Exemption order under regulation 11 of SEBI (SAST) Regulations, 2011 in the matter of " Ultramarine & Pigments Limited”

WTM/GM/CFD/53/2020-21 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTION 11(1) AND SECTION 11(2)(h) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH REGULATION 11(5) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011.

IN THE MATTER OF PROPOSED ACQUISITION OF SHARES AND VOTING RIGHTS IN – TARGET COMPANY Ultramarine & Pigments Limited ACQUIRER(S) Sampath Family Trust ("Acquirer Trust 1"), Sujata Sampath Family Trust ("Acquirer Trust 2"), Vidya Family Trust ("Acquirer Trust 3"), Ramya Family Trust ("Acquirer Trust 4"), R Parthasarathy Family Trust ("Acquirer Trust 5"), Bhooma Parthasarathy Family Trust ("Acquirer Trust 6"), Meera Parthasarathy Family Trust ("Acquirer Trust 7"), Tara Parthasarathy Family Trust ("Acquirer Trust 8")

Background –

1. Ultramarine & Pigments Limited (“Target Company”) was incorporated under the Companies Act, 1956 on October 25, 1960. The Registered Office of the Target Company is at Thirumalai House, Road No. 29, Plot no. 101/102, Sion East, Mumbai – 400022. The shares of the Target Company are listed on BSE Limited (“BSE”).

Order in the matter of Ultramarine & Pigments Limited

2. SEBI received an application dated December 12, 2019 ("Application") from Sampath Family Trust ("Acquirer Trust 1"), Sujata Sampath Family Trust ("Acquirer Trust 2"), Vidya Family Trust ("Acquirer Trust 3"), Ramya Family Trust ("Acquirer Trust 4"), R Parthasarathy Family Trust ("Acquirer Trust 5"), Bhooma Parthasarathy Family Trust ("Acquirer Trust 6"), Meera Parthasarathy Family Trust ("Acquirer Trust 7") and Tara Parthasarathy Family Trust ("Acquirer Trust 8") (collectively referred to as the “Acquirer Trusts / Proposed Acquirers”) seeking exemption from the applicability of inter alia Regulations 3, 4 and 5 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("Takeover Regulations") in the matter of proposed direct acquisition of interest in the Target Company by the Acquirer Trusts. Amended Trust Deeds executed on July 13, 2020 were also received vide email dated July 14, 2020. 3. Regulation 3, 4 and Regulation 5(1) of the Takeover Regulations states – “Substantial acquisition of shares or voting rights.

3(1) No acquirer shall acquire shares or voting rights in a Target Company which taken together with shares or voting rights, if any, held by him and by persons acting in concert with him in such Target Company, entitle them to exercise twenty-five per cent or more of the voting rights in such Target Company unless the acquirer makes a public announcement of an open offer for acquiring shares of such Target Company in accordance with these regulations.

3(2) No acquirer, who together with persons acting in concert with him, has acquired and holds in accordance with these regulations shares or voting rights in a target company entitling them to exercise twenty-five per cent or more of the voting rights in the target company but less than the maximum permissible non-public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise more than five per cent of the voting rights, unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations: Provided that such acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the maximum permissible non-public shareholding. Provided further that, acquisition pursuant to a resolution plan approved under section 31 of the Insolvency and Bankruptcy Code, 2016 [No. 31 of 2016] shall be exempt from the obligation under the proviso to the sub-regulation (2) of regulation 3. Explanation.— For purposes of determining the quantum of acquisition of additional voting rights under this sub-regulation,— (i) gross acquisitions alone shall be taken into account regardless of any intermittent fall in shareholding or voting rights whether owing to disposal of shares held or dilution of voting rights owing to fresh issue of shares by the target company. (ii) in the case of acquisition of shares by way of issue of new shares by the target company or where the target company has made an issue of new shares in any given financial year, the difference between the pre-allotment and the post-allotment percentage voting rights shall be regarded as the quantum of additional acquisition.

