Cravatex Ltd. — Capital/Financing Update 2021

Aug 17, 2021

Registered Office : Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai – 400 001 CIN L93010MH1951PLC008546

Telephone No. : +91 22 6666 7474 Email : info@cravatex.com Website : www.cravatex.com

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17[th] August, 2021

BSE Limited Department of Corporate Services (DCS-Listing) Phiroze Jeejeebhoy Towers Dalal Street Mumbai – 400 001

Company Code: 509472

Dear Sirs,

• Sub : Subscription to Rights Issue and Execution of Third Supplemental Agreement to the Share Subscription and Shareholders’ Agreement dated 9[th] March, 2020.

• Ref : Disclosure as required under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further to our letter dated 13[th] August, 2021 and in accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“ SEBI LODR ”), we, Cravatex Limited (“ Company ”), wish to inform you that on 17[th] August, 2021 the Company has:

• a) Subscribed to 2,95,254 (Two lakhs ninety five thousand two hundred and fifty four) nos. of 0.001% Compulsorily Convertible Preference Shares (“CCPS”) with a face value of Rs.100/- (Rupees one hundred) each at a price of Rs.168.74 (Rupees one hundred sixty eight and seventy four paise) [including a premium of Rs. 68.74 (Rupees sixty eight and seventy four paise)] for an amount aggregating to Rs. 4,98,21,159.96 (Rupees Four crores ninety eight lakhs twenty one thousand one hundred fifty nine and ninety six paise) offered by Cravatex Brands Limited (“CBL”), a material subsidiary of the Company, by way of a rights issue.

Detailed information in relation to the above, as required to be disclosed in terms of Regulation 30 read with Schedule III of the SEBI LODR is annexed hereto as Annexure 1 .

• b) Executed the Third Supplemental Agreement to the Share Subscription and Shareholders Agreement dated 9[th] March, 2020 (“ Third Supplemental SSSHA ”) between the Company, CBL, Rajesh Batra, Rohan Batra, R.B. Fitness and Trading Private Limited and Paragon Partners Growth Fund – I, in relation to the Company’s further investment into CBL through rights issue as mentioned above in Point (a).

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Registered Office : Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai – 400 001 CIN L93010MH1951PLC008546

Telephone No. : +91 22 6666 7474 Email : info@cravatex.com Website : www.cravatex.com

Detailed information in relation to the above, as required to be disclosed in terms of Regulation 30 read with Schedule III of the SEBI LODR is annexed hereto as Annexure 2 .

Kindly take the above information on record.

Thanking You, For Cravatex Limited,

Digitally signed by SUDHANSHU NAMDEO DN: c=IN, o=Personal, SUDHANSH 2.5.4.20=925a3182dfaeb944aef04c218275696ed8797edcd95692041189f0d7dbd75b a8, postalCode=410218, st=Maharashtra, serialNumber=ed5747e3e6b898fec2d2218 U NAMDEO 61890d0b5acbfee35124932f1bd649a2993918105, cn=SUDHANSHU NAMDEO Date: 2021.08.17 17:42:25 +05'30'

Sudhanshu Namdeo Company Secretary

Registered Office : Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai – 400 001 CIN L93010MH1951PLC008546 Telephone No. : +91 22 6666 7474 Email : info@cravatex.com Website : www.cravatex.com

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Annexure 1

The disclosure pursuant to Regulation 30 of the SEBI LODR read with Para A(1) of Part A of Schedule III and SEBI Circular CIR/CFD/CMD/4/2015 dated 9[th] September 2015 with respect to the subsidiary is as follows:

Acquisition(s) (including agreement to acquire), Scheme of Arrangement (amalgamation/ merger/ demerger/restructuring), or sale or disposal of any unit(s), division(s) or subsidiary of the listed entity or any other restructuring

