Braemar ACM Shipbroking India Pvt. Ltd.

Ajay Kumar Regional Director for Delhi and CGM, New Delhi Date: May 6, 2019 CA No. NDL 355/2018 In the matter of Braemar ACM Shipbroking India Private Limited Building No. 22, 2nd Floor, Pushp Vihar Commercial Complex, Madangir New Delhi 110062 (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 4, 2018 (received at Reserve Bank of India, New Delhi on December 18, 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 remittance received for issue of shares, and (ii) delay in filing the Annual Return on Foreign Liabilities and Assets (FLAR), in terms of paragraphs 9(1)(A) and 9(2) respectively 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 Braemar ACM Shipbroking India Private Limited CA No. NDL 355/2018 time.

2. The relevant facts of the case are as follows: (a) The applicant company was incorporated on May 8, 2003 with the name Braemar Seascope India Private Limited which was changed to Braemar ACM Shipbroking India Private Limited on March 23, 2015. The company is engaged in the business of ship broking and chartering of ships. (b) The applicant received foreign inward remittance of ₹10,00,000/- (Rupees Ten Lakh only) on June 11, 2003 and reported the same to RBI on July 23, 2003 with a delay of 12 days 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 in accordance with these Regulations shall submit to Reserve Bank, not later than 30 days from the date of receipt of the amount of consideration, a report indicating the details as prescribed therein. (c) The applicant had filed the Annual Return on Foreign Liabilities and Assets (FLAR) to the Reserve Bank for the financial years 2010-2011 to 2017-2018 on August 23, 2018 with delay ranging from 1 month and 8 days to 7 years, 1 month and 8 days.

Whereas in terms of paragraph 9 (2) of Schedule 1 to FEMA 20/2000- RB, all Indian companies which have received Foreign Direct Investment in the previous year(s) including the current year shall submit to the Reserve Bank, on or before the 15th day of July of each year, a report titled ‘Annual Return on Foreign Liabilities and Assets’ as specified by the Reserve Bank from time to time. (d) Thus, there are contraventions of paragraphs 9(1)(A) and 9(2) of Schedule 1 to FEMA 20 /2000-RB, 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 Murari Prasad Verma, Accounts Manager and Ms Sonika Bharati appeared for personal hearing on May 2, 2019 on behalf of the applicant. The representatives of the applicant admitted the contraventions committed by the applicant for which compounding has been sought. During the personal hearing, they submitted that the delays were without any malafide or wilful intention but were mainly due to lack of awareness regarding compliance to FEMA Regulations. They requested for a lenient

Braemar ACM Shipbroking India Private Limited CA No. NDL 355/2018 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 ₹10,00,000/- (Rupees Ten Lakh only) and the period of delay is 12 days. (b) Paragraph 9(2) of Schedule 1 to FEMA 20/2000-RB, due to delay in filing of the Annual Return on Foreign Liabilities and Assets (FLAR) for the financial years 2010- 11 to 2017-2018 with delay ranging from 1 month and 8 days to 7 years, 1 month and 8 days. Foreign liability of the company as on March 31, 2018 stood at ₹830.29 lakh as per FLA Return.

5. It has been declared in the compounding application dated December 4, 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 dated January 10, 2019 furnished as part of 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 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 Braemar ACM Shipbroking India Private Limited CA No. NDL 355/2018 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 ₹90,080/- (Rupees Ninety Thousand and Eighty only) will meet the ends of justice.

7. Accordingly, I compound the admitted contravention of paragraphs 9(1)(A) and 9(2) 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 ₹90,080/- (Rupees Ninety Thousand and Eighty 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 6th day of May 2019.

Sd/- (Ajay Kumar) Regional Director for Delhi and CGM, New Delhi