Advent Global Solutions Ltd

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present Ramanath Dash Regional Director Date: November 09, 2016 C.A. HYD 143 In the matter of M/s. Advent Global Solutions Pvt. Ltd. Plot No. 172, Kavuri Hills Phase 2, Madhapur Hyderabad 500081. (Applicant) In exercise of the powers conferred under Section 15 (1) of Foreign Exchange Management Act, 1999 and the Regulations/ Rules/ Notifications/ Orders made there under, I pass the following Order The applicant has filed the compounding application dated July 4, 2016 received on July 13, 2016 for compounding of contravention of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued there under. The contraventions sought to be compounded are (i) neither the equity instruments were issued nor the money refunded to the foreign investor, a person resident outside India, within 180 days of the receipt of the inward remittance; and (ii) delay in reporting receipt of foreign inward remittances towards subscription to equity to a person resident outside India in terms of Paragraph 8 and Paragraph 9 (1) (A) of Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India)

FED M/s. Advent Global Solutions Pvt. Ltd. CA No. HYD 143 Regulations, 2000 of Schedule 1 to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 notified vide Notification No. FEMA.20/2000-RB dated 3rd May 2000 and as amended from time to time (hereinafter referred to as Notification No. FEMA 20 /2000-RB). 2. The relevant facts of the case are as follows: a) The applicant is a resident company incorporated originally as A. G Solutions Pvt. Ltd under the Companies Act, 1956 on 28.02.2005 and changed its name to Advent Global Solutions Pvt. Ltd on 10.03.2010. The company was renamed as Advent Global Solutions Ltd with effect from 04.11.2010 and again renamed as Advent Global Solutions Pvt. Ltd on 13.01.2016. The company is engaged in the business of delivering enterprise software solutions, IT consulting and outsourcing services and product engineering solutions.

b) The applicant had received foreign inward remittances from overseas investors towards advance for subscription to equity shares as indicated below:

Sl. Name of Remitter Date of Date of Total Amount (`) No. Receipt Reporting

1 Madhav N. Devalaraja 44,34,675 26.10.2010 10.12.2010 2 Lakshmi Narayan Nese 44,59,608 09.11.2010 10.12.2010 3 Lakshmi Narayan Nese 57,97,608 10.11.2010 21.02.2011 Jayanth Kumar Vodela- 4 18,38,031 22.02.2011 24.03.2011 Uma Vodela

FED M/s. Advent Global Solutions Pvt. Ltd. CA No. HYD 143 5 Ravi Prakash Dugyala 22,24,219 14.03.2011 24.03.2011 6 Srinivasa R. Veeramasu 39,81,290 06.04.2011 07.11.2014 7 Madhav N. Devalaraja 44,23,676 27.04.2011 07.11.2014 8 Lakshmi Narayana 1,42,39,608 04.05.2011 07.11.2014 9 Srinivasa R. Veeramasu 4,46,587 09.05.2011 07.11.2014 10 Venkat R Birudula 22,18,556 01.07.2011 04.08.2011 Total 4,40,63,858

The applicant reported receipt of remittances towards share subscription amounting to ` 4,40,63,858/- to the Regional Office of Reserve Bank of India and remittances amounting to ` 4,00,01,608/- was reported with delay ranging from 1 day to 3 years 6 months 2 days approximately as indicated above. Whereas in terms of paragraph 9 (1) (A) of Schedule 1 to Notification No. FEMA 20/2000-RB, an Indian company issuing shares or convertible debentures in accordance with these Regulations should report to the Reserve Bank of India as per the prescribed procedure not later than 30 days from the date of receipt of the amount of consideration.

c) The company delayed in refund of share application money beyond the stipulated period of 180 days from the date of receipt of inward remittances with delay ranging from 2 years 10 months 10 days to 3 years 2 months 19 days approximately as detailed under:

