DIRECTORS' REPORT

Your directors have great pleasure in submitting the Thirty Eighth (38^th) Annual Report together with the audited accounts
for the year ended 31^st March, 2026

FINANCIAL RESULTS

The Financial results for the year ended 31^st March 2026 are furnished below: (R_s. i_n L_akh_s)

PERFORMANCE AND STATE OF AFFAIRS

Company Overview and Operational Highlights

The Company is engaged in the manufacture of cotton yarn and knitted fabrics (i.e) core textile products that serve as essential
inputs to the global apparel and textile industry. Our primary raw material, raw cotton, is an agricultural commodity that is both
abundantly available and sustainably sourced, domestically and through imports. Given the nature of our inputs and
manufacturing processes, our operations present minimal environmental or social risk.

Importantly, the production of cotton yarn and knitted fabrics is a non water intensive process, significantly reducing our
ecological footprint. Subsequent processing by downstream users also would require minimum resources depending upon the
production activities carried out by the customer, further reinforcing the sustainable nature of our value chain.

Our manufacturing activities fall under the 'Orange' category, as classified by the Tamil Nadu Pollution Control Board,
indicating moderate environmental impact. To under score our commitment to sustainable practices, we have obtained several
globally recognized certifications, including:

• Global Organic Textile Standard (GOTS)

• Better Cotton Platform

• U.S. Cotton Trust Protocol (USCTP)

• OEKO-TEX (Fabric, Recycled Polyester Cotton, Yarn)

• Recycled Claim Standard V2.0 (RCS)

• Cotton Made in Africa (CMIA)

• Forest Stewardship Council (FSC)

• Global Recycled Standard V4.0 (GRS)

• Organic Content Standard V3.0 (OCS)

• Regenagri Content Standard

• Sedex

The Company continues to implement initiatives that enhance operational efficiency and resource optimization. Our strategic
priorities remain firmly aligned with customer satisfaction, high quality production which serves as a base for attracting niche
customers who are aligned with our principles.

RAW MATERIAL SOURCING AND CUSTOMER RELATIONS

The Company sources high quality raw cotton from reputed suppliers across India, USA, Australia, Africa and Egypt ensuring
consistency in the quality of our end products. We have earned a strong reputation in the industry for our ethical procurement
practices and our steadfast adherence to contract terms and this facilitates us to accept customer's tailor made requests for
product and delivery schedule with utmost ease, fostering long- standing relationships with clients across geographies.

Owing to our meticulous raw material selection process and proprietary in-house technology, we are able to deliver products
which offer a low fall rate in the hands of the downstream garment manufacturers. This quality advantage enhances our
customer's production efficiency fostering long term business relationships with our Company.

BRAND ENGAGEMENT AND TRACEABILITY INITIATIVES

In response to the growing industry emphasis on traceability, particularly among global brands, the Company has witnessed
increased direct engagement from end customers. Leading brands are now extending their sourcing traceability up to the
spinner level. In alignment with this trend, the Company is proud to have been approved as a certified spinner by reputed
international brands. The customers are predominantly high-net-worth entities with strong credit profiles and minimal counter
party risk, positioned in the top quartile of the value chain. The Company has maintained long-standing relationships with these
customers. Further, the Company's prudent policy of undertaking exports, except in a few instances, against irrevocable Letters
of Credit (LCs), and domestic sales against payment, mitigates credit risk and supports a strong liquidity position.

BUSINESS PERFORMANCE AND MARKET DYNAMICS

Despite prevailing geopolitical uncertainties and fluctuating global demand, the Company sustained a stable performance,
underpinned by:

• Continued innovation in product development

• Consistent adherence to quality standards

• Timely fulfilment of committed orders

While the Company continues to uphold exceptional quality standards across its product range, the actual growth achieved
during the year was impacted due to continued ongoing geopolitical disruptions and global market uncertainties, which
disrupted demand patterns and supply chain dynamics across key regions.

RENEWABLE ENERGY INITIATIVES

As part of our enduring commitment to sustainability, the Company has made substantial investments in renewable energy
infrastructure, comprising Wind power installations with a capacity of 27.4 MW and Rooftop solar installations totalling 8.33
MW.

