Order in respect of Aero Trust and Iceberg Trust in the matter of Jai Corp Limited

SEBI/WTM/SR/CFD–DCR/ 33 /06/2017 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI CORAM: S. RAMAN, WHOLE TIME MEMBER ORDER UNDER 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 JAI CORP LIMITED.

Background –

1.1 Jai Corp Limited (“Target Company”) was incorporated under the Companies Act, 1956 (“Companies Act”) on June 6, 1985. The Registered Office of the Target Company is at A–3, MIDC Industrial Area, Nanded– 431603. The shares of the Target Company are listed on BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”).

1.2 SEBI received an application dated October 3, 2016 (“Application”) from Aero Trust (“Acquirer Trust 1”) and Iceberg Trust (“Acquirer Trust 2”) (represented by their Trustee – Mr. Virendra Jain) (Collectively referred to as the “Proposed Acquirers”) seeking exemption from the applicability of Regulation 3 and Regulation 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”) in respect of the proposed acquisition and control of the shareholding and voting rights in the Target Company.

1.3 Regulation 3 and Regulation 4 of the Takeover Regulations state – “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. (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.

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. (3) For the purposes of sub-regulation (1) and sub-regulation (2), acquisition of shares by any person, such that the individual shareholding of such person acquiring shares exceeds the stipulated thresholds, shall also be attracting the obligation to make an open offer for acquiring shares of the target company irrespective of whether there is a change in the aggregate shareholding with persons acting in concert.

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.”

1.4 In the aforementioned Application, the following was inter alia stated – i. “I, Mr. Virendra Jain, in my capacity as a Trustee of Acquirer Trust 1 and Acquirer Trust 2, both being private trusts settled on July 5, 2016 and also in the capacity of authorized representative of other Trustees of the Acquirers, hereby make this application under Regulation 11 of the Takeover Regulations seeking exemption from the applicability of the Takeover Regulations to the proposed acquisition of equity shares aggregating to 42,992,240 representing 24.09% of the paid up equity share capital of the Target Company (“Proposed Acquisition”). ii. Currently, these shares are held by Mr. Virendra Jain, his wife Mrs. Rina Jain and his son, Mr. Ankit Jain (“Jain Family/Transferors”) and are disclosed as Promoter and Promoter Group holding in the shareholding pattern filed by the Target Company.

iii. The detailed shareholding of the Jain Family, inter alia, as Promoter/Promoter Group in the Target Company is as under: Table A Sr. No. Name No. of shares % Shareholding A. Promoter Group 1. Mr. Virendra Jain 5,871,620 3.29 2. Mrs. Rina Jain 21,719,220 12.17 3. Mr. Ankit Jain 15,401,700 8.63 Total shares held by 1+2+3 42,992,540 24.09 Total shares to be acquired from 1+2+3 *42,992,240 24.09 4. Mr. Jai Kumar Jain 4,780 0.00 5. Mr. Satyapal Jaikumar Jain 18,211,800 10.21 6. Mrs. Laxmi Jain 14,253,540 7.99 7. Mr. Anand Jain 3,610,240 2.02 8. Mrs. Sushma Jain 16,130,740 9.04 9. Mr. Gaurav Jain 10,527,200 5.90 10. Mr. Harsh Jain 23,251,560 13.03 11. Sparsh Trading Private Limited 2,00,000 0.11 12. Richmond Traders Private Limited 2,00,000 0.11 13. Ridhi Synthetics Limited 1,00,000 0.06 14. Pet Fibres Limited 2,00,000 0.11 15. Kasturi Trading Co. Private Limited 2,00,000 0.11 16. Hide N Chic Furniture Private Limited 2,00,000 0.11 17. Somerset Trading Private Limited 2,00,000 0.11 Total 130,282,400 73.01 * Of the 42,992,540 shares of the Target Company held by Mr. Virendra Jain, Mrs. Rina Jain and Mr. Ankit Jain, 42,992,240 shares are proposed to be transferred to Aero Trust and Iceberg Trust. The remaining 300 shares will be retained by Mr. Virendra Jain (100 shares), Mrs. Rina Jain (100 shares) and Mr. Ankit Jain (100 shares).

