Swarnim Trading Pvt Ltd

(Applicant) In exercise of the powers conferred under Section 15 (1) 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 August 31, 2016 received on September 06, 2016 for compounding of contravention of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued there under. The contraventions sought to be compounded are (i) delay in reporting receipt of foreign inward remittances and (ii) delay in submission of Form FC-GPR to the Reserve Bank after issue of shares towards subscription to equity to a person resident outside India in terms of Paragraph 9 (1) (A) and Paragraph 9 (1) (B) of Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside

FED M/s. Swarnim Trading Private Limited CA No. HYD 151 India) Regulations, 2000 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 and as amended from time to time (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 a private limited company under the Companies Act, 1956 on 06.06.2011. The company is engaged in the business to export from India and import into India, trading of any material, all commodities, consumer goods, tea, coffee, chemicals, minerals, textiles materials and articles whether raw, semi manufactured or manufactured to /from all parts of the world etc. b) The applicant had received foreign inward remittances from overseas investors towards advance for subscription to equity shares as indicated below:

Sr Name of the remitter Total Amount Date of receipt Reported on No. (`) 1 Radiant Bay Ventures 1,89,36,000 16.09.2011 31.10.2011 Ltd 2 Fiora Enterprises Ltd 2,22,42,017 26.09.2011 31.10.2011 3 Fiora Enterprises Ltd 2,69,08,385 15.12.2011 04.01.2012 4 Fiora Enterprises Ltd 2,14,40,000 15.05.2012 12.06.2012 5 Fiora Enterprises Ltd 2,16,20,000 07.11.2012 07.12.2012 Total 11,11,46,402

The applicant reported receipt of remittances towards share subscription amounting to ` 11,11,46,402/- to the Regional Office of Reserve Bank of India and remittances amounting to ` 6,27,98,017/- was reported with delay ranging from 1 day to 15 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 company issuing shares or convertible debentures in accordance with these Regulations should report to the FED M/s. Swarnim Trading Private Limited CA No. HYD 151 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 company 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 of shares which shares reporting shares allotted allotted (`) Radiant Bay 1 10.03.2012 18,93,340 1,89,36,000 27.01.2015 Ventures Ltd Fiora 2 15.03.2012 22,23,910 2,22,42,017 27.01.2015 Enterprises Ltd Fiora 3 11.06.2012 26,90,440 2,69,08,385 27.01.2015 Enterprises Ltd Fiora 4 10.11.2012 21,43,660 2,14,40,000 27.01.2015 Enterprises Ltd Fiora 5 04.05.2013 21,61,660 2,16,20,000 27.01.2015 Enterprises Ltd Total 1,11,13,010 11,11,46,402

The applicant filed Form FC-GPRs for the allotment of shares amounting to ` 11,11,46,402/- with a delay ranging from 1 year 7 months 24 days to 2 years 9 months 18 days approximately beyond the prescribed limit as listed above. 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 FC-GPR 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/793/14.66.003/2016-17 dated October 21, 2016 for further submission in person and/or producing documents, if any, in support of the application. b) The applicant appeared for personal hearing on October 25, 2016 during which Shri G.V.L.N Raju, Director of the company, Shri Shiva Rami Reddy YN, Chartered

FED M/s. Swarnim Trading Private Limited CA No. HYD 151 Accountants and Shri Anil Dubba, Company Secreatary, M/s. P. Murali & Co represented the applicant. The applicant admitted the contraventions for which the compounding has been sought. During the personal hearing it was submitted that the delay was neither willful nor with a malafide intention. In view of the foregoing, 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 made in the application as well the submissions made in this context by the applicant during the personal hearing. 4. I have given my careful consideration to the documents on record and submission made by the applicant during the personal hearing. 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 due to delay in reporting of receipt of foreign inward remittances towards subscription to equity shares as detailed above. The contraventions relate to an amount of ` 6,27,98,017/-and the duration of contravention ranges from 1 day to 15 days approximately. b) Paragraph 9 (1) (B) of Schedule 1 to Notification No. 20/2000-RB due to delay in submission of Form FC-GPR to Reserve Bank after issue of shares to persons resident outside India and the contravention relates to an amount of ` 11,11,46,402/- and the duration of contravention ranges from 1 year 7 months 24 days to 2 years 9 months 18 days approximately. 5. In terms of Section 13 of the FEMA, any person contravening any provision of the Act shall be liable to a penalty upto 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 ` 6,36,000/- (Rupees Six Lakhs Thirty Six Thousand Only) will meet the ends of justice.

FED M/s. Swarnim Trading Private Limited CA No. HYD 151 6. 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 of ` 6,36,000/- (Rupees Six Lakhs Thirty Six Thousand 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 09th day of November 2016.

Sd/- (Ramanath Dash) Regional Director