Skyworth India Electronics Private Limited

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present Shri. Subrata Das Regional Director (Andhra Pradesh and Telangana) and Chief General Manager (Hyderabad) Date: November 26, 2018 C.A. HYD 331 In the matter of M/s. Skyworth India Electronics Pvt Ltd H. No. 6-3-248/C, 1st Floor, Srinivas Sai Nilayam Road No. 1, 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 September 8, 2018 received by us on September 11, 2018 for compounding of contraventions of the provision of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued thereunder. 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 Compounding of contraventions under FEMA 1999 M/s Skyworth India Electronics Pvt Ltd CA No. HYD 331 Issue of Security by a person resident outside India) Regulations, 2000 notified vide Notification no. FEMA. 20/2000-RB dated 3rd May 2000 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, 1956 on May 19, 2011 (CIN: U51909TG2011PTC074574). The company is engaged in “Wholesale of radio, television and other consumer electronics including CD/ DVD players and recorders”. b) The applicant had received foreign inward remittances from the following investors as indicated below: Sl Name of the Amount Date of Date of No Remitter (INR) Receipt Reporting 1 Skyworth 12990000 13.06.2011 27.06.2011 Multimedia International Ltd 2 Skyworth 6822168 16.08.2011 14.09.2011 Multimedia International Ltd 3 Skyworth 10436000 16.05.2012 19.06.2012 Multimedia International Ltd 4 Skyworth 221619240 19.06.2015 02.07.2015 Multimedia International Ltd 5* Skyworth 343168411 01.02.2018 05.03.2018 Multimedia International Ltd Total 59,50,35,819 * Late Submission Fee of ₹ 42,896/- has been paid by the applicant for reporting delay of 2 days.

Compounding of contraventions under FEMA 1999 M/s Skyworth India Electronics Pvt Ltd CA No. HYD 331 The applicant reported receipt of remittances towards share subscription amounting to ₹ 59,50,35,819/- to the Regional Office of Reserve Bank of India, out of which one remittance of ₹ 1,04,36,000/- was reported with a delay of 4 days approximately beyond the prescribed limit. 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 applicant allotted equity shares and filed form FC-GPRs as indicated below:

Sl Name of Date of Number Amount for Date of No investor allotment of shares which shares reporting of shares allotted allotted (INR) 1 Qi Yong* 16.06.2011 10 1000 22.06.2011 2 Skyworth 990 99000 Multimedia International Ltd 3 Skyworth 17.06.2011 128900 12890000 22.06.2011 Multimedia International Ltd 4 Skyworth 08.11.2011 68221 6822100 29.11.2011 Multimedia International Ltd 5 Skyworth 13.06.2012 104360 10436000 25.06.2012 Multimedia International Ltd 6 Skyworth 03.07.2015 2216192 221619200 07.06.2017 Multimedia International Ltd 7 Skyworth 12.02.2018 3431684 343168400 12.03.2018 Multimedia International Ltd Total 59,50,35,700 *Nominee shareholder of M/s Skyworth Multimedia International Ltd

Compounding of contraventions under FEMA 1999 M/s Skyworth India Electronics Pvt Ltd CA No. HYD 331 The applicant filed form FCGPRs for the allotment of shares amounting to ₹ 59,50,35,700/- to the Regional Office of Reserve Bank of India, out of which shares amounting to ₹ 22,16,19,200/- were reported with a delay of 1 year 10 months 5 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/ 1025 /14.66.003/2018-19 dated November 20, 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 November 22, 2018 during which Shri. B Ravi, Director represented the applicant.

The authorized representative 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. 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 towards issue of shares amounting to ₹ 1,04,36,000/- with a delay of 4 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 Compounding of contraventions under FEMA 1999 M/s Skyworth India Electronics Pvt Ltd CA No. HYD 331 persons resident outside India and the contravention relates to an amount of ₹ 22,16,19,200/- with a delay of 1 year 10 months 5 days approximately.

5. It has been declared in the compounding application dated September 8, 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 September 8, 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 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 ₹ 2,16,000/- (Rupees Two Lakh Sixteen Thousand 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 ₹ 2,16,000/- (Rupees Two Lakh Sixteen 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 favour of the Compounding of contraventions under FEMA 1999 M/s Skyworth India Electronics Pvt Ltd CA No. HYD 331 "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, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly. Dated this 26th day of November 2018

Sd/- (Subrata Das) Regional Director (Andhra Pradesh and Telangana) and Chief General Manager (Hyderabad)