UPI Polymers 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: December 19, 2018 C.A. HYD 350 In the matter of M/s. UPI Polymers Private Limited Survey No. 2508 Industrial Park, Survepalli Village Venkatachalam Mandal Nellore District Andhra Pradesh – 524 320 (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 November 08, 2018 received on November 12, 2018 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are (i) delay in reporting receipt of foreign inward remittances and (ii) delay in submission of Form FC-GPR to Reserve Bank of India after issue of shares towards subscription to equity in terms of Paragraph 9(1)(A) and Paragraph 9(1)(B) respectively of Schedule

Compounding of contraventions under FEMA 1999 M/s UPI Polymers Private Limited CA No. HYD 350 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 03, 2000 (hereinafter referred to as Notification No. FEMA 20/2000-RB) as then applicable. 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 12.01.2010 (CIN: U25200TG2010PTC066639). The company is engaged in the business of manufacturing High Density Polyethylene Pipes (HDPE) and fitting. b) The applicant had received foreign inward remittances from various foreign investors towards advance for subscription to equity shares as indicated below. Sl Name of the Remitter Total Amount Date of Date of No (INR) Receipt Reporting 1 Middle East Industrial 27479730 17.08.2011 12.05.2012 Investment LLC 2 Union Pipes Industry LLC 30840089 05.12.2013 21.02.2014 3 Union Pipes Industry LLC 30840090 06.02.2014 23.05.2014 4 Union Pipes Industry LLC 30840091 30.06.2014 17.07.2014 5 Union Pipes Industry LLC 20000000 02.08.2017 01.09.2017 Total 14,00,00,000

The applicant received the foreign inward remittances amounting to `14,00,00,000/- as indicated above out of which remittances amounting to `8,91,59,909/- were reported to Reserve Bank of India with delays ranging from 1 month 17 days to 7 months 26 days approximately beyond the prescribed period of 30 days. 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 Compounding of contraventions under FEMA 1999 M/s UPI Polymers Private Limited CA No. HYD 350 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 shares and filed form FC-GPRs as indicated below: Sl Name of the Date of Number of Amount for Date of No investor allotment shares/CCPS which shares reporting of shares allotted allotted (INR) 1 Middle East 11.01.2012 2747973 27479730 17.07.2012 Industrial Investment LLC 2 Union Pipes 22.03.2014 6168017 61680170 02.06.2014 Industry LLC 3 Union Pipes 04.07.2014 3084010 30840100 22.08.2014 Industry LLC 4 Union Pipes 03.08.2017 1999992 19999920 02.09.2017 Industry LLC Total 13999992 13,99,99,920

The applicant filed form FCGPRs for issue of shares amounting to `13,99,99,920/- as indicated above out of which shares amounting to `12,00,00,000/- were reported with delays ranging from 19 days to 5 months 7 days approximately beyond the stipulated period of 30 days. 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 of India 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/1149/14.66.003/2018-19 dated December 11, 2018 for further submission in person and/or producing documents, if any, in support of the application.

Compounding of contraventions under FEMA 1999 M/s UPI Polymers Private Limited CA No. HYD 350 (b) The applicant appeared for personal hearing on December 13, 2018 during which Shri. K Maddulety Reddy, Executive Secretary represented the applicant. The authorized representative of the company 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 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. 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 `8,91,59,909/- and the delay ranges from 1 month 17 days to 7 months 26 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 ` 12,00,00,000/- and the period of contravention ranges from 19 days to 5 months 7 days approximately. 5. It has been declared in the compounding application dated November 08, 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 November 08, 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 Compounding of contraventions under FEMA 1999 M/s UPI Polymers Private Limited CA No. HYD 350 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 ` 1,12,000/- (Rupees One Lakh Twelve 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 of ` 1,12,000/- (Rupees One Lakh Twelve 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 "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 19th day of December 2018

Sd/-

Compounding of contraventions under FEMA 1999 M/s UPI Polymers Private Limited CA No. HYD 350 (Subrata Das) Regional Director (Andhra Pradesh and Telangana) and Chief General Manager (Hyderabad)