Regulation 2 - Definitions - Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004

2. Definitions In these Regulations, unless the context otherwise requires: a. Act means Foreign Exchange Management Act, 1999, (42 of 1999): b. authorised dealer means a person authorised as an authorised dealer under sub section (1) of section 10 of the Act; 10 [(ba) Alternative Investment Fund means a fund as defined under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012;] c. American Depository Receipt (ADR) means a security issued by a bank or a depository in United States of America (USA) against underlying rupee shares of a company incorporated in India; d. 'Core Activity' means an activity carried on by an Indian entity turnover wherefrom constitutes not less than 50% of its total turnover in the previous accounting year; e. Direct investment outside India means investment by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange, but does not include portfolio investment. 5 [ (ea) 'Domestic Depository' shall have the same meaning as assigned to it in the Companies (Issue of Indian Depository Receipts) Rules, 2004. (eb) 'Eligible Company' means a Company eligible to issue Indian Depository Receipts under rule 4 of the Companies (Issue of Indian Depository Receipts) Rules, 2004 ] f. Financial commitment means 7 [the amount of direct investment by way of contribution to equity, loan and 100 per cent of the amount of guarantees and 50 per cent of the performance guarantees] issued by an Indian party to or on behalf of its overseas Joint Venture Company or Wholly Owned Subsidiary; g. Foreign Currency Convertible Bond (FCCB) means a bond issued by an Indian company expressed in foreign currency, and the principal and interest in respect of which is payable in foreign currency; h. Form means the forms annexed to these Regulations; i. Global Depository Receipt (GDR) means a security issued by a bank or a depository outside India against underlying rupee shares of a company incorporated in India; j. Host country means the country in which the foreign entity receiving the direct investment from an Indian party is registered or incorporated; 6 [ (ja) 'Indian Depository Receipts' have the same meaning as assigned to it in the Companies (Issue of Indian Depository Receipts) Rules, 2004 . ] k. Indian party means a company incorporated in India or a body created under an Act of Parliament or a partnership firm registered under the Indian Partnership Act, 1932 8 [or a Limited Liability Partnership (LLP) as defined under clause (ma) of Regulation 2 of this Notification] making investment in a Joint Venture or Wholly Owned Subsidiary abroad, and includes any other entity in India as may be notified by the Reserve Bank: - Provided that when more than one such company, body or entity make an investment in the foreign entity, all such companies or bodies or entities shall together constitute the Indian party l. Investment banker means an Investment banker registered with the Securities and Exchange Commission in USA, or the Financial Services Authority in UK, or appropriate regulatory authority in Germany, France, Singapore or Japan; m. Joint Venture (JV) means a foreign entity formed, registered or incorporated in accordance with the laws and regulations of the host country in which the Indian party makes a direct investment; 9 [(ma) Limited Liability Partnership' (LLP) means a body corporate having perpetual succession duly formed and incorporated under the Limited Liability Partnership Act, 2008 (No.6 of 2009).] n. Mutual Fund means a Mutual Fund referred to in clause (23D) of section 10 of the Income Tax Act, 1961; o. 'Net worth' means paid up capital and free reserves; p. Real estate business means buying and selling of real estate or trading in Transferable Development Rights (TDRs) but does not include development of townships, construction of residential/commercial premises, roads or bridges; q. Wholly Owned Subsidiary (WOS) means a foreign entity formed, registered or incorporated in accordance with the laws and regulations of the host country, whose entire capital is held by the Indian party; 2 (qa) 'Venture Capital Fund' means a fund as defined under the Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996. 3 [(qb) 'Trust' means a Trust registered under the Indian Trust Act, 1882. (qc) 'Society' means a Society registered under the Societies Registration Act, 1860.] (r) Agricultural Operations means agricultural operations as defined in the 'National Bank for Agriculture and Rural Development Act, 1981. 4 [(s) Foreign Currency Exchangeable Bond means a bond expressed in foreign currency, the principal and interest in respect of which is payable in foreign currency issued by an issuing company and subscribed to by a person who is a resident outside India in foreign currency and exchangeable into equity shares of offered company, in any manner, either wholly, or partly or on the basis of any equity related warrants attached to debt instruments. (t) issuing company means a company registered under the Companies Act, 1956 (1 of 1956) and eligible to issue Foreign Currency Exchangeable Bond under these regulations. (u) offered company' means a company registered under the Companies Act, 1956 (1 of 1956) and whose equity shares is/are offered in exchange of the Foreign Currency Exchangeable Bond. (v) promoter group has the same meaning as defined in the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.] (w). Words and expressions used but not defined in these Regulations shall have the meanings respectively assigned to them in the Act. ********************* Notes : 1. For the words and figures 50 per cent of the amount of guarantees , the words and figures 100 per cent of the amount of guarantees has been substituted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (w.e.f. 14th day of June, 2007) 2. Has been inserted vide Notification No. G.S.R. 13(E) dated 9/10/2007 (w.e.f. 30th day of April, 2007) 3. Has been inserted vide Notification No. 181/2008 dated 1/10/2008 (w.e.f. 27th day of June 2008) 4. Clause (s) to (v) inserted vide notification no. 188/2009 dated 3/2/2009 with effect from 23/9/2009. Further Existing clause (s) renumbered as (w). 5. Inserted vide Notification No. FEMA 225/2012-RB, DATED 7-3-2012 6. Inserted vide Notification No. FEMA 225/2012-RB, DATED 7-3-2012 7. Substituted vide Notification No. 277/2013-RB dated May 08, 2013, w.e.f. May 27, 2011before it was read as, the amount of direct investment by way of contribution to equity and loan and 1 100 per cent of the amount of guarantees 8. Inserted vide Notification No. 299/2014-RB March 24, 2014 9. Inserted vide Notification No. 299/2014-RB March 24, 2014 10. Inserted vide NOTIFICATION NO. 326/RB-2014 dated 12th November, 2014