iv. Mrs. Rina Jain and Mr. Virendra Jain had settled Acquirer Trust 1 and Acquirer Trust 2 respectively on 5th day of July, 2016, for the benefit of the Jain Family. v. The Settlor, Trustees and Beneficiaries of the Acquirer Trusts are as under:

Acquirer Trust 1 – Aero Trust Settlor Trustees Beneficiaries Mrs. Rina Jain Mr. Virendra Jain and Mrs. Rina Jain Mr. Virendra Jain, Mr. Ankit Jain and lineal descendants of Mr. Ankit Jain

Acquirer Trust 2 – Iceberg Trust Settlor Trustees Beneficiaries Mr. Virendra Jain Mr. Virendra Jain and Mrs. Rina Jain Mrs. Rina Jain, Mrs. Ruchi Jain Hanasoge and lineal descendants of Mrs. Ruchi Jain Hanasoge, vi. In order to realign Jain Family’s shareholding in the Target Company with a view to facilitate succession planning and consolidate control, it is proposed that the family members of the Jain Family will transfer the shares held by them in the Target Company, to the Acquirer Trust 1 and Acquirer Trust 2 in the following manner –

Table B Name Pre – Acquisition Post – Acquisition Shares % Shares % Promoter Group 1. Mr. Virendra Jain 5,871,620 3.29 100 0.00 2. Mrs. Rina Jain 21,719,220 12.17 100 0.00 3. Mr. Ankit Jain 15,401,700 8.63 100 0.00 4. Aero Trust 0 0.00 *21,719,120 12.17 5. Iceberg Trust 0 0.00 *21,273,120 11.92 Total 42,992,540 24.09 42,992,540 24.09

6. Mr. Jai Kumar Jain 4,780 0.00 4,780 0.00 7. Mr. Satyapal Jaikumar Jain 18,211,800 10.21 18,211,800 10.21 8. Mrs. Laxmi Jain 14,253,540 7.99 14,253,540 7.99 9. Mr. Anand Jain 3,610,240 2.02 3,610,240 2.02 10. Mrs. Sushma Jain 16,130,740 9.04 16,130,740 9.04 11. Mr. Gaurav Jain 10,527,200 5.90 10,527,200 5.90 12. Mr. Harsh Jain 23,251,560 13.03 23,251,560 13.03 13. Sparsh Trading Private Limited 2,00,000 0.11 2,00,000 0.11 14. Richmond Traders Private Limited 2,00,000 0.11 2,00,000 0.11 15. Ridhi Synthetics Limited 1,00,000 0.06 1,00,000 0.06 16. Pet Fibres Limited 2,00,000 0.11 2,00,000 0.11 17. Kasturi Trading Co. Private Limited 2,00,000 0.11 2,00,000 0.11 18. Hide N Chic Furniture Private Limited 2,00,000 0.11 2,00,000 0.11 19. Somerset Trading Private Limited 2,00,000 0.11 2,00,000 0.11 A. Total Promoter Group 130,282,400 73.01 130,282,400 73.01 B. Public 48,167,010 26.99 48,167,010 26.99 C. Total (A + B) 1,78,449,410 100 1,78,449,410 100 * Of the 42,992,540 shares of the Target Company held by Mr. Virendra Jain, Mrs. Rina Jain and Mr. Ankit Jain, 42,992,240 shares are proposed to be transferred to Aero Trust and Iceberg Trust. The remaining 300 shares will be retained by Mr. Virendra Jain (100 shares), Mrs. Rina Jain (100 shares) and Mr. Ankit Jain (100 shares).

vii. The Proposed Acquisition to the Acquirer Trusts would be effected by way of gift, which will be an off–market transaction … As a result of the proposed (acquisition), the Acquirer Trusts would be holding 24.09% directly in the Target Company.

viii. There are 9 Directors on the Board of Directors of the Target Company, viz. –

Table B Sr. No. Name Designation 1. Anand Jain Chairman 2. Virendra Jain Vice Chairman 3. Gaurav Jain Managing Director 4. V. S. Pandit Director – Works 5. K. M. Doongaji Independent Director 6. S. H. Junnarkar Independent Director 7. S. N. Chaturvedi Independent Director 8. Anup P. Shah Independent Director 9. Aziza A. Chitalwala Independent Director

