repo… · “ our businesses are deeply aligned with our corporate ethos and innovation. we...

Committed to the future

Kitex Garments Limited Annual Report 2016-17

“Our businesses are deeply aligned with

our corporate ethos and innovation.

We constantly endeavour to operate

at the forefront of new technologies.

We at Kitex have been unceasingly investing

in developing new products, technology

and modernisation.

Mr. M.C.Jacob

(22.4.1933 – 5.6.2011)

Illustrious Founder – Chairman

of Kitex Group of Companies

”

At Kitex, enriching people through caring is inherent

in our business model. Since the inception of the

company our founder M.C Jacob made ‘caring’ the

basic motto and today we believe that caring is the

very winning formula of our company. Over the

years we have realised that when our actions are

filled with caring, business, employee & community

relations are strengthened.

Our founder Late Mr. Meckamkunnel Chacko Jacob

(M.C.Jacob) was moved by the plight of the farmers

who worked in his father's fields. That's when he

decided to set up an aluminium-based unit in 1968

with an employee strength of eight. This was the first

baby step to put Kizhakkambalam, then a remote

village in Kerala into a hub of industrial activities.

The Anna-Kitex group of companies he founded,

since then took wings and grew multifold. By the

time he departed from this world in 2011, the group

had become a diversified business conglomerate

having interests in Aluminium, Spices, Textiles and

Apparels. The group provided scores of people

livelihood by giving employment as well as through

its regular social interventions.

A caring legacy

Annual Report 2016 - 2017 1

About Kitex .............................................................02Chairman’s Statement ........................................03Economic Value Added .....................................04Financial Highlights .............................................05Kitex Value Chain .................................................06Review of Operations .........................................08Product Safety Certifications ..........................09Our People Responsibility .................................10Employee Welfare ...................................................11Energy & Environment .........................................12Energy & Water Conservation...........................13Integrated Skill Development Scheme .........14Corporate Social Responsibility ......................15Management Discussion & Analysis ...............18Notice ...........................................................................21

Table of Contents

Corporate Information ......................................30Directors’ Report ....................................................32Corporate Governance Report .......................69Independent Auditor’s Report .......................80Balance Sheet .........................................................84Profit and Loss ........................................................85Notes on Accounts ...............................................86Cash Flow Statement ........................................114Independent Auditor’s Report .....................115Consolidated Balance Sheet ..........................118Consolidated Profit and Loss ........................119Notes on Consolidated ...................................120Consolidated Cash Flow .................................147Proxy Form .......................................................... 149Attendance Slip ...................................................151

Disclaimer

Statements in this report that describe the Company’s objectives, projections, estimates, expectations or predictions of the future may be ‘forward-looking statements’ within the meaning of the applicable securities laws and regulations. The Company cautions that such statements involve risks and uncertainty and that actual results could differ materially from those expressed or implied. Important factors that could cause differences include raw materials’ cost or availability, cyclical demand and pricing in the Company’s principal markets, changes in government regulations, economic developments within the countries in which the Company conducts business, and other factors relating to the Company’s operations, such as litigation, labour negotiations and fiscal regimes.

Key Highlights

Award 2017

Opened Design Studio in New Jersey

Financial Express - Corporate Financial Operation (FE-CFO) of the Year Award 2017

Kitex Garments Limited2

Established in 1992 Kitex Garments Ltd is into 100% exports of cotton garments especially infant wear. The company exports its products to US and European markets. In 1995 the company went public and the shares are currently listed on NSE & BSE. The vertically integrated manufacturing plant makes infant wear as well as fabrics.

Products

• Body suits

• Sleepwear

• Rompers

• Burps

• Bibs

• Training pants

About Kitex

Number ofemployees

4,402

Built uparea sq.ft.

6 lakhs

Per day Capacity(Infant wear) units

3.3 lakhs

Textile capacityper day

50 Tons


Dear Shareholders

Our performance in FY16-17 has not been encouraging as we had a subdued topline due to delayed dispatches, foreign exchange fluctuations and delay in implementing our manufacturing automation. Our margins were impacted primarily due to increase in employee costs.

Chairman’s Statement

Despite these unanticipated events impacting our performance, our initiatives to move to the next level is intact as most of our operational initiatives to enhance our process competence and efforts to expand our markets are progressing in line with our strategic goals.

Our Performance

During the year under review, your Company has recorded its revenue from operations as Rs. 54,590.13 lakhs which is at par with Rs. 54,581.67 in the previous year. Profit before taxation is Rs. 14,270.11 lakhs. against last year’s figure of Rs. 17,105.50. Net profit after tax is Rs. 9254.08 lakhs. The Basic Earnings per Equity Share (of face value of Re.1/-) is Rs. 19.48 compared to Rs. 23.60 in the previous year.

Review of operations

Our associate firm Kitex USA LLC has posted a initial turnover of around Rs. 80 lakhs ($ 1,28,818.41) and gross profit of around Rs. 5.5 Lakhs ($ 8,815.41) for the year ended March 31, 2017. Your Company has consigned its product worth Rs. 20.01 Crores to its associate during the year. Going forward to increase our brand equity in US markets, we opened a world class design studio in New Jersey in the month of April 2017. Major US Clients are investing considerable amounts on designing. The newly inaugurated Studio gives designing services based on their unique requirements purely as a value addition. This value addition enables your company’s clients in cost saving and thereby better our business relations with them. Further we have started direct business with WALMART & TARGET.

In the previous annual report I had mentioned about our initiatives to upgrade and increase our manufacturing capacity. While our goal was to commission this upgraded facility in FY16-17, we were not able to achieve this milestone due to more time required for customization of the automation process. This was unforeseen however our automation partner along with our technical team has successfully completed major part of the trials and its almost ready for commissioning. We have increased our skilled work force during the year under review and the new financial year also comes with this people advantage.

Sustainability

During the year we carried out our sustainability initiatives related to energy and environment with more vigour. We continue with our corporate social responsibility initiatives and during the year have taken up many new initiatives touching upon food security, education, health, drinking water and livelihood.

I take this opportunity to thank our employees, customers, bankers, investors suppliers and Government for reposing their trust in the management. We assure you our commitment for continued growth.

Regards

Sabu M. Jacob

Chairman & Managing Director


Economic Value Added

Revenue

54,590lakhs

CSR Spend

609lakhs

PAT

9,254lakhs

Total Dividend

712lakhs

PBT

14,270lakhs

Dividend per share

1.50Rupees

Taxes

5,016 lakhs

Market Capitalisation

203,561lakhs

Salaries Paid

9183lakhs

EPS

19.48Rupees


Financial Highlights

(Rupees in Lakhs)

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Income

Sales 31,199.88 31,698.33 44,221.00 51,109.59 54,581.67 54,590.13

Other Income 634.82 402.51 1,334.36 1,342.34 1,981.66 199.77

Total 31,834.69 32,100.85 45,555.36 52,451.94 56,563.33 54,789.90

Expenditure

Cost of Raw Materials Consumed 17,491.24 16,126.71 23,477.44 20,978.53 20,976.48 21,096.16

Changes in inventories of finished goods, work-in-progress and Stock-in-Trade (265.83) 389.11 118.23 (21.54) 29.72 (1,575.74)

Employees Benefits Expense 3,780.74 4,376.44 5,697.16 7,450.07 8,361.72 9,182.86

Finance Costs 1,760.69 1,147.20 1,061.59 1,916.41 1,375.67 926.68

Depreciation and amortization expense 686.64 862.13 968.00 2,132.94 2,127.31 2,036.28

Other Expenses 4,370.40 4,795.17 5,414.40 5,828.78 6,586.93 8,853.55

Total 27,823.88 27,696.76 36,736.83 38,285.19 39,457.83 40,519.79

PBT 4,010.82 4,404.08 8,818.53 14,166.75 17,105.50 14,270.11

Current Tax 1,235.00 1,485.00 2,536.00 4,217.00 6,094.00 5,312.70

Deferred Tax 64.26 (18.60) 545.65 98.00 (198.00) (296.67)

PAT 2,711.56 2,937.68 5,736.88 9,851.75 11,209.50 9,254.08

Capital 475.00 475.00 475.00 475.00 475.00 475.00

Earnings per equity share 5.71 6.18 12.08 20.74 23.60 19.48


Cotton is harvested from farms

Robotized, fully automated yarn-dyeing is used for value-added yarn-dyed products

Dye-dispensing is done in a fully automated manner at Kitex

Yarn, Dyestuffs and Chemicals are purchased by Kitex and tested at its laboratory. All ingredients must meet Oekotex Standard 100 Class-I standards and GOTS Organic standards

Raw Cotton undergoes Ginning and is cleaned and converted to Bales for dispatch to Spinning Mills

Yarns are of the highest quality in terms of

specifications like count, strength, evenness as well as

product safety parameters laid out by Oekotex Standard 100 Class-I & GOTS standards.

Fully automated Robotic technology is used to prepare dyeing recipes at Kitex’s laboratory. This ensures accuracy and consistency of colours

Fibres are spun to make Yarns in Spinning Mills

Kitex Value Chain


Kitex uses the most modern advanced knitting machinery from Japan and Germany to convert yarn to greige fabric

Washing is done thereafter on advanced relaxed open-width machinery from Germany

Automatic screen-printing machines from Austria are used for placement-printing - for value-added products that have prints on garments

Fabric is printed on modern rotary printing machines from Austria. Advanced features like design-memory and extended chamber ensures high quality output

Advanced embroidery machines from Germany and Japan enable value-addition of garments to cater to higher-end customers who require embroidery motifs on their garments

Fabrics produced are of highest quality in terms of specification and product safety compliance.

Sewing production done in a systematic manner. Advanced systems like GSD, Inspire and ERP enable cost-effective and efficient production and tracking.

Automated Spreading and Cutting machines

enable accurate cutting of fabrics.

Final products are of the highest quality in terms of specifications, and comply

with strict product safety standards of Oekotex

Standard 100 Class-I, GOTS and CPSIA

Greige fabric is bleached on advanced bleaching machinery from Germany

Cold Pad Technology is used to dye fabrics in a relaxed continuous

open-width process that ensures high dye-pickup, color consistency

and low water and energy consumption. Rolling stations

ensure efficient dye-pickup and excellent colour fastness

External

Internal


Review of Operations

The company has been allotting regular capex for improvement of technology and infrastructure and is in the process of upgrading its current facilities so as to expand its capacity. It is a vertical set-up with knitting and processing of fabrics, until finished garments are done in-house.

The facility is a 240 meters long and 70 meters wide that covers an area of 180,768 sq. ft, one of the largest in the world under one roof. The

process line is equipped with digital dispenser system for error-free, automatic and computer-controlled preparation of color guidelines, high quality knitting machines, most modern dyeing, printing and finishing machines that use cutting-edge technology. Its garmenting unit uses latest machinery for pattern Computer-Aided-Design (CAD), plotting and grading. It has Automatic spreader machines which enhance the speed of spreading and Automated cutting

machines that enable faster & precision cutting. The factory is equipped with latest sewing machinery ensures stain-free, quality sewing and state-of-the-art spectrophotometer ensures electronic color reading & transmission.

The plant produces knitted fabrics that are of exceptional quality, and is well appreciated and recognized by reputed childrenwear apparel brands in the United States and Europe.


Product Safety Certifications

International retailers, brands and buyers are demanding more effective ways to evaluate supplier manufacturing performance through improved transparency and more reliable, open benchmarking processes. At Kitex we have adopted Supplier Qualification Program (SQP) standards to meet world-class benchmarking.

Kitex Garments is certified at ‘Platinum’ level, the highest possible rating, by Worldwide Responsible Accredited Production (WRAP). This certification is recognized by all major retailers, manufacturers and importers in the US and worldwide, and gives them assurance that the apparel produced at the accredited factory is produced in a safe, lawful, humane and ethical manner.

Kitex Garments is rated as ‘Low Risk’ by GSV for compliance to Customs Trade Partnership against Terrorism (C-TPAT) and Border Security requirements laid out by the government of United States. ‘Low Risk’ is GSV’s highest possible rating and assures Governments, Manufacturers and Retailers that the supply chain operates in a secure and efficient manner.

The safety of products is a major concern among retailers worldwide. Governments worldwide have framed policies and standards that seek to ensure the safety of products sold in their countries. In the US, Consumer Product Safety Commission (CPSC) has laid down strict standards that must be adhered to by brands, retailers, manufacturers and importers. In the EU, REACH standards have gained acceptance. Kitex Garments is certified ‘Class-I’ for compliance to Oeko-Tex Standard 100 standards. Class-I is the strictest standard for chemical product safety and is an assurance that products so produced are safe for infants.

Kitex Garments is certified for compliance to GOTS, the worldwide leading textile processing standard for organic fibres, including ecological and social criteria, backed up by independent certification. It ensures organic status of textiles, from harvesting of the raw materials, through environmentally and socially responsible manufacturing up to labelling in order to provide a credible assurance to the end consumer. This certification enables Kitex Garments to supply certified organic garments to customers worldwide.

The Customs-Trade Partnership Against Terrorism (C-TPAT) is a voluntary supply chain security program led by U.S. Customs and Border Protection (CBP) and focused on improving the security of private companies’ supply chains with respect to terrorism.

The Workplace Conditions Assessment (WCA) program provides a powerful, cost-effective solution for companies and facilities seeking to improve workplace conditions efficiently and in accordance with widely accepted industry standards and best practices. WCA addresses all key elements of sustainability and ethical practices related to work place people, products, and environment.


Our People Responsibility

The Company’s HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity. The Company is giving direct employment to 4402 employees. The Company endeavours to be an ‘Employer of Choice’ by fostering an environment of aspirational goal setting, continuous improvement, in addition to health and safety, and corporate responsibility.

ParticularsCanteen Committee

Health and Safety Committee

Grievance Committee

Works Committee

Prevention of Harassment and abusement Committee

Composition 14-15 members (workers with a management who is in officer post heading HR/ welfare/ compliance)

14-15 members (workers with a management who is in officer post heading HR/ welfare/ compliance)



14-15 Female members with one NGO staff with the experience in social work.

Issue that are handled

Canteen related issues Health and safety related issue

General issue: change in working day which are not acceptable, salary reduction, non acceptability of policy.

Work related issues like works overload, harassment from superior etc……

Harassment and abuse to female workers.

C o m m i t te e Meeting

Once in every month Once in every month Once in every month Once in every month Once in every month


Employee Welfare

Employee Accommodation

Company provides a well furnished and hygienic dormitory facility for the outstation female staff. Hostel has a qualified welfare officer and a female security personnel to ensure the welfare and safety of the inmates round the clock. The dormitory comes with all amenities.

Canteen

A well equipped and fully automated canteen facility with steam cooking and automated food processing facilities caters to the food requirements of the inmates round the clock. Regional cuisines are provided to the inmates as per their taste to make them feel at home.

Medical support

A well equipped specialty clinic has been set up inside our premises for instant medical support to the staff. In addition to this a special general physician and qualified nurses are available in the premises during working hours and on call on a 24x7 basis to cater to any medical emergencies. Immediate medical attention is given to the workers falling sick. In case of emergencies, ambulance is available to take the sick to the hospital.

Recreation

Each block is provided with two Plasma Televisions to cater to the varying linguistic needs of the inmates. Recreational activities

are arranged for boosting the morale and mental health of employees. Workers can relax themselves by involving in indoor and outdoor games such as caroms, chess, shuttle, etc. We also provide prayer hall facility for the workers. A separate waiting room is arranged for the visitors.

On Sundays and holidays the hostel inmates are provided with facilities for shopping in nearest cities with transportation and support. To meet the religious needs of the inmates transports are being provided in the morning and evening to nearby places of worship.


Energy & Environment

The problem of climate

change no longer needs

an prologue. It is widely

accepted as the most

serious environmental

challenge that the world

faces. At the centre of

climate change issue

are the increasing

concentrations of carbon

dioxide (CO2) and other

greenhouse gases in the

earth’s atmosphere as a

result of human activities.

This has been shown to

lead to increases in global

atmospheric temperatures

(global warming) and

associated “changes

in the earths climatic

system” (climate change).

Kitex management

considers environment

responsibility as one

of the most important

element our materiality

matrix.

Our state of the art bleaching and dyeing machines use considerably less water than the conventional machines. Energy consumed by these machines is only half of what is consumed by normal machines

Effluent treatment is done through a biological treatment plant, ensuring that the environment is protected. Effluents are treated to international standards before they are discharged from the plant. Water so discharged, is used for internal horticulture purposes.

Biological wastes produced at the facility are utilized and converted to bio gas which is used at our hostel kitchens as fuel

Our facility is situated in a location that gets abundant rain. Rain water is harvested which in turn helps in save water which is otherwise used for various manufacturing & general purposes.


Energy & Water Conservation

Kitex Garments is

committed to conducting

its business in an

environmentally responsible

manner by continuously

updating and implementing

best technological solutions

in terms of process, cost

management, choice of

equipment quality, process

efficiency, and using

advanced water purification

mechanisms, the company is

getting closer to its dream of

‹zero-discharge› plants.

Heat Recovery Systems

The Company is investing in heat recovery systems with the objective of increasing its process efficiencies and thus decreasing its fuel and energy consumption. Reduction in thermal and air pollution, equipment sizes and thereby reduction in auxiliary energy consumption are indirect benefits. The company expects to gain in terms of decreased running costs & gain in energy savings.

Advanced Fully Automated Boiler

Company is in the process of setting up a highly advanced fully automated boiler. It is part of the company’s commitment to conduct its business in a socially and environmentally responsible manner. This new type of boiler is a single combustion source for steam and thermal oil, and requires less space compared to two separate systems. Since it is automated it will help in reducing the manpower. This new boiler once installed is expected to save energy on account of Furnace Oil to Biomass for Thermal Oil Boiler and also on account of higher Boiler efficiencies of 85%. Heat recovery systems on the boiler would ensure that energy is saved and operating costs reduced.

Fully Automated Advanced Effluent and Waste Treatment Plants

Company is setting up fully automated highly advanced Effluent Treatment Plant (ETP) and Sewage Treatment Plant (STP). The objective is to ensure that treated water meets tough European standards, and can be reused. It is part of the company’s commitment to conduct its business in an environmentally responsible manner.

Rainwater Harvesting

At Kitex, rainwater is is collected, purified and used for various manufacturing processes. Rainwater collected from rooftops is directed to trenches located at all four corners of the factory. It is then made to pass through a water treatment plant, which filters, purifies and treats the water and made suitable for use.


Integrated Skill Development Scheme

With a view to address the manpower requirement of the diverse textile and related segments, the Ministry of Textiles introduced pilot phase of Integrated Skilled Development Scheme (ISDS) in the last two years of the 11th Five Year Plan Year 2010-11. Subsequently, the scheme has been scaled up during the 12th plan with a target of skilling 15 lakhs persons by the end of March 2017.

The Scheme is initiated to provide basic technical and managerial skills to rural youth from families below the poverty line to enable them to take up self-employment and wage employment in the broad fields of textile. Rural young women stand to benefit the most from the ISDS.

Kitex has aligned ISD scheme with its ongoing development social development activities for upgrading skills among rural youth and has been imparting training to rural youth.

Training Details

Training Venue Kitex Garments Ltd

Training Hours/No of days 08.00 am to 05.00 pm (38 days)

ContentsGeneral Awareness, Awareness about Company, Safety measures, Domain classes, soft skills and Practical session.

Attendance Bio metric

Age Requirements Between 18 to 35

Current Agencies ITCOT and FIWE

Industrial Internship OJT (Soon after training)

Training Certificates Developed and Created by Ministry of Textiles, Govt. of INDIA


Kitex CSR

The Key activities/ initiatives of Kitex CSR conducted during the FY 2016-17 are detailed below:

Agriculture

Promoting sustainable agricultural practices is the main focus areas of Kitex CSR initiatives. It includes participative and group farming in over 1100 acres of farmland with the full co-operation of farmers in Kizhakkambalam Panchayat. Out of this, 1000 acres were used for rice farming, vegetable framing and fruits cultivation. More farm development equipments and other mechanical devices were procured and put into operation for better yield and financial improvements. A total of Rs. 7 lakhs have been spent cumulative upto this year end.

Safe Drinking water and water Security

The programme focuses on supply of drinking water to some of the backward colonies located near the factory premises at Kizhakkambalam. Twenty permanent and forty portable water tanks were constructed during the last year. Safe drinking water was provided to backward areas

of panchayat.

Kitex is investing in building capacities of communities to harvest and conserve water. This has been achieved by building water harvesting structure, blending modern technologies with local situations. Kitex has initiated dredging of all canals in and around Kizhakkambalam by removing accumulated wastes and thereby making it useful for the agriculture and drinking. The company has constructed check dams, farms ponds, 290 wells (some are under construction) and identified 510 wells for the purpose of maintenance in the last year. It has also budgeted for side protecting of canal for safe drinking water.

Education

In order to improve the quality in teaching and learning process in education, the Company has budgeted smart Class (One is already implemented) equipped with modern amenities. This would benefit a large number of students. The company has also provided two school buses to Kumanod and Choorakode UP Schools. Your company have been providing noon meal to students. Your company is also funding for basic infrastructure of schools for quality education. We have spent

Agriculture Drinking Water Education Food Security

A total of Rs. 7 lakhs have been spent cumulative upto this year end.

Kitex has constructed check dams, farms ponds, 290 wells (some are under construction) and identified 510 wells for the purpose of maintenance in the last year.

The company has spent Rs. 19 lakhs on education and allied activities during the year under review.

an amount of Rs. 9 lakhs extended to needy families in Kizhakkambalam Panchayat area during the year.

Corporate Social Responsibility


Rs. 19 lakhs on education and allied activities during the year under review.

Food Security Programme

Your company extended distribution of essential food materials including vegetables at very moderate subsidized prices (which is almost half the market prices) twice a week to those poor and needy families. This benefit was funded with an amount of Rs. 9 lakhs in Kizhakkambalam Panchayat area during the year.

Health Care

Your Company takes care of the health of society by providing Regular Health and Medical Check-up Camps. Free medicines were distributed and follow up medical facilities were extended on a regular basis to the needy members. Your Company through its ‘mother and child’ initiative, is working on women’s health in semi-urban and rural areas with specific focus on nutrition like egg and milk to pregnant women and children of less than 5 years. Continuing with the program of good health to all in Kizhakkambalam, the company extends its ambulance services to the needy on demand at the shortest time at free of cost. This is basically for patients who have to undertake dialysis on a regular basis in the primary Health Centre. It has incurred an expenditure of Rs. 3.5 lakhs under this head.

Housing

Your Company has introduced housing scheme ‘Ente Veedu Scheme’ in the year 2016 whereby 200 houses including sanitation, colony

renovation, toilets etc.. were planned for construction. Out of total, 35 houses are completed. In Njaraloor Colony under Kizhakkambalam Panchayat, 37 houses is almost getting completed. 28 houses are under planning stage in Velangu Colony. It has spent around Rs. 1.35 Crores for this project during the year under review.

Infrastructural development

Your company is developing the basic infrastructure in and around Kizhakkambalam Panchayat by broadening the exiting roads, development of new roads, side protection on both sides of the road, improving drainage facilities, scientific rain water harvesting and other allied activities. It has identified around 510 street light posts for upgrading to LED lights, thereby conserving the energy for the future. Transformation of street light to LED light is in progress and the company has purchased new mobile crane under this programme. It has invested 4.34 Crores for the infrastructure development during the last year.

A new beginning for employment generation

Your Company has started new scheme ‘Adugramam Padhadhy’ farms whereby ten goats per cage is provided on request from families in Kizhakkambalam panchayath free of cost. The scheme is already commenced and this would be extended to cow and poultry farming.

It is estimated that by extending the above programs, your company have generated more than one lakh job hours of employment for the local population in Kizhakkambalam Panchayat

Health Care Housing Infrastructure Employment

The company has incurred an expenditure of Rs. 3.5 lakhs under this head.

The company has spent around Rs. 1.35 Crores for this project during the year under review.

The company has invested 4.34 Crores for the infrastructure development during the last year.

more than one lakh job hours of employment for the local population in Kizhakkambalam Panchayat


Statutory & Financial Statements


Key market facts about the Company

• World’sleadinginfantapparelmanufacturer

• Makespecializedinfantapparelsfor0-2years

• KeyMarketisUSA(99%)followedbyEurope(1%)

• Major Clients : Gerber, Walmart, Amazon,Toys R Us, Mothercare, Carters, The Children’sPlace,Kohl’s,Buy-BuyBaby,RossStoresandTarget.

• Kitex USA LLC takes care of the new forwardintegrationinitiativesinUSA&Canada.

• DesignStudioinUSforvaluedaddedservices

Global Economy

AsperIMF,Globalgrowth,currentlyestimatedat3.1percent in 2015, is projected at 3.4 percent in 2016and3.6percentin2017.ThepickupinglobalactivityisprojectedtobemoregradualthanintheOctober2015World Economic Outlook (WEO), especially inemergingmarketanddevelopingeconomies.

In advanced economies, a modest and unevenrecovery is expected to continue, with a gradualfurther narrowing of output gaps. The picture foremerging market and developing economies isdiversebutinmanycaseschallenging.Theslowdownand rebalancing of the Chinese economy, lowercommodityprices,andstrainsinsomelargeemergingmarketeconomieswillcontinuetoweighongrowthprospectsin2016–17.Theprojectedpickupingrowthinthenexttwoyears—despitetheongoingslowdownin China—primarily reflects forecasts of a gradualimprovementofgrowthrates incountriescurrentlyin economic distress, notably Brazil, Russia, andsomecountriesintheMiddleEast,thougheventhisprojectedpartialrecoverycouldbefrustratedbyneweconomicorpoliticalshocks.

Risks to the global outlook remain tilted to thedownside and relate to ongoing adjustments inthe global economy: a generalized slowdown inemerging market economies, China’s rebalancing,

lower commodity prices, and the gradual exit fromextraordinarilyaccommodativemonetaryconditionsin the United States. If these key challenges arenot successfully managed, global growth could bederailed.

Major Developments in FY16-17

• KitexUSA LLC (50-50 Joint Investment betweenKCL and KGL) which signed a brand-licensingagreementwithLamazeInternationalforthesaleof infant wear in the US and Canada under theLamazebrandhascommenceditsbusiness

• KitexUSALLCistheexclusivesupplierforLamazeinfant wear (for children up to five years old)inUS andCanada. The contract validity is till 31December2020,extendableforfiveyears.

• OwnBrand“LittleStar”hasbeenlaunchedin2016:ThebrandisenvisagesasamassmarketproductinUSandCanada.TheManagementalsoplanstolaunchthebrandthroughtheonlineroute

• OpeneddesigncentreinNewJersey

About the Industry

The textile and apparel industry can be broadlydivided into two segments - yarn and fibre, andprocessedfabricsandapparel. Indiaaccountsfor14per cent of theworld’s production of textile fibresand yarns (largest producer of jute, second largestproducer of silk and cotton, and third largest incellulosicfibre).Indiahasthehighestloomcapacity(includinghandlooms)with63percentoftheworld’smarketshare.

ThedomestictextileandapparelindustryinIndiaisestimatedtoreachUS$141billionby2021fromUS$67billionin2014.Increasedpenetrationoforganisedretail, favourable demographics, and rising incomelevels are likely to drive demand for textiles. Indiaistheworld’ssecondlargestexporteroftextilesandclothing.

TextileandapparelexportsfromIndiaareexpectedto increase to US$ 82 billion by 2021 fromUS$ 40billion in 2014. Readymade garments remain thelargest contributor to total textile and apparelexports from India. In FY15-16 the segment had ashareof40percentofalltextileandapparelexports.Cottonandman-madetextilesweretheothermajorcontributors with shares of 31 per cent and 16 percent,respectively.

Rising government focus and favourable policiesis leading to growth in the textiles and clothingindustry. Foreign direct investment (FDI) in textilesectorincreasedtoUS$1,587.8millioninFY15-16fromUS$1,424.9millioninFY14-15.TheMinistryofTextilesisencouraginginvestmentsthroughincreasingfocuson schemes suchasTechnologyUp-gradationFundScheme (TUFS). To promote apparel exports, 12locations have been approved by the governmentto setupapparelparks forexports.Asper the 12thFiveYear Plan, theGovernment plans to provide abudgetarysupportofUS$4.25billiontotextiles.FreetradewithASEANcountriesandproposedagreementwithEuropeanUnionwillalsohelpboostexports.

Inthenearfuture,India’sapparelexportstodevelopedmarketsareexpectedtoincreaseconsiderably.TotalexportsoftextilesandapparelareexpectedtotouchUS$65billionbyMarch2017.

Review of Financial Performance

During the year under review, your Company hasrecorded its revenue fromoperations as ` 54,590.13lakhswhichisatparwith`54,581.67inthepreviousyear. Profit before taxation is ` 14,270.11 lakhs,whichis26%marginonitsrevenuefromoperationshas declined at 16.58 % against last year’s figure of` 17,105.50.Netprofitaftertaxis`9254.08lakhs.TheBasicEarningsperEquityShare(offacevalueof`1/-)is`19.48comparedto`23.60inthepreviousyear.

Management Discussion & Analysis


Review of Business Segments

The Company has two segments, which includegarmentsandfabric.InFY16-17thegarmentsegmentscontributed84%ofthesaleandFabric16%.

Opportunity Spectrum

Children’swearmarketisoneofthemostprofitablesegmentsintheglobalapparelindustry.Thissegmentwas not affected by the meltdown on the globaleconomy. TechNavio’s analysts forecast the BabyClothingmarketintheUStogrowataCAGRof2.67percentduringtheperiod2014-2019.Thedevelopedanddevelopingmarketsofinfantgarmentsdependsonthreemajorbuyingfactors–thenumberofbabiesborn,and thepurchasingpowerofparentsand thesafetyandqualitystandardsoftheapparels.Thekeydriversoftheinfantwearmarketareasfollows.

• Organised Retail Sector: In the key markets towhichKitexsuppliesitsproductssuchasUSAandEuropeorganizedretailaccountsfor80%shareofthe total retailmarket. Thismakes the shoppingconvenientwiththeaddedbenefitsofqualityandsafetyoftheproductsavailable.

• Extension of Product Lines to Baby Clothing:Existing players in the apparelmarket, primarilybrandedmanufactures, are extending their linesofproductstobabyclothing

• DemandforComfortandQuality:Theselectionofclothingforbabiesisdonejudiciouslybyparentsastheychoosethebestproductsfortheirnewborn

• Growing popularity of online shopping: Theinternet is valuable source of information forparents. The number of parent who research,deliberate, discover, and compare children’sproducts on the internet is increasing each day(courtesy:Technavio)

Kitex Unique Advantages

ThekeyadvantageofKitex is itstrainedmanpowerand vertical value chain consisting of state of theart process machines, international quality checksystemsandfinaldeliveryofcustomizeditemstothecustomers.

Sustainable Practices

Caring our employees, customers, society andenvironment is company’s founding legacy. Inalignment with our people approach, all ourcustomers,mostly global leaders in infant apparels,strictly follow the Ethical Trading Initiative (ETI)while sourcing and hence the code of practice atKitex ismostlybasedontheETI’sbaseCode,whichoutlines the labourstandardsexpectedat factories.Ourcustomersfollowthirdpartyaswellas internalsocialauditstoconfirmthattheirsupplierslikeKitexcomplywith the code. The codebriefly covers thefollowing

• Briberyandcorruptionisprohibited

• Noforcedlabour

• Havingemployeewelfarecommittees

• Safeandhygienicworkingconditions

• Nochildlabour

• Wagesarereasonableandfair

• Reasonableworkinghours

• Nodiscrimination

• Regularemployment

• Nophysicalorverbalabuse

• Disciplinaryandgrievance

• Environmentalimpacts

Risk Management Policy implementation

Intoday’seconomicenvironment,RiskManagementisavery importantpartofbusiness. Themainaimofriskmanagementisto identify,monitorandtakeprecautionarymeasuresinrespectoftheeventsthatmayposerisksforthebusiness.YourCompany’sriskmanagementisembeddedinthebusinessprocesses.Yourcompanyhasidentifiedthefollowingrisks:

Key RiskImpact to Kitex Garments Ltd

Mitigation Plans

CommodityPriceRisk

Risk of pricefluctuationon basic rawmaterials likecotton, yarn,Chemicals,power as wellas finishedgoods used inthe process ofmanufacturing

The Companycommandsexcellent businessrelationship withthe buyers. In caseofmajorfluctuationeither upwardsor downwards,the matter will bemutually discussedand compensatedboth ways. Alsoby focusing onnew value addedproducts helps inloweringtheimpactof price fluctuationinfinishedgoods.

Uncertainglobaleconomicenvironment– slow growthin globaleconomy

Impact ondemand andrealizationof Exports ofChildrenswear

Infant wear by itsvery nature is noteffected by slowdowns/recessions,since parentscompromise on theinfants needs as alastresortonly.

Interest RateRisk

Any increasein interest ratecan affect thefinancecost

Dependenceon debt is veryminimum and wehave surplus fundswithBankstosettlethe entire debt incasetheneedarises.


ForeignExchangeRisk

Your companyexports all theproducts toUSA and otherEuropeancountries. Anyvolatility inthe currencymarketcan impactthe overallprofitability

The Companycommandsexcellent businessrelationship withthe buyers. In caseofmajorfluctuationeither upwardsor downwards,the matter will bemutually discussedand compensatedbothways.

HumanResourcesRisk

YourCompany’sability todeliver valueis dependenton its ability toattract, retainand nurturetalent.Attritionand non-availability ofthe requiredtalent resourcecan affectthe overallperformance oftheCompany

By continuouslybenchmarkingof the best HRpractices acrossthe industryand carryingout necessaryimprovements toattract and retainthebesttalent.

By putting inplace productionincentives on timebound basis andevaluating theperformance ateach stage of work.Also recruitmentis across almost allstatesofIndiawhichhelps to mitigatethis risk and we donot anticipate anymajor issue for thecomingfiveyears.

CompetitionRisk

Yourcompanyisalways exposedto competitionRisk fromAsianCountries likeSriLanka,China,Taiwan, andother AfricanCountries. Theincrease incompetitioncancreate pressureon margins,market shareetc

By continuousefforts to enhancethe brand imageof the Companyby focusing onR&D, quality, Cost,timely delivery andcustomer service.By introducingnew product rangecommensuratewith demands yourcompany plans tomitigatetheriskssoinvolved.

ComplianceRisk –Increasingregulatoryrequirements

Anydefaultcanattract penalprovisions

By regularlymonitoring andreview of changesin regulatoryframework.

By monitoring ofcompliancethroughlegal complianceManagement toolsandregular internalauditbyE&Y.

IndustrialSafety,EmployeeHealth andSafetyRisk

TheGarmentingindustry islabourintensiveandareexposedto accidents,health andinjury risk dueto machinerybreakdown,humannegligenceetc

By developmentandimplementationof critical safetystandards acrossthe variousdepartments of thefactory, establishingtraining needidentificationat each level ofemployee. Weare certified forGlobal safety andcompliance Auditslike WRAP,CTPATetc.

Internal Control Systems and their Adequacy

The Company has a proper and adequate internalcontrolsystemtoensurethatallassetsaresafeguardedandprotectedagainstlossfromunauthorizeduseordisposition and those transactions are authorised,recordedandreportedcorrectly.

The internal control is exercised throughdocumented policies, guidelines and procedures. Itissupplementedbyanextensiveprogramofinternalaudits conducted by in house trained personnel.The audit observations and corrective action takenthereon are periodically reviewed by the auditcommittee to ensure effectiveness of the internalcontrol system. The internal control is designedto ensure that the financial and other records arereliableforpreparingfinancialstatementsandotherdata,andformaintainingaccountabilityofpersons.Apart from the above the company has engagedMessrs. K Venkitachalam Aiyer & Co, CharteredAccountants to conduct Internal Audit during theyear2016-17.

Human Resources/Industrial Relations

The Company’s HR philosophy is to establish andbuild a high performing organization, where eachindividual is motivated to perform to the fullestcapacity: tocontribute todevelopingandachievingindividual excellence and departmental objectivesandcontinuouslyimproveperformancetorealizethefullpotentialofourpersonnel.TheCompanyisgivingdirect employment to 4402 employees. Industrialrelationsarecordialandsatisfactory.

Cautionary Statement

Statementsmade herein describing the Company’sexpectations or predictions are “forward-lookingstatements”.Theactualresultsmaydifferfromthoseexpectedorpredicted.PrimefactorsthatmaymakeadifferencetotheCompany’sperformance includemarket conditions, input costs, govt. regulations,economicdevelopmentwithin/outsidecountryetc.


Notice is hereby given that the 25th AnnualGeneralMeetingoftheMembersofKitexGarmentsLimitedwillbeheldonMonday,June19,2017attheFactory Premises of the Company at Building No.9/536A,Kizhakkambalam,Kochi–683562,Keralaat10.00A.M.totransactthefollowingbusiness:-

ORDINARY BUSINESS

1. To receive, consider and adopt AuditedFinancial Statements (including theConsolidated financial statements) of theCompany for the year ended March 31, 2017together with the Report of the Board ofDirectors and Independent Auditors reportthereon.

2. TodeclareafinalDividendof`0.75perequityshare and to ratify the Interim Dividend of`0.75perequityshare,alreadypaidduringtheyear, for the financial year ended March 31,2017.

3. To appoint a Director in place of Mr. K LV Narayanan (DIN 01273573), who retiresby rotation in terms of Section 152(6) ofCompaniesAct,2013andArticle116ofArticlesofAssociation,andbeingeligibleoffershimselfforre-appointment.

4. ToRe-appointM/s.VarmaandVarma,CharteredAccountants, Kochi (Firm Registration No.004532S)whoshallholdofficeforthefinancialyear2017-18 from the conclusionof this 25thAnnual General Meeting till the conclusionof the 26th Annual General Meeting and toauthorizetheBoardtofixtheirremuneration.

SPECIAL BUSINESS

5. REVISION OF REMUNERATION PAYABLE TO MS. SINDHU CHANDRASEKHAR (DIN 06434415) WHOLE-TIME DIRECTOR

Toconsiderand if thoughtfit, topasswithorwithoutmodification,thefollowingresolutionasanOrdinaryResolution:

“RESOLVED THAT in partial modification ofthe resolutionpassedby themembers at the23rdAnnualGeneralMeetingoftheCompanyheldon4thJune,2015fortheappointmentofMs. Sindhu Chandrasekhar (DIN 06434415) asaWhole TimeDirectordesignatedasWomanDirector of the Company and the terms ofremuneration payable to her and pursuantto Sections 196, 197 and other applicableprovisions of the Companies Act, 2013 (“Act”)and theRulesmade thereunder, as amendedfromtimetotime,readwithScheduleVtotheAct,theCompanyherebyapproveswitheffectfromJanuary1,2017anduptoMarch15,2020the revision in the salary and other benefitsapplicable toMs. SindhuChandrasekhar (DIN06434415)asdetailedinthestatementformingpartofthisnotice.

RESOLVED FURTHER THAT the Board ofDirectors (including any Committee thereof)be and is hereby authorised to fix her salarywithin the salary scale approved, increasingthereby,proportionately,allbenefitsrelatedtothequantumofsalary.

RESOLVED FURTHER THAT the Board ofDirectorsbeand isherebyauthorised to takeallsuchstepsasmaybenecessary,properandexpedienttogiveeffecttothisresolution.”

6. TO APPROVE THE ISSUE OF BONUS SHARES

To consider and if thought fit, to pass, withor without modification(s), the followingResolutionasanOrdinaryResolution.

“RESOLVED THAT pursuant to the Articles 71to73ofArticlesofAssociationoftheCompanyandSection63andotherapplicableprovisions,if any, of the Companies Act, 2013 read withRule 14 of the Companies (Share Capital andDebentures)Rules,2014asamendedfromtimeto time, provisions of SEBI (Issue of Capitaland Disclosure Requirements) Regulations,2009,SEBI(ListingObligationsandDisclosure

Requirements) Regulations, 2015 (includingstatutory modification(s) or re-enactmentthereof for the time being in force) to theextentnotifiedandineffecttosuchapprovals,consents,sanctions,permissionsandprovisionsof other applicable laws, regulations, rules,directions, guidelines including those issuedby Reserve Bank of India and such otherregulatory authorities concerned from timeto time, to the extent applicable and subjecttosuchapproval(s)asmaybenecessaryfromauthorityincludingshareholders,consentandapprovalof themembersof theCompanybeandisherebyaccordedforasumnotexceeding` 1.9 Crores (Rupees One Crore Ninety Lakhsonly) out of Free Reserve of the Company,as appropriate, for the financial year endingMarch 31, 2018 (necessary accounting entrybeing made immediately upon approval ofshareholders)becapitalizedforthepurposeofissueofBonusshareamongthemembersoftheCompany,whosenameappearintheRegisterofMembersmaintainedbytheCompanyandtheListofBeneficialOwnersasreceivedfromNational Securities Depository Limited andCentralDepositoryServices(India)LimitedonRecorddateasmaybefixedinthisregardbytheBoardinaccordancewithlawandtoapplythe said sum inpayingup in full amaximumof1,90,00,000equityshares(thebonusshares)oftheCompanyof`1each(RupeeOneOnly)atpar,tobeallotted,distributedandcreditedas fully paid up to and among themembersintheproportionof2bonusequitysharesforevery 5 existing fully paid up equity sharesheld by them respectively as on record dateand that the Bonus shares so distributed, forall purposes, be treated as an increase in thenominalamountinthecapitaloftheCompanybyeachmembersandnotasincome.

RESOLVED FURTHER THAT the issue andallotmentofthesaidbonussharestotheextentthattheyrelatetoNon-ResidentIndians(NRIs),Persons of IndianOrigin/Overseas Corporate

Notice


Bodies and other foreign investors of theCompany, will be subject to the approval oftheReserveBankofIndiaandotherregulatoryauthorityasthecasemaybe.

RESOLVED FURTHER THAT if as a resultof implementation of this resolution, anymemberbecomesentitledtoafractionofnewequity shares to be allotted as bonus shares,thecompanyshallnotissueanycertificateorcouponinrespectofsuchfractionalshares,butthe total number of such new equity sharesrepresenting such fractions shall be allottedby theBoard to anominee tobe selectedbytheboardwhowouldholdthemastrusteefortheequityshareholderswhowouldhavebeenentitled to such fractions, in case the samewere issued. Such nominee will as soon aspossiblesellsuchequitysharesallottedtohimattheprevailingmarketrateandthenetsaleproceedsofsuchsharesafteradjustingthecostandexpensesinrespectthereofbedistributedamongsuchmemberswhoareentitledtosuchfractionsintheproportionoftheirrespectiveholdingandallotmentoffractionsthereof.

RESOLVED FURTHER THAT theBonusSharessoallottedshallalwaysbesubjecttothetermsandconditionscontainedintheMemorandumandArticlesofAssociationoftheCompanyandshallrankparipassuinallrespectwithexistingfullypaidupequitysharesoftheCompany.

RESOLVED FURTHER THAT no letter ofAllotment shall be issued but in the case ofmembers who hold shares in dematerialisedmode, the Bonus Shares shall be credited tothe beneficiary accounts of the membersmaintained inDepositoryParticipants and incaseofmemberswhoholdshares inphysicalmode, the share certificate in respect of theBonus Shares shall be dispatched within theprescribedtimelimit.

RESOLVED FURTHER THATtheBoardbeandisherebyauthorisedtotakenecessarystepsforlistingoftheBonusSharesonStockExchangeswhere the equity shares of the Company arelisted,intermsoftheSEBI(ListingObligationsand Disclosure Requirements) Regulations,2015 and other applicable Rules andRegulations.

RESOLVED FUTHER THAT Mr. SabuM. Jacob,Chairman&ManagingDirector(DIN:00046016)or any one from directors and the CompanySecretarybeandisherebyauthorisedtodoallsuchacts,deeds,mattersandthingsasmayinitsabsolutediscretion,deemnecessaryforthepurposeofgivingeffecttothisresolution.”

7. APPROVAL FOR MATERIAL RELATED PARTY TRANSACTIONS

To considerand if thought fit topasswithorwithoutmodification,thefollowingresolutionasanordinaryresolution:-

“RESOLVED THATpursuanttoSection188andotherapplicableprovisionsof theCompaniesAct,2013andtheCompanies(MeetingofBoardand its Powers) Rules, 2014 including anymodificationsoramendmentsorclarificationsthereon, if any, and pursuant to Regulations23ofSEBI (ListingObligationsandDisclosureRequirements) Regulations, 2015 as amendedfrom time to time read with standard listingagreement enteredwith the StockExchangesandsubjecttosuchotherapprovals,consents,permissions and sanctions of any authoritiesas may be necessary, approval of theshareholdersbeandisherebyaccordedtotheBoardofDirectorstoenter intoacontract(s)/Transactions(s)/ arrangement(s) with KITEXCHILDRENSWEAR LIMITED a related partywithin the meaning of the aforesaid law, onsuchtermsandconditionsasmaybemutuallyagreedupon,uptoamaximumamountof`150

Croresineachfinancialyearfromthefinancialyear2016-17fortheperiodof3years,howeverthatcontract(s)/Transaction(s)/Arrangement(s)so carried out shall at all times be in theordinary course of Company’s business andalsoatthearmslengthbasis.

RESOLVED FURTHER that the Board ofDirectors of the company and/or the AuditCommittee as may be applicable from timeto time authorized to settle any question,difficultyordoubtthatmayarisewithregardto giving effect to the aboveResolution; signandexecutenecessarydocumentsandpaperson an ongoing basis and to do and performall such acts, deeds and things as may benecessary or in its absolute discretion deemnecessary,proper,desirableandtofinalizeanydocumentsandwritingsinthisregard.

RESOLVED FURTHER THAT theBoardbeandisherebyauthorized todelegatealloranyofthe powers conferred on it by or under thisresolution to any Committee of Directors oftheCompanyortoanyoneormoreDirectorsoftheCompanyasitmayconsiderappropriateinordertogiveeffecttothisresolution.”

ByOrderoftheBoardofDirectorsofKitex Garments Limited

Sabu M Jacob

Chairman&ManagingDirector(DIN:00046016)

KizhakkambalamApril28,2017


Notes:

1. AMEMBERENTITLEDTOATTENDANDVOTEAT THE MEETING IS ENTITLED TO APPOINTAPROXYTOATTENDANDVOTEONAPOLLONLY INSTEAD OF HIMSELF/ HERSELF ANDSUCHAPROXYNEEDNOTBEAMEMBER.

