Dear Members,
Your Directors are pleased to present the 33rd Annual Report of the
Company together with the Audited Financial Statements for the financial year ended March
31, 2025.
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, 2025 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, 2025 is summarized below:
|
Standalone |
Consolidated |
| Particulars |
For the year ended March 31, 2025 |
For the year ended March 31, 2024 |
For the year ended March 31, 2025 |
For the year ended March 31, 2024 |
| Sales and other Income |
|
|
|
|
| Revenue from operations |
98,280.46 |
61,692.20 |
98,280.46 |
61,692.20 |
| Other Income |
3,660.96 |
2,467.06 |
1,854.11 |
1,424.99 |
| Total Revenue |
101,941.42 |
64,159.26 |
100,134.57 |
63,117.19 |
| Profit Before Interest, Depreciation and Tax |
23,648.33 |
12,711.76 |
21,930.44 |
11,476.39 |
| Less: Finance Charges |
1,401.72 |
733.19 |
1,401.72 |
733.19 |
| Depreciation |
1,571.67 |
2,070.40 |
1,574.50 |
2,070.74 |
| Net Profit Before Tax |
20,674.94 |
9,908.17 |
18,954.22 |
8,672.46 |
| Less: Provision for Tax |
5,379.61 |
3,089.40 |
5,379.62 |
3,089.41 |
| Net Profit After Tax |
15,295.33 |
6,818.77 |
13,574.60 |
5,583.05 |
| Share of Profit/ (Loss) of Associates |
- |
- |
- |
- |
| Net Profit after share of profit of |
15,295.33 |
6,818.77 |
13574.60 |
5,583.05 |
| Associates |
|
|
|
|
| Balance of Profit brought forward |
62,896.45 |
59,109.12 |
57,383.72 |
54,533.44 |
| Balance available for appropriation |
78,191.78 |
65,927.89 |
70,958.32 |
60,116.48 |
| Dividend paid on Equity Shares |
997.50 |
997.50 |
997.50 |
997.50 |
| Transfer to General Reserve |
2,000.00 |
2,000.00 |
2000.00 |
2,000.00 |
| Issue of Bonus Shares |
1,330.00 |
- |
1,330.00 |
- |
| Surplus carried to Balance Sheet |
73,864.28 |
62,930.39 |
66,630.82 |
57,118.98 |
3. FINANCIAL PERFORMANCE
The Company continues to maintain its market leadership in Infants wear
across US markets during the year under review. We are glad to inform that the Company
achieved its record turnover in the history during the fiscal year. Global market trends
favours Indian Textile Industry. Drive to find alternate source from China provides huge
opportunity for India. Recent turmoils in Bangladesh has exposed the risk in sourcing of
garments from there. The recent Trade agreement signed with UK will open up huge market
for Indian Textiles Industry. Kitex Group vision to expand capacity has given it an edge
as the capacity available in India is limited and the lead time to add capacity is longer.
We expect to capture the huge opportunities available and will continue our record growth
in the coming years also.
During this year we have added few more leading buyers both from USA
and Europe to strengthen our exports and as future potential partners in our future
journey.
STANDALONE PERFORMANCE
On standalone basis, your company reported a turnover of H101,941.42
lakhs ie., a 58.89% increase over the previous financial year. Cost of goods sold as a
percentage to revenue from operations increased to 42.98% as against 41.35% in the
previous year due to increased production. Employee cost as a percentage to revenue from
operations decreased to 16.11% (H15,833.66 lakhs) as against 19.35%
H ( 11,939.36 lakhs) in the previous year. The operating profit stood
at H 20,674.94 lakhs compared with H 9,908.17 lakhs in the previous year, a jump of
108.67% over previous year. The net profit for the year was H 15,295.33 lakhs as against
H 6,818.77 lakhs reported in the previous year, a growth of 124.31%
over previous year. The EPS from continuing operations for the reporting year was H7.67 as
against H 3.42 reported in the previous year.