Together, the Company's renewable energy currently meet approximately 82- 84 % of its total energy requirements. By
maximizing the captive use of clean energy, the Company actively contributes to the Clean Development Mechanism (CDM)
and supports broader efforts towards global climate change mitigation.

During the financial year, rooftop solar installations generated 8,673,734 kWh, while wind energy exported to the grid totalled
41,010,872.05 kWh. As a result of these renewable energy initiatives, the Company successfully reduced CO2 emissions by an
estimated 35,723.23 tonnes, underscoring its commitment to environmental sustainability.

FINANCIAL HIGHLIGHTS

The revenue for the year registered a growth of 9.28% compared to a decline of 13.90% in the previous year. The gross profit for
the year registered a growth of 2.75%, compared to an increase of 0.60% in the previous year

EXPORT PERFORMANCE

Export turnover during the year stood at Rs.54,549.93 Lakhs, as against Rs.49,545.39 Lakhs in the previous year representing
increase of 10.10 %, as compared to decline of 16.49% in FY 2024-25. Exports accounted for 72.90% of total turnover, as compared
to 72.43 % in the previous year.

CAPITAL INVESTMENT AND EXPANSION

In FY 2025-26 the Company invested Rs.6995.82 Lakhs from internal accruals towards enhancing its capacity and infrastructure.
The investment was allocated as follows:

• Plant and Machinery: Rs.4455.98 Lakhs

• Factory Building: Rs.2060.17 Lakhs

• Capital Work in Progress: Rs.479.67 Lakhs

The company has further proposed to modernize its plant at an estimated cost of Rs. 130.00 Crores and to be fully met out of
internal accruals. This will strengthen the production process considerably and would be operational from March 2027
onwards. The orders have been placed with Indigenous Machinery Manufacturers and Letter of Credits are opened in respect of
Import of Plant and Machinery

FINANCIAL STABILITY

The Company remains debt free, with no long term liabilities on its balance sheet. A robust cash position and prudent financial
management ensures the availability of adequate liquidity to support both current operations and planned future
modernization.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.10.00 Crores to the General Reserve out of the amount available for appropriation.

DIVIDEND

The Board of Directors has recommended payment of dividend for FY 2025-26 as under

If approved by the members at the Annual General Meeting (AGM) to be held on 29.09.2026, the proposed dividend would
result in cash outflow of dividend Rs. 2118.25 Lakhs for FY 2025-26 .The payout ratio of dividend works out to 29.60% (Previous
year dividend payout ratio 32.22%)

The Dividend Distribution Policy is placed on the Company's weblink http://www.acmills.in/investors/policies/dividend-
distribution-policy/ in terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr.K.Venkatachalam (DIN 01062171 ), Non Executive
Director, who retires by rotation and being eligible, offers himself for reappointment.

The Board has re-appointed Sri. P.V. Chandran (DIN 00628479), as Managing Director of the Company, based on the
recommendation of the Nomination and Remuneration Committee, to hold Office, for a further period of five years
commencing from 1 ^st April 2027 , subject to approval of the shareholders by Special Resolution, pursuant to Section 196(3)(a) of
the Companies Act, 2013, as he is aged 77 years.

Special Resolution is placed for the approval of the Members for the continued holding of office by Dr.K.Venkatachalam (DIN
01062171 ), Non Executive Director, pursuant to proviso to Regulation 17 (1A) of SEBI (LODR) Regulations, 2015, who would
attain the age of 75 years during holding of such office .

Special Resolution is placed for the approval of the Members for reappointment of Mrs. Vijayalakshmi Narendra (DIN:
00412374), as Independent Women Director of the Company, for second term of consecutive 5 years, commencing from
12 ^th August 2026 and for continued holding of office, upon attaining the age of 75 years, during FY 2031-32, in accordance with
Regulation 17(1A) of SEBI (LODR) Regulations, 2015.

Special Resolution is placed for the approval of the Members for appointment of Sri. K. Murali Mohan (DIN: 00626361),
Chartered Accountant, aged 78 years, as an Independent Director of the Company, for an initial term of five (5) consecutive years
commencing from the conclusion of the 38 ^th Annual General Meeting in accordance with Regulation 17(1A) of SEBI (LODR)
Regulations, 2015.

