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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 ..... gh Press Notes/ Press Releases 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty shares of the company held as deposit by a Custodian bank in India. DRs are traded on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sectors which are specified in the negative list by the SEBI, with approval of Central Government, by notification in the Official Gazette 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 'RBI' means the Reserve Bank of India established under the Reserve Bank of India Act, 1934. 2.1.32 'Resident Entity' means 'Person resident in India' excluding an individual. 2.1.33 'Resident Indian Citizen' shall be interpreted in line with the definition of '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 Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annex-1 ). ( iii ) A daily statement in respect of all transactions (except derivative trade) has to be submitted by the custodian bank in floppy / soft copy in the prescribed format directly to RBI. 3.1.5 Only SEBI registered FII and NRIs as per Schedules 2 and 3 respectively of Foreign Exchange Management (Transfer or Issue of Security 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-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... talization norms, etc. 3.1.4 FDI in Trusts: FDI in Trusts other than VCF is not permitted. 3.2.5 FDI in Limited Liability Partnerships (LLPs) : FDI in LLPs is permitted, subject to the following conditions: ( a ) FDI will be allowed, through the Government approval route, only in LLPs operating in sectors/activities where 100% FDI is allowed, through the automatic route and there are no 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been received on or after May 1, 2007 are considered as debt. Accordingly all norms applicable for ECBs relating to eligible borrowers, recognized lenders, amount and maturity, end-use stipulations, etc. shall apply. Since these instruments would be denominated in rupees, the rupee interest rate will be based on the swap equivalent of London Interbank Offered Rate (LIBOR) plus the spread as permissible for ECBs of corresponding maturity. 3.3.3 The inward remittance 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 fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Erstwhile OCBs who are not eligible to invest in India and entities prohibited from buying, selling or dealing in securities by SEBI will not be eligible to subscribe to ADRs/ GDRs issued by Indian companies. ( viii )The pricing of ADR / GDR issues should be made at a price 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. ( 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 inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and c . the price as applicable to transfer of shares from resident to non-resident as per the pricing guidelines laid down by the Reserve Bank from time to time, where the issue of shares is on preferential allotment. 3.4.3 Foreign Currency Account Indian companies which are eligible to issue shares to persons resident outside India under the FDI Policy may be allowed to retain the share subscription amount in a Foreign Currency Account, with the prior approval of RBI. 3.4.4 Transfer of shares and convertible debentures ( i ) Subject to FDI sectoral 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 (includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eree, resident in India. ( ii ) The sale consideration in respect of equity instruments purchased by a person resident outside India, remitted into India through normal banking channels, shall be subjected to a Know Your Customer (KYC) check by the remittance receiving AD Category-I bank at the time of receipt of funds. In case, the remittance receiving AD Category-I bank is different from the AD Category-I bank handling the transfer transaction, the KYC check should be carried out by the remittance receiving bank and the KYC report be submitted by the customer to the AD Category-I bank carrying out the transaction 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent approval followed by permission from RBI. ( iii ) A person resident in India, who intends to transfer any capital instrument, by way of gift to a person resident outside India, has to obtain prior approval from Reserve Bank. While forwarding applications to Reserve Bank for approval for transfer of capital instruments by way of gift, the documents mentioned in Annex-3 should be enclosed. Reserve Bank considers the following factors while processing such applications: ( a ) The proposed transferee (donee) is eligible to hold such capital instruments under Schedules 1, 4 and 5 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. ( 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms authorities towards assessment of the fair-value of such imports. ( c ) The application clearly indicating the beneficial ownership and identity of the Importer Company as well as overseas entity. ( d ) Applications complete in all respects, for conversions of import payables for capital goods into FDI being made within 180 days from the date of shipment of goods. (II) pre-operative/ pre-incorporation expenses (including payments of rent etc.), subject to compliance with the following conditions: ( a ) Submission of FIRC for remittance of funds by the overseas promoters for the expenditure incurred. ( b ) Verification and certification of the pre-incorporation/pre-operative expenses by the statutory auditor. ( c ) Payments should be 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o or more Indian companies has been approved by a Court in India, the transferee company or new company is allowed to issue shares to the shareholders of the transferor company resident outside India, subject to the conditions that: ( i ) the percentage of shareholding of persons resident outside India in the transferee or new company does not exceed the sectoral cap, and ( ii ) the transferor company or the transferee or the new company is not engaged in activities which are prohibited under the FDI policy . 