N M Infrastructures Pvt Ltd.

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad -500 004 Present K R K REDDY Deputy General Manager Date: September 08, 2016 C.A. HYD 138 In the matter of M/s. N M Infrastructurs Private Limited Plot no. 61, New no. 86, Avanti Nagar, Basheerbagh, Hyderabad- 500 029 (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 filed the compounding application dated June 06, 2016 for compounding of contravention of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued there under. The contraventions sought to be compounded are (i) neither the equity instruments were issued nor the money refunded to the foreign investor, a person resident outside India, within 180 days of the receipt of the inward remittance; and the consideration has not been received before the issuance of shares to non-residents (ii) delay in reporting receipt of foreign inward remittances; (iii) delay in submission of Form FC-GPR to the Reserve Bank after issue of shares towards subscription to equity to a person resident outside India in terms of Paragraph 8, Paragraph 9 (1) (A) and Paragraph 9 (1) (B) of Foreign Exchange

FED M/s. N M Infrastructurs Pvt Ltd CA No. HYD 138 Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 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 and as amended from time to time (hereinafter 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 on 29.09.2003.The company is engaged in the activity of “shops, depots, warehouses, concessions, privileges, licenses”. b) The applicant had received foreign inward remittances from overseas investors towards advance for subscription to equity shares as indicated below: Name of Remitter Total Amount(INR) Date of Receipt Date of Reporting

Munaar 26,85,457 10.05.2006 01.04.2015 International Ltd The applicant reported receipt of remittances towards share subscription amounting to 26,85,457/- to the Regional Office of Reserve Bank of India and remittances amounting ₹ to 26,85,457/- was reported with delay of 8 years 9 months 21 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.

FED M/s. N M Infrastructurs Pvt Ltd CA No. HYD 138 c) The company allotted equity shares and filed Form FC-GPR as indicated below: Name of Date of Number of Amount for Date of Remitter allotment shares which shares reporting allotted allotted(INR) Munaar 06.10.2008 26,853 26,85,300 08.04.2015 International Ltd The applicant filed Form FC-GPRs for the allotment of shares amounting to 26, 85,300/- as indicated above with a delay of 6 years 5 months 3 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 FC-GPR along with documents prescribed therein within 30 days from the date of issue of shares to person resident outside India.

d) The company delayed in allotment of shares beyond the stipulated period of 180 days from the date of receipt of inward remittances and allotted shares without approval of RBI with delay of 10 months 10 days approximately as detailed under: Name of Amount Date of Date of Amount for Remitter received receipt of allotment of which shares (INR) funds shares allotted(INR) Munaar 26,85,457 10.05.2006 06.10.2008 26,85,300 International Ltd Whereas in terms of Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB, if the shares are not issued within 180 days from the date of receipt of the inward remittance, the amount of consideration so received shall be refunded to the person concerned, provided the Reserve Bank may on an application made to it and for sufficient reasons permit to refund the amount of consideration received towards issue of security, if such amount is outstanding beyond a period of 180 days from the date of FED M/s. N M Infrastructurs Pvt Ltd CA No. HYD 138 receipt. The amendment in paragraph 8 of Schedule 1 to Notification No. FEMA 20/20000-RB was introduced by issue of Foreign Exchange Management (Transfer or Issue of Security by a Person outside India) (Third Amendment Regulation, 2007 notified, vide Notification No. FEMA 170/2007-RB dated November 13, 2007 in the official Gazette of the Govt. of India.

3 a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/471/14.66.003/2016-17 dated August 24, 2016 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant appeared for personal hearing on September 08, 2016 during which Shri. Y N Shiva Rami Reddy, Chartered Accountant, P. Murali & Co. and Shri Dubba Anil, Company Secretary, P. Murali & Co. represented the applicant. The applicant admitted the contraventions for which the compounding has been sought. During the personal hearing it was submitted that the delay was due to administrative reasons in initial time and was not willful or with a malafide intention. In view of the foregoing, 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 as well the submissions made in this context by the applicant during the personal hearing. 4. I have given my careful consideration to the documents on record and submission made by the applicant during the personal hearing.

Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: (a) Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB for allotting the shares beyond the stipulated period of 180 days from the date of receipt of foreign inward remittances. The contravention relates to an amount of 26, 85,300/- and the period of contravention is 10 months 10 days approximately. ₹ (b) Paragraph 9 (1) (A) of Schedule 1 to Notification No. FEMA.20/ 2000-RB due to delay in reporting of receipt of foreign inward remittances towards subscription to equity shares as detailed above. The contraventions relate to an amount of 26, 85,457/- and the duration of contravention is 8 years 9 months 21 days approximately. ₹

FED M/s. N M Infrastructurs Pvt Ltd CA No. HYD 138 (c) Paragraph 9 (1) (B) of Schedule 1 to Notification No. 20/2000-RB due to delay in submission of Form FC-GPR to Reserve Bank after issue of shares to persons resident outside India and the contravention relates to an amount of 26,85,300/- and the duration of contravention is 6 years 5 months 3 days approximately. ₹ 5. 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 1,00,000/- (Rupees One Lakh only) will meet the ends of justice. 6. Accordingly, I compound the admitted contraventions namely, the contraventions of ₹ Paragraph 8, 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 of 1,00,000/- (Rupees One Lakh 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 favor 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 eighth day of September 2016.

Sd/- (K R K Reddy) Deputy General Manager