Proxiesinordertobeeffective,shouldbedulystamped, completed, signed and deposited atthe registeredofficeof theCompanynot lessthan 48 hours before the commencement ofthemeeting.RevenueStampshouldbeaffixedon the Proxy Form. Forms which are notstampedareliabletobeconsideredasinvalid.ItisadvisablethattheProxyholder’ssignaturemayalsobe furnished in theProxyForm, foridentificationpurposes.

A person can act as a proxy on behalf ofmembersnotexceedingfifty(50)andholdingintheaggregatenotmorethantenpercentofthetotalsharecapitaloftheCompanycarryingvoting rights. A member holding more thanten percent of the total share capital of theCompany carrying voting rightsmay appointasinglepersonasproxyandsuchpersonshallnot act as a proxy for any other person orshareholder.

2. TheStatementpursuanttoSection102oftheCompanies Act, 2013, in respect of the itemsofspecialbusinessunderItemNo.5to7totheNoticeisannexedhereto.

3. The Register of Members and Share TransferBooks of the Company will remain closedfromJune13,2017toJune19,2017(bothdaysinclusive).

4. NoneoftheDirectorsseekingappointment/re-appointmentorwhose termsofappointmentare revised, is related to anymember of theBoard of Directors or to any Key ManagerialPersonnel.

5. For the convenienceof theMembers and forproper conduct of the Meeting, entry to theplaceof theMeetingwillbe restrictedby theAttendanceSlipandphotoidproof.MembersarerequestedtowritetheirClientIDandDPID

numbers/FolioNumber (asapplicable)ontheAttendanceslip,affixtheirsignatureandhanditoverat theentrancehall.Transport facilitywill be provided to the shareholders fromKizhakkambalamtotheFactorypremisesandbackforattendingthemeeting.

6. Incaseofjointholdersattendingthemeeting,theMemberwhosenameappearsas the firstholderintheorderofnamesaspertheRegisterofMembersoftheCompanywillbeentitledtovote.

7. Corporate members intending to send theirauthorised representatives to attend themeetingarerequestedtosendtotheCompanya certified copy of the Board Resolutionauthorizingtheirrepresentativetoattendandvote on their behalf at the Annual GeneralMeeting.

8. Membersholdingsharesinelectronicformareadvisedtosendtheirrequestforthechangeofaddress, Bank particulars, Residential statusor request for transmission of shares etc totheirDepositoryParticipant.TheCompanyoritsRegistrarandShareTransferAgentcannotact on any such requests received directlyfromthemembersholdingsharesinelectronicform.Membersholdingsharesinphysicalformareadvised to send such request toRegistrarand Share Transfer Agent of the Company,M/s. Cameo Corporate Services Limited,Subramanian Building No. 1, Club HouseRoad, Chennai 600002, TamilNadu, Tel: 044-28460390Fax:044-28460129.

9. Noticeof theAGMalongwithAnnualReport2016-17 is being sent by electronic mode tothose members whose email addresses areregistered with the Company/ DepositoryParticipantsunlessanymemberhasrequestedforthephysicalcopyofthesame.ForMemberswhohavenotregisteredtheiremailaddresses,physical copies are being sent by permittedmode. To support the Green Initiative,members (holding shares in electronic form)whohavenotregisteredtheiremailaddresses,are requested to register the samewith theirDepository Participants. Members holding

shares in physical mode are requested toregister their email IDwith theRegistrar andShareTransferAgentoftheCompany.

10. AFinalDividendof`0.75 (75%)persharehasbeenrecommendedbytheBoardofDirectorsof the year ended March 31, 2017, subject tothe approval of shareholders. Dividend, ifapproved shall be paid on or before July 17,2017andtobecompletedwithinthestatutorytimelimit.

11. Request for any clarification needed on theaccounts should be lodged in writing at theRegisteredOfficeoftheCompanyonorbefore5P.M.onJune17,2017.

12. All documents, transfers, dematerializationrequestsandothercommunicationsinrelationthereto should be addressed directly to theCompany’sRegistrar&TransferAgents.

13. MembersmayalsonotethattheNoticeofthe25thAnnualGeneralMeetingandtheAnnualReport for 2016-17 will also be available onthe Company’s website www.kitexgarments.com for their download. The physical copiesof the aforesaid documents will also beavailableattheCompany’sRegisteredOfficeinKizhakkambalam,Alwaye,Kochibetween11.00AMand1.00P.M.onallworkingdaysuptothedateoftheAnnualGeneralMeeting.

14. Memberswhohavenotencashedthedividendwarrantsforthefinancialyearended2009-10and/oranysubsequentyearsarerequestedtowritetotheCompanygivingnecessarydetailsalong with claimant’s proof of identity andaddress. In this connection the company hasplacedthenamesofsuchpersonswhohasnotclaimeddividendsince2009-10inthewebsiteofthecompanyandtheshareholderscanviewthedetailsatwww.kitexgarments.com

15. In order to enable payment of dividend bydirect credit to the bank accounts of theshareholders through National ElectronicClearing Service (NECS) / National ElectronicFundTransfer(NEFT),thoseholdingshares inphysical form are requested to furnish their


mandatesforthesameintheattachedformatalongwiththespecifieddetails/documentstoM/sCameoCorporateServicesLimited.ThoseholdingsharesinDe-matformarerequestedtoupdatetheirrecordswithDPsinthisrespect.

16. AsperprovisionsofSection124ofCompaniesAct,2013, theamountofdividendsremainingunclaimed for a period of seven years is tobe transferredalongwith shareheld in thosefoliostotheInvestorEducationandProtectionFund.Accordingly,thedividenddeclaredforallthefinancialyearsendeduptoMarch31,2009had been transferred to Investor EducationandProtectionFund.

17. TheCompanyshallprovide/host therequireddetails of unclaimed dividend amountsreferred to under Section 124 of CompaniesAct, 2013, on its website and alsoMinistry ofCorporateAffairs(MCA)websiteintherelevantformeveryyear.Forthefinancialyearended31stMarch,2016,theinformationonunclaimeddividendfortheyearsfrom2009-10to2015-16wasfiledwiththeMinistryofCorporateAffairsand hosted on the web site of the Companywithinthestatutorytime.

18. Details of dividenddeclared for the financialyearsfrom2009-10onwardsaregivenbelow:

Financial Year

Declared on

Dividend yield

Amount paid per equity

share (`)

2009-10 30.12.2010 30% `0.30

2010-11 30.05.2011 40% `0.40

2011-12 30.05.2012 60% `0.60

2012-13 14.05.2013 80% `0.80

2013-14 15.05.2014 100% `1.00

2014-15 04.06.2015 125% `1.25

2015-16(1stInterimDividend)

30.10.2015 75% `0.75

2015-16Final

10.06.2016 75% `0.75

19. TheCompanyhas releasedanAdvertisementdated 30.04.2015 in National Daily viz.,Financial Express and Regional languagedaily viz., Chandrika for transferring unpaid/unclaimed dividend and unclaimed sharesof the Company to Investor Educationand Protection Fund (IEPF) Account asper Section 124(6) of the Companies Act,2013. The Company has also sent individualcommunication dated December 9, 2016 tothe concerned shareholders whose dividendremains unpaid or unclaimed for period ofSeven(7)consecutiveyears,attheirregisteredaddressandsharesareliabletobetransferredto IEPF account under the aforesaid Rules,for taking appropriate action(s) by theshareholdersconcerned.TheCompletedetailsofunpaidorunclaimeddividendsandsharesdue for transfer are available on thewebsiteof the Company ie., www.kitexgarments.com.In case, the Company does not receive anycommunicationfromconcernedshareholder(s)byMay31,2017,theCompanyshalltransfertheunpaidorunclaimeddividendsandshares toIEPFaccounts.

20. Foranycommunication,theshareholdersmayalso send requests to theCompany’s investore-mail IDs: [email protected] [email protected]

21. Voting through electronic means:

a) In compliance with provisions ofSection108of theCompaniesAct,2013and the Rule 20 of the Companies(Management and Administration)Rules, 2014 as amended from time totime together with relevant clauses inSEBI(ListingObligationsandDisclosureRequirements) Regulations, 2015, theCompanyispleasedtoprovideMembersthefacilitytoexercisetheirrighttovoteat the25thAnnualGeneralMeetingbyelectronicmeansandthebusinessmaybetransactionthroughe-votingservicesprovided by the Central DepositoryServices(India)Limited(CDSL).

“Electronic voting system” means asecuredvotingsystembasedprocessofdisplayofelectronicballots,recordingof

votes of theMembers and the numberof votes polled in favour or against, insuch a manner that the entire votingexercised by way of electronic meansgets registered and counted in anelectronicregistryinacentralizedserverwithadequatecybersecurity.

“Remote e-voting” means the facilityof casting votes by aMember using anelectronic voting system from a placeotherthanvenueofageneralmeeting.

“Cut-off date” for determining theeligibility for voting either throughelectronic voting system or ballot isfixed as June 12, 2017. A person whoisnot aMember as on the cut off dateshouldtreatthisNoticeforinformationpurposesonly.

b) Procedure for Remote E-Voting

(i) Log on to the e-voting websitewww.evotingindia.com

(ii) Clickon“Shareholders”tab.

(iii) NowEnteryourUserID

a. ForCDSL:16digitsbeneficiaryID,

b. For NSDL: 8 Character DP IDfollowedby8DigitsClientID,

c. Members holding shares inPhysical Form should enterFolio Number registered withtheCompany.

(iv) NextentertheImageVerificationasdisplayedandClickonLogin.

(v) IfyouareholdingsharesinDe-matformandhad loggedon towww.evotingindia.com and voted onanearliervotingofanycompany,thenyour existingpassword is tobeused.

(vi) Ifyouarea first timeuser followthestepsgivenbelow:


ForMembers holding shares in Demat Form andPhysicalForm

PAN* Enter your 10 digit alpha-numeric*PAN issued by Income TaxDepartment (Applicable for both de-mat shareholders as well as physicalshareholders)

• Members who have not updatedtheir PAN with the Company/Depository Participant arerequestedtousethefirsttwolettersoftheirnameandthelast8digitsofthede-mataccount/folionumberinthePANfield.

• Incasethefolionumberislessthan8digitsentertheapplicablenumberof 0’s before the number after thefirst two characters of thename inCAPITAL letters.Eg. Ifyourname isRamesh Kumar with folio number100 then enterRA00000100 in thePANfield.

DOB# Enter theDateofBirthasrecorded inyourde-mataccountorinthecompanyrecordsforthesaidde-mataccountorfolioindd/mm/yyyyformat.

DividendBankDetails#

Enter the Dividend Bank Details asrecordedinyourde-mataccountorinthe company records for the said de-mataccountorfolio.

• Please enter the DOB or DividendBankDetailsinordertologin.Ifthedetails are not recorded with thedepositoryorcompanypleaseenterthe number of shares held by you as on the cut-off date in the Dividend Bank details field.

(vii) Afterenteringthesedetailsappropriately,clickon“SUBMIT”tab.

(viii) Membersholdingshares inphysical formwillthen reach directly the Company selectionscreen. However, members holding sharesin De-mat form will now reach ‘PasswordCreation’ menu wherein they are requiredto mandatorily enter their login password

in the new password field. Kindly note thatthis password is to be also used by the de-mat holders for voting for resolutions of anyother company on which they are eligibleto vote, provided that company opts fore-votingthroughCDSLplatform. It isstronglyrecommended not to share your passwordwithanyotherpersonandtakeutmostcaretokeepyourpasswordconfidential.

(ix) ForMembersholdingshares inphysicalform,thedetailscanbeusedonlyfore-votingontheresolutionscontainedinthisNotice.

(x) Click on the EVSN to choose <KITEX GARMENTS LIMITED>tovote.

(xi) Onthevotingpage,youwillsee“RESOLUTIONDESCRIPTION”andagainstthesametheoption“YES/NO” forvoting.Select theoptionYESorNOasdesired.TheoptionYESimpliesthatyouassenttotheResolutionandoptionNOimpliesthatyoudissenttotheResolution.

(xii) Clickonthe“RESOLUTIONSFILELINK”ifyouwishtoviewtheentireResolutiondetails.

(xiii) Afterselectingtheresolutionyouhavedecidedtovoteon,clickon “SUBMIT”.Aconfirmationboxwill be displayed. If youwish to confirmyour vote, click on “OK”, else to change yourvote, click on “CANCEL” and accordinglymodifyyourvote.

(xiv) Once you “CONFIRM” your vote on theresolution, youwillnotbeallowed tomodifyyourvote.

(xv) Youcanalsotakeoutprintofthevotingdoneby you by clicking on “Click here to print”optionontheVotingpage.

(xvi) If Demat account holder has forgotten thechangedpasswordthenEntertheUserIDandtheimageverificationcodeandclickonForgotPassword& enter thedetails as promptedbythesystem.

(xvii) Note for Non-Individual Shareholders &Custodians

• Non-Individual shareholders (i.e. otherthanIndividuals,HUF,NRIetc.)arerequiredto logon tohttps://www.evotingindia.co.in

and register themselves as Corporate andcustodiansrespectively

• A scanned copy of the Registration Formbearing the stamp and sign of the entityshould be e-mailed to [email protected].

• After receiving the login details theyshould create compliance user using theadminloginandpassword.TheComplianceuserwouldbe able to link the depositoryaccount(s)/ folio numbers on which theywishtovote.

• The list of accounts should be mailed [email protected] and onapproval of the accounts they would beabletocasttheirvote.

• A scanned copy of the Board Resolutionand Power of Attorney (POA) which theyhave issued in favour of the Custodian, ifany, shouldbeuploaded inPDFformat inthesystemforthescrutinizertoverifythesame.

In case of members receiving the physical copy:

Please follow all the steps from Sl. No. : (i to xvii)abovetocastvote.

General Information

(A) ThevotingperiodbeginsonFriday,June16,2017at9.00A.MandendsonSunday,June 18, 2017 at 5.00 P.M. During thisperiod shareholders’ of the Company,holdingshareseitherinphysicalformorindematerializedform,asonthecut-offdateie.,Monday,June12,2017,maycasttheir vote electronically. The RemoteE-voting module shall be blocked byCDSLforvotingthereafter.

(B) Membershaveanoption tovoteeitherRemote e-voting (availing the servicesprovidedbyCDSL)ORbye-votingatAGMvenueorbypollslipstobedistributedatthemeeting.Ifmembershavecasttheirvotethroughremotee-voting,thentheyshouldnotcasttheirvoteatthemeetingbut they can attendmeeting. HoweverifamemberhasvotedthroughRemote


e-voting and has again voted at themeeting, then the voting done throughRemotee-votingshallprevailandvotingdoneat themeetingshallbetreatedasinvalid. Members attending meetingwhohavenotalreadycasttheirvotebyremotee-votingshallbeabletoexercisetheirrightattheAGM

(C) In case you have any queries or issuesregarding e-voting, you may refer theFrequently Asked Questions (“FAQs”)and e-votingmanual available atwww.evotingindia.co.in under help sectionorwrite an email [email protected] or you may contactHelpdesk:18002005533/022-22723333

22. TheroutemaptothevenueofAGMisprovidedintheAnnualReportforeasylocation.

23. TheCompanyhasappointedMr.P.D.Vincent(FCS 3067 andCP. 7940), PractisingCompanySecretary, Kochi, as the Scrutinizer forconducting the e-voting process (includingremote e-voting) in a fair and transparentmanner.

24. The Scrutinizer shall, immediately after theconclusion of voting at the Annual GeneralMeeting, first count the votes cast at themeeting, thereafter unblock the votes castthroughremotee-votinginthepresenceofatleast2 (two)witnessesnot inemploymentoftheCompanyandmakenotlaterthan2daysof conclusion of the meeting, a consolidatedScrutinizer’s Report of the total votes cast infavouroragainst,ifany,totheChairmanand/orDirector or a person authorized by him inwritingwhoshallcountersignthesame.

25. The results shall be declared forthwith uponreceiptoftheScrutinizer’sReport.Theresultsdeclared along with the Scrutinizer’s Reportshall be placed on the Company’s websitewww.kitexgarments.com,itsNoticeBoardandon the website of CDSL and communicatedto the stock exchanges where shares of theCompanyarelisted.

PARTICULARS OF DIRECTORS WHO ARE PROPOSED TO BE RE-APPOINTED/ APPOINTED AT THE MEETING ARE GIVEN BELOW.

A. MR. K. L. V. NARAYANAN

DateofBirthandage 02.04.1957;61yearsofage

Qualification BatchelorofArts

Expertise in specificfunctionalareas

Expertise in Exportmanagement, ExcellentKnowledge of all exportrelated matters with anindustry experience ofover 40 years in textileindustry.

DirectorshipheldinotherCompanies

a) Victory Paper andBoards(India)Ltd

b)KitexApparelsLimited

Details of theremunerationlastdrawn

Refer Annexure B ofDirectorsReport

DateoffirstappointmentontheBoard

04.04.2013

Relationship with otherDirectors, Manager andother Key ManagerialPersonnelofthecompany

Nil

Number of Meetingsof the Board attendedduringtheyearandotherDirectorships

Refer CorporateGovernance Reportforming part of AnnualReport

Chairman/member ofthe Committee of theBoardofDirectorsofthisCompany

Refer CorporateGovernance Reportforming part of AnnualReport

Committee MembershipinotherCompanies

Nil

Shareholdings in theCompany

Nil

B. MS. SINDHU CHANDRASEKHAR

DateofBirth 01.06.1969;49yearsofage

Qualification ScienceGraduate

Expertise in specificfunctionalareas

Ms. Sindhu Chandrasekharjoined Kitex Group in april1995 & later on inductedintoKitexGarmentsLimitedin the year 1997. She hasbeen holding various postand presently the positionhas Manager - Finance.Ms. Sindhu Chandrasekharhas been handling theTreasury Managementof the company fora quite long period.Ms.SindhuChandrasekharisinstrumentalinmaintainingaperfectcashmanagementsystem in the companyduringhertenure.

DirectorshipheldinotherCompanies

• KitexHerbalsLimited

• KitexInfantswearLimited

Detailsoftheremunerationlastdrawn

ReferAnnexureBtotheDirectorsReport

DateoffirstappointmentontheBoard

16.03.2015

RelationshipwithotherDirectors,ManagerandotherKeyManagerialPersonnelofthecompany

Nil

number of MeetingsoftheBoardattendedduring the year andotherDirectorships

ReferCorporateGovernanceReportformingpartofAnnualReport

Chairman/member oftheCommitteeoftheBoard of Directors ofthisCompany

ReferCorporateGovernanceReportformingpartofAnnualReport

CommitteeMembershipinotherCompanies

Nil

Shareholdings in theCompany

Nil


EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF COMPANIES ACT, 2013

Item No. 5

Themembers of theCompany at the 23rd AnnualGeneralMeetingheldon4thJune,2015,hadapprovedtheappointmentofMs.SindhuChandrasekhar(DIN06434415) as a Whole-time Director designated asWomanDirector of theCompany and the terms ofremuneration payable to her for the period fromMarch16,2015toMarch15,2020.Themembershadinter alia approved, salary not exceeding ` 57,000with an annual increment not exceeding 15% perannumandaperformanceBonusuptoamaximumofEightmonthssalaryperannumpayablequarterlyat the discretion of Chairman &Managing DirectorwiththeapprovaloftheBoard.ThemonthlysalaryofMs. Sindhu Chandrasekhar was revised with effectfromApril1,2016.Thiswaswithinthelimitsspecifiedin the shareholders approval of June 4, 2015 uptoDecember31,2016.

Taking into consideration her present salaryand future revisions, if any, and based on therecommendationofNominationandRemunerationCommittee,theBoardofDirectorson30thJanuary,2017decidedtorevisethesalaryscaleapplicabletoMs.SindhuChandrasekharfromtheexisting`57,000permonth to `65,500/- permonth in the pay scaleof `65,5000 to `1,00,000 and a performance bonusof8monthstoamaximumof24monthssalaryperannualpayablequarterlybasedonherperformanceat the discretion of the Chairman & ManagingDirector for theperiod January 1, 2017 toMarch 15,2020.Allothertermsandconditionsrelatingtoherappointmentandremunerationasapprovedearlierbythemembersremainunchanged.

Details of remuneration paid to Ms. SindhuChandrasekhar during the Financial Year 2016-17havebeendisclosedintheannexuretotheDirectors’Report and in the Corporate Governance Report.ThisStatementmayalsoberegardedasadisclosureunder SEBI (Listing Obligations and DisclosureRequirements)Regulations,2015.

Relevant documents in respect of the said itemswould be made available, for inspection by themembers without payment of any fee, at theRegisteredOfficeoftheCompanybetween11.00AMand1.00P.M.onallworkingdaysuptothedateoftheAnnualGeneralMeeting.

TheBoardrecommendstheOrdinaryResolutionsetoutat ItemNo.5of theNotice forapprovalby themembers.

None of the Directors, Key Managerial Personnelof theCompanyand their relatives is concernedorinterested,financiallyorotherwise,inthisresolutionexceptMs.SindhuChandrasekhar.

Item No. 6

The Company’s shares were listed on BSE Limitedin the year 1995 and the National Stock ExchangeofIndiaLimitedintheyear2011(consequenttotheclosure of Cochin Stock Exchange) and have beenactively traded in the stock exchanges. Over theyears, the Company has performed significantlyboth in terms of revenue and profit and has beenrewardingitsshareholdersconsistently.TheDirectorshave created free reserves to a considerableextentout of its distributable profits and the balance inreservesandsurplusasonMarch31,2017is`450.67Crores. At present, the Authorised Share Capital ofyourCompanyis`25,00,00,000(RupeesTwentyFiveCrores)dividedinto25,00,00,000equitysharesof`1(RupeeOne)each.

With a view to distribute the benefit among themembersinformofequitysharesoutoffreereserveoftheCompanywithoutreceivinganyconsideration,its Board of Directors at its meeting held on April28, 2017 has recommended issue of shares in ratioof2:5, i.e.Twosharesforevery5sharesheldbytheshareholders, subject to their approval. The issueof bonus shares, by way of capitalizing reserves, isauthorizedbytheCompany’sArticlesofAssociation.The paid-up capital as on aforesaid Boardmeetingdateis`4.75Crores.Anamountof`1.9Croresfromthefreereservesisrequiredtobecapitalizedfortheissue of bonus shares in the ratio of 2:5. After thebonusissue,thepaid-upsharecapitalwouldincreaseto`6.65Crores.Theproposalforcapitalizationofthesaidreservesandissueofbonussharesisnowplacedforconsiderationandapprovalofthemembers.

TheRecordDatefordeterminingtheeligibilityoftheshareholders to receive the said bonus shares shallbefixedbytheBoardinconsultationwiththeStockExchangeswhere shares are listed.Accordingly, theresolutionatitemnos.6oftheNoticeseeksapprovalof theMembers bywayofOrdinaryResolution forissueofBonusshares.


The Directors/ Key Managerial Personnel or theirrelatives are concerned or interested, to the extentof their shareholding in theCompany, ifany, in theresolutionssetoutatitemno.6oftheaccompanyingnotice.

Item No. 7

YourCompany sellsprocessed textiles toM/s.KitexChildrenswear Limited, (hereinafter referred toas “the KCL”) an unlisted company which is alsopromoted by Mr. Sabu M Jacob who is also theManaging Director of this company. Your companyalsotakesonrentandalsorentoutsomeportionofthefactorypremisestoKCLandalsoengagesKCLforundertakingspecial jobworkcontracts. ThesaleofprocessedTextilesandJobworkcontractsdependenton the requirement of both the Companies for itsproductsfromtimetotimeandtheabilitytosupplysuch specified Childrenswear by these companies.During the course of its business, KCL also sells itsproductstoothercompanies.

YourcompanyhasnotedthatM/s.KitexChildrenswearLimited fall under the category of a related partyof the Company in terms of Regulation 23 of SEBI(Listing Obligations and Disclosure Requirements)Regulations,2015asnotifiedandamendedfromtimeto time. Theprovisions of this regulation readwithPolicyonRelatedPartyTransactionsapprovedandnotifiedby theBoardofDirectors of theCompanyconsideratransactionwitharelatedpartymaterialif the transaction/transactions to be enteredinto individually or taken together with previoustransactions during a financial year exceeds tenpercentof theAnnualconsolidatedturnoverof thecompanyasperthelastauditedfinancialstatementsoftheCompany.Further,theSEBI(ListingObligationsand Disclosure Requirements) Regulations, 2015as amended from time to time require allmaterialrelated party transactions to be approved by theshareholders through an ordinary resolution andtherelatedpartiesshallabstainfromvotingonsuchresolutions.


The Company envisages that the transactionsentered intowithM/s. Kitex Childrenswear Limitedwhether individually and/or in aggregate wouldexceedthestipulatedthresholdlimitoftenpercentof consolidated annual turnover of the CompanyasperthelatestauditedfinancialstatementsoftheCompanyduringa financialyearunder review.Thecompany therefore requires the approval of theshareholdersbyanordinaryresolutionforenteringintosuchtransaction(s)/Contract(s)/arrangement(s)with M/s. Kitex Childrenswear Limited upto amaximumamountasmentionedintheresolutionineachfinancialyearfromtheFY2016-17foraperiodof3years.

Although approval of the shareholders would notbe required under the provisions of Section 188of the Companies Act, 2013 and the rules madethereunderandasamendedfromtimeto timeduetothereasonthattransactionswithrelatedpartyarein the ordinary course of business and at the armslengthbasis,thesameisbeingsoughtasanabundantprecautionarymeasure.

All relatedparties shall abstain fromvotingon thisresolution.

Therelevantinformationisasfollows:

1. Nameoftherelatedparties

Kitex ChildrenswearLimited(KCL)

2. NameoftheDirectororKMPwhoisrelated

Mr.SabuMJacob

3. Natureofrelationship

Mr. Sabu M Jacob is theChairman & ManagingDirectorofKitexGarmentsLimited (KGL) and is alsothe Managing Director ofKCL.Heisthepromoterforboth the companies. He isholding 99.69% shares inKCLalongwithhiswife.

4. MonetaryValue The estimated aggregatecontract value for thematters proposed in theresolution shallnot exceed` 150 Crores for KCL ineach financial year for 3consecutiveyears

5. Nature,materialtermsandparticularsofarrangements

Purchase and sale ofProcessed Textiles andjob work contracts, alsotakes on rent and rentout some portions ofthe factory premises toKCL by the company asthese are dependent onthe requirement of bothcompanies for its productsfrom time to time andthe ability to supply ofspecifiedmaterialbythesescompanies. However suchtransactions would be inthe ordinary course of thecompany’s business and atthearm’slengthbasis.

6 Any advance paidor received for thearrangementifany

As per industry norms,customanduses.

7 TenureofContract 3years

8 Any otherinformationrelevant orimportant forthe members totake a decisionon the proposedresolution

Nil

TheAuditcommitteeandtheBoardoftheDirectorsof the Company have considered these proposedarrangementsandlimitsattheirmeetingheldonApril

28,2017haveapprovedtheproposedarrangementswith the Related Party M/s. Kitex ChildrenswearLimited and have also decided to seek approval ofshareholdersbywayofordinaryresolutionpursuanttosection188oftheCompaniesAct2013readwiththe Companies (Meeting of Board and its Powers)Rules,2014andSEBI(ListingObligations&DisclosureRequirements) Regulations, 2015 as amended fromtimetotime.

Mr.SabuMJacobandhisrelativeswhodirectlyholdinaggregate1,84,15,268EquitysharesoftheCompanyareconcernedorinterestedintheordinaryresolutionunder Agenda Item no. 7. M/s. Kitex ChildrenswearLimited holds in aggregate 73,50,329 Equity sharesandbeingapromotercompanyisalsointerestedorconcerned intheordinaryresolutionunderAgendaitemNo.7


TheBoardrecommendstheOrdinaryResolutionsetoutat ItemNo. 7of theNotice forapprovalby themembers.

The Directors/ Key Managerial Personnel or theirrelatives are concerned or interested, to the extentof their shareholding in theCompany, ifany, in theresolutionssetoutatitemno.7oftheaccompanyingnotice.

ByOrderoftheBoardofDirectorsofKitex Garments Limited

Place:KizhakkambalamDate:April28,2017

Sabu M. JacobChairman&ManagingDirector

(DIN:00046016)


ROUTE MAP TO THE 25TH ANNUAL GENERAL MEETING VENUE


BOARD OF DIRECTORS

Mr.SabuMJacob–Chairman&ManagingDirector

Prof.E.MPaulose–IndependentDirector

Mr.BenniJoseph–IndependentDirector

Mr.KLVNarayanan–Director

Mr.CPPhilipose–IndependentDirector

Ms.SindhuChandrasekhar-WomanDirector

BOARD COMMITTEES

Audit Committee

Mr.BenniJoseph,Chairman

Prof.E.MPaulose,Member

Mr.CPPhilipose,Member

Nomination and Remuneration Committee

Prof.E.MPaulose–Chairman

Mr.BenniJoseph–Member

Mr.KLVNarayanan–Member

Stakeholders Relationship Committee

Mr.KLVNarayanan-Chairman

Mr.SabuMJacob-Member

Ms.SindhuChandrasekhar-Member

CSR Committee

Mr.SabuMJacob-Chairman

Mr.BenniJoseph-Member

Mr.KLVNarayanan-Member

Mr.CPPhilipose,Member

Risk Management Committee

Mr.SabuMJacob,Chairman

Mr.BenniJoseph,Member

Prof.E.M.Paulose,Member

KEY MANAGERIAL PERSONNEL

Mr.SabuMJacob-Chairman,ManagingDirector&

ChiefFinancialOfficer

Mr.A.Babu-CompanySecretary

INDEPENDENT STATUTORY AUDITORS & INCOME TAX CONSULTANTS

M/s.Varma&Varma,CharteredAccountants,Kochi

SECRETARIAL AUDITORS

M/s.SVJS&Associates,CompanySecretaries,Kochi

INTERNAL AUDITORS

M/s.KVenkitachalamAiyer&Co,CharteredAccountants,Kochi

LEGAL ADVISORS

M/s.JosephandKurian,Advocates,Kochi

BANKER

StateBankofIndia

SHARE TRANSFER AGENTS

M/s.CameoCorporateServicesLimited

SubramanianBuildingNo.1,ClubHouseRoad,

Chennai600002,TamilNadu

Tel:044-28460390,Fax:044–28460129

E-mail:[email protected]

REGISTERED OFFICE & FACTORY

KitexGarmentsLimited

(CIN:L18101KL1992PLC006528)

P.B.No.5,Kizhakkambalam-683562,

Alwaye,Kochi,Kerala

Phone:9104844142000,Fax:914842680604

Website:www.kitexgarments.com,

E-mail:[email protected]

LISTED IN STOCK EXCHANGES:

BSELimited,Mumbai

The National Stock Exchange of India Limited,Mumbai

Corporate Information


1. FORMAT FOR REGISTERING EMAIL ID

DP/ClientID/FolioNo:

Nameofthesole/firstholder:

PostalAddress:

EmailAddress:

ContactTelephoneNo:

Signature

2. FORMAT OF MANDATE FOR PAYMENT OF DIVIDEND BY NECS / NEFT

FolioNo:


PostalAddress:

EmailAddress:

IherebyauthorizeM/sKitexGarmentsLimitedtomakepaymentofdividendbydirectcredittomybankaccount thedetailsofwhicharefurnishedbelow:

BankName

BranchName:

BranchAddress:

MICRcode:

IFSCcode:

AccountType:

AccountNo:

Iencloseherewiththefollowingdocumentsinproofoftheabovedetails:

PhotocopyofBankPassBook/BankStatement

Photocopy of a Blank cheque leaf of theaccount

Signature

3. FORMAT FOR CLAIMING UNPAID DIVIDENDS OF PREVIOUS YEARS

DP/ClientID/FolioNo:


PostalAddress:

Yearsforwhichdividendnotreceived:

Email:

ContactTelephoneNo:

Signature


YourDirectorsarepleasedtopresenttheTwentyfifthAnnualReportoftheCompanytogetherwiththeAuditedStatementofAccountsforthefinancialyearendedMarch31,2017.

1. Financial Highlights

HighlightsoffinancialResultsfortheyearareasunder:

(`inLakhs)

Particulars Standalone Consolidated

For the year ended March 31, 2017




Sales and other Income

Revenuefromoperations 54,590.13 54,581.67 54,590.13 54,581.67

OtherIncome 199.77 1,981.66 199.77 1,981.66

Total Revenue 54,789.90 56,563.33 54,789.90 56,563.33

ProfitBeforeInterestandDepreciation 17,233.07 20,608.48 17,233.07 20,608.48

Less:FinanceCharges 926.68 1,375.67 926.68 1,375.67

Depreciation 2,036.28 2,127.31 2,036.28 2,127.31

Net Profit Before Tax 14,270.11 17,105.50 14,270.11 17,105.50

Less:ProvisionforTax 5016.03 5,896.00 5016.03 5,896.00

Net Profit After Tax 9254.08 11,209.50 9254.08 11,209.50

ShareOfProfit/(Loss)OfAssociates - - (875.95) (240.04)

NetProfitaftershareofprofitofAssociates - - 8,378.13 10,969.46

BalanceofProfitbroughtforward 31,377.39 23,025.44 31,377.35 23,025.44

Balanceavailableforappropriation 40,631.47 34,234.94 39,755.47 33,994.90

DividendonEquityShares

(InterimandFinalProposed) 712.50 712.50 712.50 712.50

TaxonproposedDividend 145.05 145.05 145.05 145.05

TransfertoGeneralReserve 16,000.00 2,000.00 16,000.00 2,000.00

SurpluscarriedtoBalanceSheet 23,773.92 31,377.39 22,897.93 31,177.35

Directors’ Report


2. Operations of the Company

YourCompany is into100%exportsofcottongarmentsespeciallyInfantswear.TheCompanyexports its products to United States andEuropeanMarkets.

a) Performance review

During the year under review, yourCompanyhasrecordeditsrevenuefromoperationsas̀ 54,590.13lakhswhichisatparwith`54,581.67inthepreviousyear.Profitbeforetaxationis`14,270.11lakhs,whichis26%marginonitsrevenuefromoperationshasdeclinedat16.58%againstlastyear’sfigureof`17,105.50.Netprofitafter tax is ` 9254.08 lakhs. The BasicEarningsperEquityShare(offacevalueof`1/-) is` 19.48comparedto`23.60 inthepreviousyear.

Kitex USA LLC being Associate of yourCompanyhaspostedconsiderablygoodinitial turnover of around ` 80 lakhs ($1,28,818.41) and Gross profit of around` 5.5 Lakhs ($ 8,815.41) for the yearended March 31, 2017. Your Companyhas consigned its product worth of` 20.01 Crores to its Associate duringtheprevious year. It has openedWorldClassDesignStudioinNewJerseyinthemonth of April 2017. Major US Clientsare investinghugemoneyondesigning.The newly inaugurated Studio givesdesigningservicesbasedontheiruniquerequirementsat freeofcost.Thisvalueadditionenablesyourcompany’sclientsin cost saving to its buyer, therebycreating good relationship with theirclient. Further we have started directbusinesswithWALMART&TARGET.

Onaconsolidatedbasis,therehavebeennosignificantchangesinfinancialfiguresduring theyearunder reviewexcept incaseofappropriationof`(875.95)Lakhsas against ` (240.04) lakhs in last year.Your Company has made investmentin Kitex USA LLC of $ 10,50,000 in thepreviousyear.

During the year under review,your company has received orderconfirmations from major InfantGarment buyers viz., Buy-Buy Baby,Ross Stores, Amazone, Target, Walmartwho can contributemajor part of yourCompany’sturnoverincomingyears.

Nomaterial changesandcommitmentshaveoccurredafterthecloseoftheyeartillthedateofthisReport,whichaffectthefinancialpositionoftheCompany.

b) Dividend and Dividend Distribution Policy

As you are aware your Directors hadrecommended a 1st Interim dividendof ` 0.75 per equity share of ` 1/- eachon October 31, 2016. The companyhas earned a net profit of ` 9,254.07lakhs for the year ended March 31,2017 and accordingly your Directorshave recommended a final dividend of`0.75perequityshareoffacevalue`1/-making it toa totalof` 1.50perequityshare of ` 1/- each which is 150%. TheproposedfinaldividendissubjecttotheapprovalofthemembersattheensuingAnnualGeneralMeeting.

The total dividend appropriation(excludingdividendtax)forthecurrentyearis`712.50lacsasagainst712.50lacsin thepreviousyear. TheCompanyhaspaiddividenddistributiontaxof`145.05lacsforthecurrentyear.

The Board at itsmeeting held on April28, 2017 has adopted the dividenddistribution policy for determiningcircumstances and parameters underwhichdividendpay-outcouldbemadeon periodical basis. Policy is availableon the Company’s website www.kitexgarments.com and also annexedherewithas“AnnexureA”.

c) Share Capital

During the year under review, there

wasnochangeintheCompany’sissued,subscribed and paid-up equity sharecapital. On March 31, 2017, it stood at`475lacsdividedinto4,75,00,000equityof`1each.

With a view to distribute the benefitamong themembers in form of equitysharesoutfreereserveoftheCompanywithout receivinganyconsideration, itsBoardofDirectorsatitsmeetingheldonApril28,2017hasrecommendedissueofequityshareinratioof2:5i.e.2sharesforevery5sharesheldbytheshareholders,subject to their approval. The issue ofbonus shares, by way of capitalizingreserves,isauthorizedbytheCompany’sArticlesofAssociation.

d) Transfer to Reserve

Your Company has earned a totalprofit after tax of ` 9,254.08 lakhs outof which a sum of ` 16,000 lakhs hasbeentransferredtoGeneralReserveforthe purpose of future expansions andacquisitions.

e) Transfer of amount to Investors Education and Protection Fund

TheCompanyhastransferredunclaimeddividend of ` 6,06,754 for the financialyear 2008-09 to Investors EducationProtectionFund(IEPF)on10.11.2016.

3. Capital Expenditure

Ason31stMarch,2017, thegrossFixedAssetsstoodat` 27,153.84 lakhsandnet fixedassets` 16,095.17 lakhs. Additions during the yearamountto`1,088.58lakhs.

YourDirectorshaveapprovedanexpenditureof a total of ` 7,110 lakhs for upgradingtechnology,modernizationandinfrastructuraldevelopmentsduringtheyearunderreview.

4. Future Prospects

TheIndianTextileIndustryrepresentsarichand


diverse spectrumof activitieswith thehand-wovensectorononeendandcapitalintensivemill/power loomontheother.TheSpectrumincludes activities in the decentralizedpowerlooms,hosieryandknitting sectorsandthehandicrafts segments tonamea few. Thetextile industry plays a pivotal role throughits contribution to industrial output andemployment generation and export earningsof country. India is major exporting countryas far as textile sector is concerned and notdependentonimport.Majorityofimporttakesplace to re-export or special requirement. AsperUNcomtradedatabase, India isrankedasthe 2nd largest textile and clothing exportergloballyafterchinawithUS$38.6billionworthofexports.

YourDirectorsapprovedphaseIexpansionof` 241 Crores of Capital Investment within3yearsforAutomation,NewPlant&Machineryand other amenities. This investment wouldbring an increase in the Company’s turnoverby90%-100%beingmorethan1000Crores.Ithasalsoapprovedinvestmentofsurplusfundsupto100Croresp.a.inliquidfunds,debtfundsandotherinstruments.

The international buyers show preference toyourcompany’sproductsduetoitsadherenceto international quality standards, timelydeliveryandintroductionofnewdesignsbasedon contemporary market trends and henceyour Directors are confident of achievingbetterworkingresultsinthecomingyear.

5. Awards and Recognition

The Company has received FE CFO Award(Financial Express – Capital FinancialOperation) in theMediumLevel Category foritsrobustperformanceduringthelastyear.

6. Change in the Nature of Business

During the year under review, there was nochangeinthenatureofthebusiness.

7. Listing

The Equity Shares of the Company continue

toremain listedonBSELimitedandNationalStockExchangeofIndiaLimited.

8. Fixed Deposit

The Company has not accepted any depositwithin the meaning of Chapter V of theCompanies Act, 2013 and the Rules framedthereunder.

9. Particulars of Loans, Guarantees or Investments:

Particulars of investments made during theperiod under review, are provided in thestandalonefinancialstatement(PleaserefertoNote.13tothestandalonefinancialstatement).TherewerenoLoangiven,guaranteesgivenandsecuritiesprovidedbytheCompanyduringthereportingperiod.

10. Extract of Annual Return

Details forming part of the extract of theAnnual Return in form MGT 9 is annexedherewithas“AnnexureB”.

11. Directors and Key Managerial Personnel

Mr.K.L.V.NarayananretiresintheforthcomingAnnual General Meeting and being eligibleoffers himself for reappointment. The detailsof the aforesaid Directors, his expertise invarious functional areas as required to bedisclosedunderRegulation36(3)oftheListingRegulations, form part of the Notice of theensuingAnnualGeneralMeeting.

Duringtheyearunderreview,Mr.SabuMJacobbeingtheChairman&ManagingDirectorwasappointed by entrusting additional duty ofChiefFinancialofficerw.e.f.20.07.2016.

Duringtheyearunderreview,5(Five)meetingsof the Board of Directors, Board Committeeswereheld, details ofwhichare set out in theCorporateGovernanceReportwhich forms apartofthisReport.

11.1. Declaration by Independent Directors

Pursuanttosubsection(6)ofSection149

oftheCompaniesAct,2013andReg16(1)(b) of the SEBI (ListingObligations andDisclosure Requirement) Regulations,2015, the Independent Directors of theCompanyviz.Mr.BenniJoseph,Mr.E.M.Poulose,Mr.C.P.PhiliposeandMr.K.L.V.NarayanhavegivendeclarationtotheCompany that they qualify the criteriaof independenceas requiredunder theActandtheregulations.

11.2. Annual Board Evaluation and Familiarisation programme

The Board has carried out an annualevaluation of its own performance,the directors and also committees ofthe Board based on the guidelinesformulated by the Nomination &Remuneration Committee. Boardcomposition, quality and timely flowof information, frequency of meetings,andlevelofparticipationindiscussionsweresomeoftheparametersconsideredduringtheevaluationprocess.

Anote on the familiarizingprogrammeadopted by the Company for theorientationandtrainingoftheDirectorsand the Board evaluation processundertaken in compliance with theprovisions of the Companies Act, 2013and SEBI (Listing Obligations andDisclosure Requirements) Regulations,2015 is provided in the CorporateGovernanceReportwhichformspartofthisReport.

Further, the Independent Directorsof the Company met once during theyear on January 30, 2017 to review theperformance of the Non-executivedirectors,ChairmanoftheCompanyandperformance of the Board as a whole.The manner in which the evaluationhas been carried out has been set outin the Corporate Governance Reportwhich forms an integral part of thisReport. The details of the programmefor familiarisation of the Independent


DirectorsofyourCompanyareavailableon the Company’s website, www.kitexgarments.com.

11.3. Policy on Nomination and Remuneration and Performance evaluation of Directors, KMP and Senior Management Personnel

The Company believes that a diverseand inclusive culture is integral toits success. A diverse Board, amongothers, will enhance the quality ifdecisions by utilizing different skills,qualifications, professional experienceand knowledge of the Board membersnecessaryforachievingsustainableandbalanced development. Accordingly,Board based on the recommendationof the Nomination and RemunerationCommittee has formulated a policyon remuneration of Directors, KeyManagerial Personnel and SeniorManagementoftheCompany.Thepolicycovers the appointment, includingcriteria for determining qualification,positive attributes, independenceand remuneration of its Directors,Key Managerial Personnel and SeniorManagementPersonnel.TheNominationandRemunerationPolicy isannexedasAnnexure–Ctothisreport.

Nomination and RemunerationCommittee has also carried outthe evaluation of every director’sperformance.

12. Board Committees

Detailed composition of the mandatoryBoard committees namely Audit Committee,Nomination and Remuneration Committee,CSR Committee, Stakeholders RelationshipCommittee, number of meetings held duringtheyearunderreviewandotherrelateddetailsaresetoutintheCorporateGovernanceReportwhichformsapartofthisReport.

TherehavebeennosituationswheretheBoardhasnotacceptedanyrecommendationoftheAuditCommittee.

13. Directors’ Responsibility Statement

Pursuant to the requirement under section134(5)oftheAct,theBoardofDirectorsoftheCompanyherebystateandconfirmthat;

a) in the preparation of the annualaccounts for the financial year endedMarch31,2017,theapplicableaccountingstandardshadbeenfollowedandtherewerenomaterialdepartures;

b) the directors had selected suchaccounting policies and applied themconsistently and made judgments andestimates that are reasonable andprudentsoastogiveatrueandfairviewofthestateofaffairsofthecompanyattheendofthefinancialyearasatMarch31,2017andoftheprofitofthecompanyforthatperiod;

c) the directors had taken proper andsufficient care for the maintenanceof adequate accounting records inaccordance with the provisions ofthis Act for safeguarding the assets ofthe company and for preventing anddetectingfraudandotherirregularities;

d) the directors had prepared the annualaccountsonagoingconcernbasis;

e) the directors had laid down internalfinancial controls to be followed bythe company and that such internalfinancialcontrolsareadequateandwereoperatingeffectively.

f) the directors had devised propersystems to ensure compliancewith theprovisions of all applicable laws andthat such systems were adequate andoperatingeffectively.

14. Employees’ Stock Option Scheme

TheCompanyhasnot granted anyEmployeeStockOptionwithinthemeaningofsection62(1)(b)oftheCompaniesAct,2013readwithitsRulesframedthereunderandrespectiveSEBIregulations.

15. Subsidiary & Associate Company

As on March 31, 2017, the Company hasa Associate Company, Kitex USA LLC,accounts of which shall be made availableto the shareholders of the Company seekingsuch information at any point of time. TheConsolidated Financial Statements of theCompanyalongwithitsAssociatepreparedforthe year 2016-17 in accordancewith relevantAccounting Standard issued by Institute ofCharteredAccountantsof IndiaformspartofthisAnnualReport.AReportonthehighlightsofperformanceofsubsidiaries,associatesandjointventurecompaniesandtheircontributionto the overall performance of the companyduringtheperiodunderreport isprovidedasAnnexure–D.

