Mas Fabric Park (India) Private Limited

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present R Subramanian Regional Director Date: June 07, 2018 C.A. HYD 302 In the matter of M/s MAS Fabric Park (India) Private Limited NSL Icon, 4th Floor, 8-2-684/2/A, Road No.12 Banjara Hills, Hyderabad – 500 034 (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 April 11, 2018 received by us on April 11, 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 and (ii) delay in submission of Form FCGPR to the Reserve Bank after issue of shares to a person resident outside India in terms of Paragraph 9(1)(A) and Paragraph 9(1)(B) 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 (herein after referred to as Notification no. FEMA 20/2000-RB) as then applicable.

Compounding of contraventions under FEMA 1999 M/s MAS Fabric Park (India) Private Limited CA No. HYD 302 2. 2. The relevant facts of the case are as follows: a) The applicant is a resident company incorporated as Private Limited Company under the erstwhile Companies Act, 1956 on January 10, 2007 (CIN: U17124TG2007PTC079001). The company is engaged in the business of creating a state of the art integrated apparel park with the capacity and capability to attract modern and state of the art manufacturing and service providers. b) The applicant had received foreign inward remittances from single foreign investor as indicated below: Sl Name of Remitter Amount (INR) Date of Date of No Receipt Reporting 1 MAS Investments Pvt Ltd 44085825 08.02.2007 14.06.2007 44513308 06.03.2007 14.06.2007 2 MAS Investments Pvt Ltd 12239681 22.08.2007 14.11.2007 6174993 23.10.2007 14.11.2007 5691907 14.11.2007 15.11.2007 3 MAS Investments Pvt Ltd 3944673 05.02.2008 03.03.2008 3984985 26.02.2008 03.03.2008 11673598 25.03.2008 02.04.2008 4 MAS Investments Pvt Ltd 8558374 17.07.2008 17.07.2008 5 MAS Investments Pvt Ltd 9478199 03.10.2008 24.10.2008 6 MAS Investments Pvt Ltd 7403044 31.12.2008 21.01.2009 1260500 31.03.2009 27.04.2009 7 MAS Investments Pvt Ltd 2043983 08.12.2009 04.01.2010 2167770 02.02.2010 01.03.2010 2235257 30.04.2010 24.05.2010 8 MAS Investments Pvt Ltd 3796199 02.09.2010 06.10.2010 3172250 16.12.2010 11.05.2011 4230338 24.01.2011 11.02.2011 9 MAS Investments Pvt Ltd 2117306 15.10.2012 06.11.2012 1920625 20.12.2012 08.01.2013

Compounding of contraventions under FEMA 1999 M/s MAS Fabric Park (India) Private Limited CA No. HYD 302 10 MAS Investments Pvt Ltd 2557321 12.05.2015 22.07.2015 11 MAS Investments Pvt Ltd 3139382 24.06.2015 22.07.2015 12 MAS Investments Pvt Ltd 2508425 24.11.2015 27.01.2016 Total 18,88,97,943 The applicant reported receipt of remittances towards share subscription amounting to ₹ 18,88,97,943/- to the Regional Office of Reserve Bank of India, out of which remittance amounting to ₹ 11,28,73,009/- were reported with a delay ranging from 4 days to 3 months 26 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 allotted equity shares and filed form FC-GPRs as indicated below:

Sl Name of investor Date of Number of Amount for Date of No allotment shares/CC which shares Reporting of shares PS allotted allotted (INR) 1 MAS Investments Pvt Ltd 06.08.2007 8859910 88599100 11.10.2007 2 MAS Investments Pvt Ltd 08.12.2007 08.01.2008 2410656 24106560 3 MAS Investments Pvt Ltd 31.03.2008 25.08.2008 1960325 19603250 4 MAS Investments Pvt Ltd 12.12.2008 09.01.2009 855838 8558380 5 MAS Investments Pvt Ltd 04.02.2009 27.02.2009 947819 9478190 6 MAS Investments Pvt Ltd 25.05.2009 19.06.2009 866354 8663540 7 MAS Investments Pvt Ltd 21.05.2010 01.06.2010 644701 6447010

Compounding of contraventions under FEMA 1999 M/s MAS Fabric Park (India) Private Limited CA No. HYD 302 8 MAS Investments Pvt Ltd 28.02.2011 22.03.2011 1119878 11198780 9 MAS Investments Pvt Ltd 27.03.2013 16.04.2013 403793 4037930 10 MAS Investments Pvt Ltd 30.05.2015 17.03.2016 255732 2557320 11 MAS Investments Pvt Ltd 03.07.2015 17.03.2016 313938 3139380 12 MAS Investments Pvt Ltd 18.01.2016 17.06.2016 250842 2508420 Total 18,88,97,860

The applicant filed form FCGPRs for the allotment of shares amounting to ₹ 18,88,97,860/- out of which shares amounting to ₹ 14,05,14,030/- were reported with a delay ranging from 1 day to 8 months 17 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.

3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/2082/14.66.003/2017-18 dated May 28, 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 May 30, 2018 during which Shri. Y. Sambasiva Rao, AGM (Finance & Accounts) and Shri. Y. Venkateswara Rao, Practicing Company Secretary, represented the applicant. The authorized representatives of the applicant admitted the contraventions for which the Compounding of contraventions under FEMA 1999 M/s MAS Fabric Park (India) Private Limited CA No. HYD 302 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 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 towards00 issue of shares amounting to ₹ 11,28,73,009/- and the delay ranges from 4 days to 3 months 26 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 ₹ 14,05,14,030/- and the delay ranges from 1 day to 8 months 17 days approximately.

5. It has been declared in the compounding application dated April 11, 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 April 11, 2018 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

Compounding of contraventions under FEMA 1999 M/s MAS Fabric Park (India) Private Limited CA No. HYD 302 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 ₹ 92,750/- (Rupees Ninety Two Thousand Seven Hundred Fifty Only) will meet the ends of justice.

7. Accordingly, I compound the admitted contraventions, namely, the contraventions of Paragraph 9(1)(A) 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 ₹ 92,750/- (Rupees Ninety Two Thousand Seven Hundred Fifty 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 07th day of June 2018

Sd/-

Compounding of contraventions under FEMA 1999 M/s MAS Fabric Park (India) Private Limited CA No. HYD 302 (R Subramanian) Regional Director