Rajapalayam Mills Ltd Directors Report

TO THE MEMBERS

Your Directors have pleasure in presenting their 90 th Annual Report and the Audited Accounts of the Company for the year ended 31 st March, 2026.

1. FINANCIAL RESULTS

The financial results for the year ended 31 st March, 2026 after charging all expenses but before deducting finance cost and depreciation have resulted in operating profit (EBITDA) of Rs. 14,636.77 Lakhs against Rs. 9,881.61 Lakhs for the previous financial year 2024-25. Summary of Separate Financial Results of the Company is furnished below:

( Rs. in Lakhs)

Financial Results - Separate	Year ended 31-03-2026	Year ended 31-03-2025
Revenue	96,688.76	92,405.99
Operating Profit : Profit before Interest, Depreciation and Tax (PBIDT)	14,636.77	9,881.61
Less: Interest	9,209.11	9,089.90
Profit before Depreciation and Tax (PBDT)	5,427.66	791.71
Less: Depreciation	7,539.23	7,534.28
Profit / (Loss) before Exceptional Items	(2,111.57)	(6,742.57)
Exceptional Items	84.40	74.19
Profit / (Loss) before Tax	(2,027.17)	(6,668.38)
Less: Tax Expenses
Current Tax	\u2013	\u2013
Deferred Tax Expenses / (Savings)	(514.79)	(1,647.91)
Profit / (Loss) after Tax	(1,512.38)	(5,020.47)
Other Comprehensive Income / (Loss) for the Year (Net of Tax)	177.20	(150.82)
Total Comprehensive Income / (Loss) for the Year (TCI)	(1,335.18)	(5,171.29)

2. SHARE CAPITAL

The Paid-up Capital of the Company is Rs. 922.02 Lakhs (PY: Rs. 922.02 Lakhs) consisting of 92,20,200 Shares of Rs. 10/- each.

3. DIVIDEND

Your Directors have pleasure in recommending a Dividend of Rs. 0.50/- per share (PY: Rs. 0.50/- per share). The total amount of Dividend outgo for the year will be Rs. 46.10 Lakhs (PY: Rs. 46.10 Lakhs).

DIRECTORS REPORT

As per Income Tax Act, 2025, the dividend will be taxable in the hands of the Shareholders and the Company will make payment of dividend after deducting applicable TDS.

The Company has declared Dividend out of Free Reserves in accordance with Companies Act, 2013 and the payment of Dividend is in accordance with the Dividend Distribution Policy of the Company. The Policy is available on the website of the Company and the same can be accessed with the following web link:

https://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/dividend-distribution-policy.pdf

4. TAXATION

The Company has opted to pay tax under Section 115BAA of the Income Tax Act, 1961. The Company is not liable to pay income tax and not provided any amount towards current tax provision. Deferred Tax of Rs. 514.79 Lakhs (PY: Rs. 1,647.91 Lakhs) has been withdrawn for the financial year 2025-26.

5. MANAGEMENT DISCUSSION AND ANALYSIS TRADE CONDITIONS

5.1 COTTON

The cotton production in India during the cotton season 2024-25 was 313 lakh bales (170 kg each), compared to 327 lakh bales in the previous season, reflecting a decline of 4% due to reduced acreage.

At the beginning of the cotton season 2025-26, the Cotton Association of India (CAI) estimated the cotton crop for the new season at 305 lakh bales, compared to 313 lakh bales in the previous year. However, the revised estimate of cotton arrivals increased to 320 lakh bales. The Cotton Corporation of India (CCI) procured 91 lakh bales during the cotton season 2025-26 (as on 05-02-2026) and further increased the MSP for medium staple cotton and long staple cotton by 8%. Despite some correction in cotton prices, the decline in yarn prices was significantly sharper, resulting in a wider disparity that adversely affected the margins of yarn spinners across India.

International cotton prices traded in the range of 74.05 US cents per LB to 78.81 US cents per LB, compared to domestic cotton prices, which traded in the range of 78.75 US cents per LB to 81.50 US cents per LB.