The requisite special resolutions, together with the details and information prescribed under the Companies Act, 2013 and the
SEBI (LODR) Regulations, 2015, are set out in the Notice convening the ensuing Annual General Meeting and form part of the
Annual Report.

In the opinion of the Board, Mrs. Vijayalakshmi Narendra (DIN: 00412374) , Women Independent Director, recommended for re
appoinment for the second term and Sri. K. Murali Mohan (DIN: 00626361), Chartered Accountant who is proposed to be
appointed as Independent Director, carries requisite integrity, expertise and experience.

In terms of Section 149 of the Companies Act, 2013, the Independent Directors of the Company are Sri. E.M. Nagasivam,
Mrs. Vijayalakshmi Narendra, Dr. T. Bina and Mrs. T. R. Seethalakshmi.

In the opinion of the Board, all the Independent Directors fulfill the conditions specified in the Companies Act, 2013 and Rules
made thereunder and SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and are independent of the
Management.

Sri. N. Subramaniam (DIN: 00657972) has resigned his directorship w.e.f 18.06.2025 on account of personal reasons and there
were no other material reason for his resignation. The Board wishes to place on record its appreciation for the services rendered
by him during his tenure of office.

In terms of Section 134 (3) (c) read with Section 134(5) of the Companies Act 2013, your Directors state that: -

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are
no material departures;

ii. Accounting policies selected have been applied consistently. Reasonable and prudent judgments have been made so
as to give a true and fair view of the state of affairs of the Company as at the end of 31^st March, 2026 and of the profit
of the Company for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting
frauds and other irregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. Internal financial controls have been laid down to be followed by the Company and such internal financial controls are
adequate and were operating effectively;

vi. Systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating
effectively.

NUMBER OF MEETINGS OF THE BOARD

The Board held four meetings during the Financial Year 2025-26 namely, 27^th May 2025, 08^th August 2025, 08^th November, 2025,
and 10^th February 2026.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149(7) of the
Companies Act,2013, stating that they meet the criteria of independence as provided in sub-section (6) of Section 149. Further,
none of the Independent directors have any pecuniary relationship or transaction with the Company which may affect their
independence. The Independent Directors have registered themselves with the Indian Institute of Corporate Affairs ('IICA').
Familiarization programme of Independent Directors was carried out at Board Meetings. .

MEETING OF INDEPENDENT DIRECTORS:

Independent directors have carried out a separate meeting in accordance with Para VII of Schedule IV of the Companies Act,
2013 and Regulation 25(3) of Listing Regulations,2015.

DEPOSITS:

The Company has not accepted any deposits from the public and therefore furnishing of details in terms of Rule 8 (5) (v) & (vi) of
Companies (Accounts) Rules, 2014 does not arise.

AUDITORS

M/s. S. Krishnamoorthy & Co, Chartered Accountants (ICAI Firm Registration No.001496S)was appointed as Statutory
Auditors for a continuous period of five years from the conclusion of 34^thAGM (2022) till the conclusion of 39^thAGM (2027).

Certificate from the Auditors has been received to the effect that they are eligible to act as Statutory Auditors of the Company
under Section 141 of the Companies Act, 2013 and further submitted the Peer Review Certificate dt. 24.03.2026 issued to them by
Institute of Chartered Accountants of India (ICAI) valid upto 31.03.2029.

AUDITORS' REPORT

The Auditors' Report to the Shareholders does not contain any reservation, qualification or adverse remark. There were no
instances of fraud reported by the Auditor to the Central Government or to the Audit Committee of the Company as indicated
under the provisions of Section 143 (12) of the Companies Act, 2013

SECRETARIAL AUDITORS

In terms of the provisions of Regulation 24A of SEBI Listing Regulations, the shareholders at the 37^th Annual General Meeting
held on 27.09.2025 appointed Sri. Sundararajan Baalaji, Practising Company Secretary ( FCS No.5966) (Peer Review Certificate
No. 6871/2025) as Secretarial Auditors, to conduct Secretarial Audit of the Company for 5 consecutive financial years effective
from the financial year 2025-26.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report for the financial year ended 31^st March, 2026 is annexed herewith marked as Annexure V to this
Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark

SECRETARIAL STANDARDS

The Company is in compliance with the Secretarial Standards on Meetings of Board of Directors (SS-1) and General Meetings
(SS-2) issued by the Institute of Company Secretaries of India.

COST RECORD

The Cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, are
prepared, maintained and the same are audited by the Cost Auditor.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with rules made thereunder, the Board, has re-appointed
M/s. Sakthivel & Co, Cost Accountants (Firm Registration No. 100414), to audit the Cost Accounts of the Company for the year
ending 31^st March, 2027. Their remuneration is to be ratified by shareholders at the ensuing Annual General Meeting.

The Cost Audit Report and other documents for the year ended 31^st March, 2025 were submitted with the Central
Government by filing Form CRA-4 vide SRN AB6576505 dated 06^th September, 2025

INTERNAL FINANCIAL CONTROLS

The Company has in place internal financial controls systems, commensurate with the size and nature of its operations
to ensure proper recording of financial and operational information and compliance of various internal controls
and other regulatory and statutory compliances.

AUDIT COMMITTEE

The Committee comprises of Directors Mrs. Vijayalakshmi Narendra, Sri.E.M. Nagasivam and Mrs .Vidya Jyothish Pillai.

PROHIBITION OF INSIDER TRADING

In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company
has, inter-alia, adopted a Code of Conduct for Prohibition of Insider Trading, Code of Practices and Procedures for fair
Disclosure of Unpublished Price Sensitive Information (Code) duly approved by the Board of Directors of the Company. The
Code of conduct are posted on the Company's website under web link at https://www.acmills.in/wp-
content/uploads/2016/07/insiderpol.pdf and https://www.acmills.in/wp-content/uploads/2016/08/Code.pdf

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism / Whistle Blower Policy for Directors and Employees to report genuine concerns
about any wrongful conduct with respect to the Company of its business or affairs. The details of the Vigil Mechanism /
Whistle Blower Policy are available on the Company's website www.acmills.in & under web-link
https://www.acmills.in/investors/policies/whistle-blower-policy/

The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) in
compliance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility
Policy) Rules, 2014, indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies
Act, 2013, which has been approved by the Board, the details of the same are made available on the Company's website
www.acmills.in & under web- link https://www.acmills.in/2016/08/csr-policy/ The Corporate Social Responsibility
Committee consists of Directors Sri. P.V. Chandran, Dr.K. Venkatachalam, Mrs. Bhavya Chandran and Sri. E.M.Nagasivam as
members of the committee. The Committee held two meetings during the financial year 2025-26 namely 26^th May, 2025 and
07^thNovember, 2025.

CSR EXPENDITURE

The requirement to spend in this regard is Rs. 219.27 Lakhs ( Previous year Rs. 321.14 Lakhs) @ 2% of 3 years average net profit of
the Company and the Company has spent Rs. 226.65 Lakhs (Previous year Rs 325.52 Lakhs). The CSR expenditure are into (i)
Public Park and Public waiting lounge with Library at the places belonging to Coimbatore Police Department (ii) Animal
Protection (iii) Medical Support, (iv) Relief to Poor (v) Rural Works (vi) Education (vii) Cultural Activity and the details of
expenditure are furnished in Annexure -II to this report

NOMINATION AND REMUNERATION POLICY

The Company has formulated the policy in this regard prescribing the criteria for determining qualifications positive attributes
and independence of a director and the main attribute focused on is positive value creation and contribution in respect of on¬
going activities of the Company and its value enhancement with adequate qualifications and independence. Details of the
policy are made available in the Corporate Governance Report and on the Company's website www.acmills.in under web-link
https://www.acmills.in/2025/04/nomination-and-remuneration-policy/

Nomination and Remuneration Committee presently consists of Directors, Sri. E.M.Nagasivam, Mrs. Vijayalakshmi Narendra
and Mrs. Bhavya Chandran.

