Wandertrails Services 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: October 16, 2018 C.A. HYD 315 In the matter of M/s. Wandertrails Services Private Limited Plot No. 10, Doctor’s Colony Pedawaltair, Visakhapatnam Andhra Pradesh – 530 017 (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 May 25, 2018 received on May 28, 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; (ii) delay in submission of Form FC-GPR to Reserve Bank of India after issue of shares towards subscription to equity and (iii) delay in refund of excess share application money to the non-resident investor in terms of Paragraph 9(1)(A), Paragraph 9(1)(B) and Paragraph 8 respectively of Compounding of contraventions under FEMA 1999 M/s Wandertrails Services Private Limited CA No. HYD 315 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 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, 2013 on 27.01.2016 (CIN: U63090AP2016PTC098156). The company is engaged in the business of travel agency activities. b) The applicant had received foreign inward remittances from single foreign investor towards advance for subscription to equity shares as indicated below.

S. Name of the Remitter Total Amount Date of Date of No (INR) Receipt Reporting

1 Earlsfield Investments PPC 2011400 18-04-2016 11-07-2016 2 Earlsfield Investments PPC 6909727.50 30-05-2016 11-07-2016 3 Earlsfield Investments PPC 4324500 09-06-2016 20-09-2016 4 Earlsfield Investments PPC 1500000 28-09-2016 31-01-2017 5 Earlsfield Investments PPC 3428280 03-11-2016 31-01-2017 6 Earlsfield Investments PPC 1166814.30 27-12-2016 06-05-2017 7 Earlsfield Investments PPC 3436176.20 06-01-2017 02-02-2017 8 Earlsfield Investments PPC 3597625 27-01-2017 06-05-2017 9 Earlsfield Investments PPC 3537600 31-03-2017 27-04-2017 10 Earlsfield Investments PPC 1715715 28-04-2017 20-07-2017 11 Earlsfield Investments PPC 2921952 12-05-2017 18-07-2017

Compounding of contraventions under FEMA 1999 M/s Wandertrails Services Private Limited CA No. HYD 315 12 Earlsfield Investments PPC 1784285 15-05-2017 20-07-2017 13 Earlsfield Investments PPC 4110198.75 03-07-2017 18-07-2017 14 Earlsfield Investments PPC 2011528 19-08-2017 07-09-2017 Total 4,24,55,801.75

The applicant received the foreign inward remittances amounting to `4,24,55,801.75 as indicated above out of which remittances amounting to `2,93,60,298.80 were reported to Reserve Bank of India with delays ranging from 12 days to 3 months 10 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 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 equity which shares reporting of shares shares/CCP allotted (INR) S allotted 1 Earlsfield 09-06-2016 10 Equity 254723.61 28-09-2016 Investments PPC 510 CCPS 12990904.10 2 Earlsfield 25-11-2016 193 CCPS 4916165.48 24-03-2017 Investments PPC 3 Earlsfield 01-01-2017 46 CCPS 1171728.56 08-05-2017 Investments PPC 4 Earlsfield 24-02-2017 276 CCPS 7030371.36 08-05-2017 Investments PPC 5 Earlsfield 31-03-2017 139 CCPS 3540658.04 18-09-2017 Investments PPC

Compounding of contraventions under FEMA 1999 M/s Wandertrails Services Private Limited CA No. HYD 315 6 Earlsfield 29-05-2017 252 CCPS 6419034.72 19-09-2017 Investments PPC 7 Earlsfield 13-07-2017 161 CCPS 4101049.96 19-09-2017 Investments PPC 8 Earlsfield 07-09-2017 78 CCPS 1986816 21-11-2017 Investments PPC Total 4,24,11,451.83

The applicant filed form FCGPRs for issue of shares amounting to `4,24,11,451.83 as indicated above and the same were reported with delays ranging from 1 month 7 days to 4 months 19 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. e. The applicant has delayed in refund of excess share application money of ` 44,350.23 to the foreign investor beyond the stipulated period of 180 days from the date of receipt of remittances. Period of contravention ranges from 6 months 13 days to 7 months 29 days approximately.

Sl Name of the Date of Total Excess share Date of seeking No investor receipt Amount application approval for (INR) money (INR) refund 1 Earlsfield 03-07-2017 4110198.75 19638.23 28-08-2018 Investments PPC 2 Earlsfield 19-08-2017 2011528 24712 28-08-2018 Investments

Compounding of contraventions under FEMA 1999 M/s Wandertrails Services Private Limited CA No. HYD 315 PPC

Total 44,350.23

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. 3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/676/14.66.003/2018-19 dated October 08, 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 October 15, 2018 during which Shri. Surya Prakash Palakodeti, Chartered Accountant 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 but was on account of delay in obtaining KYC and FIRC and lack of professional guidance in their initial stages. In view of the foregoing, the representative of the Compounding of contraventions under FEMA 1999 M/s Wandertrails Services Private Limited CA No. HYD 315 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 `2,93,60,298.80 and the delay ranges from 12 days to 3 months 10 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 ` 4,24,11,451.83 and the period of contravention ranges from 1 month 7 days to 4 months 19 days approximately. (c) Paragraph 8 of Schedule 1 to Notification No.20/2000-RB read with A.P (DIR Series) Circular No. 20 dated December 14, 2007 for delay in refund of share application money to the foreign investor and the contravention relates to an amount of `44,350.23 and the delay ranges from 6 months 13 days to 7 months 29 days approximately. 5. It has been declared in the compounding application dated May 25, 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 June 26, 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 Wandertrails Services Private Limited CA No. HYD 315 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 ` 50,000/- (Rupees Fifty Thousand 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 of ` 50,000/- (Rupees Fifty 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, Rule10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly.

Dated this 16th day of October 2018

Compounding of contraventions under FEMA 1999 M/s Wandertrails Services Private Limited CA No. HYD 315 Sd/- (Subrata Das) Regional Director (Andhra Pradesh and Telangana) and Chief General Manager (Hyderabad)