Order in the matter of NRB Industrial Bearing Ltd

1. NRB Industrial Bearings Limited (hereinafter referred to as the 'Target Company') is a company incorporated under the Companies Act, 1956 having its registered office at Dhannur, 15, Sir P.M. Road, Fort, Mumbai - 400001. The equity shares of the Target Company are listed on the Bombay Stock Exchange Limited (hereinafter referred to as ‘BSE’) and the National Stock Exchange of India Limited (hereinafter referred to as ‘NSE’).

2. Mr. Trilochan Singh Sahney and Mrs. Hanwantbir Kaur Sahney, in their capacity as the Trustees of Trilochan Singh Sahney Trust 2 (hereinafter referred to as the 'Acquirer' or ‘Trust 2’) has filed an application dated June 24, 2013 with the Securities and Exchange Board of India (hereinafter referred to as 'SEBI') under Regulation 11 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as 'Takeover Regulations'), seeking exemption from the applicability of Regulation 3(1) of the Takeover Regulations, with respect to the proposed acquisition of 94,38,910 (38.95%) equity shares of the Target Company by the Trilochan Singh Sahney Trust 2 from Trilochan Singh Sahney Trust 1 (hereinafter referred to as 'Transferor' or 'Trust 1'). The Acquirer is a private family trust, settled on November 06, 2012. Mr. Trilochan Singh Sahney, is the Settlor of both the Acquirer and Trust 1 (which is also a private family trust). Mr. Trilochan Singh Sahney and Ms. Hanwantbir Kaur Sahney are the trustees of both the Acquirer and the Transferor (Trust 1). The beneficiaries of the Trust 2 are Mr. Trilochan Singh Sahney, his wife Ms. Hanwantbir Kaur Sahney, his son Mr. Devesh Singh Sahney, daughter Ms. Harshbeena Sahney Zaveri and his lineal bloodline descendants.

3. The application dated June 24, 2013 and the subsequent communications from Mr. Trilochan Singh Sahney dated August 09, 2013, August 29, 2013, September 03, 2013, October 10, 2013 and November 19, 2013 in response to the queries of SEBI, state the following: a. The Target Company is a wholly owned subsidiary of NRB Bearings Limited. The Sahney family are the promoters of both the Target Company and NRB Bearings Limited. The shareholding of the Sahney family in NRB Bearings Limited is inter alia held through Trust 1 which holds 3,77,55,640 equity shares (constituting 38.95%) of NRB Bearings Limited. Trust 1 is also designated as one of the promoters of NRB Bearings Limited. b. The 2,42,30,650 equity shares of the Target Company were listed on April 09, 2013, pursuant to the Scheme of Arrangement between NRB Bearings Limited, the Target Company, their respective shareholders and the creditors under Sections 391 to 394 of the Companies Act, 1956. The scheme was approved by Hon'ble High Court of Judicature of Bombay vide order dated August 24, 2012 and filed with the Registrar of Companies, Maharashtra on September 25, 2012. Trust 1 holds 94,38,910 equity shares (constituting 38.95%) in the Target Company. c. As per the family arrangement amongst the members of the promoter family, it has been agreed, that the management of NRB Bearings Limited would primarily be with its managing director, Ms. Harshbeena Sahney Zaveri and is in the day to day control of its management.

It has been further agreed amongst the promoter family, that the management of the Target Company would primarily be with Mr. Devesh Singh Sahney, who is currently the managing director of the Target Company and is in control of its day to day management. d. Pursuant to the aforesaid family arrangement amongst the promoters' family, Trust 1 has been restated on November 06, 2012 inter alia to record the scope of the management of NRB Bearings Limited in favour of Ms. Harshbeena Sahney Zaveri. The Acquirer (Trust 2) has been constituted on November 06, 2012 inter alia to record the scope of management of the Target Company in favour of Mr. Devesh Singh Sahney. e. Mr. Trilochan Singh Sahney and Ms. Hanwantbir Kaur Sahney in the capacity of trustees of Trust 1, have proposed to transfer holding in the Target Company to the Acquirer by way of share transfer as a part of the private family arrangement. For the proposed transfer, no price is to be paid by the Acquirer and the total issued and paid up capital of the Target Company will remain the same before and after the proposed acquisition.

f. There will be no change in the shareholding pattern of the promoter/ promoter group of the Target Company.