The Company strategically shifted its focus towards more value-added counts and imported higher-quality cotton when prices were at reasonable levels. This strategy enabled the Company to procure diversified varieties of cotton from across the globe and offer competitively priced yarn. In order to enhance the availability of raw cotton in the domestic market, stabilize cotton prices, and reduce input costs, the Government of India exempted import duty on cotton from 30-09-2025 to 31-12-2025.

5.2 YARN PRODUCTION

The production volume has increased to 142.20 Lakhs Kgs during the FY 2025-26 as against 141.01 Lakhs Kgs of previous year due to better capacity utilization.

5.3 SALE OF YARN

During FY 2025-26, the Companys sales volume increased to 134.71 lakh kgs as against 131.80 lakh kgs in the previous year. However, the sales value of yarn decreased to Rs. 587.67 crores during FY 2025-26, compared to Rs. 644.61 crores in the previous year.

Due to geopolitical challenges and sluggish market demand for cotton yarn, spinning mills faced severe pressure on margins. This situation forced many spinning mills across India to operate at lower capacities, with several mills reducing production due to substantial losses in yarn manufacturing. However, the Companys focus on producing a flexible and diversified range of products helped protect its sales volumes during this sluggish period. Further, the Red Sea crisis significantly impacted exports, resulting in higher freight and insurance costs, along with shipping delays.

The Companys continued focus on strengthening its infrastructure to manufacture diverse products, including various high-quality value-added yarns, and its collaboration with customers to develop innovative products, helped maintain capacity utilization and sales volumes in the export market. However, sales volume of value-added yarns such as Elitwist, Gassing, High Twist, Mélange, Core Yarn, and Mercerized Yarn decreased to 2,800 tonnes during FY 2025-26 from 3,255 tonnes in the previous year.

5.4 EXPORTS

The Company has made export of Cotton Yarn (including merchant exports) during the financial year 2025-26 with a value of Rs. 210.02 Crores compared to Rs. 267.45 Crores in the previous year. The Companys focus on Product enhancement through technology advancement, traceability of entire production process, continuous customer-centricity and production of unmatched quality helped it to maintain export volume.

Your Directors are thankful to M/s. Asahi Kasei Advance Corporation, Japan for their continued support and efforts towards promoting exports to Japan.

5.5 FABRIC DIVISION

The Fabric Unit is operating with 328 Looms and finishing capacity capable of producing 50,000 meters of finished fabrics per day.

In terms of production and sales, the Fabric unit manufactured 162 Lakhs Meters of Fabric (compared to 155 Lakhs Meters in the previous year) and sold 152 Lakhs Meters of Fabrics (compared to 153 Lakhs Meters in the previous year). The total revenue generated by the Fabric unit for the financial year 2025-26 amounted to Rs. 340.68 Crores (compared to Rs. 241.37 Crores in the previous year). Additionally, the export turnover of Fabric for the financial year 2025-26 was Rs. 149.67 Crores (compared to Rs. 57.44 Crores in the previous year).

The quality of fabric produced by the Company has been well accepted both in domestic and export markets, leading to numerous enquiries from leading brands across the globe for the supply of processed fabric.

5.6 POWER COST

During the financial year 2025-26, the Company was able to consume power from its own wind farms to the extent of 56% (PY: 50%) of the total power requirement. Inspite of increase in power tariff by Tamil Nadu Power Distribution Corporation Limited and increased consumption, the power cost was decreased to Rs. 55.82 Crores, from Rs. 59.61 Crores in the previous year, due to better wind velocity, favourable weather conditions and Companys endeavor towards optimization of renewable power.

5.7 FINANCE COST

The finance cost of the Company increased to Rs. 92.09 Crores during the financial year 2025-26 from Rs. 90.90 Crores in the previous financial year. Additional working capital requirements, enhanced Fabric capacity and additional term loan borrowings had resulted in an increased outflow of finance costs during the FY 2025-26 compared to FY 2024-25.

