Eugenetek India Private Limited

In the Reserve Bank of India Foreign Exchange Department Mumbai Regional Office Main Building, 3rd floor Shahid Bhagat Singh Marg, Fort Mumbai 400 001 Present Shri Sandeep Kulkarni Assistant General Manager CA No. MUM 979/2019 In the matter of M/s Eugenetek India Private Limited 101, 1st Floor, Divyapuri CHS. Ltd., Shree Nagar Colony, M G Road, Goregaon (West), Mumbai 400 104 (Applicant) In exercise of the powers conferred under section 15(1) of the Foreign Exchange Management Act, 1999 and the Regulations/Rules/Notifications/Orders made thereunder, I pass the following Order 1 The applicant has filed the compounding application dated July 17, 2019, received at the Reserve Bank on October 16, 2019, for compounding of contravention/s of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contravention/s sought to be compounded are in respect of the following (Regulations/ paras under 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 May 3, 2000 and as amended from time to time (hereinafter referred to as FEMA 20): (i) Para 9 (1) (B) of FEMA 20: Delay in filing Form FC GPR to Reserve Bank after issue of shares to person resident outside India (ii) Para 8 of FEMA 20: Neither the equity instruments were issued, nor the money refunded to the foreign investor within 180 days from the receipt of the inward remittance

FED, MRO, CEFA, M/s Eugenetek India Private Limited, CA No: MUM 979/2019

2 Brief details of the applicant company are as follows: Date of Incorporation August 16, 2017 Its main activities are: Operation of concert and theatre halls and other arts facilities 3 The applicant received foreign inward remittances from non-resident investors towards equity shares / compulsorily convertible preference shares/ compulsorily convertible debentures and it reported the same to the Reserve Bank on dates as indicated below. Delay in reporting Foreign Direct Investment &/or delay in allotting the shares/ refunding the amount (whereas, "Y" represents delay in number of years, "M" represents delay in number of months and "D" represents delay in number of days, and LSF stands for : Late Submission Fees Sr. Date of Amount received Date of Delay in Date of Delay in No/ inward (in INR) reporting to reporting allotment allotment LSF remittanc RBI Foreign / refund or refund e (DD-MM-YY) Investment (DD-MM-YY) (DD-MM-YY) 1 5,24,900.00 31-07-18 0 16-08-17 0Y 10M 20D 06-07-18 2 14-08-18 30,00,000.00 31-08-18 0 16-08-18 0Y 0M 0D TOTAL 35,24,900.00 4 In respect of remittance amounting to Rs. 5,24,900/- (Rupees Five Lakh Twenty Four Thousand Nine Hundred and Zero Paise Only), the applicant company allotted shares prior to receipt of inward remittance. Whereas, the sequence of events envisaged under Para 8 of FEMA 20 is that the Indian company has to first receive the inward remittance and then proceed with allotment of shares. Also, in terms of para 8 of FEMA 20, an Indian company is required to issue shares or refund the amount within 180 days from the date of receipt of inward remittance. The delay under this para is 0Y 10M 20D.

5 The company allotted equity shares/compulsorily convertible preference shares/compulsorily convertible debentures and filed FC-GPRs as indicated below: Delay in filing Form FCGPR (whereas, "Y" represents delay in number of years, "M" represents delay in number of months and "D" represents delay in number of days, LSF stands for : Late Submission Fees, IP stands for Issue Price and FV stands for Face Value Sr. Date of Number of IP (FV+ Amount (IP*no Date of Delay in no/ allotment shares premium) of shares) reporting filing LSF (DD-MM-YY) (in INR) (in INR) (DD-MM-YY) FCGPR 1 16-08-17 99990 10.00 9,99,900.00 31-07-18 0Y 10M 14D LSF 16-08-18 300000 10.00 30,00,000.00 31-01-19 LSF Paid Paid TOTAL 39,99,900.00

