TEP Solar India Pvt. Ltd.

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present Ramanath Dash Regional Director Date: August 17, 2016 C.A. HYD 137 In the matter of M/s. TEP Solar India Pvt. Ltd (Formerly M/s. Mulbrick Solar Pvt. Ltd.) 6-3-154-159, Flat No. 303 Royal Majestic Prem Nagar Colony Hyderabad 500 004. . (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 May 11, 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; (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

FED M/s. TEP Solar India Pvt. Ltd. CA No. HYD 137 of Paragraph 8, Paragraph 9 (1) (A) and Paragraph 9 (1) (B) of Foreign Exchange 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 as a private limited company under the Companies Act, 1956 on 20-03-2013 under the name of M/s. Mulbrick Solar Pvt. Ltd and later on 08-09-2015 the name was changed to M/s. TEP Solar India Pvt. Ltd. The company is engaged in the business of generation of solar energy. b) The applicant had received foreign inward remittances from overseas investors towards advance for subscription to equity shares as indicated below:

Sl. Name of Remitter Total Amount Date of Date of No. ( ) Receipt Reporting 1 Mulbrick Limited 4,14,163 01-11-13 11-11-13 ₹ 2 Mulbrick Limited 8,25,753 05-12-13 09-12-13 3 Mulbrick Limited 2,10,75,000 27-12-13 01.01.14 4 Mulbrick Limited 40,00,000 16-04-13 02.04.14 5 Mulbrick Limited 34,99,382 11-07-13 02.04.14 6 Mulbrick Limited 1,79,73,882 02.08.13 02.04.14 7 Mulbrick Limited 90,000 05-09-13 02.04.14 8 Mulbrick Limited 4,15,645 05-02-14 07-02-14 9 Mulbrick Limited 9,15,936 25-04-14 14-05-14 10 Mulbrick Limited 31,28,030 18-12-14 19-12-14 11 Mulbrick Limited 15,64,013 23-12-14 30-12-14 12 Mulbrick Limited 3,05,320 31-01-15 10-02-15 13 Mulbrick Limited 61,49,386 20-02-15 24-02-15 14 Mulbrick Limited 61,46,168 09-07-15 20-07-15

FED M/s. TEP Solar India Pvt. Ltd. CA No. HYD 137 15 Mulbrick Limited 98,08,844 25-08-15 07-09-15 16 Mulbrick Limited 91,41,021 30-09-15 05-10-15 17 TEP Solar Mauritius 22,54,363 30-10-15 01-11-15 Total 8,77,06,906 The applicant reported receipt of remittances towards share subscription amounting to 8,77,06,906/- to the Regional Office of Reserve Bank of India and remittances ₹ amounting to 2,55,63,264/- was reported with delay ranging from 5 months 26 days to 10 months 15 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 Date of Number of Amount for Date of No Investor allotment shares which shares reporting of shares allotted allotted ( ) Mulbrick ₹ 1 Limited 10-01-14 9,000 90,000 09.09.14 Mulbrick 17,97,388 2 Limited 10-01-14 (ccps) 1,79,73,880 16-07-14 Mulbrick 25-03-14 22,31,941 16-07-14 3 Limited 2,23,14,910 Mulbrick 31-03-14 41,564 16-07-14 4 Limited 4,15,640 Mulbrick 23-06-14 91,593 16-07-14 5 Limited 9,15,930 Mulbrick 24-01-15 4,69,204 23.02.15 6 Limited 46,92,040 Mulbrick 10-02-15 30,532 27.02.15 7 Limited 3,05,320

FED M/s. TEP Solar India Pvt. Ltd. CA No. HYD 137 Mulbrick 25-02-15 6,14,938 24-03-15 8 Limited 61,49,380 Mulbrick 05.08.15 749938 05.09.15 Limited 7499380 TEP Solar, 05-08-15 614616 05-09-15 9 Mauritius 6146160 TEP Solar, 21-10-15 18,94,986 20-11-15 10 Mauritius 1,89,49,860 TEP Solar, 14-12-15 2,25,436 11.01.16 11 Mauritius 22,54,360

Total 8,77,06,860

The applicant filed Form FC-GPRs for the allotment of shares amounting to 5, 44, 39,970/- as indicated above with a delay ranging from 1 day to 7 months 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 with delay of 1 year 6 months 26 and 1 year 9 months 21 days approximately as detailed under: Sr Name of the Date of Amount date of Value of No. investor receipt of ( ) issue of shares funds share issued ( ) 1 Mulbrick Ltd 16.04.13 40,00₹,000 05.08.15 74,99,38₹0 2 Mulbrick Ltd 11.07.13 34,99,382 Total 74,99,382 74,99,380

FED M/s. TEP Solar India Pvt. Ltd. CA No. HYD 137 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 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/262/14.66.003/2016-17 dated August 03, 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 August 12, 2016 during which Shri Sandip Agarwal, Managing Director of the company and CS Dvmgopal, Company Secretaries, Dvmgopal & Associates 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:

FED M/s. TEP Solar India Pvt. Ltd. CA No. HYD 137 (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 74,99,380/- and the period of contravention ranges from 1 year 6 months 26 days to 1 year 9 months 21 ₹ 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 2,55,63,264/-and the duration of contravention ranges from 5 months 26 days to 10 months 15 days ₹ approximately. (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 5,44,39,970/- and the duration of contravention ranges from 1 day to 5 months 6 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 1,50,000/- (Rupees One lakh fifty thousand 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 1,50,000/- (Rupees One lakh fifty 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 FED M/s. TEP Solar India Pvt. Ltd. CA No. HYD 137 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 17th day of August 2016.

Sd/- (Ramanath Dash) Regional Director