In compliance with the applicable provisions of the Companies Act, 2013 ('the Act’), the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR’), this Board’s Report is prepared based on the
standalone financial statements of the Company (except to the extent where it is specifically mentioned) for the year under review
and also presents the key highlights of performance of subsidiaries and associate companies and their contribution to the overall
performance of the Company for the year under review.

The Directors are pleased to present the 34^th Annual Report of the Company together with the Audited Financial Statements for the
financial year ended March 31,2026.

1. CORPORATE OVERVIEW

Your company is primarily into exports of cotton garments especially Infants wear and Kids wear. The Company exports its
products to United States and European Markets.

2. FINANCIAL HIGHLIGHTS

As mandated by the Ministry of Corporate Affairs, your company has prepared the financial statements (both standalone and
consolidated) for the year ended March 31, 2026 as per Indian Accounting Standard ('IND AS’) notified under Sec 133 of the
Companies Act, 2013 read with notification no. G.S.R. 111(E) dated 16.02.2015 as amended from time to time.

The Standalone and Consolidated financial performance of the Company for the financial year ended March 31, 2026 is
summarized below:

3. FINANCIAL PERFORMANCE

The Company continues to maintain its market leadership in Infants wear across US markets during the year under review. In
addition, with a view to risk mitigation we have added European buyers also during the year. We are also planning to penetrate
UK market too in the coming years. As everybody are aware Company had to take back foot both on turnover and Profit sides
due to the Tariff war created globally. Our turnover dipped by app: 38% and EBIDTA by app: 62%.

However the Tariff war has moderated and duty rates have
come down to normal levels and the Company expects to
achieve a record turnover for 2026-27 although the major
performance will be skewed towards the 2^nd half year.
Again the Trade agreement signed with UK and Europe
will open up huge market for Indian Textiles Industry. Kitex
Groups vision to expand capacity has given it an edge as
the capacity available in India is limited and the lead time
to add capacity it longer. We expect to capture the huge
opportunities available and will continue our record growth
in the coming years.

STANDALONE PERFORMANCE

On standalone basis, your company reported a turnover of
H 63,660.93 lakhs ie., a 38% dip over last year. Cost of goods
sold as a percentage to revenue from operations increased
to 47% as against 43% basically due to reduction in margin
due to tariff issues. Employee cost as a percentage to
Turnover increased to 20% as against 15.50% in the
previous year. The operating profit stood at H 8,933 lakhs
compared with H 23,648 lakhs in the previous year, a dip of
62% over previous year.

However the company expects to reverse this trend in FY
26-27 towards achieving a record turnover .

CONSOLIDATED PERFORMANCE

On consolidated basis, total revenue for the financial
year under review was H71,928.15 lakhs as against H
100,134.57 lakhs for the previous financial year, a dip of
28% .Operating profit was H 8,070 lakhs and net profit after
tax was (910) lakhs .

The major reason for loss is due to the operating losses of
Kitex Apparel Parks Ltd , the new subsidiary which started
Commercial production whose operating expenses are
very huge while sales was negligible and had only domestic
yarn and fabric sales mostly.

PERFORMANCE HIGHLIGHTS OF SUBSIDIARY &
ASSOCIATE COMPANY

• ASSOCIATE COMPANY

As on March 31,2026, the Company has an Associate
Company, Kitex USA LLC being an Associate Company
with joint investment between the Company and Kitex
Childrenswear Limited to support and facilitate design
and supply for US Market customers. The Associate
Company markets through own Brand "Little Star”
Infants wear in US and Canada.

Your company has also sold products worth H462.81
Lakhs to its Associate during the reporting period.

• SUBSIDIARIES

During the year under review, the company had 6 wholly
owned subsidiaries viz. Kitex Babywear Limited, Kitex
Littlewear Limited, Kitex Kidswear Limited, Kitex
Knits Limited, Kitex Socks Limited and Kitex Packs

Limited. Company has one more subsidiary named
Kitex Apparel Parks Limited formed as joint venture
to take care of the expansion at Telangana along
with Kitex Childrenswear Limited in the ratio 70:30
investment ratio.