3.5.5 Issue of shares under Employees Stock Option Scheme (ESOPs) ( i ) Listed Indian companies are allowed to issue shares under the Employees Stock Option Scheme (ESOPs), to its employees or employees of its joint venture or wholly owned subsidiary abroad, who are resident outside India, other than to the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olicy and directions issued by the Reserve Bank; ( c ) the Statutory Auditor has certified that the borrowing company will utilized / has utilized the proceeds of the ECB for the permitted end use/s only. (B) Non-resident holding shares of an Indian company, can pledge these shares in favour of the AD bank in India to secure credit facilities being extended to the resident investee company for bonafide business purpose, subject to the following conditions: ( i ) in case of invocation of pledge, transfer of shares should be in accordance with the FDI policy in vogue at the time of creation of pledge; ( ii ) submission of a declaration/ annual certificate from the statutory auditor of the investee company that the loan proceeds will be / have been utilized for the declared purpose; ( iii ) the Indian company has to follow the relevant SEBI disclosure norms; and ( iv ) pledge of shares 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 inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition etc. or ( iv ) The ownership of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident Indian citizens, will be/is being transferred/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition etc. ( v ) It is clarified that these guidelines will not apply to sectors/activities where there are no foreign investment caps, that is, 100% foreign investment is permitted under the automatic route. ( vi ) It is also clarified that Foreign investment shall include all types of foreign investments i.e. FDI, investment by FIIs, NRIs, ADRs, GDRs, Foreign Currency Convertible 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 Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l have to additionally follow RBI's Regulatory Framework for CICs. 3.10.3.3 For infusion of foreign investment into an Indian company which does not have any operations and also does not have any downstream investments, Government/FIPB approval would be required, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps. Note: Foreign investment into other Indian companies would be in accordance/ compliance with the relevant sectoral conditions on entry route, conditionalities and caps. 3.10.4 Downstream investment by an Indian company which is owned and/or controlled by non resident entity/ies: 3.10.4.1 Downstream investment by an Indian company, which is owned and/ or controlled by non-resident entity/ies, into another Indian company, would be in accordance/compliance with the relevant sectoral conditions on entry 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 compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4.1.3 Guidelines for calculation of total foreign investment i.e. direct and indirect foreign investment in an Indian company. ( i ) Counting the Direct Foreign Investment: All investment directly by a non-resident entity into the Indian company would be counted towards foreign investment. ( ii ) Counting of indirect foreign Investment: ( a ) The foreign investment through the investing Indian company would not be considered for calculation of the indirect foreign investment in case of Indian companies which are 'owned and controlled' by resident Indian citizens and/or Indian Companies which are owned and controlled by resident Indian citizens. ( b ) For cases where condition ( a ) above is not satisfied or if the investing company is owned or controlled by 'non resident entities', the entire investment by the investing company into the subject Indian Company would be considered as indirect foreign investment, provided that, as an exception, the indirect foreign investment in only the 100% owned subsidiaries of operating-cum-investing/investing companies, will be limited to the foreign investment in the operating-cum-investing/ inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents will have to be informed to the approving authority. The approving authority will consider such inter-se agreements for determining ownership and control when considering the case for approval of foreign investment. ( c ) In all sectors attracting sectoral caps, the balance equity i.e. beyond the sectoral foreign investment cap, would specifically be beneficially owned by/held with/in the hands of resident Indian citizens and Indian companies, owned and controlled by resident Indian citizens. ( d ) In the I B and Defence sectors where the sectoral cap is less than 49%, the company would need to be 'owned and controlled' by resident Indian citizens and Indian companies, which are owned and controlled by resident Indian citizens. (A) For this purpose, the equity held by the largest Indian shareholder would have to be at least 51% of the total equity, excluding the equity held by Public Sector Banks and Public Financial Institutions, as defined in Section 4A of the Companies Act, 1956. The term 'largest Indian shareholder', used in this clause, will include any or a combination of the following: (I) In the case of an individual shareholder, ( aa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii ) Secretary to Government, Department of Commerce, Ministry of Commerce Industry ( iv ) Secretary to Government, Economic Relations, Ministry of External Affairs ( v ) Secretary to Government, Ministry of Overseas Indian Affairs. 