You are here » Home » Companies » Company Overview » Kitex Garments Ltd

Kitex Garments Ltd.

BSE: 521248 Sector: Industrials
NSE: KITEX ISIN Code: INE602G01020
BSE 14:45 | 28 Jun 225.40 0.80






NSE 14:34 | 28 Jun 225.05 0.20






OPEN 223.20
52-Week high 308.90
52-Week low 108.30
P/E 11.68
Mkt Cap.(Rs cr) 1,499
Buy Price 224.90
Buy Qty 50.00
Sell Price 225.30
Sell Qty 1.00
OPEN 223.20
CLOSE 224.60
52-Week high 308.90
52-Week low 108.30
P/E 11.68
Mkt Cap.(Rs cr) 1,499
Buy Price 224.90
Buy Qty 50.00
Sell Price 225.30
Sell Qty 1.00

Kitex Garments Ltd. (KITEX) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Twenty Ninth Annual Report ofthe Company together with the audited financials statements for the financial year endedMarch 31 2021.


Your company is into exports of cotton garments especiallyInfantswear. The Company exports its products to United States and European Markets.


As mandated by the Ministry of Corporate Affairs your company hasprepared the financial statement (both standalone and consolidated) for the year endedMarch 31 2021 as per Indian Accounting Standard (‘IND AS') notified under Sec133 of the Companies Act 2013 read with notification no. G.S.R. 111(E) dated 16.02.2015as amended from time to time.

The Standalone and consolidated financial performance of the Companyfor the financial year ended March 31 2021 is summarized below:

(Rs. in Lakhs)

Particulars Standalone Consolidated
For the year ended March 31 2021 For the year ended March 31 2020 For the year ended March 31 2021 For the year ended March 31 2020
Sales and other Income
Revenue from operations 45538.82 73920.98 45538.82 73920.98
Other Income 1010.46 4436.56 431.29 3918.79
Total Revenue 46549.28 78357.54 45970.11 77839.77
Profit Before Interest and Depreciation 11048.82 17664.83 10456.71 17134.54
Less: Finance Charges 253.95 702.49 255.59 702.49
Depreciation 2310.44 2645.23 2310.44 2645.23
Net Profit Before Tax 8484.44 14317.12 7892.33 13786.82
Less: Provision for Tax 2494.24 3449.73 2465.07 3449.73
Net Profit After Tax 5990.20 10867.39 5427.26 10337.09
Share Of Profit/ (Loss) Of Associates - - - -
Net Profit after share of profit of Associates 5990.20 10867.39 5427.26 10337.09
Balance of Profit brought forward 42151.22 35775.33 38773.88 33011.04
Balance available for appropriation 48153.77 46556.31 44213.49 43208.03
Dividend paid on Equity Shares - 1995.00 - 1995.00
Tax on Dividend - 410.09 - 410.09
Transfer to General Reserve 2000.00 2000.00 2000.00 2000.00
Surplus carried to Balance Sheet 46153.77 42151.22 42213.49 38802.94


The Company continues to maintain its market leadership in Infantswearacross US markets during the year under review. But during the pandemic situationturnover was affected due to disruptions in international Logistics and abundant cautionapplied in executing orders.

Your Company continued to build good relationship with our customers.The quality in our products is a prime motto of our business. At Kitex people are highlydevoted towards the operations and are also partners in growth. During the year underreport there was a sustained focus to increase strength of your company and sharpencompetitive advantages with a view towards long term value creation.


On standalone basis your company reported a turnover of Rs. 46549.28lakhs ie. a 40.59 % decrease over the previous financial year. The year on year revenuedecrease is due to the pandemic related disruptions in our key markets as well asinternational Logistic coming to an almost standstill. But we could able to maintain theprofitability of the Company at 18% margin. Your company took abundant caution inexecuting orders. The operating profit stood at Rs. 8484.44 lakhs compared with Rs.14317.12 lakhs in the previous year. The net profit for the year was Rs. 5990.20 lakhsas against Rs. 10867.39 lakhs reported in the previous year. The EPS fromcontinuing operations for the reporting year was Rs. 9.01 as against Rs. 16.34 reported inthe previous year. During the initial months of the lock down commencing from March 2020the production operations and inputs supplies were impacted however it has beencompletely restored post lock down. The management has taken due care in adhering to costcontrol measures as a result of which operational costs and freight expenses hassignificantly reduced. Your Company was able to maintain descent profitability despite thepandemic disrupting the operations. Due to the disruptions in the company's mainmarkets like US and UK the production quantity of the infant garments got reduced.Stepping into FY 2022 the demand for our products is picking up.


