Millennial Card Technologies Pvt. Ltd.

In the matter of Millennial Card Technologies Private Limited T – 19, Basement, Green Park Main, New Delhi 110016 (Applicant) In exercise of the powers under Section 15(1) of Foreign Exchange Management Act, 1999 and the Regulations/ Rules/ Notifications/ Orders made thereunder, I pass the following Order. ORDER The applicant has filed the compounding application dated December 15, 2018 (received at Reserve Bank of India, New Delhi on December 20, 2018) for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are those of (i) delay in reporting foreign inward remittances received for issue of shares, and (ii) delay in filing form FC-GPR after issue of shares, in terms of paragraphs 9(1)(A) and 9(1)(B) 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 May 3, 2000 (hereinafter referred to as FEMA 20/2000- RB), as amended from time to time.

Millennial Card Technologies Private Limited CA No. NDL 356/2018 2. The relevant facts of the case are as follows: (a) The applicant company was incorporated on May 17, 2017 and is engaged in the business of developing and providing information service activities. (b) The applicant had received a foreign inward remittance of ₹24,46,674/- on June 13, 2017 from its foreign investor M/s Incubate Fund Pte Ltd., Singapore and reported it on July 27, 2017 with a delay of 14 days beyond the prescribed period in contravention of paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000-RB, as then applicable. Whereas, in terms of paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000- RB, an Indian company issuing shares or convertible debentures or warrants in accordance with these Regulations should submit to Reserve Bank, not later than 30 days from the date of receipt of the amount of consideration, a report as per the prescribed procedure. (c) The applicant had reported the allotment of shares to M/s Incubate Fund Pte Ltd., Singapore, on two occasions with delay of 6 days and 1 month & 1 day beyond the prescribed period, as detailed below, in contravention of paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, as then applicable. Sl. Date of No. of shares/ Amount (in INR) Date of reporting No. allotment CCPS allotted 1. 28.06.2017 578 2446674.00 03.08.2017 2. 18.10.2017 578 2446674.00 18.12.2017 Total 48,93,348.00 Whereas, in terms of paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, an Indian company issuing shares or convertible debentures in accordance with these Regulations should submit to Reserve Bank, not later than 30 days from the date of issue of shares, a report in form FC-GPR together with documents prescribed therein. (d) Thus, there are contraventions of paragraphs 9(1)(A) and 9(1)(B) of Schedule 1 to FEMA 20/ 2000-RB dated May 3, 2000, as then applicable.

3. The applicant was given an opportunity for personal hearing for further submission in person and/ or by producing documents, if any, in support of the application. Shri Parth Gupta, Chartered Accountant appeared for personal hearing on March 19, 2019 on behalf of the applicant. The representative of the applicant admitted the contraventions committed by the applicant for which compounding has been sought. During the personal hearing, he submitted that delays were without any malafide or Millennial Card Technologies Private Limited CA No. NDL 356/2018 wilful intention but were mainly due to oversight of FEMA provisions. He requested for a lenient view in the matter. The application for compounding is, therefore, being considered on the basis of averments made in the application as well as other documents and submissions made during the personal hearing.

4. I have given my careful consideration to the documents on record and submissions made by the applicant during the personal hearing. Accordingly, I hold that the applicant has contravened the following FEMA provisions: (a) Paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000-RB, due to delay in reporting of foreign inward remittance received towards subscription of shares as detailed in paragraph 2(b) above. The contravention relates to an amount of ₹24,46,674/- (Rupees Twenty Four Lakh Forty Six Thousand Six Hundred and Seventy Four only) and the period of delay is 14 days. (b) Paragraph 9(1)(B) of Schedule 1 to FEMA 20/200-RB, due to delay in filing form FC-GPR after issue of shares as detailed in paragraph 2(c) above. The contraventions relate to an amount of ₹48,93,348/- (Rupees Forty Eight Lakh Ninety Three Thousand Three Hundred and Forty Eight only) and the period of delay are 6 days and 1 month &1 day.

5. It has been declared in the compounding application dated December 15, 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 undertaking 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. 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.

6. In terms of Section 13 of the FEMA, any person contravening any provision of the Millennial Card Technologies Private Limited CA No. NDL 356/2018 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 ₹20,825/- (Rupees Twenty Thousand Eight Hundred and Twenty Five only) will meet the ends of justice.

7. Accordingly, I compound the admitted contraventions of paragraph 9(1)(A) and 9(1)(B) of Schedule 1 to FEMA 20/2000- RB, as then applicable, by the applicant based on the facts detailed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000, on payment of an amount of ₹20,825/- (Rupees Twenty Thousand Eight Hundred and Twenty Five only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, 6, Sansad Marg, New Delhi-110001 by a demand draft drawn in favour of the “Reserve Bank of India” and payable at New Delhi 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 the 20th day of March 2019.

Sd/- (P S Khual) General Manager