5.8 DIVIDEND INCOME

During the financial year 2025-26, the Company received dividend income of Rs. 7.61 Crores (PY: Rs. 8.67 Crores) and the particulars of dividend received are provided under Note No.50(a) (ix).

5.9 KEY FINANCIAL RATIOS

Pursuant to Schedule V(B) of SEBI (LODR) Regulations, 2015, the Key Financial Ratios for the year 2025-26 are given below:

S. No. Particulars	31-03-2026	31-03-2025	Variation in %	Formula adopted
1 Debtors Turnover Ratio (Days)	77	71	8	365 Days / (Net Revenue / Average Trade Receivables)
2 Inventory Turnover Ratio (Days)	119	128	(-) 7	365 Days / (Net Revenue / Average Inventories)
3 Interest Coverage Ratio	0.78	0.26	200	(Profit Before Tax + Interest)/ (Interest + Interest Capitalised)
4 Current Ratio	1.12	1.15	(-) 2	Current Assets / (Total Current Liabilities - Other Financial Liabilities - Current maturities of Long Term Debt)
5 Debt - Equity Ratio	2.74	2.57	7	Total Debt / Total Equity
6 Operating Profit Margin	16%	11%	48	EBITDA / Net Revenue
7 Net Profit Margin	(-) 2%	(-) 6%	-	Net Profit / Net Revenue
8 Return on Net worth	(-) 3%	(-) 11%	-	Total Comprehensive Income / Average
				Net worth
9 Total Debt / EBITDA	7.80	11.21	(-) 30	Total Debt / EBITDA
10 Return on Capital Employed	5%	3%	101	(TCI + Interest)/ (Average of Equity plus Total Debt)
11 Price Earnings Ratio	N/A	N/A		Market Price per share as at 31 st March / Earning per share

Note: EBITDA denotes Profit Before Tax + Interest + Depreciation

Reason for variations in excess of ± 25%:

The increase in operating profit during the financial year 2025-26 has resulted in an improvement in the Interest Coverage Ratio, Operating Profit Margin, Total Debt / EBITDA Ratio and Return on Capital Employed.

6. MODERNISATION / EXPANSION

During the FY 2025-26, the Company has invested an amount of Rs. 35.09 Crores in modernizing Comber Machine, Carding Machine, Sectional Warping Machine, Raising Machine etc. which has been funded from internal accruals and loan from Banks.

7. PROSPECTS FOR THE CURRENT YEAR

Volatility in cotton prices continues, with both cotton and yarn prices experiencing wide fluctuations. According to data published by the Foreign Agricultural Service of the USDA, global cotton production for the 2026-27 season is expected to decline by 5% due to lower production projections for Australia, Brazil, China, Pakistan, Turkey, and the United States. However, global cotton consumption is projected to grow by 1.33% owing to larger global cotton supplies, replenishment of inventories across the textile and apparel supply chain and prospects for global economic growth.

The India-UK Free Trade Agreement signed in May, 2025 has opened new export opportunities for the textile industry. Similarly, the India-Europe Free Trade Agreement, hailed as the mother of all deals, signed in January 2026, marks a strategic breakthrough in Indias global trade engagement.

The Company continuously monitors various process parameters and implements robust system controls to deliver consistent quality yarn and fabric to end customers and leading brands. Strengthening its product portfolio with more value-added and customized yarn counts such as Mercerized Yarn, Mélange Yarn, and Core Yarn is expected to help mitigate the impact of falling demand for commodity counts. Over the last five years, the share of value-added products has increased from 12% to 40%.

The Companys modernization of spinning mills and forward integration through the establishment of fabric manufacturing and processing facilities are expected to drive top-line growth and protect margins during the current year. Further, the Companys initiatives towards sustainable manufacturing practices, including water reuse, zero-liquid-discharge systems, and bio-treatment of wastewater for recycling, reinforce its commitment to environmental sustainability and position it among the leading textile companies globally.

The synergies between the Companys spinning and fabric capacities are expected to enable it to offer a wide range of textile products with quick turnaround times. The Company has secured an A Grade in Social Audit Compliance, and leading domestic and international brands are increasingly approaching the Company for sourcing yarn and fabric. The Company remains confident that these measures will contribute to healthy top-line growth and sustainable profitability in the years ahead.

