Skyfi Education Labs 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: December 19, 2016 C.A. HYD 168 In the matter of M/s. Skyfi Education Labs Pvt. Ltd. D No. 58-22-34/9 Pydimamba Nilayam Butchirajupalem Vishakapatnam 530027 (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 October 05, 2016 received on October 13, 2016 and addendum dated November 18, 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) delay in reporting receipt of foreign inward remittances and (ii) 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 9 (1) (A) and Paragraph 9 (1) (B) of Foreign Exchange Management (Transfer or issue of FED M/s. Skyfi Education Labs Private Limited CA No. HYD 168 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 10.01.2013 as a private limited company under Companies Act, 1956. The company is in the business of providing services in the field of education by providing hardware and software tools and equipment for education purposes including preparation and distribution of educational modules, educational material and to conduct practical workshops thereof. b) The applicant had received foreign inward remittances from Foreign Company towards advance for subscription to equity shares as indicated below: Sr Name of Remitter Total Amount Date of Date of No. (`) Receipt Reporting 1 Cedarampattu S Mohan 2,50,000 02.12.2013 25.02.2014 2 Shead Investment Holdings 5,00,000 10.12.2013 27.12.2013 3 Kalpataru Ventures Pvt. Ltd. 7,45,792 06.01.2014 17.01.2014 4 Shead Investment Holdings 4,99,719 21.08.2014 19.12.2014 5 Cedarampattu S Mohan 2,50,000 28.08.2014 19.12.2014 Total 22,45,511

The applicant reported receipt of remittances towards share subscription amounting to ` 9,99,719/- to the Regional Office of Reserve Bank of India and reported remittances with delay ranging from 1 month 24 days to 2 month 29 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

FED M/s. Skyfi Education Labs Private Limited CA No. HYD 168 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:

Sr Name of Investor Date of Number of Amount for Date of No allotment shares which shares reporting to of shares allotted allotted (`) RBI 1 equity Cedarampattu S share and 1 Mohan 24,999 CCDS 2,50,000 1 equity Shead Investment share and 2 28.01.2014 28.02.2014 Holdings 49,999 CCDS 5,00,000 1 equity Kalpataru share and 3 3,75,010 Ventures Pvt. Ltd. 37,500 CCDs Kalpataru 37,078 4 23.06.2014 3,70,782 24.07.2014 Ventures Pvt. Ltd. CCDs Cedarampattu S 25,000 5 03.09.2014 2,50,000 Mohan CCDs 09.02.2015 Shead Investment 49,972 6 03.09.2014 4,99,719 Holdings CCDs Total 22,45,511

The applicant filed Form FC-GPRs for the allotment of shares amounting to ` 22,45,511/- as indicated above with delay ranging from 1 day to 4 months 7 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.

FED M/s. Skyfi Education Labs Private Limited CA No. HYD 168

3. a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/1099/14.66.003/2016-17 dated December 01, 2016 for further submission in person and/or producing documents, if any, in support of the application.

b) The applicant vide e-mail dated December 08, 2016 has stated that they would not be able to attend the personal hearing and therefore, requested to dispose of the compounding application based on the documents submitted along with the compounding application. In view of the foregoing, 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 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 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 9,99,719/- and the duration of contravention ranges from 1 month 24 days to 2 months 29 days ₹ approximately. [ b) 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 22,45,511/- and the duration of contravention ranges from 1 day to 4 months 7 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 FED M/s. Skyfi Education Labs Private Limited CA No. HYD 168 amount for which the contravention is to be compounded and I consider that an amount of ₹ 21,000/- (Rupees Twenty One Thousand Only) will meet the ends of justice. 6. 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 ₹ 21,000/- (Rupees Twenty One Thousand 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 19th day of December 2016.

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