5.1.2 The Board would be able to co-opt other Secretaries to the Central Government and top officials of financial institutions, banks and professional experts of Industry and Commerce, as and when necessary. 5.2 LEVELS OF APPROVALS FOR CASES UNDER GOVERNMENT ROUTE 5.2.1 The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow of and below Rs.1200 crore. 5.2.2 The recommendations of FIPB on proposals with total foreign equity inflow of more than Rs. 1200 crore would be placed for consideration of CCEA. 5.2.3 The CCEA would also consider the proposals which may be referred to it by the FIPB/ the Minister of Finance (in-charge of FIPB). 5.3 CASES WHICH DO NOT REQUIRE FRESH APPROVAL 5.3.1 Companies may not require fresh prior approval of the Government i.e. Minister in-charge of FIPB/CCEA for bringing in additional foreign investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted against each sector/activity is allowed, subject to applicable laws/ regulations; security and other conditionalities. In sectors/activities not listed below, FDI is permitted upto 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. Wherever there is a requirement of minimum capitalization, it shall include share premium received along with the face value of the share, only when it is received by the company upon issue of the shares to the non-resident investor. Amount paid by the transferee during post-issue transfer of shares beyond the issue price of the share, cannot be taken into account while calculating minimum capitalization requirement; Sl. No. Sector/Activity % of FDI Cap/Equity Entry Route AGRICULTURE 6.2.1 Agriculture Animal Husbandry ( a ) Floriculture, Horticulture, Apiculture and Cultivation of Vegetables Mushrooms under controlled conditions; ( b ) Development and production of Seeds and planting material; ( c ) Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture, under control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of pisciculture and aquaculture, scope of the term 'under controlled conditions' covers - l Aquariums l Hatcheries where eggs are artificially fertilized and fry are hatched and incubated in an enclosed environment with artificial climate control. u In the case of apiculture, scope of the term 'under controlled conditions' covers l Production of honey by bee-keeping, except in forest/wild, in designated spaces with control of temperatures and climatic factors like humidity and artificial feeding during lean seasons. 6.2.2 Tea Plantation 6.2.2.1 Tea sector including tea plantations Note: Besides the above, FDI is not allowed in any other plantation sector/activity 100% Government 6.2.2.2 Other conditions : ( i ) Compulsory divestment of 26% equity of the company in favour of an Indian partner/Indian public within a period of 5 years ( ii ) Prior approval of the State Government concerned in case of any future land use change. 6.2.3 MINING 6.2.3.1 Mining and Exploration of metal and non-metal ores including diamond, gold, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-notified the list of "prescribed substances" under the Atomic Energy Act 1962. Titanium bearing ores and concentrates (Ilmenite, Rutile and Leucoxene) and Zirconium, its alloys and compounds and minerals/concentrates including Zircon, were removed from the list of "prescribed substances". ( i ) FDI for separation of titanium bearing minerals ores will be subject to the following additional conditions viz. : (A) value addition facilities are set up within India along with transfer of technology; (B) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987. ( ii ) FDI will not be allowed in mining of "prescribed substances" listed in the Notification No. S.O. 61(E) dated 18.1.2006 issued by the Department of Atomic Energy. Clarification: (1) For titanium bearing ores such as Ilmenite, Leucoxene and Rutile, manufacture of titanium dioxide pigment and titanium sponge constitutes value addition. Ilmenite can be processed to produce 'Synthetic Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Industries (Development Regulation) Act 1951. 