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TMI BlogAS AMENDED CONSOLIDATED FDI POLICY EFFECTIVE FROM 1-10-2011.X X X X Extracts X X X X X X X X Extracts X X X X ..... which are notified by the Reserve Bank of India as amendments to the Foreign Exchange Management (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000 (notification No.FEMA 20/2000-RB dated May 3, 2000). These notifications take effect from the date of issue of Press Notes/ Press Releases, unless specified otherwise therein. In case of any conflict, the relevant FEMA Notification will prevail. The procedural instructions are issued by the Reserve Bank of India vide A.P.Dir. (series) Circulars. The regulatory framework over a period of time thus consists of Acts, Regulations, Press Notes, Press Releases, Clarifications, etc. 1.1.3 The present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/ Circulars issued by DIPP, which were in force as on September 30, 2011, and reflects the FDI Policy as on October 1, 2011. This Circular accordingly will take effect from October 1, 2011. Reference to any statute or legislation made in this Circular shall include modifications, amendments or re-enactments thereof. 1.1.4 Notwithstanding the rescission of earlier Press Notes/Press Releases/Clarifications/Circulars, anything done o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Stock Exchanges in the US, Singapore, Luxembourg, etc. DRs listed and traded in the US markets are known as American Depository Receipts (ADRs) and those listed and traded anywhere/elsewhere are known as Global Depository Receipts (GDRs). 2.1.9 'Erstwhile Overseas Corporate Body' (OCB) means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty percent by non-resident Indian and includes overseas trust in which not less than sixty percent beneficial interest is held by non-resident Indian directly or indirectly but irrevocably and which was in existence on the date of commencement of the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003 (the Regulations) and immediately prior to such commencement was eligible to undertake transactions pursuant to the general permission granted under the Regulations. 2.1.10 'Foreign Currency Convertible Bond'(FCCB) means a bond issued by an Indian company expressed in foreign currency, the principal and interest of which is payable in foreign currency. FCCBs are issued in accordance with the Foreign Currency Conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zette in this behalf. 2.1.20 'Investing Company' means an Indian Company holding only investments in other Indian company/ (ies), directly or indirectly, other than for trading of such holdings/securities. 2.1.21 'Investment on repatriable basis' means investment, the sale proceeds of which, net of taxes, are eligible to be repatriated out of India and the expression 'investment on non-repatriable basis' shall be construed accordingly. 2.1.22 'Joint Venture' (JV) means an Indian entity incorporated in accordance with the laws and regulations in India in whose capital a non-resident entity makes an investment. 2.1.23 'Non resident entity' means a 'person resident outside India' as defined under FEMA. 2.1.24 'Non Resident Indian' (NRI) means an individual resident outside India who is a citizen of India or is a person of Indian origin. 2.1.25 A company is considered as 'Owned' by resident Indian citizens if more than 50% of the capital in it is beneficially owned by resident Indian citizens and / or Indian companies, which are ultimately owned and controlled by resident Indian citizens; 2.1.26 'Person' includes (i) an individual (ii) a Hindu undivided family, (iii) a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person resident in India' as per FEMA, 1999, read in conjunction with the Indian Citizenship Act, 1955. 2.1.34 'SEBI' means the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992. 2.1.35 'SEZ' means a Special Economic Zone as defined in Special Economic Zone Act, 2005. 2.1.36 'SIA' means Secretariat of Industrial Assistance in DIPP, Ministry of Commerce & Industry, Government of India. 2.1.37 'Transferable Development Rights' (TDR) means certificates issued in respect of category of land acquired for public purposes either by the Central or State Government in consideration of surrender of land by the owner without monetary compensation, which are transferable in part or whole. 2.1.38 'Venture Capital Fund' (VCF) means a Fund established in the form of a Trust, a company including a body corporate and registered under Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996, which (i) has a dedicated pool of capital; (ii) raised in the manner specified under the Regulations; and (iii) invests in accordance with the Regulations. 2.1.39 "Limited Liability Partnership" means a Limited Liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity by a Person Resident Outside India) Regulations 2000, can invest/trade through a registered broker in the capital of Indian Companies on recognised Indian Stock Exchanges. 3.1.6 A SEBI registered Foreign Venture Capital Investor (FVCI) may contribute up to 100% of the capital of an Indian Venture Capital Undertaking (IVCU) and may also set up a domestic asset management company to manage the fund. All such investments can be made under the automatic route in terms of Schedule 6 to Notification No. FEMA 20. A SEBI registered FVCI can invest in a domestic venture capital fund registered under the SEBI (Venture Capital Fund) Regulations, 1996. Such investments would also be subject to the extant FEMA regulations and extant FDI policy including sectoral caps, etc. SEBI registered FVCIs are also allowed to invest under the FDI Scheme, as non-resident entities, in other companies, subject to FDI Policy and FEMA regulations. 3.2 ENTITIES INTO WHICH FDI CAN BE MADE 3.2.1 FDI in an Indian Company: Indian companies can issue capital against FDI. 3.1.2 FDI in Partnership Firm / Proprietary Concern: (i) A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) resident outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDI-linked performance conditions (such as 'Non Banking Finance Companies' or 'Development of Townships, Housing, Built-up infrastructure and Construction-development projects' etc.). (b) LLPs with FDI will not be allowed to operate in agricultural/plantation activity, print media or real estate business. (c) An Indian company, having FDI, will be permitted to make downstream investment in an LLP only if both-the company, as well as the LLP- are operating in sectors where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions. (d) LLPs with FDI will not be eligible to make any downstream investments. (e) Foreign Capital participation in LLPs will be allowed only by way of cash consideration, received by inward remittance, through normal banking channels or by debit to NRE/FCNR account of the person concerned, maintained with an authorized dealer/authorized bank. (f) Investment in LLPs by Foreign Institutional Investors (FIls) and Foreign Venture Capital Investors (FVCIs) will not be permitted. LLPs will also not be permitted to avail External Commercial Borrowings (ECBs). (g) In case the LLP with FDI has a body corporate tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI. 3.3.4 Issue of shares by Indian Companies under FCCB/ADR/GDR (i) Indian companies can raise foreign currency resources abroad through the issue of FCCB/DR (ADRs/GDRs), in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India there under from time to time. (ii) A company can issue ADRs / GDRs if it is eligible to issue shares to persons resident outside India under the FDI Policy. However, an Indian listed company, which is not eligible to raise funds from the Indian Capital Market including a company which has been restrained from accessing the securities market by the Securities and Exchange Board of India (SEBI) will not be eligible to issue