8. WINDMILL

The Company has windmills with installed capacity of 35.15 MW for its captive power consumption. During the financial year 2025-26, the wind farm generated 696 Lakhs Kwh, which is higher than 573 Lakhs Kwh generated in the previous year. This was due to high wind velocity and favourable weather conditions during the current year. All the units generated by the windmills were adjusted for captive consumption at the Companys Spinning / Fabric Division. Monetary value of power generated by the windmill division during the year was Rs. 54.28 Crores, as compared to Rs. 43.13 Crores in the previous year.

9. ASSOCIATE COMPANY

The Company has three Associate Companies: M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited and M/s. Ramco Systems Limited.

As per Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companys Associates is attached in Form AOC-1 as Annexure - I .

CONSOLIDATED FINANCIAL STATEMENTS

As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (LODR) Regulations, 2015, Companies are required to prepare consolidated financial statements of its Subsidiaries and Associates to be laid before the Annual General Meeting of the Company. Accordingly, the consolidated financial statements incorporating the accounts of Associate Companies, viz. M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, along with the Auditors Report thereon, form part of this Annual Report. As per Section 136 (1) of the Companies Act, 2013, the Financial Statements including Consolidated Financial Statements are available on the Companys website at the following link: https://www.rajapalayammills.co.in/investors/financial-report/

The consolidated profit of the Company amounted to Rs. 11,436.13 Lakhs for the year ended 31 st March, 2026 as compared to Rs. 1,704.52 Lakhs of the previous year.

The Consolidated Total Comprehensive Income for the year under review is Rs. 11,385.13 Lakhs as compared to Rs. 1,332.14 Lakhs of the previous year.

10. INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. The ERP System developed by M/s. Ramco Systems Limited has been installed for online monitoring of all functions and management information reports are being used to have better internal control system and to make timely decisions.

11. VIGIL MECHANISM / WHISTLE BLOWER POLICY

In compliance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and Whistle Blower Policy. The Policy provides a mechanism for the receipt, retention and treatment of complaints and to protect the confidentiality and anonymity of the stakeholders. The complaints can be made in writing and dropped into Whistle Blower Drop Boxes or sent through e-mail to dedicated e-mail addresses accessible only by the Corporate Ombudsman. The Policy also provides complainants with access to the Chairman of the Audit Committee. The web link for the Vigil Mechanism is disclosed in the Corporate Governance Report.

12. DIRECTORS AND KEY MANAGERIAL PERSONNAL

Smt. Soundara Kumar (DIN: 01974515) ceased to be a Non-executive independent director of the Company upon completion of her second term of five consecutive years with effect from close of business hours on 26 th August, 2025.

Justice Smt. Chitra Venkataraman (Retd.) (DIN: 07044099) has been appointed as a Non-Executive Independent Director with effect from 11 th August, 2025 and her first term of office ended on 29 th August, 2025. The Board of Directors at their meeting held on 29 th August, 2025 had re-appointed Justice Smt. Chitra Venkataraman as a Non-Executive Independent Director for her second term of five (5) consecutive years commencing from 30 th August, 2025 to 29 th August, 2030.

In the opinion of the Board, the above Independent Director possess integrity, expertise and experience for being appointed as an Independent Director and she is exempted from clearing the Online Proficiency Self-Assessment Test conducted by Indian Institute of Corporate Affairs.

According to the provisions of the Companies Act, 2013 and the Memorandum and Articles of Association of the Company, the following Directors will retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment:

1. Shri S.S. Ramachandra Raja (DIN: 00331491)

2. Shri A.V. Dharmakrishnan (DIN: 00693181)

Pursuant to Rule 8(5)(iii) of the Companies (Accounts) Rules, 2014, there have been no other changes in the Directors or Key Managerial Personnel during the year, except as mentioned above.

The Independent Directors hold office for a fixed term of 5 years from the date of their appointment and are not liable to retire by rotation.

