Ganart Technologies Private Limited

Reserve Bank of India Foreign Exchange Department Mumbai Regional Office Main Building, 3rd floor Shahid Bhagat Singh Marg, Fort Mumbai 400 001 CA No. MUM 984 / 2019 In the matter of M/s Ganart Technologies Private Limited Pune IT Park, C/2/201-204, Unit No. 10, 34 Aundh Road, Bhau Patil Marg, Pune 411020 (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 October 17, 2019, received at the Reserve Bank on October 24, 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) (A) of FEMA 20: Delay in reporting receipt of foreign inward remittance towards subscription to equity (ii) 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 (iii) 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 Ganart Technologies Private Limited, CA No: MUM 984/2019

2 Brief details of the applicant company are as follows: Date of Incorporation March 05, 2008 Its main activities are: Computer consultancy and computer facilities management activities 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 date of No/ inward (in INR) reporting to reporting allotment allotment/ LSF remittanc RBI Foreign / refund refund/ e (DD-MM-YY) Investment (DD-MM-YY) date of (DD-MM-YY) applying to RBI for approval 1 30-01-08 39,28,035.00 11-08-08 0Y 5M 11D 16-07-08 0Y 0M 0D 2 29-02-08 51,14,943.00 11-08-08 0Y 4M 12D 16-07-08 0Y 0M 0D 3 14-03-08 8,85,721.00 11-08-08 0Y 3M 27D 16-07-08 0Y 0M 0D 4 15-04-08 19,80,548.23 11-08-08 0Y 2M 26D 16-07-08 0Y 0M 0D 5 13-05-08 20,84,866.04 11-08-08 0Y 1M 28D 16-07-08 0Y 0M 0D 6 06-06-08 10,60,530.40 11-08-08 0Y 1M 5D 16-07-08 0Y 0M 0D 7 07-06-08 10,58,916.77 11-08-08 0Y 1M 4D 16-07-08 0Y 0M 0D 8 14-06-08 10,66,116.06 11-08-08 0Y 0M 27D 16-07-08 0Y 0M 0D 9 17-06-08 10,62,516.42 11-08-08 0Y 0M 24D 16-07-08 0Y 0M 0D 10 06-09-08 22,18,243.82 22-04-09 0Y 6M 16D 26-04-13 4Y 1M 22D 11 10-10-08 24,36,069.35 22-04-09 0Y 5M 12D 26-04-13 4Y 0M 18D 12 24,57,926.42 22-02-10 1Y 2M 24D 26-04-13 3Y 11M 29D 29-10-08 13 24,50,475.14 22-02-10 1Y 2M 8D 26-04-13 3Y 11M 14D 14-11-08 14 24,62,893.93 22-02-10 1Y 1M 16D 26-04-13 3Y 10M 22D 06-12-08 15 23,44,170.32 22-02-10 1Y 1M 4D 26-04-13 3Y 10M 10D 18-12-08 16 24-12-08 24,34,082.35 22-02-10 1Y 0M 29D 26-04-13 3Y 10M 4D 17 30-12-08 24,08,748.02 22-02-10 1Y 0M 23D 26-04-13 3Y 9M 28D 18 09-01-09 24,24,147.32 22-02-10 1Y 0M 13D 26-04-13 3Y 9M 19D 19 17-01-09 24,22,905.44 22-02-10 1Y 0M 5D 26-04-13 3Y 9M 11D 20 30-01-09 24,27,127.82 22-02-10 0Y 11M 23D 26-04-13 3Y 8M 28D 21 02-03-09 25,53,222.75 17-11-15 6Y 7M 15D 18-08-09 0Y 0M 0D 22 13-03-09 10,25,727.92 22-04-09 0Y 0M 9D 30-04-09 0Y 0M 0D