Further, pursuant to the provisions of Section 136 of
the Act, Audited Financial Statements in respect of
subsidiaries are available on the website of the Company
www.kitexgarments.com.

A report on the salient features of the financial statements
of Subsidiaries/ Associate Companies/ Joint Ventures
prepared in form AOC-1 is provided as Annexure - A.

There are no companies which have ceased to be its
Subsidiaries, Joint Ventures or Associate Companies
during the year under review.

The Company has adopted the policy for determining
material subsidiaries in terms of Reg 16(1)(c) of
Listing Regulations as amended from time to time
and may be accessed on the company’s website www.
kitexgarments.com.

The Consolidated Financial Statements of the Company
along with its Subsidiaries and Associate prepared for the
year 2025-26 in accordance with relevant Ind AS issued by
ICAI forms part of this Annual Report.

4. DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

Your Directors recommend for your approval, final dividend
of H0.50 paise per share (50%), subject to deduction of
income tax at source for the year ended March 31,2026 on
equity shares of Re. 1/- each fully paid-up. The total outgo
on account of dividend inclusive of taxes for FY 2025-26
is H997.50 lakhs ( PY H997.50 lakhs) which represents
a payout of 17.53% of the Company’s standalone
profit after taxes.

As per Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, top one
thousand listed entities based on market capitalization
are required to formulate a Dividend Distribution Policy.
Accordingly, the Board approved and adopted Dividend
Distribution Policy which is available on the Company’s
website: viz., www.kitexgarments.com

5. TRANSFER TO RESERVES

During the year under review, your company transferred a
sum of H2,000 lakhs to the General Reserve on account of
future expansions.

6. SHARE CAPITAL

The paid-up equity share capital as on 31^st March, 2026,
was H1995.00 lakhs consisting of 19,95,00,000 equity
shares of Re. 1/- each fully paid-up.

The Company at its last AGM increased its Authorized
Share Capital to ?50,00,00,000 (Rupees Fifty Crores only)
divided into 50,00,00,000 (Fifty Crores) Equity Shares of
Re.1/- (Rupee One only) each and consequently, Clause
V of the Memorandum of Association of the Company
stands altered.

7. MATERIAL CHANGES AND COMMITMENTS,
IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY

There have been no material changes or commitments
affecting the financial position of the Company which have
occurred between the end of the financial year and the date
of this report.

8. CORPORATE DEVELOPMENT

Scheme of Arrangement - Kitex Childrenswear Limited

Your Directors approved a Scheme of Arrangement
("the Scheme”) between Kitex Childrenswear Limited
("KCL”), your Company and their respective shareholders
and creditors during FY 2024-25. The Scheme provides
for demerger of the Textile Business Division of KCL
into your Company.

KCL is primarily engaged in apparel business specialized
in premium infants wear and Childrenswear. Under the
Scheme, your Company will issue 9706 shares of face
value of H1/- each for every 100 equity shares of KCL of
face value H1/- each to the shareholders of KCL as on
the record date as defined in the Scheme, resulting in
the issuance of 9,21,97,779 new equity shares of your
Company. The transaction will enable your company
to optimize business operations, achieve economies
of scale, create operational efficiency, common pool of
production and better utilization of resources.

The above said merger has approved by requisite majority
of members of the Company and creditors of both the
companies at their respective meetings held on July
24, 2026 pursuant to the order of the Hon’ble National
Company Law Tribunal, Kochi Bench. It is in the advanced
stage of obtaining approval from regulatory authorities.

The proposed scheme of arrangement will bring greater
agility, enabling a more focused approach to execution
and value creation, delivering superior experiences for
customers, rewarding careers for employees, and long¬
term returns for shareholders.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the
Act, the Board of Directors of the Company hereby state
and confirm that:

(i) in the preparation of the Annual accounts for the year
ended March 31, 2026, the applicable accounting
standards had been followed along with proper
explanation relating to the material departures, if any;

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

(iii) the Directors had taken proper and sufficient care
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) the annual accounts had been prepared on a
going concern basis;

(v) that proper internal financial controls were
followed by the Company and that such internal
financial controls are adequate and were operating
effectively; and

(vi) the Directors had devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems were adequate and
operating effectively.

