Exemption order under regulation 11 of SEBI (SAST) Regulations, 2011 in the matter of Alembic Pharmaceuticals Ltd.

WTM/GM/CFD/DCR1/35/2020-21 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 ALEMBIC PHARMACEUTICALS LIMITED ACQUIRER CRA FAMILY TRUST

Background – 1. Alembic Pharmaceuticals Limited (“Target Company”) is a company incorporated under the Companies Act, 1956 and has its registered office at Alembic Road, Vadodara- 390 003, Gujarat. It was incorporated on June 16, 2010 in the name and style of Alembic Pharma Ltd. The name of the company was changed to Alembic Pharmaceuticals Limited with effect from March 12, 2011. The equity shares of the Target Company are listed on the BSE Ltd.(“BSE”) and National Stock Exchange of India (“NSE”).

2. An Application dated March 16, 2020 read with email dated May 23, 2020 (“Application”) seeking exemption from the applicability of Regulations 3(2), 4 and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

Order in the matter of Alembic Pharmaceuticals Limited (“Takeover Regulations 2011”) in the matter of proposed indirect acquisition of shares in the Target Company as a result of the proposed transfer of equity shares of Nirayu Limited (“Holding Company”) from Mr. Pranav Chirayu Amin to the CRA Family Trust (“Acquirer Trust / Proposed Acquirer”) was received by SEBI from Mr. Chirayu Amin (Managing Trustee) and Mrs. Malika Amin (Trustee) for the CRA Family Trust.

3. Regulation 3(2), 4 and 5 of the Takeover Regulations 2011 states as under – “Substantial acquisition of shares or voting rights. 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. 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, the following was, inter alia, stated: (a) The shareholding in the Target Company as on March 13, 2020, is as under: TABLE I – SHAREHOLDING IN THE TARGET COMPANY (SOURCE: BSE WEBSITE& APPLICATION) NAME NO. OF SHARES % SHAREHOLDING A. PROMOTER/ PROMOTER GROUP 1. CHIRAYU RAMANBHAI AMIN 4521465 2.40 2. MALIKA CHIRAYU AMIN 3005730 1.59 3. PRANAV CHIRAYU AMIN 1009800 0.54 4. SHAUNAK CHIRAYU AMIN 1006980 0.53 5. UDIT CHIRAYU AMIN 1006980 0.53 6. BARKHA PRANAV AMIN 100 0 7. KRUPA SHAUNAK AMIN 100 0 8. TISHYA UDIT AMIN - - 9. SAMIRA PRANAV AMIN 30000 0.02 10. RANVIR PRANAV AMIN 30000 0.02 11. INAAYA SHAUNAK AMIN 30000 0.02

12. NAINTARA SHAUNAK AMIN 30000 0.02 13. NIRAYU LIMITED 70035435 37.15 14. ALEMBIC LTD. 55551528 29.47 15. VIRAMYA PACKLIGHT LLP 900 0 16. PAUSHAK LIMITED 855 0 17. SHRENO LIMITED 100 0 18. SHRENO PUBLICATIONS LIMITED 100 0 19. ALEMBIC CITY LIMITED 100 0 20. UDAY EDUCATION SOCIETY 1018050 0.54 21. BHAILAL AMIN GENERAL 280950 0.15 HOSPITAL 22. LABURNUM FAMILY TRUST 200 0 23. VIRSAD FAMILY TRUST 200 0 24. LAKSH TRUST 100 0 25. GALLUP TRUST 100 0 26. GRACE STAR TRUST 100 0 27. SATORI TRUST 100 0 28. UTKARSH VIDYAKENDRA - 0 29. UJJWAL VIDYALAYA - 0 30. VIDYANIDHI TRUST - 0 31. AROGYAVARDHINI SOCIETY - 0 TOTAL PROMOTER HOLDING 137559973 72.97 B. PUBLIC SHAREHOLDING 50955941 27.03 TOTAL 188515914 100 (b) The Acquirer Trust, viz. CRA Family Trust, registered vide trust deed dated December 30, 2019, is a private family trust which has been settled under the provisions of the Indian Trusts Act, 1882 for the benefit of the specified members of ‘Chirayu Amin Family’ who are part of the promoters and promoter group of the Target Company. Chirayu Amin Family comprises of the following members: (i) Chirayu Ramanbhai Amin (ii) Malika Chirayu Amin (iii) Pranav Chirayu Amin (iv) Shaunak Chirayu Amin (v) Udit Chirayu Amin (vi) Spouse of the persons referred to in sub clause (iii), (iv) and (v) above (vii) Lineal Descendants of the persons referred to in sub clause (iii), (iv) and (v) above (c) The Settlor, Trustees and beneficiaries of the aforementioned Acquirer Trust are as under – TABLE II: DETAILS OF ACQUIRER TRUST Settlor Trustees Beneficiaries Relationship

