The Company reported a Profit Before Tax of ?79 lakhs after
recognising exceptional income of ?442 lakhs, compared with
?637 lakhs in the previous year. Net Profit for the year stood at
?66 lakhs as against ?456 lakhs in FY2024-25.

Despite the challenging business environment, the Company
maintained healthy capacity utilisation across its manufacturing
facilities and continued to focus on operational efficiency,
cost optimisation, prudent working capital management, and
protecting profitability. The Specialized Polyester Filament
Yarn (SPFY) business remained the principal contributor to the
Company's revenue during the year.

Domestic turnover stood at ?32,272 lakhs as against ?34,213
lakhs in the previous year. Export turnover (including incentives)
declined to ?1,307 lakhs from ?3,245 lakhs in FY2024-25, primarily
owing to subdued global demand amid heightened geopolitical
tensions, trade policy uncertainties, elevated freight and
logistics costs, and disruptions in international shipping routes.
The combined impact of the Middle East conflict, the prolonged
Russia-Ukraine war, and tariff-related uncertainties in key
export markets adversely affected export orders and shipment
schedules during the year.

A detailed analysis of the Company's operational and financial
performance, industry outlook, opportunities, risks, and future
prospects is provided in the Management Discussion and Analysis
Report, which forms an integral part of this Annual Report.

TRANSFER TO RESERVES

The Board does not propose carrying any amounts to reserves.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of Business of the Company.

INDUSTRY OVERVIEW

Global Textile & Apparel Industry:

The global textile & apparel market was valued at US$1.9 trillion in
2025 and is expected to grow at a CAGR of 4.1% from 2026 to 2034.
Growth is driven by rising demand for population growth, demand
for man-made fibers, sustainability initiatives casualwear and
athleisure, social media trends, higher disposable incomes, and
e-commerce expansion. The Global Textile & Apparel trade is
expected to grow at a CAGR of 4% to reach US$1.2 trillion by 2030.

Indian Textile & Apparel Industry:

India's textiles and apparel market is projected to grow at a 11.98%
CAGR, reaching $646.96 billion by 2033, driven by robust export
potential and substantial GDP contribution. As the world's largest
cotton producer, India plays a pivotal role in global textile supply
chains, with significant growth anticipated in both domestic and
international markets.

India's Domestic Textile & Apparel Market:

India's domestic market for textiles and apparel is poised for
substantial growth, supported by rising disposable incomes and
increasing urbanization. The domestic textile and apparel market
size is estimated at US$157 billion in FY25-26, growing at a pace of
about 7% CAGR. The sector contributes 2.3% to the country's GDP
and 13% to industrial production, reflecting the sector's integral
role in India's economic landscape.

India's Textile & Apparel Trade Overview:

India continues to strengthen its position as a leading global
textile and apparel hub, with exports reaching US$35 billion and
a target to increase exports to US$105 billion by 2030, supported
by favourable policy initiatives and expanding manufacturing
capabilities. During FY26 (April-December 2025), textile and
apparel exports stood at US$27.31 billion, while imports totalled
approximately US$8.82 billion (April 2025-January 2026), primarily
comprising specialised fibres, technical textiles, premium
fabrics and other value-added products that complement
domestic production. The sector maintained a healthy trade
surplus of approximately US$19.56 billion, underscoring the
resilience, competitiveness and global appeal of India's textile
industry.

Performance Review FY26

During FY26, the Company navigated a challenging operating
environment marked by subdued export demand, weak
domestic discretionary consumption and elevated input cost
pressures. Despite these headwinds, it continued to strengthen
its operational foundation through business consolidation,
manufacturing modernisation and strategic investments.

• Revenue from operations stood at ?33,595 lakhs, down 10.4%
YoY.

• EBITDA stood at ?2,048 lakhs, with an EBITDA margin of 6.1%.

• PAT declined to ?66 lakhs, reflecting a challenging business
environment.

• Gross debt reduced to ?8,277 lakhs, its lowest level in last 3
years, strengthening the Company's balance sheet.

• The Embroidery & Laces business was consolidated at the
modern Degaon, Dhule facility, enhancing productivity,
quality, cost efficiency and delivery reliability.