10. TRANSFER TO INVESTORS EDUCATION AND
PROTECTION FUND

a. Transfer of Unpaid Dividend

Pursuant to the provisions of Sec 124(5) of
the Companies Act, 2013, your Company has
transferred H6,52,741.00 for the financial year 2017¬
18 to Investors Education Protection Fund (IEPF)
on September 18, 2025. This amount was lying
unclaimed/ unpaid with the Company for a period of
7 (seven) years after declaration of final dividend for
the said financial year.

b. Transfer of shares underlying unpaid dividend

The Board of Directors at its meeting held on May
29, 2025, resolved to transmit 14,945 equity shares
of the Company into the demat account of the IEPF
Authority held with CDSL (DPID/ Client ID: 12047200
- 13676780) in terms of the provisions of Sec 124(6)
of the Companies Act, 2013 read with IEPF Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016
as amended from time to time.

The equity shares were the shares of 35 shareholders
whose unclaimed/ unpaid dividend pertaining to
FY 2017-18 had been transferred into IEPF and who had
not encashed their dividends for 7 (seven) subsequent
financial years. The Company has taken various steps
by sending reminders requesting them to encash their
dividend so as to reduce the limit of unclaimed dividend
before transferring the dues to IEPF. The complete list of
such shareholders whose shares were due for transfer to
IEPF was also placed in investor’s relations section on the
website of the Company www.kitexgarments.com.

Further, dividend which has become unclaimed for the last
7 years since 2018-19 will be transferred to IEPF account
on or before November 02, 2026 for which Company had
sent the reminder letter to shareholders concerned. The
details are provided in the shareholder information section
of this Annual Report and are also available on our website
www.kitexgarments.com.

11. CAPITAL EXPENDITURE

As on 31^st March, 2026, the Gross Fixed Assets stood at
H29,512.94 Lakhs and net fixed assets of H9,164.58 Lakhs.
Additions during the year amount to H237.47 Lakhs.

12. FUTURE PROSPECTS

Our major future prospects is planned through our
expansion in the state of Telangana through our subsidiary
Kitex Apparel Parks Ltd. The total project cost planned
is approximately H3500 Crores which is funded through
Debt/Equity in the ratio of 70:30. The equity is shared in a
proportion of 70:30 by KGL and KCL. The term loan is funded
by a Consortium of Six Banks headed by Axis Bank. There
are two Projects, one at Kakatiya Mega Textiles Park and
second one at Sitarampur Industrial Park near Hyderabad.

Warangal Project is coming to a closure and H1800
Crores already spent against H2000 Crores planned and
production commenced in August 2025. In Sitarampur
consideration towards land has already been fully paid and
land documentation expected in October 2026. H92 Crores
has been totally spent against this Project. Commercial
production for this project is planned in September 2028.

Since the US Tarff has came to normal levels and the
USA FTA is on the anvil along with UK and EU FTA already
signed we expect major prospects for the Company. Your
Company is at a major advantage due to advanced stage of
Implementation of Telangana Project.

13. CREDIT RATING

During the year under review, India Ratings, the Credit Rating
Agency assigned the rating of the Company as "IND A with
negative outlook” for the company’s long term borrowings
and assigned the rating of IND A1 for the Company’s short
term borrowings.

14. QUALITY AND ACCOLADES

Your Company continues to win awards year by year, thus
reiterating its credible market position.

15. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the
nature of the business.

16. LISTING

The Equity Shares of the Company continue to remain
listed on BSE Limited and the National Stock Exchange
of India Limited.

17. DEPOSIT FROM THE PUBLIC

The Company has not accepted any deposit within the
meaning of Chapter V of the Companies Act, 2013 and the
Rules framed thereunder.

18. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134 (3) (a) of
the Act, the Annual Return as on March 31,2026 is available
on the website of the Company at www.kitexgarments.com.