Acquisition of control

4. Irrespective of acquisition or holding of shares or voting rights in a target company, no acquirer shall acquire, directly or indirectly, control over such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations.

Indirect acquisition of shares or control

5. (1) For the purposes of regulation 3 and regulation 4, acquisition of shares or voting rights in, or control over, any company or other entity, that would enable any person and persons acting in concert with him to exercise or direct the exercise of such percentage of voting rights in, or control over, a target company, the acquisition of which would otherwise attract the obligation to make a public announcement of an open offer for acquiring shares under these regulations, shall be considered as an indirect acquisition of shares or voting rights in, or control over the target company.”

4. In the aforementioned Application and subsequent submissions, the following was inter alia stated –

A. The shareholding pattern in the Target Company as on date of the Application and shareholding pattern post the proposed acquisition is as provided below:

Table A – Shareholding in the Target Company (Source: Application) Sr. Name Present Shareholding Proposed Shareholding No. No. of % No. of % shares Shareholding shares Shareholding

A. Promoter/ Promoter Group 1. Th irumalai Chemicals Ltd 34,82,557 11.93 34,82,557 11.93 2. Jasmine Limited 39,020 0.13 39,020 0.13 3. R. Sampath 12,75,294 4.37 0 0.00 4. Sujata Sampath 12,75,293 4.37 0 0.00 5. Parthasarathy Rangaswamy 9,77,747 3.35 0 0.00 6. Bhooma Parthasarathy 9,77,747 3.35 0 0.00 7. Meera Parthasarathy 2,36,080 0.81 0 0.00 8. Tara Parthasarathy 2,02,760 0.69 0 0.00 9. S.Vidya 1,07,515 0.37 0 0.00 10. R amya Bharathram 59,360 0.20 0 0.00 11. In dira Sundararajan 10,71,855 3.67 10,71,855 3.67 12. V .S. Sundararajan 4,108 0.01 4,108 0.01 13. Sa nthanam Sundararajan 12,22,636 4.19 12,22,636 4.19 14. Sr idhar Sundararajan 11,40,813 3.91 11,40,813 3.91 15. Ja yalakshmi Venkataraman 7,12,040 2.44 7,12,040 2.44 16. D aya Sridhar 4,71,928 1.62 4,71,928 1.62 17. Ka la Sundarveda 3,77,992 1.92 3,77,992 1.92 18. Sr idhar Sundararajan HUF 3,30,449 1.13 3,30,449 1.13 19. G eetha S 1,92,962 0.66 1,92,962 0.66 20. Pr avin Rangachari 1,80,030 0.62 1,80,030 0.62 21. V. Bharathram 36,000 0.12 36,000 0.12 22. U ttara B 16,000 0.05 16,000 0.05 23. D eepa Ajay 3,63,796 1.25 3,63,796 1.25

24. Sr inath Sridhar 1,41,180 0.48 1,41,180 0.48 25. S. Narayan 3,43,112 1.18 3,43,112 1.18 26. S. Vardarajan 3,63,796 1.24 3,63,796 1.24 27. Ka vya Narayan 16,000 0.05 16,000 0.05 28. B ina Rajan 4,000 0.01 4,000 0.01 29. Sub total 1,56,22,070 53.50 1,05,10,274 35.99 B. Acquirers 30. Sa mpath Family Trust 0 0.00 12,75,294 4.37 31. Su jata Sampath Family Trust 0 0.00 12,75,293 4.37 32. R Parthasarathy Family Trust 0 0.00 9,77,747 3.35 33. B hooma Parthasarathy Family 0 0.00 9,77,747 3.35 Trust 34. M eera Parthasarathy Family 0 0.00 2,36,080 0.81 Trust 35. Ta ra Parthasarathy Family Trust 0 0.00 2,02,760 0.69 36. V idya Family Trust 0 0.00 1,07,515 0.37 37. R amya Family Trust 0 0.00 59,360 0.20 38. Sub total 0 0.00 51,11,796 17.51 C. P ublic Shareholding 1,35,77,930 46.50% 1,35,77,930 46.50% D. Total (A/B + C) 2,92,00,000 100.00% 2,92,00,000 100.00%

