The PVR compressed format does not allow Unity to flip the compressed image upon importing (in contrast to for example compressed DDS files, which Unity flips upon importing). Given that the default orientation of PVR textures does not match the required orientation of Unity, Unity renders these textures upside down. Hence Unity asks for flipped PVR textures (a warning is given: 'Unity expects vertically flipped PVR file.'). PVR encoders such as PVRTexTool allow PVR images to be encoded with a vertical flip, signaled in the PVR image header, hence the image source file does not have to be flipped. If it is not possible to encode the PVR images y-flipped, then the only solution is to manually flip the uvs in the shader. When using PVRTexTool, pass the arguments '-flip y,flag' to flip the image vertically and signal in the metadata that it was flipped.