CONSOLIDATED PERFORMANCE
On consolidated basis, total revenue for the financial year under
review was H100,134.57 lakhs as against H63,117.19 lakhs for the previous financial year,
a growth of 58.65%. Profit before tax was H18,954.22 lakhs and net profit after tax was
H13,574.60 lakhs for the financial year under review as against H8,672.46 lakhs and
H5,583.05 lakhs for the previous year.
During the year under review, your company received orders
confirmations from major infant garment buyers viz., Gerber Childrenswear LLC, Carters,
Carters brands, Sam's Club and LAT who can contribute major part of your
Company's turnover in coming years. On an average, the Company manufactures 2.75
lakhs pieces of infant's apparel per day and dispatches as a whole container to
clients in US.
4. PERFORMANCE HIGHLIGHTS OF SUBSIDIARY & ASSOCIATE COMPANY
ASSOCIATE COMPANY
As on March 31, 2025, 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 H3,396.85
Lakhs to its Associate during the reporting period.
SUBSIDIARIES
During the year under review, the company has 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 Ltd 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 e-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 2024-25 in accordance with relevant Ind
AS issued by ICAI forms part of this Annual Report.
5. 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, 2025 on equity shares of Re. 1/- each fully paid-up. The total outgo on account
of dividend inclusive of taxes for FY 2024-25 is H997.50 lakhs ( PY H 997.50 lakhs) which
represents a payout of 6.52 % of the Company's standalone profits.
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 URL at:
http://www.kitexgarments.com/wp-content/uploads/2017/05/KGL_Dividend-Policy_2017.pdf
6. 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.
7. ISSUE OF BONUS SHARES
Your Directors are pleased to inform that during the year under review,
your Company issued 13,30,00,000 bonus equity shares of H1/- each in the ratio of 2:1.
Accordingly, the paid-up share capital of the Company was increased from H 6,65,00,000 to
H 19,95,00,000.
8. SHARE CAPITAL
Increase in Authorized Share Capital
The Board of Directors at their meeting held on August 04, 2025
approved and has resolved to seek approval from the shareholders at the ensuing Annual
General Meeting for increase in Authorized Share Capital of the Company from H25,00,00,000
(Rupees Twenty Five Crores only) divided into 25,00,00,000 (Twenty Five Crores) Equity
Shares of Re.1/- each (Rupee One only) to H50,00,00,000
(Rupees Fifty Crores only) divided into 50,00,00,000 (Fifty Crores)
Equity Shares of Re.1/- (Rupee One only) each and consequent alteration of Clause V of
Memorandum of Association of the Company
The paid-up equity share capital as on 31st March, 2025, was H1995.00
lakhs consisting of 19,95,00,000 equity shares of Re. 1/- each fully paid-up.
9. 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.
10. CORPORATE DEVELOPMENT
Scheme of Arrangement – Kitex Childrenswear Limited
During FY 2024-25, your Directors approved a Scheme of Arrangement
("the Scheme") between Kitex Childrenswear Limited ("KCL"), your
Company and their respective shareholders and creditors. 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 H 1/- 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 merger is in advanced stage of approval with stock exchanges and
SEBI and we expect the same to conclude by end of December 2025.
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.
11. 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, 2025, 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, 2025
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.
12. 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 H6,08,739.00 for the financial year 2016-17 to Investors
Education Protection Fund (IEPF) on August 22, 2024. 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.
Pursuant to the provisions of Sec 124(5) of the Companies Act, 2013,
your Company has transferred H7,02,827.00 pertaining to interim dividend in 2017-18 to
Investors Education Protection Fund (IEPF) on December 20, 2024. 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 sale proceeds of fractional
shares
Your Company has transferred the sale proceeds of fractional bonus
shares issued in the year of 2017 amounting to H32,997.00 which were not encashed for a
period of seven years has transferred to Investor Education and Protection Fund
(‘IEPF') pursuant to the provisions of Sec 125(2) of the Companies Act, 2013. c.
Transfer of shares underlying unpaid dividend
The Board of Directors at its meeting held on May 20, 2024, transmitted
11,676 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 Board of Directors at its meeting held on October 30, 2024,
transmitted 13,805 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 23 shareholders whose unclaimed/
unpaid dividend pertaining to FY 2016-17 and the equity shares were the shares of 24
shareholders whose unclaimed/ unpaid dividend pertaining to interim dividend in 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
2017-18 will be transferred to IEPF account on or before October 01, 2025 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.