The Company does not have any subsidiaryas on reporting date. During the year underreview, companies does not have become orceased to be Company’s subsidiaries, jointventuresorassociatecompanies.

16. Corporate Social Responsibility

The Company undertakes “Corporate SocialResponsibility”initiativesdirectlytothepublicof Kizhakkambalam Panchayat in improvingthequalityoflife.Duringtheyear2016-17,theCompany has undertaken many initiativesthrough a policy framework for expandingsomeofthepresentinitiativesandundertakingnewerCSRinitiativesintheyeartocome.

The CSR Policy may be accessed on theCompany’s website at the link: http://www.kitexgarments.com

OurvisiononCorporateSocialResponsibility,where we dream to make KizhakkambalamPanchayatthebestinthestateamongthetotal978Panchayaths.

The Annual Report on CSR Activities inprescribed format is enclosed with this asAnnexure-E.

Detailed composition of the CSR Committee,number of meetings held during the yearunderreviewandotherrelateddetailsareset


outintheCorporateGovernanceReportwhichformsapartofthisReport.

17. Management’s Discussion and Analysis Report

The Management’s Discussion and AnalysisReportfortheyearunderreview,asstipulatedunderRegulation34(2)(e)oftheSecuritiesandExchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations,2015,formsanintegralpartofthisReport.

18. Corporate Governance

Your Board confirms their continuedcommitment to best practices of CorporateGovernance.CorporateGovernanceprinciplesformanintegralpartofthecorevaluesofyourCompany.

In terms ofRegulation 34(3) of the Securitiesand Exchange Board of India (ListingObligations and Disclosure Requirements)Regulations, 2015, a separate report onCorporateGovernance,alongwithacertificatefromtheAuditors’onitscompliance,formsanintegralpartofthisReport.

19. Business Responsibility Report

AsperRegulation34(2)(f)oftheSecuritiesandExchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations,2015, a separate section on BusinessResponsibilityReport,describingtheinitiativestakenbyyourCompanyfromenvironmental,social and governance perspective, forms anintegralpartofthisReport“Annexure-F”

20. Business Risk Management

Your Company recognizes that Risk as anintegralpart ofbusiness and is committed tominimizingtheriskinapro-activeandefficientmanner.YourCompanyhasacomprehensiverisk management policy/framework which isreviewedbytheRiskManagementCommittee.Moredetailsonriskmanagementarecoveredin the Management Discussion and AnalysisformingpartofthisAnnualReport.

The Risk Management committee consists ofMr. Sabu M. Jacob as the Chairman and Mr.Benni Joseph and Mr. E. M. Paulose as the

members.TheCommitteehasbeenentrustedwith the responsibility to assist the Board in(a) Reviewing and approving the Company’senterprisewide riskmanagement framework;and(b)MonitoringtheriskswhichtheCompanyfacessuchasCommodityPriceRisks,UncertainGlobal economic environment risk, Interestrate risk, Foreign Exchange Risk, HumanResource Risk, Competition Risk, ComplianceRisk, Industrial Safety – Employee HealthRiskandotherriskshavebeenidentifiedandthatprocedurehasbeen laiddownto informmembersoftheBoardofDirectorsaboutriskmanagementplanfortheminimizationofrisk.

YourCompany’sRiskManagementCommitteeperiodically monitors, assesses the risk anduncertainties in the internal and externalenvironment,alongwiththecostofmitigatingriskand incorporatesRiskMitigationPlans initsstrategy,businessandoperationplans.TheRiskManagementPolicyhasbeenadoptedbytheCommittee.

A detailed report on Risk Management isincluded in Management Discussion andAnalysiswhichformspartofthisReport.

21. Internal Financial Control

Details in respect of adequacy of internalfinancial controls with reference to theFinancialStatementsarestatedinManagementDiscussion and Analysis which forms part ofthisReport.

22. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The particulars relating to conservationof energy, technology absorption, foreignexchange earnings and outgo, as required tobe disclosed under the Act, are provided inAnnexure-GtothisReport.

23. Auditors:

23.1. Statutory Auditors

Messrs Varma & Varma, CharteredAccountants (FRN 004532S) statutoryauditors of theCompany retires at thisensuingAnnualGeneralMeetingandareeligibleforre-appointment.TheAuditorsif appointed shall hold office fromthe conclusion of this Annual GeneralMeeting till the conclusion of nextAnnualGeneralMeeting.ConsentoftheAuditorsandcertificateu/s139oftheActhavebeenobtained from theAuditorsto theeffect that their re-appointment,ifmade,shallbeinaccordancewiththeapplicableprovisionsoftheActandtheRules issued thereunder. As requiredunder the SEBI (LODR), Regulations,2015 M/s. Varma & Varma, CharteredAccountants have confirmed that theyholdavalidcertificateissuedbythePeerReviewBoardofICAI.

There is no qualification, disclaimer,reservation or adverse remark madeby the Statutory Auditors in Auditors’Report. Your Board of Directorsrecommends their appointment asStatutory IndependentAuditors for thefinancialyear2017-18.

23.2. Secretarial Auditors

Pursuant to the provisions of Section204 of the Act and the Companies(Appointment and Remuneration ofManagerial Personnel) Rules, 2014, theBoardof theDirectorsof theCompanyhad appointed M/s. SVJS & Associates,Company Secretaries to undertakethe Secretarial Audit of the Companyfor the year endedMarch 31, 2017. TheSecretarial Audit Report is annexed asAnnexure–H.

23.3. Internal Auditor

The Board had appointed Messrs. KVenkitachalam Aiyer & Co, CharteredAccountantsasInternalAuditorsforthefinancialyear2016-17.

24. Related Party Transactions

During the financial year under review, all


transactionsenteredintobytheCompanywiththe Related Parties were on an arm’s lengthbasis and in the ordinary course of business.PriorapprovaloftheAuditCommitteeofyourCompany has been obtained for all RelatedPartyTransactions.

None of the Directors has any pecuniaryrelationships or transactions except to theextentofremunerationdrawnbythedirectors.

TheParticularsofcontractsandarrangementwithRelatedPartiesofyourCompanyreferredto in Section 188(1) of the Companies Act,2013inprescribedformAoC-2isappendedasAnnexure–ItotheDirector’sReport.

The Policy on Related Party Transactions, asapproved by the Board, is available on yourCompany’swebsite,http://www.kitexgarments.com

25. Significant and Material Order

TherewerenosignificantandmaterialorderspassedbytheRegulatorsorCourtsorTribunalsimpacting the going concern status andcompany’s operations in future for the yearunderreview.

26. Whistle Blower Policy

Pursuant to Section 177 of the CompaniesAct, 2013 the rulesmade thereunder and theRegulation22ofSEBI(ListingObligationsandDisclosure Requirements) Regulations, 2015,theCompanyhasestablishedaVigilMechanismfordirectorsandemployeestoreportgenuineconcernsaboutanyinstanceofanyirregularity,unethical practice and/or misconduct. ThePolicy provides for framework and processwhereby concerns can be raised by itsemployeesagainstanykindofdiscrimination,harassment,victimizationoranyotherunfairpracticebeingadoptedagainstthem.Adequatesafeguards are provided against victimizationto those who avail of the mechanism, andaccesstotheChairmanoftheAuditCommitteeinexceptional cases isprovided to them.The

Details of the Vigil policy is explained in theCorporateGovernanceReport.

27. Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Considering gender equality, the Companyhas zero tolerance for sexual harassmentat workplace. The Company has an AntiSexual Harassment Policy in line with therequirements of The Sexual Harassmentof Women at the Workplace (Prevention,Prohibition and Redressal) Act, 2013. AnInternalComplaintsCommittee(ICC)hasbeensetuptoredresscomplaintsreceivedregardingsexualharassment.Allemployees(permanent,contractual, temporary, trainees) are coveredunderthispolicy.

The following is a summary of sexualharassmentcomplaintsreceivedanddisposedoffduringthereportingperiod:

•No.ofcomplaintsreceived:Nil

•No.ofcomplaintsdisposedoff:Nil

TheCompanyhasfiledAnnualReportfortheyear endedDecember 31, 2016under theActwithDistrictofficer.

28. Particulars of Employees

The Disclosure as required under Rule5(1) of the Companies (Appointment andRemunerationofManagerialPersonnel)Rules,2014 is annexedasAnnexure – J and formsapartofthisreport.

Information relating to remuneration ofDirectors under Section 197 read withRule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel)Rules,2014hasbeengivenAnnexureKtotheDirector’sReport

29. General

Your Directors state that no disclosure or

reportingisrequiredinrespectofthefollowingitems as therewereno transactions on theseitemsduringtheyearunderreview:

• Neither the Managing Director nor theWhole-time Directors of the Companyreceiveanyremunerationorcommissionfromanyofitssubsidiaries.

• there were no frauds reported bythe auditors under provisions of theCompaniesAct,2013

• Issue of equity shares with differentialrightsastodividend,votingorotherwise;

• Therewerenorevisionsinthefinancialstatements

30. Acknowledgements

YourDirectorsthankvariousCentralandStateGovernment Departments, Organizationsand Agencies for the continued help and co-operation extended by them. The DirectorsalsogratefullyacknowledgeallstakeholdersoftheCompanyviz.customers,members,dealers,vendors, banks and other business partnersfor theexcellentsupport receivedfromthemduringtheyear.TheDirectorsplaceonrecordtheir sincereappreciationtoallemployeesoftheCompanyfortheirunstintedcommitmentandcontinuedcontributiontotheCompany

ForandonbehalfoftheBoardofDirectors Kitex Garments Limited



(DIN:00046016)


Dividend Distribution Policy

ThisDividendDistributionPolicyhasbeendraftedasperprovisionsofReg43AofSEBI(ListingObligationsand Disclosure Requirements) Regulations, 2015 asamendedfromtimetotime.

Dividend Distribution shall take into account thedistributable surplus availableunder lawaswell asthe need to retain earnings,which is turnwill takeinto account foreseeable funding requirements ofthe Company’s business, including their long termgrowth plans, organic and inorganic, as also thefinancial capacity that needs to be conserved toaddresscontingenciesthatmayarise.TheSurplusso

EXTRACT OF ANNUAL RETURN

(FormMGT-9)

AsonthefinancialyearendedonMarch31,2017

[Pursuanttosection92(3)oftheCompaniesAct,2013andrule12(1)oftheCompanies(ManagementandAdministration)Rules,2014]

I. REGISTRATION AND OTHER DETAILS

i) CIN L18101KL1992PLC006528

ii) Registrationdate 29.05.1992

iii) NameoftheCompany KitexGarmentsLimited

iv) Category/SubcategoryoftheCompany CompanyLimitedbyShares.IndianNon-GovernmentCompany

v) AddressoftheRegisteredofficeandcontactdetails “BuildingNo.9/536A,Kizhakkambalam,Alwaye,Kochi683562,Kerala”Tel.No.:0484-4142000FaxNo.:0484-2680604.Email:[email protected]

vi) Whetherlistedcompany Yes

vii) Name,AddressandContactdetailsofRegistrarandTransferAgent,ifany

“M/s.cameoCorporateServicesLimited,SubramanianBuildingNo.1,ClubHouseRoad,Chennai600002,TamilNadu.Tel:044-28460390,Fax:044–28460129,E-mail:[email protected]”

determined shall be returned to shareholders overthelongterm.

Consistent with the above, the Company willstrive to declare a steady stream of dividend toits shareholders. The actual quantum of dividendpay-outeachyearwillbeguidedby theCompany’sfinancial performance and cash flow position andwill take into account the requirements of fundsto sustain the business and growth plans of theCompanyaswellaseconomicandmarketconditionsthenprevailing.DividendDistributionwillbecognizefor foreseeable opportunities and threats in theglobalisedcompetitivecontext.

TheBoardofDirectorsoftheCompany(Hereinafterreferred to as the ‘Board’) may declare interimdividend(s) at their discretion. The Board’srecommendation to the shareholders on thefinal dividend may include Special dividend(s) asconsideredappropriate.

ForandonbehalfoftheBoardofDirectorsKitex Garments Limited



(DIN:00046016)

Annexure - A to the Directors Report

Annexure - B to the Directors Report


II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated:-

Sl. No.

Name and Description of main products / services

NIC Code* of the Product/ service % to total turnover of the company

1 Garments 2650 84%

2 Fabrics 2650 16%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.

Name and Address of the Company CIN/GLNHolding/ Subsidiary/

Associate% of shares held Applicable Section

1 KitexUSALLC,70,SuitNo.110,160SummitAvenue,Montvale,NewJersey07645

141389240 Associate 50% 2(6)

IV) SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding as of March 31, 2017

Category of Shareholders

No. of shares at the beginning of the year No of shares at the end of the year % change during the

yearDemat Physical Total% of Total

SharesDemat Physical Total

% of Total Shares

A. Promoters

(1) Indian

a) Individual/HUF - - - - - - - -

b) CentralGovt. - - - - - - - - -

c) StateGovt(s). - - - - - - - - -

d) BodiesCorp. 7,350,329 - 7,350,329 15.47 7,350,329 - 7,350,329 15.47 -

e) Banks/FI - - - - - - - -

f) AnyOther

i.DirectorsandRelativesofDirector 18,415,268 - 18,415,268 38.77 18,415,268 - 18,415,268 38.77 -

Sub-total (A) (1) :- 25,765,597 - 25,765,597 54.24 25,765,597 - 25,765,597 54.24 -

(2) Foreign

a)NRIs-Individuals - - - - - - - - -

b)Others-Individuals - - - - - - - - -

c)BodiesCorp. - - - - - - -

d)Banks/FI - - - - - - - - -

e)AnyOther - - - - - - - - -

Sub- total (A) (2):- - - - - - - - - -

Total Shareholding of Promoter (A) = (A)(1) + (A)(2)

25,765,597 - 25,765,597 54.24 25,765,597 - 25,765,597 54.24 -






% of Total Shares

B. Public Shareholding

1. Institutions

a)MutualFunds 60,237 - 60,237 0.13 65,000 - 65,000 0.14 0.01

b)Banks/FI - - - - 38,605 - 38,605 0.08 0.08

c)CentralGovt. - - - - - - - - -

d)StateGovt(s). - - - - - - - - -

e)VentureCapitalFunds 141 - 141 0.00 - - - - -0.00

f)InsuranceCompanies - - - - - - - - -

g)FIIs 932,990 - 932,990 1.96 53,398 - 53,398 0.11 -1.85

h)ForeignVentureCapitalFunds - - - - - - - - -

i)Others(specify) - - - - - - -

AlternateInvestmentFunds - - - - 60,537 - 60,537 0.13 0.13

ForeignPortfolioInvestor(Corporate)CategoryI

- - - - 3,214 - 3,214 0.01 0.01

ForeignPortfolioInvestor(Corporate)categoryII

480,047 - 480,047 1.01 2,050,028 - 2,050,028 4.32 3.31

ForeignPortfolioInvestor(Corporate)CategoryIII

43,078 - 43,078 0.09 176,509 - 176,509 0.37 0.28

Sub -total (B) (1) ;- 1,516,493 - 1,516,493 3.19 2,447,291 - 2,447,291 5.15 1.96

2. Non-Institutions

a)BodiesCorp. 5,552,166 109,000 5,661,166 11.92 5,136,107 99,000 5,235,107 11.02 -0.90

b)Individuals

i)IndividualShareholdersholdingnominalshareCapitalupto`1lakh

6,678,517 1,643,752 8,322,269 17.52 6,566,538 1,555,752 8,122,290 17.10 -0.42

ii)IndividualshareholdersholdingnominalshareCapitalinexcessof`1lakh

5,362,164 - 5,362,164 11.29 5,175,365 - 5,175,365 10.90 -0.39






% of Total Shares

c)Others(specify)

OverseasCorporateBodies - - - - - - -

ClearingMember 107,078 - 107,078 0.23 40,801 - 40,801 0.09 -0.14

MarketMaker - - - - - - - - -

UnclaimedShares - - - - - - - - -

ForeignNational - - - - 84 - 84 0.00 -

NonResidentIndian 505,092 - 505,092 1.06 545,200 - 545,200 1.15 0.08

HUF 250,241 - 250,241 0.53 166,265 - 166,265 0.35 -0.18

TRUSTS 9,900 - 9,900 0.02 2,000 - 2,000 0.00 -0.02

Sub -total (B) (2):- 18,465,158 1,752,752 20,217,910 42.56 17,632,360 1,654,752 19,287,112 40.60 -1.96

Total Public Shareholding (B)= (B)(1) + (B)(2) 19,981,651 1,752,752 21,734,403 45.76 20,079,651 1,654,752 21,734,403 45.76 0.00





% of Total Shares

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) 45,747,248 1,752,752 47,500,000 100.00 45,845,248 1,654,752 47,500,000 100.00 -

ii) Shareholding of Promoters:

Sl. No.

Shareholder’s Name

Shareholding at the beginning of the year Shareholding at the end of the year % change in the

shareholding during the

year

No. of Shares% of total

shares of the company

% of shares pledged/

encumbered to total shares

No. of Shares% of total

shares of the company

% of shares pledged/

encumbered to total shares

1 KITEXCHILDRENSWEARLIMITED 7,350,329 15.47 - 7,350,329 15.47 - -

2 BOBBYMJACOBJT1:SABUMJACOB

6,910,750 14.55 - - - - -14.55

3 SABUMJACOBJT1:BOBBYMJACOB

3,846,950 8.10 - - - - -8.10

4 SABUMJACOB 3,464,631 7.29 - 15,319,281 32.25 - 24.96

5 RENJITHAJOSEPH 3,091,500 6.51 - 3,091,500 6.51 - -

6 MCJACOB 1,096,950 2.31 - - - - -2.31

7 BOBYMJACOB 4,487 0.01 - 4,487 0.01 - -

Total 25,765,597 54.24 - 25,765,597 54.24 - -


iii) Change in Promoters’ Shareholding:

Sl No

Name of the Share holder

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No of shares% of total shares of

the companyNo of shares

% of total shares of

the company

1 KITEXCHILDRENSWEARLIMITED

Atthebeginningoftheyear01-Apr-2016 7350329 15.4743 7350329 15.4743

AttheendoftheYear31-Mar-2017 7350329 15.4743 7350329 15.4743

2 BOBBYMJACOBJT1:SABUMJACOB


DeletionofJointName09-Dec-2016 -6910750 -14.5489 0 0.0000


3 SABUMJACOBJT1:BOBBYMJACOB


DeletionofJointName09-Dec-2016 -3846950 -8.0988 0 0.0000


4 SABUM.JACOB


DeletionofJointName09-Dec-2016 6910750 14.5489 6910750 14.5489

DeletionofJointName09-Dec-2016 3846950 8.0988 3846950 8.0988

Transmissionofsharesbyoperationoflaw07-Oct-2016 1096950 2.3093 1096950 2.3093


5 RENJITHAJOSEPH



6 MCJACOB


Transmissionofsharesbyoperationoflaw07-Oct-2016 -1096950 -2.3093 0 0.0000


7 BOBYMJACOB



TheaboveshareholdersareholdingsharesinmutliplefolioswhichhavebeencombinedbasedonPAN.


iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl No

Name of the Share holder

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No of shares% of total shares of

the companyNo of shares

% of total shares of the company

1 CKGSUPERMARKETLIMITED



2 GOPINATHANCK.



3 JINSHANATHCK



4 ACUMENCAPITALMARKET(INDIA)LTD



5 SETHUPARVATHY.



6 RAJALAKSHMIS



7 INVESCOINDIAMAURITIUSLIMITED



8 EMRESURGENTFUND



9 VALUEQUESTINDIAMOATFUNDLIMITED



10 INDIAINFOLINELIMITED



Note

1. TheaboveshareholdersareholdingsharesinmutliplefolioswhichhavebeencombinedbasedonPAN.

2. TheSharesoftheCompanyaresubstantiallyheldindematformandaretradedondailybasisandhencedatewiseincrease/decreaseinshareholdingnotindicated.Thetop10shareholdersasonMarch31,2017isconsidered.


v) Shareholding of Directors and Key Managerial Personnel:

Sl. No.

For Each of the Directors and KMP

Shareholding

Date increase/

decrease in shareholding

Reason

Cumulative shareholding during the year

No. of shares at beginning

01.04.2016/end of the year 31.03.2017

% of total shares of the

Company

No. of shares

% of total shares of the

Company

Shareholding of Director:1 Mr.VenkitanarayananKalpathy

Lakshminarayanan- - - - - - -

- - - - - - -

2 Mr.BenniJoseph - - - - - - -

- - - - - - -

3 Mr.ErumalaMathewPaulose 100 0 01.04.2016 - - 100 0

100 0 31.03.2017 - - 100 0

4 Mr.ChenakkottPhiliposePhilipose - - - - - - -

- - - - - - -

Shareholding of Key Managerial Personnel:1 Mr.SabuM.Jacob*

(ChairmanandManagingDirector)3,464,631 7.29 01.04.2016 - - 3,464,631 7.29

15,319,281 32.25 31.03.2017 - - 15,319,281 32.25

2 Ms.SindhuChandrasekhar(WholeTimeDirector)

- - - - - - -

- - - - - - -

3 Mr.BabuA(CompanySecretaryandComplianceofficer)

- - - - - - -

- - - - - - -

*datewisedetailsaregivenin‘iii)ChangeinPromoters’Shareholding’of‘IV-ShareholdingPattern’asabove

V INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amountin`)

Indebtedness at the beginning of the financial year - 01.04.2016 Secured Loans

excluding depositsUnsecured

LoansDeposits

Total Indebtedness

i)PrincipalAmount 1,095,498,897 - - 1,095,498,897

ii)Interestduebutnotpaid 8,203,877 - - 8,203,877

iii)Interestaccruedbutnotdue - - - -

Total (i+ii+iii) 1,103,702,774 - - 1,103,702,774 Change in Indebtedness during the financial year*Addition - - - -

*Reduction 1,012,571,609 - - 1,012,571,609

Net Change 1,012,571,609 - - 1,012,571,609 Indebtedness at the end of the financial year 31.03.2017i)PrincipalAmount 82,927,288 - - 82,927,288

ii)Interestduebutnotpaid 4,589,683 - - 4,589,683

iii)Interestaccruedbutnotdue - - - -

Total (i+ii+iii) 87,516,971 - - 87,516,971


VI) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Amountin`)

Sl. No.

Particulars of Remuneration

Name of the Managing Director/ Whole Time Director/ Manger

Total Amount (`) Mr. Sabu M. Jacob,

Chairman & Managing Director & Chief Financial Officer

Mrs. Sindhu Chandrasekhar,

Whole Time Director 1 Gross salary

a.SalaryasperprovisionscontainedinSection17(1)oftheIncome-taxAct,1961 10,800,000 760,808 11,560,808

b.Valueofperquisitesu/s17(2)Income-taxAct,1961* - - -

c.Profitsinlieuofsalaryundersection17(3)Income-TaxAct,1961 - 793,376 793,376

2 Stock Option - - -

3 Sweat Equity - - -

4 Commission: - -

-Asa%ofProfit 63,813,260 - 63,813,260

-Others,specify - - -

5 Others, please specify -

ContributiontoPF 576,000 21,600 597,600

ContributiontoGratuity - - -

ContributiontoSuperannuationFund - - -

ConsolidatedAllowances - - -

Total (A) 75,189,260 1,575,784 76,765,044 Ceiling as per the Act 10%ofthenetprofitsoftheCompanycalculatedasperSection198ofthe

CompaniesAct,2013is`15,03,78,510

B. Remuneration to other directors: (Amountin`)

Sl. No.

Particulars of Remuneration Mr. Benni Joseph Prof. E. M. Paulose Mr. K.L.V. Narayanan Mr. C.P. Philipose Total

1 Independent Directors-FeesforattendingBoard/CommitteeMeetings 205,000 165,000 - 165,000 535,000

-Commission - - - - -

-Others - - - - -

Total (1) 205,000 165,000 - 165,000 535,000 2 Other Non- Executive Directors

-FeesforattendingBoard/CommitteeMeetings - - 150,000 - 150,000

-Commission - - - - -

-Others - - - - -

Total (2) - - 150,000 - 150,000

Total (B) = (1+2) 205,000 165,000 150,000 165,000 685,000 Total Managerial Remuneration # 76,765,044 Overall Ceiling as per the Act @ 10%ofthenetprofitsoftheCompanycalculatedasperSection198oftheCompaniesAct,2013is

`15,03,78,510

Notes: @SittingfeespaidhavenotbeenconsideredasacomponentforreckoningoverallceilingasperCompaniesAct,2013


C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (Amountin`)

Sl. No.

Particulars of RemunerationKey Managerial Personnel

TotalMr. Babu A., Company Secretary

1 Grosssalary

(a)Salaryasperprovisionscontainedinsection17(1)oftheIncome-taxAct,1961 932,770 932,770

(b)Valueofperquisitesu/s17(2)Income-taxAct,1961 - -

(c)Profitsinlieuofsalaryundersection17(3)Income-taxAct,1961 332,258 332,258

2 StockOption Nil -

3 SweatEquity - -

4 Commission - -

-As%ofprofit - -

-Others,,specify - -

5 Others, please specify

ContributiontoPF 21600 21,600

ContributiontoGratuity - -

ContributiontoSuperannuationFund - -

ConsolidatedAllowances - -

Total 1,286,628 1,286,628

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

TypeSection of the

Companies ActBrief Description

Details of Penalty /Punishment/ Compounding

fees imposed

Authority [RD / NCLT / COURT]

Appeal made, if any (give Details)

A. Company

NIL

Penalty

Punishment

Compounding

B. Directors

Penalty

Punishment

Compounding

C. Other Officers in Default

Penalty

Punishment

Compounding


NOMINATION & REMUNERATION POLICY

INTRODUCTION

Successofeverybusinessdependsonitsworkforce.Inaccordancewith theprovisionsof Section 178ofthe Companies Act, 2013, the Board of Directorsof the Company at itsmeeting held onOctober 19,2015constitutedtheNominationandRemunerationCommittee of the Board of Directors to compriseofProf.E.M.Paulose (Chairman),Mr.Benni JosephandMr.K.L.V.Narayanan(asMembers).Thispolicyon nomination and remuneration of Directors, KeyManagerial Personnel (KMPs), Senior ManagerialPersonnelandotheremployeeshasbeenformulatedintermsoftheprovisionsoftheActandthe listingagreementinordertopayequitableremunerationtotheDirectors,KMPs,SeniorManagerialPersonnelandotheremployeesoftheCompanyandtoharmonisethe aspirationsofhuman resources consistentwiththegoalsoftheCompany.

OBJECTIVE AND PURPOSE OF THIS POLICY

1. To formulate the criteria for identificationand selection of the suitable candidates forthe various positions in senior managementand also candidates who are qualified to beappointedasdirectorontheBoardofDirectorsoftheCompany.

2. To recommend a policy, relating to theremunerationforthedirectors,KeyManagerialPersonnel,SeniorManagementpersonnelandotheremployees.

Other Employees means employees whoarenotcoveredbythedefinitionof 'Worker'undertheFactoriesAct,1948asamendedfromtimetotime.

3. To make recommendations to the Board onappropriate performance criteria for theDirectors and carry on the performanceevaluationofthedirectors.

4. To identify ongoing training and educationprograms for the Board to ensure that Non-executive Directors are provided with theadequate information regarding the optionsof the business, the industry and their legalresponsibilitiesandduties.

5. To assist the Board in ensuring Boardnomination process with the diversity ofgender, thought, experience, knowledge andperspective in the Board, in accordancewiththeBoardDiversitypolicy.

6. Establishing and reviewing Board and seniorexecutive successionplans inorder toensureandmaintainanappropriatebalanceofskills,experience and expertise on the Board andseniorManagement.

7. TocarryoutanyotherfunctionasismandatedbytheBoardfromtimetotimeand/orenforcedby any statutory notification, amendment ormodification,asmaybeapplicable.

8. To perform such other functions as may benecessaryorappropriatefortheperformanceofitsduties.

TheCommittee shall be guided by the broadprinciples as laid down below in respectof nominating persons to hold office ofdirector, senior management including keymanagerialpersonnelandrecommendingtheremunerationpayable.

I. CRITERIA FOR SELECTION OF MEMBERS ON THE BOARD OF DIRECTORS AND CANDIDATES FOR SENIOR MANAGEMENT.

The Committee has adopted the followingcriteria for selection of member on theBoard of Directors of the Company and alsocandidates eligible to be appointed in theseniormanagementoftheCompany.

A) CRITERIA FOR SELECTION OF DIRECTORS

Before making any recommendationto the Board for appointment of anydirector, the Committee shall ensurethat:

a) the candidate possesses positiveattributes/ qualities such asLeadership,Industrialist,BusinessAdvisor or such other attributeswhich in the opinion of theCommitteethecandidatepossess,and are in the interest of theCompany;

b) the candidate shall be free fromany disqualifications as providedunderSections164and167oftheCompaniesAct,2013;

c) thecandidatemeettheconditionsofbeingindependentasstipulatedunder the Companies Act, 2013andSEBI(LODR)Regulations,2015as amended from time to timeand standard listing agreemententeredintowithStockExchangesin case of appointment of anindependentdirector;

Annexure - C to the Directors Report


d) the candidate possessesappropriateskills,experienceandknowledge in one or more fieldsof finance, law, management,sales, marketing, administration,research, corporate governance,technical operations,infrastructure,orsuchotherareasor disciplines which are relevantfortheCompany’sbusiness.

TERM / TENURE

a) MANAGING DIRECTOR/WHOLE-TIME DIRECTOR:

TheCompanyshallappointorre-appointany person as its Executive Chairman,ManagingDirectororExecutiveDirectorforatermnotexceedingfiveyearsatatime.Nore-appointmentshallbemadeearlier thanoneyearbefore theexpiryofterm.

b) INDEPENDENT DIRECTOR:

An Independent Director shall holdoffice fora termupto fiveconsecutiveyears on the Board of the Companyandwill be eligible for re-appointmenton passing of a special resolution bythe Company and disclosure of suchappointment in the Board's report. NoIndependent Director shall hold officeformorethantwoconsecutivetermsofuptomaximumof5yearseach,butsuchIndependentDirectorshallbeeligibleforappointmentafterexpiryofthreeyearsof ceasing to become an IndependentDirector.

Provided that an IndependentDirectorshallnot,duringthesaidperiodofthreeyears, be appointed in orbe associatedwiththeCompanyinanyothercapacity,eitherdirectlyorindirectly.AtthetimeofappointmentofIndependentDirectorit should be ensured that number ofBoards on which such IndependentDirector serves is restricted to sevenlisted companies as an IndependentDirector and three listed companiesas an Independent Director in case

suchperson is serving as aWhole-timeDirector of a listed company or suchother number as may be prescribedundertheAct

REMOVAL

TheCommitteemayrecommendwithreasonsrecordedinwriting,removalofaDirector,KMPorSeniorManagementPersonnelsubjecttotheprovisions and compliance of the CompaniesAct,2013,rulesandregulationsandthepolicyoftheCompany.

RETIREMENT

The Director, KMP and Senior ManagementPersonnel shall retire as per the applicableprovisions of the Act and the prevailingpolicy of the Company. The Board will havethe discretion to retain the Director, KMP,Senior Management Personnel in the sameposition/remunerationorotherwiseevenafterattainingtheretirementage,forthebenefitoftheCompany.

B) CRITERIA FOR SELECTION OF SENIOR MANAGEMENT PERSONNEL

The term Senior Management shallmeanpersonnelofthecompanywhoaremembersof itscoremanagement teamexcludingBoardofDirectorscomprisingall members of management one levelbelowtheExecutiveDirectors,includingthefunctionalheadsasprovidedunderSection 178 of Companies Act, 2013 asamendedfromtimetotime.

The Committee shall, before makingany recommendation to the Board forappointment, should ensure that thecandidate has the attributes set forthbelow:

a) The candidate should have aminimumexperienceof10yearsinanyoftheareasviz.infrastructure,financial management, legal,sales, marketing, administration,research, corporate governance,technical operations, or suchother areas or disciplines which

intheopinionofthemanagementand Committee are relevant fortheCompany’sbusiness;

b) The candidate should possessesqualities that demonstrateleadership skills, decisionmakingskills, effective communication,hard work, commitment andsuch other attributes which intheopinionoftheCommitteethecandidate possess and are in theinterestoftheCompany

If the Committee thought fitand in its opinion finds thatthe candidate meets the abovecriteria for appointment (asdirectorontheBoardorinseniormanagement), the CommitteeshallmakeitsrecommendationtotheBoard.

Any amendment to the abovecriteria for directors and seniormanagement shall be subjectto the prior approval of theCommittee and any suchamendment shall be informed totheBoardofDirectors.

II. REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES

A) REMUNERATION OF MANAGING DIRECTOR, WHOLE TIME DIRECTOR AND MANAGER:

The Committee while consideringthe remuneration of the ManagingDirector, the Whole Time Director andManager (wherein there isnoManagingDirector), may take into considerationthe performance of the Company,the experience of the person, hisbackground, job-profile and suitability,hispastremuneration, thecomparativeremuneration profile in the industry,size of the Company, responsibilitiesshouldered by the Managing Director /WholeTimeDirectoretc.,providedthat


any remuneration considered by theCommittee shall be in accordance andwithin the limits stipulated under theCompaniesAct,2013.

B) REMUNERATION OF NON-EXECUTIVE DIRECTOR (NED)

a) The remuneration to the NEDsmay be restricted to the sittingfeesforattendingmeetingsoftheBoard of Directors and meetingsof Audit Committees, stakeholders relationship committees,nomination and remunerationcommitteesandCSRcommittees.

b) The Independent Directors oftheCompany shall be entitled toremuneration restricted to thesittingfeesforattendingmeetingsoftheBoardoftheDirectorsandmeetingoftheAuditCommittees,stake holders relationshipcommittees, nomination andremuneration committees andCSR committees provided thatany sitting fees paid to theIndependentDirectorshallnotbeless the sitting fees paid to non-executivedirectors.

c) Independent Directors shall notbeeligibleforstockoptionsoftheCompany,ifany.

Any incidental expense incurredby the directors with relation tothe participation in themeetingsof the Board and the AuditCommitteeshallbereimbursed.

C) REMUNERATION OF KMPs, SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES

The Remuneration of the SeniorManagement Personnel, KMPsand other employees shall be inaccordance with the Policy of theCompany which is applicable to theemployees. The Committee mayconsider the remuneration of a SeniorManagementPersonnelkeepinginviewof the performance of the Business/Functionunderhiscontrolandalsothecontribution of the Business/ Functionunder his control towards the overallperformanceoftheCompany.

Other Employees means employeeswhoarenotcoveredbythedefinitionof'Worker'undertheFactoriesAct,1948asamendedfromtimetotime.

III. EVALUATION OF PERFORMANCE OF DIRECTORS

A) EVALUATION OF THE PERFORMANCE OF MANAGING DIRECTOR/ WHOLE TIME DIRECTOR

The performance of the ManagingDirector/ Whole Time Director of theCompany may be carried out by theentire Board of Directors excludingthe Director being evaluated and asper SEBI circular no. SEBI/HO/CFD/MD/CIR/2017/004 dated 05.01.2017 (asamendedfromtimetotime)takingintoconsideration various factors like theperformance of the Company visa-visthebudgetsaswellasperformanceofitscompetitorsetc...Emphasisonachievingtoplineandbottomlinetargets,withnoadversequalificationbytheauditors intheaccounts,maybemade.

B) EVALUATION OF THE PERFORMANCE OF NON-EXECUTIVE DIRECTORS AND INDEPENDENT DIRECTORS (NEDs AND IDs)

The Committee while evaluating theperformance of theNEDs and IDsmaytake into consideration various factorsasmentionedbelow:

a) Attendance at Meetings -attendance at Board Meetings,AGMs,Committeemeetings.

b) Other Directorships held bythe NED – in listed or unlistedcompanies

c) OthercompaniesinwhichNEDisaChairperson

d) ParticipationatBoard/Committeemeetings

e) Inputinstrategydecisions

f) Review of Financial Statements,risksandbusinessperformance

g) Time devoted towards discussionwithManagement

h) Review of Minutes – BoardMinutes, Committee meetingminutesandAGMMinutes

Marksmaybeassignedforeachof theabovecriteria andbasedon the score achieved, theCommitteemayevaluate theperformanceofeachnon-executivedirectorandindependentdirector.EvaluationofNonExecutiveDirectorsandIndependentDirectorsshallalsobecarriedoutasperSEBIcircularno.SEBI/HO/CFD/MD/CIR/2017/004 dated 05.01.2017 (as amendedfrom time to time) taking into considerationvariousfactorsenumeratedinthatcircular.

Furtherprovidedthat,anyamendmenttoanyof theclauses in theaforesaidpolicy shallbesubjecttothepriorapprovaloftheCommitteeandsuchamendmentshallbeinformedtotheBoardofDirectorsoftheCompany.


Statement containing salient features of the Financial Statement of Subsidiaries/ Associate Companies/ Joint Ventures

(FormAOC-1)

(Pursuanttofirstprovisotosub-section(3)ofsection129readwithrule5ofCompanies(Accounts)Rules,2014)

Part “A”: Subsidiaries (NOT APPLICABLE)

(Information in respect of each subsidiary to bepresentedwithamountsin`)

1. Sl.No.:

2. Nameofthesubsidiary:

3. Thedatesincewhensubsidiarywasacquired:

4. Reportingperiodforthesubsidiaryconcerned,if different from the holding company’sreportingperiod:

5. Reporting currency and Exchange rate as onthe lastdateof the relevant financial year inthecaseofforeignsubsidiaries:

6. Sharecapital:

7. Reserves&surplus:

8. Totalassets:

9. TotalLiabilities:

10. Investments:

11. Turnover:

12. Profitbeforetaxation:

13. Provisionfortaxation:

14. Profitaftertaxation:

15. ProposedDividend:

16. Extentofshareholding(inpercentage)

Notes:Thefollowing informationshallbefurnishedattheendofthestatement:

• Namesofsubsidiarieswhichareyettocommenceoperations

• Namesofsubsidiarieswhichhavebeenliquidatedorsoldduringtheyear.

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of theCompaniesAct,2013relatedtoAssociateCompaniesandJointVentures

(AmountinLakhs)

Sl. No.

Name of Associates/Joint Ventures

KITEX USA LLC

1 Latest audited BalanceSheetDate(Un-audited)

31.03.2017

2 Date on which theAssociate or JointVenturewasassociatedoracquired

04.04.2015

2 Shares of Associate/JointVentures held by thecompanyontheyearend

i. No. 1750210.09shares

ii. AmountofInvestmentinAssociates/JointVenture

`709.00

iii.ExtendofHolding% 50%

3 Descriptionofhowthereissignificantinfluence

More than 20%of total sharecapital held bytheCompany

Sl. No.

Name of Associates/Joint Ventures

KITEX USA LLC

4 Reasonwhy the associate/joint venture is notconsolidated

Notapplicable

5 Net-worth attributable toShareholding as per latestauditedBalanceSheet

`54.11

6 Profit/Lossfortheyear

i. ConsideredinConsolidation

(`875.95)

ii. NotConsideredinConsolidation

NA

1. Names of associates or joint ventures whichareyettocommenceoperations:NIL

2. Names of associates or joint ventures whichhavebeen liquidatedor soldduring theyear:NIL

ForKitex Garments Limited

Sabu M. Jacob Benni Joseph Chairman&Managing Director DirectorandCFO (DIN:01219476) (DIN:00046016)

Babu A. CompanySecretaryApril28,2017Kizhakkambalam

Annexure - D to the Directors Report


ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES – 2016-17

(As per Rule 8 (1) of Companies (Corporate SocialResponsibilitypolicy)Rules,2014)

A. Brief outline of the company’s CSR policy

Kitex Garments Limited (KGL) CSR policy isfocusedondemonstratingcareforthesocietythrough its focus on Eradicating Hunger andPoverty, Education and Skill Development,ensuringgoodHealth&Wellness,EnvironmentSustainability and making available SafeDrinking Water. While reaching out tounderserved communities as a part of ourHERITAGE, we believe in the trusteeshipconcept. This entails transcending businessinterestsandgrapplingwiththe"qualityoflife"challengesthatunderservedcommunitiesface,and working towards making a meaningfuldifference to them. The Projects undertakenwillbewithinthebroadframeworkofScheduleVIIoftheCompaniesAct,2013.

Our vision is – "to effectively contribute tothe social and economic development of thecommunitiesinwhichweoperate.Indoingsowe intend to build a better, sustainable wayof life for theweaker sections of society andraisethecountry'shumandevelopmentindex".Our Vision converges on Corporate Social Responsibility for Kizhakkambalam, where we dream to make this Panchayath the best in the State among the total 978 Panchayaths.

Our CSR policy includes:

1. To pursue a corporate strategy that enablesrealization of the twin goals of shareholdervalueenhancementandsocietalvaluecreationin a mutually reinforcing and synergisticmanner.

2. To implement Social Investments / CSRprogrammesprimarilyintheeconomicvicinityof yourCompany's operationswith a view toensuring the long term sustainability of suchinterventions.

3. To contribute to sustainable development inareas of strategic interest through initiativesdesigned in a manner that addresses thechallenges faced by the Indian societyespeciallyinruralIndia.

4. Tocollaboratewithcommunitiesandgroupstocontributetothenationalmissionoferadicatingpoverty and hunger, especially in rural areas,through superior farm and agri-extensionpractices, soil andmoisture conservationandwatershed management, conservation anddevelopmentofforestresources,empoweringwomen economically, supplementingprimary education and participating in ruralcapacitybuildingprogrammesandsuchotherinitiatives.

5. TosustainandcontinuouslyimprovestandardsofEnvironment,HealthandSafetythroughthecollectiveendeavourofyourCompanyanditsemployeesatalllevelstowardsattainingworldclassstandardsandsupportotherprogrammesand initiatives, internal or external, for thepreventionofillnessandcombatingofdiseasesasmaybeconsideredappropriatefromtimetotime.

6. To encourage the development of humancapital by expanding human capabilitiesthroughskillsdevelopment,vocationaltrainingetc.andbypromotingexcellenceinidentifiedculturalfields.

Details of CSR activities undertaken in the currentyear are available in our weblink: www.facebook.Twenty20Kizhakkambalam. Further detailsof Company’s CSR policy is available in www.kitexgarments.com

B. Composition of the CSR Committee

KitexGarmentsLimitedhas setupCorporateSocial Responsibility Committee (CSRCommittee) as per the requirement of theCompaniesAct,2013.ThemembersoftheCSRCommitteeason31stMarch,2017are:

i. Mr.SabuM.Jacob-Chairman

ii. Mr.K.L.V.Narayanan-Member

iii. Mr.BenniJoseph-Member

iv. Mr.C.P.Philipose–Member

C. Average net profit of the company for last three financial years: ` 133,63,59,286

D. Prescribed CSR Expenditure (two per cent of the amount as in Item C above): ` 2,67,27,184

E. Details of CSR Spend during the financial year

i. Total amount spent for the financialyear:`6,09,41,516

ii. AmountUnspent,ifany;None.

iii. Mannerinwhichtheamountwasspentduring the financial year is detailedbelow.

Annexure - E to the Directors Report


(Amountin`inlacs)

(1) (2) (3) (4) (5) (6) (7) (8)

Sr.

No.CSR project or activity identified

Sector in which the Project is covered

Projects or programs

Amount outlay (budget)

project or Program wise

Amount spent on the projects or programs

Cumulative expenditure upto to the reporting

period

Amount spent: Direct

or through implementing

agency

Sub Heads

(1) Localareaorother (1) DirectexpenditureonProjectsorPrograms

(2)SpecifytheStateanddistrictwhereprojectsorprogramswasUndertaken

(2)Overhead

1 Agriculture Environmentsustainability

Local Area covered by Kizhakkambalam Panchayat in Ernakulam District in State of Kerala

3,45,038 7,00,905(DirectexpenditureonPrograms)

7,00,905

Directly by the Company

2 Education Promotingeducation 9,40,202 19,09,913(DirectexpenditureonPrograms)

19,09,913

3 House construction

Environmentsustainability 66,34,083 1,34,76,369(DirectexpenditureonPrograms)

1,34,76,369

4 Food Supply Eradicating hunger, povertyandMalnutrition


9,05,670

5 Water Supply Making available safedrinkingwater

145,846 2,96,267(DirectexpenditureonPrograms)

2,96,267

6 Medical Promoting health includingpreventivehealthcare


3,33,815

7 Road Development

Environmentsustainability 2,13,24,663 4,33,18,577(DirectexpenditureonPrograms)

4,33,18,577

Total Spent 3,00,00,000 6,09,41,516 6,09,41,516

G. In case the company has failed to spend the two percent, of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. NotApplicable.TheCompanyhasspentabovetherequiredamount.

Our Responsibility

TheResponsibilityStatementoftheCorporateSocialResponsibility(CSR)CommitteeoftheBoardofDirectorsoftheCompanyisreproducedbelow:

‘TheimplementationandmonitoringofCorporateSocialResponsibility(CSR)Policy,isincompliancewithCSRobjectivesandpolicyoftheCompany.’

Sabu M. Jacob Benni Joseph April28,2017 Chairman&ManagingDirector MemberKizhakkambalam &ChairmanofCSRCommittee CSRCommittee (DIN:00046016) (DIN:01219476)


BUSINESS RESPONSIBILITY REPORTYourCompanyhaspleasureinpresenting1stBusinessResponsibilityReportfortheFY2016-17.TheCompany’sforeseestoinvestthefundeffectivelyforthesocialandeconomicdevelopmentofsocietiesinwhichCompanyoperates.OurVisionconvergesonCSRforKizhakkambalam,wherewedreamtomakethisPanchayatthebestPanchayatinthestateofKerala.TheCompanytargetstodevelopproductsandServicescenteredondrivingCustomersatisfactionwhilecontributingtotheoverallobjectiveofcommunitydevelopment.

SECTION A: GENERAL INFORMATION ABOUT THE COMPANY

1 CINoftheCompany L18101KL1992PLC006528

2 NameoftheCompany KitexGarmentsLimited

3 Registeredaddress PBNo.5,Kizhakkambalam,Alwaye,KochiKerala683562

4 Website www.kitexgarments.com

5 e-mailid [email protected]

6 FinancialYearreported 2016-17

7 Sector(s)thattheCompanyisengagedin(industrialactivitycode-wise) NameoftheSector NICCode

Garments 2650

Fabrics 2650

8 Listthreekeyproducts/servicesthattheCompanymanufactures/provides(asinbalancesheet) BabySuits,Sleepwear,Rompers,BibsBurpsetc..

