We have audited the accompanying standalone financial
statements of Kitex Garments Limited ("the Company”), which
comprise the Balance Sheet as at March 31,2026, the Statement
of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity, the Statement of Cash Flows
for the year then ended, and notes to the standalone financial
statements, including material accounting policy information
and other explanatory information (hereinafter referred to as the
"standalone financial statements”).

In our opinion and to the best of our information and according
to the explanations given to us, except for the effects of the
matters described in the Basis for Qualified Opinion section of
our report, the aforesaid standalone financial statements give
the information required by the Companies Act, 2013 ("the
Act”) in the manner so required and give a true and fair view
in conformity with the Indian Accounting Standards prescribed
under section 133 of the Act read with Companies (Indian
Accounting Standards) Rules, 2015, as amended ("Ind AS”)
and other accounting principles generally accepted in India, of
the state of affairs of the Company as at March 31, 2026, and
its profit (including other comprehensive income), changes in
equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

The Company has an investment in an Associate Company, Kitex
USA LLC, amounting to Rs. 2,776.24 lakhs as at March 31,2026
(March 31,2025: Rs. 2,776.24 lakhs). The associate entity has
incurred continuous losses and its net worth has fully eroded
as at the reporting date. The management of the Company
has determined the carrying value of investment from the said
Associate as recoverable based on valuations performed and
future projected cash flows, after considering the proposed
changes in the business plan, forecasted future revenue growth
and expected higher margin contributions. For the year ended
March 31, 2026, the management of the Company has not
been able to provide corroborative evidence to substantiate the
reasonableness of the above-mentioned unobservable inputs.
Accordingly, we are unable to comment on the recoverability
of the carrying value of the investment in Kitex USA, LLC as at
March 31,2026.

This matter was also qualified in our report on the standalone
financial statements of the Company for year ended
March 31,2025.

We conducted our audit of the standalone financial statements
in accordance with the Standards on Auditing (SAs) specified

under section 143(10) of the Act. Our responsibilities under
those SAs are further described in the Auditor’s Responsibilities
for the Audit of the standalone Financial Statements section of
our report. We are independent of the Company in accordance
with the Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical requirements that
are relevant to our audit of the standalone financial statements
under the provisions of the Act and the Rules thereunder, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone
financial statements of the current period. These matters were
addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. In
addition to the matter described in the Basis for Qualified Opinion
section, we have determined the matters described below to be
the key audit matters to be communicated in our report.

Valuation Of Inventory

Refer to Note 2.08 to Standalone financial statements.

The total value of inventory as of March 31, 2026, amounted
to Rs. 13,047.12 lakhs representing 9.02% of the total assets
(March 31, 2025: 18,949.15 Lakhs, 13.59% of the total
assets). Inventories are measured the lower of cost and net
realisable value.

The Company is an apparel manufacturer and exporter of knitted
garments for infants and kids.

The valuation of raw material, semi-finished and finished
goods is a comprehensive exercise and is carried out manually.
Allocation of indirect production costs is also estimated and
loaded as inventory cost, as part of the valuation exercise.
This allocation requires judgment and estimation, which are
uncertain at the time of such estimation.

Management also applies judgement in identification &
determination of obsolete inventories and slow-moving items
of stocks and estimates the appropriateness of requisite
provisions thereon. On account of the subjective judgment
and uncertainties involved above, we considered this as a
Key Audit Matter.

We have performed the following audit procedures in relation to
Inventory valuation:

• Assessed the accounting policies relating to valuation of
Inventory in compliance with Ind AS 2 ("Inventories”).

• Assessed the management process of inventory valuation
including allocation of overheads to inventory.

• Evaluated the design and implementation and tested
the operative effectiveness of relevant internal controls
pertaining to valuation of inventory, including the process
for write-down of obsolete inventory and the manual
inventorisation of indirect production costs.

• Evaluated the significant judgements and estimates
made by Management in applying Company’s accounting
policy in relation to the manual inventorisation of indirect
production costs.

• Assessed the adequacy and accuracy of disclosures
in the standalone financial statements with respect to
inventory in accordance with respective accounting
standards and framework.

Information Other than the Standalone Financial
Statements and Auditor's Report Thereon

The Company's Board of Directors are responsible for the other
information. The other information comprises the Director's
report along with annexures but does not include the standalone
financial statements and our auditor's report thereon. The
Director’s report is expected to be made available to us after the
date of this auditor’s report.

Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
identified above when it becomes available and, in doing
so, consider whether the other information is materially
inconsistent with the standalone financial statements or our
knowledge obtained in the audit or otherwise appears to be
materially misstated.

When we read the Director’s report, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance
under SA 720 'The Auditor’s responsibilities Relating to Other
Information’ and describe actions applicable in the applicable
laws and regulations.

Responsibilities of Management and Board of
Directors for the Standalone Financial Statements

The Company’s Management and Board of Directors are
responsible for the matters stated in section 134(5) of the Act
with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance, changes in equity and cash flows of the

Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards
specified under section 133 of the Act. This responsibility
also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of
the assets of the Company and for preventing and detecting
frauds and other irregularities; the selection and application
of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the standalone financial
statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the
Management and Board of Directors of the Company are
responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the Board of Directors either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the
Company’s financial reporting process.

