Overseas Investment – Liberalisation under ESOP scheme

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..... tly, in terms of Regulation 22 (2) of Notification No.FEMA.120 / RB-2004 dated 7th July 2004, as amended from time to time, Authorised Dealer banks have been delegated authority to allow remittances, without any monetary limit, for ESOPs provided that the foreign company offering ESOPs holds not less than 51% stake in the Indian Company either directly or indirectly (i.e. through a SPV or step down subsidiary). Such remittances are, however, allowed directly to the Company offering shares under ESOP scheme. However, the foreign company requires prior permission of the Reserve Bank to repurchase the shares from the employees, issued under ESOP scheme. 3.2 As a measure of rationalization, it has been decided that Authorised Dealer banks may .....

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..... resently, an eligible Indian entity making investment in a Joint Venture (JV) / Wholly Owned Subsidiary (WOS) outside India, is required to route all its transactions relating to the investment through one branch of an Authorised Dealer bank designated by it. However, the Indian investor / promoter have freedom to designate different Authorised Dealer banks / branches of Authorised Dealer banks for different JV / WOS outside India promoted by them. 4.2 In order to keep the designated branches of Authorised Dealer banks aware of the progress in the investment / disinvestment outside India routed through them, it has been decided that all communications from the Indian parties, to the Reserve Bank, relating to the investment outside India s .....

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..... foreign company M/s …………. in the Indian company, as on March 31, ______, is not less than 51%; and c) the information furnished above is true and correct to the best of our knowledge and belief. Signature of the Authorised Official : Name : Designation : Date : To, The Chief General Manager Reserve Bank of India, Foreign Exchange Department, Overseas Investment Division, Central Office, Amar Bldg., 3 rd floor, Sir. P. M. Road, Fort, Mumbai 400 001. ANNEX II [Annex to A. P. (DIR Series) Circular No. 30 dated April 05, 2006] Statement of shares repurchased by the issuing company from Indian employees / directors under ESOP Schemes for the year ended March ________ (to be submitted on the letterhead of t .....

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