Indo Count Industries Ltd — Capital/Financing Update 2021

Dec 6, 2021

6th December, 2021

National Stock Exchange of India ltd. Listing Department Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai - 400051

BSELimited Department of Corporate Services Floor 25, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001

Company Symbol: ICll Scrip Code No.: 521016

Dear Sir/Madam,

Sub.: Outcome of Board Meeting held on December 6. 2021- Approval of acquisition of Home Textiles Business of GHCllimited and specified assets of US subsidiary of GHCllimited

We are pleased to inform the exchanges that the Board at its meeting held today has approved (i) acquisition of Home Textile business of GHCLLimited, which includes manufacturing facilities at Vapi, Gujarat on a going concern basis, by way of slump sale in accordance with the terms of Business Transfer Agreement and (ii) acquisition of specified assets (inventory and intellectual property) of the US subsidiary of GHCL Limited in accordance with the terms of Asset Transfer Agreement.

The disclosure pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached.

Kindly take the above information on record.

Thanking you,

Yours faithfully, For Indo Count Industries Limited

~ Amruta Avasare Company Secretary & Compliance Officer Membership No.: ACS 18844

Encl.: A/a

Indo Count Industries Ltd

HeadOffice: 301,Arcadia, 3rd Floor,NarimanPoint, Mumbai- 400 021, Maharashtra,India;T 0224341 9500,F: 022 22B2309B Marketing Office: Dosf Imperia, 2nd floor, Manpada, Ghodbunder Road, Thane (w) - 400 607, Maharashtra, India; T: 0224151 1800, F: 0222172 0121 Home Textile Division: T3, Kagal- Hatkananqale Five Star, MIDC Ind. Area, Kolhapur - 416216, Maharashtra, India; T: 0231 6627900, F: 0231 6627979 SpinningDivision:D1, MIDC,Gokul Shirgaon,Kolhapur- 416234, Maharashtra,India;T: 0231 268'7400,F: 0231 2672161 Reqd. Office: Office No.1, Plot No. 266, Village Alte, Kumbhoj Road,Taluka Hatkanangale, Dist. Kolhapur - 416109, Maharashtra, India;T: 02302463100/2461929 CIN: L72200PN1988PLC068972, E: info@indocount.com, W: www.indocount.com

The details as required under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No. CIR/CFD/CMD/4/2015 dated 9th September, 2015 are given below:

brief such as size, turnover etc.	Name of Target Entities: GHCLLimited (tlGHCL") (tlTarget Entity") and its Wholly Owned Subsidiary Grace Home Fashions LLC(tlGHF") (tlUSTarget Entity")
	Business of Target Entities:
	GHCLLimited is a well-diversified group with footprint in chemicals, textiles and consumer products segment. Its textiles operations is an integrated set up, encompassing spinning, weaving, processing, dyeing, printing and cut/sew facilities to manufacture and export of home textile products mainly bed sheets, bed linen, duvets etc. It has in-house spinning unit at Madurai, Tamil Nadu and a home textile facility at Vapi, Gujarat.
	Grace Home Fashions LLC,viz. ("GHF"), is a wholly owned subsidiary of GHCL. GHF carries on business of sale of home textiles products in the United States of America (tlUSA"). Note: The Company would acquire the Home Textiles business of GHCL, including the manufacturing facilities of 45 million meters annually located at Vapi, Gujarat ("HT Business") and the Company's subsidiary, Indo Count Global Inc., would acquire the identified assets (i.e., inventory and intellectual property) of GHF. The assets of GHF would be acquired through our Wholly Owned Subsidiary viz. Indo Count Global Inc., USA. Financial Details as of Financial Year (FY) ended 31st March 2021
					(Rs. in crores)
		GHCL Standalone	o/w Home Textile Business	GHF Standalone	GHCL Consolidated
	Revenue from operations	2,823.09	435.41	105.28	2,900.09
	Profit before tax	422.40	4.07	(1.00)	438.57
	Profit	309.98	NA	(1.03)	326.12

Indo Count Industries Ltd

Head Office: 301,Arcadia, 3rd Floor, Nauman POint,Mumbai - 400 021, Maharashtra, India; T: 0224341 9500, F: 022 2282 3098 Marketing Office: Dosti Imperia, 2nd floor, Manpada, Ghodbunder Road, Thane (w) - 400 607, Maharashtra, India; T: 0224151 1800, F: 02221720121 Home Textile Division: T3, Kagal- Hatkananqale Five Star, MIDG Ind. Area, Kolhapur - 416216, Maharashtra, India; T: 0231 6627900, F: 0231 6627979 Spinning Division: 01, MIDC, Gokul Shirgaon, Kolhapur - 416234, Maharashtra, India: T: 0231 268'7400, F: 0231 2672161 Regd. Office: Office No.1, Plot No. 266, Village Alte, Kumbhoj Road,Taluka Hatkanangale, Dist, Kolhapur - 416109, Maharashtr-a,India; T: 02302463100/2461929 GIN: L72200PN1988PLG068972, E: info@indocount.com, W: www.indocount.com

		Financial Details as of Half Year (HY) ended 30 th September 2021
						(Rs. in crores)
			GHCL	o/w	GHF	GHCL
			Standalone	Home	Standalone	Consolidated
				Textile
				Business
		Revenue	1,827.97	385.95	44.83	1,836.71
		from
		operations
		Profit	287.78	45.73	1.38	289.45
		before tax
		Profit	210.89	NA	1.37	212.55
		after tax
		Note: Financials of Home Textiles Business is excluding spinning
		business of GHCL
2.	Whether the	The proposed acquisition does not fall within related party
	would acquisition
	fall within related	transaction and the promoters/ promoter group/ group companies of the Company have no interest in the entities whose
	party transactions		business/assets are proposed to be acquired.
	and whether the
	promoter/
	promoter group/
	companies group
	have any interest in
	entity being the
	acquired? If yes,
	the nature of
	interest and details
	thereof and
	whether the same is done 'arm's
	at
3.	length' Industry to which					GHCL is engaged in multiple business segments. The business
	the entity being acquired belongs	acquired is of the Home Textiles segment of GHCL (excluding spinning business), which is in Textile Industry.
4.	Objects and effects					In order to meet the growing demand and capture the business
	of acquisition					opportunities, the Company's Board of Directors today approved the
	(including but not
			execution of the (i) Business Transfer Agreement with GHCL for the acquisition of its home textile business on a going concern basis by
	limited to,
	disclosure of					way of a slump sale and (ii) Asset Transfer Agreement with GHCL's
	reasons for					Wholly Owned Subsidiary viz. GHF, GHCL and the Company's Wholly
	acquisition of					Owned Subsidiary viz. Indo Count Global Inc., USA for acquisition of
	target entity, if its				specified assets (inventory and intellectual property)

	business is outside the main line of	Effects of acquisition:
	business of the
	listed entity)	This acquisition will catapult Indo Count to a leadership position in the Global Home Textiles Bedding segment. With addition of almost 50% new capacity, Indo Count becomes ٠ the largest Home Textile Bedding company, globally, with annual capacity of approximately 153 million meters. Indo Count adds a whole new avenue of customer base which is ٠ untapped, thereby leading to gain in global market share. Leverage joint capabilities of Design, Innovation and Products to a $\bullet$ wider spectrum of customers. De-risking manufacturing facilities with twin state geographical diversity. Potential addition of ~ Rs.1300 -1500 Crores p.a. to the topline of the Company.
5.	Brief details of	Not Applicable.
	governmental or any regulatory approvals required for the acquisition
6.	Indicative time period for completion of the acquisition	Subject to satisfactory completion of the conditions under the Business Transfer Agreement, the parties aim to achieve the closing of the transaction in an efficient and expeditious manner, by March 2022.
7.	Nature of consideration- whether cash consideration or share swap and details of the same	Cash consideration.
8.	Cost of acquisition or the price at which the shares are acquired	The overall consideration for acquisition of Home Textiles Business is Rs. 539 crores on a debt and cash free basis of which fixed consideration is Rs. 340 crores and balance Rs. 199 crores is towards net realizable current assets, subject to certain adjustments in accordance with the Business Transfer Agreement. Additionally, Indo Count Global Inc., USA, would be paying Rs. 37 crores to GHF as a purchase consideration towards the Assets purchased, subject to certain adjustments in accordance with Asset Transfer Agreement.
9.	Percentage of shareholding /	No control or shares of the Target Entity or the US Target Entity are acquired.

$ndus_t$ rao G C C C

	control acquired
	and lor number
	of shares acquired
10.	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)	GHCLLimited is a well-diversified group with footprint in chemicals, textiles and consumer products segment. Its textiles operation is an integrated set up, encompassing spinning, weaving, processing, dyeing, printing and cut/sew facilities to manufacturing and export of home textile products mainly bed sheets, bed linen, duvets etc. GHCL has integrated home textiles manufacturing facilities of 4S million meters p.a. located at Vapi, Gujarat which is fully operational. Grace Home Fashions LLC ("GHF"), a wholly owned subsidiary of GHCL,carries on business of sale of home textiles products in USA. As part of the acquisition, the Company would acquire the Home Textiles business of GHCL,having its manufacturing facilities at Vapi, Gujarat and assets (inventory and intellectual property) of GHF.Also, the intellectual property related to home textiles business held in the name of the GHCLand GHF will be transferred to the Company and its Wholly Owned Subsidiary viz. Indo Count Global Inc., US respectively, as specified in the Business Transfer Agreement and Asset Transfer Agreement. on 14thOctober, 1983. The acquired unit was GHCLwas incorporated established in 2006. The turnover of the acquired business is as follows:
		Home Textiles (HT) Business (excluding spinning business):
						(RS.in crores)
			HYended	FYended	FYended	FYended
			30th	31st	3pt	31st
			September	March,	March,	March,
			2021	2021	2020	2019
		Revenue from operations	385.95	435.41	490.69	611.60
		Countries in which the acquired entity has presence: The acquired entity has its manufacturing facilities in Vapi, Gujarat and has business presence in USA,Canada, UK, Europe and Australia.