Rahul Ferromet & Engineering Private Limited

CA No. MUM988/2019 In the matter of M/s Rahul Ferromet & Engineering Pvt Ltd 43, Alankar Cinema Building, 1st Khetwadi Lane, SVP Road Mumbai 400 004 (Applicant) In exercise of the powers conferred under section 15(1) of the Foreign Exchange Management Act, 1999 and the Regulations/Rules/Notifications/Orders made thereunder, I pass the following

Order 1 The applicant has filed the compounding application dated October 23, 2019, received at the Reserve Bank on November 01, 2019, for compounding of contravention/s of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contravention/s sought to be compounded are in respect of the following (Regulations/ paras under 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 and as amended from time to time (hereinafter referred to as FEMA 20):

(i) Para 9 (1) (A) of FEMA 20: Delay in reporting receipt of foreign inward remittance towards subscription to equity

FED, MRO, CEFA, Rahul Ferromet & Engineering Pvt Ltd, CA No: MUM 988/2019 (ii) Para 9 (1) (B) of FEMA 20: Delay in filing Form FC GPR to Reserve Bank after issue of shares to person resident outside India 2 Brief details of the applicant company are as follows: Date of Incorporation March 20, 2003 Its main activities are: Trading in Ferrous and Non-Ferrous Metal

3 The applicant received foreign inward remittances from non-resident investors towards equity shares / compulsorily convertible preference shares/ compulsorily convertible debentures and it reported the same to the Reserve Bank on dates as indicated below.

Delay in reporting Foreign Direct Investment &/or delay in allotting the shares/ refunding the amount (whereas, "Y" represents delay in number of years, "M" represents delay in number of months and "D" represents delay in number of days, and LSF stands for : Late Submission Fees

Sr. Date of Amount Date of Delay in Date of Delay in No/ inward received reporting reporting allotment/ allotment LSF remittance (in INR) to RBI Foreign refund or refund (DD-MM-YY) (DD-MM-YY) Investment (DD-MM-YY)

1 30-05-13 0Y 5M 0D 02-05-13 0Y 0M 0D 29-11-12 38,64,998.00 2 30-05-13 0Y 4M 2D 02-05-13 0Y 0M 0D 27-12-12 7,43,065.00 3 30-05-13 0Y 3M 29D 02-05-13 0Y 0M 0D 31-12-12 3,70,109.00 4 30-05-13 0Y 3M 28D 02-05-13 0Y 0M 0D 01-01-13 2,92,764.00 5 30-05-13 0Y 3M 12D 02-05-13 0Y 0M 0D 17-01-13 24,51,080.00 6 30-05-13 0Y 1M 24D 02-05-13 0Y 0M 0D 05-03-13 16,15,928.00 7 30-05-13 0Y 1M 24D 02-05-13 0Y 0M 0D 05-03-13 13,64,330.00 8 30-05-13 0Y 1M 22D 02-05-13 0Y 0M 0D 07-03-13 4,15,590.00 9 30-05-13 0Y 1M 22D 02-05-13 0Y 0M 0D 07-03-13 13,48,890.00 10 13-07-13 0Y 7M 12D 05-04-13 0Y 0M 0D 31-10-12 11,46,659.00 TOTAL 1,36,13,413.00

FED, MRO, CEFA, Rahul Ferromet & Engineering Pvt Ltd, CA No: MUM 988/2019 In terms of Para 9 (1) (A) of FEMA 20, an Indian company issuing equity shares/ compulsorily convertible debentures/compulsorily convertible preference shares 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. However the applicant reported receipt of remittances to the Reserve Bank of India on dates indicated above with a delay ranging from 0Y 1M 22D to 0Y 7M 12D, in case of all the remittances.

4 The company allotted equity shares/compulsorily convertible preference shares/compulsorily convertible debentures and filed FC-GPRs as indicated below: Delay in filing Form FCGPR (whereas, "Y" represents delay in number of years, "M" represents delay in number of months and "D" represents delay in number of days, LSF stands for : Late Submission Fees, IP stands for Issue Price and FV stands for Face Value

Sr. Date of Number of IP (FV+ Amount (IP*no Date of Delay in no/ allotment shares premium) of shares) reporting filing LSF (DD-MM-YY) (in INR) (in INR) (DD-MM-YY) FCGPR

1 02-05-13 38680 100.00 12-09-13 0Y 3M 38,68,000.00 10D 2 02-05-13 7460 100.00 12-09-13 0Y 3M 7,46,000.00 10D 3 02-05-13 3700 100.00 12-09-13 0Y 3M 3,70,000.00 10D 4 02-05-13 2920 100.00 12-09-13 0Y 3M 2,92,000.00 10D 5 02-05-13 24520 100.00 12-09-13 0Y 3M 24,52,000.00 10D 6 02-05-13 16200 100.00 12-09-13 0Y 3M 16,20,000.00 10D 7 02-05-13 13680 100.00 12-09-13 0Y 3M 13,68,000.00 10D 8 02-05-13 4220 100.00 12-09-13 0Y 3M 4,22,000.00 10D 9 02-05-13 13510 100.00 12-09-13 0Y 3M 13,51,000.00 10D 10 05-04-13 11460 100.00 25-10-13 0Y 5M 11,46,000.00 19D TOTAL 1,36,35,000.00 The applicant filed form FC-GPRs as indicated above with a delay ranging from 0Y 3M 10D to 0Y 5M 19D. Whereas, in terms of Para 9(1) (B) of FEMA 20, an Indian company issuing shares in accordance with these Regulations has to submit to RBI a report in Form FC-GPR along with documents prescribed therein within 30 days from the date of issue of shares to Non Resident.

FED, MRO, CEFA, Rahul Ferromet & Engineering Pvt Ltd, CA No: MUM 988/2019 5 The applicant was given an opportunity for personal hearing, for further submission in person and/or for producing documents, if any, in support of the application vide e-mail dated February 18, 2020. The applicant applied for waiver of personal hearing vide e mail dated February 20, 2020. The applicant, in the compounding application, had admitted the contraventions as stated above for which compounding has been sought. It had been submitted that the contraventions were not wilful and were unintentional. The application for compounding is, therefore, being considered on the basis of the averments made in the application as well as other documents and submissions made in this context by the applicant.

6 I have given my careful consideration to the documents on record and thereafter. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: (i) Para 9 (1) (A) of FEMA 20, due to the delay in reporting of receipt of foreign inward remittance towards subscription towards shares as detailed above. The contravention relates to total amount of Rs.1,36,13,413/- (Rupees One Crore Thirty Six Lakh Thirteen Thousand Four Hundred Thirteen and Zero Paise Only) and with a delay ranging from minimum 0Y 1M 22D to maximum 0Y 7M 12D approximately.

(ii) Para 9 (1) (B) of FEMA 20, due to the delay in submission of Form FC-GPR to the Reserve Bank after issue of shares to persons resident outside India and the contravention relates to total amount of Rs.1,36,35,000/- (Rupees One Crore Thirty Six Lakh Thirty Five Thousand and Zero Paise Only) and with a delay ranging from minimum 0Y 3M 10D to maximum 0Y 5M 19D approximately.

7 It has been declared in the compounding application dated October 23, 2019 that the particulars given by the applicant in the application are true and correct to the best of their/his/her knowledge and belief. It has also been declared in a declaration attached to 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/him/her 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.

FED, MRO, CEFA, Rahul Ferromet & Engineering Pvt Ltd, CA No: MUM 988/2019 8 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 contraventions are to be compounded and I consider that an amount of Rs.32,792/- (Rupees Thirty Two Thousand Seven Hundred Ninety Two and Zero Paise Only) will meet the ends of justice.

9 Accordingly, I compound the admitted contravention/s namely, the contravention/s of Para 9 (1) (A) of FEMA 20 and Para 9 (1) (B) of FEMA 20, by the applicant, on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount of Rs. 32,792/- (Rupees Thirty Two Thousand Seven Hundred Ninety Two and Zero Paise Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, Mumbai Regional Office, Main Building, 3rd floor, Shahid Bhagat Singh Marg, Fort, Mumbai-400001 by a demand draft drawn in favour of the "Reserve Bank of India" and payable at Mumbai 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.

10 The above order is passed only in respect of contraventions of Para 9 (1) (A) of FEMA 20 and Para 9 (1) (B) of FEMA 20 and does not restrict the right of any other authority to proceed against the Company for any other violations/contraventions noticed at any point of time.

11 The application is disposed of accordingly.

Sd/- (Aviral Jain) Chief General Manager Compounding Authority

Dated : February 28, 2020