ADRs/GDRs. (iii) Unlisted companies, which have not yet accessed the ADR/GDR route for raising capital in the international market, would require prior or simultaneous listing in the domestic market, while seeking to issue such overseas instruments. Unlisted companies, which have already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Bank, from time to time. (ix) The pricing of sponsored ADRs/GDRs would be determined under the provisions of the Scheme of issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India and directions issued by the Reserve Bank, from time to time. 3.3.5 (i) Two-way Fungibility Scheme: A limited two-way Fungibility scheme has been put in place by the Government of India for ADRs / GDRs. Under this Scheme, a stock broker in India, registered with SEBI, can purchase shares of an Indian company from the market for conversion into ADRs/GDRs based on instructions received from overseas investors. Re-issuance of ADRs / GDRs would be permitted to the extent of ADRs / GDRs which have been redeemed into underlying shares and sold in the Indian market. (ii) Sponsored ADR/GDR issue: An Indian company can also sponsor an issue of ADR / GDR. Under this mechanism, the company offers its resident shareholders a choice to submit their shares back to the company so that on the basis of such shares, ADRs / GDRs can be issued abroad. The proceeds of the ADR / GDR issue are remitted back to India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy (relating to sectoral caps and entry routes), applicable laws and other conditionalities including security conditions, non-resident investors can also invest in Indian companies by purchasing/acquiring existing shares from Indian shareholders or from other non-resident shareholders. General permission has been granted to non-residents/NRIs for acquisition of shares by way of transfer subject to the following: (a) A person resident outside India (other than NRI and erstwhile OCB) may transfer by way of sale or gift, the shares or convertible debentures to any person resident outside India (including NRIs). (b) NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI. (c) A person resident outside India can transfer any security to a person resident in India by way of gift. (d) A person resident outside India can sell the shares and convertible debentures of an Indian company on a recognized Stock Exchange in India through a stock broker registered with stock exchange or a merchant banker registered with SEBI. (e) A person resident in India can transfer by way of sale, shares/convertible debentures (including transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on along with the Form FC-TRS. (iii) Escrow: AD Category-I banks have been given general permission to open Escrow account and Special account of non-resident corporate for open offers / exit offers and delisting of shares. The relevant SEBI (SAST) Regulations or any other applicable SEBI Regulations/ provisions of the Companies Act, 1956 will be applicable. AD Category-I banks have also been permitted to open and maintain, without prior approval of RBI, non-interest bearing Escrow accounts in Indian Rupees in India on behalf of residents and/or non-residents, towards payment of share purchase consideration and/or provide Escrow facilities for keeping securities to facilitate FDI transactions subject to the terms and conditions specified by RBI. SEBI authorised Depository Participants have also been permitted to open and maintain, without prior approval of RBI, Escrow accounts for securities subject to the terms and conditions as specified by RBI. In both cases, the Escrow agent shall necessarily be an AD Category- I bank or SEBI authorised Depository Participant (in case of securities' accounts). These facilities will be applicable for both issue of fresh shares to the non- resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime. (b) The gift does not exceed 5 per cent of the paid-up capital of the Indian company/each series of debentures/each mutual fund scheme. (c) The applicable sectoral cap limit in the Indian company is not breached. (d) The transferor (donor) and the proposed transferee (donee) are close relatives as defined in Section 6 of the Companies Act, 1956, as amended from time to time. The current list is reproduced in Annex-4. (e) The value of capital instruments to be transferred together with any capital instruments already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 25,000 during the calendar year. (f) Such other conditions as stipulated by Reserve Bank in public interest from time to time. 3.4.6 Conversion of ECB/Lumpsum Fee/Royalty into Equity (i) Indian companies have been granted general permission for conversion of External Commercial Borrowings (ECB) (excluding those deemed as ECB) in convertible foreign currency into equity shares/fully compulsorily and mandatorily convertible preference shares, subject to the following conditions and reporting requirements. (a) The activity of the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the foreign investor to the company directly or through the bank account opened by the foreign investor as provided under FEMA Regulations. (d) The applications, complete in all respects, for capitalization being made within the period of 180 days from the date of incorporation of the company General conditions: (i) All requests for conversion should be accompanied by a special resolution of the company. (ii) Government's approval would be subject to pricing guidelines of RBI and appropriate tax clearance. 3.5 SPECIFIC CONDITIONS IN CERTAIN CASES 3.5.1 Issue of Rights/Bonus Shares - FEMA provisions allow Indian companies to freely issue Rights/Bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap, if any. However, such issue of bonus / rights shares has to be in accordance with other laws/statutes like the Companies Act, 1956, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (in case of listed companies), etc. The offer on right basis to the persons resident outside India shall be: (a) in the case of shares of a company listed on a recognized stock exchange in India, at a price as determined by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he citizens of Pakistan. ESOPs can be issued to citizens of Bangladesh with the prior approval of FIPB. Shares under ESOPs can be issued directly or through a Trust subject to the condition that: (a) The scheme has been drawn in terms of relevant regulations issued by the SEBI, and (b) The face value of the shares to be allotted under the scheme to the non-resident employees does not exceed 5 per cent of the paid-up capital of the issuing company. (ii) Unlisted companies have to follow the provisions of the Companies Act, 1956. The Indian company can issue ESOPs to employees who are resident outside India, other than to the citizens of Pakistan. ESOPs can be issued to the citizens of Bangladesh with the prior approval of the FIPB. (iii) The issuing company is required to report (plain paper reporting) the details of granting of stock options under the scheme to non-resident employees to the Regional Office concerned of the Reserve Bank and thereafter the details of issue of shares subsequent to the exercise of such stock options within 30 days from the date of issue of shares in Form FC-GPR. 3.5.6 Share Swap: In cases of investment by way of swap of shares, irrespective of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares in favour of the lender (bank) would be subject to Section 19 of the Banking Regulation Act, 1949. (C) Non-resident holding shares of an Indian company, can pledge these shares in favour of an overseas bank to secure the credit facilities being extended to the non-resident investor / non-resident promoter of the Indian company or its overseas group company, subject to the following: (i) loan is availed of only from an overseas bank; (ii) loan is utilized for genuine business purposes overseas and not for any investments either directly or indirectly in India; (iii) overseas investment should not result in any capital inflow into India; (iv) in case of invocation of pledge, transfer should be in accordance with the FDI policy in vogue at the time of creation of pledge; and (v) submission of a declaration/ annual certificate from a Chartered Accountant/ Certified Public Accountant of the non-resident borrower that the loan proceeds will be / have been utilized for the declared purpose. 