13. CAPITAL EXPENDITURE
As on 31st March, 2025, the Gross Fixed Assets stood at H29,275.46
Lakhs and net fixed assets of H10,153.21
Lakhs. Additions during the year amount to H339.77 Lakhs.
14. 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 H3550 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 H1425
Crores already spent against H1770 Crores planned and production
commenced in April 2025. In Sitarampur consideration towards land has already been fully
paid and land documentation expected immediately. H92 Crores
has been totally spent against this Project. Commercial production for
this Project is planned in March 2027.
In view of the China plus 1 policy, political instability in Bangladesh
and the recent Trade agreement signed with UK, Indian Textile Industry is expected to
benefit considerably, as there will be a major shift of textiles demand to India. Your
Company is at a major advantage due to advanced stage of Implementation of Telangana
Project.
15. CREDIT RATING
During the year under review, India Ratings, the Credit Rating Agency
assigned the rating of the Company as "IND A Stable for the company's long term
borrowings and assigned the rating of IND A1 for the Company's short term borrowings.
16. QUALITY AND ACCOLADES
Your Company continues to win awards year by year, thus reiterating its
credible market position.
17. CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the
business.
18. LISTING
The Equity Shares of the Company continue to remain listed on BSE
Limited and the National Stock Exchange of India Limited.
19. 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.
20. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134 (3) (a) of the Act, the
Annual Return as on March 31, 2025 is available on the website of the Company at:
www.kitexgarments.com.
21. SECRETARIAL STANDARD
The Company complies with all applicable secretarial standards.
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
The Company had given a Corporate Guarantee of H 2000
Crores during the financial year 22-23 and enhanced the same to H 2023
Crores during the financial year 23-24 pursuant to the provisions of Section 185 and 186
of the Act and SEBI (LODR) Regulations, 2015. However, loan amount of H 10,634.77 Lakhs
and Investments of H 45,141.54 Lakhs have been made in its Subsidiary Companies, the
details that are covered under the provision of the said section are given in the notes to
financial statements.
23. 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. A K Mathew (DIN: 02437778) was appointed as Non-Executive
Independent Director of the Company for a term of 5 years with effect from August 14,
2024. His appointment was approved by the members at the last Annual General Meeting
(AGM).
(ii) Mrs. Sindhu Chandrasekharan (DIN: 06434415) was re-appointed as
Whole-Time Director of the Company for a term of 5 years effective from March 16, 2025.
Her re-appointment was approved by the members at the last Annual General Meeting (AGM).
(iii) Mr. Benni Joseph ceased to be the Independent Director of the
Company upon successful completion of his tenure on January 11, 2025. The Board places on
record its appreciation towards valuable contribution made by him during his tenure as
Director of the Company.
(iv) Mr. Sabu M. Jacob (DIN: 00046016) is sought to be reappointed as
Chairman and Managing Director of the Company effective from August 16, 2025 till August
15, 2028 based on recommendation of Nomination and Remuneration Committee and the Board
had in its meeting held on June 23, 2025 approved the same, subject to the approval of
shareholders at the ensuing Annual General Meeting.
(v) Mrs. Sumi Francis (DIN: 08950675) was appointed as the
Non-Executive Independent Director of the Company at the 29th Annual General Meeting held
on September 07, 2021 for a period of five years. The said period of five years ends on
November 12, 2025. Considering the past performance of Mrs. Sumi Francis as Director of
the Company, her consent and necessary disclosures to continue as Independent Director of
the Company and that she continues to meet criteria of Independence, the Board of
Directors, on June 23, 2025, had approved her re-appointment as Independent Director of
the Company for the second term from November 13, 2025 to November 12, 2030, subject to
approval of the shareholders and has recommended her re-appointment for approval of the
shareholders in the forthcoming Annual General Meeting by way of Special Resolution.