19. SECRETARIAL STANDARD

The Company complies with all applicable
secretarial standards.

20. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS BY THE COMPANY

The Company had continued to give a Corporate Guarantee
of H 2023 Crores during the financial year 25-26 pursuant to
the provisions of Section 185 and 186 of the Act and SEBI
(LODR) Regulations, 2015. Loan amount of ?19,945.01
Lakhs and Investments of ?57,434.42 Lakhs have been
made in its Subsidiary Companies, the details that are
covered under the provision of the said section are given
in the respective notes to financial statements under Note
No. 2.03 and 2.02.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review and between the end of the
financial year and date of this report, the following are
the changes in Directors and Key Managerial Personnel
of the Company:

(i) Mr. C P Philipose ceased to be the Independent
Director of the Company upon resignation on May
06, 2026. The Board places on record its appreciation
towards valuable contribution made by him during
his tenure as member of the Board and the Chairman
of the Audit Committee and Nomination and
Remuneration Committee of the Board.

(ii) Based on the recommendation of the Nomination
and Remuneration Committee (NRC) of Board and
subject to the approval of Members, the Board
appointed Mr. Bijoy Philipose as an Additional
Director, designated as a Non-Executive Independent
Director, with effect from June 30, 2026, subject to
the approval of the shareholders.

(iii) In accordance with the provisions of the Act and in
terms of the Memorandum and Articles of Association
of the Company, Mr. K L V Narayanan, Non-Executive
Director of the Company retires by rotation at the
ensuing Annual General Meeting and being eligible,
has offered himself for reappointment. Item seeking
his reappointment along with his detailed profile has
been included in the notice convening the AGM.

There is no change in the Board of Directors & Key
Managerial Personnel of your company during the financial
year 2025-26 except as mentioned above.

All Independent Directors have given declaration that
they meet the criteria of independence as laid down
under Section 149(6) of the Companies Act, 2013 and
Reg 16(1)(b) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as amended from time
to time. Based on the confirmation/ disclosure received
from the directors, the Non-Executive Directors namely Mr.
C. P. Philipose, Mr. A. K. Mathew and Mrs. Sumi Francis are
treated as independent as on March 31,2026.

The Company recognizes the importance of a diverse board
and believes that it brings new ways of thinking, insights
and different perspective on consumer wants and needs.
This will help company to retain competitive position in the
corporate world.

In the opinion of the Board, the Independent Directors
are persons with integrity, expertise and experience in
the relevant functional areas. Requirements of online
proficiency self-assessment test in terms of Rule 6(4)
of The Companies (Appointment and Qualifications of
Directors) Rules, 2014 will be complied within a period of
two years from the date of inclusion of the name in the data
bank of independent directors, if the same is applicable.

During the year under review, meetings of the Board of
Directors and its Committees were held, details of which
are set out in the Corporate Governance Report which
forms part of this Report.

22. BOARD EVALUATION & FAMILIARISATION
PROGRAMME

Having a formalized Board evaluation gives Board
Members an opportunity of assessing their own
performance and brings out the importance of the
contributions of individual directors. It is a mechanism
by which Board members candidly reflect on how well the
Board is meeting its responsibilities.

The Board of Directors has carried out an annual evaluation
of its own performance, Board Committees and individual
Directors pursuant to the provisions of the Companies
Act, 2013 as well as SEBI (LODR) Regulations, 2015.

With the objective of evaluating the performance of
Directors, Nomination and Remuneration Committee
has formulated a structured questionnaire after taking
into consideration the various aspects viz., composition
of the Board and its committees, Board’s function, its
culture, quality and timely flow of information, frequency
of meetings, execution and performance of specific duties,
obligations and governance.

Board has carried out an annual performance evaluation
of its own performance, the performance of various
committees of the Board, Individual Directors and the
Chairman based on adopted questionnaire. A note on the

familiarizing programme adopted by the Company for the
orientation and training of the Directors and the manner
in which the Board evaluation process undertaken in
compliance with the provisions of the Companies Act, 2013
and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is provided in the Corporate Governance
Report which forms part of this Report.