On consolidated basis total revenue for the financial year underreview was Rs. 45970.11 lakhs as against Rs. 77839.77 for the previous financial year adip of 40.94%. Profit before tax was Rs. 7892.33 lakhs and net profit after tax was Rs.5427.26 lakhs for the financial year under review as against Rs. 13786.82 lakhs and10337.09 lakhs for the previous year.

During the year under review your company received ordersconfirmations from major infant garment buyers viz. Gerber Childrenswear LLC CartersBuy-Buy Baby Ross Stores Amazon Target Sam's Club Oshkosh and Walmart who cancontribute major part of your Company's turnover in coming years. On an average theCompany manufactures 6 lakhs pieces of infant's apparel per day and dispatches as awhole container to clients in US. The order position has improved now and we expectturnover to revive in the coming months. Also the company has taken all possible costdrive measures. CoVID-19 pandemic has impacted various future plans of the company. Duringthe month of April & May 2020 your company utilized the opportunity by supplyingPersonal Protective Equipment (PPE) kits to International hospital and other organizationsfor which US FDA license was obtained for the same and this was carried out by the companywithout any additional investment in the existing infrastructure. The company couldgenerate an additional income from the sale of PPE Kits. There have been no materialchanges or commitments affecting the financial position of the Company which have occurredbetween the end of the financial year and the date of this report except below:


Except for few days during initial lock down production was notdisrupted and even during lock-down time factory was functional in manufacturing of PPEkits on a limited capacity in compliance with the directives/orders issued by the relevantauthorities. Amidst this pandemic your company has adhered to the various mandated normsand regulations to change the way of working to ensure a safer working environment for theemployees. The financial results for the year ended March 31 2021 were impacted bydisruptions owing to COVID 19. The Company has made an assessment of the recoverabilityand carrying values of its assets comprising property plant and equipment inventoriesreceivables and other current/ non-current assets as of 31 March 2021 and on the basis ofevaluation has concluded that no material adjustments are required in the financialresults. The Company is taking all the necessary steps and precautionary measures toensure smooth functioning of its operations and to ensure the safety and well-being of allits employees. The pandemic has re-engineered our working strategy and on the way aheaddigitalization will come as prime important in business world. Your company has brought infollowing changes during pandemic situation in the case of customer engagement:

Weekly Production updates were shared with the Buyer followed upwith online conference calls & meetings.

Physical Factory audits changed to online Audits.

Inspections were conducted online with Buyer quality & ThirdParty Audits.

All factory certifications audits were conducted by third party thruonline meetings.

Strict COVID health & Hygiene protocols are being followed atthe Production Facility for workers Health & Safety.

Training & Motivating staff during these times.



As on March 31 2021 the Company has an Associate Company. Kitex USALLC being an Associate Company with joint investment between the Company and KitexChildrenswear Limited to support and facilitate design for US Market customers. TheAssociate Company markets the licence brand "Lamaze" and Own Brand "LittleStar" Infantswear in US and Canada.

Your company has also sold products worth Rs. 26031.14 Lakhs to itsAssociate during the reporting period.


During the year under review the company has 6 wholly ownedsubsidiaries viz. Kitex Littlewear Limited Kitex Babywear Limited Kitex Socks LimitedKitex Packs Limited Kitex Knits Limited and Kitex Kidswear Limited. Further pursuant tothe provisions of Sec 136 of the Act audited financial statements in respect ofsubsidiaries are available on the website of the Company

A Report on the salient features of the financial statements ofSubsidiaries/ Associate Companies/ Joint Ventures prepared in form AOC-1 is provided as AnnexureA. There are no companies which have ceased to be its Subsidiaries joint ventures orassociate companies during the year under review.

The Company has adopted the policy for determining materialsubsidiaries in term of Reg 16(1)(c) of Listing Regulations as amended from time to timeand may be accessed on the company's website

The Consolidated Financial Statements of the Company along with itsSubsidiaries and Associate prepared for the year 2020-21 in accordance with relevant IndAS issued by ICAI forms part of this Annual Report.