Grounds for seeking exemption – i. The Acquirer Trusts and the Transferors are part of the Promoter and Promoter Group of the Target Company. The Trustees and the Beneficiaries of Acquirer Trusts are Mr. Virendra Jain and his family members, who are part of the Promoter and Promoter Group of the Target Company. ii. The Transferor and persons acting in concert with the transferors are directly in control of the Acquirer Trusts and hence, there will be no change in control of the Target Company after the proposed acquisition. iii. The proposed acquisition is only a part of the internal restructuring within the Jain Family and will not affect the interests of the public shareholders of the Target Company. iv. There will be no change in the shareholding pattern, control and management of the Target Company, pre and post the Proposed Acquisition. v. It is a non–commercial transaction which will not prejudice the interests of the public shareholders of the Target Company in any manner. vi. There will be no change in the identity of the persons who will exercise voting rights over the Target Company. There will be only change in their capacity from voting in their personal capacities as Promoters of the Target Company to voting as Trustees of the Acquirer Trusts.”

1.5 Vide additional submissions dated November 7, 2016, Mr. Virendra Jain, in his capacity as a Trustee of Aero Trust (Acquirer Trust 1) and Iceberg Trust (Acquirer Trust 2), inter alia provided point–wise reply to the queries raised vide SEBI e–mail dated October 26, 2016 –

1. SEBI Query – Under which sub –regulation of Regulation 3 of the Takeover Regulations, the application has been made?

“… The Acquirer Trusts seek an exemption from the obligation to make an open offer under Regulation 3(1), 3(2) and 3(3) of the Takeover Regulations for the proposed acquisition of shares in the Target Company from the members of the Jain Family.”

1.6 Thereafter, vide an e–mail dated December 13, 2016, Mr. Virendra Jain, in his capacity as a Trustee of Aero Trust (Acquirer Trust 1) and Iceberg Trust (Acquirer Trust 2), submitted the following Undertakings–

On behalf of Aero Trust –

1. “The applicant undertakes that no outsider other than the Family as defined in Clause 1.1.5 of the Acquirer Trust 1 settled on July 5, 2016 and their lineal descendants, shall be part of the Acquirer Trust 1 in any form whatsoever. In case, the Acquirer Trust 1 introduces any outsider as Trustees/beneficiaries or any other person to whom such powers are delegated to act as a Trustee, the same will be treated as change in control and will be subject to compliance with the Takeover Regulations. If there is any change in the beneficial interest of the beneficiaries of the Acquirer Trust 1, the same would also be subject to disclosures as per the Takeover Regulations.”

On behalf of Iceberg Trust –

1. “The applicant undertakes that no outsider other than the Family as defined in Clause 1.1.5 of the Acquirer Trust 2 settled on July 5, 2016 and their lineal descendants, shall be part of the Acquirer Trust 2 in any form whatsoever. In case, the Acquirer Trust 2 introduces any outsider as Trustees/beneficiaries or any other person to whom such powers are delegated to act as a Trustee, the same will be treated as change in control and will be subject to compliance with the Takeover Regulations. If there is any change in the beneficial interest of the beneficiaries of the Acquirer Trust 2, the same would also be subject to disclosures as per the Takeover Regulations.”

1.7 In addition to the above Undertakings, Mr. Virendra Jain, in his capacity as a Trustee of Rose Trust, submitted the following Undertaking –

1. “In the event of change in the trustees or beneficiaries of the Acquirer Trust 1 or any change in ownership/control of shares/voting rights held by Acquirer Trust 1, the Acquirer Trust 1 shall give necessary intimation to stock exchanges where the securities of Target Company are listed. 2. The provisions of the SEBI Act and the Regulations framed thereunder will apply on the basis that the ownership or control of shares or voting rights vests not only directly with the Trustees but also indirectly with the beneficiaries.