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Sr. Disclosure Remarks
No.
a) Name of the target entity, Cravatex Brands Limited (“ CBL ”)
details in brief such as size, (a material subsidiary of the Company)
turnover etc.
CBL was incorporated on 22 [nd] December 2016.
Authorised Capital: Rs.1,18,54,56,000 /-
Paid up Capital: Rs. 1,12,88,27,400/-
Turnover: 2020-21 Rs.13,018 Lakhs
2019-20 Rs.23,839 Lakhs
2018-19 Rs.14,945 Lakhs
Amount restated from Rs.15,242 Lakhs to
Rs.23,839 Lakhs as required under IndAs post
merger of Proline India Ltd (PIL) with CBL
b) Whether the acquisition While the acquisition does not fall within a
would fall within related related party transaction, it is an investment by
party transaction(s) and CL into its subsidiary CBL.
whether the promoter/
promoter group/ group Mr. Rajesh Batra (promoter, managing director
companies have any and shareholder of the Company), Mr. Rohan
interest in the entity being Batra (director and shareholder of the
acquired? If yes, nature of Company) and Mr. N. Santhanam (independent
interest and details thereof director) are also directors in CBL.
and whether the same is
done at “arms length” Consequent to the merger of PIL with CBL as
disclosed vide letter dated 26 [th] June 2020, as
consideration for the said merger, CBL shall
allot certain CCPS to promoters of PIL some of
whom are promoter / directors of the company.
The transaction is being conducted on an arm’s
length basis.
c) Industry to which the entity Footwear and Sportswear
being acquired belongs
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Registered Office : Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai – 400 001 CIN L93010MH1951PLC008546

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Telephone No. : +91 22 6666 7474 Email : info@cravatex.com Website : www.cravatex.com

d)	Objects and effects of acquisition (including but not limited to, disclosure of reasons for acquisition of target entity, if its business is outside the main line of business ofthelisted entity)	Object: Keeping in view the growth and financial requirements, CBL intends to raise the required funds by way of long term funds. Effect: CBL will continue to be a material subsidiary of the Company post acquisition.
e)	Brief details of any governmental or regulatory approvals required for the acquisition	N.A
f)	Indicative time period for completion of the acquisition	On or Before 28thAugust, 2021
g)	Nature of consideration - whether cash consideration or share swap and details of the same	Cash
h)	Cost of acquisition or the price at which the shares are acquired	2,95,254 nos. of 0.001% Compulsorily Convertible Preference Shares (“CCPS”) with a face value of Rs. 100/- each at a price of Rs. 168.74/- each (including a premium of Rs. 68.74/- each) for an amount aggregating to Rs. 4,98,21,159.96 (Rupees Four crores ninety eight lakhs twenty one thousand one hundred fifty nine and ninety six paise only).
i)	Percentage of shareholding / control acquired and / or number of shares acquired	2,95,254 CCPS with a face value of Rs. 100/- each at a price of Rs. 168.74/- each (including a premium of Rs. 68.74/- each). Post the Company making investment in CBL under the rights issue, there will be no change in the following equity shareholding of the Company in CBL: Company – 99.997% Investor–0.003%
j)	Brief background about the entity acquired in terms of products/line of business acquired, date of incorporation, history of last 3 years turnover, country in which the acquired entity has presence and any other significant information (in brief)	Products/Line of Business: Footwear and Sportswear Date of Incorporation: 22ndDecember 2016. Last 3 years Turnover: 2020-21 Rs.13,018 Lakhs 2019-20 Rs.23,839 Lakhs 2018-19 Rs.14,945 Lakhs Amount restated from Rs.15,242 Lakhs to Rs.23,839 Lakhs as required under IndAs post merger of Proline India Ltd (PIL) with CBL. Country of Presence: India

Registered Office : Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai – 400 001 CIN L93010MH1951PLC008546 Telephone No. : +91 22 6666 7474 Email : info@cravatex.com Website : www.cravatex.com

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Annexure 2

The disclosure pursuant to Regulation 30 of the SEBI LODR read with Para A(5) of Part A of Schedule III and SEBI Circular CIR/CFD/CMD/4/2015 dated 9[th] September 2015 with respect to the subsidiary is as follows:

Agreements (viz. shareholder agreement(s), joint venture agreement(s), family settlement agreement(s) (to the extent that it impacts management and control of the listed entity), agreement(s)/treaty(ies)/contract(s) with media companies) which are binding and not in normal course of business, revision(s) or amendment(s) and termination(s) thereof