Further, the Independent Directors of the Company met
on February 02, 2026 to review the performance of the
Non-Executive Directors, Chairman of the Company and
the access of the quality, quantity and timelines of flow
of information between the Company management and
the Board to effectively perform their duties. The details
of familiarization program conducted for Independent
Directors of your Company are available on your
Company’s website www.kitexgarments.com.

23. POLICY ON DIRECTORS' APPOINTMENT AND
REMUNERATION AND OTHER DETAILS

The Company’s policy on directors’ appointment
and remuneration including criteria for determining
qualifications, positive attributes, independence of a
director and other matters provided in Section 178(3) of
the Act is available on our website www.kitexgarments.
com. We affirm that remuneration paid to the directors
is as per the terms laid out in the Nomination and
Remuneration Policy of the Company.

Some of the salient features of which are as follows:

1. To regulate the appointment and remuneration of
directors, key managerial personnel and the senior
management personnel;

2. To identify persons who are qualified to become
directors as per the criteria/ Board skill matrix
identified by the Board;

3. To ensure proper composition of Board of Directors
and Board diversity;

4. To ensure that level and composition of remuneration
is reasonable and sufficient to attract, retain and
motivate directors, key managerial personnel and
senior management and their remuneration involves
a balance between fixed and incentive pay reflecting
short and long term performance objectives
appropriate to Company’s working and its goals.

5. To provide succession planning to maintain an

appropriate balance of skills, experience and
expertise on the Board and Senior Management.

24. BOARD COMMITTEES

Detailed composition of the mandatory Board committees
namely Audit Committee, Nomination and Remuneration
Committee, Risk Management Committee, Stakeholders
Relationship Committee, CSR Committee, its number
of meetings held during the year under review and other

related details are set out in the Corporate Governance
Report which forms part of this Report. There have been
no situations where the Board has not accepted any
recommendation of the Audit Committee.

25. EMPLOYEES' STOCK OPTION SCHEME

The Company has not granted any Employee Stock Option
within the meaning of section 62 (1) (b) of the Companies
Act, 2013 read with its Rules framed thereunder and
respective SEBI regulations.

26. CORPORATE SOCIAL RESPONSIBILITY

Your Company believes in touching some of the important
aspects of human life. Even before commencement of
Companies Act, 2013, it has embarked on the journey of
social change through inclusive growth, dedicated to the
cause of future and future generations. The Company
implements CSR directly to the society of Kizhakkambalam
Panchayat and four neighboring Panchayats in which it
operates and efforts are revolved around several projects
relating to Social Empowerment and Welfare, Infrastructure
Development, Sustainable Livelihood and Health Care
during the year under review. These projects are in
accordance with Schedule VII of the Act and its CSR policy.

The brief report of the Corporate Social Responsibility
(CSR) policy of the Company and the initiatives undertaken
by the Company on CSR activities during the year are set
out in Annexure - B of this report in the format prescribed
in the Companies (Corporate Social Responsibility
Policy) Rules, 2014. For other details regarding the CSR
Committee, please refer to the Corporate Governance
Report, which is a part of this report. The Corporate Social
Responsibility Policy (CSR Policy) indicating the activities
to be undertaken by the Company are available on your
Company’s website www.kitexgarments.com.

27. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the
operations of the Company, as required under SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 as amended, forms an integral part of this Report.

28. BUSINESS RESPONSIBILITY ANDSUSTAINABILITY REPORT

As required under Regulation 34 of the Listing Regulations,
the Business Responsibility and Sustainability Report
is provided in a separate section and forms part of the
Annual Report describing the initiatives undertaken by the
Company from an environmental, social and governance
perspective during the year under review.

29. CORPORATE GOVERNANCE

A separate section on parameters of statutory compliance
evidencing the standards expected from a listed entity
have been duly observed and a report on Corporate

Governance as well as certificate from Practicing Company
Secretary confirming compliance with the requirements of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 forms part of this Report.

