In case where overseas company (DIE) is unlisted, how can we calculate the market value of overseas equity investment using OFBV method under 1.b ODI of Section IV? - FEMA - FAQ - FEMA

Ans : For valuation of overseas equity investment OFBV Method should be used, as explained below: OFBV Method: Market value of equity capital held by you at OFBV for unlisted companies = (Net worth of the DIE) * (% of equity held by you) where, Net worth of the DIE = Paid up Equity Participating Preference share capital of company +Reserves Surplus - Accumulated losses (which is automatically calculated in item 3.5 in 1.b ODI). As per 1.b ODI of Section IV the formula is given below: Item 1.1 Claims on Direct Investment Enterprise = (Item 3.3/ Item 3.2) * (Item 3.5* Item 3.6) /100000 for reference period where, Item 3.2, Item 3.3, Item 3.5 and Item 3.6 are extracted from 1.b ODI.