M/S Al-Sami Agro Products Pvt Ltd

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: July 19, 2019 C.A. HYD 418 In the matter of M/s. Al-Sami Agro Products Private Limited Plot Nos. E-16, 17 & 18, Industrial Estate Dowlaiswaram, Andhra Pradesh- 533 125 (Applicant) 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 there under, I pass the following Order

The applicant has filed the compounding application dated March 25, 2019 received by us on March 26, 2019 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued there under. The contraventions sought to be compounded are (i) delay in reporting of receipt of foreign inward remittances towards equity, (ii) delay in submission of Form FCGPR to the Reserve Bank after issue of shares to a person resident outside India, (iii) delay in refund of un-allotted share application money and (iv) delay in filing the Annual Return in respect of the Foreign Liabilities and Assets (FLA Return) in terms

Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418 of Paragraph 9(1)(A), Paragraph 9(1)(B), Paragraph 8 and Paragraph 9(2) 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 03, 2000 as then applicable (hereinafter referred to as Notification No. FEMA 20/2000-RB) and Regulation 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB dated November 07, 2017 as amended from time to time.

2. The relevant facts of the case are as follows: a) The applicant is a resident applicant incorporated as Private Limited Applicant under the Companies Act, 1956 on January 17, 2009 (CIN: U01111AP2009PTC062536). The applicant is engaged in the activity of Raising of other animals, n.e.c. b) The applicant had received foreign inward remittances from single foreign investor as indicated below: Sl Name of Amount (INR) Date of Date of No Remitter Receipt Reporting 1 Duan Hongli 1,98,22,379 22.07.2014 24.09.2014 2 Duan Hongli 61,04,740 13.08.2014 24.09.2014 3 Duan Hongli 72,83,853 14.08.2014 24.09.2014 4 Duan Hongli 76,25,800 19.08.2014 24.09.2014 5 Duan Hongli 75,66,510 19.08.2014 24.09.2014 6 Duan Hongli 74,92,634 12.09.2014 24.09.2014 7 Duan Hongli 45,30,951 12.09.2014 24.09.2014 8 Duan Hongli 61,37,478 30.09.2014 30.10.2014 9 Duan Hongli 1,82,91,768 10.10.2014 30.10.2014 10 Duan Hongli 1,37,03,893 19.03.2015 17.06.2015

Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418 11 Duan Hongli 1,64,87,407 17.04.2015 17.06.2015 Total 11,50,47,413 The applicant reported receipt of remittances towards share capital amounting to ₹ 11,50,47,413/- to the Regional Office of Reserve Bank of India. Out of which remittances amounting to ₹ 7,85,94,582/- were reported with delays ranging from 5 days to 1 Month 29 Days approximately as indicated above. Whereas in terms of Paragraph 9(1)(A) of Schedule 1 to Notification No. FEMA 20/2000-RB, an Indian applicant 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 applicant allotted equity shares and filed form FC-GPRs as indicated below:

Sl Name of Date of Number of Amount for Date of No investor allotment shares which shares reporting of shares allotted allotted (INR) to AD or RBI 1 Duan Hongli 20.09.2014 21,58,102 6,04,26,856 27.04.2016 2 24.11.2014 8,72,473 2,44,29,244 01.10.2016 Total 30,30,575 8,48,56,100

The applicant reported the form FCGPRs for the allotment of shares amounting to ₹ 8,48,56,100/- as indicated above, with delays ranging from 1 year 6 months 7 days to 1 year 9 Months 7 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 applicant issuing shares in accordance with these Regulations has to submit to Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418 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. d) The applicant has neither allotted shares nor refunded the share application money within 180 days as indicated below: Sl Name of Un-allotted share Date of Receipt Date of seeking No Remitter application approval for refund money (INR) from RBI 1 Duan Hongli 1,37,03,893 19.03.2015 29.03.2019 2 1,64,87,407 17.04.2015 Total 3,01,91,300

The applicant has neither refunded nor allotted shares for the remittances amounting to ₹ 3,01,91,300/- within 180 days from the date of receipt of share application money and the refund was made with delays ranging from 3 years 5 months 15 days to 3 years 6 months 14 days approximately. Whereas in terms of Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB, 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 November 13, 2007 in the official Gazette of the Govt. of India with effect from November 29, 2007.

Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418 e) The applicant has filed FLA Return (Foreign liabilities and Assets) with delays ranging from 8 months 27 days to 3 years 8 months 27 days approximately as shown below: Sl Particulars Financial Due date of filing Date of No year the return actual filing 1 FLA Return 2014-15 15.07.2015 10.04.2019 2 FLA Return 2015-16 15.07.2016 10.04.2019 3 FLA Return 2016-17 15.07.2017 10.04.2019 4 FLA Return 2017-18 15.07.2018 10.04.2019 Whereas in terms of Para 9(2) of Schedule I to Notification No. FEMA 20/2000-RB dated May 03, 2000 as then applicable and Regulation 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB dated November 07, 2017 as amended from time to time, “All Indian companies which have received Foreign Direct Investment in the previous year(s) including the current year shall submit to the Reserve Bank of India, on or before the 15th day of July of each year, [a report titled ‘Annual Return on Foreign Liabilities and Assets’ (FLA) as specified by the Reserve Bank from time to time]. 3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/ 0174 /14.66.003/2019-20 dated July 18, 2019 for further submission in person and/or producing documents, if any, in support of the application. (b) The applicant vide e-mail dated July 19, 2019 stated that they are foregoing appearing for the personal hearing and requested that the compounding application may be disposed of on the basis of merits in terms of the facts/submission made therein along with the compounding application. The application for compounding is, therefore, being considered on the basis of the averments made in the application.

Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418 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 and the contravention relates to an amount of ₹ 7,85,94,582/- with delays ranging from 5 days to 1 month 29 days approximately. (b) Paragraph 9(1)(B) of Schedule 1 to Notification No. FEMA 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 ₹ 8,48,56,100/- with delays ranging from 1 year 6 months 7 days to 1 year 9 months 7 days approximately. (c) Paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB for delay in refund of un-allotted share application money to the non-resident investor beyond the stipulated period of 180 days from the date of receipt of remittance and the contravention relates to an amount of ₹ 3,01,91,300/- with delays ranging from 3 years 5 months 15 days to 3 years 6 months 14 days approximately.

(d) Paragraph 9(2) of Schedule 1 to Notification No. FEMA. 20/2000-RB and Regulation 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB for delay in filing of Annual Return on Foreign Liabilities and Assets to Reserve Bank of India for four years viz 2014-15 to 2017-18, with delays ranging from 8 months 27 days to 3 years 8 months 27 days approximately. 5. It has been declared in the compounding application dated March 25, 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 April 12, 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 Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418 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 including the NCLT, 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 ₹ 5,05,411/- (Rupees Five Lakh Five Thousand Four Hundred Eleven 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), Paragraph 8 and Paragraph 9(2) of Schedule 1 to Notification No. FEMA-20/2000-RB and Regulation 13.1(3) of Schedule 1 to Notification No. FEMA-20(R)/2017-RB by the applicant on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount ₹ 5,05,411/- (Rupees Five Lakh Five Thousand Four Hundred Eleven Only) dewhich 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, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

Compounding of contraventions under FEMA 1999 M/s Al-Sami Agro Products Private Limited CA No. HYD 418

The application is disposed accordingly. Dated this 19th day of July 2019

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