B. As per the Applications dated December 12, 2019:

i. R. Sampath holds 12,75,294 (4.37%), Sujata Sampath 12,75,293 (4.37%), Parthasarathy Rangaswamy 9,77,747 (3.35%), Bhooma Parthasarathy 9,77,747 (3.35%), Meera Parthasarathy 2,36,080 (0.81%), Tara Parthasarathy 2,02,760 (0.69%), S.Vidya 1,07,515 (0.37%), Ramya Bharathram 59,360 (0.20%) are the promoters of the target company.

ii. They have settled irrevocable Family Trusts for the purpose of orderly succession planning of the family and have proposed to transfer their shareholding to their respective Family Trusts. The Trustees and beneficiaries are the family members of the Transferors.

C. The proposed acquisition of shares by the Acquirer Trusts envisages the following – i. Transfer of 12,75,293 (4.37%) equity shares of the Target Company held by R. Sampath to Sampath Family Trust (Trust created vide Trust Deed dated August 30, 2018).

ii. Transfer of 12,75,293 (4.37%) equity shares of the Target Company held by Sujata Sampath to Sujata Sampath Family Trust (Trust created vide Trust Deed dated August 30, 2018).

iii. Transfer of 9,77,747 (3.35%) equity shares of the Target Company held by Parthasarathy Rangaswamy to Parthasarathy Rangaswamy Family Trust (Trust created vide Trust Deed dated August 30, 2018).

iv. Transfer of 9,77,747 (3.35%) equity shares of the Target Company held by Bhooma Parthasarathy to Bhooma Parthasarathy Family Trust (Trust created vide Trust Deed dated August 30, 2018).

v. Transfer of 2,36,080 (0.81%) equity shares of the Target Company held by Meera Parthasarathy to Meera Parthasarathy Family Trust (Trust created vide Trust Deed dated August 30, 2018).

vi. Transfer of 2,02,760 (0.69%) equity shares of the Target Company held by Tara Parthasarathy To Tara Parthasarathy Family Trust (Trust created vide Trust Deed dated August 30, 2018).

vii. Transfer of 1,07,515 (0.37%) equity shares of the Target Company held by S. Vidhya to Vidhya Family Trust (Trust created vide Trust Deed dated August 30, 2018).

viii. Transfer of 59,360 (0.20%) equity shares of the Target Company held by Ramya Bharatram To Ramya Family Trust (Trust created vide Trust Deed dated August 30, 2018).

ix. The aforementioned acquisitions will thereby trigger Regulation 3, 4 and Regulation 5 of the Takeover Regulations, 2011.

D. The Settlor, Trustees and Beneficiaries of Acquirer Trusts are as under –

Table B - Details of Acquirer Trust 1 Sampath Family Trust Settlor Trustee Beneficiaries Relationship Sujata 1. Sujata Sampath A. Rangaswamy Sampath Sujata Sampath is the wife of Sampath Rangaswamy Sampath 2. Rangaswamy B. Ramya Bharathram Ramya, Vidya & Gayatri are daughters Sampath of Sujata and Rangaswamay C. Vidya Sampath

D. Gayatri Pravin E. Children and Lineal descendants of the beneficiaries mentioned in A to D

Table C - Details of Acquirer Trust 2 Sujata Sampath Family Trust Settlor Trustee Beneficiaries Relationship Rangaswamy 1. Sujata Sampath A. Sujata Sampath Sujata Sampath is the wife of Sampath Rangaswamy Sampath 2. Rangaswamy B. Ramya Bharathram Ramya, Vidya & Gayatri are daughters Sampath of Sujata and Rangaswamay C. Vidya Sampath D. Gayatri Pravin E. Children and lineal descendants of the beneficiaries mentioned in A to D

