Global Payex Private Limited

In the Reserve Bank of India Foreign Exchange Department Mumbai Regional Office Main Building, 3rd floor Shahid Bhagat Singh Marg, Fort Mumbai 400 001 Present Shri J.K. Pandey Chief General Manager May 31, 2019 CA No. MUM 863/2019 In the matter of M/s Global Payex Pvt Ltd Simran Centre, 5th Floor, 30/H, Parsi Panchayat Road, Andheri East, Mumbai- 400069 (Applicant) In exercise of the powers conferred under section 15(1) of the Foreign Exchange Management Act, 1999 and the Regulations/Rules/Notifications/Orders made thereunder, I pass the following Order 1 The applicant has filed the compounding application dated March 25, 2019, received at the Reserve Bank on March 28, 2019, for compounding of contravention/s of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are in respect of the following Regulations/ paras under 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 May 3, 2000 and as amended from time to time (hereinafter referred to as FEMA 20):

I Para 9 (1) (A) of FEMA 20: Delay in reporting receipt of foreign inward remittance towards subscription to equity

FED, MRO, CEFA, M/s Global Payex Pvt Ltd, CA No: MUM 863/2019

II Para 9 (1) (B) of FEMA 20: Delay in filing Form FC GPR to Reserve Bank after issue of shares to person resident outside India III Para 8 of FEMA 20: Neither the equity instruments were issued, nor the money refunded to the foreign investor within 180 days from the receipt of the inward remittance IV Para 9 (2) of FEMA 20: Delay in filing ‘Annual Return on Foreign Liabilities and Assets’ (FLA Returns).

2 Brief facts of the applicant company are as follows: Date of Incorporation May 02, 2011 Its main activities are: Other information technology and computer service activities

3 The applicant received foreign inward remittance from non-resident investor towards equity shares / compulsorily convertible preference shares/ compulsorily convertible debentures and it reported the same to the Reserve Bank on dates as indicated below.

Delay in reporting Foreign Direct Investment &/or Delay in alloting the shares/ refunding the amount (whereas, "Y" represents delay in number of years, "M" represents delay in number of months and "D" represents delay in number of days, and LSF stands for : Late Submission Fees S No/ Date of Amount received Date of Para 9 (1) (A) Date of Para 8 LSF inward (in INR) reporting to allotment/ delay remittanc RBI refund e (DD-MM-YY) (DD-MM-YY) (DD-MM-YY) 1 23/06/11 11,095,000.00 07/05/18 6Y 9M 14D 30/03/16 4Y 3M 9D TOTAL 11,095,000.00 In terms of Para 9(1)(A) of FEMA 20, 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. However, the applicant reported receipt of remittance to the Reserve Bank of India on date indicated above with a delay of 6Y 9M 14D beyond the stipulated time of 30 days. 4 In respect of remittance amounting to Rs.11,095,000 (Rupees One Crore Ten Lakh Ninety Five Thousand and Zero Paise Only), indicated in the table above the company allotted shares/ refunded the amount after 180 days from the date of receipt of investment, with a delay of 4Y 3M 9D. Whereas in terms of paragraph 8 of Schedule 1 to FEMA 20, an Indian company is required to issue shares or refund the amount within 180 days from the date of receipt of inward remittance.

FED, MRO, CEFA, M/s Global Payex Pvt Ltd, CA No: MUM 863/2019

5 The company allotted equity shares/compulsorily convertible preference shares/compulsorily convertible debentures and filed FC-GPRs as indicated below:

Delay in filing Form FCGPR (whereas, "Y" represents delay in number of years, "M" represents delay in number of months and "D" represents delay in number of days, LSF stands for : Late Submission Fees, IP stands for Issue Price and FV stands for Face Value Sno/ Date of Number of IP (FV+ Amount (IP*no Date of Para 9 (1) LSF allotment shares premium) of shares) reporting (B) delay (in INR) (in INR) (DD-MM-YY) (DD-MM-YY)

1 30/03/16 443800 25.00 11,095,000.00 04/06/18 2Y 1M 4D TOTAL 11,095,000.00 The applicant filed form FC-GPR as indicated above with a delay of 2Y 1M 4D. Whereas, in terms of Paragraph 9(1) (B) of Schedule 1 to Notification No. FEMA 20, an Indian company issuing shares in accordance with these Regulations has to submit to RBI a report in Form FC-GPR along with documents prescribed therein within 30 days from the date of issue of shares to Non Resident.

6 The company has not filed/delayed in filing the Annual Return on Foreign Liabilities and Assets (FLA return) to the Reserve Bank of India for the Financial Years 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17. Whereas, in terms of Paragraph 9(2) of Schedule 1 to Notification No. FEMA 20, all Indian companies which have received Foreign Direct Investment in the previous years including the current year, shall submit to the Reserve Bank of India, on or before the due date (as applicable) each year, a report titled ‘Annual Return on Foreign Liabilities and Assets’ as specified by the Reserve Bank from time to time.

7 The applicant was given an opportunity for personal hearing, for further submission in person and/or for producing documents, if any, in support of the application vide e-mail dated May 22, 2019. The applicant appeared for personal hearing on May 27, 2019, during which Mr Kunal Gandhi, Consultant represented the applicant in the cabin of Shri J.K. Pandey, Chief General Manager, Mumbai Regional Office. The representative of the applicant admitted the contraventions for which compounding has been sought. During the hearing it was submitted that delay was inadvertent and unintentional. The representative of the applicant requested that in view of the foregoing a lenient view may be taken 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 as other documents and submissions made in this context by the applicant during personal hearing and thereafter.

8 I have given my careful consideration to the documents on record and submissions made by the applicant during the personal hearing and thereafter. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of:

FED, MRO, CEFA, M/s Global Payex Pvt Ltd, CA No: MUM 863/2019

I Para 9 (1) (A) of FEMA 20, due to the delay in reporting of receipt of foreign inward remittance towards subscription towards shares as detailed above. The contravention relates to total amount of Rs.11,095,000 (Rupees One Crore Ten Lakh Ninety Five Thousand and Zero Paise Only) with a delay of 6Y 9M 14D approximately.

II Para 9 (1) (B) of FEMA 20, due to the delay in submission of Form FC-GPR to the Reserve Bank after issue of shares to persons resident outside India and the contravention relates to total amount of Rs.11,095,000 (Rupees One Crore Ten Lakh Ninety Five Thousand and Zero Paise Only) with a delay of 2Y 1M 4D approximately.

III Para 8 of FEMA 20, since the shares were neither issued nor the amount was refunded to the person resident outside India within the prescribed time from the date of receipt of the inward remittance. The contravention relates to total amount of Rs.11,095,000 (Rupees One Crore Ten Lakh Ninety Five Thousand and Zero Paise Only) with a delay of 4Y 3M 9D approximately. IV Para 9 (2) of FEMA 20, due to non-filing/delay in filing of Annual Return on Foreign Liabilities and Assets for the Financial Years 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17.

9 It has been declared in the compounding application dated March 25, 2019 that the particulars given by the applicant in the application are true and correct to the best of their/his/her knowledge and belief. It has also been declared in a declaration attached to 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/him/her thereafter. It has further been declared that the applicant has not filed any appeal under section 17 or section 19 of FEMA, 1999. 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. 10 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 contraventions are to be compounded and I consider that an amount of Rs.629,344 (Rupees Six Lakh Twenty Nine Thousand Three Hundred Forty Four and Zero Paise Only) will meet the ends of justice.

FED, MRO, CEFA, M/s Global Payex Pvt Ltd, CA No: MUM 863/2019

11 Accordingly, I compound the admitted contravention/s namely, the contravention/s of Para 9 (1) (A) of FEMA 20, Para 9 (1) (B) of FEMA 20, Para 8 of FEMA 20 and Para 9 (2) of FEMA 20, 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. 629,344 (Rupees Six Lakh Twenty Nine Thousand Three Hundred Forty Four and Zero Paise Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, Mumbai Regional Office, Main Building, 3rd floor, Shahid Bhagat Singh Marg, Fort, Mumbai-400001 by a demand draft drawn in favour of the "Reserve Bank of India" and payable at Mumbai 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.

12 The above order is passed only in respect of contraventions of Para 9 (1) (A) of FEMA 20, Para 9 (1) (B) of FEMA 20, Para 8 of FEMA 20 and Para 9 (2) of FEMA 20 and does not restrict the right of any other authority to proceed against the Company for any other violations/contraventions noticed at any point of time.

13 The application is disposed of accordingly. dated: May 31, 2019 Compounding Authority (J.K. Pandey) Chief General Manager