3.6 ENTRY ROUTES FOR INVESTMENT: 3.6.1 Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/ fully, compulsorily and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bonds (FCCB) and fully, mandatorily & compulsorily convertible preference shares/debentures, regardless of whether the said investments have been made under Schedule 1, 2, 3 and 6 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. 3.7 CAPS ON INVESTMENTS 3.7.1 Investments can be made by non-residents in the capital of a resident entity only to the extent of the percentage of the total capital as specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 6 of this circular. 3.8 ENTRY CONDITIONS ON INVESTMENT 3.8.1 Investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. Such conditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 6 of this circular. 3.9 OTHER CONDITIONS ON INVESTMENT BESIDES ENTRY CONDITIONS 3.9.1 Besides the entry conditions on foreign investment, the investment/investors are required to comply with all relevant sectoral laws, regulations, rules, security conditions, and state/ local laws/ regulations. 3.10 FOREIGN INVESTMENT I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try route, conditionalities and caps, with regard to the sectors in which the latter Indian company is operating. 3.10.4.2 Downstream investments by Indian companies will be subject to the following conditions: (i) Such a company is to notify SIA, DIPP and FIPB of its downstream investment in the form available at http://www.fipbindia.com within 30 days of such investment, even if capital instruments have not been allotted along with the modality of investment in new/existing ventures (with/without expansion programme); (ii) downstream investment by way of induction of foreign equity in an existing Indian Company to be duly supported by a resolution of the Board of Directors as also a shareholders Agreement, if any; (iii) issue/transfer/pricing/valuation of shares shall be in accordance with applicable SEBI/RBI guidelines; (iv) For the purpose of downstream investment, the Indian companies making the downstream investments would have to bring in requisite funds from abroad and not leverage funds from the domestic market. This would, however, not preclude downstream companies, with operations, from raising debt in the domestic market. Downstream investments through internal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be limited to the foreign investment in the operating-cum-investing/ investing company. This exception is made since the downstream investment of a 100% owned subsidiary of the holding company is akin to investment made by the holding company and the downstream investment should be a mirror image of the holding company. This exception, however, is strictly for those cases where the entire capital of the downstream subsidiary is owned by the holding company. Illustration To illustrate, if the indirect foreign investment is being calculated for Company X which has investment through an investing Company Y having foreign investment, the following would be the method of calculation: (A) where Company Y has foreign investment less than 50%- Company X would not be taken as having any indirect foreign investment through Company Y. (B) where Company Y has foreign investment of say 75% and: (I) invests 26% in Company X, the entire 26% investment by Company Y would be treated as indirect foreign investment in Company X; (II) Invests 80% in Company X, the indirect foreign investment in Company X would be taken as 80% (III) where Company X is a wholly owned subsidiary of Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual shareholder, (bb) A relative of the shareholder within the meaning of Section 6 of the Companies Act, 1956. (cc) A company/ group of companies in which the individual shareholder/HUF to which he belongs has management and controlling interest. (II) In the case of an Indian company, (aa) The Indian company (bb) A group of Indian companies under the same management and ownership control. (B) For the purpose of this Clause, "Indian company" shall be a company which must have a resident Indian or a relative as defined under Section 6 of the Companies Act, 1956/ HUF, either singly or in combination holding at least 51% of the shares. (C) Provided that, in case of a combination of all or any of the entities mentioned in Sub- Clauses (I) and (II) of clause 4.1.3(v)(d)(A) above, each of the parties shall have entered into a legally binding agreement to act as a single unit in managing the matters of the applicant company. (e) If a declaration is made by persons as per section 187C of the Indian Companies Act about a beneficial interest being held by a non resident entity, then even though the investment may be made by a resident Indian citizen, the same shall be cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I/CCEA and which had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such activities/sectors have been placed under automatic route; (ii) Entities the activities of which had sectoral caps earlier and which had, accordingly, earlier obtained prior approval of FIPB/CCFI/CCEA for their initial foreign investment but subsequently such caps were removed/increased and the activities placed under the automatic route; provided that such additional investment alongwith the initial/original investment does not exceed the sectoral caps; and (iii) Additional foreign investment into the same entity where prior approval of FIPB/CCFI/CCEA had been obtained earlier for the initial/original foreign investment due to requirements of Press Note 18/1998 or Press Note 1 of 2005 and prior approval of the Government under the FDI policy is not required for any other reason/purpose. 5.4 ONLINE FILING OF APPLICATIONS FOR FIPB/GOVERNMENT'S APPROVAL 5.4.1 Guidelines for e-filing of applications, filing of amendment applications and instructions to applicants are available at FIPB's website (http://finmin.nic.in/) and (http://www.fipb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y: (i) When dealing with genetically modified seeds or planting material the company shall comply with safety requirements in accordance with laws enacted under the Environment (Protection) Act on the genetically modified organisms. (ii) Any import of genetically modified materials if required shall be subject to the conditions laid down vide Notifications issued under Foreign Trade (Development and Regulation) Act, 1992. (iii) The company shall comply with any other Law, Regulation or Policy governing genetically modified material in force from time to time. (iv) Undertaking of business activities involving the use of genetically engineered cells and material shall be subject to the receipt of approvals from Genetic Engineering Approval Committee (GEAC) and Review Committee on Genetic Manipulation (RCGM). (v) Import of materials shall be in accordance with National Seeds Policy. II. The term "under controlled conditions" covers the following: u 'Cultivation under controlled conditions' for the categories of Floriculture, Horticulture, Cultivation of vegetables and Mushrooms is the practice of cultivation wherein rainfall, temperature, solar radiation, air humidity and cult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing. 100% Automatic 6.2.3.3 Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities 6.2.3.3.1 Mining and mineral separation of titanium bearing minerals & ores, its value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation Act 1957) 100% Government 6.2.3.3.2 Other conditions: India has large reserves of beach sand minerals in the coastal stretches around the country. Titanium bearing minerals viz. Ilmenite, rutile and leucoxene, and Zirconium bearing minerals including zircon are some of the beach sand minerals which have been classified as "prescribed substances" under the Atomic Energy Act, 1962. Under the Industrial Policy Statement 1991, mining and production of minerals classified as "prescribed substances" and specified in the Schedule to the Atomic Energy (Control of Production and Use) Order, 1953 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies 100% Automatic 6.2.4.2 Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. 