FED, MRO, CEFA, M/s Eugenetek India Private Limited, CA No: MUM 979/2019

The applicant filed form FC-GPRs as indicated above, out of which 1 form FCGPR was reported with a delay of 0Y 10M 14D. Whereas, in terms of Para 9(1) (B) of FEMA 20, an Indian company issuing shares in accordance with these Regulations has to submit to RBI a report in Form FC-GPR along with documents prescribed therein within 30 days from the date of issue of shares to Non Resident. In case of the allotment/s amounting to Rs. 30,00,000/- (Rupees Thirty Lakh and Zero Paise Only) indicated in the above table as "LSF Paid", they were also reported with a delay. In terms of Regulation 13.2 of FEMA 20R/2017-RB, the person/ entity responsible for filing the reports stipulated in Regulation 13.1 shall be liable for payment of late submission fee, as may be decided by the Reserve Bank, in consultation with the Central Government, for any delays in reporting. Since the applicant has already deposited the LSF amount, this delay has not been taken into consideration for computing the amount for compounding the contraventions. 6 The applicant was given an opportunity for personal hearing, for further submission in person and/or for producing documents, if any, in support of the application vide e-mail dated December 05, 2019. The applicant appeared for personal hearing on December 10, 2019, during which Mr Dipesh Jain, Consultant and Mr Pranay Vaidya, Consultant represented the applicant in the cabin of Shri Sandeep Kulkarni, Assistant General Manager, Mumbai Regional Office.

The representatives of the applicant admitted the contraventions for which compounding has been sought. During the hearing it was submitted that delay was inadvertent and unintentional. The representatives of the applicant requested that in view of the foregoing a lenient view may be taken 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 as other documents and submissions made in this context by the applicant during personal hearing and thereafter. 7 I have given my careful consideration to the documents on record and submissions made by the applicant during the personal hearing and thereafter. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: (i) Para 9 (1) (B) of FEMA 20, due to the delay in submission of Form FC-GPR to the Reserve Bank after issue of shares to persons resident outside India and the contravention relates to total amount of Rs.9,99,900/- (Rupees Nine Lakh Ninety Nine Thousand Nine Hundred and Zero Paise Only) with a delay of 0Y 10M 14D approximately.

(ii) Para 8 of FEMA 20, since the shares were neither issued nor the amount was refunded to the person resident outside India within the prescribed time from the date of receipt of the inward remittance. The contravention relates to total amount of Rs.5,24,900/- (Rupees Five Lakh Twenty Four Thousand Nine Hundred and Zero Paise Only) with a delay of 0Y 10M 20D approximately.

FED, MRO, CEFA, M/s Eugenetek India Private Limited, CA No: MUM 979/2019

8 It has been declared in the compounding application dated July 17, 2019 that the particulars given by the applicant in the application are true and correct to the best of their/his/her knowledge and belief. It has also been declared in a declaration attached to 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/him/her 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. 9 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 contraventions are to be compounded and I consider that an amount of Rs.42,491/- (Rupees Forty Two Thousand Four Hundred Ninety One and Zero Paise Only) will meet the ends of justice.

10 Accordingly, I compound the admitted contravention/s namely, the contravention/s of Para 9 (1) (B) of FEMA 20 and Para 8 of FEMA 20, by the applicant, on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount of Rs. 42,491/- (Rupees Forty Two Thousand Four Hundred Ninety One and Zero Paise Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, Mumbai Regional Office, Main Building, 3rd floor, Shahid Bhagat Singh Marg, Fort, Mumbai- 400001 by a demand draft drawn in favour of the "Reserve Bank of India" and payable at Mumbai 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.

11 The above order is passed only in respect of contraventions of Para 9 (1) (B) of FEMA 20 and Para 8 of FEMA 20 and does not restrict the right of any other authority to proceed against the Company for any other violations/contraventions noticed at any point of time.

12 The application is disposed of accordingly. dated: December 20, 2019 Compounding Authority (Sandeep Kulkarni) Assistant General Manager