WTM/SM/CFD/59 / 2021-22

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 ACQUISITIONS OF SHARES AND

VOTING RIGHTS IN –

TARGET COMPANY KDDL Limited

ACQUIRERS RKS JS Family Trust

UDS JS Family Trust

ASP Saboo Family Trust

1. Background –

1.1. KDDL Limited (the “Target Company”/ “KDDL”) was incorporated on January 8, 1981
under the Indian Companies Act, 1956 and has its registered office at Plot no. 3, Sector-III,
Parwanoo – 173 220 (HP).

1.2. The Target Company is engaged in the business of manufacturing watch components,
precision engineering components and press tools. The equity shares of the Target Company
are listed on BSE since 1988 and NSE since 2005.

Exemption Order in the Matter of KDDL Limited Page 1 of 10

2. The Application –

2.1. An common application dated August 17, 2021 followed by a revised application dated
August 27, 2021, seeking exemption from the applicability of Regulation 3(2) of the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover
Regulations”) in the matter of proposed acquisitions of shares in the Target Company was
received by SEBI from RKS JS Family Trust, UDS JS Family Trust and ASP Saboo Family
Trust (the “Proposed Acquirers/Acquirer Trusts”). Subsequent to the receipt of the
above-mentioned applications, further clarifications and submissions have been received
from the Acquirer Trusts. Accordingly, the above-mentioned applications and subsequent
replies thereto shall be collectively referred to hereafter as the Application.

2.2. As stated above, the proposed acquisitions are to be carried out by three Trusts, namely,
RKS JS Family Trust, UDS JS Family Trust and ASP Saboo Family Trust. In this respect, it
is gathered from the Application that RKS JS Family Trust, UDS JS Family Trust and ASP
Saboo Family Trust have been instituted as irrevocable determinate trusts under the Indian
Trusts Act, 1882 by way of Trust Deeds dated January 27, 2021. The Settlors, Trustees and
beneficiaries of the aforementioned Proposed Acquirers are as under –

Table - 1
RKS JS Family Trust

Name of Name of Name of Beneficiaries Relationship of

Settlor Trustees Beneficiaries with
the Settlor
Mr. Rajendra Mr. Rajendra Mr. Rajendra Kumar Saboo Self
Kumar Kumar Saboo Mrs. Usha Devi Saboo Wife - Immediate
Saboo Relative
Mrs. Usha Mr. Jai Vardhan Saboo Son – Immediate
Devi Saboo Relative
Ms. Shivani Saboo Grand Daughter –
Lineal Descendant
Children of Shivani Saboo Lineal Descendant

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 UDS JS Family Trust
Name of Name of Name of Beneficiaries Relationship of
Settlor Trustees Beneficiaries with
the Settlor
Mrs. Usha Mr. Rajendra Mr. Rajendra Kumar Saboo Husband -
Devi Saboo Kumar Saboo Immediate
Relative
Mrs. Usha Mrs. Usha Devi Saboo Self
Devi Saboo Mr. Jai Vardhan Saboo Son – Immediate
Relative
Ms. Shivani Saboo Grand Daughter –
Lineal Descendant
Children of Shivani Saboo Lineal Descendant

ASP Saboo Family Trust

Name of Name of Name of Beneficiaries Relationship of

Settlor Trustees Beneficiaries with
the Settlor
Mr. Mr. Rajendra Mrs. Usha Saboo Wife – Immediate
Rajendra Kumar Saboo Relative
Kumar Mrs. Anuradha Saboo Son’s Wife -
Saboo Mrs. Usha Immediate relative
Devi Saboo
Mr. Pranav Saboo Grand Son –
Lineal Descendant
Mrs. Satvika Saboo Suri Grand Daughter –
Lineal Descendant

2.3. It has been submitted by the Acquirer Trusts that the total issued equity share capital of the
Target Company, was INR 12,91,13,440 divided into 1,29,11,344 equity shares of INR 10
each. The subscribed and paid up Equity Share Capital of the Target Company was INR
12,73,70,640 divided into 1,27,37,064 equity shares of INR 10 each.