Pursuant to the requirement under Sec 134 (5) of the Act the Board ofDirectors of the Company hereby state and confirm that:

(i) in the preparation of the Annual accounts for the year ended March31 2021 the applicable accounting standard have been followed along with properexplanation relating to the material departures if any;

(ii) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2021and of the profit of the Company for the year ended on that date;

(iii) that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) that proper internal financial controls were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

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


Your Directors recommend for your approval final dividend of Rs. 1.50per share (150 %) subject to the tax for the year ended March 31 2021 on equity sharesof Re. 1/- each fully paid-up. During the year under review your company transferred asum of Rs. 2000 lakhs to the General Reserve on account of future expansions. The Totaloutgo on account of dividend inclusive of taxes for FY 2020-21 is Rs. 997.50 lakhs whichrepresents a payout of 16.66 % of the Company's standalone profits.

As per Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 top One Thousand listed entities based on marketcapitalization are required to formulate a Dividend Distribution Policy. Accordingly theBoard approved and adopted Dividend Distribution policy is available on the Company'sWebsite: viz.


The paid-up equity share capital as on 31st March 2021 wasRs. 665.00 lakhs consisting of 66500000 equity shares of Re. 1/- each fully paid-up.


a. Transfer of Unpaid Dividend

Pursuant to the provisions of Sec 124 (5) of the Companies Act 2013your Company has transferred Rs. 880641.00 for the financial year 2012-13 to InvestorsEducation Protection Fund (IEPF) on July 4 2020. This amount was lying unclaimed/ unpaidwith the Company for a period of 7 (seven) years after declaration of final dividend forthe said FY.

b. Transfer of shares underlying unpaid dividend

The Board of Directors at its meeting held on February 11 2020transmitted 2581 equity shares of the Company into the demat account of the IEPFAuthority held with CDSL (DPID/ Client ID: 12047200 – 13676780) in terms of theprovisions of Sec 124 (6) of the Companies Act 2013 read with IEPF Authority (AccountingAudit Transfer and Refund) Rules 2016 as amended from time to time.

The equity shares were the shares of 10 shareholders whose unclaimed/unpaid dividend pertaining to FY 2012-13 had been transferred into IEPF and who had notencashed their dividends for 7 (seven) subsequent financial years. The Company has takenvarious steps by sending reminders requesting them to encash their dividend so as toreduce the limit of unclaimed dividend before transferring the dues to IEPF. The completelist of such shareholders whose shares were due for transfer to IEPF was also placed ininvestor's relations section on the website of the Company www.

Further dividend which has become unclaimed for the last 7 years since2013-14 must be claimed by the concerned shareholders on or before June 19 2021 for whichCompany had sent the reminder letter to them. Since due date for such transfer was elapsedon above date the company had initiated and completed the process of transfer of suchdividend to IEPF Authority on June 19 2021. The details are provided in the Shareholderinformation section of this Annual Report and are also available on our


As on 31st March 2021 the Fixed Assets stood at Rs.27056.42 lakhs and net fixed assets of Rs. 15152.51 lakhs. Additions during the yearamount to Rs. 518.57 lakhs.

Phase I expansion of Rs. 241 Crores of capital investment forautomation new Plant & Machinery and other amenities was approved by the Board ofDirectors on April 28 2017. The Board was informed that company had spent Rs. 25 Croresout of approved limit and hence the balance of Rs. 216 Crores is being carried out forimplementation of Strategic Road Map 2025. The Vendor successfully tested the automation.The Board of Director has been taking utmost effort to implement the expansion. Newbusiness venture for isolation gowns is about to be ready for implementation.


In the last Board's Report your Board of Directors had mentionedabout investment plan of Rs. 910 crores to be spent over 7 years since 2018 under thetheme "Kitex Garments Limited Strategic road map 2025". The said investmentshall be from internal accruals and borrowings. Due to CoVID-19 pandemic Board has put onhold all investment plans. The Board is yet to receive project report for investment insetting up unit for spinning mill socks diaper and wet tissue manufacturing. Onlydiversification which company has been doing is of supply of PPE kits to hospital andother organization without any additional investment and restraining the workforce. Boardexpects there would be good growth in the infants' apparel business in coming years.


During the year under review ICRA the Credit Rating Agency maintainedthe "[ICRA] AA-" rating with stable outlook for the company's long termborrowings and maintained the "[ICRA] A1+" rating for the Company's shortterm borrowings.