49% Government MANUFACTURING 6.2.5 Manufacture of items reserved for production in Micro and Small Enterprises (MSEs) 6.2.5.1 FDI in MSEs will be subject to the sectoral caps, entry routes and other relevant sectoral regulations. Any industrial undertaking which is not a Micro or Small Scale Enterprise, but manufactures items reserved for the MSE sector would require Government route where foreign investment is more than 24% in the capital. Such an undertaking would also require an Industrial License under the Industries (Development & Regulation) Act 1951, for such manufacture. The issue of Industrial License is subject to a few general conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured. However, the planned acquisition programme for such equipment and overall requirements would be made available to the extent possible. (ix) The capacity norms for production will be provided in the licence based on the application as well as the recommendations of the Ministry of Defence, which will look into existing capacities of similar and allied products. (x) Import of equipment for pre-production activity including development of prototype by the applicant company would be permitted. (xi) Adequate safety and security procedures would need to be put in place by the licensee once the licence is granted and production commences. These would be subject to verification by authorized Government agencies. (xii) The standards and testing procedures for equipment to be produced under licence from foreign collaborators or from indigenous R & D will have to be provided by the licensee to the Government nominated quality assurance agency under appropriate confidentiality clause. The nominated quality assurance agency would inspect the finished product and would conduct surveillance and audit of the Quality Assurance Procedures of the licensee. Self-certification would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of television programme in C-Band or Ku Band wherein all the pay channels are downlinked at a central facility (Hub/teleport) and again uplinked to a satellite after encryption of channel. At the cable headend these encrypted pay channels are downlinked using a single satellite antenna, transmodulated and sent to the subscribers by using a land based transmission system comprising of infrastructure of cable/optical fibres network. 6.2.7.4.1 FDI limit in (HITS) Broadcasting Service is subject to such guidelines/terms and conditions as specified from time to time by Ministry of Information and Broadcasting. 74% (total direct and indirect foreign investment including portfolio and FDI) Automatic up to 49% Government route beyond 49% and up to 74% 6.2.7.5 Setting up hardware facilities such as up-linking, HUB etc. (1) Setting up of Up-linking HUB/ Teleports 49% (FDI & FII) Government (2) Up-linking a Non-News & Current Affairs TV Channel 100% Government (3) Up-linking a News & Current Affairs TV Channel subject to the condition that the portfolio investment from FII/ NRI shall not be "persons acting in concert" with FDI investors, as defined in the SEBI(Substantial Acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion sector includes Airports, Scheduled and Non-Scheduled domestic passenger airlines, Helicopter services / Seaplane services, Ground Handling Services, Maintenance and Repair organizations; Flying training institutes; and Technical training institutions. For the purposes of the Civil Aviation sector: (i) "Airport" means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of section 2 of the Aircraft Act, 1934; (ii) "Aerodrome" means any definite or limited ground or water area intended to be used, either wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds, vessels, piers and other structures thereon or pertaining thereto; (iii) "Air transport service" means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or series of flights; (iv) "Air Transport Undertaking" means an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward; (v) "Aircraft componen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services requiring DGCA approval 100% Automatic 6.2.9.4 Other services under Civil Aviation sector (1) Ground Handling Services subject to sectoral regulations and security clearance 74% FDI (100% for NRIs) Automatic up to 49% Government route beyond 49% and up to 74% (2) Maintenance and Repair organizations; flying training institutes; and technical training institutions 100% Automatic 6.2.10 Courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act, 1898 and excluding the activity relating to the distribution of letters. 100% Government 6.2.11 Construction Development: Townships, Housing, Built-up infrastructure 6.2.11.1 Townships, housing, built-up infrastructure and construction-development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure) 100% Automatic 6.2.11.2 Investment will be subject to the following conditions: (1) Minimum area to be developed under each project would be as under: (i) In case of development of serviced h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Body concerned, which approves the building / development plans, would monitor compliance of the above conditions by the developer. Note: (i) The conditions at (1) to (4) above would not apply to Hotels & Tourism, Hospitals, Special Economic Zones (SEZs), Education Sector, Old age Homes and investment by NRIs. (ii) FDI is not allowed in Real Estate Business. 6.2.12 Industrial Parks - New and existing 100% Automatic 6.2.12.1 (i) "Industrial Park" is a project in which quality infrastructure in the form of plots of developed land or built up space or a combination with common facilities, is developed and made available to all the allottee units for the purposes of industrial activity. (ii) "Infrastructure" refers to facilities required for functioning of units located in the Industrial Park and includes roads (including approach roads), water supply and sewerage, common effluent treatment facility, telecom network, generation and distribution of power, air conditioning. (iii)"Common Facilities" refer to the facilities available for all the units located in the industrial park, and include facilities of power, roads (including approach roads), water supply and sewerage, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces 74% Automatic up to 49% Government route beyond 49% and up to 74% 6.2.15.1.1 Other conditions: (1) General Conditions: (i) This is applicable in case of Basic, Cellular, Unified Access Services, National/ International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added Services. (ii) Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institutional Investors (FIIs), Non-resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entity. In any case, the `Indian' shareholding will not be less than 26 per cent. (iii) FDI in the licensee company/Indian promoters/investment companies including their holding companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 74 per cent. While approving the investment proposals, FIPB shall take note that investment is not com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign company as a part of its roaming agreement. (x) On request of the licensor or any other agency authorised by the licensor, the telecom service provider should be able to provide the geographical location of any subscriber (BTS location) at a given point of time. (xi) The Remote Access (RA) to Network would be provided only to approved location(s) abroad through approved location(s) in India. The approval for location(s) would be given by the Licensor (DOT) in consultation with the Ministry of Home Affairs. (xii) Under no circumstances, should any RA to the suppliers/manufacturers and affiliate(s) be enabled to access Lawful Interception System(LIS), Lawful Interception Monitoring(LIM), Call contents of the traffic and any such sensitive sector/data, which the licensor may notify from time to time. (xiii)The licensee company is not allowed to use remote access facility for monitoring of content. (xiv) Suitable technical device should be made available at Indian end to the designated security agency/licensor in which a mirror image of the remote access information is available on line for monitoring purposes. (xv) Complete audit trail of the remote access activities per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49% Government route beyond 49% and up to 74% 6.2.15.3 (a) Infrastructure provider providing dark fibre, right of way, duct space, tower (IP Category I) (b)Electronic Mail (c) Voice Mail Note: Investment in all the above activities is subject to the conditions that such companies will divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. 100% Automatic up to 49% Government route beyond 49% 6.2.16 TRADING 6.2.16.1 (i) Cash & Carry Wholesale Trading/ Wholesale Trading (including sourcing from MSEs) 100% Automatic 6.2.16.1.1 Definition: Cash & Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose of trade, business and profession, as opposed to sales for the purpose of personal consumption. The yardstick to determine whether the sale is wholesale or not would be the type of customers to whom the sale is made and not the size and volume of sales. Wholesale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selling by a company through the e-commerce platform. Such companies would engage only in Business to Business (B2B) e-commerce and not in retail trading, inter alia implying that existing restrictions on FDI in domestic trading would be applicable to e-commerce as well. 6.2.16.3 Test marketing of such items for which a company has approval for manufacture, provided such test marketing facility will be for a period of two years, and investment in setting up manufacturing facility commences simultaneously with test marketing. 100% Government 6.2.16.4 Single Brand product trading 51% Government (1) Foreign Investment in Single Brand product trading is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices. (2) FDI in Single Brand products retail trade would be subject to the following conditions: (a) Products to be sold should be of a 'Single Brand' only. (b) Products should be sold under the same brand internationally i.e. products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te sector 74% including investment by FIIs Automatic up to 49% Government route beyond 49% and up to 74% 6.2.18.2 Other conditions: (1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by FIIs, NRIs and shares acquired prior to September 16, 2003 by erstwhile OCBs, and continue to include IPOs, Private placements, GDR/ADRs and acquisition of shares from existing shareholders. (2) The aggregate foreign investment in a private bank from all sources will be allowed up to a maximum of 74 per cent of the paid up capital of the Bank. At all times, at least 26 per cent of the paid up capital will have to be held by residents, except in regard to a wholly-owned subsidiary of a foreign bank. (3) The stipulations as above will be applicable to all investments in existing private sector banks also. (4) The permissible limits under portfolio investment schemes through stock exchanges for FIIs and NRIs will be as follows: (i) In the case of FIIs, as hitherto, individual FII holding is restricted to 10 per cent of the total paid-up capital, aggregate limit for all FIIs cannot exceed 24 per cent of the total paid-up capital, which can be raised to 49 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in a private bank. (d) A foreign bank will be permitted to establish a wholly-owned subsidiary either through conversion of existing branches into a subsidiary or through a fresh banking license. A foreign bank will be permitted to establish a subsidiary through acquisition of shares of an existing private sector bank provided at least 26 per cent of the paid capital of the private sector bank is held by residents at all times consistent with para (i) (b) above. (e) A subsidiary of a foreign bank will be subject to the licensing requirements and conditions broadly consistent with those for new private sector banks. (f) Guidelines for setting up a wholly-owned subsidiary of a foreign bank will be issued separately by RBI (g) All applications by a foreign bank for setting up a subsidiary or for conversion of their existing branches to subsidiary in India will have to be made to the RBI. (iii) At present there is a limit of ten per cent on voting rights in respect of banking companies, and this should be noted by potential investor. Any change in the ceiling can be brought about only after final policy decisions and appropriate Parliamentary approvals. 6.2.19 Banking- P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.1 Credit Information Companies 49% (FDI & FII) Government 6.2.21.2 Other Conditions: (1) Foreign investment in Credit Information Companies is subject to the Credit Information Companies (Regulation) Act, 2005. (2) Foreign investment is permitted under the Government route, subject to regulatory clearance from RBI. (3) Investment by a registered FII under the Portfolio Investment Scheme would be permitted up to 24% only in the CICs listed at the Stock Exchanges, within the overall limit of 49% for foreign investment. (4) Such FII investment would be permitted subject to the conditions that: (a) No single entity should directly or indirectly hold more than 10% equity. (b) Any acquisition in excess of 1% will have to be reported to RBI as a mandatory requirement; and (c) FIIs investing in CICs shall not seek a representation on the Board of Directors based upon their shareholding. 6.2.22 Infrastructure Company in the Securities Market 6.2.22.1 Infrastructure companies in Securities Markets, namely, stock exchanges, depositories and clearing corporations, in compliance with SEBI Regulations 49% (FDI & FII) [FDI limit of 26 per cent and an FII limit of 23 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign investment subject to the following condition: It would not be permissible for such a company to set up any subsidiary for any other activity, nor it can participate in any equity of an NBFC holding/operating company. Note: The following activities would be classified as Non-Fund Based activities: (a) Investment Advisory Services (b) Financial Consultancy (c) Forex Broking (d) Money Changing Business (e) Credit Rating Agencies (vii) This will be subject to compliance with the guidelines of RBI. Note: Credit Card business includes issuance, sales, marketing & design of various payment products such as credit cards, charge cards, debit cards, stored value cards, smart card, value added cards etc. (2) The NBFC will have to comply with the guidelines of the relevant regulator/s, as applicable. CHAPTER 7 REMITTANCE, REPORTING AND VIOLATION 7.1 REMITTANCE AND REPATRIATION 7.1.1 Remittance of sale proceeds/Remittance on winding up/Liquidation of Companies: (i) Sale proceeds of shares and securities and their remittance is 'remittance of asset' governed by the Foreign Exchange Management (Remittance of Assets) Regulations, 2000 under FEMA. (ii) AD Category-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Regional Office concerned of the Reserve Bank not later than 30 days from the date of receipt in the Advance Reporting Form enclosed as Annex 5. (ii) Indian companies are required to report the details of the receipt of the amount of consideration for issue of shares/convertible debentures, through an AD Category-I bank, together with a copy/ies of the FIRC/s evidencing the receipt of the remittance along with the KYC report (enclosed as Annex 6) on the non-resident investor from the overseas bank remitting the amount. The report would be acknowledged by the Regional Office concerned, which will allot a Unique Identification Number (UIN) for the amount reported. 