Vardhman Textiles Limted — M&A Activity 2020

May 28, 2020

LUDHIANA-141010, PUNJAB T: +91-161-2228943-48 F: +91-161-2601 048 E: secretarial.lud@vardhman.com

Ref. VITXL:SCY:MAY: 2020-21	DATED: 27.05.2020
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National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (E), Mumbai — 400 051. Scrip Code: VTL	BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. Scrip Code: 502986

Dear Sir/Madam,

Subject: Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. -

Pursuant to the provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable provisions, if any, we would like to inform you that the Board of Directors ('Board') of Vardhman Textiles Limited ('VTL' or 'Company') in its meeting held on 27" May, 2020 has approved, subject to necessary statutory and regulatory approvals under applicable laws, including approval of the National Company Law Tribunal(s) ('NCLT'), a Scheme of Amalgamation among VMT Spinning Company Limited (Transferor Company 1') and Vardhman Nisshinbo Garments Company Limited ('Transferor Company 2') ('Transferor Company 1 and_ Transferor Company 2 together referred to as the 'Transferor Companies') with and into the Vardhman Textiles Limited ('Transferee Company') and their respective shareholders and creditors under Section 230 to 232 and other applicable provisions, if any, of the Companies Act, 2013 (hereinafter referred to as ""Scheme'"'). .

As the proposed Scheme provide for merger of wholly owned subsidiaries (i.e. Transferor Companies) with the Holding Company (i.e. Transferee Company), the provision of SEBI Circular No. CFD/DIL3/CIR/2017/21 dated 10th March, 2017-shall not be applicable.

Please find attached herewith 'Annexure 1'-containing details as per Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Securities and Exchange Board of India Circular No. CIR/CFD/CMD/4/2015 dated 9th September 2015. ~ =

You are requested to kindly take note of the same on your records.

Thanking you, For nce Textiles Limited — =

Sanjay Gupta _ Company RRW§'7TY FABRICS. | THREADS | GARMENTS | FIBRES | STEELS

SS CC

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ANNEXURE 1 F

Obligations and Disclosure Requirements) Regulations, 2015 read with clause 1.2. of Annexure | of the SEBI Circular No. CIR/CFD/CMD/4/2015 dated September 9, 2015

S.No.		Particulars	~			Details
	a) Name of forming Amalgamation,	the part	entity(ies) The of details in	Scheme Amalgamation provides for of the amalgamation of VMT Spinning Company Limited Company Vardhman ('Transferor and 1')
			brief such as, size, turnover Nisshinbo		Garments	Company	Limited
	etc:				('Transferor Company 2') ('Transferor Company		1
					and Transferor Company 2 together referred to as
		-		the	Companies') 'Transferor	with and	the into
				Vardhman	Textiles	Limited	('Transferee
					Company') pursuant to the provisions of Sections
					230 — 232 and other relevant provisions of the Act
					and the relevant provisions of this Scheme.
				The	Companies Transferor	are	wholly-owned
				subsidiaries	the of	Company. Transferee	Brief
				details	the entities of	forming	part of
					amalgamation are as follows:
							(INR Crore)
						Turnover	Net
						(Income	worth
			7	S.No.	Parties to the _ Scheme	from Operations) 31-Dec- '	ason
			=.	~~		as on 31-	"19
			:	7		Dec-19
					VMT Spinning
				1	Company	168.88	131.51
				:	Limited
					Vardhman		7
					Nisshinbo
				2	Garments Company	40.82
				;	Limited	: - <
	YARNS	FABRICS		THREADS.	GARMENTS	STEELS FIBRES
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Vardhman 3 Textiles Limited 4,833.98 5,537-33 b) Whether the transaction would fall within related party transactions? If yes, whether the same is done at "arm's length"; The Transferor Companies are wholly owned subsidiaries of the Transferee Company. The proposed Scheme of Amalgamation does not fall within the purview of related party transaction in lieu. of general circular no. 30/2014 dated 17.07.2014 issued by Ministry of Corporate Affairs since the same is subject to the sanction of National Company Law Tribunal. Further, pursuant to Regulation 23(5)(b) of SEBI (LODR) Regulation, the related party provisions are not applicable to the proposed Scheme of Amalgamation. Area of business of the entity(ies): i. VMT Spinning Company Limited: The _ Transferor Company 1 is engaged in the business of manufacturing cotton and blended yarn. The Transferor Company 1 is a 'wholly owned subsidiary of the Transferee Company. ii, Vardhman Nisshinbo Garments Company Limited: The Transferor Company 2 is - engaged in the business of manufacturing and sale of garments (mainly shirts). The Transferor Company 2 is a wholly owned -subsidiary of the Transferee Company. iii Vardhman Textiles Limited: The Transferee Company is a textile company which is engaged in the business of manufacturing yarn and woven fabrics. d) Rationale for the Proposed Scheme: - The management of each of the Transferor Companies and the Transferee Company believe that the business conducted by the Transferor Companies should be consolidated with the Transferee Company for the following primary reasons: AEX i.- The amalgamation of the _ Transfe K Companies with and into the Trans O il en idati of the |