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, stating that they meet the independence criteria provided in Section 149(6) of the Companies Act, 2013.

Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. The Company has formulated a Code of Conduct for the Directors and Senior Management Personnel, which has been complied with.

The Audit Committee has four members, out of which three are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.

The Company has a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and other employees duly approved by the Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, in accordance with Section 178(3) of the Companies Act, 2013.

As per the Proviso to Section 178(4), the salient features of the Nomination and Remuneration Policy should be disclosed in the Boards Report. Accordingly, the following disclosures are given:

Salient Features of the Nomination and Remuneration Policy:

The objective of the Policy is to ensure that:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(b) the relationship of remuneration to performance is clear and meets the appropriate performance benchmarks;

(c) remuneration to directors, key managerial personnel and senior management is appropriate to the working of the Company and its goals.

The Nomination and Remuneration Committee and this Policy are in compliance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The web address of the Policy is

https://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/nomination-and-remuneration-policy.pdf

As required under Regulation 25(7) of LODR, the Company has programmes for familiarisation for the Independent Directors about the nature of the industry, business model, roles, rights and responsibilities of Independent Directors and other relevant information. As required under Regulation 46(2)(i) of LODR, the details of the Familiarisation Programme for Independent Directors are available at the Companys website, at the following link - https://www.rajapalayammills.co.in/wp-content/uploads/2025/02/Familiarisation.pdf

The details of familiarization programme are explained in the Corporate Governance Report also.

13. EVALUATION OF BOARD

Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, Performance of the Board as a whole and its Members and other required matters.

Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria for performance evaluation of Independent Directors, which will be based on attendance, expertise and contribution brought in by the Independent Director at the Board Meeting, which shall be taken into account at the time of re-appointment of Independent Director.

Pursuant to Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board of Directors have evaluated the performance of Independent Directors and observed the same to be satisfactory and their deliberations beneficial in Board / Committee meetings.

As per Section 178(2) of the Companies Act, 2013, the Board of Directors have evaluated the performance of the Committees of the Board.

Pursuant to Regulation 4(2)(f)(ii)(9) of SEBI (LODR) Regulations, 2015, the Board of Directors have reviewed and observed that the evaluation frame work of the Board of Directors was adequate and effective.

The Boards observations on the evaluations for the year were under review similar to their observations for the Previous year. No specific actions have been warranted based on current year observations. The Company would continue to familiarize its Directors on the industry, technological and statutory developments, which have a bearing on the Company and the industry, so that Directors would be effective in discharging their expected duties.

14. MEETINGS

During the year, six (6) Board Meetings were held. The details of the Meetings of the Board and its various Committees held during the financial year including the number of meetings attended by each Director are given in Corporate Governance Report.

15. SECRETARIAL STANDARD

As required under Clause 9 of Secretarial Standard 1, the Board of Directors confirms that the Company has complied with applicable Secretarial Standards.

16. PUBLIC DEPOSITS

Pursuant to Rule 8 (5)(v) & (vi) of the Companies (Accounts) Rules, 2014, it is reported that the Company has not accepted any deposit from public during the financial year under review. There was no outstanding of deposits as on 31-03-2026 (Previous year: NIL). The Company has no deposit, which is not in compliance with the Chapter V of the Companies Act, 2013.

17. ORDERS PASSED BY REGULATORS

Pursuant to Rule 8(5)(vii) of the Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Companys operations in future.

18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:

(a) the particulars of loans are provided under Note No.50 (b) (i).

(b) the particulars of the guarantees and investments are provided under Note No.46 and Note No. 11 & 12 respectively of Notes forming part of financial statements. The guarantees are provided to secure the loans from Banks / Financial Institutions at a competitive pricing by the borrowers.

19. CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and adopted a CSR Policy which is based on the philosophy that As the Organization grows, the Society and Community around it also grows.

The Company has undertaken various projects in the areas of eradication of hunger, promotion of healthcare including preventive healthcare, education, restoration of buildings and sites of historical importance, ensuring environmental sustainability etc., largely in accordance with Schedule VII of the Companies Act, 2013.