Auditor's Responsibilities for the Audit of the
Standalone Financial Statements

Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
standalone financial statements.

We give in "Annexure A" a detailed description of Auditor’s
responsibilities for Audit of the Standalone Financial Statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2020
("the Order”), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give
in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and except for the matter described
in the Basis for Qualified Opinion section above,
obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purposes of our audit of the
aforesaid standalone financial statements.

(b) In our opinion, proper books of account as required by
law relating to preparation of the aforesaid standalone
financial statements have been kept by the Company
so far as it appears from our examination of those
books except for the effects of the matter described
in the Basis for Qualified Opinion section above,
matters stated in the paragraph 2(h)(vi) below on
reporting under Rule 11(g) and in respect of one of
the software in the absence of sufficient appropriate
audit evidence, we are unable to comment whether
back-up of the books of account and other books and
papers maintained in electronic mode, have been kept
in servers physically located in India on a daily basis
as explained in Note 2.48 to the financial statements.

(c) The Balance Sheet, the Statement of Profit and
Loss (including other comprehensive income), the
Statement of Changes in Equity and the Statement of
Cash Flows dealt with by this Report are in agreement
with the books of account maintained for the purpose
of preparation of the standalone financial statements.

(d) Except, for the matter described in the Basis of
Qualified Opinion section above, in our opinion, the
aforesaid standalone financial statements comply
with the Accounting Standards specified under
Section 133 of the Act.

(e) On the basis of the written representations received
from the directors as on March 31, 2026 taken on
record by the Board of Directors, none of the directors
are disqualified as on March 31, 2026 from being
appointed as a director in terms of Section 164
(2) of the Act.

(f) The reservation relating to the maintenance of
accounts and other matters connected therewith are
as stated in Basis for Qualified opinion, paragraph
2(b) above on reporting under Section 143(3)
(b) and paragraph 2(h)(vi) below on reporting
under Rule 11(g).

(g) With respect to the adequacy of the internal financial
controls with reference to standalone financial
statements of the Company and the operating
effectiveness of such controls, refer to our separate
report in "Annexure C".

(h) With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:

i. The Company has disclosed the impact of
pending litigations on its financial position in its
standalone financial statements - Refer Note
2.41 to the standalone financial statements.

ii. The Company did not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses.

iii. There has been no delay in transferring amounts,
to the Investor Education and Protection
Fund by the Company during the year ended
March 31,2026.

iv. a. The Management has represented

that, to the best of it’s knowledge and
belief, as disclosed in the note 2.46 to
the standalone financial statements, no
funds have been advanced or loaned or
invested (either from borrowed funds or
share premium or any other sources or
kind of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities ("Intermediaries”), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, directly or indirectly lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.

b. The Management has represented that,
to the best of it’s knowledge and belief,
as disclosed in the note 2.46 to the
standalone financial statements, no funds
have been received by the Company from
any person(s) or entity(ies), including
foreign entities ("Funding Parties”), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, directly or indirectly, lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.

c. Based on the audit procedures performed
that have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e) contain
any material misstatement.

v The final dividend paid by the Company during
the year in respect of the same declared for
the previous year is in accordance with section
123 of the Companies Act 2013 to the extent it
applies to payment of dividend.

The Board of Directors of the Company have
proposed final dividend for the year which
is subject to the approval of the members
at the ensuing Annual General Meeting. The
dividend declared is in accordance with
section 123 of the Act to the extent it applies to
declaration of dividend.

vi. Based on examination which included test
checks, the Company has used two accounting
softwares for maintaining its books of accounts
and payroll records during the year ended March
31, 2026 which has a feature of recording
audit trail (edit log) facility. The audit trail
feature was enabled and has been operated
throughout the year for all relevant transactions
recorded except that;

• In absence of the Independent Service
Auditors report (SOC 2 report), we are
unable to comment on the audit trail
feature at database level for one of the
accounting software which is maintained
by the third party software service provider.

• Audit trail feature was not enabled
for the software used for maintaining
payroll records throughout the year as
explained in Note 2.47 to the standalone
financial statements.

Further, during the course of our audit, except for
the above, we did not come across any instance
of audit trail feature being tampered.

Additionally, the audit trail of prior years has
been preserved by the Company as per the
statutory requirements for record retention
prescribed under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 to the extent it
was enabled and recorded in prior years.

3. In our opinion, according to information, explanations given
to us, the remuneration paid or provided by the Company
to its directors is within the limits laid prescribed under
Section 197 read with Schedule V of the Act.

For M S K A & Associates LLP

(Formerly known as M S K A & Associates)
Chartered Accountants
ICAI Firm Registration No. 105047W/W101187

S. Manikandan

Partner

Place: Chennai Membership No.: 226060

Date: May 30, 2026 UDIN: 26226060OPMJQW5815