However, exports remained under pressure due to subdued
global retail demand, pricing challenges, the ongoing tariff war
and the conflict in the Middle East, which created significant
uncertainty across global supply chains, disrupted trade flows
and delayed customer purchasing decisions. Domestic demand
was also affected by cautious consumer spending. Profitability
was further impacted by lower capacity utilisation, elevated
working capital requirements and delays in the realisation of

policy-related benefits.

Despite these challenges, Pioneer Embroideries Limited remains
focused on operational excellence, cost optimisation, value-
added product expansion and manufacturing efficiency. The
modernised Degaon facility and the commissioning of green
energy infrastructure in May 2026 position the Company to
improve operating leverage, strengthen competitiveness and
drive sustainable long-term growth.

CAPITAL EXPANSION

Your Company had completed its expansion of capacities in both
the SPFY segment (in POY (Partially Oriented Yarn) and DTY (Draw
Textured Yarn)) and in the Embroidery Segment in FY24. However,
both the businesses are yet to achieve the desired capacity
utilization and value-added production due to tough business
environment. During the year, your Company replaced old TFO
Twisting Machines with new machines at a cost of ^635 lakhs.
With the commissioning of its green energy infrastructure in May
2026,PEL has further strengthened its power infrastructure at
the Kala-Amb facility by integrating solar power into its energy
mix. The initiative supplies a portion of the plant's electricity
requirement, helping optimise energy costs, improve operational
reliability and support efficient manufacturing operations.

BANK BORROWINGS

As on March 31, 2026, the Company's total secured borrowings
stood at ^7,685 lakhs, as against ^8,725 lakhs in the previous year.
Working capital borrowings stood at ^3,895 lakhs, compared with
^3,129 lakhs as on March 31, 2025. During the year, the Company
refinanced its high-interest borrowing from Kotak Mahindra
Bank with a lower-cost borrowing from Union Bank of India,
resulting in a reduction in the overall cost of borrowing.

LISTING

The Equity Shares of the Company are listed with the BSE and NSE.
DIVIDEND

Your Directors have not recommended any dividend on equity
shares in respect of the financial year 2025-26, in view of
conserving the funds for business expansion.

SHARE CAPITAL

During the year under review, there was no change in the
Company's Share capital.

SUBSIDIARY COMPANIES

The total revenue of Hakoba Lifestyle Limited in current year
stood at ^Nil R0.29 lakhs). Loss after tax and exceptional item
stood at ^0.62 lakh as compared to net loss of ^1.55 lakhs in
previous year.

The revenue of Crystal Lace (India) Limited in current year stood at
^10.08 lakhs (^0.89 lakhs). The Company has incurred a net loss of
^1.87 lakhs as compared to net loss of ^5.07 lakh in previous year.

Pioneer Realty Limited had no activity during the year.

The statement of subsidiaries in Form AOC-1 (pursuant to first
proviso to sub section (3) of section 129 of the Companies Act,
2013) is provided as Annexure - A to the Consolidated Financial
Statement and hence not repeated here for the sake of brevity.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are
prepared in compliance with applicable provisions of the
Companies Act, 2013, and "Ind AS" issued by the Institute of
Chartered Accountants of India as well as Listing Regulations as
prescribed by the Securities and Exchange Board of India (SEBI)
and form a part of the Annual Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Schedule V of the SEBI
(Listing Obligation and Disclosure Requirements) Regulations,
2015, a Report on Corporate Governance with Auditors Certificate
confirming compliance, is attached and forms an integral part
of this Report. Further, a declaration affirming compliance
with the code of conduct by all the Board members and senior
management personnel along with certificate under Regulation
17(8) of the SEBI Listing Regulations is also given in this Annual
Report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the
Companies Act, 2013, copies of the Annual Returns of the Company
prepared in accordance with Section 92(1) of the Act read with
Rule 11 of the Companies (Management and Administration)
Rules, 2014 are made available on the Company's website (www.
pelhakoba.com).

DIRECTORS

In accordance with the provisions of the Companies Act, 2013
and the Articles of Association of the Company Raj Kumar
Sekhani (DIN:00102843), who retires by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for
reappointment. Accordingly, his re-appointment forms part of
the notice of the ensuing Annual General Meeting.