3. In the event SEBI initiates any proceeding against the Acquirer Trust 1 in its capacity as a Promoter of the company, the trustees who are the promoters, if found responsible for any violation, shall continue to be liable in the same manner as if such trustee have been acting as promoters in their individual capacity. 4. The Trust Deed of the Acquirer Trust 1 shall be amended to ensure that it does not contain any limitation of liability of the Trustees/beneficiaries in relation to the provisions of the SEBI Act and all Regulations framed thereunder. 5. It is undertaken that no outsider other than the Family as defined in Clause 1.1.5 of the Acquirer Trust 1 settled on July 5, 2016 and their lineal descendants shall be part of the Acquirer Trust 1 in any form whatsoever. In case, the Acquirer Trust 1 introduces any outsider as Trustees/beneficiaries or any other person to whom such powers are delegated to act as a Trustee, the same will be treated as change in control and will be subject to compliance with the Takeover Regulations. If there is any change in the beneficial interest of the beneficiaries of the Acquirer Trust 1, the same would also be subject to disclosures as per the Takeover Regulations.”

1.8 Vide letter dated January 17, 2017, Mr. Virendra Jain, in his capacity as a Trustee of Aero Trust (Acquirer Trust 1) inter alia submitted –

1. “Rose Trust as a secondary beneficiary of Aero Trust –  In an event when none of the primary beneficiaries as set out in Annexure I of the Aero Trust Deed dated July 5, 2016, exists, Rose Trust shall be admitted as a beneficiary of Aero Trust.  Rose Trust is a private discretionary family trust settled on July 5, 2016. The details of the Trustees and beneficiaries of Rose Trust are as under – Rose Trust Trustees Beneficiaries Mr. Virendra Jain Mr. Virendra Jain Mrs. Rina Jain Mrs. Ruchi Jain Hanasoge (Daughter of Mr. Virendra Jain and Mrs. Rina Jain) Lineal descendants of Mrs. Ruchi Jain Hanasoge or any Trust created for the benefit of lineal descendants

 The Trustees as well as the beneficiaries of Rose Trust are members of the Family as defined in Clause 1.1.5 of the Rose Trust Deed.  It is further clarified that no outsider other than the Family as defined in Clause 1.1.5 of the Rose Trust Deed shall be part of the Target Company in any form whatsoever. In case of any change in the Trustee or the beneficiaries of Rose Trust, necessary disclosures shall be made with SEBI and the stock exchanges.”

Observations of the Takeover Panel on the Application made by the Proposed Acquirers –

A. Takeover Panel’s Recommendations –

2.1 The Application dated October 3, 2016, was forwarded to the Takeover Panel in terms of the proviso to Regulation 11(5) of the Takeover Regulations. The matter was deliberated by the Takeover Panel in its meeting held on January 7, 2017 (minutes of the said meeting were approved on February 17, 2017). The Takeover Panel made the following observations – “In the case of Jai Corp Limited, the Panel noted that there is a provision for secondary beneficiary (another trust) if none of the primary beneficiaries are existing and for appointing other persons (not forming part of the Promoter Group) as Trustees. In addition, the Trustees have power to add or remove beneficiaries (including those not forming part of the Promoter Group). In light of these fact, the Panel did not recommend grant of exemption pursuant to the proposed acquisition.”

Proceedings pursuant to the Takeover Panel’s Recommendations –

3.1 An opportunity of personal hearing was granted to Acquirer Trust 1 and Acquirer Trust 2 on April 26, 2017, in accordance with Regulation 11(5) of the Takeover Regulations, which was attended by their authorised representatives.

3.2 During the course of the hearing, Acquirer Trust 1 and Acquirer Trust 2 were informed of the recommendations made by the Takeover Panel in its meeting held on January 7, 2017, in respect of the Application made by them.

3.3 In this context, Acquirer Trust 1 and Acquirer Trust 2 agreed to submit an Undertaking for amending the Trust Deed for removal of Clauses pertaining to secondary beneficiary and also in respect of appointment of Trustees/beneficiaries from amongst persons not forming part of the Promoter Group.