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Vardhman a VARDHMAN TEXTILES LIMITED

| Delivering Excellence. Since 1965. _ CHANDIGARH ROAD

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business and operations of the Transferor Companies into the Transferee Company, 2 : - which complement the business of the z. Transferee Company and which will provide substantial impetus to growth, enable synergies, reduce operational costs, increase operational efficiencies and enable optimal utilization of various resources as a result of pooling of financial, managerial and technical resources, and technologies of both the 'Transferor Companies and the Transferee Company, thereby significantly contributing to business efficiency, future growth and maximizing shareholder value. e) | Incase of cash consideration | The Transferor Company 1 and the Transferor.

ii. The amalgamation of the _ Transferor Companies with and into the Transferee Company will lead to the integration of : _ -complementing businesses in one entity, the : Transferee Company. ;

ili, Since the Transferor Company 1. and Transferor Company 2 are wholly-owned subsidiaries of the Transferee Company, the _ merger of the aforementioned companies with and into the Transferee Company is likely to create more value for their 'respective stakeholders and shareholders, eliminate multiple companies in similar businesses and improve efficiencies of the consolidated business. — amount or otherwise share | Company 2 are wholly owned subsidiaries of the-}\ a

iv.- The amalgamation of the Transferor Companies with and into the Transferee Company will lead to elimination of inter- "company transactions and __ balances between the Transferor Companies and the - Transferee Company and the consolidation of the yarn, fabric and garment businesses in one entity.

exchange ratio: Transferee Company. Accordingly, upon "the - Scheme becoming effective, all the equity shares, ~~ YARNS | FABRICS {| THREADS | GARMENTS | FIBRES | STEELS

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	Vardhman 7	VARDHMAN TEXTILES LIMITED _
	Delivering Excellence. Since 1965.	-CHANDIGARH ROAD : LUDHIANA- 141010, PUNJAB T: +91-161-2228943-48 +91-161-2601 048 F: secretarial.lud@vardhman.com E:
	"	Company Transferee held the the by as in Transferor Company 1 and Transferor Company 2, either by itself or through its nominees, shall stand cancelled and extinguished. Therefore, there will allotment shares and no issue be of as Company consideration by the Transferee upon
		the Scheme coming into effect as the Transferee Company cannot issue shares of the Transferee Company to itself. The investments in the shares of the Transferor Companies, appearing in the books of account of Transferee Company shall, without any further act Consequently, deed, stand cancelled. no or valuation report is required for the Scheme.
	change f) Brief details of shareholding pattern any) of listed entity: -	in There will be no change in shareholding pattern of (if the Transferee Company pursuant to the Scheme becoming effective as no shares are being issued
	: :	by the Transferee Company in connection with the Scheme. /

For Vardhman Textiles Limited

af, - Company Secretary

YARNS | FABRICS | THREADS | GARMENTS | FIBRES | STEELS

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