9 TotalnumberoflocationswherebusinessactivityisundertakenbytheCompany

a.NumberofInternationalLocations(Providedetailsofmajor5) Nil

b.NumberofNationalLocations One

10 MarketsservedbytheCompany–Local/State/National/International/ UnitedStatesofAmericaandUnitedKingdom

SECTION B: FINANCIAL DETAILS OF THE COMPANY

1 PaidupCapital(INR) `4,75,00,000

2 TotalTurnover(INR) `545.90Crores

3 Totalprofitaftertaxes(INR) `92.54Crores

4 TotalSpendingonCorporateSocialResponsibility(CSR)aspercentageofprofitaftertax(%) `6.09Crores(morethan2%ofaveragenetprofitforthelast3financialyears)

5 Listofactivitiesinwhichexpenditurein4abovehasbeenincurred. The major areas in which the CSR expenditure has beenincurredinclude:

1.Promotinghealth

2.EradicatingHunger

3.Environmentsustainability

4.Safedrinkingwater

Annexure - F to the Directors Report


SECTION C: OTHER DETAILS

1 DoestheCompanyhaveanySubsidiaryCompany/Companies? No

2 Do the Subsidiary Company/ Companies participate in the BR Initiativesof theparentcompany? Ifyes, then indicate thenumberof such subsidiarycompany(s)

No

3 Doanyotherentity/entities(e.g.suppliers,distributorsetc.)thattheCompanydoesbusinesswith, participate in theBR initiativesof theCompany? If yes,then indicatethepercentageofsuchentity/entities? [Lessthan30%,30-60%,Morethan60%]

Yes.

The Twenty20 Kizhakkambalam, the CSR initiative is jointly promoted andmonitored with M/s. Kitex Childrenwear Limited, M/s. Kitex Limited andAnna Aluminum Co Ltd, all of them are promoter group companies. Theircontributionislessthan30%oftheoverallcontributionmadetothisinitiative.

SECTION D: BR INFORMATION

1 DetailsofDirector/DirectorsresponsibleforBR

(a)DetailsoftheDirector/DirectorsresponsibleforimplementationoftheBRpolicy/policies

DINNumber 00046016

Name Mr.SabuMJacob

Designation Chairman&ManagingDirector

(b)DetailsoftheBRhead Mr.SabuMJacob

DINNumber(ifapplicable) 00046016

Name Mr.SabuMJacob

Designation Chairman&ManagingDirector

Telephonenumber 04844142000

e-mailid [email protected]

2. Principle-Wise(asperNVGs)BRPolicy/policies

P-1 Businessshouldconductandgovernthemselveswithethics,transparencyandAccountability

P-2 Businessshouldprovidegoodsandservicesthataresafeandcontributetosustainabilitythroughtheirlifecycle.

P-3 Businessshouldpromotethewellbeingofallemployees

P-4 Businessesshouldrespecttheinterestof,andberesponsivetowardsallstakeholders,speciallythosewhoaredisadvantaged,vulnerableandmarginalized

P-5 Businessshouldrespectandpromotehumanrights

P-6 Businessshouldrespect,protectandmakeeffortstorestoretheenvironment

P-7 Businesses,whenengagedininfluencingpublicandregulatorypolicy,shoulddosoinaresponsiblemanner.

P-8 Businessshouldsupportinclusivegrowthandequitabledevelopment

P-9 Businessshouldengagewithandprovidevaluetotheircustomersandconsumersinaresponsiblemanner.


(a) Details of compliance (Reply in Y/N)

No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

1 Doyouhaveapolicy/policiesforBR Y Y Y Y Y Y Y Y Y

2 Hasthepolicybeingformulatedinconsultationwiththerelevantstakeholders? Y Y Y Y Y Y Y Y Y

3 Doesthepolicyconformtoanynational/internationalstandards?Ifyes,specify?WRAP (Worldwide Responsible Accredited Production, GSV(Global SecurityVerification),OEKO-TEXStandard 100pertaining toConsumerProductSafetyCommissionbyUSinClass-1andGOTS(GlobalOrganicTextileStandard)

Y Y Y Y Y Y Y Y Y

4 HasthepolicybeingapprovedbytheBoard?

Isyes,hasitbeensignedbyMD/owner/CEO/appropriateBoardDirector? Y Y Y Y Y Y Y Y Y

5 DoesthecompanyhaveaspecifiedcommitteeoftheBoard/Director/Officialtooverseetheimplementationofthepolicy?

Y Y Y Y Y Y Y Y Y

6 Indicatethelinkforthepolicytobeviewedonline? CorporateSocialResponsibilityPolicy:www.kitexgarments.comCodeofconduct:www.kitexgarments.com

7 Hasthepolicybeenformallycommunicatedtoallrelevantinternalandexternalstakeholders?

Thepolicyhasbeencommunicatedtokeyinternalstakeholders.Thecommunicationisanongoingprocesstocoveralltheinternalandexternal

stakeholders.

8 Doesthecompanyhavein-housestructuretoimplementthepolicy/policies. Yes,theCSRCommitteeoftheBoardofDirectorsisresponsiblefortheimplementationofKitex’spolicies.

9 DoestheCompanyhaveagrievanceredressalmechanismrelatedtothepolicy/policiestoaddressstakeholders’grievancesrelatedtothepolicy/policies?

Yes.CSRCommitteeoftheBoardofDirectorsisresponsibleforaddressingstakeholderconcernsrelatedtoBRpolicies.

10 Hasthecompanycarriedoutindependentaudit/evaluationoftheworkingofthispolicybyaninternalorexternalagency?

TheBRpolicyisevaluatedinternally.TheInternalandExternalAuditorsoftheCompanyfromtimetotimemonitortheimplementationofthese

policies.

(b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)

No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

1 ThecompanyhasnotunderstoodthePrinciples

NotApplicable

2 Thecompanyisnotatastagewhereitfindsitselfinapositiontoformulateandimplementthepoliciesonspecifiedprinciples

3 Thecompanydoesnothave financialormanpower resourcesavailableforthetask

4 Itisplannedtobedonewithinnext6months

5 Itisplannedtobedonewithinthenext1year

6 Anyotherreason(pleasespecify)


3. Governance related to BR

(a)IndicatethefrequencywithwhichtheBoardofDirectors,CommitteeoftheBoardorCEOtoassesstheBRperformanceoftheCompany.Within3months,3-6months,Annually,Morethan1year

TheManagementalongwiththeBoardofDirectorsperiodicallyassessestheBRperformanceoftheCompanyeverythreemonths.

(b)Does theCompanypublishaBRor a SustainabilityReport?What is thehyperlinkforviewingthisreport?Howfrequentlyitispublished?

The Company publishes its Business Responsibility report in their AnnualReportwhich canbe viewed in the company’swebsite:www.kitextarments.comorinthefacebookoftenty20kizhakkambalam

SECTION E: PRINCIPLE-WISE PERFORMANCE

Principle 1: Business should conduct and govern themselves with ethics, transparency and Accountability

1 Does the policy relating to ethics, bribery and corruption cover only thecompany? Yes/ No. Does it extend to the Group/ Joint Ventures/ Suppliers/Contractors/NGOs/Others?

Thecompany’sgovernancestructureguidestheorganizationkeepinginminditscorevaluesofIntegrity,CommitmentandPassion.

TheCorporatePrinciplesandtheCodeofConductcoverthecompanyanditsassociatecompaniesandareapplicabletoallitsemployees.

2 Howmany stakeholder complaintshavebeen received in thepast financialyearandwhatpercentagewassatisfactorilyresolvedbythemanagement?Ifso,providedetailsthereof,inabout50wordsorso.

Nostakeholdercomplaintswerereceivedduringtheyearontheconductofthebusinessinvolvingethics,transparencyandaccountability.

Principle 2: Business should provide goods and services that are safe and contribute to sustainability through their life cycle.

1 Listupto3ofyourproductsorserviceswhosedesignhasincorporatedsocialorenvironmentalconcerns,risksand/oropportunities.

TheCompanyisaresponsiblecorporatecitizenandiscommittedtosustainabledevelopment and looks at ways to preserve the environment and manageresourcesresponsibly.TheThreeproductsareTextiles,Machineryandworkers.TheCompanyunderstandsitsobligationsrelatingtosocialandenvironmentalconcernsandrisksandopportunities. Accordinglythecompanyhasdevisedthemanufacturingprocesses in theseproducts and systems factoring socialand environmental concerns. Your company’s manufacturing facility atKizhakkambalam is certified by WRAP(Worldwide Responsible AccreditedProduction) GSV(Global Security Verification) OEKO-TEX Standard 100 andGlobalOrganicTextileStandard

2 Foreachsuchproduct,providethefollowingdetailsinrespectofresourceuse(energy,water,rawmaterialetc.)perunitofproduct(optional):

(a) Reductionduringsourcing/production/distributionachievedsincethepreviousyearthroughoutthevaluechain?

TheCompanyhasworkedtowardscostoptimization,optimizationoflogisticsandreductionininputconsumptionratiointheprocessesandhasreducedtheconsumptionofmajorinputsincludingenergy,wateretcbyadoptionofnewtechniquesandalternatemethods.

(b) Reductionduringusagebyconsumers(energy,water)hasbeenachievedsincethepreviousyear?

TheCompanyhasputconsiderableeffortsinconservationofenergyandwaterwhichhasresultedinreducedconsumptionsincethepreviousyear.

TheproductsofthecompanyareusedbydiverseconsumerallofwhomareoutsideIndia,henceitisnotfeasibletomeasuretheusageofwater,energyandconsumers.


3 Doesthecompanyhaveproceduresinplaceforsustainablesourcing(includingtransportation)?

Yes

(a) If yes, what percentage of your inputswas sourced sustainably? Also,providedetailsthereof,inabout50wordsorso.

TheCompanyhasbuiltuphighlyintegratedhorizontalandverticalintegrationprocessesinitsoperations.Allthemajorinputsunderthecompany’scontrolare sourcedmost efficiently. The internal processes andprocedures ensureadequatesafetyduringtransportationandoptimizationoflogistics,whichinturnhelptomitigateclimatechange.

With respect toyarnprocurementwhich is oneof the important inputs forthe manufacture of garments, the company is continuously increasing thesourcingofyarnsfromwell-knownmanufacturerswhofollowbestqualityandtechnology.Thecompanyisalsocontinuouslyencouragingyarnmanufacturerstoinstallmostmodernequipmentsandtechnology.

4 Hasthecompanytakenanystepstoprocuregoodsandservicesfromlocal&smallproducers,includingcommunitiessurroundingtheirplaceofwork?

Yes

(a) If yes, what steps have been taken to improve their capacity andcapabilityoflocalandsmallvendors?

TheCompanyfosterslocalandsmallsuppliersforprocurementofgoodsandservicesintheproximitytoitsplantlocation.Firstpreferenceisgiventolocalvendors for inputmaterial locallyavailablehasalsoencouragesettingupofmany ancillary units around its plant in Kizhakkambalam. Through variousCSRprograms trainingand technical supportarebeingprovided to themtoimproveandbuildtheircapabilityandtoeducateandraisetheirstandards.

5 Does thecompanyhaveamechanism to recycleproductsandwaste? Ifyeswhatisthepercentageofrecyclingofproductsandwaste(separatelyas<5%,5-10%,>10%).Also,providedetailsthereof,inabout50wordsorso.

TheCompanyfollowstheprinciple3R(Reduce,RecycleandReuse).Itrecyclesproductsandwasteintherangeofaround10%initsfactory. FurtherWasteWaterRecyclingisalsobeingdoneacrossall its locations. Thecompanyhasinstalled Reverse Osmosis Plant for treating waste Water. More than 10%processwashasbeenreusedinyarns.

Principle 3 : Business should promote the wellbeing of all employees

1 PleaseindicatetheTotalnumberofemployees. 4402

2 PleaseindicatetheTotalnumberofemployeeshiredontemporary/contractual/casualbasis.

Nil

3 PleaseindicatetheNumberofpermanentwomenemployees. 2384

4 PleaseindicatetheNumberofpermanentemployeeswithdisabilities Nil

5 Doyouhaveanemployeeassociationthatisrecognizedbymanagement. No

6 Whatpercentageofyourpermanentemployeesismembersofthisrecognizedemployeeassociation?

NotApplicable

7 Please indicate the Number of complaints relating to child labour, forcedlabour, involuntary labour, sexual harassment in the last financial year andpending,asontheendofthefinancialyear.

Nocasesofchildlabour,forcedlabour,involuntarylabour,sexualharassmentand discriminatory employment were reported in the last financial year.Statutorily, KGL has formed an Prevention of Harassment and AbusementCommittee where employees can register their complaints against sexualharassment.ThisissupportedbytheSexualHarassmentPolicywhichensuresafreeandfairenquiryprocesswithcleartimelines.


Sl. No.

Category No of complaints filed

during the financial yearNo of complaints pending as on

end of the financial year

i Childlabour/forcedlabour/involuntarylabour Nil Nil

ii Sexualharassment Nil Nil

iii Discriminatoryemployment Nil Nil

8 Whatpercentageofyourundermentionedemployeesweregivensafety&skillup-gradationtraininginthelastyear?

Safety Training Skill Upgradation

(a)PermanentEmployees 100% 100%

(b)PermanentWomenEmployees 100% 100%

(c)Casual/Temporary/ContractualEmployees Nil Nil

(d)EmployeeswithDisabilities Nil Nil

Principle 4: Businesses should respect the interest of, and be responsive towards all stakeholders, specially those who are disadvantaged, vulnerable and marginalized

1 Hasthecompanymappeditsinternalandexternalstakeholders?Yes/No Yes.Thecompanyhasidentifieditsinternalaswellasexternalstakeholders.

Stakeholders Medium of Engagements

Governmentandregulatoryauthorities

Industrybodies/forums

Employees Meetings,newsletters,employeesatisfactionsurveyandtrainings

Customers Customermeets,customersatisfactionsurveyandweb-

basedportals

Localcommunity Visitsandcamps

Investorsandshareholders Investormeets,annualgeneralmeetingandannualreport

Suppliers Sitevisitsandpersonal/telephonicinteractions

2 Outoftheabove,hasthecompanyidentifiedthedisadvantaged,vulnerable&marginalizedstakeholders.

Yes. The Company has identified disadvantaged, vulnerableandmarginalizedstakeholdersthroughbaselinesurveys.


3 Are there any special initiatives takenby the company to engagewith thedisadvantaged,vulnerableandmarginalizedstakeholders.Ifso,providedetailsthereof,inabout50wordsorso.

The Company’s endeavors to bring in inclusive growth arechannelised through the Twenty20 program in which theCompany’sChairman&ManagingDirector,Shri.SabuM.JacobistheChairperson.

Several programmes such as health care, education,infrastructure,safedrinkingwaterandsanitation,sustainablelivelihood, self-help groups and income generation programsetc are extended to the people living near the company’smanufacturingunit.

Thesafetyoftheworkersisofutmostimportanceandacultureofsafety isbrought in,not justfortheCompany’semployeesbutalsoforotherstakeholders.The initiativeadaptedbytheunithasresultedinZeroFatalitiesinthelastfinancialyear.

Principle 5: Business should respect and promote human rights

1 DoesthepolicyofthecompanyonhumanrightscoveronlythecompanyorextendtotheGroup/JointVentures/Suppliers/Contractors/NGOs/Others?

The Company has been following the Human Rights asenshrined in theConstitutionof India as thepolicywhich isalsomadeapplicabletoallitassociatecompanies.

2 Howmanystakeholdercomplaintshavebeenreceived inthepast financialyearandwhatpercentwassatisfactorilyresolvedbythemanagement?

Ten (10) investor complaints received during the FY 2016-17outofwhichOne(1)cannotberedressedduetovariouslegalimpediments.

Principle 6 : Business should respect, protect and make efforts to restore the environment

1 DoesthepolicyrelatedtoPrinciple6coveronlythecompanyorextendstotheGroup/JointVentures/Suppliers/Contractors/NGOs/others.

The company’s Policy on Safety, Health and Environmentextends to its associate companies. A common guidelines/frameworkforthecompanyisbeingframedbytheCompany’ssustainability cell, incorporating key point from all of itsbusinesses.

2 Doesthecompanyhavestrategies/initiativestoaddressglobalenvironmentalissuessuchasclimatechange,globalwarming,etc?Y/N.Ifyes,pleasegivehyperlinkforwebpageetc.

Yes, the Company is committed to address issues of globalworming and reduction of emissions. The company hasregularly opted for technology up gradation with the lateststate-of-the-art generation technology that reduces energyconsumption. Reduction of water consumption is beingachievedthroughreuse,recycleandinstallationofcondensatePollutionUnit.PleaserefertotheSustainabilityreportfortheinitiativestakenbytheCompany.ThesameisalsoavailableinCompany’swebsitewww.kitexgarments.com

3 Doesthecompanyidentifyandassesspotentialenvironmentalrisks?Y/N Yes, theCompany regularly assesses the environmental risksemanatingfromitsoperations.

Environment/Safety management programmes are initiatedfor themitigation of identified environment aspects as wellas safety hazards. Organization-wide technology standardsaredevelopedforassessmentofenergy,carbon,wastewater,air emissions, solid waste disposal and also remediation ofcontaminatedsites.


4 DoesthecompanyhaveanyprojectrelatedtoCleanDevelopmentMechanism?Ifso,providedetailsthereof,inabout50wordsorso.Also,ifYes,whetheranyenvironmentalcompliancereportisfiled?

The Company has undertaken various projects on CleanDevelopment Mechanism (CDM) at its manufacturing Unit.The environmental compliance reports are filed periodicallywiththerespectiveStateAuthorities.Companyhasalsomadearrangements with local authorities for disposing the ETPsludgetotheminthenormalcourseofoperation.

5 Hasthecompanyundertakenanyotherinitiativeson–cleantechnology,energyefficiency,renewableenergy,etc.Y/N.Ifyes,pleasegivehyperlinkforwebpageetc.

Yes, the Company has taken several initiatives on cleantechnology,energyefficiency,renewableenergyetc.

CleanTechnology:Newandlatesttechnologyincludingorganicdyes is being used in the processing plant on a pilot scaleand initiative to establish production at commercial scale isenvisaged.

EnergyEfficiency:Thisisacontinuousexerciseandadoptionofenergyefficientequipmentfornewprojects,betterutilizationofwasteheadfrommainprocessingplantaswellasancillaryunits.

RenewableEnergy:Currently,feasibilitystudiesarebeingdonetounderstandtheviabilityofsolarenergyinproductionlinesatbothinprocessingandgarmenting.

Please refer to the Board’s Report in the Annual Report forEnergyconservationinitiatives.ThesameisalsoavailableonCompany’swebsite:www.kitexgarments.com

6 AretheEmissions/Wastegeneratedbythecompanywithinthepermissible limitsgivenbyCPCB/SPCBforthefinancialyearbeingreported?

Yes,Theemissions/WastegeneratedbytheCompanyarewithinthepermissiblelimitsgivenbyCPCB/SPCBandarereportedonperiodicbasis.

7 Numberofshowcause/legalnoticesreceivedfromCPCB/SPCBwhicharepending(i.e.notresolvedtosatisfaction)asonendofFinancialYear.

Nil

Principle 7 : Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner

1 Isyourcompanyamemberofanytradeandchamberorassociation?IfYes,Nameonlythosemajoronesthatyourbusinessdealswith:

The Company is a member of Apparel Export PromotionCouncilofIndia

2 Have you advocated/ lobbied through above associations for the advancement orimprovementofpublicgood?Yes/No;ifyesspecifythebroadareas(dropbox:Governanceand Administration, Economic Reforms, Inclusive Development Policies, Energy security,Water,FoodSecurity,SustainableBusinessPrinciples,Others)

YesthebroadareasareEconomicReforms,EnvironmentandEnergyIssuesandSustainableBusinessPrinciples.


Principle 8 : Business should support inclusive growth and equitable development.

1 Does the company have specified programmes/ initiatives/projects inpursuitofthepolicyrelatedtoPrinciple8? Ifyesdetailsthereof.

Yes.TheCompanyhasformulatedawell-definedCSRpolicywhichfocusesonthefollowingmajorareas:

1.Education

2.HealthCare

3.EnvironmentandLivelihood

4.RuralDevelopment

5.SocialEmpowerment

6.Genderdiversity

7.Housing&Sanitation

2 Are the programmes/ projects undertaken through in-houseteam/ownfoundation/externalNGO/governmentstructures/anyotherorganization?

The programmes/projects are undertaken through in-house teams/ our Twenty20Kizhakkambalam as well as in partnership with non-governmental organizations and theLocalPanchayath(inwhich17outofthe19membershavebeenelectedfromtheTwenty20initiative)toserveareasofcommunitygrowthandsustainabledevelopment.

3 Haveyoudoneanyimpactassessmentofyourinitiative? Yes.ThecompanyhasingeneralconductedimpactassessmentofitsCSRinitiativesandhasseenpositiveoutcomesandbenefitsforthepeopleinandaroundtheCompany’slocationatKizhakkambalam.

4 What is your company’s direct contribution to communitydevelopmentprojects-AmountinINRandthedetailsoftheprojectsundertaken.

During the yearunder review, theCompanyhas spent an amount of ` 6.09Crores onCSRactivitiesmainlyoneducation,healthcare,environmentandlivelihood,ruraldevelopment,womanempowerment,housingforall,foodandnutritionetcandtobringaboutasocialchangebyadvocatingandsupportingvarioussocialcampaignsandprogrammes.

5 Have you taken steps to ensure that this communitydevelopment initiative is successfully adopted by thecommunity?Pleaseexplainin50words,orso.

Yes. The Company has taken steps to ensure that the community initiatives benefit thecommunity.Projectsevolveoutofthefeltneedofthecommunitiesandtheyareengagedintheimplementationofthewelfaredriveninitiatives,aswell.Thecommunitiesactivelypartnerwith the company and take ownership of the projects, eventually as its positive outcomebenefitsthemhugely.

Principle 9: Business should engage with and provide value to their customers and consumers in a responsible manner.

1 Whatpercentageofcustomercomplaints/consumercasesarependingasontheendoffinancialyear.

TheCompanyhasawell-definedsystemofaddressingcustomercomplaints. Allcomplaintsareappropriatelyaddressedandresolved.HowevertheCompanymanufacturesgarmentsonprivatelabelsthesamefullyadheredtothecompanyfromtimetotime.

2 Doesthecompanydisplayproductinformationontheproductlabel,overandabovewhatismandatedasperlocallaws?Yes/No/N.A./Remarks(additionalinformation)

TheCompanydisplaysproductinformationontheproducts’label.Sincethecompanyisan100% export orientedUnit its products are labeled andpacked according to the standardsprescribedbythosecountrieslikeUSAandUK

3 Isthereanycasefiledbyanystakeholderagainstthecompanyregarding unfair trade practices, irresponsible advertisingand/or anti-competitivebehaviourduring the last five yearsandpendingasonendoffinancialyear.Ifso,providedetailsthereof,inabout50wordsorso.

No

4 Didyourcompanycarryoutanyconsumersurvey/consumersatisfactiontrends?

Yes consumer satisfaction surveys are being conducted periodically to asses the consumersatisfactionlevels.Sincethecompanymanufacturegarmentsprimarilyforprivatelabelsthein-housefacilityisbeingusedforthesurveyandfeedbackreviews.


PARTICULARS OF ENERGY CONSERVATION, RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(Particulars pursuant to the Rule 8(3) Companies(Accounts)Rules,2014)

A. Conservation of Energy

i. Steps taken for conservation of energy:

Your Company continually tooknecessarystepstoabsorbandadoptthelatest technologies and innovations inthe Garment Industry. These initiativesenable the facilities to become moreefficient and productive as thecompany expands, thereby helps inenergyconservation.Allmachineryandequipment are continuously serviced,updated and overhauled in order tomaintain them in good condition. Thisresultedinconsumptionoflesserenergyconsumption. Energy Conservationcontinuestoreceiveincreasedemphasisatall theunitsoftheCompany.EnergyauditsandInterunitstudiesarecarriedoutonaregularbasisfortakingstepsforreduction of the energy consumption.Henceyourcompanyhasnotoptedforalternate energy sources. Additionally,constant efforts in continuing allprevious conservation measuresand increasing awareness of energymanagement amongst employees havecontinuedwhich should enable furthersavingstotranspiregoingforward.

ii. The steps taken by the Company for utilizing alternative source of energy.

Yourcompanyhastakenstepsforup-gradationandmodernizationofvariousmachinesinphasedmanner.TheCompanyalsoreplacesoldplantandmachinery in theprocessingunitandstepsaretakentomodernizationofvariousoperationsincludinginstallationofroboticmachinesforhandlingveryspecializedwork/activities.

iii. Capital investment on energy conversation equipment: NIL

iv. Total Energy consumption and energy consumption per unit of production

POWER & FUEL CONSUMPTION Year Ended 31.03.2017 Year Ended 31.03.2016

Electricity

a)Purchased

Units(KWH) 16275567units 14715743units

TotalAmount(`) 9,11,88,694 8,75,36,013

Cost/Unit(`/KWH) 5.60 5.95

b)Owngeneration

ThroughDieselGenerator

Units(KWH) 68744Units 68031units

TotalAmount(`) 13,34,329 9,05,669

Cost/Unit(`/KWH) 19.41 13.31

Fuel

a)FurnaceOil

Quantity(KL) 2143KL 2268KL

TotalAmount(`) 6,10,10,104 5,47,71,008

Cost/Unit(`KL) 28466 24,151

b) Firewood

Quantity(MT) 13794MT 13533MT

TotalAmount(`) 3,46,70,937 3,10,05,414

Cost/Unit(`MT) 2,514 2,291

c) Diesel

Quantity(KL) 6KL 23KL

TotalAmount(`) 336516 12,11,062

Cost/Unit(`KL) 56940 53,119

Annexure - G to the Directors Report


B. Technology Absorption

i. The efforts made towards technology absorption

Inadditiontoproductandrawmaterialdevelopmentwhichcontinuestobestrengthened,ResearchandDevelopmentactivitiesonfashiondesigningarecarriedoutonon-goingbasis.Absorbingtechnologieswithstateofartmachinerieslikeautomatedcuttingmachine,automatedfabricinspectionmachines,etc.,thequalityoftheproductsandefficiencyofthesystemshavebeensubstantiallyimproved.Byapplyingthosetechnologies,thecostofproductionwasundercontrol.Duringthelastthreefinancialyears,theCompanyhasnotimportedanytechnology.ThenatureofactivitiesoftheCompanydoesnotwarrantanyexclusiveR&Ddepartment.

ii. The benefits derived like product improvement, cost reduction, product development or import substitution

Thebenefitsderivedfromautomationareincreaseinproductionandcapacityutilization.Bydeliveringbetterandqualityproducts,repeatordershavebeenplacedbycustomersduetoconsistencyinquality.

iii. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year

Thedetailsoftechnologyimported

Theyearofimport

Whetherthetechnologyhasbeenfullyabsorbed

Ifnotfullyabsorbed,areaswhereabsorptionhasnottakenplaceandreasons

NIL

iv. Expenditure incurred on research and development

Nospecificexpenditureofrecurringorcapitalnatureisinvolvedintechnologyabsorption,adoptionandinnovationdirectly.

C. Foreign exchange Earnings and Outgo-

(`inlakhs)

Sl. No. Particulars 2016-17 2015-16

1 EarningsonaccountofExports 40391.57 43,261.40

2 OutgoonaccountofImports&Expenditure 4546.59 4,540.57




(DIN:00046016)


SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31.03.2017 (FormNo.MR-3)

[Pursuant to Section 204(1) of the Companies Act,2013andRuleNo.9ofthe

Companies (Appointment and Remuneration ofManagerialPersonnel)Rules,2014]

ToTheMembersKitex Garments LimitedPBNo5,KizhakkambalamAlwaye,Ernakulam–683562,Kerala

We, SVJS & Associates, Company Secretaries, haveconductedtheSecretarialAuditofthecomplianceofapplicablestatutoryprovisionsandtheadherencetogoodcorporatepracticesbyKitex Garments Limited [CIN: L18101KL1992PLC006528] (hereinafter called“the Company”). Secretarial Audit was conductedin a manner that provided us a reasonable basisfor evaluating the corporate conducts/statutorycompliancesandexpressingouropinionthereon.

Based on our verification of the Company’s books,papers, minute books, forms and returns filed andother records maintained by the Company andalso the information provided by the Company,its officers, agents and authorized representativesduring the conduct of Secretarial Audit, we herebyreportthatinouropinion,theCompanyhas,duringthe audit period covering the financial year endedon31.03.2017,compliedwiththestatutoryprovisionslisted hereunder and also that the Company hasproperBoard-processesandcompliance-mechanisminplacetotheextent, inthemannerandsubjecttothereportingmadehereinafter.

Wehaveexaminedthebooks,papers,minutebooks,formsandreturnsfiledandotherrecordsmaintainedby the Company for the financial year ended on31.03.2017accordingtotheprovisionsof:

(i) The Companies Act, 2013 (the Act) and theRulesmadethereunder;

(ii) TheSecuritiesContracts(Regulation)Act,1956(‘SCRA’)andtheRulesmadethereunder;

(iii) TheDepositoriesAct,1996andtheRegulationsandBye-lawsframedthereunder;

(iv) ForeignExchangeManagementAct, 1999 andthe Rules and Regulations made thereunderto the extent of Foreign Direct Investment,Overseas Direct Investment and ExternalCommercialBorrowings;

(v) The following Regulations and GuidelinesprescribedundertheSecuritiesandExchangeBoardofIndiaAct,1992:-

(a) The Securities and Exchange Board ofIndia (SubstantialAcquisitionof SharesandTakeovers)Regulations,2011;

(b) The Securities and Exchange Board ofIndia (Prohibition of Insider Trading)Regulations,2015;

(c) The Securities and Exchange Boardof India (Registrars to an Issue andShare Transfer Agents) Regulations,1993 regarding the Companies Act anddealingwithclient.

(d) The Securities and Exchange Board ofIndia(ListingObligationsandDisclosureRequirements)Regulations,2015;

(vi) Other Laws specifically applicable to theCompanyasunder:

1. The Textiles (Development andRegulation)Order,2001

We have also examined compliance with theapplicableclausesofthefollowing:

(i) Secretarial Standards 1 and 2 issued by TheInstituteofCompanySecretariesofIndia;

(ii) The Listing Agreements entered into by theCompany with Bombay Stock ExchangeLimitedandNationalStockExchangeofIndiaLimited.

During the period under review the Company hascomplied with the provisions of the Act, Rules,Regulations, Guidelines, Standards etc. mentionedabove.

We further report that:

The Board of Directors of the Company is dulyconstituted with proper balance of ExecutiveDirectors,Non-ExecutiveDirectorsandIndependentDirectors. The changes in the composition of theBoardofDirectorsthattookplaceduringtheperiodunderreviewwerecarriedoutincompliancewiththeprovisionsoftheAct.

Adequatenoticeisgiventoalldirectorstoschedulethe Board Meetings, agenda and detailed notes onagendaweresentatleastsevendaysinadvanceanda system exists for seeking and obtaining furtherinformation and clarifications on the agenda itemsbeforethemeetingandformeaningfulparticipationatthemeeting.

There were no dissenting views on any decisionsof the Board, as recorded in the Minutes of Boardmeetings.

We further report that, as represented by theManagement and relied upon by us, there areadequate systems and processes in the Company

Annexure - H to the Directors Report


commensurate with size and operations of theCompany to monitor and ensure compliance withapplicablelaws,rules,regulationsandguidelines.

We further report thatduringtheauditperiodtherewerenoinstancesof:

i. Public/Right/Preferential issue of shares /debentures/sweatequity;

ii. Redemption/buy-backofsecurities;

iii. Major decisions taken by the members inpursuance to Section 180 of the CompaniesAct,2013;

iv. Merger/amalgamation/reconstruction;

v. Foreigntechnicalcollaborations.

For SVJS & AssociatesCompanySecretaries

CS Sivakumar p.ManagingPartner

CPNo:2210,FCS:3050

Kochi28.04.2017

ANNEXURE TO THE SECRETARIAL AUDIT REPORT OF EVEN DATE

ToTheMembersKitexGarmentsLimitedPBNo5,KizhakkambalamAlwaye,Ernakulam–683562,Kerala

Our Secretarial Audit Report of even date is to be read along with this letter.

1. Maintenance of the Secretarial records isthe responsibility of themanagement of theCompany. Our responsibility as SecretarialAuditors is to express an opinion on theserecords,basedonouraudit.

2. Duringtheaudit,wehavefollowedthepracticesand process as were appropriate, to obtainreasonable assurance about the correctnessof the contents of the Secretarial records.Webelieve that theprocessandpracticeswefollowed provide a reasonable basis for ourreport.

3. The correctness and appropriateness offinancialrecordsandBooksofAccountsoftheCompanyhavenotbeenverified.

4. We have obtained the ManagementrepresentationabouttheComplianceof laws,rulesandregulationsandhappeningofeventsetc.,whereverrequired.

5. ThecomplianceoftheprovisionsofCorporateand other applicable laws, rules, regulations,standards etc. is the responsibility ofmanagement. Our examination was limitedto the verification of the procedures andcompliancesontestbasis.

6. Whileforminganopiniononcomplianceandissuing the Secretarial Audit Report, we havealso taken into consideration the compliancerelated actions taken by the Company after31stMarch2017butbeforeissueoftheReport.

7. We have considered actions carried out bythe Company based on independent legal/professional opinion as being in compliancewithlaw,wherevertherewasscopeformultipleinterpretations.


CS Sivakumar p.ManagingPartner

CPNo:2210,FCS:3050

Kochi28.04.2017


PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES

[Pursuanttoclause(h)ofsub-section(3)ofsection134oftheActandRule8(2)oftheCompanies(Accounts)Rules,2014–(FormNo.AOC-2)]

1. Details of contracts orarrangements or transactionsnot at arm’s length basis (Not applicable)

a. Name(s)oftherelatedpartyandnatureofrelationship:

b. Nature of contracts/arrangements/transactions:

c. Durationof the contracts /arrangements/transactions:

d. Salient terms of thecontracts or arrangementsor transactions includingthevalue,ifany:

e. Justification for enteringinto such contractsor arrangements ortransactions:

f. Date(s) of approval by theBoard:

g. Amountpaidasadvances,ifany:

h. Date on which the specialresolution was passed ingeneralmeetingasrequiredunder first proviso tosection188

2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasis

Sl. No

Name of Related Party Nature of

RelationshipDuration of

ContractSalient Terms (1)

Amount (In

Lakhs)Nature of Contract or arrangementFabric sale (Net)

Enterprisesownedor

significantlyinfluencedbykey

managementpersonnelortheirrelatives

1 KitexChildrenswearLimitedOngoing BasedonTransferPricingGuidelines

5332.342 KitexLimited 2428.27Rent Received3 KitexChildrenswearLimited Ongoing BasedonTransferPricingGuidelines 17.55Rent Paid4 KitexChildrenswearLimited Ongoing BasedonTransferPricingGuidelines 1.22Job work charge paid5 KitexChildrenswearLimited Ongoing BasedonTransferPricingGuidelines 2485.38Job work charge received6 KitexChildrenswearLimited

Ongoing BasedonTransferPricingGuidelines438.54

7 KitexLimited 247.42Expense recovered8 KitexChildrenswearLimited Ongoing BasedonTransferPricingGuidelines 93.35Expense reimbursement (Net)9 KitexChildrenswearLimited Ongoing BasedonTransferPricingGuidelines 6.83Sale of Yarn10 KitexLimited Ongoing BasedonTransferPricingGuidelines 70.76Purchase of Fabric11 KitexLimited Ongoing BasedonTransferPricingGuidelines 1158.37Purchase of Accessories12 KitexLimited Ongoing BasedonTransferPricingGuidelines 0.05Processing Charges paid13 KitexLimited Ongoing BasedonTransferPricingGuidelines 24.09Purchase of Spices14 AnnaAluminiumCompany(P)Ltd. Ongoing BasedonTransferPricingGuidelines 32.20Investments made15 KitexUSALLC ReferNo.(2) ReferNo.(2) 709.00Sales - Ready Made Garments16 KitexUSALLC Ongoing BasedonTransferPricingGuidelines 2008.42Purchase of Utensils17 AnnaAluminiumCompany(P)Ltd. Ongoing BasedonTransferPricingGuidelines 1.28

Note (1) Appropriateapprovalshavebeentakenforrelatedpartytransaction.Advancespaid ifanyhavebeenadjustedagainstbillingwherever

applicable.

(2)TheCompanyhasbeeninvestingintoKitexUSALLCsinceitsinception.AsonMarch31,2017,Companyhasinvested$17,50,210.09constituting50%oftotalcapitaloftheInvesteeCompany


Sabu M. JacobKizhakkambalam Chairman&ManagingDirectorApril28,2017 (DIN:00046016)

Annexure - I to the Directors Report


Details pertaining to Remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1 TheratiooftheremunerationofeachdirectortothemedianremunerationoftheemployeesofthecompanyexcludingManagingDirectorforthefinancialyear

Mr.SabuM.Jacob 641.13 :1

Mr.BenniJoseph,IndependentDirector 1.75 :1

Ms.SindhuChandrasekhar 1.41 :1

Prof.E.M.Paulose,IndependentDirector 1.28 :1

Mr.KLVNarayanan,Director 1.41 :1

Mr.C.P.Phillipose,Director 13.44 :1

2 The percentage increase in remuneration of each director, Chief FinancialOfficer,ChiefExecutiveOfficer,CompanySecretaryorManager,ifany,inthefinancialyear;

Mr.SabuM.Jacob,MDandCFO -19.60%

Mr.BenniJoseph 143.77%

Prof.E.M.Paulose 161.61%

Mr.KLVNarayanan 78.37%

Mr.C.P.Phillipose 198.98%

Ms.SindhuChandrasekhar 32.87%

Mr.A.Babu.CompanySecretary 16.56%

3 ThepercentageIncrease/Decreaseinthemedianremunerationofemployees 5.12%

4 Thenumberofpermanentemployeesontherollsofcompany 4402

5 Averagepercentileincreasealreadymadeinthesalariesofemployeesotherthanthemanagerialpersonnelinthelastfinancialyearanditscomparisonwiththepercentileincreaseinthemanagerialremunerationandjustificationthereofandpointoutifthereareanyexceptionalcircumstancesforincreaseinthemanagerialremuneration

March 31, 2017 March 31, 2016

AverageincreaseinremunerationofemloyeesexcludingKMP

12.79%12.83%

AverageincreaseinremunerationofKMP -14.41% 18.49%

6 Affirmationthattheremunerationisaspertheremunerationpolicyofthecompany.

RemunerationpaidduringtheyearendedMarch31,2017isaspertheRemunerationpolicyoftheCompany




(DIN:00046016)

Annexure - J to the Directors Report


PARTICULARS OF EMPLOYEES PURSUANT TO PROVISIONS OF SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Sl. No.

Name Age QualificationNature of

employmentDesignation

Date of Commencement of employment

Experience (Years)

Gross Remuneration

Previous Employment/ Designation

the percentage of equity

shares held in the Company

whether any such

employee is a relative of any director or manager

of the company

1 Mr.SabuMJacob

54 Graduate Employee ManagingDirector

16.08.1993 34 7,51,89,260 ExecutiveDirector-

KitexLimited

38.76% No



Sd/- Sabu M. Jacob

Chairman&ManagingDirector(DIN:00046016)

Annexure - K to the Directors Report


1. KITEX PHILOSOPHY

TheMarketregulator‘SecuritiesandExchangeBoard of India’ (SEBI) has stipulated a setof Corporate Governance standard for theListedCompanies.TheCorporateGovernancestandards demonstrate inalienable rightsvested with various stakeholders and strongcommitment to values, ethics and businessconduct.

Kitex Corporate Governance philosophyis about intellectual honesty whereby thegovernance is not just about encompassingregulatory and legal requirements but alsostrives to enhance stakeholders’ value as awhole. Your Company belongs to a legacywherethevisionaryfounderslaidthestoneforgoodgovernance through thephilosophiesof“work with a social cause” implyingthedutytowork diligently carries the responsibility thatoneshouldgivesomethingbacktoothersinthesocietywhich enables one to build trust andconfidencewith one’s stakeholders, includingemployees, customer and suppliers where alongtermrelationshipscouldbedevelopedforthebenefitofeveryone.Thusthesestandardsofgovernanceareguidedbytheprinciplesof:

- Clearandethicalstrategicdirectionandsoundbusinessdecisions

- Prudentfinancialmanagement

- Transparent, accountable andprofessionaldecisionmakingmethods

Corporate Governance Report

- Excellence in Corporate Governanceby setting theguidelinesandcontinuesassessment of Board processes andmanagement systems for constantimprovements.

Yourcompany’sphilosophyincludesprotectionand facilitation of shareholder’s rights,provide adequate and timely information onall material matters including the financialsituation, performance, ownership andgovernance of the Company, opportunity toparticipateeffectively ingeneralmeetingandensureequitabletreatmenttoallshareholders.TheBoard’s role, functions, responsibilityandaccountabilityareclearlydefined.YourBoardmonitorstheCompany’soverallperformance,directs and guides the activities of theManagementtowardsthesetofgoalsandseeksaccountability.YourBoardalsosetsstandardsof corporatebehaviour, ensures transparencyin corporate dealings and compliance withthe laws and regulations. Your company hasfulfilled all the existing guidlines discribedby SEBI in chapter IV read with scheduledV of SEBI (listing obligations and discloserrequirements)regulisation,2015.

2. BOARD OF DIRECTORS

2.1. SIZE AND COMPOSITION OF BOARD:

The Board of Directors comprises ofprofessionals have expertise in theirrespectivefunctionalareasempoweringtheCorporate’sstriveforsustainedbetterCorporate Governance practices. As ondate, your company’s Board comprisesof Six Directors viz., One Executive

Chairman, One Executive Directors,3 Independent Directors and 1 NonExecutive Director having no businessrelationship with the Company. ThecompositionoftheBoardisinconformitywith the SEBI (Listing Obligations andDisclosure Requirements) Regulations,2015&CompaniesAct2013(‘Act’).

2.2. BOARD MEETINGS:

The Board of Directors meets oncein a quarter to consider among otherbusiness, the quarterly performanceof the Company and financial results.Five (5) Board Meetings were heldduringthefinancialyear2016-2017onApril 4, 2016, July 20, 2016, October 31,2016, January 9, 2017 and January 30,2017. The dates and notices along withdetailed agenda were fixed / issuedwell inadvance incompliancewiththeSecretarial Standards. The necessaryquorumwaspresentforallthemeetings.Themaximumintervalbetweenanytwomeetingsdidnotexceed120days.

2.3. DIRECTORS’ ATTENDANCE RECORD AND DIRECTORSHIPS

Details of the Composition and theattendance record of the Board ofDirectors are given below. None of theDirectors are member of more than10 Board level Committees of publiccompanies inwhich they areDirectors,nor holds chairmanship in more thanfivesuchCommittees.


Name of the DirectorExecutive/

Non-Executive/Independent

No of Directorship and Committee membership/ Chairmanships in other Indian Public Companies No. of

shares held

Attendance Particulars

Director(1)

Member(2)

Chairman(2)

No. of Board Meetings

held

No. of Board Meetings attended

Attendance at last AGM

Mr.SabuM.Jacob Promoter, Chairman &ManagingDirector

4 - - 15319281 5 5 Yes

Mr.BenniJoseph IndependentDirector 1 1 - - 5 5 Yes

Prof.EMPaulose IndependentDirector 1 - 1 100 5 5 No

Mr.K.L.V.Narayanan(3) NonExecutiveDirector 3 - - - 5 4 Yes

Ms.SindhuChandrasekhar ExecutiveDirector 2 - - - 5 5 No

Mr.CPPhilipose IndependentDirector - - - - 5 5 Yes

(1) TheDirectorshipheldbyDirectorsdonotincludealternatedirectorshipsanddirectorshipsofForeignCompanies,Section8Company,OnePersonCompaniesandPrivateLimitedCompanies.

(2) OnlyAuditCommitteeandStakeholders’RelationshipCommitteearereckonedforthispurpose.

(3) ThesaiddirectorshavesubmittedthedeclarationsatisfyingallcriteriaofIndependentDirectorundertheCompaniesAct,2013andSEBIRegulation.

NoneoftheaboveDirectorsarerelatedtoeachother.

TheBoardevaluatestheCompany’sstrategicdirection,managementpolicies,performanceobjectivesandeffectivenessofCorporateGovernancepractices.

FurthertheBoardfulfillsthekeyfunctionsasprescribedunderScheduleVofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015beingpartofthenewListingAgreement.

TheCompaniesAct,2013readwithrelevantRulesmadethereunder,facilitatestheparticipationoftheDirectorintheBoard/Committeemeetingsthroughvideoconferencingorotheraudiomode.HowevernoneoftheDirectorshaveavailedsuchafacility.

2.4 PERFORMANCE EVALUATION OF DIRECTORS:

TheBoard of directors have approved and laid down the criteria for performance evaluation of allDirectors by theNomination andRemunerationcommittee.IntermsoftheEvaluationFramework,theBoardhascarriedouttheannualperformanceevaluationofitsownperformance,thedirectorsindividuallyandtheworkingofitsCommitteesheldonJanuary30,2017.Thecriteriaforperformanceevaluationareasfollows:

� TounderstandthenatureandroleofIndependentDirector’sposition.

� Understandtherisksassociatedwiththebusiness.

� ApplicationofknowledgeforrenderingadvicetotheManagementforresolutionofbusinessissues.

� Offerconstructivechallengetomanagementstrategiesandproposals.

� Non-partisanappraisalofissues.

� Giveownrecommendationsprofessionallywithouttendingtomajorityorpopularviews.

� HandlingissuesasChairmanofBoardandothercommittees.

� Drivinganyfunctionorinitiativebasedondomainknowledgeandexperience.


� Level of commitment to rolesandfiduciaryresponsibilitiesasaBoardMember.

� Attendance and activeparticipation.

� Abilitytothinkproactive,strategicandlaterally.

2.5. APPOINTMENT AND MEETING INDEPENDENT DIRECTORS

Terms and Conditions of Independentdirectors’ appointment are available inCompany’swebsitewww.kitexgarments.com

Duringtheyearunderreview,aseparatemeeting of Independent Directors washeld on January 30, 2017 without thepresenceofNon-IndependentDirectorsand members of the management, toreviewtheperformanceoftheBoardasawholeonparametersofeffectivenessand to assess the quality, quantityand timeliness of flow of informationbetweenthemanagementandtheBoardasrequiredunderScheduleIVoftheActandtheListingRegulations.Themeetingwas attended by all the IndependentDirectors.

2.6. TRAINING, INDUCTION AND FAMILIARISATION PROGRAMME FOR DIRECTORS

Your company follows a structuredfamiliarization programme throughvariousreportsandinternalpoliciesforall theDirectorswith a view to updatethem on the Company’s policies on aregular basis. A detailed familiarizationprogram was conducted on January30, 2017 for all directors who werepresentattheBoardmeetingbyvariousdepartmental heads with the help ofvideo and power point presentation.Mr.SabuMJacob,Chairman&ManagingDirectoransweredvariousqueriesraisedby theDirectors. TheDirectors are alsoappraised about risk assessment andminimizationprocedures.

TheDetailsoffamiliarisationprogrammesimparted to the Independent Directorsduring the FY 2016-17 are also madeavailable in Company website: http://www.kitexgarments.com

2.7. CODE OF CONDUCT

The Board has laid down a Code ofConduct for all Board members andseniormanagementwhich ispostedonthewebsiteoftheCompanyhttp://www.kitexgarments.com.

All Board members have affirmed thecompliance with the Code of Conduct.A declaration to this effect signed byManaging Director, forms part of thisAnnualreport.

3. COMMITTEE OF THE BOARD

3.1 AUDIT COMMITTEE:

The Audit Committee acts as a linkbetween the Independent Auditors,InternalAuditors, theManagementandthe Board of Directors and overseasthe financial reporting process. TheAudit committee interacts with theInternalAuditors,IndependentAuditors,CompanyLawConsultant,LegalAdvisorsand Secretarial Auditors and reviewsand recommends their appointmentandremuneration.TheAuditCommitteeisprovidedwithallnecessaryassistanceand information for enabling them tocarryoutitsfunctioneffectively.

The Audit Committee comprised of3 Directors viz., Mr. Benni Joseph asChairman,Prof.E.MPauloseandMr.C.P.PhiliposeasMembers. Thecompositionof the Audit Committee complies withthe requirements of the Act and theListingRegulations.

AllmembersoftheAuditCommitteehaveaccounting and financial managementexpertise. 5 Audit Committee Meetingswereheldduringtheperiodunderreviewviz.,April04,2016,July20,2016,October31,2016,January9,2017andJanuary30,

2017.TheAuditCommitteeactsasalinkbetweenthemanagement,thestatutoryand internal auditors, and the Boardof Directors. The Audit Committee isprovidedwith the necessary assistanceand information so as to enable it tocarryoutitsfunctioneffectively.

Composi-tion

Mr. Benni Joseph

Prof. E. M. Paulose

Mr. C. P. Philipose

No.ofMeetingattended

5 5 5

The Managing Director, the Whole-time Director and Finance - Headare permanent invitees to the AuditCommittee Meetings. The StatutoryAuditors,InternalAuditorandSecretarialAuditorsoftheCompanyarealsoinvitedto the Audit Committee Meetings. TheCompany secretary is the Secretary tothe Committee. The Chairman of theAuditCommitteewaspresentatthelastAGM of the Company held on June 10,2016.

Terms of Reference of Audit Committee

• The recommendation ofappointment, remuneration andtermsofappointmentofauditorsoftheCompany.

• Reviewandmonitortheauditors’independence and performanceandeffectivenessofauditprocess.

• Approvalofpaymenttostatutoryauditors for any other servicesrendered by the statutoryauditors.

• Reviewingwith themanagement,the annual financial statementsand auditor’s Report thereonbefore submission to the Boardfor approval, with particularreferenceto:

¾ Matters required to beincluded in the Directors


Responsibility StatementtobeincludedintheBoardReport in terms of Section134oftheAct.

¾ Changes, if any, inaccounting policies andpracticesandreasonforthesame.

¾ Major accounting entriesinvolving estimates basedontheexerciseofjudgmentbymanagement.

¾ Significant adjustmentsmade in the financialstatements arising out ofauditfindings.

¾ Compliancewithlistingandother legal requirementsrelating to financialstatements

¾ Disclosure of any relatedpartytransactions

¾ Modified opinion in thedraftauditreport

• Reviewingwith themanagement,thequarterlyfinancialstatementsbeforesubmissiontotheboardforapproval;

• Reviewing and monitoring theauditors independence andeffectivenessofauditprocess

• Approval or subsequentmodification of transactions ofthe listed entity with relatedparties.

• Scrutiny of inter-corporate loansandinvestments;

• Valuation of undertakings orassetsofthelistedentitywhereveritisnecessary;

• Evaluation of internal financialcontrols and risk managementsystems

• Reviewing,withthemanagement,performance of statutory andinternalauditors,adequacyoftheinternalcontrolsystems;

• Reviewing the adequacy ofinternal audit function, if any,including the structure of theinternal audit department,staffing and seniority of theofficial heading the department,reporting structure coverage andfrequencyofinternalaudit;

• Discussion with internal auditorsof any significant findings andfollowupthereon;

• Reviewing the findings of anyinternal investigations by theinternal auditors into matterswherethereissuspectedfraudorirregularityorafailureofinternalcontrol systems of a materialnature and reporting the mattertotheboard;

• Discussionwithstatutoryauditorsbefore the audit commences,about the nature and scopeof audit as well as post-auditdiscussiontoascertainanyareaofconcern.

• To look into the reasons forsubstantial defaults in thepayment to the depositors,debenture holders, shareholders(in case of non-payment ofdeclareddividends)andcreditors;

• To review the functioning of thewhistleblowermechanism;

• ApprovalofappointmentofChiefFinancial officer after assessingthequalifications,experienceandbackgroundetc.

• Carrying out any other functionas is mentioned in the terms ofreferenceoftheAuditCommittee.

• Oversight of the listed entity’sfinancial reporting process andthe disclosure of its financialinformation to ensure that thefinancial statement is correct,sufficientandcredible.

TheAuditCommitteeshallmandatorilyreviewthefollowinginformation:

• management discussion andanalysisoffinancialconditionandresultsofoperations;

• statement of significant relatedparty transactions (as definedbythe audit committee), submittedbythemanagement;

• management letters/letters ofinternal control weaknessesissuedbythestatutoryauditors;

• internal audit reports relating tointernalcontrolweaknesses;

• the appointment, removal andterms of remuneration of thechiefinternalauditor;and

• statementofdeviations:

¾ quarterly statement ofdeviation(s), includingreportofmonitoringagency,if applicable, submitted tostock exchange(s) in termsofListingRegulations;

¾ annual statement of fundsutilised for the purposesother than those statedin the offer document/prospectus/notice in termsofListingRegulations.

Composition of the Committee isavailableonCompany’swebsite: http://www.kitexgarments.com

3.2 STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders RelationshipCommittee oversees the redressal of


Security holder’s complaints relatingto share transfers/ transmission, non-receiptofAnnualreports,nonreceiptofdeclared dividend etc. This Committeeconsists of 3 Directors viz., Mr. K.L.V.Narayanan as Chairman, Mr. Sabu M.JacobandMs.SindhuChandrasekharasthemembers.

Mr. A. Babu, Company Secretary is theComplianceOfficeroftheStakeholders’RelationshipCommittee.

Duringtheyear, theCommitteemeton4timesviz.,April04,2016,July20,2016,October 31, 2016 and January 30, 2017.YourCompany’ssharesarecompulsorilytraded in the de-materialised form.To expedite transfers in the physicalsegment, necessary authority has beendelegatedtotheCommitteetoapprovetransfers/ transmissions of shares/debentures. Details of share transfers/transmissionsapprovedbytheDirectorsandOfficersareplacedbeforetheBoard.

AttendanceatStakeholders’RelationshipCommitteemeetingsisasbelow:

Compo-sition

Mr. K.L.V. Narayanan

Mr. Sabu M. Jacob

Ms. Sindhu

Chandra sekhar

No.ofMeetingsattended

4 4 4

Statusofinvestorcomplaintsisasbelow:

No. of investor queries/ complaints received from April

01, 2016 to March 31, 2017

number of complaints not

solved to the satisfaction of shareholders

10 1*

*Nilaspercompanyrecords.Cannotberedressedduetovariouslegalimpediments.

As on March 31, 2017, there was nopendinginvestorcomplaint.

Composition of the Committee is

availableonCompany’swebsite: http://www.kitexgarments.com

3.3 NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors has constitutedthe Nomination and RemunerationCommittee (NRC) in accordance withtheActandtheListingRegulations.Theterms of reference of the NominationandRemunerationCommitteecoverallapplicablemattersspecifiedundernewSEBI Listing regulation and Section 178oftheCompaniesAct,2013.

The Committee comprises of 3 Non-Executive Directors viz., Prof. E. M.Paulose as Chairman,Mr. Benni Josephand Mr. K. L. V. Narayanan as themembers. Company Secretary acts astheSecretarytotheCommittee.

During the year, the Committee met4 times, viz., April 04, 2016, July 20,2016, October 31, 2016 and January 30,2017. Attendance at Nomination andRemunerationCommitteemeetingsareasbelow:

Compo-sition

Prof. E. M. Paulose

Mr. Benni Joseph

Mr. K. L. V. Nara yanan


4 4 4

Terms of Reference

Terms of reference of the Committeeinteraliaconsistsof

o Formulatecriteriafordeterminingqualifications, positive attributesandindependenceofdirectorandrecommendtotheBoardapolicyrelating to the remunerationof directors, Key ManagerialPersonnelandotheremployees.

o Formulation of criteria for

evaluation of performance ofindependent directors and theboardofdirectors;

o Identify persons qualified tobecome directors or hold seniormanagementpositionsandadvisetheBoardforsuchappointments/removalswherenecessary

o Evaluate the performance ofeverydirector.

o DeviseapolicyonBoarddiversity.

o Whether to extend or continuethe term of appointment of theindependentdirector,onthebasisof the report of performanceevaluation of independentdirectors.

o ensure that the level andcomposition of remunerationis reasonable and sufficient toattract, retain and motivatedirectorsandseniormanagementofthequalityrequiredtoruntheCompanysuccessfully;

o ensure that the relationship ofremuneration to performanceis clear and meets appropriateperformancebenchmarks;and

o reviewandimplementsuccessionplans for Managing Director,Executive Directors and SeniorManagement.

Remuneration Policy:

TheBoardhasapprovedNominationandRemuneration Policy as recommendedby Nomination and RemunerationCommittee which forms part ofDirectors’Report.

Directors Remuneration:

Non-Executive Directors includingIndependent Directors are paid sittingfees for attending the meetings of theBoard/ Committee within the limits asprescribed under the Companies Act,


2013.ThesittingfeesarefixedfromtimetotimebytheBoardontherecommendationsoftheNominationandRemunerationCommittee.TheseDirectorsarealsoreimbursedofanyoutofpocketexpenses incurredbythemfor thepurposeof theCompany.Detailsof remunerationpaid to theManagingDirector,ExecutiveDirectorandKeyManagerialPersonnelaregivenMGT-9AnnexureBofDirectorsReport.

NonexecutiveDirectorsdon’thaveanypecuniaryrelationshiportransactionswiththeCompany

CompositionoftheCommitteeisavailableonCompany’swebsite:http://www.kitexgarments.com

RemunerationpaidtotheChairmanandManagingDirectorandWhole-timeDirectorduring2016-17:

Name of the Director

SalaryPerquisites and

allowancesRetiral

benefitsCommission

payable

Others: Contribution

to PF

Performance Linked Incentive

TotalStock options

granted

Mr.SabuM.Jacob 1,08,00,000 - - 6,38,13,260 5,76,000 - 7,51,89,260 -

Mrs.SindhuChandrasekhar

7,60,808 - - - 21600 7,93,376 15,75,784 -

3.4 RISK MANAGEMENT COMMITTEE

RiskManagementCommitteeoftheBoardwasconstitutedwithMr.SabuM.JacobastheChairman,Mr.BenniJosephandMr.E.M.Pauloseasitsmembers.TherolesandresponsibilitiesoftheCommitteeareasprescribedunderSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015andincludesmonitoringandreviewoftheriskmanagementplanandreportingthesametotheBoardofDirectorsperiodicallyasitmaydeemfit,inadditiontoanyothertermsasmaybereferredbytheBoard,fromtimetotime.TheconstitutionofCommitteeisapplicableonlytotop100companiesbasedonmarketcapitalization.

Duringtheyearunderreview,theCommitteehasnotbeenmet.

3.5 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE)

TheCommitteecomprisesMr.SabuM.JacobastheChairman,Mr.K.L.V.Narayanan,Mr.BenniJoseph,Mr.C.P.Philiposeasthemembers.TheCompanySecretaryactsasaSecretarytotheCommittee.

Key Responsibilities of the CSR Committee:

• Formulate,monitorandrecommendtotheBoardCSRPolicyandtheactivitiestobeundertakenbytheCompany.

• Recommendtheamountofexpendituretobeincurredontheactivitiesundertaken.

• ReviewtheCompany’sperformanceintheareaofCSR.

• EvaluatethesocialimpactoftheCompany’sCSRactivities.

• ReviewtheCompany’sdisclosureofCSRmatters,includinganyannualsocialresponsibilityreport.

• ReviewtheCSRReport,withtheManagement,beforesubmissiontotheBoardforapproval.

• FormulateandimplementtheBRpoliciesinconsultationwiththerespectivestakeholders.

• EstablishamonitoringmechanismtoensurethatthefundscontributedbytheCompanyarespentfortheintendedpurposeonly.

TheCSRPolicyintendstostriveforeconomicdevelopmentthatpositivelyimpactsthesocietyatlargewithminimalresourcefootprints.ThePolicyisavailableontheCompany’swebsiteathttp://www.kitexgarments.com.


Duringtheyear,theCommitteemet4timesviz.,April04,2016,July20,2016,October31,2016andJanuary30,2017.AttendanceatCSRCommitteemeetingsareasbelow:

CompositionMr. Sabu M.

JacobMr. Benni Joseph

Mr. K. L. V. Narayanan

Mr. C. P. Philipose


4 4 4 4

Composition of the Committee is available on Company’s website: http://www.kitexgarments.com/

4. GENERAL BODY MEETINGS

Location,dateandtimeoftheAnnualGeneralMeetingsheldinthelast3years.

Sl. No. AGM Year Date Time Location

1 24th 2016 June10,2016 10:00A.M. BuildingNo.9/536A,Kizhakkambalam,Kochi–

683562,Kerala2 23rd 2015 June4,2015 10.30A.M.

3 22nd 2014 May15,2014 10.00A.M.

Allresolutionsassetoutintherespectivenoticesweredulypassedbytheshareholdersinthemeeting.

DetailsofSpecialResolutionspassedintheimmediatelyprecedingthreeAGMs:

AGM Particulars of Special Resolutions passed thereat

23rd AdoptionofnewArticlesofAssociationoftheCompanypursuanttoCompaniesAct,2013

Nospecialresolutionshavebeenpassedinthe22ndand24thAGM.NopostalBallotwasconductedduringthelastthreeyears.

ThereisnoimmediateproposalforpassinganyresolutionthroughPostalBallot.NoneofthebusinessesproposedtobetransactedattheensuingAnnualGeneralMeetingrequirepassingaresolutionthroughPostalBallot.

5. MEANS OF COMMUNICATION

TheUn-auditedQuarterlyResultsareannouncedwithin45daysfromtheendofthequarterandtheAnnualAuditedResultsareannouncedwithin60daysfromtheendofthefinancialyearasperSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015asamendedfromtimetotime.TheCompanyprovidestheinformationtothestockexchangewheresharesoftheCompanyarelisted.Theresults are alsopublished in oneEnglishnewspaperhavingnational circulation andoneMalayalamNewspaper.

TheFinancialResultsoftheCompanyarenormallypublishedinthefollowingnewspapers:

A. BusinessLine(EnglishLanguage)

B. MalayalaManorama(MalayalamLanguage)

TheFinancialResultsoftheCompanyaredisplayedontheCompany’swebsitehttp://www.kitexgarments.com/

Disclosure pursuant to various provisions ofListingRegulations,asapplicable,arepromptlycommunicated to the stock exchangeswherethesharesofyourCompanyarelisted,andaredisplayedbythemontheirwebsites.

Presentations to institutional investors / analysts:

No Detailed presentations made toinstitutional investors and financial analystsontheCompany’sun-auditedquarterlyaswellasauditedannual financial resultsduring theperiodunderreview.

6. GENERAL SHAREHOLDER INFORMATION:

6.1. ANNUAL GENERAL MEETING:

Date and Time

Monday, June 19, 2017 at10.00A.M.

Venue: BuildingNo.9/536A,Kizhakkambalam,Alwaye,Kochi–683562,Kerala

6.2. FINANCIAL YEAR:theCompanyfollowsApril1toMarch31asthefinancialyear.

6.3. FINANCIAL CALENDAR:

Un-auditedresultsQ1ending30.06.2017

3rdWeekofJuly,2017

Un-auditedresultsQ2/halfyearending30.09.2017

3rdWeekofOctober,2017

Un-auditedresultsQ3/Ninemonthsending31.12.2017

3rdWeekofJanuary,2018

AuditedResultsfortheyearending31.03.2018

1st/2ndweekofApril,2018

6.4. BOOK CLOSURE DATE: From June13, 2017 to June 19, 2017 (both daysinclusive).

6.5. DIVIDEND PAYMENT DATE:onorbeforeJuly17,2017


6.6. DETAILS OF STOCK EXCHANGES WHERE LISTED

Stock Exchanges Stock Code

BSE Ltd. (BSE)

CorporateRelationshipDept,1stFloor,NewTradingRing,RotundaBuilding,PJTowers,DalalStreet,FortMumbai–400001,Maharashtra

521248

National Stock Exchange of India Limited (NSE)

ExchangePlaza,Bandra-KurlaComplex,Bandra(E),Mumbai-400051,Maharashtra KITEX

ListingfeeshavebeenpaidfortheFinancialYear2017-18.

6.7. MARKET PRICE DATA

MarketPriceandVolumeoftheCompany’sSharesoffacevalueof`1eachtradedinthemajorstockexchangeswhereCompany’ssharesarelistedduringthefinancialyear2016-17:

Year (2016-17) BSE (Amount in `) NSE (Amount in `) Volume (nos.)

Months High Low High Low BSE NSE

April 497.00 431.10 497.45 430.10 5,34,778 39,06,616

May 485.00 439.60 484.90 434.50 2,28,089 14,89,313

June 531.95 453.90 533.00 452.30 4,89,835 33,75,065

July 543.20 482.00 543.00 482.65 2,63,188 22,80,306

August 501.15 434.50 500.00 433.25 1,39,336 18,07,541

September 505.50 398.55 506.00 399.00 1,36,152 9,56,452

October 530.30 428.90 529.80 427.40 3,01,567 17,43,603

November 463.85 354.00 463.85 352.70 5,53,134 32,24,884

December 418.00 389.90 418.90 388.90 86,143 4,81,567

January 465.00 404.00 464.90 400.10 1,67,154 9,96,801

February 450.00 417.00 451.90 415.50 67,857 4,75,481

March 434.00 393.55 435.15 416.30 7,85,733 6,97,699

Source–Websites:BSELtd.(www.bseindia.com)andTheNationalStockExchangeofIndiaLtd.(www.nseindia.com)

6.8. A PERFORMANCE CHART SHOWING SHARE PRICE OF THE COMPANY IN COMPARISON WITH BSE SENSEX DURING THE YEAR 2016-17 IS AS BELOW:

Year 2016-17 KITEX Sensex

April 461.40 25,606.62

May 453.90 26,667.96

June 527.20 26,999.72

July 493.35 28,051.86

August 486.45 28,452.17

September 438.75 27,865.96

October 511.45 27,930.21

November 401.85 26,652.81

December 407.00 26,626.46

January 448.10 27,655.96

February 422.30 28,743.32

March 428.55 29,620.50

6.9. SHARE TRANSFER PROCESS

Share Transfer, Transmission andDuplicate issue of Shares in physicalform are normally effected within aperiod of 15 days, 21 days (7 days ifthe transmission is in de-mat form)and 30 days respectively if receipt ofdocuments complete in all respects.All share transfers are approved bythe Share Transfer CommitteewithMr.SabuM Jacob as Chairman,Ms. SindhuChandrasekhar, Woman Director andMr.CPPhilipose,Directorasmembers,whichmeets at least once in fortnight,thus ensuring smooth processing and


completionofdispatchofthesharecertificateswithintheaforesaidperiodfromthelodgmentofthedocuments.

6.10. DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, 2017

Range No. of Shareholders No. of Shares held % of shareholding

1and5000 28867 6192198 13.04

5001and10000 126 935106 1.97

10001and20000 72 1044993 2.20

20001and30000 13 306369 0.64

30001and40000 8 279407 0.59

40001and50000 6 283239 0.60

50001and10000 19 1385537 2.91

100001andAbove 23 37073151 78.05

Total 29134 47500000 100.00

6.11. DE-MATERIALIZATION OF SHARES

TheCompanyhas entered intoa tripartite agreementwith theNational SecuritiesDepositoryLimited(NSDL)andCentralDepositoryServicesLimited(CDSL)toprovidetradingofshares indematerializedform.InternationalSecuritiesIdentificationNumber(ISIN)allottedtotheequitysharesoftheCompanyisINE602G01020.AsonMarch31,2017,45845248sharesofthecompany,constituting96.52%wereindematerializedform.

6.12. CATEGORIES OF SHAREHOLDING AS ON MARCH 31, 2017

Category No. of Shareholders No. of Shares held % Shareholding

Resident 27463 13463920 28.35

FinancialInstitutions 1 18629 0.04

FII 5 53398 0.11

NRI 1084 545200 1.15

CorporateBody 458 12585436 26.49

ClearingMember 70 40801 0.09

ForeignNational 1 84 0.00

MutualFunds 1 65000 0.14

Trusts 1 2000 0.00

Bank 1 19976 0.04

FPI 41 2229751 4.70

AlternativeInvestmentFund

1 60537 0.12

Directors/relative 7 18415268 38.77

Total 29134 47500000 100.00

6.13. OUTSTANDING GDRS/ ADRS/ WARRANTS OR ANY CONVERTIBLE INSTRUMENTS:

AsofMarch31,2017,theCompanydoesnot have any outstanding convertibleinstruments,whicharelikelytohaveanimpactontheequityoftheCompany.

6.14. COMMODITY RISK OR FOREIGN EXCHANGE RISK AND HEDGING ACTIVITIES

Disclosure on risks is forming part ofManagement Discussion and AnalysisReportduringtheperiodunderreview.

6.15. PLANT LOCATION: Kizhakkambalam,Alwaye,Kochi683562,Kerala

6.16. ADDRESS FOR CORRESPONDENCE

REGISTERED OFFICE

REGISTRAR AND SHARE TRANSFER

AGENT

KitexGarmentsLimited

(CIN:L18101KL1992PLC006528)

9/536A,

Kizhakkambalam,

Alwaye,

Kochi–683562,

Kerala

Tel:04844142310,

Fax:04842680604

E-mails:[email protected]

Website:www.kitexgarments.com

M/s.CameoCorporateServicesLtd.

SubramanianBuildingNo.1,

ClubHouseRoad,

Chennai600002,

TamilNadu

Tel:044-28460390

Fax:044-28460129

Email:[email protected]

website:www.cameoindia.com

7. DISCLOSURES:

7.1. RELATED PARTY TRANSACTIONS:

AllRelatedPartyTransactionsareplacedbeforetheAuditCommittee.TheBoardhasapproveda‘PolicyonRelatedPartyTransactions’ web link of which forms


partofDirectors’Report.TheParticularsof contracts and arrangement withRelated Parties of your Companyreferred to in Section 188(1) of theCompaniesAct,2013inprescribed‘formAoC-2’ is appended to the Director’sReport.

There are transactions with a RelatedParty, which qualify as materialtransaction under the SEBI (LODR),regulations,2015,forwhichshareholdersapproval sought for in the ensuingAnnual General Meeting and doesn’thave any potential conflict with theinterestsoflistedentityatlarge.

7.2. STATUTORY COMPLIANCE, PENALTIES AND STRICTURES:

There were no instances of materialnon-compliance and no strictures orpenaltieswereimposedontheCompanyeither by SEBI, StockExchanges or anystatutory authorities on any matterrelatedtocapitalmarketsduringthelastthreeyears.

7.3. VIGIL POLICY (WHISTLE BLOWER POLICY)

TheCompanyhasadoptedVigilPolicytoenableStakeholders(includingDirectorsandEmployees)toreportconcernsaboutunethicalbehaviour,actualorsuspectedfraudorviolationofCompany’sCodeofGovernanceandEthicsandalsoprovidefor direct access to the chairman ofAudit Committee in exceptional cases.The policy provide adequate safeguardagainst victimization of Director(s)/employee(s). The ProtectedDisclosures,ifanyreportedunderthispolicywouldbe appropriately and expeditiouslyinvestigated by Mr. Benni Joseph,Independent Director, being Chairmanof the Audit Committee withoutinterference from any BoardMembers.Your company hereby affirms thatno Director/employee/personnel hasbeen denied access to the Chairmanof the Audit Committee and that nocomplaints were received during the

year.TheVigilpolicyhasbeendisclosedon the Company’s website http://www.kitexgarments.com/.Thepolicyisinlinewith the Company’s Code of Conduct,Vision and Values, and forms part ofgoodCorporateGovernance.

7.4. POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

As the Company doesn’t have anysubsidiariesundertheprovisionsoftheCompanies Act, 2013 read with SEBI(Listing Obligations and DisclosureRequirements) Regulations, 2015, therequirement for adopting the Policyfor determining ‘material’ subsidiariesdoesn’t applicable in the case of theCompany.Hencewehavenotshowntheweblinkofthepolicyinthisreport.

7.5. DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed theAccounting Standards specified underSection 133 of theCompaniesAct, 2013read with Rule 7 of the Companies(Accounts) Rules, 2014 to the extentapplicable, in the preparation of thefinancialstatements.

7.6. PREVENTION OF INSIDER TRADING

Your company had adopted a Codeof conduct as per SEBI (Prohibition ofInsider Trading) Regulations, 2015 asamendedfromtimetotime,inordertopreservetheconfidentialityandpreventmisuse of unpublished price sensitiveinformation. All Directors, DesignatedEmployeeswhocouldhaveaccesstotheUnpublishedPriceSensitiveInformationof the Company are governed by thisCode. The main object of the Codeis to intimate all insiders a guideline,which they should follow in letter andspirit,whiletradingintargetcompany’ssecurities.Duringtheyearunderreview,theCompanyhadmadeduecompliancewithSEBI(ProhibitionofInsidertrading)Regulations,2015.

7.7. PROCEEDS FROM PUBLIC ISSUES, RIGHTS ISSUES, PREFERENTIAL ISSUES, ETC.

During the year under review, theCompany has not raised any proceedsby way of public issue, rights issueor preferential issue. But Board ofDirectors has recommended subject totheshareholdersapprovalattheensuingAnnualGeneralMeeting,forBonusissueofshares intheratio2:5 ie.,Twosharesforevery5sharesheldbythemasontherecord.

7.8. DETAILS OF COMPLIANCE WITH MANDATORY REQUIREMENTS

The Company has complied withall mandatory requirements laiddown under the provision of SEBI(Listing Obligations and DisclosureRequirements)Regulations,2015.

7.9. ADOPTION OF THE DISCRETIONARY REQUIREMENTS.

SEBI new listing regulations states thatthe non mandatory requirements maybeimplementedasperthediscretionofthe Company. Details of compliance ofnon-mandatory requirementsare listedbelow:

7.9.1. MODIFIED OPINION IN AUDITORS REPORT

During thecurrent financialyear,there are no audit qualificationsin the financial statements ofthe Company. The Companycontinues to adopt appropriatebest practices in order to ensureunqualifiedfinancialstatements.

8. REPORT ON CORPORATE GOVERNANCE

ThisCorporateGovernanceReportformspartof the Annual Report. The Company is fullycompliant with all the provisions of ListingRegulations,asapplicabletotheCompany.

9. CERTIFICATE FROM CEO/CFO

The CEO certification of the financialstatementsfortheyearhasbeensubmittedto


theBoardofDirectors, in itsmeetingheldonApril 28, 2017 as requiredunder SEBI (ListingObligations and Disclosure Requirements)Regulations.

10. Details of the Directors seeking appointment/reappointment have been provided in the Notice of the Annual General Meeting.

11. OBSERVANCE OF THE SECRETARIAL STANDARDS ISSUED BY THE ICSI.

The InstituteofCompanySecretariesof India(ICSI), one of the India’s premier professionalbodies has issued Secretarial Standards onimportant aspects like Board Meetings, andGeneral Meetings under series SS-1 and SS-2which came into force from 1st July, 2015upon endorsement of the same by MinistryofCorporateAffairsbynotificationandyourcompany adheres to these standards whereever applicable. The other standards likePaymentofDividend,MaintenanceofRegistersanRecords,TransmissionofShares,PassingofresolutionsbyCirculation,AffixingofCommonSeal andBoard’s reportwhich are as ondateofreportRecommendatoryinnaturearealsoadheredtovoluntarily.

12. OTHER USEFUL SHAREHOLDERS INFORMATION

12.1 GREEN INITIATIVE

The Company’s philosophy focuses onmaking the environment greener forthe benefit of prosperity. To supportthe Green Initiative, members (holdingshares in electronic form) who havenot registered their email addresses,are requestedtoregister thesamewiththeir Depository Participants.MembersholdingsharesinphysicalmodearealsorequestedtoregistertheiremailIDwiththe Registrar and Share Transfer AgentoftheCompany.

12.2 CHANGE IN ADDRESS AND FINISHING BANK DETAILS

Shareholdersholdingshares inphysicalform should notify to the Company’sRTA, change in their address with PINCodenumberandBankAccountdetails

bywrittenrequestunderthesignaturesofsole/firstjointholder.

Beneficial Owners of shares in de-matform should send their instructionsregardingchangeofaddress,bankdetails,nomination, power of attorney, changein E-mail address, etc., directly to theirDP,asthesaidrecordsaremaintainedbytheDPs.

To prevent fraudulent encashmentof dividend warrants, Shareholders,who hold shares in physical form,should provide their Bank Accountdetails to the Company’s RTA, whilethose Shareholders who hold sharesin dematerialised form should providetheir Bank Account details to their DP,forprintingofthesameonthedividendwarrants.

12.3 REGISTERING OF EMAIL ADDRESS

Shareholders, who have not yetregistered their E-mail address foravailingthefacilityofE-communication,are requested to register the samewith the Company’s RTA (in case theshares are held in physical form) ortheirDP (in case the sharesareheld indematerialisedform)soastoenabletheCompanytoservethemfast.

DECLARATION – CODE OF CONDUCT

I,SabuM.Jacob,ManagingDirectorofKitexGarmentsLimited,declarethatallthemembersoftheBoardofDirectorsandSeniorManagementhave,fortheyearendedMarch31,2017affirmedcompliancewiththeCodeofConductlaiddownfortheBoardofDirectorsandSeniorManagementintermsofRegulation26(3)readwithScheduleVofSEBI(ListingObligationsandDisclosureRequirements)Regulations,2015.

For Kitex Garments Limited

Sabu M. JacobApril28,2017 Chairman&ManagingDirectorKizhakkambalam (DIN:00046016)

CERTIFICATE ON CORPORATE GOVERNANCE

TothemembersofKitex Garments Limited

1. We have examined the compliance ofconditionsofCorporateGovernancebyKitex Garments Limited for the year ended 31st March, 2017 as stipulated in Regulation 17 to27 and clause (b) to (i) of Regulation 46 (2),ScheduleVandScheduleIIoftheSecuritiesandExchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations,2015.

2. The compliance of conditions of CorporateGovernance is the responsibility of theManagement. Our examination has beenlimited to a review of the procedures andimplementation thereof adopted by theCompany for ensuring compliance withthe conditions of Corporate Governance asstipulated above. It is neither an audit noran expression of opinion on the financialstatementsoftheCompany.

3. In our opinion and to the best of ourinformationandaccordingtotheexplanationsgiventous,andbasedontherepresentationsmade by theDirectors and themanagement,we certify that the Company has compliedwith theconditionsofCorporateGovernanceasstipulatedinRegulation17to27andclause(b) to (i)ofRegulation46 (2), ScheduleVandSchedule II of the Securities and ExchangeBoard of India (Listing Obligations andDisclosureRequirements)Regulations,2015.

4. We further state that such compliance isneitherasassuranceastothefutureviabilityof the Company nor of the efficiency oreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.


Kochi28.04.2017

CS. Sivakumar P.ManagingPartner

CPNo:2210,FCS:3050


To the Members of Kitex Garments Limited,Kizhakkambalam

Report on the Standalone Financial Statements

We have audited the accompanying standalonefinancialstatementsofKitexGarmentsLimited(“theCompany”),whichcomprisetheBalanceSheetasat31stMarch,2017,theStatementofProfitandLoss,theCashFlowStatementfortheyearthenended,andasummaryof the significant accountingpolicies andotherexplanatoryinformation.

Management’s Responsibility for the Standalone Financial Statements

TheCompany’sBoardofDirectorsisresponsibleforthemattersstatedinSection134(5)oftheCompaniesAct,2013(“theAct”)withrespecttothepreparationofthesestandalonefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformance and cash flows of the Company inaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecified under Section 133 of the Act, read withRule7oftheCompanies(Accounts)Rules,2014.Thisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsof the Act for safeguarding of the assets of theCompany and for preventing and detecting fraudsandotherirregularities;selectionandapplicationofappropriate accounting policies; making judgmentsand estimates that are reasonable and prudent;and design, implementation and maintenance ofadequate internal financial controls, that wereoperatingeffectively for ensuring theaccuracyandcompletenessoftheaccountingrecords,relevanttothe preparation and presentation of the financialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s Responsibility

Ourresponsibility is toexpressanopiniononthesestandalonefinancialstatementsbasedonouraudit.

WehavetakenintoaccounttheprovisionsoftheAct,the accounting andauditing standards andmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.

We conducted our audit in accordance with theStandards on Auditing specified under Section143(10)of theAct. ThoseStandards require thatwecomply with ethical requirements and plan andperform the audit to obtain reasonable assuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtainaudit evidence about the amounts and disclosuresinthefinancialstatements.Theproceduresselecteddepend on the auditor’s judgment, including theassessment of the risks of material misstatementof the financial statements, whether due to fraudor error. In making those risk assessments, theauditorconsiders internalfinancialcontrolrelevantto the Company’s preparation of the financialstatementsthatgiveatrueandfairviewinordertodesignauditprocedures thatareappropriate in thecircumstances.AnauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebyCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthestandalonefinancialstatements.

Opinion

In our opinion and to the best of our informationand according to the explanations given to us, the

aforesaid standalone financial statements give theinformation required by the Act in themanner sorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheCompanyasat31stMarch,2017,anditsprofitanditscashflowsfortheyearendedonthatdate.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’sReport)Order,2016(“theOrder”),issuedbytheCentralGovernmentof India intermsofsub-section(11)ofsection143oftheCompaniesAct,2013,wegiveinthe“AnnexureA”,astatementonthemattersspecifiedinparagraphs3and4oftheOrder,totheextentapplicable.

2. As required by Section 143 (3) of the Act, wereportthat:

(a) We have sought and obtained all theinformation and explanationswhich tothe best of our knowledge and beliefwerenecessary for thepurposesofouraudit.

(b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompany so far as it appears fromourexaminationofthosebooks.

(c) The Balance Sheet, the Statement ofProfit and Loss, and the Cash FlowStatementdealtwithbythisReportareinagreementwiththebooksofaccount.

(d) Inouropinion,theaforesaidstandalonefinancial statements comply with theAccounting Standards specified underSection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.

(e) On the basis of the writtenrepresentations received from the

Independent Auditor’s Report


directorsason31stMarch,2017takenonrecord by the Board of Directors, noneofthedirectorsisdisqualifiedason31stMarch, 2017 from being appointed as adirectorintermsofSection164(2)oftheAct.

(f) With respect to the adequacy ofinternalfinancialcontrolsoverfinancialreporting of the Company and theoperatingeffectivenessofsuchcontrols,refertoourseparateReportin“AnnexureB”.

(g) With respect to the other matters tobe included in the Auditor’s Reportin accordance with Rule 11 of theCompanies (Audit and Auditors) Rules,2014, in our opinion and to the best ofour information and according to theexplanationsgiventous:

i. TheCompanyhasdisclosedtheimpact of pending litigationson its financial position in itsfinancial statements – ReferNoteNo32.1tothestandalonefinancialstatements.

ii. TheCompanydidnothaveanylong-term contracts includingderivativecontractsforwhichthere were any materialforeseeablelosses.

iii. There has been no delayin transferring amounts,required to be transferred,to the Investor Educationand Protection Fund by theCompany.

iv. The Company has providedrequisite disclosures in thefinancial statements as toholdingsaswellasdealings inSpecified Bank Notes duringtheperiodfrom8thNovember,2016 to 30th December, 2016.Basedonauditproceduresandrelying on the managementrepresentation, we reportthat the disclosures are in

accordance with books ofaccount maintained by theCompany and as produced tousbytheManagement–ReferNoteNo17.3tothestandalonefinancialstatements.

For VARMA & VARMA(FRN:004532S)

Sd/-V. Sathyanarayanan

PartnerCHARTEREDACCOUNTANTS

MembershipNo.21941Place:KizhakkambalamDate:28thApril,2017

“ANNEXURE A” REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING “REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31st MARCH 2017

1.(a) The Company is maintaining proper recordsshowingfullparticulars,includingquantitativedetailsandsituationoffixedassets.

(b) We are informed that fixed assets have beenphysically verified by the management atreasonable intervals and that no materialdiscrepancieswerenoticedonsuchverification.

(c)Accordingtotheinformationandexplanationsgiven to us, the records of the Companyexamined by us and the confirmation fromfinancial lender in respect of title deedsdepositedwiththemandbasedonthedetailsof immovable properties furnished to us bytheCompany,thetitledeedsoftheimmovableproperties are held in the name of theCompany.

2. Weareinformedthatthephysicalverificationofinventoryhasbeenconductedatreasonableintervals by the management and that nomaterial discrepancies were noticed on suchverification.

3. Accordingtotheinformationandexplanationsgiven to us and the records of the companyexaminedbyus,theCompanyhasnotgrantedanyloans,securedorunsecuredtocompanies,firms, Limited Liability Partnerships or otherparties covered in the register maintainedunder Section 189 of the Act. Accordingly,the reporting requirementsunderclauses (iii)(a) to (c) of paragraph 3 of theOrder arenotapplicable.

4. Accordingtotheinformationandexplanationsgiven to us and the records of the companyexaminedbyus,thecompanyhasnotgrantedany loans or given any guarantee or securityforwhichtheprovisionsofsections185and186oftheActareapplicableandthecompanyhascompliedwiththeprovisionsofsection186oftheActinrespectofinvestmentsmadebyit.

5. The Company has not accepted any depositsfromthepublicduringtheyearandhence,thedirectivesissuedbytheReserveBankofIndiaandtheprovisionsofSections73to76oranyother relevant provisions of the Act and therulesframedthereunderarenotapplicable.

6. Tothebestofourknowledgeandaccordingtothe informationandexplanationsgiventous,the Central Government has not prescribedthemaintenanceofcostrecordsunderSection148(1)oftheActforthecompanyatthisstage.

7.(a) As per the information and explanationsgiventousandaccordingtoourexaminationof therecordsof theCompany, theCompanyhas been generally regular in depositingundisputedstatutoryduesincludingprovidentfund, employees’ state insurance, income tax,sales tax, service tax, duty of customs, dutyof excise, value added tax, cess and otherstatutory dues as applicable to theCompanytotheappropriateauthoritiesduringtheyear,exceptforaninstanceofdelayinremittanceofincometaxdeductedatsourceandcorporatedividendtax.


Therearenoarrearsofundisputedstatutoryduesoutstandingasonthelastdayofthefinancialyearforaperiodofmorethansixmonthsfromthedateonwhichtheybecamepayable.

(b) AccordingtotheinformationandexplanationsgiventousandtherecordsoftheCompanyexaminedbyus,therearenodisputedamountsduetobedepositedunderSalesTax,ServiceTax,DutyofExciseandValueAddedTaxandthefollowingdisputeddemandsofIncomeTaxandDutyofCustomshavenotbeendepositedwiththeauthoritiesasat31stMarch2017:

Name of the statute

Nature of the dues Amount (in `)

Period to which the amount relates

(Financial year)

Forum where the dispute is pending

TheCustomsAct,1962

Customsdutyandinterest

22,026,174/-(NetofRs.9,931,229/-paidunderprotest)

1996-97to1997-98 HonourableSupremeCourtofIndia

TheCustomsAct,1962

Customsdutyandinterest

207,462,031/-* 2011-12to2016-17 HonourableHighCourtofKerala

IncomeTaxAct,1961

Penalty 3,391,894/- 2010-11 CommissionerofIncomeTax(Appeals)

*Includesamountsinrespectofwhichthecompanyhasfurnishedbankguaranteetothecustomsauthority.

8. InouropinionandaccordingtotheinformationandexplanationsgiventousandtherecordsoftheCompanyexaminedbyus,theCompanyhasnotdefaultedinrepaymentofloansandborrowingstothebanks.ThecompanyhasnottakenanyloansorborrowingfromFinancialInstitutionsandGovernmentorraisedanymoneybywayofissueofdebentures.

9. AccordingtotheinformationandexplanationsgiventousandtherecordsoftheCompanyexaminedbyus,nomoneyhasbeenraisedbywayofinitialpublicofferorfurtherpublicoffer(includingdebtinstruments)andthetermloanavailedbytheCompanyhavebeenappliedforthepurposeforwhichtheloanwasobtained.

10. During the course of our examination of the books and records of the Company carried out inaccordancewiththegenerallyacceptedauditingpracticesinIndia,andaccordingtotheinformationandexplanationsgiventous,wehaveneithercomeacrossanyinstanceofmaterialfraudbytheCompanyorontheCompanyby itsofficersoremployees,noticedor reportedduring theyear,norhavebeeninformedofanysuchcasebytheManagement.

11. As stated inNoteNo31.2 to the standalone financial statements,necessaryapproval for increase inremuneration ofwhole time director Rs.286,171/- is being sought for at the ensuing Annual GeneralMeeting.AccordingtotheinformationandexplanationsgiventousandtherecordsoftheCompanyexaminedbyus,managerialremunerationhasbeenpaidorprovidedinaccordancewiththerequisiteapprovalsmandatedbytheprovisionsofsection197readwithScheduleVtotheAct.

12. TheCompany isnot aNidhi company.Accordingly, the reporting requirementsunder clause (xii) ofparagraph3oftheOrderarenotapplicable.

13. AccordingtotheinformationandexplanationsgiventousandtherecordsoftheCompanyexaminedbyus,alltransactionswiththerelatedpartiesareincompliancewithSections177and188oftheActwhereapplicableandthedetailsof suchtransactionshavebeendisclosed inNoteNo31 to thestandalonefinancialstatementsasrequiredbytheapplicableaccountingstandards.

14. Accordingtotheinformationandexplanationsgiven tous andbasedon the examinationofthe records of the Company, the Companyhas not made any preferential allotment orprivateplacementof sharesor fullyorpartlyconvertibledebenturesduringtheyear.

15. Accordingtotheinformationandexplanationsgiven to us and the records of the Companyexaminedbyus,theCompanyhasnotenteredintoanynon-cash transactionswithdirectorsor persons connected with the directors.Accordingly, thereportingrequirementunderclause (xv)ofparagraph3of theOrder isnotapplicable.

16. Accordingtotheinformationandexplanationsgiven to us and the records of the Companyexaminedbyus,theCompanyisnotrequiredto be registered under Section 45-IA of theReserve Bank of India Act, 1934. Accordingly,the reporting requirement under clause (xvi)ofparagraph3oftheOrderisnotapplicable.


Sd/-V. Sathyanarayanan




“ANNEXURE B” REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING “REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31st MARCH 2017

Report on the Internal Financial Controls under Clause (i) of sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

Wehaveauditedtheinternalfinancialcontrolsoverfinancial reporting ofKitexGarments Limited (“theCompany”)asofMarch31,2017 inconjunctionwithourauditof the standalone financial statementsoftheCompanyfortheyearendedonthatdate.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible forestablishing and maintaining internal financialcontrolsbasedontheinternalcontroloverfinancialreporting criteria established by the Companyconsidering the essential components of internalcontrol stated in the Guidance Note on Audit ofInternalFinancialControlsOverFinancialReportingissued by the Institute of Chartered Accountantsof India. These responsibilities include the design,implementation and maintenance of adequateinternal financial controls that were operatingeffectively for ensuring the orderly and efficientconduct of its business, including adherence to theCompany’s policies, the safeguarding of its assets,the prevention and detection of frauds and errors,the accuracy and completeness of the accountingrecords, and the timely preparation of reliablefinancialinformation,asrequiredundertheAct.


Our responsibility is to express an opinion on theCompany’s internalfinancialcontrolsoverfinancialreportingbasedonouraudit.Weconductedourauditin accordancewith theGuidanceNote onAudit of

InternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,issuedbytheICAIanddeemedtobeprescribedunderSection143(10)oftheAct,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditof InternalFinancialControlsand,bothissued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Noterequire that we comply with ethical requirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.

Ouraudit involvesperformingprocedurestoobtainaudit evidence about the adequacy of the internalfinancialcontrolssystemoverfinancialreportingandtheir operating effectiveness. Our audit of internalfinancial controls over financial reporting includedobtaining an understanding of internal financialcontrols over financial reporting, assessing the riskthat a material weakness exists, and testing andevaluating the design and operating effectivenessof internal control based on the assessed risk.The procedures selected depend on the auditor’sjudgement, including theassessmentof the risksofmaterial misstatement of the financial statements,whetherduetofraudorerror.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion on the Company’s internal financialcontrolssystemoverfinancialreporting.