Mr. Pranav 1) Mr. Chirayu Amin 1) Mr. Chirayu The Trustees and Chirayu Amin (Father of the Settlor) Amin beneficiaries are 2) Mrs. Malika Amin 2) Mrs. Malika immediate relatives / (Mother of the Settlor) Amin lineal descendants of 3) Mr. Pranav Amin 3) Mr. Shaunak the promoters / 4) Mr. Shaunak Amin Amin settlor. (Brother of the Settlor) 4) Mr. Udit 5) Mr. Udit Amin (Brother Amin The Trustees / of the Settlor) 5) Mrs. Barkha Beneficiaries are also Amin (Spouse part of promoters / of the Settlor) promoter group of the Target Company.

(d) Nirayu Ltd. (i.e. Holding Company), which is classified as a part of the promoters and promoter group of the Target Company, currently holds 37.15% of the equity share capital in the Target Company. The equity shareholding pattern of Nirayu Ltd. as on the date of filing the application is as under: Name of the No of Equity Shares % of Shareholding and Shareholder held Voting rights Laksh Trust 1,83,834 73.82% Pranav Amin 62,276 25.01% Chirayu Amin HUF 1,493 0.60% Paushak Ltd. 1,433 0.57% Chirayu Amin 1 0.00% Shaunak Amin 1 0.00% Total 2,49,038 100% (e) The details of the proposed acquisition are as follows: i. As on 13th March, 2020, the promoters and the promoter group hold 72.97% of the equity shares and voting rights in the Target Company, out of which 37.15% shares are held by Nirayu Limited (i.e. Holding Company). ii. Mr. Pranav Chirayu Amin, who is also classified as a part of the promoters and promoter group of the Target Company, currently holds 25.01% equity shares in Nirayu Limited. iii. In order to facilitate succession planning and welfare of the Chirayu Amin Family, it is intended that Mr. Pranav Chirayu Amin shall transfer his entire shareholding (25.01%) in Nirayu Limited (i.e.

Holding Company), without consideration, to the Acquirer Trust. Pursuant to above, the Acquirer Trust shall hold 25.01% equity shares of Holding Company, which in turn holds 37.15% equity shares in Target Company. Thus, the same would result in the indirect acquisition of shares of the Target Company by the Acquirer Trust / Proposed Acquirer from Mr. Pranav Chirayu Amin. iv. There would be no alteration to the total equity share capital or voting rights of Target Company as a result of the Proposed Indirect Acquisition. The shareholding pattern of Target Company (pre and post the proposed Acquisition) will be as follows: Shareholders’ Before the proposed After the proposed acquisition category acquisition Number of % of equity Number of % of equity equity shares/ shares/ total equity shares/ shares/ total total voting voting capital total voting voting rights held held rights held capital held Promoter and Promoter Group Total- Promoter 137559973 72.97 137559973 72.97 and Promoter Group Public Total- Public 50955941 27.03 50955941 27.03 Grand Total 188515914 100 188515914 100 v. Since the aforesaid transaction (i.e. acquisition of 25.01% shares of the Holding Company by the Acquirer Trust, which are currently held by Mr.

Pranav Chirayu Amin) would result in an indirect acquisition of shares in the Target Company by the Acquirer Trust, the same would attract the applicability of Regulation 3(2), 4 and 5 of the Takeover Regulations 2011. Vide the Application, the Acquirer Trust has sought exemption from SEBI in respect of the same. Grounds for seeking exemption – 5. The following grounds have been cited while seeking the exemption a) The Acquirer Trust currently does not hold any equity shares in the Target Company. Pursuant to the proposed transaction, the Acquirer Trust shall indirectly hold equity shares in the Target Company. The Acquirer Trust should be regarded as a ‘person acting in concert’ with the promoters of the Target Company in terms of Regulation 2(1)(q) of the Takeover Regulations. b) The proposed indirect acquisition is in furtherance to an internal reorganization within the Promoter Family and is intended to streamline succession and promote welfare of Promoter Family. The proposed indirect acquisition would be non-commercial transaction which would not affect or prejudice the interest of the public shareholders of the Target Company in any manner. c) As the trustees and beneficiaries of the Acquirer Trust are part of promoters and promoter group of the Target Company, the proposed indirect acquisition would not result in any increase/decrease in the holding of the promoters or promoter group. d) The proposed indirect acquisition of equity shares by the Acquirer Trust from the transferor would not also result in change of control and management of the Target Company.