2.4. It has been further submitted that, as on December 31, 2021, the Target Company has a
public shareholding of 53.13% and the non-public shareholding of 46.87% was entirely held
by the promoters and the promoter group.

2.5. The distribution of the promoter shareholding, as submitted by the Proposed Acquirers,
is provided hereunder:

Exemption Order in the Matter of KDDL Limited Page 3 of 10

 Table - 2
Sl. no. Promoter Percentage Holding

1 Rajendra Kumar Saboo 14.97%

2 Usha Devi Saboo 1.33%

3 Rajendra Kumar Saboo (HUF) 0.61%

4 Yashovardhan Saboo (HUF) 0.43%

5 Yashovardhan Saboo 15.33%

6 Anuradha Saboo 3.43%

7 Asha Devi Saboo 0.16%

8 Satvika Saboo 1.19%

9 Pranav Shankar Saboo 6.27%

10 Vardhan Properties & Investments Private 0.28%

Limited
11 Dream Digital Technology Private Limited 0.23%

12 Swades Capital LLC 2.54%

13 Saboo Ventures LLP 0.08%

2.6. In this regard, it has been proposed by the Acquirer Trusts that they would acquire Equity
Shares representing 16.28% of the paid-up equity share capital of the Target Company by
way of gift from Mr. Rajendra Kumar Saboo and Ms. Usha Devi Saboo (the “Sellers”) who
are a part of the promoter and members of the promoter group of the Target Company. The
details of the said acquisitions are as under:

Table -3
Acquirer Trust Shareholding

Name of Seller Shareholding &

No. of shares Voting Rights
(%)

RKS JS Family Trust Rajendra Kumar Saboo 14,00,058 10.99%

Exemption Order in the Matter of KDDL Limited Page 4 of 10

 ASP Saboo Family
Rajendra Kumar Saboo
Trust 5,05,001 3.96%

UDS JS Family Trust Usha Devi Saboo 1,69,800 1.33%

Total 20,74,859 16.28%

2.7. It has been submitted by the Acquirer Trusts that pursuant to the acquisition of shares and
voting rights, the Acquirer Trusts along with other promoters and members of the promoter
group shall directly hold voting rights of the Target Company, and post-acquisition the
overall shares held by the promoter and members of the promoter group of the Target
Company shall continue to be 46.87 %.

2.8. The shareholding of the Target Company before and after the proposed acquisitions is as
under:

Table -4
Pre-transaction
shareholding %
Name of the Shareholder
(as on December Post-transaction
31, 2021) shareholding %
Promoters:
14.97 0.01
Rajendra Kumar Saboo (‘Seller 1’)
Usha Devi Saboo
1.33 0
(‘Seller 2’)
0.61 0.61
Rajendra Kumar Saboo (HUF)
0.43 0.43
Yashovardhan Saboo (HUF)
15.33 15.33
Yashovardhan Saboo
3.43 3.43
Anuradha Saboo
0.16 0.16
Asha Devi Saboo
1.19 1.19
Satvika Saboo
6.27 6.27
Pranav Shankar Saboo
Vardhan Properties & Investments Private
0.28 0.28
Limited
Dream Digital Technology Private Limited
0.23 0.23
Swades Capital LLC
2.54 2.54
Saboo Ventures LLP
0.08 0.08
Acquirer Trusts:
RKS JS Family Trust 0 10.99
UDS JS Family Trust 0 1.33
ASP Saboo Family Trust 0 3.96

Exemption Order in the Matter of KDDL Limited Page 5 of 10

 Total Promoter Shareholding 46.87 46.87
Total Public Shareholding 53.13 53.13
The respective percentages in the tables have been rounded off to two decimal places

2.9. Further, the Acquirer Trusts, vide the Application have relied on the following grounds for
exemption from the Takeover Regulations, 2011:

a. The Acquirer Trusts and the Transferors are part of the promoter group of the
Target Company. The Trustees/Settlors are the transferors.

b. The Transferors and persons acting in concert with the Transferors are directly in
control of the Acquirer Trusts, hence, there will be no change in control and
management of the Target Company after the proposed acquisitions.

c. The proposed acquisitions are only a part of the internal re-alignment of holdings
within the Saboo family and is non-commercial. It will not prejudice the interests
of the public shareholders.

d. There will be no reduction in the holding of the public shareholders in the Target
Company.

2.10.Furthermore, vide the Application, the Acquirer Trusts, have confirmed compliance with the
Guidelines outlined in the Schedule to the SEBI Circular dated December 22, 2017. In this
regard, it has been submitted by them that –

a. 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.

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

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

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

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

Exemption Order in the Matter of KDDL Limited Page 6 of 10

 f. 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.

g. 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 Trusts.

h. The Acquirer 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.

i. The Acquirer 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.

j. The proposed acquisitions are in accordance with the provisions of the Companies
Act, 2013 and other applicable laws.

k. 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 the proposed
acquisitions.

l. There is no layering in terms of trustees / beneficiaries in case of the Acquirer

Trusts.

m. The Trust Deeds do 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.

n. Only individual promoters or their immediate relatives or lineal descendants are

Trustees and beneficiaries of the Acquirer Trusts.

Exemption Order in the Matter of KDDL Limited Page 7 of 10

3. Consideration –

3.1. Before proceeding with the consideration of the Application and the prayer made therein,
I find it appropriate to place hereunder the relevant provisions of the Takeover
Regulations, 2011 for the facility of reference:

“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:

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

a. The Application submitted is in respect of the proposed acquisition of shares and

voting rights in the Target Company i.e. KDDL Limited. The proposed
acquisitions as detailed above, which are to be made by the Proposed Acquirers
will attract the provisions of Regulation 3(2) of the Takeover Regulations, 2011.

b. The proposed acquisitions are in furtherance of an internal reorganisation within

the Promoter Family and are intended to streamline succession and promote
welfare of Promoter Family. The proposed acquisitions would be non-commercial
transactions which would not affect or prejudice the interests of the public
shareholders of the Target Company in any manner.

c. There will be no change in control of the Target Company pursuant to the

proposed acquisitions, as stipulated under the SEBI Circular dated December 22,
2017.

d. The pre–acquisition and post–acquisition shareholding of the promoters and

promoter group in the Target Company will remain the same.

3.3. 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 Acquirers,
subject to certain conditions as ordered herein below.

Exemption Order in the Matter of KDDL Limited Page 8 of 10

4. Order –

4.1. 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 Acquirers, viz. RKS JS
Family Trust, UDS JS Family Trust and ASP Saboo Family Trust from complying
with the requirements of Regulation 3(2) of the Takeover Regulations, 2011 with respect
to the acquisitions in the Target Company, i.e. KDDL Limited, by way of the proposed
acquisitions as mentioned in the Application.

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

a. The statements / averments made or facts and figures mentioned in the

Application and other submissions by the Proposed Acquirers are true and correct.

b. The proposed acquisitions shall be in accordance with the relevant provisions of

the Companies Act, 2013 and other applicable laws.

c. On completion of the proposed acquisitions, 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.

d. 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.

e. 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
transferor. In such case, the Trust Deed shall be suitably modified and
expeditiously reported to SEBI.

4.3. 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.

Exemption Order in the Matter of KDDL Limited Page 9 of 10

 4.4. The application dated August 17, 2021 and revised application dated August 27, 2021,
read with other submissions, received from RKS JS Family Trust, UDS JS Family Trust
and ASP Saboo Family Trust are accordingly disposed of.

Sd/-

Place: Mumbai S.K. MOHANTY

Date: March 28, 2022 WHOLE TIME MEMBER

SECURITIES AND EXCHANGE BOARD OF INDIA

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