Meaning of Internal Financial Controls Over Financial Reporting

Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassurance regarding the reliability of financialreportingandthepreparationoffinancialstatementsfor external purposes in accordancewith generallyacceptedaccountingprinciples.Acompany’sinternalfinancial control over financial reporting includesthose policies and procedures that (1) pertain tothe maintenance of records that, in reasonabledetail, accuratelyand fairly reflect the transactionsand dispositions of the assets of the company; (2)provide reasonable assurance that transactionsare recorded asnecessary topermit preparationoffinancial statements in accordance with generally

acceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorisationsofmanagementanddirectorsofthecompany;and(3)providereasonableassurance regardingprevention or timelydetectionofunauthorisedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideof controls,materialmisstatementsdue toerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontrolover financial reporting may become inadequatebecauseofchangesinconditions,orthatthedegreeof compliancewith the policies or proceduresmaydeteriorate.

Opinion

In our opinion, the Company has, in all materialrespects, an adequate internal financial controlssystem over financial reporting and such internalfinancial controls over financial reporting wereoperating effectively as at March 31, 2017, basedon the internal control over financial reportingcriteria established by the Company consideringtheessential componentsof internal control statedintheGuidanceNoteonAuditofInternalFinancialControls Over Financial Reporting issued by theInstituteofCharteredAccountantsofIndia.


Sd/- V. Sathyanarayanan




Particulars Note No. As at 31st March, 2017

(`)As at 31st March, 2016

(`)I. EQUITY AND LIABILITIES

(1) Shareholders' Funda) Sharecapital 3 47,500,000 47,500,000b) Reservesandsurplus 4 4,508,979,509 3,626,448,922

Sub-Total 4,556,479,509 3,673,948,922 (2) Non-Current Liabilities

a) Long-termborrowings 5 31,428,705 82,928,326b) Deferredtaxliabilities(Net) 6 176,398,195 206,064,695c) Long-termprovisions 7 74,158,788 45,692,937

Sub-Total 281,985,688 334,685,958 (3) Current Liabilities

a) Short-termborrowings 8 - 835,248,182b) TradePayables 9

i)totaloutstandingduesofmicroenterprisesandsmallenterprises;and 11,153,071 4,355,163ii)totaloutstandingduesofcreditorsotherthanmicroenterprisesandsmallenterprises 442,349,054 411,542,963

c) Othercurrentliabilities 10 92,504,068 271,757,347d) Short-termprovisions 11 160,081,730 256,646,605

Sub-Total 706,087,923 1,779,550,260 TOTAL 5,544,553,120 5,788,185,140 II. ASSETS

(1) Non-current assets(a) Fixedassets 12

i) Tangibleassets(Property,PlantandEquipment) 1,609,517,471 1,728,354,999ii) Intangibleassets 5,395,669 1,532,980iii) Capitalwork-in-progress 136,778,769 1,446,971iv) Intangibleassetsunderdevelopment 19,760,547 10,983,017

(b) Non-currentinvestments 13 117,053,718 46,153,718(c) Longtermloansandadvances 14 106,588,102 85,538,625

Sub-Total 1,995,094,276 1,874,010,310 (2) Current assets

a) Inventories 15 404,971,707 130,231,927b) Tradereceivables 16 1,311,499,004 960,064,467c) Cashandcashequivalents 17 1,343,955,427 2,499,127,677d) Short-termloansandadvances 18 40,772,395 28,898,039e) Othercurrentassets 19 448,260,311 295,852,720

Sub-Total 3,549,458,844 3,914,174,830 TOTAL 5,544,553,120 5,788,185,140 SignificantAccountingPoliciesandNotesonAccounts 1-41

TheAccompanyingNotesareanintegralpartofthefinancialstatements.

As per our separate report of even date attached For and on behalf of the Board of Directors of Kitex Garments Limited

For VARMA & VARMA (FRN:004532S)

Sd/- Sd/- V. Sathyanarayanan Sabu M. Jacob Partner,CharteredAccountants Chairman,ManagingDirectorandChiefFinancialOfficer MembershipNo.21941 DIN:00046016 Sd/- Sd/- CA Benni Joseph A. BabuPlace:Kizhakkambalam Director CompanySecretaryDate:28thApril,2017 DIN:01219476

Balance Sheet as at 31st March, 2017


Particulars Note No.For the year ended

31st March, 2017 (`)

For the year ended 31st March, 2016

(`)

Revenue

I. Revenuefromoperations 20 5,459,013,150 5,458,166,796

II. Otherincome 21 19,977,082 198,166,178

III. Total revenue (I+II) 5,478,990,232 5,656,332,974

IV. Expenses

a. Costofrawmaterialsconsumed 22 2,109,616,146 2,142,435,750

b. Changesininventoriesoffinishedgoods,work-in-progressandStock-in-Trade 23 (157,574,001) (27,515,443)

c. Employeebenefitsexpense 24 918,285,778 836,172,488

d. Financecosts 25 92,668,158 158,610,800

e. Depreciationandamortisationexpense 26 203,627,653 212,731,264

f. Otherexpenses 27 885,354,999 623,348,165

Total expenses 4,051,978,733 3,945,783,024

V. Profit before Tax (III - IV) 1,427,011,499 1,710,549,950

VI. Tax expense

(1) Currenttax 531,270,000 609,400,000

(2) Deferredtax (29,666,500) (19,800,000)

VII. Profit after tax for the year (V - VI) 925,407,999 1,120,949,950

VIII. Earnings per equity share 28

Nominalvalueofshare`1/-(`1/-)

Basic/Diluted 19.48 23.60

SignificantAccountingPoliciesandNotesonAccounts 1-41





Statement of Profit and Loss for the year ended 31st March, 2017


1. Corporate Information

KitexGarments Limited is a Public Companyincorporated in India. Its shares are listed ontheBombayStockExchangeandtheNationalStock Exchange. The Company is engaged inthe manufacture of fabric and readymadegarments.

2. Basis of Preparation

2.1. Thefinancialstatementsofthecompanyhavebeenpreparedinaccordancewiththe Generally Accepted AccountingPrinciples in India (Indian GAAP). Thecompany has prepared these financialstatements to comply in all materialrespectswiththeCompanies(Accounts)Rules,2014,andtherelevantprovisionsoftheCompaniesAct,2013.Thefinancialstatements have been prepared on anaccrual basis and under the historicalcostconvention.Theaccountingpoliciesadopted in thepreparationof financialstatementsareconsistentwiththoseofpreviousyear.

2.2 Summary of Significant Accounting Policies

2.2.1 Basis of Accounting

The financial statements are preparedunder the historical cost convention inaccordancewiththeGenerallyAcceptedAccounting Principles in India and theprovisionsoftheCompaniesAct,2013.

Significant Accounting Policies and Notes on Accounts for the Financial year ended 31st March, 2017

2.2.2 Use of Estimates

Thepresentationoffinancialstatementsin conformity with the generallyaccepted accounting principles requireestimates and assumptions to bemadethat affect the reported amount ofassets and liabilities on thedate of thefinancial statements and the reportedamount of revenues and expensesduring the reporting period. Differencebetweentheactualresultandestimatesarerecognizedintheperiodinwhichtheresultsareknown/materialized.

2.2.3 Inventories

Inventories are valued at lower of costornetrealisablevalue.Forthispurpose,the cost of bought-out inventoriescomprise of the purchase cost of theitems,netofapplicabletax/dutycreditsand cost of bringing such items intothe factory on First-In, First-Out (FIFO)basis.Costof Inventory comprisesCostof Purchase, Cost of Conversion andother Costs incurred to bring them totheir respective present location andcondition. The net realizable value ofboughtout inventories is takenat theircurrent replacement value. The cost ofmanufactured inventories comprisesof the direct cost of productionplus appropriate fixed and variableproductionoverheads.

2.2.4 Revenue Recognition

Revenue is recognizedwhen significantrisksandrewardsofownershipofgoodshave been passed to the buyer. Exportincentives are recognized on exportson accrual basis, except when thereare significant uncertainties, based onthe estimated realisable value of suchentitlements.Otherincomeisrecognizedonaccrualbasis,exceptwhentherearesignificantuncertainties.

2.2.5 Tangible Assets (Property, Plant and Equipment)

Property, Plant and Equipmentare stated at cost less accumulateddepreciation and impairment in valueif any. Cost includes purchase price,(inclusive of import duties and non–refundable purchase taxes, afterdeducting tradediscountsandrebates),other costs directly attributable tobringing the asset to the location andconditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement and an initial estimate ofthe costs of dismantling, removing theitemandrestoringthesiteonwhichitislocated,ifany.

When parts of an item of property,plant and equipment have differentuseful lives, they are accounted for asseparate items (major components).

Notes


The cost of replacement spares/ majorinspection relating to property, plantandequipmentiscapitalizedonlywhenit is probable that future economicbenefitsassociatedwith thesewill flowtothecompanyandthecostoftheitemcanbemeasuredreliably.

The cost ofAssets not ready for use asat theBalanceSheetdatearedisclosedunderCapitalWork-In-Progress.

2.2.6 Intangible Assets

Intangible assets are recorded at thecost of acquisition of such assets andare carried at cost less accumulatedamortisationandimpairment,ifany.

2.2.7 Leased Assets

OperatingLeases:Rentalsarerecognisedas an expense with reference to leasetermsandotherconsiderations.

Finance Leases: The lower of the fairvalueoftheleasedassetsattheinceptionof the lease and present value of theminimum lease rentals is capitalized asfixedassetswithcorrespondingamountshown as lease liability. The principalcomponentintheleaserentalisadjustedagainsttheleaseliabilityandtheinterestcomponentischargedtotheStatementofProfitandLoss.

2.2.8 Depreciation and Amortisation

Depreciation on Fixed Assets isprovidedonStraightLineMethodattheuseful lives based on a review by themanagementattheyear-endasunder:

a) Assets (other than capitalspares)- based on useful livesprescribed under Schedule II oftheCompaniesAct,2013

b) Capital Spares- based on usefullife of each replaced part (2 - 5years).

Software costs treated asIntangible Assets is amortisedoveraperiodofthreeyears.

2.2.9 Foreign Currency Transactions

Transactions denominated in foreigncurrency are recorded at the rate ofexchange prevailing on the date oftransaction.

Monetary assets and liabilitiesdenominated in foreign currenciesoutstanding at the year end are re-statedattherateofexchangeprevailingat the year-end and the gain or loss, isrecognized in the Statement of ProfitandLoss.

Exchange differences arising on actualpayments/ realizations and year-endrestatements are recognized in theStatementofProfitandLoss.

2.2.10 Forward Contracts

The Company enters into foreignexchange forward contracts to hedgeits exposure to movements in foreignexchange rates. The company doesnot use the foreign exchange forwardcontracts for trading or speculationpurposes.

Premium or discount arising at theinception of a forward exchangecontract is amortised as expense orincome over the life of the contract.ExchangedifferencesonsuchcontractsarerecognisedintheStatementofProfitandLossinthereportingperiodinwhichtheexchangerateschange.

2.2.11 Government Grants

Government Grants are recognizedwhere there is reasonable assurancethat the Company has complied withthe conditions attached to them andthat the Grant will be received. Grantrelating to depreciable fixed assets isreduced from the gross value of FixedAssets.Grants/Subsidiesinthenatureofrevenue are recognized as income overthe period necessary to match themwith the related costs which they areintendedtocompensate.

2.2.12 Investments

Long-term Investments made bythe Company are stated at cost andprovisionfordiminutioninthevalueoflong-term investments is made only ifsuchadeclineisotherthantemporary.

2.2.13 Employee Benefits

ShortTermEmployeeBenefits

All employee benefits payable whollywithin twelve months of renderingthe service are classified as short-termemployeebenefitsandrecognizedintheperiod in which the employee renderstherelatedservice.

DefinedContributionPlans

The contributions remitted togovernment administered ProvidentandEmployeeStateInsuranceonbehalfof its employees in accordance withthe relevant statute are charged to theStatement of Profit and Loss as andwhendue.TheCompanyhasnofurtherobligationsforfutureProvident/Pensionfund benefits other than its monthlycontributions.

DefinedBenefitPlans

Thenetpresentvalueof theobligationfor gratuity benefits as determinedon independent actuarial valuation,conductedannuallyusingtheprojectedunit credit method, as adjusted forunrecognized past services cost, if any,is recognised in the books of account.ActuarialgainsandlossesarerecognisedinfullintheStatementofProfitandLossfortheperiodinwhichtheyoccur.

LongTermEmployeeBenefits:

CompensatedAbsences:

The company has a scheme forcompensated absences for employees,the liability of which is determined onthe basis of an independent actuarialvaluation carried out at the endof theyear, using the projected unit credit


method. Actuarial gains and losses arerecognized in full in the Statement ofProfit andLoss for theperiod inwhichtheyoccur.

Post-employment and other long termemployeebenefitsarerecognisedasanexpense in theStatementofProfit andLossfortheyearinwhichtheemployeehas rendered services. The expensesare recognised at the present value ofthe amount payable determined usingactuarialvaluationtechniques.

2.2.14 Borrowing Costs

Borrowing Costs directly attributableto the acquisition, construction andproduction of qualifying assets arecapitalised as part of the Cost of suchassets. All other borrowing costs arecharged to the StatementofProfit andLoss.

2.2.15 Taxation

Income tax is accounted in accordancewithAccountingStandardonAccountingfor Taxes on Income (AS-22), whichincludes current taxes and deferredtaxes.

Current tax is provided on the basis ofestimatedtaxableincomeinaccordancewiththeIncomeTaxAct,1961usingtheapplicabletaxratesandtaxlaws.

Deferred tax assets and liabilitiesarising on account of timing differenceand which are capable of reversal insubsequentperiods,arerecognizedusingthetaxratesandtaxlawsthathavebeenenactedor substantively enactedasontheBalanceSheetdate.

Deferredtaxassetsarerecognisedonlytotheextentthereisreasonablecertaintythat sufficient future taxable incomewill be available, except that deferredtax assets arising due to unabsorbeddepreciationandlossesarerecognisedifthereisavirtualcertaintythatsufficientfuture taxable incomewill be availabletorealisethesame.

2.2.16 Earnings per share

Basic/dilutedearningspershareiscalculatedby dividing the net profit/loss for the yearattributable to equity shareholders (afterdeductingattributabletaxes)bytheweightedaverage number of equity shares/dilutedpotential equity shares outstanding as at theendoftheyear,asthecasemaybe.

2.2.17 Impairment of Assets

TheCompanyassessesat eachBalanceSheetdate whether there is any indication that anassetmaybe impaired.Anasset is treatedasimpaired, when the carrying value of assetsexceeds its recoverable value. Based on suchassessment,impairmentlossifanyisrecognized

intheStatementofProfit&Lossfortheperiodinwhichtheassetisidentifiedasimpaired.Theimpairmentlossrecognisedinprioraccountingperiodsisreversediftherehasbeenachangeintheestimateofrecoverableamount.

2.2.18 Provisions, Contingent Liabilities and Contingent Assets.

Provisions are recognisedwhen the companyhas a present obligation as a result of apast event, for which it is probable that acash outflow will be required and a reliableestimate can be made of the amount of theobligation. Provisions are not discounted toitspresentvalueandaredeterminedbasedonmanagement estimate required to settle theobligation at the Balance Sheet date. Theseare reviewedat eachBalanceSheetdate andadjusted to reflect the correct managementestimates.

Contingent Liabilities are disclosedwhen thecompanyhasapossibleobligationorapresentobligationand it isprobable that a cash flowwillnotberequiredtosettletheobligation.

Contingent assets are neither recognized nordisclosedintheaccounts.


3. Share Capital

SI No.

ParticularsAs at 31st March, 2017


(`)

a. Authorised

250,000,000(250,000,000)Equitysharesof`1/-(`1/-)each 250,000,000 250,000,000

b. Issued, Subscribed and fully paid up


c. Reconciliation of shares outstanding at the beginning and at the end of the reporting year.

ParticularsAs at 31st March, 2017 As at 31st March, 2016

No. of shares Amount (`) No. of shares Amount (`)

Atthebeginningoftheyear 47,500,000 47,500,000 47,500,000 47,500,000

Add:SharesIssuedduringtheyear NIL NIL NIL NIL

Outstandingattheendoftheyear 47,500,000 47,500,000 47,500,000 47,500,000

d. Terms/rights attached to equity shares.

Thecompanyhasonlyoneclassofsharesreferredtoasequityshareswithafacevalueof`1/-each.Eachholderofequityshareisentitledtoonevotepershare.ThecompanydeclaresandpaysdividendinIndianRupees.Thedividendproposed/declaredbytheBoardofDirectorsissubjecttoapproval/regularisationbytheshareholders'intheensuingAnnualGeneralMeeting.IntheeventofliquidationoftheCompany,theholdersofequityshareswillbeentitledtoreceivetheremainingassetsoftheCompany,afterdistributionofallpreferentialamounts,inproportiontothenumberofequitysharesheldbytheshareholders.

e. Details of shareholders holding more than 5% shares in the Company

Particulars

As at 31st March, 2017 As at 31st March 2016

No. of shares% of holding in the class


EquitySharesof`1eachfullypaid

KitexChildrenswearLimited 7,350,329 15.47% 7,350,329 15.47%

SabuMJacob 15,319,281 32.25% 3,464,631 7.29%

BobbyMJacob 4,487 0.01% 4,487 0.01%

SabuMJacobandBobbyMJacob - - 3,846,950 8.10%

BobbyMJacobandSabuMJacob - - 6,910,750 14.55%

RenjithaJoseph 3,091,500 6.51% 3,091,500 6.51%

GopinathanCK 2,788,025 5.87% 2,890,673 6.09%

CKGSuperMarketLimited 3,023,882 6.37% 3,023,882 6.37%

AsperrecordsoftheCompany,includingitsRegisterofMembersandotherdeclarationsreceivedfromthemregardingbeneficialinterest,theaboveshareholdingrepresentsbothlegalandbeneficialownershipofshares.


4. Reserves and surplus

SI No.



(`)

a. Capital Reserve

InvestmentSubsidy 2,210,000 2,210,000

b. General Reserve

BalanceasperlastFinancialStatements 486,500,000 286,500,000

Add:AmounttransferredfromsurplusintheStatementofProfitandLoss 1,600,000,000 200,000,000

Closingbalance 2,086,500,000 486,500,000

c. Surplus/(Deficit) in the Statement of Profit and Loss

BalanceasperlastFinancialStatements 3,137,738,922 2,302,543,797

Profitfortheyear 925,407,999 1,120,949,950

4,063,146,921 3,423,493,747

Less:Appropriations

Interimdividend(SeeNoteNo4.2below) 35,625,000 35,625,000

Proposedfinaldividend(SeeNoteNo4.1below) - 35,625,000

Taxonproposeddividendandinterimdividend 7,252,412 14,504,825

TransfertoGeneralReserve 1,600,000,000 200,000,000

TotalAppropriations 1,642,877,412 285,754,825

NetsurplusintheStatementofProfitandLoss 2,420,269,509 3,137,738,922

Total Reserves and surplus 4,508,979,509 3,626,448,922

4.1 TheBoardofDirectorsofthecompanyhasproposedfinaldividendof` 0.75(` 0.75)pershare,whichissubjecttoapprovalbytheshareholdersattheensuingAnnualGeneralMeeting.InaccordancewiththerevisedAccountingStandard-4‘ContingenciesandEventsoccurringaftertheBalanceSheetDate’(effectivefrom01.04.2016)proposeddividendfortheyearandCorporateDividendTaxthereonhasnotbeenrecognisedasadistributionofprofitinthecurrentyear’saccounts.

4.2 Duringtheyear,theBoardofDirectorsoftheCompanyhasdeclaredandpaidinterimdividendof` 0.75/-persharefortheFinancialYearendingon31stMarch,2017,whichissubjecttoregularisationoftheshareholdersintheensuingAnnualGeneralMeeting.

4.3 TheBoardofDirectorsofthecompanyhasproposedtoissuebonussharesintheratioof2:5totheshareholderswhichissubjecttoapprovaloftheshareholdersattheensuingAnnualGeneralMeeting.


5. Long-term borrowings

SI No.



(`)

a. TermLoans

IndianRupeeLoanFromStateBankofIndia(Secured)

IndianRupeeLoanFromAxisBankLimited(Secured)

31,428,705-

82,928,326-

31,428,705 82,928,326

b. CurrentmaturitiesoflongtermborrowingsdisclosedundertheheadOtherCurrentLiabilities(SeeNoteNo.10)

StateBankofIndia

AxisBankLimited

51,500,000-

181,494,904

1,211,557

c. TermsofRepaymentsofIndianRupeeTermLoans

NameoftheBank StateBankofIndia

TypeofLoan TermLoan

Amountsanctioned/availed(`)Sanctioned

` 820,000,000(Availed`521,094,096/-)

Sanctioned-`25,000,000/-

(Availed`24,668,462/-)


(Availed`108,534,611/-)


(Availed`57,664,538/-)

CurrentInterestrateasatyearend Nil(11.8%) 11.15%(11.7%) 11.15%(11.7%) 11.15%(11.7%)

Detailsofrepayment Theloanhasbeenrepaidinfullduring

theyear

First35months:`400,000/-

Next22months:`500,000/-

First40months:`2,500,000/-

Next15months`3,500,000/-

Next5months:`4,200,000/-


Next10months:`1,500,000/-

NameoftheBank AxisBankLimited

TypeofLoan VehicleLoan

Amountsanctioned/availed(`) ` 1,350,000/- ` 1,350,000/- ` 1,228,000/- ` 890,000/-

CurrentInterestrateasatyearend Nil(11.01%) Nil(11.01%) Nil(11.01%) Nil(11.01%)


theyear

Theloanhasbeenrepaidinfullduring

theyear


theyear


theyear

5.1 TermsloansfromSBIaresecuredbyfirstchargeovertheassetscreatedoutofbank'sfinance,byequitablemortgageover25.44acresoflandandbuildingbelongingtothecompanyandbypersonalguaranteeofManagingDirector.

5.2 ThevehicleloansfromAxisBankLimitedissecuredbywayofhypothecationofvehiclesacquiredbyusingtheloan.


6. Deferred tax liabilities (Net)

SI No.



(`)

a. Deferred Tax Liability

Onexcessofnetbookvalueoverincometaxwrittendownvalueoffixedasset 212,691,833 222,991,833

GrossDeferredTaxLiability 212,691,833 222,991,833

b. Deferred Tax Asset

OnProvisions/otherdisallowances 36,293,638 16,927,138

GrossDeferredTaxAsset 36,293,638 16,927,138

Net Deferred Tax Liability 176,398,195 206,064,695

7. Long-term provisions

SI No.



(`)

a. Provision for Employee benefits (See Note 7.1 below) 74,158,788 45,692,937

74,158,788 45,692,937

7.1

a.

Disclosures required under Accounting Standard 15 - “Employee Benefits”

Defined Contribution Plans

DuringtheyearthefollowingamountshavebeenrecognizedintheStatementofProfitandLossonaccountofdefinedcontributionplans:

SI No.



(`)

(i) EmployerscontributiontoProvidentFund 47,558,415 44,135,664

(ii) EmployerscontributiontoEmployee’sStateInsurance 14,624,652 14,151,535

62,183,067 58,287,199

b. Defined Benefit Plans - Gratuity: Unfunded Obligation

ThefollowingtablesummarizesthecomponentsofexpenserecognizedintheStatementofProfitandLossandtheamountsrecognizedintheBalanceSheet.

SI No.



(`)

1. Financial Assumptions at the Valuation Date:

a. DiscountRate(p.a) 7.45% 7.80%

b. ExpectedRateofReturnonAssets(p.a) 0.00% 0.00%

c. SalaryEscalationRate*(p.a) 7.00% 7.00%

d. Mortalityrate IndianAssuredLivesMortality(2006-08)

Ulttable

IndianAssuredLivesMortality(2006-08)

Ulttable


2. Expense Recognized in Statement of Profit and Loss:

a. CurrentServiceCost 12,813,300 10,954,875

b. InterestonDefinedBenefitObligation 4,692,830 3,581,880

c. NetActuarialLosses/(Gains)RecognizedinYear (1,617,689) 2,752,668

d. PastServiceCost - -

Total amount included in “Employee benefits expense” (Note 24) 15,888,441 17,289,423

3. Net (Asset)/Liability recognised in the balance sheet as at year end:

NetLiabilityisbifurcatedasfollows:

Current 4,253,552 3,316,513

NonCurrent 56,164,017 45,692,937

Net Liability 60,417,569 49,009,450

4. Change in Defined Benefit Obligation:

a. OpeningDefinedBenefitObligation 49,009,450 35,374,677

b. CurrentServiceCost 12,813,300 10,954,875

c. InterestCost 4,692,830 3,581,880

d. ActuarialLosses/(Gain) (1,617,689) 2,752,668

e. BenefitsPaid (4,480,322) (3,654,650)

f. Closing Defined Benefit Obligation 60,417,569 49,009,450

g. ContributionsbyEmployer 4,480,322 3,654,650

h. BenefitsPaid (4,480,322) (3,654,650)

i. ExpectedEmployer'sContributionNextYear 4,253,552 3,316,513

5. Details of Present Value of Unfunded Obligations as at year end is under:

31st March, 2017 (`)

31st March, 2016 (`)

31st March, 2015 (`)

31st March, 2014 (`)

31st March, 2013 (`)

60,417,569 49,009,450 35,374,677 25,382,535 27,483,858

* The assumption of future salary increases takes into account inflation, seniority, promotions and other relevant factors such as supply and demand in theemploymentmarket.

Theabovedisclosuresarebasedoninformationfurnishedbytheindependentactuaryandrelieduponbytheauditors.


c. Long term employee benefit - Compensated absences : Unfunded obligation

SI No.


(`)

1. FinancialAssumptionsattheValuationDate:

a. DiscountRate(p.a) 7.45%

b. ExpectedRateofReturnonAssets(p.a) 0.00%

c. SalaryEscalationRate*(p.a) 7.00%


Ulttable

* The assumption of future salary increases takes into account inflation, seniority, promotions and other relevant factors such as supply and demand in theemploymentmarket.


8. Short-term borrowings

SI No.



(`)

a. Workingcapitalloansfrombanks(Secured)(SeeNoteNo8.1below) - 835,248,182

- 835,248,182

8.1 Workingcapitalloansfrombanksaresecuredbyfirstchargeovertheentirecurrentassetsofthecompany,bothpresentandfuture,equitablemortgageover25.44acresoflandandbuildingbelongingtothecompanyandbypersonalguaranteeoftheManagingDirector.Theloansarerepayableondemand.

9. Trade Payables

SI No.



(`)

a. Totaloutstandingduesofmicroenterprisesandsmallenterprises;(SeeNoteNo9.1below) 11,153,071 4,355,163

b. Totaloutstandingduesofcreditorsotherthanmicroenterprisesandsmallenterprises 442,349,054 411,542,963

453,502,125 415,898,126


9.1 Thecompanyhastakenstepstoidentifythesupplierswhoqualifyunderthedefinitionofmicroandsmallenterprises,asdefinedundertheMicro,SmallandMediumEnterprisesDevelopmentAct2006.IntimationshavebeenreceivedfromsomeofthesuppliersregardingtheirstatusunderthesaidActasattheyear-end,basedonwhich,principalamountunpaidtosuchsuppliersasattheyearendaggregatingto` 11,153,071/-(` 4,355,163/-)hasbeenincludedunderTradepayables.Intheopinionofthemanagement,therearenooverduetotheabovepartiesandtheimpactofinterest,ifany,whichmaybepayableinaccordancewiththeprovisionsoftheAct,isnotexpectedtobematerial.Disclosuresrequiredundersection22oftheMicro,SmallandMediumEnterprisesDevelopmentAct,2006areasfollows:

SI No.



(`)

a. PrincipalAmountremainingunpaidbutnotdueasattheyearend. 11,153,071 4,355,163

b. Interestduethereonandremainingunpaidasattheyearend. NIL NIL

c. InterestpaidbytheCompanyintermsofSection16ofMicro,Small&MediumEnterprisesDevelopmentAct2006alongwiththeamountofpaymentmadetothesupplierbeyondtheappointeddayduringtheyear.

NILNIL

d. Interestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedunderMicro,SmallandMediumEnterprisesDevelopmentAct,2006.

NILNIL

e. Interestaccruedandremainingunpaidasattheyearend NIL NIL

f. Furtherinterestremainingdueandpayableeveninthesucceedingyear,untilsuchdatewhentheinterestduesasaboveareactuallypaid to thesmallenterprises, for thepurposeofdisallowanceofadeductibleexpenditureundersection23oftheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.

NILNIL

10. Other current liabilities

SI No.



(`)

a. Currentmaturitiesoflongtermborrowings(seenoteNo.5(b)above) 51,500,000 182,706,461

b. Interestaccruedanddueonborrowings 821,310 2,819,805

c. Advancefromcustomers 2,527,024 4,275,256

d. Unpaiddividend 6,597,893 7,356,078

e. Otherpayables

StatutoryDues 21,100,277 42,994,596

RetentionMoney 4,567,618 363,711

CreditorsforCapitalExpenditure 5,389,946 10,241,465

IntegratedSkillDevelopmentScheme(ISDS)ProjectExpensesPayable(Net) - 20,999,975

92,504,068 271,757,347


11. Short-term provisions

SI No.



(`)

a. ProvisionforEmployeebenefits(SeeNoteNo.7.1above) 8,485,339 3,316,513

b. Others

IncomeTax(Net) 151,596,391 210,452,680

Proposedfinaldividend(SeeNoteNo4.1above) - 35,625,000

CorporateDividendTax - 7,252,412

160,081,730 256,646,605


12. Fixed assets (Amountin`)

SI No.

NATURE OF ASSET

GROSS BLOCK DEPRECIATION/ AMORTIZATION NET BLOCK

As at 01.04.2016

Additions during the

year

Disposals/Adjustments

(See Note No.12.1 and 12.2 below)

As at 31.03.2017

As at 01.04.2016

Disposals/ Adjustments

During the Year

As at 31.03.2017

As at 31.03.2017

As at 31.03.2016

(i) Tangible assets (Property, Plant and Equipment)

1. FreeholdLand 48,982,920 - - 48,982,920 - - - - 48,982,920 48,982,920

(48,982,920) (-) (-) (48,982,920) (-) (-) (-) (-) (48,982,920) (48,982,920)

2. Building 635,293,246 - - 635,293,246 176,476,211 - 18,450,168 194,926,379 440,366,867 458,817,035

(634,085,287) (1,207,959) (-) (635,293,246) (155,605,898) (-) (20,870,313) (176,476,211) (458,817,035) (478,479,389)

3. Plant&Machinery 1,735,237,546 78,316,670 51,003,308 1,762,550,908 597,312,123 12,914,046 157,213,941 741,612,018 1,020,938,890 1,137,925,423

(1,692,745,233) (48,927,049) (6,434,736) (1,735,237,546) (437,029,399) (2,578,167) (162,860,891) (597,312,123) (1,137,925,423) (1,255,715,834)

4. Furniture&Fixtures 45,620,166 2,657,130 - 48,277,296 29,282,166 - 3,666,837 32,949,003 15,328,293 16,338,000

(43,841,573) (1,778,593) (-) (45,620,166) (24,888,835) (-) (4,393,331) (29,282,166) (16,338,000) (18,952,738)

5. Vehicles 56,356,886 6,510,113 3,584,707 59,282,292 30,109,514 3,584,707 6,184,474 32,709,281 26,573,011 26,247,372

(55,299,186) (1,057,700) (-) (56,356,886) (24,144,711) (-) (5,964,803) (30,109,514) (26,247,372) (31,154,475)

6. OfficeEquipments 30,309,186 9,462,145 764,739 39,006,592 25,565,897 - 2,563,884 28,129,781 10,876,811 4,743,289

(27,726,340) (2,582,846) (-) (30,309,186) (22,901,018) (-) (2,664,879) (25,565,897) (4,743,289) (4,825,322)

7. Computers 37,334,319 23,795,966 94,815 61,035,470 25,398,100 - 7,550,543 32,948,643 28,086,827 11,936,219

(30,301,189) (7,033,130) (-) (37,334,319) (18,708,582) (-) (6,689,518) (25,398,100) (11,936,219) (11,592,607)

8. ElectricalEquipments 60,054,512 900,457 - 60,954,969 36,689,771 - 5,901,346 42,591,117 18,363,852 23,364,741

(58,640,870) (1,413,642) (-) (60,054,512) (29,659,026) (-) (7,030,745) (36,689,771) (23,364,741) (28,981,844)

Total (i) 2,649,188,781 121,642,481 55,447,569 2,715,383,693 920,833,782 16,498,753 201,531,193 1,105,866,222 1,609,517,471 1,728,354,999

(2,591,622,598) (64,000,919) (6,434,736) (2,649,188,781) (712,937,469) (2,578,167) (210,474,480) (920,833,782) (1,728,354,999) (1,878,685,129)

(i) Intangible assets

1. Computersoftware 33,814,905 5,959,149 - 39,774,054 32,281,925 - 2,096,460 34,378,385 5,395,669 1,532,980

(33,607,680) (207,225) (-) (33,814,905) (30,025,141) (-) (2,256,784) (32,281,925) (1,532,980) (3,582,539)

Total (ii) 33,814,905 5,959,149 - 39,774,054 32,281,925 - 2,096,460 34,378,385 5,395,669 1,532,980

(33,607,680) (207,225) (-) (33,814,905) (30,025,141) (-) (2,256,784) (32,281,925) (1,532,980) (3,582,539)

GRAND TOTAL (i) + (ii) 2,683,003,686 127,601,630 55,447,569 2,755,157,747 953,115,707 16,498,753 203,627,653 1,140,244,607 1,614,913,140 1,729,887,979

PreviousYear 2,625,230,278 64,208,144 6,434,736 2,683,003,686 742,962,610 2,578,167 212,731,264 953,115,707 1,729,887,979 1,882,267,668

12.1 AdjustmentsduringtheyearfromPlantandMachinery,OfficeEquipmentsandComputerincludes`12,784,180/-(`Nil),beingtheGovernmentGrantreceivedunder“IntegratedSkillDevelopmentScheme”(ISDS).

12.2 AdjustmentduringtheyearfromPlantandMachineryincludes`18,828,563/-(`Nil),beingtheGovernmentgrantreceivedunderthe“TechnologyUpgradationfundScheme”(TUFS).

12.3 InaccordancewithprovisionsofrevisedAccountingStandard-10‘PlantPropertyandEquipment(FixedAssets)effectivefrom01.04.2016,thecostofreplacementspareswhichhaveaneffectivelifeofmorethanonefinancialyearhavebeentreatedasFixedAssets.ThesereplacementspareswereearlierbeingexpensedtotheStatementofProfitandLoss.TheimpactofthechangeontheStatementofProfitandLossfortheyearisnotmaterial.


(iii) Capital work-in-progress

SI No. Particulars As at 01.04.2016 Additions during the year Disposals/Adjustments As at 31.03.2017

1. BuildingunderConstruction - 15,262,720 - 15,262,720

(-) (-) (-) (-)

2. PlantMachineryandEquipmentunderinstallation/erection 1,446,971 227,279,015 107,209,937 121,516,049

(2,360,947) (42,058,993) (42,972,969) (1,446,971)

Total (iii) 1,446,971 242,541,735 107,209,937 136,778,769

PreviousYear (2,360,947) (42,058,993) (42,972,969) (1,446,971)

(iv) Intangible assets under development


1. Intangibleassetsunderdevelopment 10,983,017 8,777,530 - 19,760,547

(561,800) (10,421,217) (-) (10,983,017)

Total (iv) 10,983,017 8,777,530 - 19,760,547

PreviousYear (561,800) (10,421,217) (-) (10,983,017)

13. Non-current investments

SI No.



(`)

InvestmentinEquityInstruments(atCost)-Longterm

a. Unquoted (Trade):

In Associates :

1,750,210.09(700,210.09)fullypaidupMembershipUnitsofUSD1/-eachinKitexUSALLC 117,010,318 46,110,318

Aggregateamountofunquotedinvestments(A) 117,010,318 46,110,318

b. Quoted ( Non Trade):

7,000(7,000)EquitySharesof` 2/-eachinPunjabNationalBankLtd,fullypaidup 43,400 43,400

Aggregateamountofquotedinvestments(B) 43,400 43,400

AggregateMarketValueofquotedinvestments:` 1,054,900/-(` 592,900/-)

Total (A+B) 117,053,718 46,153,718


14. Long term loans and advances

SI No.



(`)

Unsecured, considered good

a. Capitaladvances 36,419,968 15,395,339

b. SecurityDeposit 22,109,296 15,782,719

c. Others

(i) BalanceswithGovernmentAuthorities 20,465,817 20,465,817

(ii) Incometax(Net) 27,593,021 33,894,750

106,588,102 85,538,625

15. Inventories

SI No.



(`)

a. Raw-Materials 131,853,588 35,367,873

b. Rawmaterialsintransit 6,388,167 -

c. Workinprogress 224,577,172 89,742,621

d. Finishedgoods 27,860,883 5,121,433

e. Stores,sparesandconsumables 14,103,252 -

f. Storesandsparesintransit 188,645 -

404,971,707 130,231,927

15.1 MethodofvaluationofInventory-Refer2.2.3ofSignificantAccountingPolicies

16. Trade receivables

SI No.



(`)

Unsecured, Considered Good

a. OutstandingforaperiodExceedingsixmonthsfromthedatetheyaredueforpayment 1,431,465 967,396

b. Others 1,310,067,539 959,097,071

1,311,499,004 960,064,467


17. Cash and cash equivalents

SI No.



(`)

a. Cashonhand 112,532 239,650

b. Balancewithbanks:

Incurrentaccounts 1,304,685,808 2,462,197,549

Indepositaccounts 39,157,087 36,690,478

1,343,955,427 2,499,127,677

17.1 BalancewithbanksinCurrentAccountsincludeearmarkedbalancesforunpaiddividendof`6,597,893/-(`7,356,078/-)

17.2 BalancewithbanksinDepositAccountsinclude`39,157,087/-(`35,133,138/-)withamaturityperiodoflessthan12monthsandRsNil(`1,557,340)withamaturityperiodofmorethan12monthsasattheendoftheyear,whichareheldassecurityagainstLetterofCredits/BankGuarantee.

17.3 ThedetailsofSpecifiedBankNotes(SBN)heldandtransactedduringtheperiodfrom8thNovember,2016to30thDecember,2016areasprovidedintheTablebelow:

Particulars SBNOther denomination

notesTotal

Closingcashinhandason08.11.2016 264,500 2,437 266,937

(+)Permittedreceipts - 300,000 300,000

(-)Permittedpayments 22,000 166,355 188,355

(-)AmountdepositedinBanks 242,500 40,000 282,500

Closingcashinhandason30.12.2016 - 96,082 96,082

18. Short-term loans and advances

SI No.



(`)


a. AdvanceRecoverableincashorkindorforvaluetobereceived:

Advancetosuppliers/serviceproviders 38,648,930 27,227,879

b. Others

(i) AdvancetoEmployees 1,923,465 1,470,160

(ii) OtherDeposits 200,000 200,000

40,772,395 28,898,039

18.1 IntheopinionoftheDirectors,LoansandAdvancesandOthercurrentassetshavethevalueatwhichtheyarestatedintheBalanceSheet,ifrealisedintheordinarycourseofbusiness.


19. Other current assets

SI No.



(`)


(i) ExportIncentivesReceivable(SeeNoteNo19.1below) 231,635,527 87,274,776

(ii) Interestaccruedonfixeddeposits 1,302,611 1,310,391

(iii) SubsidyReceivable(SeeNoteNo19.2below) 120,906,276 87,668,951

(iv) KVATRefundReceivable 94,415,897 103,552,236

(v) Deferredpremiumonforwardcontract - 16,046,366

448,260,311 295,852,720

19.1 Duringtheyear,incomefromexportincentivehasbeenrecognisedbasedonexportsmade,asagainsttheearlierpracticeofrecognisingsuchincomewhenconfirmationoftherighttoreceivewasestablished,sinceintheopinionofthemanagementtherearenosignificantuncertaintiesatthisstage.Thishasresultedinrecognitionofahigherincomefromexportincentivestotheextentof` 69,833,399/-inthecurrentyear.

19.2 SubsidyreceivableundertheTextileUpgradationFundScheme(TUFS)includes` 87,668,951/-(` 80,530,588/-)carriedforwardfromearlieryears.Stepsarebeingtakentorecoverthesubsidyclaims,whichintheopinionofthemanagementareconsideredrecoverableinfull.

20. Revenue from operations

SI No.

ParticularsFor the year ended

31st March, 2017 (`)


(`)

a. SaleofProducts

(i) Sales-Export 4,039,156,570 4,312,737,291

(ii) Sales-Domestic 808,954,203 679,815,852

Total(A)+(B) 4,848,110,773 4,992,553,143

b. OtherOperatingRevenues

(i) ExportIncentives 530,501,098 422,865,117

(ii) JobworkCharges 67,562,686 31,007,537

(iii) SaleofmanufacturingScrap 3,432,007 2,362,281

(iv) Others 9,406,586 9,378,718

5,459,013,150 5,458,166,796


21. Other income

SI No.


31st March, 2017 (`)


(`)

a. InterestIncome

BankDeposits 2,735,788 2,989,117

OtherDeposits 568,205 526,486

b. DividendIncomeonLongTerminvestments - 23,100

c. InterestSubsidy(TUFS) 14,408,761 7,138,363

d. ForeignExchangeRateVariation(Net) - 163,944,386

e. Rentreceived 1,754,800 1,583,067

f. Othernon-operatingincome 509,528 21,961,659

19,977,082 198,166,178

22. Cost of raw materials consumed

SI No.


31st March, 2017 (`)


(`)

OpeningStock 35,367,873 44,685,839

Add:Purchases 2,212,490,028 2,133,117,784

ClosingStock (138,241,755) (35,367,873)

2,109,616,146 2,142,435,750

23. Changes in inventories of finished goods, work-in-progress and Stock-in-Trade

SI No.


31st March, 2017 (`)


(`)

ClosingStock

Finishedgoods 27,860,883 5,121,432

Workinprogress 224,577,172 89,742,622

252,438,055 94,864,054

Less:

OpeningStock

Finishedgoods 5,121,432 8,093,208

Workinprogress 89,742,622 59,255,403

94,864,054 67,348,611

(157,574,001) (27,515,443)


24. Employee benefits expense

SI No.


31st March, 2017 (`)


(`)

a. SalariesandWages 775,005,995 705,696,978

b. ContributiontoProvidentFund 47,558,415 44,135,664

c. StaffWelfareExpenses 95,721,368 86,339,846

918,285,778 836,172,488

25. Finance costs

SI No.


31st March, 2017 (`)


(`)

a. InterestExpenses 84,127,061 153,432,037

b. OtherBorrowingcosts 8,541,097 5,178,763

92,668,158 158,610,800

26. Depreciation and amortization expense

SI No.


31st March, 2017 (`)


(`)

a. DepreciationofTangibleAssets 201,531,194 210,474,480

b. AmortizationofIntangibleAssets 2,096,459 2,256,784

203,627,653 212,731,264


27. Other expenses

SI No.


31st March, 2017 (`)


(`)

1 PowerandFuel 188,540,581 175,429,165

2 RepairstoBuilding 4,991,872 26,665,966

3 RepairstoPlantandMachinery 36,577,051 26,156,313

4 RepairstoOthers 37,566,627 35,166,858

5 Consumptionofstoresandspareparts 109,171,253 86,868,167

6 Insurance 6,730,651 6,129,778

7 Processingcharges 258,433,531 116,767,590

8 TestingCharges 19,557,219 12,445,291

9 OtherProductionexpenses 15,446,298 5,133,853

10 SittingfeetoDirectors 787,750 311,379

11 TravellingandConveyance 14,746,605 10,282,814

12 Postage,CourierandTelephone 5,115,722 5,569,160

13 Rent 4,509,635 3,852,152

14 Paymenttotheauditor

-Asauditor 1,035,000 595,721

-Fortaxationmatters 515,506 17,175

-Forotherservices 408,250 171,250

-Forreimbursementofexpenses 32,823 -

15 LegalandprofessionalCharges 6,461,433 9,002,400

16 Rates&TaxesexcludingtaxesonIncome 7,318,344 17,007,571

17 PrintingandStationery 4,687,408 4,922,541

18 GeneralExpenses 5,005,577 4,423,619

19 FreightandForwardingcharges-Outward 36,680,114 19,645,947

20 AdvertisementandSalesPromotion 10,089,769 19,740,735

21 SalesCommission - 701,287

22 Bankcharges 2,761,657 2,912,494

23 LossonSaleofFixedassets 3,436,070 1,227,811

24 Dutydrawbackwrittenoff 257,835 -

25 Priorperiodexpenses - 231,522

26 Expensesoncorporatesocialresponsibilityactivities(SeeNoteNo.27.1below) 61,105,916 31,969,606

27 ForeignExchangeRateVariation(Net) 43,384,502 -

885,354,999 623,348,165


27. Details of expenses on corporate social responsibility activities :

a. Grossamountrequiredtobespentbythecompanyduringtheyear`26,774,793/-(`18,258,000/-)

b. Amountspentduringtheyearon:

SI No.


31st March, 2017 (`)


(`)

a. Construction/acquisitionofanyasset - -

b. Onpurposesotherthan(a)above 61,105,916 31,969,606

61,105,916 31,969,606

28. Earnings per equity share

SI No.


31st March, 2017 (`)


(`)

a. Netprofitaftertaxation 925,407,999 1,120,949,950

b. NetprofitavailabletoEquityShareholders 925,407,999 1,120,949,950

c. No.ofequitysharesatyearend 47,500,000 47,500,000

d. WeightedaveragenumberofEquitySharesof`1/-each(fullypaid-up) 47,500,000 47,500,000

e. BasicandDilutedEarningsperShare 19.48 23.60

29. Leases

A. OperatingLease:CompanyasLessor

Futureminimumrentalsreceivableunderoperatingleaseisasfollows:

SI No.


31st March, 2017 (`)


(`)

Withinoneyear 304,254 544,132

304,254 544,132

B. OperatingLease:CompanyasLessee

TheCompanyhas takenvarious residential andofficepremisesunderoperating leaseagreements. Theseagreementsare generally foraperiodof 11months.TheCompanyhasalsotakenequipmentsonrentforshorterdurationduringtheyear.MinimumleasepaymentschargedduringtheyeartotheStatementofProfitandLossaggregatedto`4,509,635/-(Previousyear`3,852,152/-)


30. Segment Information

SI No.