Your Company continues to win awards year by year thus reiterating itscredible market position.


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


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


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


Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return as on March 31 2021 is available on the website of the Company at the


The Company complies with all applicable secretarial standards.


During the year under review no loan guarantees and investmentspursuant to the provisions of Section 186 of the Act and SEBI (LODR) Regulations 2015were made by the Company. However loans and Investments covered under the provision ofthe said section are given in the notes to financial Statements.


During the year under review and between the end of the financial yearand date of this report the following are the changes in directors and Key ManagerialPersonnel of the Company: (i) In accordance with Articles of Association Mrs. SindhuChandrasekharan (DIN: 06434415) executive director of the Company will be retiring at theensuing Annual General Meeting and being eligible seek reappointment. Item seeking herre-appointment along with her detailed profile has been included in the notice conveningthe AGM. (ii) The Board on the recommendation of the Nomination & RemunerationCommittee subject to the approval of the shareholders has appointed Mrs. Sumi Francis(DIN: 08950675) as an Independent Director (additional Director) to hold office for a termof five (5) years from November 13 2020 upto November 12 2025. Necessary resolution inconnection with her appointment is contained in the notice of Annual General Meeting.

There is no change in the Board of Directors & Key ManagerialPersonnel of your company during the financial year 2020-21 except as mentioned above. AllIndependent Directors have given declaration that they meet the criteria of independenceas 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 totime. Based on the confirmation/ disclosure received from the directors the Non ExecutiveDirectors namely Mr. E. M. Paulose Mr. Benni Joseph Mr. C. P. Philipose and Mrs. SumiFrancis are treated as independent as on March 31 2021. The Company recognizes theimportance of a diverse board and believes that it brings new ways of thinking insightsand different perspective on consumer wants and needs. This will help company to retaincompetitive position in the corporate world.

In the opinion of the Board the Independent Directors are persons withintegrity expertise and experience in the relevant functional areas. Requirements ofonline proficiency self-assessment test in terms of Rule 6(4) of The Companies(Appointment and Qualifications of Directors) Rules 2014 will be complied within theprescribed timeline if the same is applicable to each of them.

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


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

The Board of Directors has carried out an annual evaluation of its ownperformance Board Committees and individual Directors pursuant to the provisions of theCompanies Act 2013 as well as SEBI (LoDR) Regulations 2015.

With the objective of evaluating the performance of DirectorsNomination and Remuneration Committee has formulated a structured questionnaire aftertaking into consideration the various aspects viz. composition of the Board and itscommittees Board's function its culture quality and timely flow of informationfrequency of meetings execution and performance of specific duties obligations andgovernance. Board has carried out an annual performance evaluation of its own performancethe performance of various committees of the Board Individual Directors and the Chairmanbased on adopted questionnaire. A note on the familiarizing programme adopted by theCompany for the orientation and training of the Directors and the manner in which the Boardevaluation process undertaken in compliance with the provisions of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is providedin the Corporate Governance Report which forms part of this Report. Further theIndependent Directors of the Company met on February 10 2021 to review the performance ofthe Non-executive directors Chairman of the Company and the access of the qualityquantity and timeliness of flow of information between the Company management and theBoard to effectively perform their duties. The details of familiarization programconducted for Independent Directors of your Company are available on your Company'swebsite


The Company's policy on directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a director and other matters provided in Section 178(3) of the Act isavailable on our website We affirm that remuneration paid to thedirectors is as per the terms laid out in the Nomination and Remuneration Policy of theCompany.

Some of the salient features of which are as follows:

1. To regulate the appointment and remuneration of directors keymanagerial personnel and the senior management personnel;

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

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

4. To ensure that level and composition of remuneration is reasonableand sufficient to attract retain and motivate directors key managerial personnel andsenior management and their remuneration involves a balance between fixed and incentivepay reflecting short and long term performance objectives appropriate to Company'sworking and its goals.


Detailed composition of the mandatory Board committees namely AuditCommittee Nomination and Remuneration Committee Risk Management Committee CSRCommittee Stakeholders Relationship Committee its number of meetings held during theyear under review and other related details are set out in the Corporate Governance Reportwhich forms part of this Report.

There have been no situations where the Board has not accepted anyrecommendation of the Audit Committee.