30. VIGIL MECHANISM

The Company has adopted a Vigil Mechanism to report
concern about unethical behavior, actual or suspected
fraud or violation of Company’s code of conduct by
the Directors and employees. The policy provides for
direct access to the Chairman of the Audit Committee
and safeguarding the employees and Directors who
raises grievances against victimization. The details of
establishment of such mechanism have been disclosed in
the corporate governance report for the year under review.
The vigil mechanism is disclosed in the website of the
company viz., www.kitexgarments.com.

31. RELATED PARTY TRANSACTIONS

All transactions or arrangement entered into with the
related parties for the year under review were on arm’s
length basis and in the ordinary course of business. Hence
the provisions of Section 188 of the Companies Act,
2013 and the Rules made thereunder are not attracted.
Accordingly, the disclosure of Related Party Transactions
as required under Section 134(3)(h) of the Companies Act,
2013 in Form AOC-2 is enclosed as Annexure - C.

The company has developed a framework through Standard
Operating Procedures for the purpose of identification
and monitoring of such Related Party Transactions. All
Related Party Transactions were placed before the Audit
Committee as also to the Board for approval. Omnibus
approval was obtained on a yearly basis for transactions
which are of repetitive nature. Transactions entered
into pursuant to omnibus approval are audited by the
Risk Assurance Department and a statement showing
the details of all Related Party Transactions are placed
before the Audit Committee and the Board for review and
approval on a quarterly basis.

None of the Directors has any pecuniary relationship or
transactions vis-a-vis the Company. The policy on Related
Party Transactions as approved by the Board of Directors
has been uploaded on the website of the Company viz.,
www.kitexgarments.com.

32. INTERNAL CONTROL SYSTEM AND THEIR
ADEQUACY

Your Company has an effective internal control and risk-
mitigation system, which are constantly assessed and
strengthened with new/ revised standard operating
procedures. The Company’s internal control system is
commensurate with its size, scale and complexities of its
operations. The internal and operational audit is entrusted
with M/s. K Venkatachalam Aiyer & Co, a leading firm of
Chartered Accountants. The main thrust of Internal Audit is
to test and review controls, appraisal of risks and business

processes, besides benchmarking controls with best
practices in the industry.

The Audit Committee of the Board of Directors actively
reviews the adequacy and effectiveness of the internal
financial control systems w.r.t. the financial statements
and suggests improvements to strengthen the same. The
Company has a robust Management Information System,
which is an integral part of the control mechanism.

The Audit Committee of the Board of Directors, Independent
Auditors and the Core Committee Heads have periodically
been appraised the significant internal audit observations
and the corrective actions have been taken. The Audit
Committee places a key role in providing assurance to the
Board of Directors. In order to maintain its objectivity and
independence, the Internal Audit function reports to the
Chairman of the Audit Committee.

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

The information on conservation of energy, technology
absorption and foreign exchanges earnings and outgo
pursuant to Section 134(3)(m) of the Companies Act,
2013 read with the Rule 8(3) of the Companies (Accounts)
Rules, 2014 as amended from time to time is annexed as
Annexure - D and forms an integral part of this Report.

34. BUSINESS RISK MANAGEMENT

Your Company continues to strengthen its robust Risk
Management Framework and the same was reviewed by the
Audit Committee periodically. As per the listing regulations,
top 1000 listed entities based on market capitalization has
to constitute Risk Management Committee. Accordingly,
Board of Directors at its meeting held on May 28, 2021 has
constituted the Committee, the details of which have been
covered in the Corporate Governance Report forming part
of the report. The Committee meets for focused interaction
with business, identifying and prioritizing strategic,
operational risk and formulating appropriate mitigation
strategies and conducting frequent review of the progress
on the management of the identified risk. The Committee
also constituted the Risk Management policy for assessing
the risks connected to the company and also minimization
procedures. Your company believes that managing risk
helps in maximizing return. The company’s approach in
addressing business risks includes periodical review of
such risks and thereby mitigating it effectively. The risk
management framework is reviewed periodically by the
Board and the Audit Committee. Some of the risks that the
company is exposed to are:

• FINANCIAL RISKS:

The Company’s policy is to actively manage its foreign

exchange risks within the framework laid down by the

Company’s forex policy approved by the Board. Given

the interest rate fluctuations, your Company has
adopted a prudent and conservative risk mitigation
strategy to minimize financial and interest cost risks.