31st March, 2017 (`)


(`)

I Business Segments:

1. Segment Revenue

a. Garments 4,591,957,730 4,760,781,105

b. Fabric 2,261,387,213 2,039,217,620

6,853,344,943 6,799,998,725

Less:InterSegmentRevenue(SeeNoteNo.30.1below) (1,394,331,793) (1,341,831,928)

5,459,013,150 5,458,166,797

2. Segment Results

a. Garments 1,619,906,032 1,848,831,273

b. Fabric 108,744,216 35,548,995

Total 1,728,650,248 1,884,380,268

Less:Interest (82,441,788) (121,742,769)

c. UnallocableExpenses (239,174,043) (221,595,953)

UnallocableIncome 19,977,082 169,508,404

Profit before tax 1,427,011,499 1,710,549,950

SI No.



(`)

1. Segment Assets

a. Garments 2,080,112,881 1,210,012,468

b. Fabrics 1,585,012,558 1,541,526,673

c. Unallocated 1,879,426,682 3,036,646,859

Total 5,544,552,121 5,788,186,000

2 Segment Liabilities

a. Garments 250,821,931 279,511,368

b. Fabrics 171,190,672 343,668,791

c. Unallocated 566,060,008 1,491,056,840

Total 988,072,611 2,114,236,999

3. Capital Employed

a. Garments 1,829,290,950 930,501,099

b. Fabric 1,413,822,886 1,197,857,879

c. Unallocable 1,313,365,674 1,545,589,940

Total 4,556,479,510 3,673,948,918


4. Depreciation

a. Garments 36,907,467 31,046,105

b. Fabric 143,024,869 148,711,005

c. Unallocable 23,695,317 32,974,154

Total 203,627,653 212,731,264

SI No.


31st March, 2017 (`)


(`)

II Geographical Segments: (See Note No.30.2 below)

a. Sales-Export 4,039,156,570 4,312,737,291

b. Sales-Domestic 808,954,203 679,815,852

4,848,110,773 4,992,553,143

30.1 IntersegmenttransfershavebeenpricedonthebasisofthepricingadoptedforintercompanyfabricsalesmadetoKitexChildrenswearLimited.

30.2 Assetsandliabilitiesarenotcapableofbeingstatedseparatelygeographicalsegmentwisesincealltheassetsandliabilitiesareheldundercompositeundertakingforboththegeographicalsegments.

31. Related Party Disclosure

Disclosure of transactions with related parties as required by Accounting Standard-18 on related party disclosures as prescribed by Companies (Accounting Standards) Rules, 2006

Relatedpartieswithwhomtransactionshavetakenplaceduringtheyear:

a. Key Managerial Personnel:

(i) SabuMJacob,ManagingDirectorhavingcontrolovertheenterprise

(ii) SindhuChandrasekhar,Wholetimedirector

b. Enterprise owned or significantly influenced by key management personnel or their relatives:

(i) KitexChildrenswearLimited

(ii) KitexLimited

(iii) AnnaAluminiumCompanyPrivateLimited

(iv) KitexHerbalsLimited

(v) KitexApparelsLimited

(vi) KitexInfantswearLimited

c. Associate Enterprise

(i) KitexUSALLC


Description of Transactions

SI No.

Name of Related Party Nature of Transaction

Transaction Value for the year (`)


(`)


(`)

a. Enterprises owned or significantly influenced by key management personnel or their relatives:(See Note No. 31.1 below)


(SeeNoteNo.31.1below)

Saleoffabric(Net) 533,233,986 469,657,555

PurchaseofMLFPSlicence - 7,840,287

RentReceived 1,754,800 1,808,778

RentPaid 121,845 109,979

ProcessingChargespaid 248,538,439 100,209,407

Jobworkchargesreceived 43,854,050 -


Expenserecovered 9,335,414 34,241

ExpenseReimbursed 683,000 -

(ii) KitexLimited SaleofFabric 242,827,036 131,374,399

SaleofYarn 7,075,605 6,370,081

SaleofReadyMadeGarments - 12,595,105

PurchaseofFabric 115,837,094 96,132,658

PurchaseofYarn - 4,697,015

PurchaseofAccessories 4,833 1,857,811


JobWorkChargesReceived 24,741,555 33,194,428

Expenserecovered 324,875 -

Others 38,822 -

(iii) AnnaAluminiumCompany(P)Ltd. PurchaseofSpices 3,220,210 3,193,617

PurchaseofUtensils 128,210 6,484

Others(Net) (79,800) -

b. Key Management Personnel:

(i) SabuM.Jacob Remuneration 75,189,260 88,965,349

(ii) SindhuChandrasekhar Remuneration(SeeNoteNo.31.2below) 1,575,784 1,128,221

c. Associate Enterprise:

(i) KitexUSALLC Investmentsmade 70,900,000 46,110,318

Sales-ReadyMadeGarments 200,841,998 -


SI. No.

Name of Related Party

Outstanding amounts carried in the Balance Sheet

As at 31st March, 2017 (`)


a. Enterprises owned or significantly influenced by key management personnel or their relatives:

Receivables

(i) KitexChildrenswearLimited 71,470,719 -

(ii) KitexLimited 32,940,472 25,859,629

Payables

(i) KitexChildrenswearLimited - 67,453,792

(ii) AnnaAluminiumCompany(P)Ltd. 13,254 447,899


Payables

(i) SabuMJacob 104,427,416 61,139,993

(ii) SindhuChandrasekhar 15,861 55,200


Receivables

(i) KitexUSALLC(TradeReceivable) 197,164,496 -

(ii) KitexUSALLC(CarryingvalueofInvestment) 117,010,318 46,110,318

31.1 NecessaryapprovaloftheshareholdersasmayberequiredisbeingsoughtforattheGeneralMeeting.

31.2 Necessaryapprovalforincreaseinremunerationofwholetimedirector`286,171/-isbeingsoughtforattheensuingAnnualGeneralMeeting.


32. Contingent Liabilities and Commitments

32.1 Contingent Liabilities (to the extent not provided for)

ThedetailsofContingentLiabilitiesareasunder.(DisclosedintermsofAccountingStandard–29onProvisions,ContingentLiabilities&ContingentAssetsnotifiedbytheCompanies(AccountingStandards)Rules,2006)

Sl No.

Particulars

(i) Claimsagainstthecompanynotacknowledgedasdebts-` Nil(` Nil).

(ii) CounterGuarantees issuedby theCompany for theguarantees issuedbyBanksamounts to` 149,007,300/- (` 108,728,462/-). These include` 140,019,425/-(` 99,344,425/-)furnishedasbankguaranteetoCustomsDepartmentbasedondemandsraisedbythem.

(iii) Customsdues,pendinginappeal(excluding` 140,019,425/-(` 99,344,425/-)includedin(ii)above),includinginterestof` 56,809,329/-(whichincludesinterestrelatingtotheyear` 19,925,002/-):` 99,400,549/-(` 13,088,518/-).

(iv) EmployeeProvidentFund(EPF)andEmployeeStateInsuranceCorporation(ESI)demands,pendinginappeal:` 46,188,438/-(` 34,343,194/-).

(v) IncomeTaxdemandpendinginappeal:` 8,264,874/-(` 8,791,506/-).

(vi) Theabovedemandsaredisputedby thecompanyandmattersarepending inappealbeforeappellateauthorities invariousstages. In theopinionof themanagementandbasedonlegaladvicereceived,thesedemandsarenottenableinlawandthecompanyishopefulofgettingfullreliefandhencenoprovisionhasbeenmadethereof.

(vii) LettersofCreditOutstandingamountsto` 45,989,995/-(` 85,265,876/-).

32.2 Capital Commitments

Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountsandnotprovidedfor(Netofadvance):` 158,477,305/-(`Nil)

33. Value of Imports on CIF basis

SI No.


31st March, 2017 (`)


(`)

a. Raw-materials 332,035,857 376,246,301

b. ComponentsandSpareparts 32,350,470 31,755,152

c. CapitalGoods 58,022,532 20,353,822

422,408,859 428,355,275

34. Expenditure in foreign currency

SI No.


31st March, 2017 (`)


(`)

a. Salary 2,914,118 8,096,288

b. FeesforTechnical/ProfessionalServices 13,272,234 3,448,236

c. RebateandDiscounts 5,335,863 12,398,510

d. Others 2,546,845 1,758,392

24,069,060 25,701,426


35. Earnings in foreign currency

SI No.


31st March, 2017 (`)


(`)

a. ExportofgoodscalculatedonFOBBasis 4,023,225,666 4,312,737,291

b. Others 9,796,021 13,402,754

4,033,021,687 4,326,140,045

36. Particulars of raw materials consumed during the year

SI No.


31st March, 2017 (`)


(`)

a. Yarn 1,164,710,356 1,067,988,078

b. TrimsandPackingMaterials 530,403,142 623,052,849

c. DyesandChemicals 301,020,374 346,425,652

d. WovenFabric 113,482,274 104,969,171

2,109,616,146 2,142,435,750

37. Breakup of consumption

SI No.

Particulars% of total Consumption

as on 31.03.2017


(`)

% of total Consumption as on 31.03.2016


(`)

a. Raw-materials

Indigenous 80.43% 1,784,485,888 77.13% 1,719,399,618

Imported 14.65% 325,130,259 18.98% 423,036,132

Total (a) 95.08% 2,109,616,147 96.11% 2,142,435,750

b. StoresandSpares

Indigenous 3.05% 67,596,869 2.03% 45,296,868

Imported 1.87% 41,574,384 1.86% 41,571,299

Total (b) 4.92% 109,171,253 3.89% 86,868,167

Grand Total (a)+(b) 100% 2,218,787,400 100% 2,229,303,917

38. Long Term Contracts

Therearenolongtermcontractsason31.03.2017includingderivativecontractsforwhichthereareanymaterialforeseeablelosses.


40. Donations

SI No.


31st March, 2017 (`)


(`)

a. KeralaCongress(M) 600,000 -

b. BharatiyaJanathaParty 1,000,000 1,000,000

c. DistrictCommitteeofMuslimLeague 50,000 -

1,650,000 1,000,000

41. Previous Year Figures

Figureshavebeenroundedofftothenearestrupee.Previousyearfigures,unlessotherwisestatedaregivenwithinbracketsandhavebeenre-groupedandrecastwherevernecessarytobeinconformitywithcurrentyear’slayout.





ParticularsFor the year ended 31st March, 2017

(`)For the year ended 31st March, 2016

(`)A) Cash Flows from Operating Activities

NetProfitbeforetaxandextraordinaryitems 1,427,011,499 1,710,549,950Add/(Less):AdjustmentsFor:Depreciation/Amortization 203,627,653 212,731,264Sundrybalanceswrittenback(Net) (397,417) (292,842)Dutydrawbackwrittenoff 257,835 -UnrealizedForeignExchangeRateVariation 76,195,809 11,513,432FinanceCosts 92,668,158 158,610,800LossonsaleofFixedAssets 3,436,070 1,227,811DividendIncome - (23,100)InterestIncome (17,712,754) (10,653,966)OperatingProfitbeforeworkingcapitalchanges 1,785,086,853 2,083,663,349Adjustmentforworkingcapitalchanges(Increase)/DecreaseinTrade&otherreceivable (506,283,093) (365,064,323)(Increase)/DecreaseinInventories (274,739,780) (18,197,477)Increase/(Decrease)inTradeandotherPayables 28,778,168 167,671,782CashGeneratedfromOperations 1,032,842,148 1,868,073,331DirectTaxes (583,824,560) (517,084,680)CashFlowBeforeExtraordinaryItems 449,017,588 1,350,988,651ExtraordinaryItems - -Net Cash from/(used in) Operating Activities ( A ) 449,017,588 1,350,988,651

B) Cash Flows from Investing ActivitiesPurchaseofFixedAssets (280,834,814) (60,380,432)Investmentinshares (70,900,000) (46,110,318)InterestReceived 3,311,773 3,577,068SaleofFixedAssets 3,900,000 2,628,758DividendReceived - 23,100Net Cash from/(used in) Investing Activities ( B ) (344,523,039) (100,261,824)

C) Cash Flows from Financing ActivitiesIncrease/(Decrease)inBorrowings (1,017,954,264) (511,384,363)FinanceCostspaid (94,666,653) (160,892,373)DividendPaid/transferredincludingDividendDistributiontax (86,513,009) (111,899,100)Net Cash from/(used in) Financing Activities ( C ) (1,199,133,926) (784,175,836)SummaryNet Cash from/(used in) Operating Activities ( A ) 449,017,588 1,350,988,651 Net Cash from/(used in) Investing Activities ( B ) (344,523,039) (100,261,824)Net Cash from/(used in) Financing Activities ( C ) (1,199,133,926) (784,175,836)Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) (1,094,639,377) 466,550,991 CashandCashEquivalentsatthebeginningoftheyear 2,499,127,677 2,032,576,686LossonrestatementofCashandCashEquivalents(Net) (60,532,873) -Cash and Cash Equivalents at the end of the year 1,343,955,427 2,499,127,677

1. Cashandcashequivalentsattheendoftheyearincludes`39,157,087/-(`36,690,478/-)heldunderlienand`6,597,893/-(`7,356,078/-)depositedinunclaimeddividendaccountwhichisearmarkedforpaymentofdividend.

As per our separate report of even date attached For and on behalf of the Board of Directors of Kitex Garments Limited For VARMA & VARMA (FRN:004532S)

V. Sathyanarayanan Sabu M. Jacob Partner,CharteredAccountants Chairman,ManagingDirectorandChiefFinancialOfficer MembershipNo.21941 DIN:00046016

CA Benni Joseph A. BabuPlace:Kizhakkambalam Director CompanySecretaryDate:28thApril,2017 DIN:01219476

Cash Flow Statement for the year ended 31st March, 2017


To the Members of Kitex Garments Limited,Kizhakkambalam

Report on the Consolidated Financial Statements

We have audited the accompanying consolidatedfinancial statements of Kitex Garments Limited(“hereinafter referred to as “the Company”) and itsassociate(KitexUSALLC)comprisingtheConsolidatedBalanceSheetasat31stMarch,2017,theConsolidatedStatementofProfitandLoss,theConsolidatedCashFlow Statement for the year then ended, and asummaryof the significant accountingpolicies andotherexplanatoryinformation(hereinafterreferredtoas“theconsolidatedfinancialstatements”).

Management’s Responsibility for the Consolidated Financial Statements

The Company’s Board of Directors is responsiblefor the preparation of these consolidated financialstatements in terms of the requirements of theCompanies Act, 2013 (hereinafter referred to as“the Act”) that give a true and fair view of theconsolidated financial position, consolidatedfinancial performance and consolidated cash flowsoftheCompanyincludingitsassociateinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia, including theAccounting Standards specifiedunderSection133oftheAct,readwithRule7oftheCompanies (Accounts) Rules, 2014. The respectiveBoardofDirectorsofthecompanyanditsassociateareresponsibleformaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingoftheassetsoftheCompanyanditsassociateandforpreventinganddetectingfraudsandother irregularities; theselectionandapplicationofappropriate accounting policies; making judgmentsand estimates that are reasonable and prudent;and the design, implementation and maintenanceof adequate internal financial controls, that wereoperatingeffectively for ensuring theaccuracyandcompletenessoftheaccountingrecords,relevantto

the preparation and presentation of the financialstatementsthatgiveatrueandfairviewandarefreefrommaterial misstatement, whether due to fraudor error, which have been used for the purpose ofpreparationoftheconsolidatedfinancialstatementsbytheDirectorsoftheCompany,asaforesaid.


Ourresponsibility is toexpressanopinionontheseconsolidated financial statements based on ouraudit.Whileconductingtheaudit,wehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.

We conducted our audit in accordance with theStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedfinancial statementsare freefrommaterialmisstatement.

An audit involves performing procedures toobtain audit evidence about the amounts and thedisclosuresintheconsolidatedfinancialstatements.The procedures selected depend on the auditor’sjudgment, including the assessment of the risksof material misstatement of the consolidatedfinancial statements, whether due to fraud orerror. Inmaking those riskassessments, theauditorconsiders internal financial control relevant to theCompany’spreparationoftheconsolidatedfinancialstatementsthatgiveatrueandfairviewinordertodesignauditprocedures thatareappropriate in thecircumstances. An audit also includes evaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmade by the Company’s Board of Directors, aswell as evaluating the overall presentation of theconsolidatedfinancialstatements.

We believe that the audit evidence obtained byus is sufficient and appropriate to provide a basisfor our audit opinion on the consolidated financialstatements.

Opinion

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventousandbasedon theother financial informationof the associate,theaforesaidconsolidatedfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywith the accounting principles generally acceptedin India, of the consolidated state of affairs of theCompanyanditsassociateasat31stMarch,2017,andtheirconsolidatedprofitandtheirconsolidatedcashflowsfortheyearendedonthatdate.

Other Matters

a) The consolidated financial statements alsoincludetheCompany’sshareofnetloss(afterelimination of share of unrealised profit ontransactionswithassociate)ofRs.87,595,207/-for theyearended31stMarch,2017 (PreviousYear–NetlossofRs.24,003,888/-)asconsideredin the consolidated financial statements, inrespect of one associate registered outsideIndia, whose financial statements/financialinformation have not been audited forthe reasons as stated in Note No 2.2 to theConsolidated Financial Statements. Thesefinancial statements/financial informationhave been prepared by the Management ofthe associate and has been compiled by aCertified Public Accountant in accordancewithStatementsonStandardsforAccountingand Review Services issued by the AmericanInstituteofCertifiedPublicAccountants andhavebeenfurnishedtousbytheManagementof the Company and our opinion on theconsolidated financial statements, in so far

Independent Auditor’s Report


as it relates to the amounts and disclosuresincluded in respect of the associate, is basedsolelyonsuchunauditedfinancialstatements/financial information. In our opinion andaccordingtotheinformationandexplanationsgiventousbytheManagement,thesefinancialstatements/ financial information are notmaterialtotheCompany.

Our opinion on the consolidated financialstatements, and our report on Other Legaland Regulatory Requirements below, is notmodified in respectof theabovematterwithrespecttoourrelianceontheworkdoneandthefinancialstatements/financialinformationcertifiedbytheManagement.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act,based on our audit and the other financialinformationoftheassociate,havingregardtothe observations stated under Other Mattersparagraph above, we report, to the extentapplicable,that:

(a) We have sought and obtained all theinformation and explanationswhich tothe best of our knowledge and beliefwerenecessary for thepurposesofouraudit of the aforesaid consolidatedfinancialstatements.

(b) Inouropinion,properbooksofaccountasrequiredbylawrelatingtopreparationof the aforesaid consolidated financialstatements have been kept so far as itappears fromourexaminationof thosebooks.

(c) The Consolidated Balance Sheet, theConsolidated Statement of Profit andLoss, and the Consolidated Cash FlowStatementdealtwithbythisReportarein agreement with the relevant booksof accountmaintained for the purposeof preparation of the consolidatedfinancialstatements.

(d) Inouropinion,theaforesaidconsolidatedfinancial statements comply with theAccounting Standards specified underSection133oftheAct,readwithRule7of

theCompanies(Accounts)Rules,2014.

(e) On the basis of the writtenrepresentations received from thedirectors of the Company as on 31stMarch, 2017 taken on record by theBoard of Directors of the Company,noneofthedirectorsoftheCompanyisdisqualifiedason31stMarch,2017frombeingappointedasadirectorintermsofSection164(2)oftheAct.

(f) With respect to the adequacy of theinternalfinancialcontrolsoverfinancialreporting of the Company and theoperatingeffectivenessofsuchcontrols,refertoourseparateReportin“AnnexureA”.

(g) With respect to the other matters tobe included in the Auditor’s Reportin accordance with Rule 11 of theCompanies (Audit and Auditors) Rules,2014, in our opinion and to the best ofour information and according to theexplanationsgiventous:

i. The consolidated financialstatements disclose the impactof pending litigations on theconsolidated financial positionof theCompany –ReferNoteNo32.1 to the consolidated financialstatements.

ii. The Company did not have anymaterial foreseeable losses onlong-term contracts includingderivativecontracts.

iii. There has been no delay intransferring amounts, requiredto be transferred, to the InvestorEducationandProtectionFundbytheCompany.

iv. The Company has providedrequisite disclosures in theconsolidatedfinancialstatementsas to holdings aswell as dealingsin Specified Bank Notes duringthe period from 8th November,2016 to 30th December, 2016.

Based on audit procedures andrelying on the managementrepresentation, we report thatthedisclosures are in accordancewithbooksofaccountmaintainedbytheCompanyandasproducedtousbytheManagement–ReferNote No 17.3 to the consolidatedfinancialstatements.



PartnerCharteredAccountantsMembershipNo.21941

Place:KizhakkambalamDate:28thApril,2017

ANNEXURE AREFERRED TO IN PARAGRAPH 1(f) UNDER THE HEADING “REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED AND IT’S ASSOCIATE FOR THE YEAR ENDED 31ST MARCH 2017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidatedfinancial statements of Kitex Garments Limited(“hereinafter referred to as “the Company”) and itsassociate(KitexUSALLC),asofandfortheyearendedMarch31,2017,wehaveauditedtheinternalfinancialcontrolsoverfinancialreportingoftheCompanyasofthatdate.


Management’s Responsibility for Internal Financial Controls

TheBoardofDirectorsofthecompanyisresponsiblefor establishing and maintaining internal financialcontrolsbasedontheinternalcontroloverfinancialreporting criteria established by the Companyconsidering the essential components of internalcontrol stated in the Guidance Note on Audit ofInternalFinancialControlsOverFinancialReportingissuedbythe InstituteofCharteredAccountantsofIndia(ICAI).Theseresponsibilitiesincludethedesign,implementation and maintenance of adequateinternal financial controls that were operatingeffectively for ensuring the orderly and efficientconduct of its business, including adherence to thecompany’spolicies,thesafeguardingofitsassets,theprevention and detection of frauds and errors, theaccuracyandcompletenessoftheaccountingrecords,and the timely preparation of reliable financialinformation, as required under the Companies Act,2013.


Our responsibility is to express an opinion on theCompany’s internalfinancialcontrolsoverfinancialreporting based on our audit. We conducted ouraudit in accordance with the Guidance Note onAudit of Internal Financial Controls Over FinancialReporting (the “GuidanceNote”) issued by the ICAIand the Standards on Auditing, issued by ICAI anddeemedtobeprescribedundersection143(10)oftheCompaniesAct,2013, to theextentapplicable toanaudit of internal financial controls, both applicabletoanauditof InternalFinancialControlsand,bothissued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Noterequire that we comply with ethical requirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.

Ouraudit involvesperformingprocedurestoobtainaudit evidence about the adequacy of the internalfinancial controls system over financial reportingandtheiroperatingeffectiveness.

Ourauditofinternalfinancialcontrolsoverfinancialreporting included obtaining an understanding of

internal financial controls over financial reporting,assessing the risk that a material weakness exists,andtestingandevaluatingthedesignandoperatingeffectiveness of internal control based on theassessed risk. The procedures selected depend ontheauditor’s judgment, including theassessmentofthe risks of material misstatement of the financialstatements,whetherduetofraudorerror.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion on the Company’s internal financialcontrolssystemoverfinancialreporting.

Meaning of Internal Financial Controls Over Financial Reporting

Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassurance regarding the reliability of financialreportingandthepreparationoffinancialstatementsfor external purposes in accordancewith generallyacceptedaccountingprinciples.Acompany’sinternalfinancial control over financial reporting includesthose policies and procedures that (1) pertain tothe maintenance of records that, in reasonabledetail, accuratelyand fairly reflect the transactionsand dispositions of the assets of the company; (2)provide reasonable assurance that transactionsare recorded asnecessary topermit preparationoffinancial statements in accordance with generallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorisationsofmanagementanddirectorsofthecompany;and(3)providereasonableassurance regardingprevention or timelydetectionofunauthorisedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideof controls,materialmisstatementsdue toerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontrolover financial reporting may become inadequate

becauseofchangesinconditions,orthatthedegreeof compliancewith the policies or proceduresmaydeteriorate.

Opinion

In our opinion, the Company has, in all materialrespects, an adequate internal financial controlssystem over financial reporting and such internalfinancial controls over financial reporting wereoperating effectively as at March 31, 2017, basedon the internal control over financial reportingcriteria established by the Company consideringtheessential componentsof internal control statedintheGuidanceNoteonAuditofInternalFinancialControls Over Financial Reporting issued by theInstituteofCharteredAccountantsofIndia.

Other Matters

a) As stated in sub-paragraph (a) of the OtherMattersparagraphinourindependentauditor’sreport, the financial statements/ financialinformationoftheassociateregisteredoutsideIndiaareunauditedandhavebeen furnishedto us by the Management and our aforesaidreport under Section 143(3)(i) of the Act onthe adequacy and operating effectiveness ofthe internal financial controls over financialreportingdoesnotincludereportinginsofarasitrelatestothesaidassociate.



PartnerCharteredAccountantsMembershipNo.21941

Place:KizhakkambalamDate:28thApril,2017


Particulars Note No. As at 31st March, 2017


(`)I. EQUITY AND LIABILITIES

(1) Shareholders' Funda) Sharecapital 3 47,500,000 47,500,000b) Reservesandsurplus 4 4,397,380,414 3,602,445,034

Sub-Total 4,444,880,414 3,649,945,034 (2) Non-Current Liabilities

a) Long-termborrowings 5 31,428,705 82,928,326b) Deferredtaxliabilities(Net) 6 176,398,195 206,064,695c) Long-termprovisions 7 74,158,788 45,692,937

Sub-Total 281,985,688 334,685,958 (3) Current Liabilities

a) Short-termborrowings 8 - 835,248,182b) TradePayables 9

i) totaloutstandingduesofmicroenterprisesandsmallenterprises;and 11,153,071 4,355,163ii) totaloutstandingduesofcreditorsotherthanmicroenterprisesandsmallenterprises 442,349,054 411,542,963

c) Othercurrentliabilities 10 92,504,068 271,757,347d) Short-termprovisions 11 160,081,730 256,646,605

Sub-Total 706,087,923 1,779,550,260 TOTAL 5,432,954,025 5,764,181,252 II. ASSETS

(1) Non-current assets(a) Fixedassets 12

i) Tangibleassets(Property,PlantandEquipment) 1,609,517,471 1,728,354,999ii) Intangibleassets 5,395,669 1,532,980iii) Capitalwork-in-progress 136,778,769 1,446,971iv) Intangibleassetsunderdevelopment 19,760,547 10,983,017

(b) Non-currentinvestments 13 5,454,623 22,149,830(c) Longtermloansandadvances 14 106,588,102 85,538,625

Sub-Total 1,883,495,181 1,850,006,422 (2) Current assets

a) Inventories 15 404,971,707 130,231,927b) Tradereceivables 16 1,311,499,004 960,064,467c) Cashandcashequivalents 17 1,343,955,427 2,499,127,677d) Short-termloansandadvances 18 40,772,395 28,898,039e) Othercurrentassets 19 448,260,311 295,852,720

Sub-Total 3,549,458,844 3,914,174,830 TOTAL 5,432,954,025 5,764,181,252 SignificantAccountingPoliciesandNotesonConsolidatedAccounts 1-42





Consolidated Balance Sheet as at 31st March, 2017


Particulars Note No. For the year ended

31st March, 2017 (`)


(`)

Revenue

I. Revenuefromoperations 20 5,459,013,150 5,458,166,796

II. Otherincome 21 19,977,082 198,166,178

III. Total revenue (I+II) 5,478,990,232 5,656,332,974

IV. Expenses

a. Costofrawmaterialsconsumed 22 2,109,616,146 2,142,435,750

b. Changesininventoriesoffinishedgoods,work-in-progressandStock-in-Trade 23 (157,574,001) (27,515,443)

c. Employeebenefitsexpense 24 918,285,778 836,172,488

d. Financecosts 25 92,668,158 158,610,800

e. Depreciationandamortisationexpense 26 203,627,653 212,731,264

f. Otherexpenses 27 885,354,999 623,348,165

Total expenses 4,051,978,733 3,945,783,024

V. Profit before Tax (III - IV) 1,427,011,499 1,710,549,950

VI. Tax expense

(1) Currenttax 531,270,000 609,400,000

(2) Deferredtax (29,666,500) (19,800,000)

VII. Profit after tax for the year before share of profit/loss of associate(V - VI) 925,407,999 1,120,949,950

Less:

(1) ShareoflossinAssociate 67,635,113 24,003,888

(2) ShareofunrealisedprofitontransactionwithAssociate 19,960,094 -

VIII. Profit for the year attributable to shareholders of the company 837,812,792 1,096,946,062

IX. Earnings per equity share 28

Nominalvalueofshare`1/-(`1/-)Basic/Diluted 17.64 23.09

SignificantAccountingPoliciesandNotesonConsolidatedAccounts 1-42





Consolidated Statement of Profit and Loss for the year ended 31st March, 2017


Significant Accounting Policies and Notes on Consolidated Accounts for the Financial Year ended 31st March, 2017

1. Corporate Information

KitexGarmentsLimitedisaPublicCompanyincorporatedinIndia.ItssharesarelistedontheBombayStock Exchange and the National Stock Exchange. The Company is engaged in themanufacture offabricandreadymadegarments.KitexUSALLCisacorporationregisteredinDelaware,UnitedStatesofAmericawith50%equityparticipationeachfromKitexGarmentsLimitedandKitexChildrenswearLimited.

2. Summary of Significant Accounting Policies

2.1 Principles of Consolidation

TheconsolidatedfinancialstatementsrelatetoKitexGarmentsLimited(the‘Company’)andtheCompany’sshareofprofit/lossinitsassociate.Theconsolidatedfinancialstatementshavebeenpreparedonthefollowingbasis:

i. Thefinancialstatements/financialinformationoftheassociateusedintheconsolidationaredrawnuptothesamereportingdateasthatoftheCompany,i.e.,31March,2017.

ii. The consolidated financial statements include the share of profit / loss of an associateentitywhichhasbeenaccounted forusing ‘equitymethod’ asperAS23 ‘Accounting forInvestments in Associates in Consolidated Financial Statements’. Accordingly, the shareofprofit/ lossoftheassociateentity(thelossbeingrestrictedtothecostofinvestment)has been added to / deducted from the cost of investment. In using equitymethod foraccounting for investment in an associate, unrealised profits and losses resulting fromtransactions between the company and the associate is eliminated to the extent of thecompany’sinterestintheassociate.

iii. Following associate entity has been considered in the preparation of the consolidatedfinancialstatements:

Name of the entity Relationship

% of Holding and voting power either directly or indirectly through subsidiary as at:

31st March, 2017 31st March, 2016

KitexUSALLC Associate 50% 50%

iv. The consolidated financial statements have been prepared using uniform accountingpoliciesforliketransactionsandothereventsinsimilarcircumstancesandarepresentedtotheextentpossible,inthesamemannerastheCompany’sseparatefinancialstatements.

Notes

2.2 Basis of Preparation

i. The Consolidated FinancialStatements of Kitex GarmentsLimited (the Company) and itsassociate Kitex USA LLC havebeen prepared in accordancewithAccountingStandard–23(AS23) “Accounting for Investmentsin Associates in ConsolidatedFinancial Statements” notifiedby the Companies (AccountingStandards)Rules,2006.

ii. Investments in the associateM/s. Kitex USA LLC is accountedfor using the Equity Methodof accounting as laid downby Accounting Standard 23 –“Accounting for investmentin Associates in ConsolidatedFinancial Statements”. Theinvestment is initially recognizedat cost and the carrying amountis increased or decreased torecognize the investors’ share ofprofit and loss of the investeeafter the date of acquisitionand the unrealised profits andlosses resulting fromtransactionsbetween the company and theassociate is eliminated to theextent of the company’s interestin the associate. No statutoryaudit has been conducted bythe associate M/s. Kitex USA LLCfor the year ended 31.03.2017 asthe same is not required underthe statutes of that country. Thefinancial statements/ financialinformation comprising balancesheet as of March 31st 2017 andthe relatedstatementsof incomeand retained earnings for the


period beginning April 1st 2016ending December 31st 2016 andperiodbeginningJanuary1st2017endingMarch31st2017havebeenpreparedbythemanagementandthe financial statement/ financialinformation has been compiledby a Certified Public Accountantin accordance with Statementson Standards forAccounting andReview Services issued by theAmerican Institute of CertifiedPublicAccountants.

2.2.1 Basis of Accounting

The consolidated financial statementsof the Company have been preparedin accordance with generally acceptedaccounting principles in India (IndianGAAP).TheCompanyhaspreparedtheseconsolidated financial statements tocomplyinallmaterialrespectswiththeAccounting Standards specified underSection133of theAct, readwithRule7oftheCompanies(Accounts)Rules,2014.The consolidated financial statementshavebeenpreparedonanaccrualbasisandunderthehistoricalcostconvention.The accounting policies adopted in thepreparation of consolidated financialstatementsareconsistentwiththoseofpreviousyear.

2.2.2 Use of Estimates

Thepresentationoffinancialstatementsin conformity with the generallyaccepted accounting principles requireestimates and assumptions to bemadethat affect the reported amount ofassets and liabilities on thedate of thefinancial statements and the reportedamount of revenues and expensesduring the reporting period. Differencebetweentheactualresultandestimatesarerecognizedintheperiodinwhichtheresultsareknown/materialized.

2.2.3 Inventories

Inventories are valued at lower of costornetrealisablevalue.Forthispurpose,the cost of bought-out inventoriescomprise of the purchase cost of theitems,netofapplicabletax/dutycreditsand cost of bringing such items intothe factory on First-In, First-Out (FIFO)basis.Costof Inventory comprisesCostof Purchase, Cost of Conversion andother Costs incurred to bring them totheir respective present location andcondition. The net realizable value ofboughtout inventories is takenat theircurrent replacement value. The cost ofmanufactured inventories comprisesof the direct cost of productionplus appropriate fixed and variableproductionoverheads.

2.2.4 Revenue Recognition

Revenue is recognizedwhen significantrisksandrewardsofownershipofgoodshave been passed to the buyer. Exportincentives are recognized on exportson accrual basis, except when thereare significant uncertainties, based onthe estimated realisable value of suchentitlements.Otherincomeisrecognizedonaccrualbasis,exceptwhentherearesignificantuncertainties.

2.2.5 Tangible Assets (Property, Plant and Equipment)

Property, Plant and Equipmentare stated at cost less accumulateddepreciation and impairment in valueif any. Cost includes purchase price,(inclusive of import duties and non– refundable purchase taxes, afterdeducting tradediscountsandrebates),other costs directly attributable tobringing the asset to the location andconditionnecessaryforittobecapableofoperatinginthemannerintendedbymanagement and an initial estimate ofthe costs of dismantling, removing theitemandrestoringthesiteonwhichitislocated,ifany.

When parts of an item of property,plant and equipment have differentuseful lives, they are accounted for asseparate items (major components).The cost of replacement spares/ majorinspection relating to property, plantandequipmentiscapitalizedonlywhenit is probable that future economicbenefitsassociatedwith thesewill flowtothecompanyandthecostoftheitemcanbemeasuredreliably.

The cost ofAssets not ready for use asat theBalanceSheetdatearedisclosedunderCapitalWork-In-Progress.

2.2.6 Intangible Assets

Intangible assets are recorded at thecost of acquisition of such assets andare carried at cost less accumulatedamortisationandimpairment,ifany.

2.2.7 Leased Assets

OperatingLeases:Rentalsarerecognisedas an expense with reference to leasetermsandotherconsiderations.

Finance Leases: The lower of the fairvalueoftheleasedassetsattheinceptionof the lease and present value of theminimum lease rentals is capitalized asfixedassetswithcorrespondingamountshown as lease liability. The principalcomponentintheleaserentalisadjustedagainsttheleaseliabilityandtheinterestcomponentischargedtotheStatementofProfitandLoss.

2.2.8 Depreciation and Amortisation

Depreciation on Fixed Assets isprovidedonStraightLineMethodattheuseful lives based on a review by themanagementattheyear-endasunder:

a) Assets (other than capitalspares) - based on useful livesprescribed under Schedule II oftheCompaniesAct,2013


b) Capital Spares- based on usefullife of each replaced part (2 - 5years).

Software costs treated asIntangible Assets is amortisedoveraperiodofthreeyears.

2.2.9 Foreign Currency Transactions

Transactions denominated in foreigncurrency are recorded at the rate ofexchange prevailing on the date oftransaction.

Monetary assets and liabilitiesdenominated in foreign currenciesoutstanding at the year end are re-statedattherateofexchangeprevailingat the year-end and the gain or loss, isrecognized in the Statement of ProfitandLoss.

Exchange differences arising on actualpayments/ realizations and year-endrestatements are recognized in theStatementofProfitandLoss.

2.2.10 Forward Contracts

The Company enters into foreignexchange forward contracts to hedgeits exposure to movements in foreignexchange rates. The company doesnot use the foreign exchange forwardcontracts for trading or speculationpurposes.

Premium or discount arising at theinception of a forward exchangecontract is amortised as expense orincome over the life of the contract.ExchangedifferencesonsuchcontractsarerecognisedintheStatementofProfitandLossinthereportingperiodinwhichtheexchangerateschange.

2.2.11 Government Grants

Government Grants are recognizedwhere there is reasonable assurancethat the Company has complied withthe conditions attached to them and

that the Grant will be received. Grantrelating to depreciable fixed assets isreduced from the gross value of FixedAssets.Grants/Subsidiesinthenatureofrevenue are recognized as income overthe period necessary to match themwith the related costs which they areintendedtocompensate.

2.2.12 Investments

Long-term Investments made bythe Company are stated at cost andprovisionfordiminutioninthevalueoflong-term investments is made only ifsuchadeclineisotherthantemporary.

2.2.13 Employee Benefits

ShortTermEmployeeBenefits

All employee benefits payable whollywithin twelve months of renderingthe service are classified as short-termemployeebenefitsandrecognizedintheperiod in which the employee renderstherelatedservice.

DefinedContributionPlans

The contributions remitted togovernment administered ProvidentandEmployeeStateInsuranceonbehalfof its employees in accordance withthe relevant statute are charged to theStatement of Profit and Loss as andwhendue.TheCompanyhasnofurtherobligationsforfutureProvident/Pensionfund benefits other than its monthlycontributions.

DefinedBenefitPlans

Thenetpresentvalueof theobligationfor gratuity benefits as determinedon independent actuarial valuation,conductedannuallyusingtheprojectedunit credit method, as adjusted forunrecognized past services cost, if any,is recognised in the books of account.ActuarialgainsandlossesarerecognisedinfullintheStatementofProfitandLossfortheperiodinwhichtheyoccur.

Long Term Employee Benefits:

CompensatedAbsences:

The company has a scheme forcompensated absences for employees,the liability of which is determined onthe basis of an independent actuarialvaluation carried out at the endof theyear, using the projected unit creditmethod. Actuarial gains and losses arerecognized in full in the Statement ofProfit andLoss for theperiod inwhichtheyoccur.

Post-employment and other long termemployeebenefitsarerecognisedasanexpense in theStatementofProfit andLossfortheyearinwhichtheemployeehas rendered services. The expensesare recognised at the present value ofthe amount payable determined usingactuarialvaluationtechniques.

2.2.14 Borrowing Costs

Borrowing Costs directly attributableto the acquisition, construction andproduction of qualifying assets arecapitalised as part of the Cost of suchassets. All other borrowing costs arecharged to the StatementofProfit andLoss.

2.2.15 Taxation

Income tax is accounted in accordancewithAccountingStandardonAccountingfor Taxes on Income (AS-22), whichincludes current taxes and deferredtaxes.

Current tax is provided on the basis ofestimatedtaxableincomeinaccordancewiththeIncomeTaxAct,1961usingtheapplicabletaxratesandtaxlaws.

Deferred tax assets and liabilitiesarising on account of timing differenceand which are capable of reversal insubsequentperiods,arerecognizedusingthetaxratesandtaxlawsthathavebeenenactedor substantively enactedasontheBalanceSheetdate.


Deferredtaxassetsarerecognisedonlytotheextentthereisreasonablecertaintythat sufficient future taxable incomewill be available, except that deferredtax assets arising due to unabsorbeddepreciationandlossesarerecognisedifthereisavirtualcertaintythatsufficientfuture taxable incomewill be availabletorealisethesame.

2.2.16 Earnings per share

Basic /diluted earnings per share iscalculated by dividing the net profit/loss for the year attributable toequity shareholders (after deductingattributable taxes) by the weightedaveragenumberofequityshares/dilutedpotentialequitysharesoutstandingasattheendoftheyear,asthecasemaybe.

2.2.17 Impairment of Assets

TheCompany assesses at eachBalanceSheet date whether there is anyindicationthatanassetmaybeimpaired.An asset is treated as impaired, whenthe carrying value of assets exceedsits recoverable value. Based on suchassessment, impairment loss if any isrecognized in theStatementofProfit&Lossfortheperiodinwhichtheassetisidentified as impaired. The impairmentloss recognised in prior accountingperiods is reversed if there has been achange in the estimate of recoverableamount.

2.2.18 Provisions, Contingent Liabilities and Contingent Assets.

Provisions are recognised when thecompany has a present obligation asa result of a past event, for which it isprobable that a cash outflow will berequiredandareliableestimatecanbemade of the amount of the obligation.Provisions are not discounted to itspresentvalueandaredeterminedbasedon management estimate required tosettletheobligationattheBalanceSheetdate.ThesearereviewedateachBalanceSheet date and adjusted to reflect thecorrectmanagementestimates.

ContingentLiabilitiesaredisclosedwhenthecompanyhasapossibleobligationora present obligation and it is probablethatacashflowwillnotberequiredtosettletheobligation.

Contingentassetsareneitherrecognizednordisclosedintheaccounts.


3. Share Capital

SI No.



(`)

a. Authorised


b. Issued, Subscribed and fully paid up


c. Reconciliation of shares outstanding at the beginning and at the end of the reporting year.

ParticularsAs at 31st March, 2017 As at 31st March, 2016

No. of shares Amount (`) No. of shares Amount (`)

Atthebeginningoftheyear 47,500,000 47,500,000 47,500,000 47,500,000

Add:SharesIssuedduringtheyear NIL NIL NIL NIL

Outstandingattheendoftheyear 47,500,000 47,500,000 47,500,000 47,500,000

d. Terms/rights attached to equity shares.

Thecompanyhasonlyoneclassofsharesreferredtoasequityshareswithafacevalueof`1/-each.Eachholderofequityshareisentitledtoonevotepershare.ThecompanydeclaresandpaysdividendinIndianRupees.Thedividendproposed/declaredbytheBoardofDirectorsissubjecttoapproval/regularisationbytheshareholders'intheensuingAnnualGeneralMeeting.IntheeventofliquidationoftheCompany,theholdersofequityshareswillbeentitledtoreceivetheremainingassetsoftheCompany,afterdistributionofallpreferentialamounts,inproportiontothenumberofequitysharesheldbytheshareholders.

e. Details of shareholders holding more than 5% shares in the Company

Particulars

As at 31st March, 2017 As at 31st March 2016


No. of shares % of holding in the class

EquitySharesof`1eachfullypaid

KitexChildrenswearLimited 7,350,329 15.47% 7,350,329 15.47%

SabuMJacob 15,319,281 32.25% 3,464,631 7.29%

BobbyMJacob 4,487 0.01% 4,487 0.01%

SabuMJacobandBobbyMJacob - - 3,846,950 8.10%

BobbyMJacobandSabuMJacob - - 6,910,750 14.55%

RenjithaJoseph 3,091,500 6.51% 3,091,500 6.51%

GopinathanCK 2,788,025 5.87% 2,890,673 6.09%

CKGSuperMarketLimited 3,023,882 6.37% 3,023,882 6.37%

AsperrecordsoftheCompany,includingitsRegisterofMembersandotherdeclarationsreceivedfromthemregardingbeneficialinterest,theaboveshareholdingrepresentsbothlegalandbeneficialownershipofshares.


4. Reserves and surplus

SI No.



(`)

a. Capital Reserve

InvestmentSubsidy 2,210,000 2,210,000

b. General Reserve

BalanceasperlastFinancialStatements 486,500,000 286,500,000

Add:AmounttransferredfromsurplusintheStatementofProfitandLoss 1,600,000,000 200,000,000

Closingbalance 2,086,500,000 486,500,000

c. Surplus/(Deficit) in the Statement of Profit and Loss

BalanceasperlastFinancialStatements 3,113,735,034 2,302,543,797

Profitfortheyear 837,812,792 1,096,946,062

3,951,547,826 3,399,489,859

Less:Appropriations

Interimdividend(SeeNoteNo4.2below) 35,625,000 35,625,000

Proposedfinaldividend(SeeNoteNo4.1below) - 35,625,000

Taxonproposeddividendandinterimdividend 7,252,412 14,504,825

TransfertoGeneralReserve 1,600,000,000 200,000,000

TotalAppropriations 1,642,877,412 285,754,825

NetsurplusintheStatementofProfitandLoss 2,308,670,414 3,113,735,034

Total Reserves and surplus 4,397,380,414 3,602,445,034

4.1 TheBoardofDirectorsofthecompanyhasproposedfinaldividendof` 0.75(Rs.0.75)pershare,whichissubjecttoapprovalbytheshareholdersattheensuingAnnualGeneralMeeting.InaccordancewiththerevisedAccountingStandard-4‘ContingenciesandEventsOccurringaftertheBalanceSheetDate’(effectivefrom01.04.2016)proposeddividendfortheyearandCorporateDividendTaxthereonhasnotbeenrecognisedasadistributionofprofitinthecurrentyear’saccounts.

4.2 Duringtheyear,theBoardofDirectorsoftheCompanyhasdeclaredandpaidinterimdividendof` 0.75/-persharefortheFinancialYearendingon31stMarch,2017,whichissubjecttoregularisationoftheshareholdersintheensuingAnnualGeneralMeeting.

4.3 TheBoardofDirectorsofthecompanyhasproposedtoissuebonussharesintheratioof2:5totheshareholderswhichissubjecttoapprovaloftheshareholdersattheensuingAnnualGeneralMeeting.


5. Long-term borrowings

SI No.



(`)

a. TermLoans

IndianRupeeLoanFromStateBankofIndia(Secured) 31,428,705 82,928,326

IndianRupeeLoanFromAxisBankLimited(Secured) - -

31,428,705 82,928,326

b. CurrentmaturitiesoflongtermborrowingsdisclosedundertheheadOthercurrentliabilities(SeeNoteNo10below):

StateBankofIndia 51,500,000 181,494,904

AxisBankLimited - 1,211,557

c. TermsofRepaymentsofIndianRupeeTermLoans

1. Name of the Bank StateBankofIndia

Type of Loan TermLoan

Amount sanctioned/availed (`) Sanctioned` 820,000,000

(Availed` 521,094,096/-)


(Availed` 24,668,462/-)


(Availed` 108,534,611/-)


(Availed` 57,664,538/-)

CurrentInterestrateasatyearend Nil(11.8%) 11.15%(11.7%) 11.15%(11.7%) 11.15%(11.7%)


theyear

First35months:`400,000/-

Next22months:`500,000/-


Next15months` 3,500,000/-Next5months:` 4,200,000/-

First50months:` 1,300,000/-

Next10months:` 1,500,000/-

2. NameoftheBank AxisBankLimited

TypeofLoan VehicleLoan

Amountsanctioned/availed(`) `1,350,000 `1,350,000 `1,228,000 `890,000

CurrentInterestrateasatyearend Nil(11.01%) Nil(11.01%) Nil(11.01%) Nil(11.01%)


theyear


theyear


theyear


theyear

5.1 Terms loansfromSBIaresecuredbyfirstchargeovertheassetscreatedoutofbank’s finance,byequitablemortgageover25.44acresof landandbuildingbelongingtothecompanyandbypersonalguaranteeofManagingDirector.

5.2 ThevehicleloansfromAxisBankLimitedissecuredbywayofhypothecationofvehiclesacquiredbyusingtheloan.


6. Deferred tax liabilities (Net)

SI No.



(`)

a. Deferred Tax Liability

Onexcessofnetbookvalueoverincometaxwrittendownvalueoffixedasset 212,691,833 222,991,833

GrossDeferredTaxLiability 212,691,833 222,991,833

b. Deferred Tax Asset

OnProvisions/otherdisallowances 36,293,638 16,927,138

GrossDeferredTaxAsset 36,293,638 16,927,138

NetDeferredTaxLiability 176,398,195 206,064,695

7. Long-term provisions

SI No.



(`)

a. ProvisionforEmployeebenefits(SeeNote7.1below) 74,158,788 45,692,937

74,158,788 45,692,937

7.1 Disclosures required under Accounting Standard 15 - “Employee Benefits”

a. Defined Contribution Plans

DuringtheyearthefollowingamountshavebeenrecognizedintheStatementofProfitandLossonaccountofdefinedcontributionplans:

SI No.



(`)

(i) EmployerscontributiontoProvidentFund 47,558,415 44,135,664

(ii) EmployerscontributiontoEmployee’sStateInsurance 14,624,652 14,151,535

62,183,067 58,287,199


b. Defined Benefit Plans - Gratuity: Unfunded Obligation

ThefollowingtablesummarizesthecomponentsofexpenserecognizedintheStatementofProfitandLossandtheamountsrecognizedintheBalanceSheet.

SI No.



(`)

1. Financial Assumptions at the Valuation Date:

a. DiscountRate(p.a) 7.45% 7.80%

b. ExpectedRateofReturnonAssets(p.a) 0.00% 0.00%

c. SalaryEscalationRate*(p.a) 7.00% 7.00%

d. Mortalityrate IndianAssuredLivesMortality(2006-08)Ult

table

IndianAssuredLivesMortality(2006-08)Ult

table

2. Expense Recognized in Statement of Profit and Loss:

a. CurrentServiceCost 12,813,300 10,954,875

b. InterestonDefinedBenefitObligation 4,692,830 3,581,880

c. NetActuarialLosses/(Gains)RecognizedinYear (1,617,689) 2,752,668

d. PastServiceCost - -

Totalamountincludedin"Employeebenefitsexpense"(Note24) 15,888,441 17,289,423

3. Net (Asset)/Liability recognised in the balance sheet as at year end:

NetLiabilityisbifurcatedasfollows:

Current 4,253,552 3,316,513

NonCurrent 56,164,017 45,692,937

NetLiability 60,417,569 49,009,450

4. Change in Defined Benefit Obligation:

a. OpeningDefinedBenefitObligation 49,009,450 35,374,677

b. CurrentServiceCost 12,813,300 10,954,875

c. InterestCost 4,692,830 3,581,880

d. ActuarialLosses/(Gain) (1,617,689) 2,752,668

e. BenefitsPaid (4,480,322) (3,654,650)

f. ClosingDefinedBenefitObligation 60,417,569 49,009,450

g. ContributionsbyEmployer 4,480,322 3,654,650

h. BenefitsPaid (4,480,322) (3,654,650)

i. ExpectedEmployer'sContributionNextYear 4,253,552 3,316,513

5. Details of Present Value of Unfunded Obligations as at year end is under:

31st March, 2017 (`)

31st March, 2016 (`)

31st March, 2015 (`)

31st March, 2014 (`)

31st March, 2013 (`)

60,417,569 49,009,450 35,374,677 25,382,535 27,483,858

*Theassumptionoffuturesalaryincreasestakesintoaccountinflation,seniority,promotionsandotherrelevantfactorssuchassupplyanddemandintheemploymentmarket.



c. Long term employee benefit - Compensated absences : Unfunded obligation

SI No.


(`)

1. FinancialAssumptionsattheValuationDate:

a. DiscountRate(p.a) 7.45%

b. ExpectedRateofReturnonAssets(p.a) 0.00%

c. SalaryEscalationRate*(p.a) 7.00%


Ulttable

*Theassumptionoffuturesalaryincreasestakesintoaccountinflation,seniority,promotionsandotherrelevantfactorssuchassupplyanddemandintheemploymentmarket.


8. Short-term borrowings

SI No.



(`)

a. Workingcapitalloansfrombanks(Secured)(SeeNoteNo8.1below) - 835,248,182

- 835,248,182

8.1 Workingcapitalloansfrombanksaresecuredbyfirstchargeovertheentirecurrentassetsofthecompany,bothpresentandfuture,equitablemortgageover25.44acresoflandandbuildingbelongingtothecompanyandbypersonalguaranteeoftheManagingDirector.Theloansarerepayableondemand.

9. Trade Payables

SI No.



(`)

a. Totaloutstandingduesofmicroenterprisesandsmallenterprises;(SeeNoteNo9.1below) 11,153,071 4,355,163

b. Totaloutstandingduesofcreditorsotherthanmicroenterprisesandsmallenterprises 442,349,054 411,542,963

453,502,125 415,898,126

9.1 Thecompanyhastakenstepstoidentifythesupplierswhoqualifyunderthedefinitionofmicroandsmallenterprises,asdefinedundertheMicro,SmallandMediumEnterprisesDevelopmentAct2006.IntimationshavebeenreceivedfromsomeofthesuppliersregardingtheirstatusunderthesaidActasattheyear-end,basedonwhich,principalamountunpaidtosuchsuppliersasattheyearendaggregatingtoRs.11,153,071/-(Rs.4,355,163/-)hasbeenincludedunderTradepayables.Intheopinionofthemanagement,therearenooverduetotheabovepartiesandtheimpactofinterest,ifany,whichmaybepayableinaccordancewiththeprovisionsoftheAct,isnotexpectedtobematerial.Disclosuresrequiredundersection22oftheMicro,SmallandMediumEnterprisesDevelopmentAct,2006areasfollows:


SI No.



(`)

a. PrincipalAmountremainingunpaidbutnotdueasattheyearend. 11,153,071 4,355,163

b. Interestduethereonandremainingunpaidasattheyearend. NIL NIL

c. InterestpaidbytheCompanyintermsofSection16ofMicro,Small&MediumEnterprisesDevelopmentAct2006alongwiththeamountofpaymentmadetothesupplierbeyondtheappointeddayduringtheyear.

NILNIL

d. Interestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedunderMicro,SmallandMediumEnterprisesDevelopmentAct,2006.

NILNIL

e. Interestaccruedandremainingunpaidasattheyearend NIL NIL

f. Furtherinterestremainingdueandpayableeveninthesucceedingyear,untilsuchdatewhentheinterestduesasaboveareactuallypaidtothesmallenterprises, forthepurposeofdisallowanceofadeductibleexpenditureundersection23oftheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.

NIL NIL

10. Other current liabilities

SI No.



(`)

a. Currentmaturitiesoflongtermborrowings(SeeNoteNo5(b)above) 51,500,000 182,706,461

b. Interestaccruedanddueonborrowings 821,310 2,819,805

c. Advancefromcustomers 2,527,024 4,275,256

d. Unpaiddividend 6,597,893 7,356,078

e. Otherpayables

StatutoryDues 21,100,277 42,994,596

RetentionMoney 4,567,618 363,711

CreditorsforCapitalExpenditure 5,389,946 10,241,465

IntegratedSkillDevelopmentScheme(ISDS)ProjectExpensesPayable(Net) - 20,999,975

92,504,068 271,757,347

11. Short-term provisions

SI No.



(`)

a. ProvisionforEmployeebenefits(SeeNoteNo.7.1above) 8,485,339 3,316,513

b. Others

IncomeTax(Net) 151,596,391 210,452,680

Proposedfinaldividend(SeeNoteNo4.1above) - 35,625,000

CorporateDividendTax - 7,252,412

160,081,730 256,646,605


12. Fixed assets

SI No.

NATURE OF ASSET

GROSS BLOCK DEPRECIATION/ AMORTIZATION NET BLOCK

As at 01.04.2016Additions during the

year

Disposals/Adjustments

(See Note No.12.1 and 12.2

below)

As at 31.03.2017 As at

01.04.2016Disposals/

Adjustments During the

YearAs at 31.03.2017 As at 31.03.2017 As at 31.03.2016

(i) Tangible assets (Property, Plant and Equipment)

1. FreeholdLand 48,982,920 - - 48,982,920 - - - - 48,982,920 48,982,920

(48,982,920) (-) (-) (48,982,920) (-) (-) (-) (-) (48,982,920) (48,982,920)

2. Building 635,293,246 - - 635,293,246 176,476,211 - 18,450,168 194,926,379 440,366,867 458,817,035

(634,085,287) (1,207,959) (-) (635,293,246) (155,605,898) (-) (20,870,313) (176,476,211) (458,817,035) (478,479,389)

3. Plant&Machinery

1,735,237,546 78,316,670 51,003,308 1,762,550,908 597,312,123 12,914,046 157,213,941 741,612,018 1,020,938,890 1,137,925,423

(1,692,745,233) (48,927,049) (6,434,736) (1,735,237,546) (437,029,399) (2,578,167) (162,860,891) (597,312,123) (1,137,925,423) (1,255,715,834)

4. Furniture&Fixtures

45,620,166 2,657,130 - 48,277,296 29,282,166 - 3,666,837 32,949,003 15,328,293 16,338,000

(43,841,573) (1,778,593) (-) (45,620,166) (24,888,835) (-) (4,393,331) (29,282,166) (16,338,000) (18,952,738)

5. Vehicles 56,356,886 6,510,113 3,584,707 59,282,292 30,109,514 3,584,707 6,184,474 32,709,281 26,573,011 26,247,372

(55,299,186) (1,057,700) (-) (56,356,886) (24,144,711) (-) (5,964,803) (30,109,514) (26,247,372) (31,154,475)

6. OfficeEquipments

30,309,186 9,462,145 764,739 39,006,592 25,565,897 - 2,563,884 28,129,781 10,876,811 4,743,289

(27,726,340) (2,582,846) (-) (30,309,186) (22,901,018) (-) (2,664,879) (25,565,897) (4,743,289) (4,825,322)

7. Computers 37,334,319 23,795,966 94,815 61,035,470 25,398,100 - 7,550,543 32,948,643 28,086,827 11,936,219

(30,301,189) (7,033,130) (-) (37,334,319) (18,708,582) (-) (6,689,518) (25,398,100) (11,936,219) (11,592,607)

8. ElectricalEquipments

60,054,512 900,457 - 60,954,969 36,689,771 - 5,901,346 42,591,117 18,363,852 23,364,741

(58,640,870) (1,413,642) (-) (60,054,512) (29,659,026) (-) (7,030,745) (36,689,771) (23,364,741) (28,981,844)

Total (i) 2,649,188,781 121,642,481 55,447,569 2,715,383,693 920,833,782 16,498,753 201,531,193 1,105,866,222 1,609,517,471 1,728,354,999

(2,591,622,598) (64,000,919) (6,434,736) (2,649,188,781) (712,937,469) (2,578,167) (210,474,480) (920,833,782) (1,728,354,999) (1,878,685,129)

(ii) Intangible assets

1. Computersoftware

33,814,905 5,959,149 - 39,774,054 32,281,925 - 2,096,460 34,378,385 5,395,669 1,532,980

(33,607,680) (207,225) (-) (33,814,905) (30,025,141) (-) (2,256,784) (32,281,925) (1,532,980) (3,582,539)

Total (ii) 33,814,905 5,959,149 - 39,774,054 32,281,925 - 2,096,460 34,378,385 5,395,669 1,532,980

(33,607,680) (207,225) (-) (33,814,905) (30,025,141) (-) (2,256,784) (32,281,925) (1,532,980) (3,582,539)

GRAND TOTAL (i)+(ii)

2,683,003,686 127,601,630 55,447,569 2,755,157,747 953,115,707 16,498,753 203,627,653 1,140,244,607 1,614,913,140 1,729,887,979

PreviousYear 2,625,230,278 64,208,144 6,434,736 2,683,003,686 742,962,610 2,578,167 212,731,264 953,115,707 1,729,887,979 1,882,267,668

12.1 AdjustmentsduringtheyearfromPlantandMachinery,OfficeEquipmentsandComputerincludes`12,784,180/-(`Nil),beingtheGovernmentGrantreceivedunder“IntegratedSkillDevelopmentScheme”(ISDS).

12.2 AdjustmentduringtheyearfromPlantandMachineryincludes`18,828,563/-(`Nil),beingtheGovernmentgrantreceivedunderthe“TechnologyUpgradationfundScheme”(TUFS).

12.3 InaccordancewithprovisionsofrevisedAccountingStandard-10‘PlantPropertyandEquipment(FixedAssets)effectivefrom01.04.2016,thecostofreplacementspareswhichhaveaneffectivelifeofmorethanonefinancialyearhavebeentreatedasFixedAssets.ThesereplacementspareswereearlierbeingexpensedtotheStatementofProfitandLoss.TheimpactofthechangeontheStatementofProfitandLossfortheyearisnotmaterial.


(iii) Capital work-in-progress


1. BuildingunderConstruction - 15,262,720 - 15,262,720

(-) (-) (-) (-)

2. PlantMachineryandEquipmentunderinstallation/erection 1,446,971 227,279,015 107,209,937 121,516,049

(2,360,947) (42,058,993) (42,972,969) (1,446,971)

Total (iii) 1,446,971 242,541,735 107,209,937 136,778,769

PreviousYear (2,360,947) (42,058,993) (42,972,969) (1,446,971)

(iv) Intangible assets under development


1. Intangibleassetsunderdevelopment 10,983,017 8,777,530 - 19,760,547

(561,800) (10,421,217) (-) (10,983,017)

Total (iv) 10,983,017 8,777,530 - 19,760,547

PreviousYear (561,800) (10,421,217) (-) (10,983,017)

13. Non-current investments

SI No.



(`)

InvestmentinEquityInstruments(atCost)-Longterm

a. Unquoted (Trade):

In Associates :

1,750,210.09(700,210.09)fullypaidupMembershipUnitsofUSD1/-eachinKitexUSALLC 117,010,318 46,110,318

Less:

ShareofAccumulatedReserves 24,003,888 -

ShareoflossinAssociate 67,635,113 24,003,888

ShareofunrealisedprofitontransactionwithAssociate 19,960,094 -

111,599,095 24,003,888

Aggregateamountofunquotedinvestments(A) 5,411,223 22,106,430

b. Quoted ( Non Trade):

7,000(7,000)EquitySharesof` 2/-eachinPunjabNationalBankLtd,fullypaidup 43,400 43,400

Aggregateamountofquotedinvestments(B) 43,400 43,400

AggregateMarketValueofquotedinvestments:` 1,054,900/-(` 592,900/-)

Total (A+B) 5,454,623 22,149,830


14. Long term loans and advances

SI No.



(`)


a. Capitaladvances 36,419,968 15,395,339

b. SecurityDeposit 22,109,296 15,782,719

c. Others

(i) BalanceswithGovernmentAuthorities 20,465,817 20,465,817

(ii) Incometax(Net) 27,593,021 33,894,750

106,588,102 85,538,625

15. Inventories

SI No.



(`)

a. Raw-Materials 131,853,588 35,367,873

b. Rawmaterialsintransit 6,388,167 -

c. Workinprogress 224,577,172 89,742,621

d. Finishedgoods 27,860,883 5,121,433

e. Stores,sparesandconsumables 14,103,252 -

f. Storesandsparesintransit 188,645 -

404,971,707 130,231,927

15.1 Method of valuation of Inventory - Refer 2.2.3 of Significant Accounting Policies

16. Trade receivables

SI No.



(`)

Unsecured, Considered Good

a. OutstandingforaperiodExceedingsixmonthsfromthedatetheyaredueforpayment 1,431,465 967,396

b. Others 1,310,067,539 959,097,071

1,311,499,004 960,064,467

17. Cash and cash equivalents

SI No.



(`)

a. Cashonhand 112,532 239,650

b. Balancewithbanks:

Incurrentaccounts 1,304,685,808 2,462,197,549

Indepositaccounts 39,157,087 36,690,478

1,343,955,427 2,499,127,677


17.1 BalancewithbanksinCurrentAccountsincludeearmarkedbalancesforunpaiddividendof` 6,597,893/-(` 7,356,078/-)

17.2 BalancewithbanksinDepositAccountsinclude` 39,157,087/-(` 35,133,138/-)withamaturityperiodoflessthan12monthsandRsNil(` 1,557,340)withamaturityperiodofmorethan12monthsasattheendoftheyear,whichareheldassecurityagainstLetterofCredits/BankGuarantee.

17.3 ThedetailsofSpecifiedBankNotes(SBN)heldandtransactedduringtheperiodfrom8thNovember,2016to30thDecember,2016areasprovidedintheTablebelow:

Particulars SBNOther denomination

notesTotal

Closingcashinhandason08.11.2016 264,500 2,437 266,937

(+)Permittedreceipts - 300,000 300,000

(-)Permittedpayments 22,000 166,355 188,355

(-)AmountdepositedinBanks 242,500 40,000 282,500

Closingcashinhandason30.12.2016 - 96,082 96,082

18. Short-term loans and advances

SI No.



(`)


a. AdvanceRecoverableincashorkindorforvaluetobereceived:

Advancetosuppliers/serviceproviders 38,648,930 27,227,879

b. Others

(i) AdvancetoEmployees 1,923,465 1,470,160

(ii) OtherDeposits 200,000 200,000

40,772,395 28,898,039

18.1 IntheopinionoftheDirectors,LoansandAdvancesandOtherCurrentAssetshavethevalueatwhichtheyarestatedintheBalanceSheet,ifrealisedintheordinarycourseofbusiness.

19. Other current assets

SI No.



(`)


(i) ExportIncentivesReceivable(SeeNoteNo19.1below) 231,635,527 87,274,776

(ii) Interestaccruedonfixeddeposits 1,302,611 1,310,391

(iii) SubsidyReceivable(SeeNoteNo19.2below) 120,906,276 87,668,951

(iv) KVATRefundReceivable 94,415,897 103,552,236

(v) Deferredpremiumonforwardcontract - 16,046,366

448,260,311 295,852,720


19.1 Duringtheyear,incomefromexportincentivehasbeenrecognisedbasedonexportsmade,asagainsttheearlierpracticeofrecognisingsuchincomewhenconfirmationoftherighttoreceivewasestablished,sinceintheopinionofthemanagementtherearenosignificantuncertaintiesatthisstage.Thishasresultedinrecognitionofahigherincomefromexportincentivestotheextentof` 69,833,399/-inthecurrentyear.

19.2 SubsidyreceivableundertheTextileUpgradationFundScheme(TUFS)includes` 87,668,951/-(` 80,530,588/-)carriedforwardfromearlieryears.Stepsarebeingtakentorecoverthesubsidyclaims,whichintheopinionofthemanagementareconsideredrecoverableinfull.

20. Revenue from operations

SI No.



(`)

a. SaleofProducts

(i) Sales-Export 4,039,156,570 4,312,737,291

(ii) Sales-Domestic 808,954,203 679,815,852

b. OtherOperatingRevenues

(i) ExportIncentives 530,501,098 422,865,117

(ii) JobworkCharges 67,562,686 31,007,537

(iii) SaleofmanufacturingScrap 3,432,007 2,362,281

(iv) Others 9,406,586 9,378,718

5,459,013,150 5,458,166,796

21. Other income

SI No.


31st March, 2017 (`)


(`)

a. InterestIncome

BankDeposits 2,735,788 2,989,117

OtherDeposits 568,205 526,486

b. DividendIncomeonLongTerminvestments - 23,100

c. InterestSubsidy(TUFS) 14,408,761 7,138,363

d. ForeignExchangeRateVariation(Net) - 163,944,386

e. Rentreceived 1,754,800 1,583,067

f. Othernon-operatingincome 509,528 21,961,659

19,977,082 198,166,178


22. Cost of raw materials consumed

SI No.


31st March, 2017 (`)


(`)

OpeningStock 35,367,873 44,685,839

Add:Purchases 2,212,490,028 2,133,117,784

ClosingStock (138,241,755) (35,367,873)

2,109,616,146 2,142,435,750

23. Changes in inventories of finished goods, work-in-progress and Stock-in-Trade

SI No.


31st March, 2017 (`)


(`)

ClosingStock

Finishedgoods 27,860,883 5,121,432

Workinprogress 224,577,172 89,742,622

252,438,055 94,864,054

Less:

OpeningStock

Finishedgoods 5,121,432 8,093,208

Workinprogress 89,742,622 59,255,403

94,864,054 67,348,611

(157,574,001) (27,515,443)

24. Employee benefits expense

SI No.


31st March, 2017 (`)


(`)

a. SalariesandWages 775,005,995 705,696,978

b. ContributiontoProvidentFund 47,558,415 44,135,664

c. StaffWelfareExpenses 95,721,368 86,339,846

918,285,778 836,172,488

25. Finance costs

SI No.


31st March, 2017 (`)


(`)

a. InterestExpenses 84,127,061 153,432,037

b. OtherBorrowingcosts 8,541,097 5,178,763

92,668,158 158,610,800


26. Depreciation and amortization expense

SI No.


31st March, 2017 (`)


(`)a. DepreciationofTangibleAssets 201,531,194 210,474,480

b. AmortizationofIntangibleAssets 2,096,459 2,256,784

203,627,653 212,731,264

27. Other expenses

SI No.


31st March, 2017 (`)


(`)1 PowerandFuel 188,540,581 175,429,165

2 RepairstoBuilding 4,991,872 26,665,966

3 RepairstoPlantandMachinery 36,577,051 26,156,313

4 RepairstoOthers 37,566,627 35,166,858

5 Consumptionofstoresandspareparts 109,171,253 86,868,167

6 Insurance 6,730,651 6,129,778

7 Processingcharges 258,433,531 116,767,590

8 TestingCharges 19,557,219 12,445,291

9 OtherProductionexpenses 15,446,298 5,133,853

10 SittingfeetoDirectors 787,750 311,379

11 TravellingandConveyance 14,746,605 10,282,814

12 Postage,CourierandTelephone 5,115,722 5,569,160

13 Rent 4,509,635 3,852,152

14 Paymenttotheauditor

-Asauditor 1,035,000 595,721

-Fortaxationmatters 515,506 17,175

-Forotherservices 408,250 171,250

-Forreimbursementofexpenses 32,823 -

15 LegalandprofessionalCharges 6,461,433 9,002,400

16 Rates&TaxesexcludingtaxesonIncome 7,318,344 17,007,571

17 PrintingandStationery 4,687,408 4,922,541

18 GeneralExpenses 5,005,577 4,423,619

19 FreightandForwardingcharges-Outward 36,680,114 19,645,947

20 AdvertisementandSalesPromotion 10,089,769 19,740,735

21 SalesCommission - 701,287

22 Bankcharges 2,761,657 2,912,494

23 LossonSaleofFixedassets 3,436,070 1,227,811

24 Dutydrawbackwrittenoff 257,835 -

25 Priorperiodexpenses - 231,522

26 Expensesoncorporatesocialresponsibilityactivities(SeeNoteNo.27.1below) 61,105,916 31,969,606

27 ForeignExchangeRateVariation(Net) 43,384,502 -

885,354,999 623,348,165


27.1 Details of expenses on corporate social responsibility activities :

a. Grossamountrequiredtobespentbythecompanyduringtheyear`26,774,793/-(`18,258,000/-)

b. Amountspentduringtheyearon:

SI No.


31st March, 2017 (`)


(`)

a. Construction/acquisitionofanyasset - -

b. Onpurposesotherthan(a)above 61,105,916 31,969,606

61,105,916 31,969,606

28. Earnings per equity share

SI No.


31st March, 2017 (`)


(`)

a. Netprofitaftertaxation 837,812,792 1,096,946,062

b. NetprofitavailabletoEquityShareholders 837,812,792 1,096,946,062

c. No.ofequitysharesatyearend 47,500,000 47,500,000

d. WeightedaveragenumberofEquitySharesof`1/-each(fullypaid-up) 47,500,000 47,500,000

e. BasicandDilutedEarningsperShare 17.64 23.09

29. Leases

A. OperatingLease:CompanyasLessor

Futureminimumrentalsreceivableunderoperatingleaseisasfollows:

SI No.


31st March, 2017 (`)


(`)

Withinoneyear 304,254 544,132

304,254 544,132

B. OperatingLease:CompanyasLessee

TheCompanyhas takenvarious residential andofficepremisesunderoperating leaseagreements. Theseagreementsare generally foraperiodof 11months.TheCompanyhasalsotakenequipmentsonrentforshorterdurationduringtheyear.MinimumleasepaymentschargedduringtheyeartotheStatementofProfitandLossaggregatedto`4,509,635/-(`3,852,152/-)


30. Segment Information

SI No.


31st March, 2017 (`)


(`)

I Business Segments:

1. Segment Revenue

a. Garments 4,591,957,730 4,760,781,105

b. Fabric 2,261,387,213 2,039,217,620

6,853,344,943 6,799,998,725

Less:InterSegmentRevenue(SeeNoteNo.30.1below) (1,394,331,793) (1,341,831,928)

5,459,013,150 5,458,166,797

2. Segment Results

a. Garments 1,619,906,032 1,848,831,273

b. Fabric 108,744,216 35,548,995

Total 1,728,650,248 1,884,380,268

Less:Interest (82,441,788) (121,742,769)

c. UnallocableExpenses (239,174,043) (221,595,953)

UnallocableIncome 19,977,082 169,508,404

Profit before tax 1,427,011,499 1,710,549,950

SI No.



(`)

1. Segment Assets

a. Garments 2,080,112,881 1,210,012,468

b. Fabrics 1,585,012,558 1,541,526,673

c. Unallocated 1,879,426,682 3,036,646,859

Total 5,544,552,121 5,788,186,000

2 Segment Liabilities

a. Garments 250,821,931 279,511,368

b. Fabrics 171,190,672 343,668,791

c. Unallocated 566,060,008 1,491,056,840

Total 988,072,611 2,114,236,999


3. Capital Employed

a. Garments 1,829,290,950 930,501,099

b. Fabric 1,413,822,886 1,197,857,879

c. Unallocable 1,313,366,674 1,545,589,940

4,556,480,510 3,673,948,918

4. Depreciation

a. Garments 36,907,467 31,046,105

b. Fabric 143,024,869 148,711,005

c. Unallocable 23,695,317 32,974,154

203,627,653 212,731,264

SI No.


31st March, 2017 (`)


(`)

II GeographicalSegments:(SeeNoteNo.30.2below)

a. Sales-Export 4,039,156,570 4,312,737,291

b. Sales-Domestic 808,954,203 679,815,852

4,848,110,773 4,992,553,143

30.1 IntersegmenttransfershavebeenpricedonthebasisofthepricingadoptedforintercompanyfabricsalesmadetoKitexChildrenswearLimited.

30.2 Assetsandliabilitiesarenotcapableofbeingstatedseparatelygeographicalsegmentwisesincealltheassetsandliabilitiesareheldundercompositeundertakingforboththegeographicalsegments.

31. Related Party Disclosure

Disclosureof transactionswithrelatedpartiesas requiredbyAccountingStandard-18onrelatedpartydisclosuresasprescribedbyCompanies (AccountingStandards)Rules,2006

Relatedpartieswithwhomtransactionshavetakenplaceduringtheyear:

a. Key Managerial Personnel:

(i) SabuMJacob,ManagingDirectorhavingcontrolovertheenterprise

(ii) SindhuChandrasekhar,Wholetimedirector

b. Enterprise owned or significantly influenced by key management personnel or their relatives:


(ii) KitexLimited

(iii) AnnaAluminiumCompanyPrivateLimited

(iv) KitexHerbalsLimited

(v) KitexApparelsLimited

(vi) KitexInfantswearLimited


c. Associate Enterprise

(i) KitexUSALLC

DescriptionofTransactions

SI No.

Name of Related Party Nature of TransactionTransaction Value for the year (`)



a. Enterprises owned or significantly influenced by key management personnel or their relatives: (See Note No. 31.1 below)

(i) KitexChildrenswearLimited Saleoffabric(Net) 533,233,986 469,657,555

RentReceived 1,754,800 1,808,778

RentPaid 121,845 109,979


Jobworkchargesreceived 43,854,050 -


Expenserecovered 9,335,414 34,241

ExpenseReimbursed 683,000 -

(ii) KitexLimited SaleofFabric 242,827,036 131,374,399

SaleofYarn 7,075,605 6,370,081

SaleofReadyMadeGarments - 12,595,105

PurchaseofFabric 115,837,094 96,132,658

PurchaseofYarn - 4,697,015

PurchaseofAccessories 4,833 1,857,811


JobWorkChargesReceived 24,741,555 33,194,428

Expenserecovered 324,875 -

Others 38,822 -

(iii) AnnaAluminiumCompany(P)Ltd. PurchaseofSpices 3,220,210 3,193,617

PurchaseofUtensils 128,210 6,484

Others(Net) (79,800) -


(i) SabuM.Jacob Remuneration 75,189,260 88,965,349

(ii) SindhuChandrasekhar Remuneration(SeeNoteNo.31.2below) 1,575,784 1,128,221


(i) KitexUSALLC Investmentsmade 70,900,000 46,110,318

Sales-ReadyMadeGarments 200,841,998 -


SI No.

Name of Related Party

Outstanding amounts carried in the Balance Sheet



a. Enterprises owned or significantly influenced by key management personnel or their relatives:

Receivables

(i) KitexChildrenswearLimited 71,470,719 -

(ii) KitexLimited 32,940,472 25,859,629

Payables

(i) KitexChildrenswearLimited - 67,453,792

(ii) AnnaAluminiumCompany(P)Ltd. 13,254 447,899


Payables

(i) SabuMJacob 104,427,416 61,139,993

(ii) SindhuChandrasekhar 15,861 55,200


Receivables

(i) KitexUSALLC(TradeReceivable) 197,164,496 -

(ii) KitexUSALLC(NetCarryingvalueofInvestment) 5,411,223 22,106,430

31.1 NecessaryapprovaloftheshareholdersasmayberequiredisbeingsoughtforattheGeneralMeeting.

31.2 Necessaryapprovalforincreaseinremunerationofwholetimedirector` 286,171/-isbeingsoughtforattheensuingAnnualGeneralMeeting.

32. Contingent Liabilities and Commitments

32.1 Contingent Liabilities (to the extent not provided for)

ThedetailsofContingentLiabilities areasunder. (Disclosed in termsofAccountingStandard–29onProvisions,ContingentLiabilities&ContingentAssetsnotifiedbytheCompanies(AccountingStandards)Rules,2006)

(i) Claimsagainstthecompanynotacknowledgedasdebts-` Nil(`Nil).

(ii) CounterGuaranteesissuedbytheCompanyfortheguaranteesissuedbyBanksamountsto` 149,007,300/-(` 108,728,462/-).Theseinclude` 140,019,425/-(` 99,344,425/-)furnishedasbankguaranteetoCustomsDepartmentbasedondemandsraisedbythem.

(iii) Customsdues,pendinginappeal(excluding` 140,019,425/-(` 99,344,425/-)includedin(ii)above),includinginterestof̀ 56,809,329/-(whichincludesinterestrelatingtotheyear` 19,925,002/-):` 99,400,549/-(` 13,088,518/-).

(iv) EmployeeProvidentFund(EPF)andEmployeeStateInsuranceCorporation(ESI)demands,pendinginappeal:` 46,188,438/-(` 34,343,194/-).

(v) IncomeTaxdemandpendinginappeal:` 8,264,874/-(` 8,791,506/-).


(vi) Theabovedemandsaredisputedbythecompanyandmattersarependinginappealbeforeappellateauthoritiesinvariousstages.Intheopinionofthemanagementandbasedonlegaladvicereceived,thesedemandsarenottenableinlawandthecompanyishopefulofgettingfullreliefandhencenoprovisionhasbeenmadethereof.

(vii) LettersofCreditOutstandingamountsto` 45,989,995/-(` 85,265,876/-).

32.2 CapitalCommitments

Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountsandnotprovidedfor(Netofadvance):` 158,477,305/-(`Nil)

33. Value of Imports on CIF basis

SI No.


31st March, 2017 (`)


(`)

a. Raw-materials 332,035,857 376,246,301

b. ComponentsandSpareparts 32,350,470 31,755,152

c. CapitalGoods 58,022,532 20,353,822

422,408,859 428,355,275

34. Expenditure in foreign currency

SI No.


31st March, 2017 (`)


(`)

a. Salary 2,914,118 8,096,288

b. FeesforTechnical/ProfessionalServices 13,272,234 3,448,236

c. RebateandDiscounts 5,335,863 12,398,510

d. Others 2,546,845 1,758,392

24,069,060 25,701,426

35. Earnings in foreign currency

SI No.


31st March, 2017 (`)


(`)

a. ExportofgoodscalculatedonFOBBasis 4,023,225,666 4,312,737,291

b. Others 9,796,021 13,402,754

4,033,021,687 4,326,140,045


36. Particulars of raw materials consumed during the year

SI No.


31st March, 2017 (`)


(`)

a. Yarn 1,164,710,356 1,067,988,078

b. TrimsandPackingMaterials 530,403,142 623,052,849

c. DyesandChemicals 301,020,374 346,425,652

d. WovenFabric 113,482,274 104,969,171

2,109,616,146 2,142,435,750

37. Breakup of consumption

SI No. Particulars% of total

Consumption as on 31.03.2017


(`)

% of total Consumption as on

31.03.2016


(`)

a. Raw-materials

Indigenous 80.43% 1,784,485,888 77.13% 1,719,399,618

Imported 14.65% 325,130,259 18.98% 423,036,132

Total (a) 95.08% 2,109,616,147 96.11% 2,142,435,750

b. StoresandSpares

Indigenous 3.05% 67,596,869 2.03% 45,296,868

Imported 1.87% 41,574,384 1.86% 41,571,299

Total (b) 4.92% 109,171,253 3.89% 86,868,167

Grand Total (a)+(b) 100% 2,218,787,400 100% 2,229,303,917

38. Long Term Contracts

Therearenolongtermcontractsason31.03.2017includingderivativecontractsforwhichthereareanymaterialforeseeablelosses.


40. Additional information as required by paragraph 2 of the General instructions for Preparation of Consolidated Financial Statements to Schedule III to the Companies Act, 2013.

Name of the entity

As at 31st March, 2017 As at 31st March, 2016

Net Assets, ie., total assets - total liabilities

Net Assets, ie., total assets - total liabilities

As a % of consolidated net

assets

Amount (`)

As a % of consolidated net

assets

Amount (`)

Company 99.88% 4,439,469,191 99.39% 3,627,838,604

Associate(InvestmentasperEquityMethod):

KitexUSALLC 117,010,318 46,110,318

Less:ShareofLossandUnrealisedProfit (111,599,095) (24,003,888)

0.12% 5,411,223 0.61% 22,106,430

Total 100% 4,444,880,414 100% 3,649,945,034

Name of the entity



Share in profit or loss Share in profit or loss

As a % of consolidated profit

or loss

Amount (`)

As a % of consolidated profit

or loss

Amount (`)

Company 110.46% 925,407,999 102.19% 1,120,949,950

Associate(InvestmentasperEquityMethod):

KitexUSALLC -10.46% (87,595,207) -2.19% (24,003,888)

Total 100% 837,812,792 100% 1,096,946,062


41. Donations

SI No. ParticularsFor the year ended

31st March, 2017 (`)


(`)

a. KeralaCongress(M) 600,000 -

b. BharatiyaJanathaParty 1,000,000 1,000,000

c. DistrictCommitteeofMuslimLeague 50,000 -

1,650,000 1,000,000

42. Previous Year Figures

Figureshavebeenroundedofftothenearestrupee.Previousyearfigures,unlessotherwisestatedaregivenwithinbracketsandhavebeenre-groupedandrecastwherevernecessarytobeinconformitywithcurrentyear’slayout.





Particulars For the year ended 31st March, 2017 (`)

For the year ended 31st March, 2016 (`)

A) Cash Flows from Operating ActivitiesNetProfitbeforetaxandextraordinaryitems 1,427,011,499 1,710,549,950Add/(Less):AdjustmentsFor:Depreciation/Amortization 203,627,653 212,731,264Sundrybalanceswrittenback(Net) (397,417) (292,842)Dutydrawbackwrittenoff 257,835 -UnrealizedForeignExchangeRateVariation 76,195,809 11,513,432FinanceCosts 92,668,158 158,610,800LossonsaleofFixedAssets 3,436,070 1,227,811DividendIncome - (23,100)InterestIncome (17,712,754) (10,653,966)OperatingProfitbeforeworkingcapitalchanges 1,785,086,853 2,083,663,349Adjustmentforworkingcapitalchanges(Increase)/DecreaseinTrade&otherreceivable (506,283,093) (365,064,323)(Increase)/DecreaseinInventories (274,739,780) (18,197,477)Increase/(Decrease)inTradeandotherPayables 28,778,168 167,671,782CashGeneratedfromOperations 1,032,842,148 1,868,073,331DirectTaxes (583,824,560) (517,084,680)CashFlowBeforeExtraordinaryItems 449,017,588 1,350,988,651ExtraordinaryItems - -Net Cash from/(used in) Operating Activities ( A ) 449,017,588 1,350,988,651

B) Cash Flows from Investing ActivitiesPurchaseofFixedAssets (280,834,814) (60,380,432)Investmentinshares (70,900,000) (46,110,318)InterestReceived 3,311,773 3,577,068SaleofFixedAssets 3,900,002 2,628,758DividendReceived - 23,100Net Cash from/(used in) Investing Activities ( B ) (344,523,039) (100,261,824)

C) Cash Flows from Financing ActivitiesIncrease/(Decrease)inBorrowings (1,017,954,264) (511,384,363)FinanceCostspaid (94,666,653) (160,892,373)DividendPaid/transferredincludingDividendDistributiontax (86,513,009) (111,899,100)Net Cash from/(used in) Financing Activities ( C ) (1,199,133,926) (784,175,836)SummaryNet Cash from/(used in) Operating Activities ( A ) 449,017,588 1,350,988,651 Net Cash from/(used in) Investing Activities ( B ) (344,523,039) (100,261,824)Net Cash from/(used in) Financing Activities ( C ) (1,199,133,926) (784,175,836)Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) (1,094,639,377) 466,550,991 CashandCashEquivalentsatthebeginningoftheyear 2,499,127,677 2,032,576,686LossonrestatementofCashandCashEquivalents(Net) (60,532,873) -Cash and Cash Equivalents at the end of the year 1,343,955,427 2,499,127,677

1. Cashandcashequivalentsattheendoftheyearincludes`39,157,087/-(` 36,690,478/-)heldunderlienand` 6,597,893/-(` 7,356,078/-)depositedinunclaimeddividendaccountwhichisearmarkedforpaymentofdividend.

As per our separate report of even date attached For and on behalf of the Board of Directors of Kitex Garments Limited For VARMA & VARMA (FRN:004532S)

V. Sathyanarayanan Sabu M. Jacob Partner,CharteredAccountants Chairman,ManagingDirectorandChiefFinancialOfficer MembershipNo.21941 DIN:00046016

CA Benni Joseph A. BabuPlace:Kizhakkambalam Director CompanySecretaryDate:28thApril,2017 DIN:01219476

Consolidated Cash Flow Statement for the year ended 31st March, 2017


KITEX GARMENTS LIMITED(CIN:L18101KL1992PLC006528)

P.B.No.5,Kizhakkambalam-683562,Alwaye,Kochi,Kerala,Phone:9104844142000,Fax:914842680604,

Website:www.kitexgarments.com,E-mail:[email protected]

Proxy Form(FormNo.MGT–11)

[Pursuanttosection105(6)oftheCompaniesAct,2013andrule19(3)oftheCompanies(ManagementandAdministration)Rules,2014]

NameoftheMember(s):

Registeredaddress:

E-mailId:

FolioNo./ClientId&DPId:

I/We,beingtheMember(s)of______sharesoftheabovenamedCompany,herebyappoint

(1) Name:..............................................................................................................................................................................................Address.................................................................................................................................................................................

...............................................................................................................................................................................................................................................................................................................................................................................................................

Email-Id..........................................................................................................................................................................................Signature............................................................................................................................................... (orfailinghim)

(2) Name...............................................................................................................................................................................................Address.................................................................................................................................................................................

...............................................................................................................................................................................................................................................................................................................................................................................................................

Email-Id..........................................................................................................................................................................................Signature............................................................................................................................................... (orfailinghim)

(3) Name...............................................................................................................................................................................................Address.................................................................................................................................................................................

E-mail-id:......................................................................................................................................................................................Signature..............................................................................................................................................................................

asmy/ourproxytoattendandvote(onapoll)forme/usandonmy/ourbehalfatthe25thAnnualGeneralMeetingoftheCompanyonMonday,June19,2017atFactoryPremisesoftheCompany

atBuildingNo.9/536A,Kizhakkambalam,Kochi–683562at10.00A.M.andatanyadjournmentthereofinrespectofsuchresolutionsasareindicatedbelow:

No. RESOLUTIONS

Ordinary Business

1 Toreceive,considerandadoptAuditedFinancialStatements(includingConsolidatedFinancialStatements)oftheCompanyfortheyearendedMarch31,2017togetherwiththeReportoftheBoardofDirectorsandIndependentAuditorsreportthereon.

2 TodeclareafinalDividendof`0.75perequityshareandtoratifytheinterimdividendof`0.75perequityshare,alreadypaidduringtheyear,forthefinancialyearendedMarch31,2017.

3 ToappointaDirectorinplaceofMr.KLVNarayanan(DIN01273573),whoretiresbyrotationintermsofSection152(6)ofCompaniesAct,2013andArticle116ofArticlesofAssociation,and

beingeligibleoffershimselfforre-appointment.

4 ToRe-appointM/s.VarmaandVarma,CharteredAccountants,Kochi(FRN004532S)whoshallholdofficeforthefinancialyear2017-18fromtheconclusionofthis25thAnnualGeneral

Meetingtilltheconclusionofthe26thAnnualGeneralMeetingandtofixtheirremuneration.

Special Business

5 RevisionofremunerationpayabletoMs.SindhuChandrasekhar(DIN06434415)Whole-TimeDirector.

6 ToapprovetheIssueofBonusShares

7 ApprovalforMaterialRelatedPartyTransactions

Signedthis___________dayofJune2017.

Signatureofshareholder(s)…………………………………..

SignatureofProxyholder(s)………………………………….

Notes:

1. ThisformofproxyinordertobeeffectiveshouldbecompletedanddepositedattheRegisteredOfficeoftheCompany,notlessthan48hoursbeforethecommencementoftheMeeting.

2. Fortheresolutions,ExplanatorystatementandNotes,pleaserefertotheNoticeoftheTwentyfifthAnnualGeneralMeeting.

3. Aholdermayvoteeitherfororagainsteachresolution

Affix

Revenue

Stamp


KITEX GARMENTS LIMITED(CIN:L18101KL1992PLC006528)

P.B.No.5,Kizhakkambalam-683562,Alwaye,Kochi,Kerala

Phone:9104844142000,Fax:914842680604

Website:www.kitexgarments.com,E-mail:[email protected]

Attendance Slip

25th Annual General Meeting

FolioNo./DPID–ClientID:

NameandAddressoftheshareholder(s):

IcertifythatIamaregisteredShareholder/ProxyfortheregisteredshareholderoftheCompany.Iherebyrecordmypresenceatthe25thAnnualGeneralMeetingoftheCompanyonMonday,

June19,2017attheFactoryPremisesoftheCompanyatBuildingNo.9/536A,Kizhakkambalam,Kochi–683562at10.00AM

____________________________________ __________________________________________ ______________________________

Member’sFolio/DPID-ClientIDNo. Member’s/Proxy’snameinBlockLetters Member’s/Proxy’sSignature

CUTHERE...............................................................................................................................................................................................................................................................................................................................................................................................

Electronic Voting Particulars

IfdesirousofE-voting,pleasereadtheinstructionsgivenintheAGMNoticebeforeexercising.

EVSN

(ElectronicVotingSequenceNumber)*DefaultPAN/SequenceNo.

*ThosewhohavenotregisteredtheirPANmayusedefaultPAN

Company’s CSR wing Twenty 20

Kizhakkambalam organised the

largest ever ‘Thiruvathirakkali,

Kerala’s traditional art form at

Kizhakkambalam in May 2017,

which was predominantly

p a r t i c i p a t e d b y w o m e n

employees of the company.

With over 6500 participants

the event created new history in

the Guinness book of World

Records.

Registered OfficeKitex Garments Limited

(CIN: L18101KL1992PLC006528)P. B. No. 5, Kizhakkambalam - 683562, Alwaye, Kochi, Kerala

Phone: 91 0484 4142000, Fax: 91 484 2680604Website: www.kitexgarments.com, E-mail: [email protected]

repo… · “ our businesses are deeply aligned with our corporate ethos and innovation. we...

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