Table D - Details of Acquirer Trust- 3 Vidya Family Trust Settlor Trustee Beneficiaries Relationship 1. Sujata 1. Sujata Sampath A. Vidya Sampath Sujata Sampath is the wife of Sampath Rangaswamy Sampath 2. 2. Rangaswamy B. Children and lineal Vidya is the daughter of Sujata and Rangaswamy Sampath descendants of Vidya Sampath Rangaswamay Sampath C. Spouses of Children and lineal descendants of Vidya Sampath

Table E - Details of Acquirer Trust- 4 Ramya Family Trust Settlor Trustee Beneficiaries Relationship 1. Sujata 1. Sujata Sampath A. Ramya Bharathram Sujata Sampath is the wife of Sampath Rangaswamy Sampath 2. 2. Rangaswamy B. Children and lineal Ramya is the daughter of Sujata and Rangaswamy Sampath descendants of Ramya Ramaswamy Sampath Bharathram C. Spouses of Children and lineal descendants of Ramya Bharathram

Table F - Details of Acquirer Trust- 5 R Parthasarathy Family Trust Settlor Trustee Beneficiaries Relationship Rangaswamy 1. Rangaswamy A. Bhooma Parthasarathy Bhooma Parthasarathy is the wife of Parthasarathy Parthasarathy Rangaswamy Parthasarathy, and Tara and Meera are their daughters. 2. Bhooma B. Tara Parthasarathy Parthasarathy C. Meera Parthasarathy Daughter D. Children and lineal descendants of the beneficiaries mentioned in B and C

Table G - Details of Acquirer Trust- 6 Bhooma Parthasarathy Family Trust Settlor Trustee Beneficiaries Relationship Bhooma 1. Bhooma A. Rangaswamy Parthasarathy Bhooma Parthasarathy is the wife of Parthasarathy Parthasarathy Rangaswamy Parthasarathy, and Tara and Meera are their daughters.

2. Rangaswamy B. Tara Parthasarathy Daughter Parthasarathy C. Meera Parthasarathy Daughter D. Children and lineal descendants of the beneficiaries mentioned in B and C

Table H - Details of Acquirer Trust – 7 Tara Parthasarathy Family Trust Settlor Trustee Beneficiaries Relationship 1. 1. Rangaswamy A. Tara Parthasarathy Bhooma Parthasarathy is the wife of Rangaswamy Parthasarathy Rangaswamy Parthasarathy and Tara, Parthasarathy is their daughter. 2. Bhooma 2. Bhooma B. Children and lineal Parthasarathy Parthasarathy descendants of Tara Parthasarathy

Table I - Details of Acquirer Trust -8 Meera Parthasarathy Family Trust Settlor Trustee Beneficiaries Relationship 1. 1. Rangaswamy A. Meera Parthasarathy Bhooma Parthasarathy is the wife of Rangaswamy Parthasarathy Rangaswamy Parthasarathy and Parthasarathy Meera is their daughter. 2. Bhooma 2. Bhooma B. Children and lineal Parthasarathy Parthasarathy descendants of Meera Parthasarathy

E. Grounds for seeking exemption –

Acquirer Trusts under the respective exemption applications provided the grounds for seeking exemption. The summary of the same is given below:

i. The proposed inter se transfer to the Trusts (The Acquirers) is pursuant to an internal reorganization within the promoter family and is intended to streamline succession and promote welfare of the promoter family. This acquisition would not affect or prejudice the interests of the public shareholders of the Target Company in any manner. ii. The proposed transfer to the Trusts (The Acquirers) is for efficient succession planning and for holding the controlling interest in the Target Company in the Trusts rather than spreading the holding amongst different individuals. iii. The proposed transfer would not result in change in control and management of the Target Company. The trustees of the Acquirer Trusts, through whom control would be exercised over the assets of the Trusts, are part of the promoter/ promoter group of Target Company. The pre-acquisition shareholding and post-acquisition shareholding of promoter/promoter group in the Target Company would remain the same. iv. As specified in the Trust deed, only individual promoters or their immediate relatives or lineal descendants are trustees and beneficiaries of Acquirer trusts. v. The trusts are irrevocable discretionary private family trust. The trustees and the ultimate beneficiaries are individuals from the promoter family.