• COMMODITY PRICE RISKS

The Company is exposed to the risk of price
fluctuations of raw materials as well as finished
goods. The company proactively manages
these risks through forward booking, inventory
management and proactive vendor development
practices. Your company’s reputation for quality,
product differentiation coupled with the existence
of a powerful brand image with a robust design and
marketing network in US mitigates the impact of price
risk on finished goods.

• REGULATORY RISKS

The Company recognized its risks attached to
various statutes, laws and regulations. The company
is mitigating these risks through regular review of
legal compliances carried out through our internal as
well as external compliance audits by our customers.

• HUMAN RESOURCE RISKS

Retaining the existing talent pool and attracting new
talent are the major risks affecting the company. We
have initiated various measures including rolling out
of strategic talent management systems, training and
integration of learning and development activities.
Our company has collaborated with various agencies
like Integrated Skill Development Scheme (ISDS),
Kudumbashree which helps to identify, nurture and
groom labour talents within all states of India to
prepare them for future business leadership.

• STRATEGIC RISKS

Emerging businesses, capital expenditure for
capacity expansion etc are normal strategic risks
face by your company. However, your Company has
well-defined processes and procedures for obtaining
approval for investments in new businesses and
capacity expansions.

• CYBER SECURITY RISKS

Understanding the threat landscape is essential for
your company to make informed decisions about
where to focus the security efforts and resources.
Another major concern is the over-reliance on AI
tools may lead to a gradual erosion of foundational
technical skills. However, your Company thinks on
how to approach technical training and professional
development in light of AI’s influence and periodical
internal cyber security audit to ensure the minimal
cyber security risks.

35. AUDITORS

35.1 INDEPENDENT AUDITORS

As per the provisions of Section 139 of Companies
Act, 2013, M/s. MSKA & Associates, Chartered
Accountants, (FRN: 105047W) have been re¬
appointed as Independent Auditors of the company
for the second term of five years from the conclusion
of the 31^st AGM of the Company held on September
30, 2023. Further the report of the Independent
Auditors along with notes to financial statements is
enclosed to this Annual Report.

The Auditors have confirmed that they have
subjected themselves to the peer review process
of Institute of Chartered Accountants of India (ICAI)
and hold valid certificate issued by the Peer Review
Board of the ICAI.

The Audit Committee reviews the independence and
objectivity of the Auditors and the effectiveness of
the Audit process.

The Auditors’ Report on the Company’s Standalone
Financial Statements contain qualification and the
Company’s Consolidated Financial Statements do
not contain any qualification, reservation, disclaimer
or adverse remarks.

35.2. BOARD'S COMMENT ON AUDITOR'S

QUALIFICATIONS

The explanations on the qualifications/observations
given by the Statutory Auditors in their Audit Reports
have been provided in Note 2.02.1 to the Standalone
Financial Statements.

35.3.SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the
Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed
M/s. SVJS & Associates, Practicing Company
Secretaries, Kochi as Secretarial Auditor of the
Company for a term of five (5) consecutive years,
commencing from financial year 2025-26 till financial
year 2029-30 to undertake the Secretarial Audit of the
Company for a period of five years and the same was
approved by the Shareholders at the AGM held in 2025.
The Audit Report issued by the Secretarial Auditors
for the FY 2025-26 form part of this Report and is set
out in Annexure - E which is self-explanatory.

The explanations on the observations given by the
Secretarial Auditors in their Audit Report are as
follows: The Company will report the violation of
the Code of Conduct under the SEBI (Prohibition
of Insider Trading) Regulations, 2015 to the stock
exchange(s) and will strengthen its monitoring and
compliance mechanisms.