6.2.6 DEFENCE 6.2.6.1 Defence Industry subject to Industrial license under the Industries (Development Regulation) Act 1951 26% Government 6.2.6.2 Other conditions : ( i ) Licence applications will be considered and licences given by the Department of Industrial Policy Promotion, Ministry of Commerce Industry, in consultation with Ministry of Defence. ( ii ) The applicant should be an Indian company / partnership firm. ( iii ) The management of the applicant company / partnership should be in Indian hands with majority representation on the Board as well as the Chief Executives of the company / partnership firm being resident Indians. ( iv ) Full particulars of the Directors and the Chief Executives should be furnished along with the applications. ( v ) The Government reserves the right to verify the antecedents of the foreign collaborators and domestic promoters including their financial standing and credentials in the world market. Preference would be given to original equipment manufacturers or design establishments, and compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference may be given to the Public Sector organizations as per guidelines of the Department of Public Enterprises. ( xiv ) Arms and ammunition produced by the private manufacturers will be primarily sold to the Ministry of Defence. These items may also be sold to other Government entities under the control of the Ministry of Home Affairs and State Governments with the prior approval of the Ministry of Defence. No such item should be sold within the country to any other person or entity. The export of manufactured items would be subject to policy and guidelines as applicable to Ordnance Factories and Defence Public Sector Undertakings. Non-lethal items would be permitted for sale to persons / entities other than the Central of State Governments with the prior approval of the Ministry of Defence. Licensee would also need to institute a verifiable system of removal of all goods out of their factories. Violation of these provisions may lead to cancellation of the licence. ( xv ) Government decision on applications to FIPB for FDI in defence industry sector will be normally communicated within a time frame of 10 weeks from the date of acknowledgement. SERVICES S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 26% (FDI FII) Government 6.2.7.5.1 Other conditions: ( i ) All the activities at (1), (2) and (3) above will be further subject to the condition that the Company permitted to uplink the channel shall certify the continued compliance of this requirement through the Company Secretary at the end of each financial year. ( ii ) FDI for Up-linking TV Channels will be subject to compliance with the Up-linking Policy notified by the Ministry of Information Broadcasting from time to time. 6.2.8 Print Media 6.2.8.1 Publishing of Newspaper and periodicals dealing with news and current affairs 26% (FDI and investment by NRIs/PIOs/FII) Government 6.2.8.2 Publication of Indian editions of foreign magazines dealing with news and current affairs 26% (FDI and investment by NRIs/PIOs/FII) Government 6.2.8.2.1 Other Conditions: ( i ) 'Magazine', for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily basis, containing pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mate 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 component" means any part, the soundness and correct functioning of which, when fitted to an aircraft, is essential to the continued airworthiness or safety of the aircraft and includes any item of equipment; ( vi ) "Helicopter" means a heavier-than -air aircraft supported in flight by the reactions of the air on one or more power driven rotors on substantially vertical axis; ( vii ) "Scheduled air transport service" means an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognizably systematic series, each flight being open to use by members of the public; ( viii ) "Non-Scheduled Air Transport service" means any service which is not a scheduled air transport service and will include Cargo airlines; ( ix ) "Cargo airlines" would mean such airlines which me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution 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 housing plots, a minimum land area of 10 hectares ( ii ) In case of construction-development projects, a minimum built-up area of 50,000 sq.mts ( iii ) In case of a combination project, any one of the above two conditions would suffice (2) Minimum capitalization of US$10 million for wholly owned subsidiaries and US$ 5 million for joint ventures with Indian partners. The funds would have to be brought in within six months of commencement of business of the Company. (3) Original investment cannot be repatriated bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 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, common effluent treatment, common testing, telecom services, air conditioning, common facility buildings, industrial canteens, convention/conference halls, parking, travel desks, security service, first aid center, ambulance and other safety services, training facilities and such other facilities meant for common use of the units located in the Industrial Park. ( iv ) " Allocable area" in the Industrial Park means- ( a ) in the case of plots of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bile 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 coming from countries of concern and/or unfriendly entities. ( iv ) The investment approval by FIPB shall envisage the conditionality that Company would adhere to licence Agreement. ( v ) FDI shall be subject to laws of India and not the laws of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raphical 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 pertaining to the network operated in India should be maintained for a period of six months and provided on request to the licensor or any other agency authorised by the licensor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Wholesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tic 6.2.16.2.1 E-commerce activities refer to the activity of buying and 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 follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue. ( iii ) Any individual investment of more than 10% would be subject to provisions of section 3(3) ( f ) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 6.2.18 Banking Private sector 6.2.18.1 Banking Private 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isory authority in the home country and meeting Reserve Bank's licensing criteria will be allowed to hold 100 per cent paid up capital to enable them to set up a wholly-owned subsidiary in India. ( c ) A foreign bank may operate in India through only one of the three channels viz. , ( i ) branches ( ii ) a wholly-owned subsidiary and ( iii ) a subsidiary with aggregate foreign investment up to a maximum of 74 per cent 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 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Central Government, but does not include securities. 