vi. The Trusts (The Acquirers) undertake that no outsider other than family members and their descendants shall be part of the acquirer trusts and any change in the trustees or beneficiaries of the Acquirer Trusts resulting in change in ownership or control of the Target Company shall be in compliance with the Target Company and shall be adequately disclosed. vii. The Trusts shall comply with the provisions of the SEBI Circular dated December 22, 2017 (SEBI/HO/CFD/DCR1/CIR/P/2017/131). 5. The Acquirer Trusts (vide the Application read with emails dated April 03, 2020 & July 14, 2020) have confirmed their compliance with the following Guidelines outlined in the Schedule to the SEBI Circular dated December 22, 2017:

i. The Trusts are in substance, only a mirror image of the Promoters’ holdings and consequently, there is no change of ownership or control of the shares or voting rights in the Target Company.

ii. Only individual promoters or their immediate relatives or lineal descendants are Trustees and beneficiaries.

iii. The beneficial interest of the beneficiaries of the Trusts have not been and will not in the future, be transferred, assigned or encumbered in any manner including by way of pledge/mortgage.

iv. In case of dissolution of the Trusts, the assets will be distributed only to the beneficiaries of the Trusts or to their legal heirs.

v. The Trustees will not be entitled to transfer or delegate any of their powers to any person other than one or more of themselves.

vi. Any change in the trustees / beneficiaries and any change in ownership or control of shares or voting rights held by the Trusts shall be disclosed within 2 days to the concerned stock exchanges with a copy endorsed to SEBI for its record.

vii. As far as the provisions of the SEBI Act and the regulations framed thereunder are concerned, the ownership or control of shares or voting rights will be treated as vesting not only with the Trustees but also indirectly with the beneficiaries.

viii. The liabilities and obligations of individual transferors under the SEBI Act and the regulations framed thereunder will not change or get diluted due to transfers to the Trusts.

ix. The Trusts shall confirm, on an annual basis, that they are in compliance with the exemption order passed by SEBI. The said confirmation shall be furnished to the company which it shall disclose prominently as a note to the shareholding pattern filed for the quarter ending March 31 each year, under Regulation 31 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

x. The Trusts shall get their compliance status certified from an independent auditor annually and furnish the certificate to the Stock Exchanges for public disclosure with a copy endorsed to SEBI for its records.

xi. The proposed acquisition is in accordance with the provisions of the Companies Act, 2013 and other applicable laws.

xii. The transferors are disclosed as promoters in the shareholding pattern filed with the Stock Exchanges for a period of at least 3 years prior to transfer (except for holding on account of inheritance), xiii. There is no layering in terms of trustees/beneficiaries in case of Trusts.

xiv. The Trust Deeds do not contain any limitation of liability of the trustees / beneficiaries in relation to the provisions of the SEBI Act and all regulations framed thereunder.

Consideration –

6. I have considered the Applications submitted by the Acquirer Trusts and other material available on record. Without reiterating the facts as stated above, the following is noted:

A. The Applications submitted are in respect of the proposed acquisitions of shares and voting rights in the Target Company i.e. Ultramarine & Pigments Limited. The proposed acquisitions as detailed at paragraph 4C, which are to be made by Sampath Family Trust ("Acquirer Trust 1"), Sujata Sampath Family Trust ("Acquirer Trust 2"), Vidya Family Trust ("Acquirer Trust 3"), Ramya Family Trust ("Acquirer Trust 4"), R Parthasarathy Family Trust ("Acquirer Trust 5"), Bhooma Parthasarathy Family Trust ("Acquirer Trust 6"), Meera Parthasarathy Family Trust ("Acquirer Trust 7"), Tara

Parthasarathy Family Trust ("Acquirer Trust 8") i.e. the Proposed Acquirers, will attract the provisions of Regulations 3(2) and 4 of the Takeover Regulations 2011.

B. Pursuant to the proposed acquisitions, the Proposed Acquirers will hold an aggregate of 17.51% of the paid up equity capital in the Target Company.

C. The objective of the proposed acquisitions is to streamline succession and promote welfare of the Promoter family.

D. There will be no change in control of the Target Company pursuant to the proposed acquisition, as stipulated under the SEBI Circular dated December 22, 2017.

E. The pre -acquisition and post-acquisition shareholding of the Promoters in the Target Company will remain the same (except that of the transferors and the transferees in the Direct Acquisition).

F. There will also be no change in the public shareholding of the Target Company

G. The Target Company shall continue to be in compliance with the minimum public shareholding requirements under the Securities Contracts Regulation Rules, 1957 ("SCRR") and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

H. The Proposed Acquirers have also confirmed that they are in compliance with the Guidelines outlined in the Schedule to the SEBI Circular dated December 22, 2017 (as reproduced at paragraph 5).

7. Considering the aforementioned, I am of the view that exemption as sought for in the Application (read with further submissions) may be granted to the Proposed Acquirer, subject to certain conditions as ordered herein below.

Order –

8. I, in exercise of the powers conferred upon me under Section 19 read with Section 11(1) and Section 11(2)(h) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and Regulation 11(5) of the Takeover Regulations, hereby grant exemption to the proposed Acquirers viz. Sampath Family Trust ("Acquirer Trust 1"), Sujata Sampath Family Trust ("Acquirer Trust 2"), Vidya Family Trust ("Acquirer Trust 3"), Ramya Family Trust ("Acquirer Trust 4"), R Parthasarathy Family Trust ("Acquirer Trust 5"), Bhooma Parthasarathy Family Trust ("Acquirer Trust 6"), Meera Parthasarathy Family Trust ("Acquirer Trust 7"), Tara Parthasarathy Family Trust ("Acquirer Trust 8") from complying with the requirements of Regulation 3(1), 4 and 5(1) of the Takeover Regulations with respect to the proposed acquisition/exercise of voting rights in respect of the Target Company, viz. Ultramarine & Pigments Limited, by way of proposed transactions as mentioned in the Application.

9. The exemption so granted is subject to the following conditions:

i. The proposed acquisition shall be in accordance with the relevant provisions of the Companies Act, 2013 and other applicable laws.

ii. On completion of the proposed acquisition, the Proposed Acquirers shall file a report with SEBI within a period of 21 days from the date of such acquisition, as provided in the Takeover Regulations 2011.

iii. The statements/averments made or facts and figures mentioned in the Application and other submissions by the Proposed Acquirer are true and correct, iv. The Proposed Acquirers shall ensure compliance with the statements, disclosures and undertakings made in the Application. The Proposed Acquirers shall also ensure compliance with the provisions of the SEBI Circular dated December 22, 2017.

v. The Proposed Acquirers shall also ensure that the covenants in the Trust Deeds are not contrary to the above conditions and undertaking provided by the transferors. In such case, the Trust Deeds shall be suitably modified and expeditiously reported to SEBI.

10. The exemption granted above is limited to the requirements of making open offer under the Takeover Regulations 2011 and shall not be construed as exemption from the disclosure requirements under Chapter V of the aforesaid Regulations; compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015; Listing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or any other applicable Acts, Rules and Regulations.

11. The Applications dated December 12, 2019 and the related correspondences filed by Sampath Family Trust ("Acquirer Trust 1"), Sujata Sampath Family Trust ("Acquirer Trust 2"), Vidya Family Trust ("Acquirer Trust 3"), Ramya Family Trust ("Acquirer Trust 4"), R Parthasarathy Family Trust ("Acquirer Trust 5"), Bhooma Parthasarathy Family Trust ("Acquirer Trust 6"), Meera Parthasarathy Family Trust ("Acquirer Trust 7"), Tara Parthasarathy Family Trust ("Acquirer Trust 8") are accordingly disposed of.

Place: Mumbai G. MAHALINGAM Date: December 11, 2020 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA