Aayush NRI LEPL Healthcare (P) 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: December 31, 2018 C.A. HYD 336 In the matter of M/s. Aayush NRI LEPL Healthcare (P) Ltd No. 48-13-3 & 3A, Opp. Siddhartha Medical College Sri Ramachandra Nagar, Ring Road Vijayawada – 520 008 (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 27, 2018 received by us on October 08, 2018 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued there under. The contraventions sought to be compounded are (i) delay in reporting of receipt of foreign inward remittances towards subscription of equity, (ii) delay in submission of Form FCGPR to the Reserve Bank after issue of shares to a person resident outside India and (iii) delay in refund of excess share

Compounding of contraventions under FEMA 1999 M/s Aayush NRI LEPL Healthcare (P) Ltd CA No. HYD 336 application money to a person resident outside India, in terms of Paragraph 9(1)(A), Paragraph 9(1)(B) and Paragraph 8 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 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 originally incorporated as NRI Lingamaneni Healthcare Private Limited under the Companies Act, 1956 on January 6, 2011 and later changed its name to M/s Aayush NRI LEPL Healthcare Private Limited (CIN: U85100AP2011PTC072069). The company is engaged in “Hospital activities”. b) The applicant had received foreign inward remittances from the following investors as indicated below: Sl Name of Remitter Amount Date of Date of No (INR) Receipt Reporting 1 Mahesh Bikkina 20,06,197 11.02.2013 05.03.2013 2 Naga Raju 9,00,000 27.03.2014 24.12.2014 Danthuluri 3 Naga Raju 8,55,962 02.04.2014 24.12.2014 Danthuluri 4 Puttagunta Ranga 87,64,500 06.06.2014 25.07.2014 5 Sudhakar 41,16,920 16.07.2014 11.08.2014 Kanthamneni 6 Kiran Jagralamudi 74,01,250 25.07.2014 11.08.2014 7 Kiran Jagralamudi 25,83,102 28.08.2014 10.09.2014 Total 2,66,27,931

The applicant reported receipt of remittances towards share subscription amounting to ₹ 2,66,27,931/- from 11.02.2013 to 28.08.2014 to the Regional Office of Reserve Bank of India as indicated above, out of which remittance amounting to Compounding of contraventions under FEMA 1999 M/s Aayush NRI LEPL Healthcare (P) Ltd CA No. HYD 336 ₹ 1,05,20,462/- were reported with delays ranging from 19 days to 7 months 28 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 of Amount for Date of No investor allotment shares which shares Reporting of shares allotted allotted (INR) 1 Mahesh Bikkina 05.08.2013 1,92,804 20,05,162 03.09.2013 2 Naga Raju 28.03.2014 69,230 8,99,990 11.02.2015 Danthuluri 3 Naga Raju 03.04.2014 65,843 8,55,959 11.02.2015 Danthuluri 4 Puttagunta 05.08.2014 6,74,193 87,64,509 16.02.2015 Ranga Sudhakar 3,16,557 41,15,241 Kanthamneni Kiran 5,69,327 74,01,251 Jagralamudi 5 Kiran 04.10.2014 1,98,700 25,83,100 16.02.2015 Jagralamudi Total 20,86,654 2,66,25,212

The applicant filed form FCGPRs for the allotment of shares amounting to ₹ 2,66,25,212/- from 05.08.2013 to 04.10.2014 to the Regional Office of Reserve Bank of India as indicated above, out of which remittance amounting to ₹ 2,46,20,050/- were reported with delays ranging from 3 months 13 days to 9 months 15 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

Compounding of contraventions under FEMA 1999 M/s Aayush NRI LEPL Healthcare (P) Ltd CA No. HYD 336 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 d) The company has refunded the share application money beyond the stipulated period of 180 days to the foreign investors as shown below:

Sl Name of Date of Total amount Excess share Date of No Remitter receipt received (INR) application refund money (INR) 1 Sudhakar 23.06.2011 31,34,478 15,428 09-03-2012 Kanthamneni 2 Babu V 25.08.2011 90,484 5,314 01-03-2012 Kanthamneni Total 32,24,962 20,742

The applicant has refunded the unallotted share application money amounting to ₹ 20,742/- with delays ranging from 9 days to 2 months 18 days beyond the prescribed limit. Whereas in terms of Paragraph 8 of Schedule 1 to Notification No.FEMA 20/2000-RB read with A.P (DIR Series) Circular No. 20 dated December 14, 2007, 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 13th November 2007 in the official Gazette of the Govt. of India.

Compounding of contraventions under FEMA 1999 M/s Aayush NRI LEPL Healthcare (P) Ltd CA No. HYD 336 3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/ 1175 /14.66.003/2018-19 dated December 14, 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 December 21, 2018 during which Mr. Md. Irfan Ansari, Company Secretary 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 ₹ 1,05,20,462/- with a delay ranging from 19 days to 7 months 28 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 persons resident outside India and the contravention relates to an amount of ₹ 2,46,20,050/- with a delay ranging from 3 months 13 days to 9 months 15 days approximately. (c) Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB read with A.P (DIR Series) Circular No. 20 dated December 14, 2007 for delay in refund of excess share application money to the foreign investor and the contravention relates to an Compounding of contraventions under FEMA 1999 M/s Aayush NRI LEPL Healthcare (P) Ltd CA No. HYD 336 amount of ₹ 20,742/- and the delay ranges from 9 days to 2 months 18 days respectively. 5. It has been declared in the compounding application dated September 27, 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 December 21, 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 ₹ 49,728/- (Rupees Forty Nine Thousand Seven Hundred Twenty Eight Only) will meet the ends of justice. 7. Accordingly, I compound the admitted contraventions, namely, the contraventions of Paragraph 9(1)(A), Paragraph 9(1)(B) and Paragraph 8 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 ₹ 49,728/- (Rupees Forty Nine Thousand Seven Hundred Twenty Eight Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, 1st Floor, Saifabad, Hyderabad -

Compounding of contraventions under FEMA 1999 M/s Aayush NRI LEPL Healthcare (P) Ltd CA No. HYD 336 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, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly. Dated this 31st day of December 2018

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