Cargo Exchange India Pvt Ltd

In exercise of the powers conferred under sub-section 1 of Section 15 of Foreign Exchange Management Act, 1999 and the Regulations/ Rules/ Notifications/ Orders made thereunder, I pass the following Order

The applicant has submitted the compounding application dated January 21, 2019 received by us on January 22, 2019 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are (i) delay in reporting of receipt of foreign inward remittances towards subscription of equity and (ii) delay in submission of Form FCGPR to the Reserve Bank after issue

Compounding of contraventions under FEMA 1999 M/s Cargo Exchange India Private Limited CA No. HYD 400 of shares to a person resident outside India in terms of Paragraph 9(1)(A) and Paragraph 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 3rd May 2000 as then applicable (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 Private Limited Company under the Companies Act, 2013 on January 30, 2015 (CIN: U63090TG2015PTC097453). The company is engaged in the business of “Cargo handling incidental to land transport”. b) The applicant had received foreign inward remittances from the following foreign investors as indicated below: Sl Name of Remitter Amount (INR) Date of Date of No Receipt Reporting 1 HEB International 1,32,99,850 20.07.2016 13.09.2016 FZE 2 Anthill Scale 31,99,300 16.05.2017 10.10.2017 Ventures Pte Ltd Total 1,64,99,150 The applicant reported receipt of remittances towards share subscription amounting to ₹ 1,64,99,150/- to the Regional Office of Reserve Bank of India, with delays ranging from 25 days to 3 months 25 days approximately beyond the prescribed limit. 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.

Compounding of contraventions under FEMA 1999 M/s Cargo Exchange India Private Limited CA No. HYD 400 c) The company allotted equity shares and filed form FC-GPRs as indicated below:

Sl Name of investor Date of Number of Amount for Date of No allotment shares which shares reporting to of shares allotted allotted (INR) AD or RBI 1 HEB International 27.07.2016 91,094 1,32,99,724 22.11.2016 FZE 2 Anthill Scale 16.05.2017 21,913 31,99,298 11.10.2017 Ventures Pte Ltd Total 1,13,007 1,64,99,022

The applicant filed form FCGPRs for the allotment of shares amounting to ₹ 1,64,99,022/- as indicated above, which were reported with delays ranging from 2 months 27 days to 3 months 26 days approximately beyond the prescribed limit. 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 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/ 2127 /14.66.003/2018-19 dated April 04, 2019 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant appeared for personal hearing on April 08, 2019 represented by Shri. Y Eshwar Sharma, Practicing Company Secretary. The authorized representative of the applicant admitted the contraventions for which the Compounding of contraventions under FEMA 1999 M/s Cargo Exchange India Private Limited CA No. HYD 400 compounding has been sought and 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/ submissions made in the application and 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 ₹ 1,64,99,150/- and the delay ranges from 25 days to 3 months 25 days approximately. (b) Paragraph 9(1)(B) of Schedule 1 to Notification No. 20/2000-RB for delay in submission of Form FCGPR to Reserve Bank of India after issue of shares to persons resident outside India and the contravention relates to an amount of ₹ 1,64,99,022/- and the delay ranges from 2 months 27 days to 3 months 26 days approximately. 5. It has been declared in the compounding application dated January 21, 2019 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 March 26, 2019 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 Compounding of contraventions under FEMA 1999 M/s Cargo Exchange India Private Limited CA No. HYD 400 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 ₹ 38,150/- (Rupees Thirty Eight Thousand One Hundred Fifty 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 ₹ 38,150/- (Rupees Thirty Eight Thousand One Hundred Fifty 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 12th day of April 2019

Sd/- (Subrata Das) Regional Director (Andhra Pradesh and Telangana) and Chief General Manager (Hyderabad)