On account of losses, there was no CSR obligation for FY 2025-26. However, the Company has spent an amount of Rs. 3.08 Lakhs towards CSR activities.

The Company also spent a sum of Rs. 7.27 Lakhs (PY: Rs. 6.37 Lakhs) on other social causes and projects, which do not qualify as CSR expenditure under the classifications listed out in Schedule VII of the Companies Act, 2013.

The CSR policy is available at the Companys website at the following link: https://www.rajapalayammills.co.in/wp-content/uploads/2022/07/corporate-social-responsibility-policy.pdf

The Annual Report on CSR activities as prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - II .

20. AUDITS

STATUTORY AUDIT

M/s. N.A. Jayaraman & Co., Chartered Accountants (FRN: 001310S) and M/s. SRSV & Associates, Chartered Accountants (FRN: 015041S), who have been appointed as the Statutory Auditors of the Company for second term of five consecutive years at the 86 th Annual General Meeting, would be the Auditors of the Company till the conclusion of 91 st Annual General Meeting to be held in the year 2027.

As required under Regulation 33(1)(d) of SEBI (LODR) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The report of the Statutory Auditors for the year ended 31 st March, 2026 does not contain any qualification, reservation or adverse remark and no instance of fraud has been reported by Auditors under Section 143(12) of Companies Act, 2013.

SECRETARIAL AUDIT

Shri M.R.L. Narasimha, a Practicing Company Secretary is the Secretarial Auditor of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditor for the year ended 31 st March, 2026 is attached as Annexure - III . The report does not contain any qualification, reservation or adverse remark.

COST AUDIT

As per Section 148(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Cost Records and Audit) Rules,2014, the Company is required to maintain cost records and accordingly such records and accounts are made and maintained.

The Board of Directors had approved the appointment of M/s. N. Sivashankaran & Co., (FRN: 100662), Practising Cost Accountant as the Cost Auditor of the Company to audit the Companys Cost Records relating to manufacture of textile products for the year 2025-26 at a remuneration of Rs. 2,25,000/- (Rupees Two Lakhs Twenty-Five Thousand) exclusive of GST and out-of-pocket expenses.

The remuneration of the cost auditor is required to be ratified by the members in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter is being placed before the Members for ratification at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2024-25 due to be filed with Ministry of Corporate Affairs by 09-09-2025, had been filed on 27-08-2025. The Cost Audit Report for the financial year 2025-26 due to be submitted by the Cost Auditor within 180 days from the closure of the financial year will be filed with the Ministry of Corporate Affairs, within 30 days thereof.

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

Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV .

22. ANNUAL RETURN

In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of the Annual Return for the year ended 31-03-2025 has been placed on the website of the Company and web link of such Annual Return is- https://www.rajapalayammills.co.in/wp-content/uploads/2026/02/Annual%20Return%2031-03-2025.pdf

23. CORPORATE GOVERNANCE

The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V(C) of SEBI (LODR) Regulations, 2015, a Report on Corporate Governance being followed by the Company is attached as Annexure - V .

As required under Schedule V(E) of SEBI (LODR) Regulations, 2015, a Certificate from the Auditors confirming compliance of conditions of Corporate Governance is also attached as Annexure - VI to this Report.

As required under Regulation 34(3) read with Schedule V Para C (10)(i) of SEBI (LODR) Regulations, 2015, Certificate from the Secretarial Auditor that none of the Companys Directors have been debarred or disqualified from being appointed or continuing as Directors of Companies, is attached as Annexure - VIA .

During the year under review, no complaints had been received regarding sexual harassment. The relevant statutory disclosure related to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, are available at Point No.12(xii) of Corporate Governance Report.

24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure - VII .

The statement containing names of the top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this report.