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Sr. Disclosure Remarks
No.
1. Name(s) of parties with Cravatex Brands Limited (“ CBL ”), Rajesh
whom the agreement is Batra, Rohan Batra, R.B. Fitness and Trading
entered Private Limited (“ RB Fitness ”) and Paragon
Partners Growth Fund – I (“ Investor ”).
2. Purpose of entering into the To amend the Share Subscription and
agreement Shareholders’ Agreement dated 9 [th] March,
2020 to amend certain terms as a result of the
fresh additional investment by the Company
in CBL.
3. Shareholding, if any, in the The Company is the majority equity
entity with whom the shareholder of CBL holding 99.997% of the
agreement is executed equity share capital of CBL.
4. Significant terms of the All the key terms/ rights of the earlier
agreement (in brief) special agreements (details whereof are set out
rights like right to appoint below in point 9 below) as mentioned in the
director, first right to share earlier disclosures made to BSE vide letter
subscription in case of dated 9 [th] March, 2020, 14 [th] August, 2020 and
issuance of shares, right to 9 [th] June, 2021 shall remain unchanged.
restrict any change in
capital structure, etc.
5. Whether the said parties are R.B. Fitness, Rajesh Batra and Rohan Batra
related to the promoter / are promoters / members of the promoter
promoter group / group group of the Company, and collectively hold
companies in any manner. If 74.99% of the shareholding of the Company,
yes, nature of the and CBL is a material subsidiary of the
relationship. Company.
6. Whether the transaction While the execution of the Third
would fall within related Supplemental SSSHA does not fall within a
party transactions? If yes, related party transaction, the execution
whether the same is done at thereof is pursuant to an investment by CL
“arms length”. into its subsidiary, CBL.
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Registered Office : Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai – 400 001 CIN L93010MH1951PLC008546

Telephone No. : +91 22 6666 7474 Email : info@cravatex.com Website : www.cravatex.com

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7. In case of issuance of shares No shares are being issued pursuant to the
to the parties, details of Third Supplemental SSSHA. However, as
issue price, class of shares mentioned in Annexure 1 above, the
issued. Company is subscribing to 2,95,254 CCPS.
8. Any other disclosures Not applicable.
related to such agreements,
viz., details of nominee on
the board of directors of the
listed entity, potential
conflict of interest arising
out of such agreements, etc;
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7. In case of issuance of shares to the parties, details of issue price, class of shares issued. No shares are being issued pursuant to the Third Supplemental SSSHA. However, as mentioned in Annexure 1 above, the Company is subscribing to 2,95,254 CCPS.	7. In case of issuance of shares to the parties, details of issue price, class of shares issued. No shares are being issued pursuant to the Third Supplemental SSSHA. However, as mentioned in Annexure 1 above, the Company is subscribing to 2,95,254 CCPS.	7. In case of issuance of shares to the parties, details of issue price, class of shares issued. No shares are being issued pursuant to the Third Supplemental SSSHA. However, as mentioned in Annexure 1 above, the Company is subscribing to 2,95,254 CCPS.
8. Any other disclosures related to such agreements, viz., details of nominee on the board of directors of the listed entity, potential conflict of interest arising out of such agreements, etc; Not applicable.
9.	In case of termination or amendment of agreement, listed entity shall disclose additional details to the stock exchange(s): a) name of parties to the agreement; b) nature of the agreement; c) date of execution of the agreement; d) details of amendment and impact thereof or reasons of termination and impact thereof.	Additional details are as follows: a) The Company, CBL, Rajesh Batra, Rohan Batra, RB Fitness and the Investor were parties to the earlier agreements (details whereof are set out in (b) below); b) The Third Supplemental SSSHA amends the following earlier agreements between the parties, which are: (i) Share Subscription and Shareholders Agreement dated 9thMarch, 2020 (which amended and superseded the earlier agreement dated 23rdMarch, 2017); (ii) Supplemental Agreement dated 14thAugust, 2020, to amend certain terms as a result of the fresh additional investment by the Company in CBL and (iii) Second Supplemental Agreement dated 9thJune, 2021, to amend certain terms as a result of the fresh additional investment by the Company in CBL c) Date of execution of Third Supplemental SSSHA is 17thAugust, 2021. d) To amend the Share Subscription and Shareholders’ Agreement dated 9thMarch, 2020 to amend certain terms as a result of the fresh additional investment by the Company in CBL. All the key terms / rights of the earlier agreements as mentioned in the earlier disclosures made to the stock exchange _vide_letter dated 9thMarch, 2020, 14th August, 2020 and 9thJune, 2021 shall remain unchanged.

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