3.4 Thereafter, vide letter dated April 28, 2017 (received at SEBI on May 15, 2017), Mr. Virendra Jain, in his capacity as a Trustee of Aero Trust (Acquirer Trust 1) and Iceberg Trust (Acquirer Trust 2), submitted as under – “With reference to our discussion on April 26, 2017, we hereby submit the following:

a. We undertake to amend the Trust Deeds of Aero Trust, Iceberg Trust and Rose Trust to provide that the Trustees and beneficiaries of these Trusts would include only the family members and their lineal descendants at all times.  In this regard, we undertake to amend Clause 11.1.3 of the Trust Deed of Aero Trust. “11.1.3 In an event of Initial Trustees, being Mr. Ankit Jain and Mrs Ruchi Jain Hanasoge being discharged from the Office of the Trustee in accordance with Clause 10.2 above, then any person nominated by Mr. Ankit Jain from the Family during his lifetime shall be appointed as a Trustee.”  We also undertake to amend Clause 11.1.3 of the Trust Deed of Iceberg Trust. The revised Clause would be as under: “In an event of Initial Trustees, Mrs Ruchi Jain Hanasoge and Mr. Ankit Jain being discharged from the office of the Trustees in accordance with Clause 10.2 above, then any person nominated by Mrs Ruchi Jain Hanasoge from the Family during her lifetime shall be appointed as a Trustee.”

b. We also undertake to amend the definition of “Beneficiaries” provided in Clause 1.1.2 of the Trust Deed of the Aero Trust and Iceberg Trust which provides for the definition of “Beneficiaries”. The revised Clause 1.1.2 would be as under: “1.1.2 Beneficiaries means collectively the Person set out in Annexure I to this Trust Deed or such other Persons from the family who may be appointed as a Beneficiary strictly in accordance with this Trust Deed from time to time.”

c. We also undertake to delete Clause 1.1.10 from the Trust Deed of the Aero Trust which provides for the definition of “Rose Trust”. d. Further, we also undertake to delete the “List of Secondary Beneficiaries” from Annexure I of the Trust Deed of Aero Trust wherein Rose Trust shall be deemed to be the beneficiary of the Aero Trust when none of the Primary Beneficiaries are existing. e. We also hereby undertake that such amendment in the Trust Deeds shall be carried out within a period of 30 days from the date of receipt of the Order from SEBI granting exemption to the proposed acquisition of shares of the Target Company.

We would like to reiterate that the proposed transfer of shares of the Target Company (i.e. Jai Corp) to the Trusts is being done wherein the Trustee and beneficiaries of such Trusts are only the family members as defined in the respective Trust Deeds and facilitate succession planning.”

Consideration of the Application and Findings –

4.1 I have considered the Application alongwith further correspondence/submissions/clarifications submitted by the Acquirer Trusts; the recommendations of the Takeover Panel and other material available on record.

4.2.1 From the preceding paragraphs, it is noted that –

A. The Application submitted is in respect of the proposed acquisition and control of the shareholding and voting rights in the Target Company i.e. Jai Corp Limited.

B. The aforesaid acquisition is proposed to be made by Aero Trust and Iceberg Trust i.e. the Proposed Acquirers, in the following manner –

Name Pre – Acquisition Post – Acquisition Shares % Shares % A. Promoter Group 1. Mr. Virendra Jain 5,871,620 3.29 100 0.00 2. Mrs. Rina Jain 21,719,220 12.17 100 0.00 3. Mr. Ankit Jain 15,401,700 8.63 100 0.00 4. Aero Trust 0 0.00 *21,719,120 12.17 5. Iceberg Trust 0 0.00 *21,273,120 11.92 B. Total 42,992,540 24.09 42,992,540 24.09 * Of the 42,992,540 shares of the Target Company held by Mr. Virendra Jain, Mrs. Rina Jain and Mr. Ankit Jain, 42,992,240 shares are proposed to be transferred to Aero Trust and Iceberg Trust. The remaining 300 shares will be retained by Mr. Virendra Jain (100 shares), Mrs. Rina Jain (100 shares) and Mr. Ankit Jain (100 shares).

C. The proposed acquisition transaction is pursuant to a private family arrangement intended to streamline succession and welfare of the Jain Family and will not affect the interest of the public shareholders.