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


Your Company believes in touching some of the important aspects ofhuman life. Even before commencement of Companies Act 2013 it has embarked on thejourney of social change through inclusive growth dedicated to the cause of future andfuture generations. The Company implements CSR directly to society of KizhakambalamPanchayat in which it operates and efforts are revolved around several projects relatingto Social Empowerment and Welfare Infrastructure Development Sustainable Livelihood andHealth Care during the year under review. These projects are in accordance with ScheduleVII 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 CSRactivities during the year are set out in Annexure B of this report in the formatprescribed in the Companies

(Corporate Social Responsibility Policy) Rules 2014. For other detailsregarding the CSR Committee please refer to the Corporate Governance Report which is apart of this report. The Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company are available on your Company'swebsite


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


As required under Regulation 34 of the Listing Regulations theBusiness Responsibility Report is provided in a separate section and forms part of theAnnual Report.


A separate section on parameters of statutory compliance evidencing thestandards expected from a listed entity have been duly observed and a report on CorporateGovernance as well as certificate from company secretary in practice confirming compliancewith the requirements of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 forms part of this Report.


The Company has a Vigil Mechanism to report concern about unethicalbehavior actual or suspected fraud or violation of Company's code of conduct by theDirectors and employees. The vigil mechanism is disclosed in the website of the companyviz.


All transactions or arrangement entered into with the related partiesfor the year under review were on arm's length basis and in the ordinary course ofbusiness. Hence the provisions of Section 188 of the Companies Act 2013 and the Rulesmade thereunder are not attracted. Accordingly the disclosure of Related PartyTransactions as required under Section 134 (3) (h) of the Companies Act 2013 in Form AOC2 is enclosed as Annexure C.

The company has developed a framework through Standard OperatingProcedures for the purpose of identification and monitoring of such Related PartyTransactions. All Related Party Transactions were placed before the Audit Committee asalso to the Board for approval. Omnibus approval was obtained on a yearly basis fortransactions which are of repetitive nature. Transactions entered into pursuant to omnibusapproval are audited by the Risk Assurance Department and a statement showing the detailsof all Related Party Transactions are placed before the Audit Committee and the Board forreview and approval on a quarterly basis.

None of the Directors has any pecuniary relationship or transactionsvis--vis the Company.

The policy on Related Party Transactions as approved by the Board ofDirectors has been uploaded on the website of the Company viz.


Your Company has an effective internal control and risk-mitigationsystem which are constantly assessed and strengthened with new/ revised standardoperating procedures. The Company's internal control system is commensurate with itssize scale and complexities of its operations. The Internal and operational audit isentrusted with M/s. K. Venkitachalam Aiyer & Co a firm of Chartered Accountants. Themain thrust of Internal Audit is to test and review controls appraisal of risks andbusiness processes besides benchmarking controls with best practices in the industry.

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

The Audit Committee of the Board of Directors Independent Auditors andthe Core Committee Heads have periodically been appraised the significant internal auditobservations and the corrective actions have been taken. The Audit Committee places a keyrole in providing assurance to the Board of Directors. In order to maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee.


The information on conservation of energy technology absorption andforeign exchanges earnings and outgo pursuant to Section 134 (3) (m) of the Companies Act2013 read with the Rule 8(3) of the Companies (accounts) Rules 2014 as amended from timeto time is annexed as Annexure - D and forms an integral part of this Report.


Your Company continues to strengthen its robust Risk ManagementFramework and the same was reviewed by the Audit Committee periodically. As per latestlisting regulations top 1000 listed entities based on market capitalization has toconstitute Risk Management Committee. Accordingly Board of Directors at its meeting heldon May 28 2021 has constituted the Committee the details of which have been covered inthe Corporate Governance Report forming part of the report. The Committee meets forfocused interaction with business identifying and prioritizing strategic operationalrisk and formulating appropriate mitigation strategies and conducting frequent review ofthe progress on the management of the identified risk. The Committee also constituted theRisk Management policy for assessing the risks connected to the company and alsominimization procedures. Your company believes that managing risk helps in maximizingreturn. The company's approach in addressing business risks includes periodicalreview of such risks and thereby mitigating it effectively. The risk management frameworkis reviewed periodically by the Board and the Audit Committee. Some of the risks that thecompany is exposed to are:


The Company's policy is to actively manage its foreign exchangerisks within the framework laid down by the Company's forex policy approved by theBoard. Given the interest rate fluctuations your Company has adopted a prudent andconservative risk mitigation strategy to minimize financial and interest cost risks.