FED, MRO, CEFA, M/s Ganart Technologies Private Limited, CA No: MUM 984/2019

23 18-03-09 8,00,000.00 26-09-16 7Y 5M 8D 30-04-09 0Y 0M 0D 23A 18-03-09 88,222.71 26-09-16 7Y 5M 8D 30-03-09 0Y 0M 0D 24 25-03-09 12,325.80 08-09-16 7Y 4M 14D 30-03-09 0Y 0M 0D 25 02-04-09 14,93,251.07 17-11-15 6Y 6M 15D 18-08-09 0Y 0M 0D 26 13-04-09 14,75,302.98 14-09-12 3Y 4M 1D 30-04-09 0Y 0M 0D 27 06-05-09 17,66,159.11 17-11-15 6Y 5M 11D 18-08-09 0Y 0M 0D 28 21-05-09 7,01,255.89 22-02-12 2Y 8M 1D 06-08-12 2Y 8M 18D 29 05-06-09 18,58,038.00 17-11-15 6Y 4M 12D 18-08-09 0Y 0M 0D 30 24-06-09 9,59,896.30 17-11-15 6Y 3M 23D 18-08-09 0Y 0M 0D 31 02-07-09 18,94,882.22 22-02-12 2Y 6M 20D 06-08-12 2Y 7M 6D 32 10-08-09 21,20,505.00 02-02-10 0Y 4M 23D 30-09-09 0Y 0M 0D 32A 10-08-09 13,834.00 02-02-10 0Y 4M 23D 04-02-10 0Y 0M 0D 33 07-09-09 21,75,957.27 01-11-12 3Y 0M 24D 07-12-09 0Y 0M 0D 34 30-10-09 16,33,989.63 01-11-12 2Y 11M 1D 07-12-09 0Y 0M 0D 35 28-01-10 6,86,166.39 14-09-12 2Y 6M 17D 04-02-10 0Y 0M 0D 36 04-03-10 3,61,486.02 15-05-12 2Y 1M 10D 25-05-10 0Y 0M 0D 37 05-04-10 3,52,955.40 05-06-12 2Y 1M 0D 25-05-10 0Y 0M 0D 38 05-05-10 4,42,568.30 05-06-12 2Y 0M 0D 06-08-12 1Y 9M 3D 39 03-06-10 9,19,408.22 24-08-10 0Y 1M 21D 06-08-12 1Y 8M 5D 40 29-06-10 4,58,361.44 15-05-12 1Y 9M 16D 06-08-12 1Y 7M 10D 41 03-08-10 4,56,036.10 05-01-11 0Y 4M 2D 06-08-12 1Y 6M 5D 42 06-09-10 4,58,890.38 19-01-11 0Y 3M 13D 06-08-12 1Y 5M 2D 43 04-10-10 4,37,802.64 19-01-11 0Y 2M 15D 06-08-12 1Y 4M 4D 44 03-11-10 2,190.70 24-05-11 0Y 5M 20D 06-08-12 1Y 3M 5D 45 03-11-10 4,36,754.74 24-05-11 0Y 5M 20D 06-08-12 1Y 3M 5D 46 06-12-10 2,22,015.00 24-05-11 0Y 4M 17D 06-08-12 1Y 2M 2D 47 02-02-11 4,49,698.80 17-02-11 0 06-08-12 1Y 0M 6D 4,44,119.98 22-03-11 0 06-08-12 0Y 10M 30D 48 09-03-11 49 13-04-11 7,01,721.75 26-05-11 0Y 0M 12D 06-08-12 0Y 9M 26D 50 22-06-11 4,40,726.78 17-05-12 0Y 9M 25D 06-08-12 0Y 7M 17D 51 04-08-11 4,36,884.48 15-05-12 0Y 8M 10D 06-08-12 0Y 6M 4D 52 04-12-15 22,89,358.58 10-12-15 0 03-02-16 0Y 0M 0D TOTAL 7,52,98,699.00 In terms of Para 9 (1) (A) of FEMA 20, an Indian company issuing equity shares/ compulsorily convertible debentures/compulsorily convertible preference shares 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.

However the applicant company reported receipt of remittances to the Reserve Bank of India on dates indicated above in 49 out of 52 total remittances with a delay ranging from 0Y 0M 9D to 7Y 5M 8D. 4 In respect of remittances amounting to Rs.3,53,90,107/- (Rupees Three Crore Fifty Three Lakh Ninety Thousand One Hundred Seven and Zero Paise Only), indicated in the table above the company allotted shares/ refunded the amount after 180 days from the date of receipt of investment. Whereas 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 period of delay under this para ranges from 0Y 6M 4D to 4Y 1M 22D.

FED, MRO, CEFA, M/s Ganart Technologies Private Limited, CA No: MUM 984/2019

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 16-07-08 10000 20.00 2,00,000.00 11-08-08 0 1A 16-07-08 180 100000.00 1,80,00,000.00 11-08-08 0 2 30-03-09 10000 10.00 1,00,000.00 04-10-10 1Y 5M 4D 3 30-04-09 80000 10.00 8,00,000.00 04-10-10 1Y 4M 4D 4 30-04-09 25 100000.00 25,00,000.00 21-11-12 3Y 5M 21D 5 18-08-09 86 100000.00 86,00,000.00 26-08-09 0 6 30-09-09 21 100000.00 21,00,000.00 02-02-10 0Y 3M 3D 7 07-12-09 38 100000.00 38,00,000.00 26-08-10 0Y 7M 19D 8 04-02-10 7 100000.00 7,00,000.00 15-01-13 2Y 10M 11D 9 25-05-10 7 100000.00 7,00,000.00 03-06-10 0 10 06-08-12 8903 1000.00 89,03,000.00 30-08-12 0 11 26-04-13 26486 1000.00 2,64,86,000.00 31-07-13 0Y 2M 4D 12 03-02-16 20812 110.00 22,89,320.00 02-03-16 0 TOTAL 7,51,78,320.00

The applicant filed form FC-GPRs as indicated above with a delay ranging from 0Y 2M 4D to 3Y 5M 21D. 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.

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 January 01, 2020. The applicant applied for waiver of personal hearing vide e mail dated January 02, 2020. The applicant, in the compounding application, had admitted the contraventions as stated above for which compounding has been sought. It had been submitted that the contraventions were not wilful and were unintentional. 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.

FED, MRO, CEFA, M/s Ganart Technologies Private Limited, CA No: MUM 984/2019

7 I have given my careful consideration to the documents on record and thereafter. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: (i) Para 9 (1) (A) of FEMA 20, due to the delay in reporting of receipt of foreign inward remittance towards subscription towards shares as detailed above. The contravention relates to total amount of Rs.7,21,15,522/- (Rupees Seven Crore Twenty One Lakh Fifteen Thousand Five Hundred Twenty Two and Zero Paise Only) and with a delay ranging from minimum 0Y 0M 9D to maximum 7Y 5M 8D approximately. (ii) 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.3,64,86,000/- (Rupees Three Crore Sixty Four Lakh Eighty Six Thousand and Zero Paise Only) and with a delay ranging from minimum 0Y 2M 4D to maximum 3Y 5M 21D approximately.

(iii) 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.3,53,90,107/- (Rupees Three Crore Fifty Three Lakh Ninety Thousand One Hundred Seven and Zero Paise Only) and with a delay ranging from minimum 0Y 6M 4D to maximum 4Y 1M 22D approximately.

8 It has been declared in the compounding application dated October 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.4,11,341/- (Rupees Four Lakh Eleven Thousand Three Hundred Forty One and Zero Paise Only) will meet the ends of justice.

FED, MRO, CEFA, M/s Ganart Technologies Private Limited, CA No: MUM 984/2019

10 Accordingly, I compound the admitted contravention/s namely, the contravention/s of Para 9 (1) (A) of FEMA 20, 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. 4,11,341/- (Rupees Four Lakh Eleven Thousand Three Hundred Forty 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) (A) of FEMA 20, Para 9 (1) (B) of FEMA 20 and Para 8 of FEMA 20 and does not restrict the rights 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. sd/- (Aviral Jain) Chief General Manager and Compounding Authority Dated: January 07, 2020