The changes in the composition of the Board of Directors that

took place during the year were as below:

• Appointment of Mr. Vishal Rajkumar Sekhani as an Executive
Director w.e.f October 14, 2025.

• Resignation of Mr. Harsh Vardhan Bassi as Managing Director
w.e.f October 13, 2025.

• Appointment of Mr. Saurabh Maheshwari as Managing
Director w.e.f October 14, 2025.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company
pursuant to Section 203 of the Companies Act, 2013:

BOARD PERFORMANCE/ EVALUATION

The performance evaluation of the non-executive directors
is done by the Board annually. This evaluation is based taking
into consideration inputs received from the Directors, covering
various aspects of the Board's functioning such as the attendance
and contribution of the member at the Board/ Committee
meetings. The process also considers core competency, expertise,
personnel characteristics and specific responsibility of the
director concerned.

The performance evaluation of the Chairman, Managing and
Executive Directors were carried out by the Independent Directors
in a separate meeting of Independent Directors, performance of
Non-Independent Directors, performance of the Board as a whole
and performance of the Chairman was evaluated, taking into
account the view of the Executive Directors and Non-Executive
Directors. A separate exercise was carried out to evaluate the
performance of individual Directors who were evaluated on
parameters such as level of engagement, contribution and
independence of judgment. The Board of Directors expressed
their satisfaction with the evaluation process.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE¬
APPOINTMENT, IF ANY

All the Independent Directors have provided 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) and SEBI LODR
Regulations.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All new Independent Directors (IDs) inducted into the Board
are given an orientation. Presentations are made by Executive
Directors (EDs) and Senior Management giving an overview of
the Company's operations, to familiarize the new Independent
Directors (IDs) with the Company's Business operations. The new
IDs are given an orientation on our products, group structure and
subsidiary company, Board constitution and procedures, matters
reserved for the Board, and the Company's major risks and risk
management strategy.

BOARD MEETINGS

The details of number of meetings of the Board, held during the
year forms part of the Corporate Governance Report and hence
not repeated here for the sake of brevity.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION
AND PROTECTION FUND

The details of unpaid and unclaimed amounts as on 31st March,
2026 are uploaded on the Company's website (www.pelhakoba.
com).

VIGIL MECHANISM

The Company has established a Vigil Mechanism/Whistle Blower
Policy that enables the Directors and Employees to report
genuine concerns. The Vigil Mechanism provides for an adequate
safeguard against victimization of persons who use the Vigil
Mechanism.

Details of the Vigil Mechanism/Whistle Blower policy are made
available on the Company's website (www.pelhakoba.com).

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY
THECOMPANY

Details of the Loans, Guarantees and Investment covered under
section 186 of the Companies Act, 2013 are given in the Financial
Statements.

CREDIT RATING

The details pertaining to credit rating, forms part of the Corporate
Governance Report and hence not repeated here for the sake of
brevity.

NOMINATION AND REMUNERATION POLICY

The Committee has framed a policy to determine the qualification
and attributes for appointment and basis of determination of
remuneration of all the Directors, Key Managerial Personnel and
Senior Management. A copy of the policy is annexed as Annexure
-A.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties for the year
under review were on arm's length basis and in the ordinary course
of business and Company has not entered into any contract/
arrangement/transaction with related parties which could be
considered material in nature thus provisions of Section 188 of
the Companies Act, 2013 and the Rules made thereunder are not
attracted. Thus, disclosure in Form AOC-2 in terms of Section 134
of the Companies Act, 2013, is included as Annexure - B and forms
an integral part of this Report.

All related party transactions are placed before the Audit
Committee as also to the Board for approval.

The Company has developed a Related Party Transactions Policy
which has been uploaded on the website of the Company and
web-link thereto has been provided in the Corporate Governance
report.

DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF
THE ACT

The Company has never accepted any deposit from the public
falling within the ambit of Section 73 of the Companies Act, 2013
and the Companies (Acceptance of Deposits) Rules, 2014, or under
Chapter V of the Act. Hence, the requirement for furnishing details
of deposits which are not in compliance with the Chapter V of the
Act is not applicable.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE
FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED
BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY
TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE
OFTHE REPORT

There is no material change affecting the financial position of the
Company which have occurred between the end of the financial
year.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the
information and explanations obtained by them, your Directors
make the following statement in terms of Section 134(3)(c) of the
Companies Act, 2013:

(i) That in the preparation of the Annual Accounts for the year
ended 31st March, 2026, the applicable Accounting Standards
have been followed along with proper explanation relating to
material departures, if any;

(ii) that the accounting policies selected and applied are
consistent and the judgments and estimates made are
reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at 31st March, 2026 and
of the net profit of the Company for the year ended on that
date;

(iii) that 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 fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going
concern basis;

(v) that the Directors had laid down adequate internal financial
controls to be followed by the Company and these are
operating effectively;

(vi) that adequate and proper systems to ensure compliance
with all applicable laws have been devised and such systems
operate effectively in the Company.

STATUTORY AUDIT

The appointment of M/s. M B A H & CO. (ICAI Regn. No.121426W),
Statutory Auditors of the Company were appointed for a period
of 5 years at 30th Annual General Meeting as statutory auditors
till the conclusion of 35th Annual General Meeting, as per the
provisions of Section 139 of the Companies Act, 2013.

There is no qualification, reservation or adverse remark or
disclaimer made by the Statutory Auditors i.e. M/s. M B A H & CO.,
Chartered Accountants in its report and therefore, there are
no further explanations to be provided for in this report and is
prepared as per "Ind AS".

COST AUDIT

The Board of Directors, on the recommendation of Audit
Committee, has re-appointed M/s. D S A & Co., Cost accountants,
as Cost Auditor to audit the cost accounts of the Company for the
year 2026-27 at a remuneration of ^1,40,000 plus GST as applicable
and reimbursement of out-of-pocket expenses. A resolution
seeking member's approval for the remuneration payable to
the Cost Auditor forms part of the Notice convening the Annual
General Meeting. The Company has maintained cost accounts and
records for the business, which is applicable as per Section 148(1)
of the Companies Act, 2013 for the year ended March 31, 2026.

SECRETARIAL AUDIT

As required under Section 204 of the Companies Act 2013, and
rules made thereunder, the Company has appointed M/s. Sanjay
Dholakia & Associates, a firm of Company Secretaries in Practice
(Membership No.2655; C.P No.1798) for a period of 5 years,
commencing from the financial year 2025-26 to undertake the
Secretarial Audit of the Company. The Secretarial Audit Report is
included as Annexure - C and forms an integral part of this Report.

There is no qualification, reservation or adverse remark or
disclaimer made by the Secretarial Auditors in its report and
therefore, there are no further explanations to be provided for in
this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation
system, commensurate with its size, scale and complexity of its
operations. The scope and authority of the Internal Audit function
is also defined. The Audit Committee of the Board actively reviews
the adequacy and effectiveness of the systems.

The Internal Audit Department monitors and evaluates the
efficacy and adequacy of internal control system in the Company,
its compliance with operating systems, accounting procedures
and policies at all locations of the Company and its subsidiaries.
Based on the report of internal audit function, corrective actions
are undertaken in the respective areas and thereby strengthen
the controls. Significant audit observations and corrective actions
thereon are presented to the Audit Committee of the Board.

Based on the framework of internal financial controls and
compliance systems established and maintained by the Company,
work performed by the internal, statutory and secretarial
auditors, including audit of internal financial controls over
financial reporting, and the reviews performed by management
and the audit committee, the Board is of the opinion that the
Company's internal financial controls were adequate and
operating effectively as at March 31, 2026.

During the year under review, no material or serious observation
has been observed for inefficiency or inadequacy of such controls.

RISK MANAGEMENT

There is a continuous process for identifying, evaluating and
managing significant risks faced through a risk management
process designed to identify the key risks facing business. Risks
would include significant weakening in demand from core-end
markets, inflation uncertainties and any adverse regulatory
developments, etc. During the year a risk analysis and assessment
were conducted and no major risks were noticed.

SAFETY, HEALTH & ENVIRONMENT

The Company, in order to ensure health and safety of its
employees and other staff, took adequate pre-emptive measures
to enhance the hygiene and sanitization protocols across
all offices and plants, in line with guidelines in force by local
authorities. The health of the employees coming to workspace
is being continuously monitored for any signs of the health
complications and adequate containment measures are in place.