6.2.20.2 Policy for FDI in Commodity Exchange 49% (FDI FII) [Investment by Registered FII under Portfolio Investment Scheme (PIS) will be limited to 23% and Investment under FDI Scheme limited to 26% ] Government 6.2.20.3 Other conditions: ( i ) FII purchases shall be restricted to secondary market only and ( ii ) No non-resident investor/ entity, including persons acting in concert, will hold more than 5% of the equity in these companies. 6.2.21 Credit Information Companies (CIC) 6.2.21.1 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 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be brought upfront ( iii ) US $ 50 million for foreign capital more than 75% out of which US$ 7.5 million to be brought upfront and the balance in 24 months. ( iv ) 100% foreign owned NBFCs with a minimum capitalisation of US$ 50 million can set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital. The minimum capitalization condition as mandated by para 3.10.4.1, therefore, shall not apply to downstream subsidiaries. ( v ) Joint Venture operating NBFCs that have 75% or less than 75% foreign investment can also set up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also complying with the applicable minimum capitalisation norm mentioned in ( i ), ( ii ) and ( iii ) above and ( vi ) below. ( vi ) Non- Fund based activities : US $0.5 million to be brought upfront for all permitted non-fund based NBFCs irrespective of the level of foreign 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there are no legal proceedings pending in any court in India against the applicant or the company under liquidation and there is no legal impediment in permitting the remittance. 7.1.2 Repatriation of Dividend: Dividends are freely repatriable without any restrictions (net after Tax deduction at source or Dividend Distribution Tax, if any, as the case may be). The repatriation is governed by the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 7.1.3 Repatriation of Interest: Interest on fully, mandatorily compulsorily convertible debentures is also freely repatriable without any restrictions (net of applicable taxes). The repatriation is governed by the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 7.2 . REPORTING OF FDI 7.2.1 Reporting of Inflow ( i ) An Indian company receiving investment from outside India for issuing shares/convertible debentures/preference shares under the FDI Scheme, should report the details of the amount of consideration to the Regional Office concerned of the Reserve Bank not later than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets (Annex 7) should be filed on an annual basis by the Indian company, directly with the Reserve Bank. This is an annual return to be submitted by 31st of July every year, pertaining to all investments by way of direct/portfolio investments/reinvested earnings/other capital in the Indian company made during the previous years ( i.e. the information submitted by 31st July will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments made into the company which is outstanding as on the balance sheet date. The details of overseas investments in the company both under direct/portfolio investment may be separately indicated. ( e ) Issue of bonus/rights shares or stock options to persons resident outside India directly or on amalgamation/merger/demerger with an existing Indian company, as well as issue of shares on conversion of ECB/royalty/lumpsum technical know-how fee/import of capital goods by units in SEZs, has to be reported in Form FC-GPR. 7.2.3 Reporting of transfer of shares Reporting of transfer of shares between residents and non-residents and vice versa is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enal provisions of the FEMA. Reserve Bank of India administers the FEMA and Directorate of Enforcement under the Ministry of Finance is the authority for the enforcement of FEMA. The Directorate takes up investigation in any contravention of FEMA. 7.3.1 Penalties ( i ) If a person violates/contravenes any FDI Regulations, by way of breach/non-adherence/non-compliance/contravention of any rule, regulation, notification, press note, press release, circular, direction or order issued in exercise of the powers under FEMA or contravenes any conditions subject to which an authorization is issued by the Government of India/FIPB/Reserve Bank of India, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contraventions where such amount is quantifiable, or up to two lakh Rupees where the amount is not quantifiable, and where such contraventions is a continuing one, further penalty which may extend to five thousand Rupees for every day after the first day during which the contraventions continues. ( ii ) Where a person committing a contravention of any provisions of this Act or of any rule, direction or order made thereunder is a company (com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents relevant to the compounding proceedings. The Compounding Authority shall pass an order of compounding after affording an opportunity of being heard to all the concerns as expeditiously and not later than 180 days from the date of application made to the Compounding Authority. Compounding Authority shall issue order specifying the provisions of the Act or of the rules, directions, requisitions or orders made thereunder in respect of which contravention has taken place along with details of the alleged contraventions. Annex 1 FC-GPR (To be filed by the company through its Authorised Dealer Category-I bank with the Regional Office of the RBI under whose jurisdiction the Registered Office of the company making the declaration is situated as and when shares/convertible debentures are issued to the foreign investor, along with the documents mentioned in item No. 4 of the undertaking enclosed to this Form) Permanent Account Number (PAN) of the investee company given by the Income-tax Department Date of issue of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import of capital goods by units in SEZ 08 ESOPs 09 Share Swap 10 Others (please specify) Total ( b ) Type of security issued No. Nature of security Number Maturity Face value Premium Issue Price per share Amount of inflow* 01 Equity 02 Compulsorily Convertible Debentures 03 Compulsorily Convertible Preference shares 04 Others (please specify) Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sovereign Wealth Funds 09 Partnership/Proprietorship Firms 10 Financial Institutions 11 NRIs/PIO 12 Others (please specify) Sub Total ( b ) Resident Total DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE INDIAN COMPANY: (Delete whichever is not applicable and authenticate) We hereby declare that: 1. We comply with the procedure for issue of shares/convertible debentures as laid down under the FDI scheme as indicated in Notification No. FEMA 20/2000-RB dated 3rd May 2000, 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 conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchant Banker/Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. 5. Unique Identification Numbers given for all the remittances received as consideration for issue of shares/convertible debentures (details as above), by Reserve Bank. R R (Signature of the Applicant)* : ______________________________________ (Name in Block Letters) : ______________________________________ (Designation of the signatory) : ______________________________________ Place: Date: (* To be signed by Managing Director/Director/Secretary of the Company) CERTIFICATE TO BE FILED BY THE COMPANY SECRETARY 3 OF THE INDIAN COMPANY ACCEPTING THE INVESTMENT: (As per Para 9(1)(B) ( i ) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000) In respect of the abovementioned details, we certify the following : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are: ( a ) listed on a recognized stock exchange in India ,shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines , as applicable, provided the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date pf purchase or sale of shares, ( b ) not listed on a recognized stock exchange in India ,shall not be less than the fair value to be determined by a SEBI registered Category I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method. The price per share arrived at should be certified by a SEBI registered Category I Merchant Banker or a Chartered Accountant. 2.3 Transfer by Non-resident ( i.e. by incorporated non-resident entity, erstwhile OCB, foreign national, NRI, FII) to Resident Sale of shares by a non-resident to resident shall be in accordance with Regulation 10 B (2) of Notification No. FEMA 20/2000-RB dated May 3, 2000 which shall not be more than the minimum price at which the transfer of shares can be made fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer i.e. number of shares to be transferred, the name of the investee company whose shares are being transferred and the price at which shares are being transferred. In case there is no formal Sale Agreement, letters exchanged to this effect may be kept on record. ( ii ) Where Consent Letter has been signed by their duly appointed agent, the Power of Attorney Document executed by the seller/buyer authorizing the agent to purchase/sell shares. ( iii ) The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India showing equity participation of residents and non-residents category-wise ( i.e. NRIs/OCBs/foreign nationals/incorporated non-resident entities/FIIs) and its percentage of paid up capital obtained by the seller/buyer or their duly appointed agent from the company, where the sectoral cap/limits have been prescribed. ( iv ) Certificate indicating fair value of shares from a Chartered Accountant. ( v ) Copy of Broker s note if sale is made on Stock Exchange. ( vi ) Undertaking from the buyer to the effect that he is eligible to acquire shares/convertible debentures under FDI policy and the existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions, the transferee/his duly appointed agent should approach the investee company to record the transfer in their books along with the certificate in the Form FC-TRS from the AD branch that the remittances have been received by the transferor/payment has been made by the transferee. On receipt of the certificate from the AD, the company may record the transfer in its books. 6.3 The actual inflows and outflows on account of such transfer of shares shall be reported by the AD branch in the R-returns in the normal course. 6.4 In addition the AD branch should submit two copies of the Form FC-TRS received from their constituents/customers together with the statement of inflows/outflows on account of remittances received/made in connection with transfer of shares, by way of sale, to IBD/FED/or the nodal office designated for the purpose by the bank in the enclosed proforma (which is to be prepared in MS-Excel format). The IBD/FED or the nodal office of the bank will in turn submit a consolidated monthly statement in respect of all the transactions reported by their branches together with copies of the FC-TRS Forms received from their branches to Foreign Exchange Department, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annex - 4 Definition of "relative" as given in section 6 of Companies Act, 1956. A person shall be deemed to be a relative of another, if, and only if: ( a ) they are members of a Hindu undivided family ; or ( b ) they are husband and wife ; or ( c ) the one is related to the other in the manner indicated in Schedule IA (as under) 1. Father. 2. Mother (including step-mother). 3. Son (including stepson). 4. Son s wife. 5. Daughter (including step-daughter). 6. Father s father. 7. Father s mother. 8. Mother s mother. 9. Mother s father. 10. Son s son. 11. Son s son s wife. 12. Son s daughter. 13. Son s daughter s husband. 14. Daughter s husband. 15. Daughter s son. 16. Daughter s son s wife. 17. Daughter s daughter. 18. Daughter s daughter s husband. 19. Brother (including step-brother). 20. Brother s wife. 21. Sister (including step-sister). 22. Sister s husband. Annex - 5 Report by the Indian company receiving amount of consideration for issue of shares/Convertible debentures under the FDI Scheme (To be filed by the company through its Authorised D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 investor. (Signature of the Authorised Official of the AD bank receiving the remittance) Date : Place: Stamp : Annex 7 Annual Return on Foreign Liabilities and Assets (Return to be filled under A.P. (DIR Series) Circular No.45 dated March 15, 2011 to the Department of Statistics and Information Management, RBI, Mumbai) Please read the guidelines/definitions carefully before filling-in the Return Section I: Identification Particulars 1. Name and Address of the Indian Company _________________________________________________ _________________________________________________ _________________________________________________ City: Pin: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I s use (Industry Code) 8. Whether your company is listed in India [please tick ( )]? Yes No 9. Whether your company has any Foreign Collaboration? Yes No If yes, please indicate whether it is (please 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 E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e end of March Previous FY December Current FY March Current FY 1.0 Equity Capital (1.0 = 1.2-1.1) 1.1 Claims on Direct Investor 1.2 Liabilities to Direct Investor 2.0 Other Capital(2.0 = 2.2-2.1) 2.1 Claims on Direct Investor 2.2 Liabilities to Direct Investor 3.0 Disinvestments in India during the year Note: ( i ) if investor is a company, then country is the country of incorporation; ( ii ) Please use different sheet using same format to report different non-resident company/individual. Block 2B: Foreign Direct Investment in India (Less than 10% Equity Holding) [Please furnish here the outstanding investments made under the FDI Scheme in India by Non-resident Direct investors, who were individually holding less than 10 per cent ordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 derivatives contract entered into with non-residents. Financial Derivatives Country of non-resident investor Amount in lakh as at the end of ( i ) Notional Value March Previous FY March Current FY ( ii ) Mark to market value Note: 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 3C: Other Investments: This is a residual category that includes all financial outstanding not considered as direct investment or portfolio investment (outstanding liabilities with Unrelated Parties) Other Investment Country of non-resident lender Amount in lakh as at the end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrent 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 Ty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heet for each country. Block 5B: Financial Derivatives (with non-resident entities only) Please furnish here the outstanding claims on non-residents on account of financial derivatives contract entered into with Non-residents. Financial Derivatives Country of non-resident enterprise Amount in lakh as at the end of March Previous FY March Current FY ( i ) Notional Value ( ii ) Mark to market value Note: 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 5C: Other Investment (Outstanding claims on Unrelated Parties): This is a residual category that includes all financial outstanding claims not considered as direct investment or portfolio investment. Other Investment Country of non-resident enterprise 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Note: # Currency of denomination of the contingent foreign liability should be mentioned in Col. 3. Refer to the details on Contingent liabilities given in Annex. Block 8: Employee Information of reporting Indian company As at the end-March of Previous FY Current FY No. of Employees on Payroll BLOCK 9: Name( s ) Address (es) of your subsidiary in India Sr. Nos. Name of Subsidiary in India* Your Equity holding in subsidiary % Address Retained profit/loss of your subsidiary in India during the current FY (Amount in lakh) Certificate We hereby certify that all the facts and figures furnished in this schedule reflect the accurate position of the company and reported after understanding all the items of all the blocks o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it should be reported under the Foreign Direct Investment in India (Liabilities), section II of the return. If the non-resident entity holds the 10 per cent or more equity/ordinary shares in the reporting Indian company, then it should reported under Block 2A (item 1.2, liabilities to direct investment). However, if the non-resident entity holds less than 10 per cent of the equity capital of reporting Indian company, then it should be reported under Block 2B (item 1.2, liabilities to direct investment). In both the cases, the investing non-resident entity is called as the Direct Investor (DI) while the reporting Indian company is called as Direct Investment Enterprise (DIE). If the reporting Indian company also holds the equity shares in its DI company abroad and if its share is less than 10 per cent of equity capital of DI company, then it is called as reverse investment and same should be reported under item 1.1 (claim on direct investor) of the respective block i.e. Block 2A or 2B. ( b ) Foreign Direct Investment abroad by Indian companies (Block 4A and 4B) If the reporting Indian company invest in equity shares of non-resident company, under the Overseas Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claims of all creditors have been met. These include ordinary shares, stocks, participating preference shares, depository receipts (ADRs/GDRs) denoting ownership of equity securities issued to non-residents, shares/units in mutual funds investment trusts, equity securities that are sold under repurchase agreement, equity securities that are sold under securities lending arrangement. ( iii ) Debt Securities (Block 3A 5A, Item 2.0) These include bonds and notes, money market instruments. ( iv ) Bonds and Notes (Block 3A 5A, Item 2.1) This category includes debt securities with original contractual maturities of more than one year (long-term). It includes the long-term securities such as Debentures, Non-participating preference shares, Convertible bonds, Negotiable certificates of deposit, Perpetual bonds, Collateralized mortgage obligations, Dual currency, Zero coupon and other Deep discounted bonds, Floating rate bonds and Index-linked bonds. ( v ) Money Market Instruments (Block 3A 5A, Item 2.2) These short-term instruments include treasury bills, commercial paper, banker s acceptances, short-term negotiable certificates of deposit and short-term notes issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans should be reported under the loan item of Block 3C or 5C. ( iii ) Other Liabilities and Assets (Block 3C 5C, Item 6.0) These are the residual items that include all external financial liabilities and assets not recorded elsewhere in the liabilities/assets. These are miscellaneous accounts receivable and payable such as accounts relating to interest payments in arrears, loan payments in arrears, wages and salaries outstanding, prepayments of insurance premiums, taxes outstanding the like. ( iv ) Long-term and Short-term Investment (Block 3C 5C) Long-term investment is defined as investment with an original contractual maturity of more than one year. Short-term investment includes currency, investment payable on demand or with an original contractual maturity of one year or less. E. Disinvestments in India and Abroad (Item 3.0 in Block 2A, 2B, 3A, 4A, 4B 5A) Any disinvestments made by non-resident direct investor of the reporting Indian company during the year should be reported in Block 2A and Block 2B and portfolio disinvestments in Block 3A. Likewise, any disinvestment made by the reporting Indian company in its DIE abroad during the year should be report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sectoral limits and Pricing Guidelines have been complied with. vi. Declaration from the Fll/sub account to the effect that the individual FII/Sub account ceiling as prescribed has not been breached. Additional documents in respect of sale of shares/compulsorily and mandatorily convertible preference shares/debentures by a person resident outside India vii. If the sellers are NRIs/OCBs, the copies of RBI approvals, if applicable, evidencing the shares held by them on repatriation/non-repatriation basis. viii. No Objection/Tax Clearance Certificate from Income Tax Authority/Chartered Accountant. 1 Name of the company Address (including e-mail, telephone Number, Fax No.) Activity NIC Code No. 2 Whether FDI is allowed under Automatic route Sectoral Cap under FDI Policy 3 Nature of transaction (Strike out whichever is not applicable) Transfer from resident to non resident/ Transfer from non resident to resident 4 Name of the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 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 resident buyer, and in respect of the transfer of shares/compulsorily and mandatorily convertible preference shares/compulsor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RIs/PIOs/OCBs ( iv ) Held by FIIs 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] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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