(vi) In accordance with Articles of Association, Mr. Sabu M Jacob (DIN:
00046016), executive director of the Company will be retiring at the ensuing Annual
General Meeting and being eligible, seek reappointment. Item seeking his re-appointment
74 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 2024-25 except as mentioned above.
The Company has received declaration of Independence as stipulated
under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 from the Independent Directors
confirming that they meet the criteria of independence as laid down under Section 149(6)
of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 as amended from time to time. The Independent
Directors have complied with the Code for Independent Directors prescribed in Schedule IV
to the Companies Act, 2013.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, 2025.
In the opinion of the Board, the Independent Directors are persons with
integrity, expertise and experience in the relevant functional areas. The Independent
Directors of the Company have registered themselves with the data bank maintained by
Indian Institute of Corporate Affairs (IICA). In terms of Section 150 of the Companies
Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of
Directors) Rules, 2014, Mr. C. P. Philipose and Mr. A. K. Mathew are exempted from
undertaking the online proficiency self assessment test and Mrs. Sumi Francis has
successfully qualified the online proficiency self assessment test, conducted by the IICA.
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.
24. 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 January 20,
2025 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 and met on February
14, 2025 to review and recommend the above mentioned Scheme of Arrangement. The details of
familiarization program conducted for Independent Directors of your Company are available
on your Company's website www.kitexgarments.com.
25. 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.
The policy has been amended to incorporate the changes that took place
during the year under review.
26. BOARD COMMITTEES
Detailed composition of the mandatory Board committees namely Audit
Committee, Nomination and Remuneration Committee, Risk Management Committee, CSR
Committee, Stakeholders Relationship 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.
27. 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.
28. 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.
During the year under review, there has been no change to the CSR
policy.
29. 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.
30. BUSINESS RESPONSIBILITY AND SUSTAINABILITY 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.
31. 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 Obligation and Disclosure Requirements)
Regulations, 2015 forms part of this Report.
32. 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.
33. 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 e-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. 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-?-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.
34. 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.
35. 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.
36. 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) 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.
37. AUDITORS
37.1. INDEPENDENT AUDITORS
As per the provisions of Section 139 of the 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 31st 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 and
Consolidated Financial Statements contain qualification, reservation, disclaimer or
adverse remarks.
37.2.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 and Consolidated Financial Statements.
37.3. 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 Board has re-appointed M/s. SVJS & Associates, Practicing Company
Secretaries, Kochi to conduct the Secretarial Audit for the financial year 2024-25. The
Audit Report issued by the Secretarial Auditors for the said FY 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: Company has paid fines imposed by both the stock
exchanges for delayed compliance of Regulation 17(1A) of the Listing Regulations and
Company has taken steps to ensure compliance of the SEBI (Prohibition of Insider Trading)
Regulations, 2015.
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, 2025 is annexed herewith as Annexure
- E1. The Secretarial Audit Report of KAPL does not contain any qualification,
reservation or adverse remark.
Further, pursuant to amended Regulation 24A of SEBI Listing
Regulations, and subject to your approval being sought as the ensuing AGM M/s. SVJS &
Associates, Practicing Company Secretaries, Kochi, (Peer Review Certificate No. 6215/2024
dated November 11, 2024) has been appointed as a Secretarial Auditor to undertake the
Secretarial Audit of your Company for the first term of five consecutive financial years
from FY 2025-26 till FY 2029-30. M/s. SVJS & Associates, Practicing Company
Secretaries, Kochi has confirmed that they are not disqualified to be appointed as a
Secretarial Auditor and is eligible to hold office as Secretarial Auditor of your Company.
37.4. INTERNAL AUDITORS
M/s. K. Venkatachalam Aiyer & Co, Chartered Accountants continue to
be the Internal Auditors of your company for the financial year 2024-25.
38. 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.
39. ENVIRONMENT AND SAFETY
TheCompanyisconsciousoftheimportancetoenvironmental 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 of sexual harassment received in the year: Nil
No. of complaints disposed off during the year: Nil
No. of cases pending for more than ninety days: Nil
No. of complaints pending as on end of the financial year: 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, 2024 under the Act with District officer.
40. 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 a 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 a 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.
41. 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.
42. 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.
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