Your Company is committed to maintaining its efforts in providing
a safe working environment to its employees.

HUMAN RESOURCE

The Company takes pride in the commitment, competence
and dedication shown by its employees in all areas of business.
Employees are team members being one of the most critical
resources in the business which maximize the effectiveness of
the Organization. Human resources build the Enterprise, and the
sense of belonging would inculcate the spirit of dedication and
loyalty amongst them towards strengthening the Company's
Polices and Systems. The Company takes various HR initiatives to
align the HR policy to the growing requirements of business.

Your Company regularly conducts technical and safety training
programmes.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING
CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

There are no orders passed by the Regulators or courts or
tribunals impacting the going concern status and Company's
operations in future.

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

Pursuant to Section 22 of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 read
with Rule 14, the internal committee constituted under the said
act has confirmed that no complaint/case has been filed/pending
with the Company during the year.

MANAGERIAL REMUNERATION

a. Details of the remuneration of each director to the median
remuneration of the employees of the Company and other
details as required pursuant to Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are annexed as Annexure - D.

b. The statement containing particulars of employees as
required under Section 197(12) of the Act read with Rule
5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is provided in a separate
annexure forming part of this report. Further, the report and
the accounts are being sent to the members excluding the
aforesaid annexure. In terms of Section 136 of the Act, the said
annexure is open for inspection at the Registered Office of
the Company. Any shareholder interested in obtaining a copy
of the same may write to the Company Secretary.

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

The particulars as prescribed under Section 134(3)(m) of the
Companies Act, 2013, read with the Rule 8(3) of the Companies
(Accounts) Rules, 2014, are attached as Annexure-E to this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company seeks to build constructive relationship with all
the stakeholders and wants to benefit from your Company's
presence. The Company has framed a CSR policy, which has been
uploaded on the website of the Company. The provisions of CSR
activities under Companies Act 2013 were applicable to your
Company. A detail pursuant to Rule 9 of Companies (Corporate
Social Responsibility Policy) Rules, 2014 is annexed as Annexure -F.

EMPLOYEE STOCK OPTION PLAN (ESOP)

Details of ESOP implemented during the year are as below:

(a) options granted; NIL

(b) options vested; NIL

(c) options exercised; NIL

(d) options lapsed; NIL

(e) the exercise price; NA

(f) variation in terms of options; No

(g) money realised by exercise of options; NA

(h) total number of options in force; 418,364

(i) employee wise details of options granted to:

(j) Key Managerial Personnel; Mr. Saurabh Maheshwari: 90,000

Mr. Deepak Sipani: 15,000
Ms. Ami Thakkar: 5,000

There is no material change in the ESOP scheme and the same
is in compliance with the SEBI (Share Based Employee Benefits)
Regulations, 2014. ESOP scheme are made available on the
Company's website (www.pelhakoba.com).

As per Regulation 13 of Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014, a certificate
received from the secretarial auditor of the company that the
scheme(s) has been implemented in accordance with these
regulations and in accordance with the resolution of the Company
in the general meeting is annexed as Annexure -G.

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

During the year, there were no applications made or any
proceedings pending under the Insolvency and Bankruptcy Code,
2016 (31 of 2016).

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

During the year, the Company had not made any One-Time
Settlement with any banks or Financial Institutions.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued
by Institute of Company Secretaries of India on Meeting of Board
of Directors and General Meetings.

GENERAL DISCLOSURE

During the Financial Year under review:

a. The Company has not issued Equity Shares with differential
rights as to dividend, voting or otherwise, pursuant to the
provisions of Section 43 of the Act and Rules made thereunder.

b. The Company has not made any provisions of money or has
not provided any loan to the employees of the Company for
purchase of shares of the Company or its holding Company,
pursuant to the provisions of Section 67 of the Act and Rules
made thereunder.

c. The Company has not accepted any deposit from the
public, pursuant to the Chapter V of the Act and Rules made
thereunder.

d. The Company has not bought back its shares, pursuant
to the provisions of Section 68 of the Act and Rules made
thereunder.

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