Vital Paper Products Pvt Ltd

In the RESERVE BANK OF INDIA Foreign Exchange Department Secretariat Road Saifabad, Hyderabad 500 004 Present R. Subramanian Regional Director Date: June 02, 2017 C.A. HYD 192 In the matter of M/s. Vital Paper Products Private Ltd No. 215, Benjamin Road, Sector 24, Sri City Varadiahpalem Mandal Chittoor District, Andhra Pradesh-517 541 (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 January 31, 2017 received by us on April 25, 2017 for compounding of contravention of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued there under. The contravention sought to be compounded is (i) delay in reporting receipt of foreign inward remittances towards subscription to equity; in terms of Paragraph 9 (1) (A) 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)

FED M/s. Vital Paper Products Pvt Ltd CA No. HYD 192 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 21.05.2012. The company is engaged in the business of manufacture of paper and related products. 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 Reporting No (INR) Receipt 1 Vital Solutions Pte Ltd 9963000 11.06.2012 10.07.2012 2 Vital Solutions Pte Ltd 16500000 12.07.2012 26.07.2012 3 Vital Solutions Pte Ltd 11000000 23.07.2012 16.08.2012 4 Vital Solutions Pte Ltd 17632000 28.08.2012 17.09.2012 5 Vital Solutions Pte Ltd 15678000 08.10.2012 02.11.2012 6 Rajiv Dhar 10 24.12.2012 21.03.2013 7 Vital Solutions Pte Ltd 17364000 18.06.2013 12.07.2013 8 Vital Solutions Pte Ltd 6010000 27.03.2014 11.04.2014 9 Vital Solutions Pte Ltd 29200000 21.05.2014 18.06.2014 10 Vital Solutions Pte Ltd 27427500 18.09.2014 01.10.2014 11 Vital Solutions Pte Ltd 12000000 29.03.2016 29.09.2016 12 Vital Solutions Pte Ltd 11975400 18.04.2016 07.10.2016 13 Vital Solutions Pte Ltd 28661280 20.06.2016 29.09.2016 14 Vital Solutions Pte Ltd 10000000 06.04.2016 28.09.2016 15 Vital Solutions Pte Ltd 13386000 20.09.2016 28.09.2016 16 Vital Solutions Pte Ltd 9969000 04.10.2016 25.10.2016 17 Vital Solutions Pte Ltd 19944000 10.11.2016 24.11.2016 18 Vital Solutions Pte Ltd 20328000 19.12.2016 27.12.2016 19 Vital Solutions Pte Ltd 27168000 27.12.2016 19.01.2017 20 Vital Solutions Pte Ltd 54312000 06.01.2017 25.01.2017

FED M/s. Vital Paper Products Pvt Ltd CA No. HYD 192 21 Vital Solutions Pte Ltd 40794000 18.01.2017 31.01.2017 TOTAL 39,93,12,190

The applicant reported receipt of remittances towards share subscription amounting to 39,93,12,190/- to the Regional Office of Reserve Bank of India and remittances amounting to 6,26,36,690/- was reported with delay ranging from 1 month 26 days to ₹ 5 months 1 day 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. 3. a) The applicant was given an opportunity for personal hearing vide letter HY.FE.FID/2482/14.66.003/2016-17 dated 16.05.2017 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant appeared for personal hearing on May 22, 2017 during which Shri. R.Srinivasa Rao, Plant Financial Controller, Shri. Nirmal Kumar Jain K, Chartered Accountant and Ms. Sneha Motha, Chartered Accountant represented the applicant. The representatives of 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 and was not willful or with 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: (a) 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 6, 26, 36,690 /- ₹

FED M/s. Vital Paper Products Pvt Ltd CA No. HYD 192 and the duration of contravention ranges from 1 month 26 days to 5 months 1 day 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 - (Rupees Eighty Nine Thousand Six Hundred Seventy only) will meet the ends of justice. ₹ 89,670 / 6. Accordingly, I compound the admitted contraventions namely, the contraventions of Paragraph 9 (1) (A) 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 - (Rupees Eighty Nine Thousand Six Hundred Seventy only)which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange ₹ 89,670 / 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 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 2nd day of June 2017.

Sd/- (R. Subramanian) Regional Director