However, the annual report is being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Companies Act, 2013, the said Annexure is open for inspection. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

25. INDUSTRIAL RELATIONS AND PERSONNEL

The Company has 4,938 employees as on 31-03-2026 (PY: 5,030). Industrial relations with employees remained cordial during the year. The Company focused more on Human Resources Development activities and imparted training to develop the skill-set of the employees to enable them to face the challenges in the work environment.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the following are the details of complaints:

S.no Particulars	Remark
1. Number of complaints of sexual harassment received in the year	NIL
2. Number of complaints disposed of during the year	NIL
3. Number of cases pending for more than ninety days	NIL

26. RELATED PARTY TRANSACTION

Prior approval / Omnibus approval is obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. Transactions with the related party which are material in nature, in accordance with Companys Related Party Transaction Policy and Regulation 23 of SEBI (LODR) Regulations, 2015 and required to be disclosed in Form AOC-2 is attached as Annexure VIII . In accordance with Indian Accounting Standard - 24 (Related Party Disclosure), the details of transactions with the related parties are set out in Note No: 50 of disclosures forming part of Financial Statements.

As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, The Companys Related Party Transaction Policy is disclosed in the Companys website and its web link is: https://www.rajapalayammills.co.in/wp-content/uploads/2025/04/related-party-transaction-policy-2022.pdf

27. RISK MANAGEMENT POLICY

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and minimization of risk thereof. The Risk Management policy of the Company is available at the Companys website and its web link is: https://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/risk-management-policy.pdf

28. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Dividend amount remaining unclaimed/unpaid for a period of over 7 years was transferred to IEPF as detailed below:

Dividend Details	Amount Transferred (in Rs. )	Date of Transfer to IEPF
Dividend 2017-2018	3,73,172	03-09-2025

Shares corresponding to the said dividend were transferred to IEPF, as detailed below:

No. of Shares	Date of Transfer to IEPF
6,969	09-09-2025

Year wise amount of unpaid /unclaimed dividend lying in the unpaid account and corresponding shares, which are liable to be transferred to IEPF and due dates for such transfer, are tabled below:

Year	Type of Dividend	Date of Declaration of Dividend	Last date for claiming Unpaid Dividend	Due date for transfer to IEP Fund	No. of Shares of Rs.10/- each	Amount of unclaimed / unpaid Dividend as on 31-03-2026 in Rs.
2018-2019	Dividend	14-08-2019	13-08-2026	12-09-2026	91,179	3,64,716.00
2019-2020	Dividend	15-09-2020	14-09-2027	14-10-2027	1,05,972	1,05,146.80*
2020-2021	Dividend	25-08-2021	24-08-2028	23-09-2028	1,07,200	53,300.40*
2021-2022	Dividend	20-08-2022	19-08-2029	18-09-2029	1,14,711	1,10,996.20*
2022-2023	Dividend	18-08-2023	17-08-2030	16-09-2030	63,924	62,443.20*
2023-2024	Dividend	28-08-2024	27-08-2031	26-09-2031	1,43,917	83,354.20*
2024-2025	Dividend	29-08-2025	28-08-2032	27-09-2032	1,52,803	76,112.50*

* Net of TDS

29. MATERIAL CHANGES SINCE 1 ST APRIL, 2026

There have been no changes affecting the financial position of the Company between the end of the financial year (31-03-2026) and till the date of this report (28-05-2026).

30. DIRECTORS RESPONSIBILITY STATEMENT

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

(a) they had followed the applicable accounting standards along with proper explanation relating to material departures, if any, in the preparation of the annual accounts for the year ended 31 st March, 2026;

(b) they 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 as on 31 st March, 2026 and the loss of the Company for the year ended on that date;

(c) they 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) they had prepared the Annual Accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31. During the financial year under review, there was no change in the nature of business of the Company.

ACKNOWLEDGEMENT

The Directors are grateful to the various Departments and agencies of the Central and State Governments for their help and co-operation. They are thankful to the Financial Institutions and Banks for their continued help, assistance and guidance. The Directors wish to place on record their appreciation of employees at all levels for their commitment and their contribution.

On Behalf of the Board of Directors,

For RAJAPALAYAM MILLS LIMITED,

	P.R. VENKETRAMA RAJA
ARIYALUR	CHAIRMAN
28 th MAY, 2026	(DIN: 00331406)