Centrax Gas Turbines India Pvt. Ltd.

In the RESERVE BANK OF INDIA Foreign Exchange Department 6, Sansad Marg New Delhi-110001 Present Devika Gowrishankar Deputy General Manager Date: May 30, 2019 CA No. NDL 405/2019 In the matter of Centrax Gas Turbines India Private Limited F Block, Ground Floor, The Mira Corporate Suites 1 & 2, Old Ishwar Nagar, Mathura Road, New Delhi - 110065 (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 March 05, 2019 (received at Reserve Bank of India, New Delhi on March 06, 2019) 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 Form FC-GPR after issue of shares, in terms of paragraphs 9(1)(A) and 9(1)(B) 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 time.

Centrax Gas Turbines India Private Limited CA No. NDL 405/2019

2. The relevant facts of the case are as follows: (a) The applicant company (under liquidation) was incorporated on August 23, 2010. The company was engaged in the business of repair and maintenance of engines and turbines. The shareholders of the company accorded their consent for voluntary winding up of the company during the Extra Ordinary General Meeting (EGM) held on December 20, 2016 and the company is in the process of voluntary winding up. (b) The applicant had received remittances from its foreign investors on six occasions during March 2011 to September 2013 and reported them with delay ranging from 10 days to 6 months and 12 days, as detailed below, beyond the prescribed period in contravention of paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000-RB, as then applicable.

S. No. Date of receipt Amount (₹) Date of reporting 1 30.03.2011 99,900.00 27.12.2011 2 16.05.2011 100.00 27.12.2011 3 03.05.2011 9,83,076.48 01.09.2011 4 12.05.2011 16,923.52 16.09.2011 5 06.06.2012 2,01,836.15 16.07.2012 6 13.09.2013 8,19,744.21 31.10.2013 Total 21,21,580.36

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 through AD bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the Registered office of the company operates, not later than 30 days from the date of receipt of the amount of consideration received by Indian company for issue of shares and convertible debentures, a report in form specified in Annex C to this Schedule along with documents prescribed therein. (c) The applicant had issued equity shares to its foreign investors on three occasions and reported them with delay ranging from 5 days to 7 months and 28 days, as detailed below, beyond the prescribed period in contravention of paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, as then applicable.

Centrax Gas Turbines India Private Limited CA No. NDL 405/2019

S. Date of No. of shares Amount (₹) Date of reporting in No. allotment allotted Form FC-GPR 1. 30.03.2011 9990 99,900.00 27.12.2011 2 16.05.2011 10 100.00 27.12.2011 3 20.10.2011 100000 10,00,000.00 24.11.2011 Total 11,00,000.00

Whereas, in terms of paragraph 9(1)(B) 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 issue of shares, a report in form FC-GPR together with documents prescribed therein. (d) Thus, there are contraventions of paragraphs 9(1)(A) and 9(1)(B) 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 Lalit Choudhary, Company Secretary, appeared for personal hearing on May 30, 2019 on behalf of the applicant. The representative of the applicant admitted the contraventions committed by the applicant for which compounding has been sought. During the personal hearing, he submitted that contraventions were without any malafide or wilful intention but committed inadvertently due to lack of professionals to take care of FEMA compliances. He requested for a lenient 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, on account of delay in reporting foreign inward remittance received towards subscription of shares as detailed in paragraph 2(b) above. The contraventions relate to an amount of ₹21,21,580.36 (Rupees Twenty One Lakh Twenty One Thousand Five Hundred Eighty and Paise Thirty Six only) and the period of delay ranges from 10 days to 6

Centrax Gas Turbines India Private Limited CA No. NDL 405/2019 months and 12 days. (b) Paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, on account of delay in filing Form FC-GPR after issue of shares as detailed in paragraph 2(c) above. The contraventions relate to an amount of ₹11,00,000/- (Rupees Eleven Lakh only) and the period of delay ranges from 5 days to 7 months and 28 days.

5. It has been declared in the compounding application dated March 05, 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 also been declared in the declaration 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. It has further been declared that the applicant has not filed any appeal under Section 17 or Section 19 of FEMA. 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 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. After considering the submissions made by the applicant and the facts and circumstances of the case, I am persuaded to compound the contraventions, in line with the Guidance Note on Computation Matrix prescribed as part of Master Direction – Compounding of Contraventions, framed in accordance with the Foreign Exchange (Compounding Proceedings) Rules, 2000. Accordingly, it stands to reason that payment of an amount of ₹23,150/- (Rupees Twenty Three Thousand One Hundred and Fifty only) will meet the ends of justice in the circumstances of this case.

7. Accordingly, I compound the admitted contraventions of paragraphs 9(1)(A) and 9(1)(B) 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

Centrax Gas Turbines India Private Limited CA No. NDL 405/2019

Proceedings) Rules, 2000, on payment of an amount of ₹23,150/- (Rupees Twenty Three Thousand One Hundred and Fifty 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 30th day of May 2019.

Sd/- (Devika Gowrishankar) Deputy General Manager