4. According to the Acquirer, the shareholding of Transferor i.e. 38.95% is proposed to be transferred to the Acquirer/ Trust 2 by way of share transfer. The proposed acquisition would increase the holding of the Acquirer from 0% to 38.95% in the Target Company, thus triggering Regulation 3(1) of the Takeover Regulations. The application has been made in respect of the said acquisition in the Target Company, seeking exemption from making an open offer in terms of the Regulation 3(1) of the Takeover Regulations, on the following grounds: a. The proposed transfer is only to give effect to the promoter family arrangement and will not result in any change of control or change in management of the Target Company. b. There will be no change in control or management of the Target Company after the proposed acquisition and the same continues to remain with the Sahney family. c. The transfer would in no way affect the interest of the shareholders including the minority shareholders of the Target Company.

5. I have considered the application of the Acquirer, the subsequent responses of the Acquirer in respect of the queries of SEBI and the material available on record. The Acquirer has proposed to acquire 38.95% shares/ voting rights in the Target Company from one of the promoters of the Target Company, i.e., Trust 1. The reason for the proposed transfer to the Acquirer is the internal reorganisation within the Trilochan Singh Sahney Family. The said acquisition would result in the increase of the individual shareholding of the Acquirer from 0% to 38.95% in the Target Company. As per the shareholding pattern of the Target Company as on the date of application, i.e. June 24, 2013, the total shareholding of the promoter group was 72.36%. Out of the above, Trust 1 holds 38.95% and other promoter group entities collectively hold 33.41%.

6. The shareholding pattern of the promoter and promoter group (before and after the proposed acquisition) are as under: Before the proposedProposed After the proposed Promoter and Promoter group acquisition transaction acquisition Trilochan Singh Sahney Trust 1 (Transferor) 38.95% -38.95% 0 Trilochan Singh Sahney Trust 2 (Acquirer) 0 38.95% 38.95% Others (promoter group other than Transferor) 33.41% 0 33.41% Total 72.36% - 72.36%

7. I have seen the restated trust deed of the Trust 1 and note that under the definition of 'Trust Fund' it has been inter alia stated that equity shares of Target Company will be part of the Trust 1 until distribution of the same to Trust 2. Further, I note that the Acquirer is a private family trust settled by Mr. Trilochan Singh Sahney, the Settlor/ Trustee of the Transferor. The Transferor is one of the promoter of the Target Company and falls within the definition of 'promoter group' under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and the Acquirer would become part of the promoter group pursuant to the proposed acquisition as the Trustees and the beneficiaries of the Acquirer are family members of Mr. Trilochan Singh Sahney, a promoter of the Target Company. Therefore, the Acquirer would be regarded as a person deemed to be acting in concert with the promoters of the Target company in terms of Regulation 2(1)(q) of the Takeover Regulations. I note that the Acquirer does not hold any shares in the Target Company prior to the proposed acquisition. Pursuant to the proposed transaction, the shareholding of the Acquirer would increase from nil to 38.95% in the Target company. Accordingly, the Acquirer would be under an obligation to make an open offer as required under 3(1) of the Takeover Regulations unless exempted by SEBI.

8. I note that there would be no change in the management or control of the Target Company as a result of the proposed transaction between the Acquirer and the Transferor. I also note that the proposed transaction would not affect or prejudice the interests of the public shareholders of the Target Company.

9. In view of the foregoing, I consider the present case, a fit one for granting exemption to the Acquirer from complying with requirements of Regulation 3(1) of the Takeover Regulations.

10. In view of the above, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Regulation 11(5) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, hereby grant exemption to the proposed Acquirer, the Trilochan Singh Sahney Trust 2 from complying with the requirements of Regulation 3(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 with respect to its proposed acquisition of 94,38,910 shares of the Target Company, namely NRB Industrial Bearings Limited by way of share transfer from Trust 1.

11. The exemption is granted subject to the following conditions: a. The proposed acquisition shall be in accordance with the relevant provisions of the Companies Act, 1956, the Companies Act, 2013 and other applicable laws and shall be completed within 30 days from the date of this order and the Acquirer shall file a report with SEBI in the manner provided in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 within 21 days from the date of the acquisition; b. The statements/ averments made or facts/ figures given in the application and in the subsequent correspondence by the said Acquirer are true and correct to its best knowledge; c. The Acquirer/ Target Company shall ensure compliance with the statements, disclosures and undertakings made in the application and subsequent correspondences; and d. This exemption is limited to the requirements of making open offer under Regulation 3(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and shall not be construed as exemption from the requirements of disclosure required under Chapter V of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, compliance of SEBI (Prohibition of Insider Trading) Regulations, 1992, the Listing Agreement or any other applicable Acts, Rules and Regulations.

DATE: March 10th, 2014 PRASHANT SARAN PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA