Management Health Solutions India Private Limited

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present P Kalyan Chakravarthy Assistant General Manager Date: October 24, 2018 C.A. HYD 326 In the matter of M/s. Management Health Solutions India Pvt Ltd 6-3-1192/1/1 to 20, Kundanbagh, Begumpet Hyderabad – 500 016 (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 submitted the compounding application dated August 17, 2018 received by us on August 21, 2018 for compounding of contraventions of the provision of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued there under. The contraventions sought to be compounded are (i) delay in reporting of receipt of foreign inward remittances towards subscription of equity, (ii) delay in submission of Form FCGPR to the Reserve Bank after issue of shares to a person resident outside India and (iii) delay in allotment of shares to a person resident outside India, in terms of Paragraph 9(1)(A), Paragraph 9(1)(B) and Paragraph 8 of Schedule 1 to Foreign Exchange Management (Transfer or Issue of Compounding of contraventions under FEMA 1999 M/s Management Health Solutions India Private Limited CA No. HYD 326 Security by a person resident outside India) Regulations, 2000 notified vide Notification no. FEMA. 20/2000-RB dated 3rd May 2000 and as then applicable (herein after 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 as Private Limited Company under the Companies Act, 2013 on December 24, 2014 (CIN: U74900TG2014FTC096967). The company is engaged in “Other information technology and computer service activities n.e.c”. b) The applicant had received foreign inward remittances from the following investors as indicated below: Sl Name of Remitter Amount Date of Date of No (INR) Receipt Reporting 1 Management Health 100000 10.02.2015 27.04.2015 Solutions Inc 2 Management Health 1900 05.05.2015 13.01.2016 Solutions Inc 3 MHS Holding 10 08.12.2015 16.01.2016 Company Inc Total 1,01,910

The applicant reported receipt of remittances towards share subscription amounting to ₹ 1,01,910/- which were reported with a delay ranging from 9 days to 7 months 9 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.

Compounding of contraventions under FEMA 1999 M/s Management Health Solutions India Private Limited CA No. HYD 326 c) The applicant allotted equity shares and filed form FC-GPRs as indicated below:

Sl Name of investor Date of Number Amount for Date of No allotment of which reporting of shares shares shares allotted allotted (INR) 1 Management Health 24.12.2014 9999 99990 18.04.2016 Solutions Inc 2 MHS Holding 24.12.2014 1 10 Company Inc 3 MHS Holding 10.05.2016 1 10 04.05.2017 Company Inc 4 Management Health 10.05.2016 190 1900 Solutions Inc Total 1,01,910

The applicant filed form FCGPRs for the allotment of shares amounting to ₹ 1,01,910/- to the Regional Office of Reserve Bank of India, as indicated above and are reported with delays ranging from 10 months 25 days to 1 year 2 months 26 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 company has delayed in allotment of shares to the non-resident investors beyond 180 days from the date of receipt of remittance as shown below.

Compounding of contraventions under FEMA 1999 M/s Management Health Solutions India Private Limited CA No. HYD 326

Sl Name of Remitter Amount (INR) Date of Date of No Receipt allotment of shares 1 Management Health 100000 10.02.2015 24.12.2014 Solutions Inc 2 Management Health 1900 05.05.2015 10.05.2016 Solutions Inc 3 MHS Holding 10 08.12.2015 10.05.2016 Company Inc Total 1,01,910

Whereas in terms of Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000- RB, the shares have to be issued within the stipulated period of 180 days from the date of receipt of the inward remittance. Here the amount of contravention is ₹ 1,900/- and the period of contravention is 6 months 9 days approximately. 3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/ 706 /14.66.003/2018-19 dated October 12, 2018 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant appeared for personal hearing on October 22, 2018 during which Shri. Mitil Chokshi, Chartered Accountant and Smt. Aravinda Nistala, Chartered Accountant represented the applicant. The authorized representatives of the applicant admitted the contraventions for which the compounding has been sought. During the personal hearing it was submitted that the delay was not wilful or with a malafide intention but was on account of administrative reasons. In view of the foregoing, the representative of the applicant requested to take a lenient view in Compounding of contraventions under FEMA 1999 M/s Management Health Solutions India Private Limited CA No. HYD 326 disposal of the 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)(A) of Schedule 1 to Notification No. FEMA 20/2000-RB for delay in reporting the receipt of consideration towards issue of shares amounting to 1,01,910/- and the delay ranges from 9 days to 7 months 9 days approximately. (b) 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 ₹ 1,01,910/- and the delay ranges from 10 months 25 days to 1 year 2 months 26 days approximately. (c) Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB for delay in allotment of shares to the non-resident investor and the contravention relates to an amount of ₹ 1,900/- and the period of contravention is 6 months 9 days approximately.

5. It has been declared in the compounding application dated August 17, 2018 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 August 17, 2018 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. 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

Compounding of contraventions under FEMA 1999 M/s Management Health Solutions India Private Limited CA No. HYD 326 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 ₹ 21,664/- (Rupees Twenty One Thousand Six Hundred Sixty Four Only) will meet the ends of justice. 7. Accordingly, I compound the admitted contraventions, namely, the contraventions of Paragraph 9(1)(A), Paragraph 9(1)(B) and Paragraph 8 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 ₹ 21,664/- (Rupees Twenty One Thousand Six Hundred Sixty Four 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, Rule10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly. Dated this 24th day of October 2018

Sd/- (P Kalyan Chakravarthy) Assistant General Manager