The Company’s unlisted subsidiary, Kitex Apparel
Parks Limited (KAPL) had also undergone Secretarial
Audit in terms of Regulation 24A of the Listing
Regulations and Circulars/Guidelines issued
thereunder. The Secretarial Audit Report of KAPL for
the financial year ended March 31, 2026 is annexed
herewith as Annexure - E1. The Secretarial Audit
Report of KAPL does not contain any qualification,
reservation, and adverse remark.

35.4.INTERNAL AUDITORS

M/s. K. Venkatachalam Aiyer & Co, Chartered
Accountants continue to be the Internal Auditors of
your company for the financial year 2025-26.

36. SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS

There were no significant and material orders passed by
the Regulators/ courts except as mentioned in corporate
governance report which forms part of this report, which
would impact the going concern status of your company
and its future operations during the period under review.

37. ENVIRONMENT AND SAFETY

The Company is conscious of the importance to
environmental friendly and safe operations. The
company’s policy requires conduct of operations in
such a manner so as to ensure safety of all concerned,
compliance of environmental regulations and preservation
of natural resources.

As required by the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and redressal) Act,
2013, the Company has formulated and implemented
a policy on prevention of sexual harassment at the
workplace with a mechanism of lodging complaints. The
following is a summary of sexual harassment complaints
received and disposed off during the reporting period:

• No. of complaints received in the year: Nil

• No. of complaints disposed off during the year: Nil

• No. of cases pending for more than ninety days: Nil

The company has complied with provisions relating to the
constitution of Internal Complaints Committee under the
Act. The Company has filed Annual Report for the year
ended December 31,2025 under the Act with District officer.

38. HUMAN RESOURCES AND INDUSTRIAL
RELATIONS

Your Company believes that its manpower is an asset
for the company and enjoys strong brand image as a
preferred and caring employer. The ongoing focus is on
attracting, retaining and engaging talent with the objective
of creating a robust talent pipeline at all levels. Value-
based HR programmes have enabled your Company’s HR

team to become strategic partners for the business. Your
company laid stress to build a women-friendly workplace
by introducing various initiatives for the development of
women employees in the organization. Your Company has
focused on internal talents and nurtures them through the
culture of continuous learning and development, thereby
building capabilities for creating future leaders. Your
company’s initiatives like hiring freeze at some levels,
robust talent review, career development conservations
and best-in-class development opportunities, which
will help to enhance the employees experience at your
Company. The Company’s Human Resources plays a
critical role in your Company’s talent management process.

The disclosure as required under Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is annexed as Annexure - F and forms part
of this report.

Information relating to remuneration of Directors under
Section 197 read with Rule 5(2) of Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014
has been given in Annexure - G to the Director’s Report.

39. GENERAL

Your Directors state that no disclosure or reporting is
required in respect of the following items as there were no
transactions on these items during the year under review:

• There were no frauds reported by the auditors under
provisions of the Companies Act, 2013;

• Issue of equity shares with differential rights as to
dividend, voting or otherwise;

• There were no revisions in the financial statements;

• Issue of share (including sweat equity shares) to
employees of the Company under any scheme as
permitted under any provision of Companies Act, 2013.

• Company is not required to maintain cost records as
specified by the Central Government under section
148(1) of the Companies Act, 2013.

• The Company has complied with the applicable
provisions of Maternity Benefit Act, 1961.

• No application has been made under the Insolvency
and Bankruptcy Code; hence the requirement to
disclose the details of 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 is not applicable; and

• The requirement to disclose the details of difference
between amount of the valuation done at the time
of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions
along with the reasons thereof, is not applicable.

40. ACKNOWLEDGEMENTS

Your Directors thank various Central and State Government
Departments, Organizations and Agencies for the continued
help and cooperation extended by them. The Directors also
gratefully acknowledge all stakeholders of the Company
viz. customers, members, dealers, vendors, banks and
other business partners for the excellent support received
from them during the year. The Directors place on record
their sincere appreciation to all employees of the Company
for their unstinted commitment and continued contribution
to the Company.

For and on behalf of the Board of
Kitex Garments Limited

Sabu M Jacob

Kizhakkambalam Chairman & Managing Director

August 14, 2026 (DIN: 00046016)