The Company is exposed to the risk of price fluctuations of rawmaterials as well as finished goods. The company proactively manages these risks throughforward booking inventory management and proactive vendor development practices. Yourcompany's reputation for quality product differentiation coupled with the existenceof a powerful brand image with a robust design and marketing network in US mitigates theimpact of price risk on finished goods.


The Company recognized its risks attached to various statutes laws andregulations. The company is mitigating these risks through regular review of legalcompliances carried out through our internal as well as external compliance audits by ourcustomers.


Retaining the existing talent pool and attracting new talent are themajor risks affecting the company. We have initiated various measures including rollingout of strategic talent management systems training and integration of learning anddevelopment activities. Our company has collaborated with various agencies like IntegratedSkill Development Scheme (ISDS) Kudumbashree which helps to identify nurture and groomlabour talents within all states of India to prepare them for future business leadership.


Emerging businesses capital expenditure for capacity expansion etc arenormal strategic risks face by your company. However your Company has well-definedprocesses and procedures for obtaining approval for investments in new businesses andcapacity expansions.



As per the provisions of Section 139 of the Companies Act 2013 MSKA& Associates Chartered Accountants (FRN 105047W) have been appointed as IndependentAuditors of the company for a period of 5 (Five) years in the AGM of the Company held onJuly 28 2018.

Further the report of the Independent Auditors along with notes tofinancial statements is enclosed to this Annual Report. The Auditors' Report does notcontain any qualification reservation disclaimer or adverse remarks.


Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Company has re-appointed M/s. SVJS & Associates Practicing CompanySecretaries Kochi to conduct the Secretarial Audit for the financial year 2020-21. TheAudit Report issued by the Secretarial Auditors for the said FY form part of this Reportand is set out in Annexure – E which is self-explanatory.


M/s. K. Venkitachalam Aiyer & Co Chartered Accountants continue tobe the Internal Auditors of your company for the financial year 2020-21.


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


The Company is conscious of the importance to environmental friendlyand safe operations. The company's policy requires conduct of operations in such amanner so as to ensure safety of all concerned compliance of environmental regulationsand preservation of natural resources.

As required by the Sexual Harassment of Women at Workplace (PreventionProhibition and redressal) Act 2013 the Company has formulated and implemented a policyon prevention of sexual harassment at the workplace with a mechanism of lodgingcomplaints. The following is a summary of sexual harassment complaints received anddisposed off during the reporting period:

• No. of complaints received: Nil

• No. of complaints disposed off: Nil

• No. of complaints pending: Nil

The company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Act. The Company has filed Annual Report forthe year ended December 31 2020 under the Act with District officer.


Your Company believes that its manpower is an asset for the company andenjoys strong brand image as a preferred and caring employer. The ongoing focus is onattracting retaining and engaging talent with the objective of creating a robust talentpipeline at all levels. Value-based HR programmes have enabled your Company's HR teamto become strategic partners for the business. Your company laid stress to build awomen-friendly workplace by introducing various initiatives for the development of womenemployees in the organization. Your Company has focused on internal talents and nurturesthem through the culture of continuous learning and development thereby buildingcapabilities for creating future leaders. Your company's initiatives like a hiringfreeze at some levels robust talent review career development conservations andbest-in-class development opportunities which will help to enhance the employeesexperience at your Company. The Company's Human Resources plays a critical role inyour 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 197read 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.


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

• Neither the Managing Director nor the Whole-time Directors ofthe Company received any remuneration or commission from any of its subsidiaries;

• There were no frauds reported by the auditors under provisionsof the Companies Act 2013;

• Issue of equity shares with differential rights as to dividendvoting or otherwise;

• There were no revisions in the financial statements;

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

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

• No application has been made under the Insolvency and BankruptcyCode; hence the requirement to disclose the details of application made or any proceedingpending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the yearalongwith their status as at the end of the financial year is not applicable; and

• The requirement to disclose the details of difference betweenamount of the valuation done at the time of onetime settlement and the valuation donewhile taking loan from the Banks or Financial Institutions along with the reasons thereofis not applicable.


Your Directors thank various Central and State Government DepartmentsOrganizations and Agencies for the continued help and cooperation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.

For and on behalf of the Board of
Kitex Garments Limited
Sabu M. Jacob
June 29 2021 Chairman and Managing Director
Kizhakkambalam (DIN: 00046016)