RISK MANAGEMENT POLICY

The Company has developed and adopted a detailed Enterprise Risk Management Policy to sustain the operations of the
Company and the same is disclosed in the website of the Company, www.acmills.in & under web - link
https://www.acmills.in/2016/07/risk-management-policy/. The Risk Management Committee consists of Directors
Sri.P.V.Chandran, Dr.K.Venkatachalam, Mrs. Vidya Jyothish Pillai and Sri. E.M. Nagasivam.

STAKEHOLDERS RELATIONSHIP POLICY

The Company has formulated policy for early resolution of stakeholders' grievances and the same is made available in the
Company's website www.acmills.in & under web - link https://www.acmills.in/2016/07/stake-holders-grievance-
resolution/ The Stakeholders relationship committee consists of Directors Dr.K.Venkatachalam , Sri. E.M. Nagasivam ,Mrs.
Vidya Jyothish Pillai and Mrs. Bhavya Chandran.

SUBSIDIARIES

The Company does not have any subsidiaries.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the
Company and its future operations.

LOANS, GUARANTEES AND INVESTMENTS

The Company has not made any investments or given any loans or guarantees or provided any security in connection with a
loan to any person or body corporate, as defined under Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

The Company does not have any related party transactions as defined in Section 188 of the Companies Act, 2013 hence e-Form
AOC-2 is not enclosed.

MATERIAL CHANGES AND COMMITMENTS

There were no Material changes and Commitments affecting the financial position of the Company that have occurred between
the end of the financial year 31^st March, 2026 to which the financial statements relate and the date of this report

CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of business during the year under review as prescribed in Rule 8(5)(ii) of the Companies
(Accounts) Rules, 2014.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Information regarding the same is also
provided in the Corporate Governance Report forming part of Directors' Report. The Internal Committee has been setup to
redress the complaints received on the sexual harassment. All employees of the Company are covered under this policy. The
details of complaints received and disposed off during the financial year 2025-26 are as follows:

DETAILS OF APPLICATION MADE /PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016

There were no applications made or proceedings pending against the Company under the provisions of the Insolvency and
Bankruptcy Code, 2016, during the financial year under review.

DETAILS OF ONE TIME SETTLEMENT/VALUATION WITH BANK OR FINANCIAL
INSTITUTION

No one-time settlement or valuation was undertaken by the Company while availing loans from any Bank or Financial
Institution. Accordingly, the requirement to furnish details pursuant to Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014
does not arise.

MATERNITY BENEFIT COMPLIANCE STATEMENT

Pursuant to Rule 8(5)(xiii) of the Companies (Accounts) Rules, 2014 (as amended), the Company confirms compliance with the
provisions of the Maternity Benefit Act, 1961.

All eligible women employees are provided paid maternity leave, nursing breaks, and applicable creche facilities.

The Company ensures protection against termination during maternity leave and updates relevant policies regularly.

There were no complaints or violations reported during the year under review.

BOARD EVALUATION

The Board has carried out an annual performance evaluation of its own performance and that of its Committees and individual
Directors. Further the Independent Directors have carried out review of performance of non- independent directors and the
Board as a whole, performance of the Chairperson and further made an assessment of quality, quantity and time lines of flow of
information between the Company management and the Board for effective and reasonable performance of its duties.

ANNUAL RETURN

Pursuant to Section 92 (3) copy of Annual Return is made available in the Company's website www.acmills.in under web link
https://www.acmills.in/?s=MGT-7

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

Particulars relating to Conservation of Energy, Technology absorption, Foreign Exchange Earning and outgo, as required to be
disclosed under the Act, are set out in Annexure - I to this report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1), 5(2)
and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed in Annexure III
to this report.

ADDITIONAL DISCLOSURES PURSUANT TO SEBI REGULATIONS

Business Responsibility and Sustainability Report is furnished in Annexure IV and the additional disclosures pursuant to
Regulation 34 (3) and 53 (f) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 in respect (i)
Management Discussion and Analysis (ii) Corporate Governance Report (iii) Related Party Disclosures for the year under
review are given as a separate statement in the Annual Report

By order of the Board
(P.V.CHANDRAN)

Place : Coimbatore Chairman and Managing Director

Date : 08.08.2026 (DIN : 00628479)