7.2.2 Reporting of issue of shares (i) After issue of shares (including bonus and shares issued on rights basis and shares issued under ESOP)/fully, mandatorily & compulsorily convertible debentures/fully, mandatorily & compulsorily convertible preference shares, the Indian company has to file Form FC-GPR, enclosed in Annex 1, not later than 30 days from the date of issue of shares. (ii) Form FC-GPR has to be duly filled up and signed by Managing Director/Director/Secretary of the Company and submitted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done in Form FC-TRS (Annex 8). The Form FC-TRS should be submitted to the AD Category-I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. The AD Category-I bank, would forward the same to its link office. The link office would consolidate the Form FC-TRS and submit a monthly report to the Reserve Bank. 7.2.4 Reporting of Non-Cash Details of issue of shares against conversion of ECB have to be reported to the Regional Office concerned of the RBI, as indicated below: (i) In case of full conversion of ECB into equity, the company shall report the conversion in Form FC-GPR to the Regional Office concerned of the Reserve Bank as well as in Form ECB-2 to the Department of Statistics and Information Management (DSIM), Reserve Bank of India, Bandra-Kurla Complex, Mumbai - 400 051, within seven working days from the close of month to which it relates. The words "ECB wholly converted to equity" shall be clearly indicated on top of the Form ECB-2. Once reported, filing of Form ECB-2 in the subsequent months is not necessary. (ii) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm or other association of individuals as defined in the Companies Act), every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. (iii) Any Adjudicating Authority adjudging any contraventions under 6.3.1(i), may, if he thinks fit in addition to any penalty which he may impose for such contravention direct that any currency, security or any other money or property in respect of which the contravention has taken place shall be confiscated to the Central Government. 7.3.2 Adjudication and Appeals (i) For the purpose of adjudication of any contravention of FEMA, the Ministry of Finance as per the provisions contained in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 appoints officers of the Central Government as the Adjudicating Authorities for holding an enquiry in the manner prescribed. A reasonable opportunity has to be given to the person alleged to have committed contraventions against whom a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is not applicable) Existing company/New company If existing company, give registration number allotted by RBI for FDI, if any Telephone Fax e-mail 2. Description of the main business activity NIC Code Location of the project and NIC code for the district where the project is located Percentage of FDI allowed as per FDI policy State whether FDI is allowed under Automatic Route or Approval Route (strike out whichever is not applicable) Automatic Route/Approval Route 3. Details of the foreign investor/collaborator* Name Address Country Constitution/Nature of the investing Entity [Specify whether 1. Individual 2. Company 3. FII 4. FVCI 5. Foreign Trust 6. Private Equity Fund 7. Pension/Provident Fund 8. Sovereign Wealth Fund (SWF)2 9. Partnership/Proprietorship Firm 10. Financial Institution 11. NRIs/PIO 12. Others (please specify)] Date of incorporation 4. Particulars of Shares/Convertible Debentures Issued (a) Nature and date of issue Nature of issue Date of issue Number of shares/convertible debentures 01 IPO/FPO 02 Preferential allotment/private placement 03 Rights 04 Bonus 05 Conversion of ECB 06 Conversion of royal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended from time to time. 2. The investment is within the sectoral cap/statutory ceiling permissible under the Automatic Route of RBI and we fulfil all the conditions laid down for investments under the Automatic Route namely (strike off whichever is not applicable). (a) Foreign entity/entities--(other than individuals), to whom we have issued shares have existing joint venture or technology transfer or trade mark agreement in India in the same field and Conditions stipulated at Para 4.2 of Consolidated FDI policy Circular of Government of India have been complied with. OR Foreign entity/entities--(other than individuals), to whom we have issued shares do not have any existing joint venture or technology transfer or trade mark agreement in India in the same field. For the purpose of the 'same' field, 4 digit NIC 1987 code would be relevant. (b) We are not an Industrial Undertaking manufacturing items reserved for small sector. OR We are an Industrial Undertaking manufacturing items reserved for small sector and the investment limit of 24% of paid-up capital has been observed/requisite approvals have been obtained. (c) Shares issued on rights basis to non-residents are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es/convertible debentures under these Regulations. 4. The company has all original certificates issued by AD Category-I banks in India, evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000. (Name & Signature of the Company Secretary) (Seal) FOR USE OF THE RESERVE BANK ONLY: Registration Number for the FC-GPR: Unique Identification Number allotted to the Company at the time of reporting receipt of remittance R Annex - 2 Terms and conditions for Transfer of Shares/Convertible Debentures, by way of Sale, from a Person Resident in India to a Person Resident Outside India and from a Person Resident Outside India to a Person Resident in India 1.1 In order to address the concerns relating to pricing, documentation, payment/receipt and remittance in respect of the shares/convertible debentures of an Indian company, in all sectors, transferred by way of sale, the parties involved in the transaction shall comply with the guidelines set out below. 1.2 Parties involved in the transaction are (a) seller (resident/non-resident), (b) buyer (resident/non-resident), (c) duly authorized agent/s of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le proceeds 4.1 The sale consideration in respect of the shares purchased by a person resident outside India shall be remitted to India through normal banking channels. In case the buyer is a Foreign Institutional Investor (FII), payment should be made by debit to its Special Non-Resident Rupee Account. In case the buyer is a NRI, the payment may be made by way of debit to his NRE/FCNR (B) accounts. However, if the shares are acquired on non-repatriation basis by NRI, the consideration shall be remitted to India through normal banking channel or paid out of funds held in NRE/FCNR (B)/NRO accounts. 4.2. The sale proceeds of shares (net of taxes) sold by a person resident outside India may be remitted outside India. In case of FII, the sale proceeds may be credited to its special Non-Resident Rupee Account. In case of NRI, if the shares sold were held on repatriation basis, the sale proceeds (net of taxes) may be credited to his NRE/FCNR(B) accounts and if the shares sold were held on non repatriation basis, the sale proceeds may be credited to his NRO account subject to payment of taxes. 4.3. The sale proceeds of shares (net of taxes) sold by an OCB may be remitted outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been signed by their duly appointed agent the Power of Attorney Document authorizing the agent to purchase/sell shares by the seller/buyer. In case there is no formal Sale Agreement, letters exchanged to this effect may be kept on record. (iii) If the sellers are NRIs/OCBs, the copies of RBI approvals evidencing the shares held by them on repatriation/non-repatriation basis. The sale proceeds shall be credited NRE/NRO account, as applicable. (iv) Certificate indicating fair value of shares from a Chartered Accountant. (v) No Objection/Tax Clearance Certificate from Income-tax authority/Chartered Account. (vi) Undertaking from the buyer to the effect that the Pricing Guidelines have been adhered to. 6. Reporting requirements 6.1 Reporting of transfer of shares between residents and non-residents and vice versa is to be done in Form FC-TRS. The Form FC-TRS should be submitted to the AD Category-I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. The AD Category-I bank, would forward the same to its link office. The link o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls or give such directions as required from the transferor/transferee or their agents, if need be. Annex- 3 Documents to be submitted by a person resident in India for transfer of shares to a person resident outside India by way of gift (i) Name and address of the transferor (donor) and the transferee (donee). (ii) Relationship between the transferor and the transferee. (iii) Reasons for making the gift. (iv) In case of Government dated securities and treasury bills and bonds, a certificate issued by a Chartered Accountant on the market value of such security. (v) In case of units of domestic mutual funds and units of Money Market Mutual Funds, a certificate from the issuer on the Net Asset Value of such security. (vi) In case of shares and convertible debentures, a certificate from a Chartered Accountant on the value of such securities according to the guidelines issued by Securities & Exchange Board of India or DCF method for listed companies and unlisted companies, respectively. (vii) Certificate from the concerned Indian company certifying that the proposed transfer of shares/convertible debentures by way of gift from resident to the non-resident shall not breach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If Approval Route, give details (ref. No. of approval and date) Automatic Route/Approval Route 6. Name of the AD through whom the remittance is received 7. Address of the AD A Copy of the FIRC evidencing the receipt of consideration for issue of shares/convertible debentures as above is enclosed. (Authorised signatory of the investee company) (Stamp) (Authorised signatory of the AD) (Stamp) FOR USE OF THE RESERVE BANK ONLY: Unique Identification Number for the remittance received: Annex - 6 Know Your Customer (KYC) Form in respect of the non-resident investor Registered Name of the Remitter/Investor (Name, if the investor is an Individual) Registration Number (Unique Identification Number* in case remitter is an Individual) Registered Address (Permanent Address if remitter Individual) Name of the Remitter's Bank Remitter's Bank Account No. Period of banking relationship with the remitter * Passport No., Social Security No., or any Unique No. certifying the bona fides of the remitter as prevalent in the remitter's country We confirm that all the information furnished above is true and accurate as provided by the overseas remitting bank of the non-resident inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease tick the appropriate one) (a) Technical collaboration (b) Financial collaboration (foreign equity participation) (c) Both Block 1A : Total Paid up Capital of Indian Company Item End-March of previous FY End-March current FY Number of Shares Amount in lakh Number of Shares Amount in lakh 1.0 Total Paid-up Capital [(i)+(ii)] (i) Ordinary/Equity Share (ii) Preference Share [(a)+(b)] (a) Participating (b) Non-participating 2.0 Non-resident Equity Holdings 1 Individuals 2 Companies 3 FIIs 4 FVCIs 5 Foreign Trusts 6 Private Equity Funds 7 Pension/Provident Funds 8 Sovereign Wealth Fund (SWF)§ 9Partnership/Proprietorship firms 10 Financial Institutions 11 NRIs/PIO 12 Others (please specify) Note: FY: Financial Year Block 1B : Free Reserves & Surplus and Retained Profit Item Amount in ' lakh as at the end - March of Previous FY Current FY 3.1 Free Reserves & Surplus as at the end of Amount in lakh During Previous FY During Current FY 3.2 Profit (+)/Loss (-) after tax 3.3 Dividend Declared (excluding tax on dividend) 3.4 Retained Profit/loss (3.4 = 3.2 -3.3) Section II FOREIGN LIABILITIES 2. Investments made under Foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Block 3A: Portfolio Investment Please furnish here the outstanding investments by non-resident investors made under the Portfolio Investment Scheme in India. In case of listed companies, equity should be valued using share price on closing date of reference period, while in case of unlisted companies, Own Fund of Book Value (OFBV) Method should be used. (see the attached guidelines for details) Portfolio Investment Country of nonresident investor Amount in lakh as at the end of March Current FY March Previous FY 1.0 Equity Securities 2.0 Debt Securities(2.0 = 2.1+2.2) 2.1 Bonds and Notes (original maturity more than 1year) 2.2 Money Market Instruments (original maturity upto1year) 3.0 Disinvestments in India during the year Note: Data pertaining to each type of investment are to be reported consolidating the information country wise. If more countries are involved to report the data for the particular type(s) of investment, it should be reported in the same format using additional sheets separately for each country. Block 3B: Financial Derivatives (with non-resident entities only) Please furnish here the outstanding foreign liabilities on account of financial deriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase furnish the information in BLOCK 6. Name of the non-resident Direct Investment Enterprise (DIE) Type of Capital Country of non-resident DIE Equity holding (%) Amount in lakh as at the end of March Previous FY December Current FY March Current FY 1.0 Equity Capital (1.0 = 1.1-1.2) 1.1 Claims on Direct Investment Enterprise 1.2 Liabilities to Direct Investment Enterprise 2.0 Other Capital(2.0 = 2.1-2.2) 2.1 Claims on Direct Investment Enterprise 2.2 Liabilities to Direct Investment Enterprise 3.0 Disinvestments made abroad during the year Note: Please use separate sheets in the above format to report for separate DIEs Block 4B: Foreign Direct Investment Abroad (Less than 10% Equity holding) [Please furnish here your outstanding investments in non-resident enterprises (Direct Investment Enterprises DIE), made under the Overseas Direct Investment Scheme, in each of which your company holds less than 10 per cent Equity shares on the reporting date]. Name of the nonresident enterprises Type of Capital Country of nonresident enterprises Amount in lakh as at the end of March Previous FY December Current FY March Current FY 1.0 Equity Capital (1.0 = 1.1-1.2) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terprise Amount in lakh as at the end of March Previous FY March Current FY 4.0 Trade Credit (4.0=4.1+4.2) 4.1 Short Term (4.1=4.1.1+4.1.2) 4.1.1. Up to 6 Months 4.1.2. 6 Months to 1 Year 4.2 Long Term 5.0 Loans (5.0=5.1+5.2) 5.1 Short Term (Up to 1 year) 5.2 Long Term 6.0 Other Assets (6.0=6.1+6.2) 6.1 Currency & Deposits 6.2 Others Note: (i) Data pertaining to each type of investment are to be reported consolidating the information country wise. If particular type(s) of investment spreads over more than one country, it should be reported in the above format using separate additional sheet for each country. Block 6: Equity Capital, Free Reserves & Surplus of Direct Investment Enterprise Abroad [Please report here the total equity, the equity held by your company and the total free reserves & surplus of those nonresident enterprises in each of which your company held 10 per cent or more shares on the reporting date]. If this block is Non-NIL then please make sure that you have provided the relevant information in BLOCK 4A. Name of the DIE Item Currency Amount in Foreign Currency as at the end of (in actual) March Previous FY March Current FY (1) (2) (3) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Free Reserves and Surplus should exclude Tax provisions and other items such as (i) provision for deferred taxation (ii) Tax Equalization Reserve (iii) Investment Allowance (unutilized) and (iv) Revaluation Reserve Retained Profit (Block 1B, Item 3.4) Retained profit = Profit after tax - Dividend declared (excluding tax on dividend) (i.e. Item 3.4 = Item 3.2 minus Item 3.3 of Block 1B) A. Direct Investment: Direct investment is a category of international investment in which a resident entity in one economy (direct investor (DI) acquires a lasting interest in an enterprise resident in another economy (Direct Investment Enterprise (DIE). It consists of two components, viz., Equity capital and Other Capital. (i) Equity Capital under Direct Investment It covers (1) Equity in branches and all shares (except non-participating preferred shares) in subsidiaries and associates; (2) Contributions such as the provision of machinery, land & building(s) by a direct investor to a DIE by equity participation; (3) Acquisition by a DIE of shares in its direct investor, termed as Reserve investment (i.e. claims on DI). (a) Foreign Direct Investment in India (Block 2A, 2B) If the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds, investment in debt securities including non-participating preference shares, trade credits, financial leasing, share application money, between direct investors and DIEs and between two DIEs that share the same Direct Investor. Non-participating preferred shares owned by the direct investor are treated as debt securities & should be included in Other Capital. B. Portfolio Investment: (i) Portfolio Investment (Block 3A & 5A) It covers external claims by or liabilities to reporting Indian company in equity and debt securities other than those included in direct investment (Block 2A, 2B and 4A, 4B). Debt securities include long-term bonds and notes, short-term money market instruments. Any investment is made by the non-resident entities in Indian company under the Portfolio Scheme in India should be should be reported under Block 3A (Portfolio liabilities). Any investment made by the Indian company in foreign shares and/or debt securities, apart from the investment made under the Overseas Direct Investment Scheme, reported under Block 5A (Portfolio assets). (ii) Equity Securities (Block 3A & 5A, Item 1.0) Equity securities are instruments acknowledging the holders' claim t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by importer (you) for (your) imports or credit extended by exporter (you) directly to (your) importer. Trade credit liabilities are advance payment received by the exporter (you) for (your) exports or credit received by importer (you) directly from (your) exporter. It may be noted here that funding provided by an enterprise other than the supplier for the purpose of purchasing goods or services is treated as a loan and not as trade credit. (ii) Loans (Block 3C & 5C, Item 5.0) Loans are direct lending of funds by a creditor to a debtor through arrangements. These include, loans to finance trade (i.e. Buyers' credit in which a bank or a financial institution or an export credit agency in the exporting country extends a loan directly to a foreign buyer or to a bank in the importing country to pay for the purchase of goods and services), mortgages, and other loans and advances. Financial leases and repurchase agreements are also considered loans. Note that loan received from the non-resident direct investor should be reported under Other Capital of Block 2A or 2B while loan extended to your subsidiaries/associates abroad should be reported under Other Capital of block 4A or 4B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in column 2. Seal/ Annex - 8 Form FC-TRS Declaration regarding transfer of shares/compulsorily and mandatorily convertible preference shares (CMCPS)/debentures by way of sale from resident to non resident/non-resident to resident (to be submitted to the designated AD branch in quadruplicate within 60 days from the date of receipt of funds) The following documents are enclosed For sale of shares/compulsorily and mandatorily convertible preference shares/debentures by a person resident in India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent and in the latter case the Power of Attorney Document. ii. The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India. iii. Certificate indicating fair value of shares from a Chartered Accountant. iv. Copy of Broker's note if sale is made on Stock Exchange. v. Declaration from the buyer to the effect that he is eligible to acquire shares/compulsorily and mandatorily convertible preference shares/debentures under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. vi. Declaration from the Fll/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountants */** Valuation report (CA Certificate to be attached) Declaration by the transferor/transferee I/We hereby declare that: i. The particulars given above are true and correct to the best of my/our knowledge and belief. ii. I/We, was/were holding the shares compulsorily and mandatorily convertible preference shares/debentures as per FDI Policy under FERA/FEMA Regulations on repatriation/non repatriation basis. iii. I/We, am/are eligible to acquire the shares compulsorily and mandatorily convertible preference shares/debentures of the company in terms of the FDI Policy. It is not a transfer relating to shares compulsorily and mandatorily convertible preference shares/debentures of a company engaged in financial services sector or a sector where general permission is not available. iv. The Sectoral limit under the FDI Policy and the pricing guidelines have been adhered to. Signature of the Declarant or his duly authorised agent Date: Note: In respect of the transfer of shares/compulsorily and mandatorily convertible preference shares/compulsorily and mandatorily convertible debentures from resident to non resident the declaration has to be signed by the non resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Equity held by non-residents (c) Percentage of equity held by non-residents to total paid-up capital 13. Whether issue was on private placement basis. If yes, please give details of the investors and GDRs/ADRs issued to each of them 14. Number of GDRs/ADRs issued 15. Ratio of GDRs/ADRs to underlying shares 16. Issue Related Expenses (a) Fee paid/payable to Merchant Bankers/Lead Manager (i) Amount (in US$) (ii) Amount as percentage to the total issue (b) Other expenses 17. Whether funds are kept abroad. If yes, name and address of the bank 18. Details of the listing arrangement Name of Stock Exchange Date of commencement of trading 19. The date on which GDRs/ADRs issue was launched 20. Amount raised (in US $) 21. Amount repatriated (in US $) Certified that all the conditions laid down by Government of India and Reserve Bank of India have been complied with. Sd/- Sd/- Chartered Accountant Authorised Signatory of the Company Annex - 10 Form DR - Quarterly [Refer to paragraph 4(3) of Schedule 1] Quarterly Return (To be submitted to the Reserve Bank of India, Foreign Investment Division, Central Office, Mumbai) 1. Name of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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