Neotiss Limited

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present R Subramanian Regional Director Date: March 08, 2018 C.A. HYD 265 In the matter of M/s. Neotiss Limited #9-14, Pashamylaram I.D.A. Isnapur, Patancheru Mandal Sangareddy District Telangana-502 307 (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 November 08, 2017 received on November 13, 2017 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are (i) delay in reporting receipt of foreign inward remittances and (ii) delay in submission of Form FC-GPR to Reserve Bank of India after issue of shares towards subscription to equity in terms of Paragraph 9(1)(A) and Paragraph 9(1)(B) respectively of Schedule 1 to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 notified vide Notification No.

Compounding of contraventions under FEMA 1999 M/s Neotiss Limited CA No. HYD 265 FEMA.20/2000-RB dated 3rd May 2000 (hereinafter referred to as Notification No. FEMA 20 /2000-RB) as then applicable.

2. The relevant facts of the case are as follows: a) The applicant is a company originally incorporated as M/s. Chitrakoot Speciality Steels Limited under the Companies Act, 1956 on 30.11.1996 and changed its name subsequently and finally to M/s. Neotiss Limited on 01.07.2016 (CIN: U99999TG1996PLC025571). The company is engaged in the business of manufacturing or dealing in any manner in tubes and other hollow sections in various metals and alloys. b) The applicant received foreign inward remittances from various foreign investors towards advance for subscription to equity shares as indicated below.

Sl Name of Remitter Total Amount Date of Date of No (INR) Receipt Reporting 1 Lalit Kapoor 2326978 27.03.2001 09.05.2001 2 AMS Informatix Inc. 4651606 29.03.2001 09.05.2001 3 Paul Barlett 1687989 02.05.2001 28.05.2001 4 Preet Mohan Kapoor 1999980 06.09.2004 24.11.2004 5 Paul Barlett 968342 12.10.2004 10.11.2004 6 Valtimet SAS 199599655.81 05.04.2006 26.04.2006 7 Valtimet SAS 106756129 20.05.2009 27.05.2009 8 Valtimet SAS 139495005 15.04.2011 29.04.2011 9 Vallourec Heat Exchanger 466242400 23.12.2015 19.01.2016 Limited 10 Neotiss SAS 14985027 11.01.2017 22.02.2017 Total 93,87,13,111.81

Compounding of contraventions under FEMA 1999 M/s Neotiss Limited CA No. HYD 265 The applicant received foreign inward remittances amounting to Rs.93,87,13,111.81/- as indicated above out of which remittances amounting to Rs.2,39,63,591/- were reported to Reserve Bank of India with delays ranging from 11 days to 1 month 19 days beyond the prescribed period of 30 days. 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 shares and filed form FC-GPRs as indicated below:

Sl Name of investor Date of Number of Amount for Date of No allotment of shares/CC which shares reporting shares PS allotted allotted (INR) 1 Lalit Kapoor 15.04.2001 51700 2326500 09.05.2001 2 AMS Informatix Inc. 15.04.2001 103350 4650750 09.05.2001 3 Paul Barlett 21.05.2001 37500 1687500 28.05.2001 4 Preet Mohan 27.10.2004 176988 1999964.40 24.11.2004 Kapoor 5 Paul Barlett 27.10.2004 85694 968342.20 24.11.2004 6 Valtimet SAS 05.04.2006 13103969 199599655.81 03.05.2006 7 Valtimet SAS 08.06.2009 10675612 106756120 06.07.2009 8 Valtimet SAS 11.10.2011 13949500 139495000 22.05.2017

9 Vallourec Heat 20.02.2016 46624240 466242400 23.03.2016 Exchanger Tubes 10 Neotiss SAS 11.03.2017 1498502 14985020 14.04.2017 Total 86307055 93,87,11,252.41

Compounding of contraventions under FEMA 1999 M/s Neotiss Limited CA No. HYD 265 The applicant filed form FCGPRs for issue of shares amounting to Rs.93,87,11,252.41/- as indicated above out of which shares amounting to Rs.62,07,22,420/- were reported with delays ranging from 2 days to 5 years 6 months 11 days approximately beyond the stipulated period of 30 days. 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 of India 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/1519/14.66.003/2017-18 dated February 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 March 05, 2018 during which Shri. Kishore Eswaran, Director and Ms. Khusboo Laxmi Bhagat, Practicing Company Secretary 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 concerned official leaving the job without proper intimation. 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 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. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of:-

Compounding of contraventions under FEMA 1999 M/s Neotiss Limited CA No. HYD 265 (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 Rs.2,39,63,591/- and the delay ranges from 11 days to 1 month 19 days.

(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 Rs.62,07,22,420/- and the period of contravention ranges from 2 days to 5 years 6 months 11 days approximately.

5. It has been declared in the compounding application dated November 08, 2017 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 November 08, 2017 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 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

Compounding of contraventions under FEMA 1999 M/s Neotiss Limited CA No. HYD 265 and I consider that an amount of Rs.5,95,185/- (Rupees Five Lakhs Ninety Five Thousand One Hundred Eighty Five 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 of Rs.5,95,185/- (Rupees Five Lakhs Ninety Five Thousand One Hundred Eighty Five 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 08th day of March 2018

Sd/- (R Subramanian) Regional Director