Auviz Systems India Private limited

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present Shri.P Kalyan Chakravarthy Assistant General Manager Date: April 15, 2019 C.A. HYD 404 In the matter of M/s. Auviz Systems India Private Limited Block A, B & C, 13th Floor, Meenakshi Tech Park Survey No. 39, Gachibowli, Serilingampally Mandal Hyderabad – 500 084 (Applicant) In exercise of the powers conferred under sub-section 1 of Section 15 of Foreign Exchange Management Act, 1999 and the Regulations/ Rules/ Notifications/ Orders made there under, I pass the following Order

The applicant has submitted the compounding application dated January 12, 2019 received by us on January 30, 2019 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are (i) delay in submission of Form FCGPR to the Reserve Bank after issue of shares to a person resident outside India, (ii) delay in receipt of consideration after allotment of shares to a person resident outside India and (iii) delay in filing the Annual Return in respect of the Foreign Liabilities and Assets (FLA Return), in terms of Paragraph 9(1)( B), Paragraph 8, Paragraph 9(2) of Schedule 1 to Foreign Exchange

Compounding of contraventions under FEMA 1999 M/s Auviz Systems India Private Limited CA No. HYD 404 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 as then applicable (hereinafter referred to as Notification No. FEMA 20/2000- RB) and Regulation 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB dated November 07, 2017 as amended from time to time. 2. The relevant facts of the case are as follows: a) The applicant is a resident company incorporated as Private Limited Company under the Companies Act, 1956 on February 12, 2014 (CIN: U72200TG2014FTC092906). The company is engaged in the business of “Other information service activities n.e.c”. b) The applicant had received foreign inward remittances from the following foreign investors as indicated below: Sl No Name of Remitter Amount (INR) Date of Date of Receipt Reporting 1 Auviz Systems Inc., USA 1,00,000 11.05.2018 12.06.2018 Total 1,00,000 The applicant reported receipt of remittance towards share subscription amounting to ₹ 1,00,000/- to the Regional Office of Reserve Bank of India, which was reported with a delay of 2 days approximately beyond the prescribed limit. Late submission fee of ₹ 100/- paid by the applicant on 11.01.2019. c) The company allotted equity shares and filed form FC-GPRs as indicated below: Sl Name of investor Date of Number of Amount for which Date of No allotment shares shares allotted reporting (INR) 1 Auviz Systems Inc., USA 19.02.2014 9,999 99,990 29.08.2018 Total 99,990

Compounding of contraventions under FEMA 1999 M/s Auviz Systems India Private Limited CA No. HYD 404 The applicant filed form FCGPR for the allotment of shares amounting to ₹ 99,990/- as indicated above, which was reported with a delay of 4 years 5 months 8 days approximately beyond the prescribed limit. Whereas in terms of Paragraph 9(1)(B) of Schedule 1 to Notification No. FEMA 20/2000-RB, an Indian company issuing shares in accordance with these Regulations has to submit to Reserve Bank a report in form FCGPR along with documents prescribed therein within 30 days from the date of issue of shares to person resident outside India. d) The applicant has delayed in receiving inward remittance of ₹ 99,990/- after the allotment of 9,999 shares to M/s Auviz Systems Inc., USA with a delay of 4 years 2months 22days, in contravention of Paragraph 8 of Schedule 1 to FEMA Notification No. 20/2000-RB dated May 03, 2000 as amended from time to time

Sl No Name of Remitter Amount (INR) Date of Date of allotment Receipt 1 Auviz Systems 99,990 19.02.2014 11.05.2018 Inc., USA Total 99,990 e) The company has delayed in filing FLA Return (Foreign liabilities and Assets) as shown below:

Sl Particulars Financial Due date of Date of actual filing No year filing the return 1 FLA Return 2013-14 15.07.2014 12.03.2019 2 FLA Return 2014-15 15.07.2015 12.03.2019 3 FLA Return 2015-16 15.07.2016 12.03.2019 4 FLA Return 2016-17 15.07.2017 12.03.2019 5 FLA Return 2017-18 15.07.2018 12.03.2019

Compounding of contraventions under FEMA 1999 M/s Auviz Systems India Private Limited CA No. HYD 404

Whereas in terms of Para 9(2) of Schedule I to Notification No. FEMA 20/2000-RB dated May 03, 2000 as then applicable and Regulation 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB dated November 07, 2017 as amended from time to time, “All Indian companies which have received Foreign Direct Investment in the previous year(s) including the current year shall submit to the Reserve Bank of India, on or before the 15th day of July of each year, [a report titled ‘Annual Return on Foreign Liabilities and Assets’ (FLA) as specified by the Reserve Bank from time to time]. 3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/ 2038 /14.66.003/2018-19 dated March 27, 2019 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant vide e-mail dated March 29, 2019 stated that they are foregoing appearing for the personal hearing and requested that the compounding application may be disposed of on the basis of merits in terms of the facts/submission made therein along with the compounding application.

The application for compounding is, therefore, being considered on the basis of the averments made in the application. 4. I have given my careful consideration to the documents on record. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of:- (a) Paragraph 9(1)(B) of Schedule 1 to Notification No. 20/2000-RB for delay in submission of Form FC-GPR to Reserve Bank of India after issue of shares to persons resident outside India and the contravention relates to an amount of ₹ 99,990/- and the period of contravention is 4 years 5 months 8 days approximately. (b) Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB for delay in receipt of consideration after allotment of shares to the non-resident investor and the Compounding of contraventions under FEMA 1999 M/s Auviz Systems India Private Limited CA No. HYD 404 contravention relates to an amount of ₹ 99,990/- and the period of contravention is 4 years 2 months 22 days approximately. (c) Paragraph 9(2) of Schedule I to Notification No. FEMA 20/2000-RB and Paragraph 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB for delay in filing of Annual Return on Foreign Liabilities and Assets to Reserve Bank of India for five financial years viz. 2013-14 to 2017-18 with delays ranging from 7 months 25 days to 4 years 7 months 25 days approximately.

5. It has been declared in the compounding application dated January 12, 2019 that the particulars given by the applicant in the application are true and correct to the best of their knowledge and belief. It has been declared in the declaration dated January 12, 2019 furnished with the compounding application that the applicant was not under any enquiry/investigation/adjudication by any agency as on the date of the application and has, in this regard, not informed of initiation of any such enquiry/investigation/adjudication proceedings against it thereafter. It has further been declared that the applicant has not filed any appeal under section 17 or section 19 of FEMA, 1999. Accordingly, the above contraventions which are being compounded in this Order are subject to the veracity of the above declarations made by the applicant and this order is without prejudice to any other action which may be taken by any authority under the extant laws if the said declarations are subsequently discovered to be false and/or incorrect. 6. In terms of Section 13 of the FEMA, any person contravening any provision of the Act shall be liable to a penalty up to 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 ₹ 95,000/- (Rupees Ninety Five Thousand Only) will meet the ends of justice.

Compounding of contraventions under FEMA 1999 M/s Auviz Systems India Private Limited CA No. HYD 404 7. Accordingly, I compound the admitted contraventions, namely, the contraventions of Paragraph 9(1)(B), Paragraph 8, Paragraph 9(2) of Schedule 1 to Notification No. FEMA-20/2000-RB and Regulation 13.1(3) of Schedule 1 to Notification No. FEMA- 20(R)/2017-RB by the applicant on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount ₹ 95,000/- (Rupees Ninety Five Thousand 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 compounded amount within the above mentioned period, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly. Dated this 15th day of April 2019

Sd/- (P Kalyan Chakravarthy) Assistant General Manager