Kitex Garments Ltd

Fund-raising plan

• Board approved raising funds up to ₹3,000 crore via equity, NCDs with warrants, or convertible instruments.
• Amount is aggregate up to ₹3,000 crore or equivalent, in one or more tranches.
• Mode includes Qualified Institutional Placement (QIP) or other permissible modes.
• Subject to regulatory and shareholder approvals and applicable law.
• Terms to be determined by the Board or its constituted committee.
• Annexure outlines instrument mix and regulatory framework for the proposed issue.
• Board approval given at meeting on August 14, 2026.

Financials and fundraising

• Unaudited standalone and consolidated results for quarter ended June 30, 2026 approved.
• Limited Review Reports by statutory auditor accompanying the results enclosed.
• Raising funds up to Rs 3,000 crore via QIP or other permissible modes approved.
• Terms of issuance to be determined by the Board or a committee.

Auditor remarks and disclosures

• Standalone auditor's review includes a qualified conclusion on recoverability of Kitex USA LLC investment.
• Investment in Kitex USA LLC eroded net worth; recoverability not corroborated.
• Guarantee for subsidiary borrowings of Rs 2,02,300 lakhs; Rs 1,01,203.99 lakhs outstanding.
• Auditors qualified this matter in the June 30, 2026 quarter report.

Strategic actions

• Scheme of Arrangement: demerger of textile business of Kitex Childrenswear Limited into the holding company approved Feb 2025.
• Action to be effected on obtaining regulatory approvals.

Regulatory/Compliance

• Group compliant with New Labour Codes; no material impact currently.
• Company to monitor central and state rule finalisation and clarify financial impact as appropriate.

Meeting Details

• Meeting date: August 14, 2026
• Time: Not disclosed
• Location: Not disclosed

Key Agenda Items

• Approval of unaudited standalone and consolidated results for quarter ended June 30, 2026
• Proposal to raise funds by issuing securities in one or more tranches (FPO/QIP/preferential issue)
• Fresh shareholder approval at upcoming AGM for fund-raising on similar terms

Other Notes

• Trading window closed from July 01, 2026 to 48 hours after board outcome disclosure

Scheme and approvals

• Composite demerger scheme between a demerged entity and the listed resulting company approved by equity shareholders.
• Public shareholders approved the scheme by majority voting.
• Unsecured creditors approved by majority in value.
• The scheme is subject to NCLT Kochi Bench sanction and other regulatory approvals.
• No share exchange ratio disclosed in voting disclosures.
• Votes completed; awaiting NCLT sanction for final implementation.

Overview

• Demerger of textile division from the demerged company into the resulting company.
• Equity shareholders on the record date will receive new equity shares of the resulting company.

Rationale

• Consolidates textile business for focused growth and synergies; unlocks value.

Key terms

• Demerger on a going-concern basis; liabilities shift to the resulting company.
• New equity shares issued to demerged shareholders per entitlement ratio.
• Two subsidiaries will become 100% owned by the resulting company.

Approvals & status

• Addendum issued; meeting to consider the scheme on July 24, 2026.
• Tribunal sanction remains required for final approval.
• Annexures provide asset, liability, and post-scheme structure details.

Financial impact

• Assets and liabilities of the demerged undertaking transferred to the resulting company at pre-demerger values.
• No explicit cash consideration disclosed in the addendum.

Stakeholders

• Shareholders of the demerged company will become shareholders of the resulting company.
• Post-demerger, the resulting company will own key subsidiaries 100%.

Dematerialisation status

• Dematerialisation requests received during the quarter were processed within the time limit.
• Securities dematerialised have been listed on the exchanges where the earlier securities are listed.
• Certificates for dematerialisation were mutilated and cancelled after verification; depository name substituted as registered owner.

Committee reconstitution

• Reconstitution of Audit, Nomination & Remuneration, Stakeholders Relationship, and Risk Management Committees.
• Effective date: June 30, 2026.
• Audit Committee composition: Bijoy Philipose (Chairman), Sumi Francis, A K Mathew (Non-Executive Independent).
• Nomination and Remuneration Committee: A K Mathew (Chairman); Sumi Francis; K L V Narayanan (Member).
• Stakeholders Relationship Committee: K L V Narayanan (Chairman); Sabu M Jacob; Sindhu Chandrasekharan (Members).
• Risk Management Committee: Sabu M Jacob (Chairman); Sindhu Chandrasekharan; Bijoy Philipose (Members).

Internal Auditor appointment

• Board approved appointment of K. Venkatachalam Aiyer and Co, Chartered Accountants, as Internal Auditor.
• Reason for change: Appointment as Internal Auditor.
• Term: FY 2026-27; appointment effective June 30, 2026.
• Brief profile: KVA is an established CA firm with several branches across India.

Director change

• Appointment of Bijoy Philipose as Additional Non-Executive Independent Director effective June 30, 2026.
• Term for Independent Director is five years, subject to shareholders' approval.
• Board approved per Nomination and Remuneration Committee recommendation.
• Profile: Bijoy Philipose, BSc CS; MD of Sevana Electrical Appliances Private Limited.
• Not related to any existing directors.
• Not debarred by SEBI or other authorities.