Mr. Chirayu Amin, Mrs. Malika Amin, Mr. Pranav Amin, Mr. Shaunak Amin and Mr. Udit Amin (trustees of the Acquirer Trust) through whom control would be exercised over the assets of the Acquirer Trust, are also members belonging to promoters and promoter group of the Target Company in their personal capacity. e) In any event, since the Acquirer Trust has been set up for the benefit of the members of Chirayu Amin Family, who are part of promoters and promoter group of the Target Company, the trustees of the Acquirer Trust will exercise control only as part of the promoter group. Therefore, regardless of whether the trustees exercise control in their personal capacity or as trustees, the promoters and promoter group would continue to be in control of the Target Company. f) There is no effective change in the exercise of voting power or in the control/management of the Target Company. The pre-acquisition shareholding and post-acquisition shareholding of promoters and promoter group in the Target Company would therefore remain same. The change in the identity of persons exercising voting rights over the Target Company would only be between persons, who in their personal capacities, are persons belonging to promoters and promoter group of the Target Company and are relatives of the person transferring the equity shares.

6. The Acquirer Trust, vide the Application read with subsequent submissions, have confirmed compliance with the following Guidelines outlined in the Schedule to the SEBI Circular dated December 22, 2017 – i. The Acquirer Trust is in substance, only a mirror image of the promoter’s 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 Acquirer Trust has not been and shall 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 Acquirer Trust, the assets will be distributed only to the beneficiaries of the Acquirer Trust 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 Acquirer Trust 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, 1992 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, 1992 and the regulations framed thereunder will not change or get diluted due to transfer to the Acquirer Trust. ix. The Acquirer Trust shall confirm, on an annual basis, that it is 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 Acquirer Trust shall get its 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 transferor is disclosed as promoter in the shareholding pattern filed with the Stock Exchanges for a period of at least 3 years prior to the proposed acquisition. xiii.

There is no layering in terms of trustees / beneficiaries in case of the Acquirer Trust. xiv. The Trust Deed does not contain any limitation of liability of the trustees / beneficiaries in relation to the provisions of the SEBI Act, 1992 and all regulations framed thereunder.

Consideration – 7. I have considered the Application submitted by the Acquirer Trust and other material available on record. Without reiterating the facts as stated above, the following is noted:

(a) The Application submitted is in respect of the proposed indirect acquisition of shares and voting rights in the Target Company i.e. Alembic Pharmaceuticals Limited. The proposed acquisition as detailed above, which is to be made by the Acquirer Trust, will attract the provisions of Regulations 3(2), 4 and 5 of the Takeover Regulations 2011. (b) Pursuant to the proposed acquisition, the Acquirer Trust would indirectly hold the same number of shares in the Target Company as currently being indirectly held by the transferor, Mr. Pranav Chirayu Amin, who is part of the promoters and promoter group of the Target Company. (c) The proposed acquisition is in furtherance to an internal reorganization within the Promoter Family and is intended to streamline succession and promote welfare of Promoter Family. The proposed indirect acquisition would be a non-commercial transaction which would not affect or prejudice the interests of the public shareholders of the Target Company in any manner. (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 and promoter group in the Target Company will remain the same. (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 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. (h) The Acquirer Trust has confirmed that it is in compliance with the Guidelines outlined in the Schedule to the SEBI Circular dated December 22, 2017 (as reproduced at paragraph 6 above).

8. 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 –

9. I, in exercise of the powers conferred upon me under Section 19 read with Section 11(1) and Section 11(2)(h) of the SEBI Act, 1992 and Regulation 11(5) of the Takeover Regulations 2011, hereby grant exemption to the Proposed Acquirer, viz. CRA Family Trust from complying with the requirements of Regulations 3(2), 4 and 5 of the Takeover Regulations 2011 with respect to the proposed indirect acquisition in the Target Company, viz. Alembic Pharmaceuticals Limited, by way of proposed transaction as mentioned in the Application.

10. 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 Acquirer shall ensure compliance with the statements, disclosures and undertakings made in the Application. The Proposed Acquirer shall also ensure compliance with the provisions of the SEBI Circular dated December 22, 2017. v. The Proposed Acquirer shall also ensure that the covenants in the Trust Deed are not contrary to the above conditions and undertaking provided by the transferor. In such case, the Trust Deed shall be suitably modified and expeditiously reported to SEBI.

11. 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.

12. The Application dated March 16, 2020 read with other submissions, filed by CRA Family Trust, are accordingly disposed of.

Place: Mumbai G. MAHALINGAM Date: September 30, 2020 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA