Precot Limited has proposed a final dividend of ₹4 per equity share for the financial year ended March 31, 2026, alongside seeking shareholder approval to vary the remuneration terms of four key directors. The company’s Board of Directors approved the payout and the special resolutions at a meeting held on July 22, 2026, setting the stage for its 64th Annual General Meeting (AGM) scheduled for August 20, 2026. The dividend declaration underscores the company’s commitment to returning value to shareholders despite a year-on-year decline in net profit, while the remuneration variations aim to provide leadership continuity by guaranteeing minimum pay in scenarios of inadequate profits.

The AGM will be conducted through Video Conferencing or Other Audio-Visual Means (VC/OAVM) at 4:00 PM on August 20, 2026, adhering to Ministry of Corporate Affairs circulars. Shareholders holding shares as of the record date, August 13, 2026, will be eligible to vote and receive the dividend. The register of members will remain closed from August 14, 2026, to August 20, 2026, inclusive, during which no transfers will be processed. Remote e-voting will be open from August 16, 2026, to August 19, 2026.

Key AGM Dates

Special Business Resolutions

Apart from the adoption of audited financial statements and the re-appointment of T Kumar (DIN: 07826033), who retires by rotation, the AGM agenda includes four special resolutions. These seek to vary the terms and conditions of remuneration for Chairman and Managing Director Ashwin Chandran, Vice Chairman and Managing Director Prashanth Chandran, Executive Director T Kumar, and Director-Technical Textiles Ravi Kumar Abburu.

The variation does not increase the total remuneration package previously approved by shareholders in August 2025. Instead, it clarifies that in the event of loss or inadequacy of profits during their tenure (April 1, 2026, to March 31, 2029), the agreed remuneration shall serve as the minimum payable amount under Section 197(3) of the Companies Act, 2013. This ensures financial certainty for key leadership roles regardless of operational performance fluctuations.

Additionally, shareholders will ratify the remuneration of ₹4.50 lakhs, plus out-of-pocket expenses, payable to Cost Auditor Mr. R. Krishnan (Registration No. 7799) for the audit of cost records for FY27.

Financial Performance Context

Precot reported a net profit of ₹35.85 crore for FY26, down from ₹32.88 crore in FY25, although this figure excludes discontinued operations which resulted in a loss of ₹18.89 crore in the prior year. Revenue from operations stood at ₹989.04 crore in FY26, up from ₹872.51 crore in FY25. The company’s reserves and surplus increased to ₹445.33 crore from ₹413.09 crore. The proposed dividend of ₹4 per share represents a significant return on the ₹12 crore paid-up equity capital.

What the Numbers Show

The divergence between rising revenue and declining net profit highlights margin pressure or higher costs in FY26 compared to FY25. While revenue grew by approximately 13%, net profit from continuing operations fell from ₹51.77 crore to ₹35.85 crore. The elimination of the discontinued operations loss in FY26 contributes to the overall profit stability, but the core operating profitability requires scrutiny. The decision to lock in minimum remuneration for top executives suggests management is prioritizing stability amidst these operational shifts, ensuring leadership retention even if future profits do not match revenue growth trajectories.

Precot Limited has incorporated a wholly-owned subsidiary, Precot Holdings Limited, in Jebel Ali Free Zone (Jafza), Dubai, United Arab Emirates, effective July 6, 2026. The company received all incorporation documents on July 9, 2026. This strategic initiative aims to engage in international business and investments, broadening the company's global reach and operational footprint.

Subsidiary Details

The Board of Directors had approved the incorporation of this foreign subsidiary during its meeting held on September 2, 2025. The new entity is fully owned by Precot Limited and will operate under the regulations of the Jebel Ali Free Zone Authority Offshore Companies Regulations 2018.

Strategic Objectives

The primary objects of the subsidiary include engaging in international business and investments within and outside the UAE. Precot Holdings Limited is authorized to hold assets and equity of subsidiary corporations, incorporate or purchase stakes in other companies globally, and own freehold property acceptable by the Jebel Ali Free Zone Authority. This move leverages Dubai's position as a key global trade hub to facilitate Precot Limited's broader expansion objectives.