Sr Name of the investor Date of receipt Amount Date of No. of funds (`) application of refund Jayant Kumar Vodela & 1 22.02.2011 18,38,031 Uma Vodela 2 14.03.2011 22,24,219 Ravi Prakash Dugyala 3 06.04.2011 39,81,290 Srinivasa R Veeramasu 07.11.2014 4 27.04.2011 44,03,677.55 Madhav N Devalaraja 5 04.05.2011 1,42,74,106.32 Lakshmi Narayana Nese 6 09.05.2011 4,46,587 Srinivasa R Veeramasu

FED M/s. Advent Global Solutions Pvt. Ltd. CA No. HYD 143 Venkatarama Reddy 7 01.07.2011 22,18,556 Birudula Total 2,93,86,466.87

Whereas in terms of Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB, if the shares are not issued within 180 days from the date of receipt of the inward remittance, the amount of consideration so received shall be refunded to the person concerned, provided the Reserve Bank may on an application made to it and for sufficient reasons permit to refund the amount of consideration received towards issue of security, if such amount is outstanding beyond a period of 180 days from the date of receipt. The amendment in paragraph 8 of Schedule 1 to Notification No. FEMA 20/20000-RB was introduced by issue of Foreign Exchange Management (Transfer or Issue of Security by a Person outside India) (Third Amendment Regulation, 2007 notified, vide Notification No. FEMA 170/2007-RB dated November 13, 2007 in the official Gazette of the Govt. of India..

3 a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/813/14.66.003/2016-17 dated October 26, 2016 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant appeared for personal hearing on November 1, 2016 during which Shri T. Reddinatha Reddy, Assistant Manager, Finance of the company represented the applicant. The applicant admitted the contraventions for which the compounding has been sought. During the personal hearing it was submitted that the delay was due to miscommunication between the company and its consultants and discontinuation of project and was neither willful nor with a malafide intention. In view of the foregoing, the applicant requested to take a lenient view in disposal of the application. The application for compounding is, therefore, being considered on the basis of the averments made in the application as well the submissions made in this context by the applicant during the personal hearing.

FED M/s. Advent Global Solutions Pvt. Ltd. CA No. HYD 143 4. I have given my careful consideration to the documents on record and submission made by the applicant during the personal hearing. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: (a) Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB for delay in refund of share application money beyond the stipulated period of 180 days from the date of receipt of foreign inward remittances. The contravention relates to an amount of `. 2,93,86,466.87 and the period of contravention ranges from 2 years 10 months 10 days to 3 years 2 months 19 days approximately. (b) Paragraph 9 (1) (A) of Schedule 1 to Notification No. FEMA.20/ 2000-RB due to delay in reporting of receipt of foreign inward remittances towards subscription to equity shares as detailed above. The contraventions relate to an amount of ` 4,00,01,608/-and the duration of contravention ranges from 1 day to 3 years 6 months 2 days approximately. 5. In terms of Section 13 of the FEMA, any person contravening any provision of the Act shall be liable to a penalty upto thrice the sum involved in such contravention upon adjudication.

However, taking into account the relevant facts and circumstances of the case as stated in the foregoing paragraphs, I am persuaded to take a lenient view on the amount for which the contravention is to be compounded and I consider that an amount of ` 4,66,635/- (Rupees Four Lakhs Sixty Six Thousand Six Hundred Thirty Five Only) will meet the ends of justice. 6. Accordingly, I compound the admitted contraventions namely, the contraventions of Paragraph 8 and Paragraph 9 (1) (B) of Schedule 1 to Notification No. FEMA-20/2000- RB by the applicant on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount of ` 4,66,635/- (Rupees Four Lakhs Sixty Six Thousand Six Hundred Thirty Five Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, 1st Floor, Saifabad, Hyderabad - 500004 by a demand draft drawn in favour of the "Reserve Bank of India" and payable at Hyderabad within a period of 15 days from the date of this order. In case of failure to deposit the FED M/s. Advent Global Solutions Pvt. Ltd. CA No. HYD 143 compounded amount within the above mentioned period, Rule10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly. Dated this 09th day of November 2016.

Sd/- (Ramanath Dash) Regional Director