D. There will be no change in control of the Target Company pursuant to the proposed acquisition.

E. There is no new acquisition of shares by the Promoters Group and the pre-acquisition and post-acquisition shareholding of the Promoter Group in the Target Company will remain the same at 73.01%.

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. From the Takeover Panel’s Recommendations, the following is reiterated – “In the case of Jai Corp Limited, the Panel noted that there is a provision for secondary beneficiary (another trust) if none of the primary beneficiaries are existing and for appointing other persons (not forming part of the Promoter Group) as Trustees. In addition, the Trustees have power to add or remove beneficiaries (including those not forming part of the Promoter Group). In light of these fact, the Panel did not recommend grant of exemption pursuant to the proposed acquisition.”

I. However, vide letter dated April 28, 2017, Mr. Virendra Jain, in his capacity as a Trustee of Aero Trust (Acquirer Trust 1) and Iceberg Trust (Acquirer Trust 2), forwarded Undertakings for amending the Trust Deeds of the aforementioned Trusts –

 To provide that the Trustees and beneficiaries of these Trusts would include only the family members and their lineal descendants at all times.  To amend the definition of “Beneficiaries” provided in Clause 1.1.2 of the Trust Deed of Aero Trust and Iceberg Trust.  To delete Clause 1.1.10 from the Trust Deed of Aero Trust which provides for the definition of “Rose Trust”.  To delete the “List of Secondary Beneficiaries” from Annexure I of the Trust Deed of Aero Trust wherein Rose Trust shall be deemed to be the beneficiary of Aero Trust when none of the Primary Beneficiaries are existing.  Such amendments in the Trust Deeds shall be carried out within a period of 30 days from the date of receipt of the Order from SEBI granting exemption to the proposed acquisition of shares of the Target Company.

4.2.2 Considering the Undertakings submitted by Aero Trust and Iceberg Trust, I am of the view that exemption as sought for in the Application (read with further correspondence/submissions/ clarifications) be granted to the Proposed Acquirers, subject to certain conditions as ordered herein below.

Order –

5.1 I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) read with Regulation 11(5) of the Takeover Regulations, hereby grant exemption to the Proposed Acquirers, viz. Aero Trust and Iceberg Trust (represented by their Trustee – Virendra Jain), from complying with the requirements of Regulation 3 of the Takeover Regulations with respect to the proposed acquisition/exercise of voting rights in respect of the Target Company, viz. Jai Corp Limited, by way of proposed transactions as mentioned in the Application.

5.2 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 Takeovers Regulations. iii. The statements/ averments made or facts and figures mentioned in the Application and in the subsequent correspondence/submissions/clarifications by the proposed acquirer are true and correct. iv. The provisions of the SEBI Act and the Regulations framed thereunder will apply on the basis that the ownership or control of shares or voting rights vests not only directly with the Trustees but also indirectly with the beneficiaries of the Proposed Acquirers. v. There shall be no limitation of liability of the Trustees/beneficiaries in relation to the provisions of the SEBI Act and all Regulations framed thereunder. vi. The Proposed Acquirers shall honour their undertakings and shall also ensure compliance with the statements, disclosures and undertakings made in the Application and in the subsequent correspondence. vii. The Proposed Acquirers 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 Target Company, which 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. viii. The Proposed Acquirers shall get the compliance status certified from an Independent Auditor annually and furnish the same to the stock exchanges with a copy endorsed to SEBI for its records.

ix. 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. x. The liabilities and obligations of individual transferors under the SEBI Act and Regulations framed thereunder will not change or get diluted due to transfers to the Proposed Acquirers. xi. The Trust Deeds shall be revised as undertaken by the Proposed Acquirers and Transferors within a period of 30 days from the date of this Order suitably incorporating all the Undertakings given by the Proposed Acquirers to SEBI. An authenticated copy of the same shall be submitted to SEBI within 30 days of this Order.

5.3 The exemption granted above is limited to the requirements of making open offer under the Takeover Regulations 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.

5.4 The Application dated October 3, 2016 (read with further correspondence/submissions/ clarifications) filed by Aero Trust and Iceberg Trust (represented by their Trustee – Virendra Jain), is accordingly disposed of.

Place: Mumbai S. RAMAN Date: June 7, 2017 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA