW OF OPERATIONS

During the period under consideration the revenue of the Company has marginally increase from Rs. 10519.40 lakh to Rs. 10631.80 lakh showing an increase of 1.07%.

The Company has incurred a net loss of Rs. 88.77 lakh during the period under review whereas in the previous year, there was a net profit of Rs. 125.65 lakh.

During the financial year, the company has incurred operating loss of Rs. 105.80 lakh before tax whereas operating loss in the previous year was Rs. 909.13 lakh. Thus, the company has reduced the operating loss by Rs. 803.33 lakh which can be said a marked improvement in business operation efficiency.

STATE OF AFFAIRS

The company specializes in the production of Mink Blankets. The manufacturing unit has state-of-the-art machinery based on the advanced technology which has been specially imported for the production facility. The company has stream lined facilities for knitting, dyeing, processing, printing, finishing and packaging. The complete facility is backed by the team of highly skilled and experienced workforce, who ensure zero defects at every stage of production. But the company has not been able to utilize the expanded installed capacity due to cycle of slack in demand. When demand grows, it is expected that the company will achieve growth.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There are no material changes affecting the affairs of the company which have occurred between the end of the financial year

CHANGE IN THE NATURE OF BUSINESS

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

DIVIDEND

No dividend has been recommended.

GENERAL RESERVES

No amount was transferred to General Reserve during the financial year under review.

DEPOSITS

Your Company has no unclaimed / unpaid matured deposit or interest due thereon. Your Company has not accepted any deposits covered under ‘Chapter V - Acceptance of Deposits by Companies under the Companies Act, 2013 during the financial year ended March 31, 2026, but there was an outstanding loan of Rs. 698 Lakh including interest from following: a. Director of the company b. Un-secured loan by promoters which is exempted as deposit under Rule 2(c) (viii) and 2(c)(xiii) of Companies (Acceptance of Deposit) Rules, 2014.

CAPITAL STRUCTURE

The Authorized Share Capital of the Company as on March 31, 2026 was Rs. 12,00,00,000/- divided into 1,20,00,000 equity shares of Rs. 10/- each. The Subscribed and Paid up Equity Share Capital as at March 31, 2026 was Rs. 10,25,97,500/- divided into 1,02,59,750 equity shares of Rs. 10/- each fully paid-up.

During the year under review, the Company has neither issued any shares with differential voting rights nor has granted any stock options or sweat equity Shares. There was no buy back of shares. As on March 31, 2026, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(3) read with Schedule V (B) of the Securities of Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, is given in a separate section forming part of the Annual Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your company does not have any unlisted/listed subsidiary company or Joint Venture or any Associate Company. Therefore, pursuant to the provisions of the Rule 8 of Companies (Accounts) Rules, 2014, there is no requirement to attach Form AOC-1.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act 2013, your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2026, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at March 31, 2026 and of the losses of the Company for the year ended on that date; c) the Directors have 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 have prepared the annual accounts on a ‘going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions ( RPT) that were entered during the FY were on arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. There was no material RPT transacted by the Company during the year that required Shareholders approval under Regulation 23 of the Listing Regulations. None of the transactions with related parties fell under Section 188(1) of the Act. The disclosure of RPTs as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2025-26 and hence does not form part of this report.

The Policy on dealing with related party transactions and on determining materiality of related party transactions as approved by the Board may be accessed on the Companys website at the link https://prakashwoollen.com/InvestorFiles/RPT12.02.2025.pdf

RISK MANAGEMENT .

In accordance with provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is not required to have a Risk Management Committee. However, Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Company has a Risk Management Policy in place to identify and mitigate risks that may impact its business objectives.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

During the year under review, no application was made nor were any proceedings pending under the Insolvency and Bankruptcy Code, 2016. Therefore, the disclosure of details regarding any application made or proceeding pending at the end of the Financial Year is not applicable.

DETAILS OF EMPLOYEES

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company maintains a zero-tolerance policy towards sexual harassment in the workplace. Our comprehensive policy on prevention, prohibition and redressal is fully aligned with the sexual harassment of women at workplace (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH) and its associated rules. It is committed to providing equal opportunities to all employees, irrespective of the race, caste, sex, religion, color, nationality, disability, or any other distinguishing characteristics.

The details of the framework for prevention of sexual harassment at work place are placed on the website of the company at the link :-https://prakashwoollen.com/InvestorFiles/sd.pdf In line with the act the company has established an internal committee to address complaints and ensure compliance. The Internal Committee meets regularly to stay informed about the policy and to promote awareness of POSH provisions.

COMPLIANCE OF THE PROVISIONS RELATING TO THE MATERNITY BENEFIT ACT 1961

The board confirmed that the company is in compliance with the provisions of the Maternity Benefit Act, 1961, as amended from time to time.

INTERNAL FINANCIAL CONTROLS

The Board has ensured the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The Companys Internal Control Systems are commensurate with the nature of its business and the size and complexity of its operations. It comprises of audit and compliance by internal audit checks by M/s Akshay Anand & Co. - Chartered Accountants F-75, Wave Greens Colony, Opp. Wave Mall, Moradabad, Internal Auditor of the Company.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the financial transactions and review various business processes. Independence of the Internal Auditors and compliance is ensured by the direct report of Internal Auditors to the Audit Committee of the Board.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Company is managed and controlled by a Board which is an optimum blend of Executives and Non-Executive Professional Directors. As on 1st April, 2025 the Board of Directors of the Company consists of six (6) Directors including one (1) Chairman & Managing Director, one (1) Whole time Director & CFO, one (1) Whole time Director and three (3) Non-executive Directors, out of which two (2) are Independent Directors, and one (1) is Woman Independent Director.

As on 31ST March, 2026, the Board of Directors of the Company consists of Eleven (11) Directors including one (1) Managing Director, one (1) Whole time Director & CFO, three (3) Whole time Director and six (6) Non-executive Directors, out of which four (4) are Independent Director including Woman Independent Director and two (2) Non-Executive and Non-Independent Directors The composition of the Board is in compliance with Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the relevant provisions of the Companies Act, 2013. All the Directors possess the requisite qualifications and experience in general corporate Management, finance, banking and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.

Retirement by rotation:

Mr. Vijay Kumar Gupta, Whole- Time Director, & Mr. Ashish Gupta Whole- Time Director are liable to retire by rotation and being eligible offer themself for re-appointment at ensuing Annual General Meeting.

The Board recommends their re-appointment to the Shareholders.

Appointments:

Mr. Ashish Gupta (DIN: 08708369) and Mr. Kapil Gupta (DIN: 08708451) were appointed as additional directors and Whole-time Directors of the Company w.e.f. 23rd July, 2025. Mr. Mayur Gupta (DIN: 11191064) (non-promoter non-independent and non-executive director) and Mr. Pankaj Kumar Mittal (DIN: 02169695) (non-promoter independent and non-executive director) were also appointed as additional directors. The Board also recommended their appointment to shareholders. The appointment of Mr. Daya Kishan Gupta as Managing Director for 3 years w.e.f 01.09.2025 to 31.08.2028 and Mr. Deepak Oberoi (DIN: 11191007) as Non promoter and Non-Executive Director was also recommended to shareholders for approval.

The shareholders approved the above appointments in the AGM held on 30.08.2025.

Cessation:

No cessation during the financial year 2025-2026.

Key Managerial Personnel (KMP)

Mr. Daya Kishan Gupta, Managing Director, Mr. Adeep Gupta, Whole time Director, Mr. Kapil Gupta, Whole time Director, Mr. Ashish Gupta, Whole-time Director. Mr. Vijay Kumar Gupta, Whole-time Director & CFO and Ms. Sneha Agarwal, Company Secretary were the KMPs of the Company in terms of Section 203 of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 during the period under review

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of Section 149 read with Schedule IV of the Companies Act, 2013. The Board confirms that the independent directors meet the criteria as laid down under the Companies Act, 2013.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

In accordance with the provisions of Schedule IV to the Companies Act, 2013 and Regulation 25(3) of SEBI (LODR), 2015, a separate meeting of the Independent Directors of the Company was held on 07th March 2026 to discuss the agenda items as prescribed under the applicable laws. The meeting was attended by all Independent Directors of the Company.

BOARD ANNUAL EVALUATION

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation i.e. evaluation of the performance of: (i) the Board as a whole, (ii) individual directors (including independent directors and Chairperson) and (iii) various Committees of the Board. The Performance evaluation was carried out by the Nomination and Remuneration Committee based on the “Annual Evaluation Framework” prepared by the Committee. The framework includes the evaluation of directors on various parameters such as:

Board dynamics and relationships

Information flows

Decision-making

Relationship with stakeholders

Company performance and strategy

Tracking Board and committees effectiveness

Peer evaluation

In compliance with the Companies Act, 2013 and Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board has carried out an evaluation of its own performance, Committees and performance of individual Directors during the period under review. The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfillment of Directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation involves Self-Evaluation by the Board Members and subsequent assessment by the Board of Directors. The Board of Directors expressed their satisfaction with the evaluation process.

The details of the framework for performance evaluation of Independent Directors, Board, Committees and other individual Directors are placed on the website of the company at the link: https://prakashwoollen.com/InvestorFiles/independent%20director.pdf The details of programs for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: https://prakashwoollen.com/InvestorFiles/07.03.2026.pdf

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS PROVIDED UNDER THE COMPANIES ACT, 2013

The Company has formulated a Nomination and Remuneration Policy which is available on the website of the company. The link of the same is https://prakashwoollen.com/InvestorFiles/Nrc.pdf Other details are provided in Corporate Governance Report.

CODE OF CONDUCT FOR BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL

The Board of Directors has framed a code of conduct for BOD, KMPS, and Senior Management Personnel which is available on the website of the company. The link of the same is https://prakashwoollen.com/InvestorFiles/CODE%20OF%20CONDUCT.pdf

AUDITORS Statutory Auditors

The shareholders of the Company at AGM held on August 28, 2024 had appointed M/s. Harshit Mehrotra and Associates, Chartered Accountants (Firm Registration No. 032921C), as the Statutory Auditor of the Company for the First term of 5 years, i.e., from the conclusion of the Forty Fifth AGM till the conclusion of the Fiftieth AGM of the Company to be held in the year 2030.

Auditors Report

The Report given by M/s. Harshit Mehrotra and Associates, Statutory Auditors on the financial statement of the Company for the year ended March 2026 is part of the Annual Report. There are no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

Cost Auditors

Companies (cost records and audit) (Amendment) Rules, 2015 are not applicable on the Company for the financial year 2025 26.

Secretarial Auditor

Mr. Rupinder Singh Bhatia, Practicing Company Secretary, (COP No. 2514) (Peer Review No: 1496/2021), was appointed as Secretarial Auditor of the Company to conduct Secretarial Audit for a period of five consecutive years, commencing from April 1, 2025 to March 31, 2030, pursuant to the provisions of Regulation 24A of SEBI LODR read with Section 204 of the Companies Act, 2013 or such other applicable provisions, if any.

The Secretarial Audit Report for the Financial Year ended March 31, 2026, is attached herewith as Annexure - I and forms an integral part of this Annual Report. The Secretarial Audit Report is self-explanatory and does not contain any qualification, reservation or adverse remark.

Further the Secretarial Auditors of the Company have not reported any incidence of fraud as specified under Section 143(12) of the Act.

COMPOSITION OF COMMITTEES Audit Committee

The Board of Directors of the Company has a duly constituted Audit Committee in terms of the provisions of Section 177 of the Companies Act, 2013 read with the Rules framed thereunder and Regulation 18 of the Listing Regulations. The terms of reference of the Audit Committee has been approved by the Board of Directors. Composition of the Audit Committee, number of meetings held during the year under review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report.

The Audit Committee comprises Four (4) Non-Executive Independent Directors namely Dr. Sandeep Raj (Chairman), Dr. Swatantra Agrawal, Dr. Latha Agarwal, CA Pankaj Kumar Mittal and one (1) Whole-Time Director/ CFO namely Mr. Vijay Kumar Gupta as other members. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee

A Nomination and Remuneration Committee has been constituted under section 178 of the Companies Act 2013 read with the Rules framed thereunder and Regulation 19 of the Listing Regulations for formulization of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees The Board of Directors constituted a Nomination and Remuneration Committee comprising three (3) Non-Executive Independent Directors namely Dr. Swatantra Agrawal as (Chairman), Dr. Sandeep Raj (Member) and Dr. Latha Agarwal (Member). The function of the Nomination and Remuneration Committee includes recommendation of appointment of KMP(s), Whole-time Director(s)/ Managing Director/Joint Managing Director and recommendation to the Board of their remuneration.

The aforesaid policy has been posted on the Website of the Company: -https://prakashwoollen.com/InvestorFiles/Nrc.pdf

Stakeholder Relationship Committee

The Board of Directors constituted a Stakeholder Relationship Committee comprising two (2) Non- Executive Independent Directors namely Dr. Sandeep Raj (Chairman), Dr. Swatantra Agrawal and one (1) Whole Time Director namely Mr. Adeep Gupta as other members. The Stakeholder Relationship Committee, inter alia, oversees and reviews all matters connected with the investor services in connection with applications received and shares allotted in the Initial Public Offer, status of refund account, conversion of partly paid shares into fully paid shares, rematerialization and dematerialization of shares and transfer of shares of the Company.

The Committee oversees performance of the Registrar and Transfer Agents of the Company and recommends measures for overall improvement in the quality of investor services.

Corporate Social Responsibility Committee

Provisions of Section 135 of the Companies Act, 2013, pertaining to the Corporate Social Responsibility (CSR) are not applicable on the company.

Finance Committee

The Board of Directors of the Company has a duly constituted Finance Committee in terms of the provisions of Section 179(3) of the Companies Act, 2013 read with the Rules framed thereunder. The terms of reference of the Finance Committee has been approved by the Board of Directors. Composition of the Finance Committee, number of meetings held during the year under review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report.

The Finance Committee comprises three Executive Directors namely Mr. Vijay Kumar Gupta (Chairman), Mr. Daya Kishan Gupta and Mr. Adeep Gupta as other members.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of provisions of Section 177 of the Companies Act, 2013 and Rules framed thereunder read with Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, includes an Ethics & Compliance Task Force comprising senior executives of the Company. The Company has a whistle blower policy/ vigil mechanism for directors and employees to report genuine concerns or grievances.

The whistle Blower policy has been posted on the Website of the Company: -https://prakashwoollen.com/InvestorFiles/whistle%20blower%20policy.pdf

MEETINGS OF THE BOARD OF DIRECTORS

Five meetings of the Board of Directors were held during the financial year 2025-26 i.e. on 30.05.2025, 23.07.2025, 12.08.2025, 30.10.2025 and 04.02.2026. The details of the meetings of the Board held during the financial year 2025-26 forms part of the Corporate Governance Report.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

The Company has not given loan in terms of section 186 and has not made investment and provided security in terms of section 186 of the Companies Act, 2013.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure II to this Report.

ANNUAL RETURN

Pursuant to Sec 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of Annual Return of 2025-2026 can be accessed at Companys website at https://prakashwoollen.com/Home/ Investors_Title?Id=b3718f00-02bd-415d-91cb-cf4ea148cf7c.

PARTICULARS OF EMPLOYEES

Remuneration of Independent Director is sitting fees. c. The percentage increase in the median remuneration of employees in the financial year: 11.44% d. The number of permanent employees on the rolls of Company: 404 e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 53.45%.

Increase in the managerial remuneration for the year was 0.00%. f. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

INFORMATION REQUIRED UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 FOR THE PERIOD FROM APRIL 1, 2025, TO MARCH 31, 2026.

SHARES a. Buy Back of Securities

The Company has not bought back any of its securities during the year under review. b. Sweat Equity The Company has not issued any Sweat Equity Shares during the year under review. c. Bonus Shares No Bonus Shares were issued during the year under review. d. Issue of Shares with differential voting rights e. Issue of Shares under Employee Stock Option Scheme No such issue of shares under employee stock option scheme was made. f. Issue of shares through private placement Nil g. Issue of Shares without differential voting rights Nil.

GENERAL DISCLOSURES

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:

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for the assistance and cooperation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.