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TMI BlogConsolidated FDI PolicyX X X X Extracts X X X X X X X X Extracts X X X X ..... 3.3 Types of Instruments 3.4 Issue/Transfer of Shares 3.5 Specific Conditions in Certain Cases 3.6 Entry Routes for Investment 3.7 Caps on Investments 3.8 Entry Conditions on Investment 3.9 Other Conditions on Investment Besides Entry Conditions 3.10 Foreign Investment into/downstream Investment by Indian Companies Chapter-4 Calculation of Foreign Investment 4.1 Total Foreign Investment i.e. Direct and Indirect Foreign Investment in Indian Companies Chapter-5 Foreign Investment Promotion Board (FIPB) 5.1 Constitution of FIPB 5.2 Levels of Approvals for Cases under Government Route 5.3 Cases Which do not Require Fresh Approval 5.4 Online Filing of Applications for FIPB/Government's Approval Chapter-6 Sector Specific Conditions on FDI 6.1 Prohibited Sectors 6.2 Permitted Sectors Agriculture 6.2.1 Agriculture Animal Husbandry 6.2.2 Tea Plantation Mining and Petroleum Natural Gas 6.2.3 Mining 6.2.4 Petroleum Natural Gas Manufacturing 6.2.5 Manufacture of items reserved for production in Micro and Small Enterprises (MSEs) 6.2.6 Defence Services Sector Information Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. This framework is embodied in the Circular on Consolidated FDI Policy, which may be updated every year, to capture and keep pace with the regulatory changes, effected in the interregnum. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce Industry, Government of India makes policy pronouncements on FDI through 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 Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of FEMA. 2.1.7 'Control' shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements. 2.1.8 'Depository Receipt' (DR) means a negotiable security issued outside India by a Depository bank, on behalf of an Indian company, which represent the local Rupee denominated equity 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 Indians and includes overseas trust in which not less than sixty percent beneficial interest is held by non-resident Indians directly or indirectly but irrevocably and which was in existence on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in accordance with these Regulations. 2.1.17 'Government route' means that investment in the capital of resident entities by non-resident entities can be made only with the prior approval of Government (FIPB, Department of Economic Affairs (DEA), Ministry of Finance or Department of Industrial Policy Promotion, as the case may be). 2.1.18 'Group Company' means two or more enterprises which, directly or indirectly, are in a position to: (i) exercise twenty-six percent or more of voting rights in other enterprise; or (ii) appoint more than fifty percent of members of board of directors in the other enterprise. 2.1.19 'Holding Company' would have the same meaning as defined in Companies Act, 1956 . 2.1.20 'Indian Company' means a company incorporated in India under the Companies Act, 1956 . 2.1.21 'Indian Venture Capital Undertaking' (IVCU) means an Indian company: (i) whose shares are not listed in a recognised stock exchange in India; (ii) which is engaged in the business of providing services, production or manufacture of articles or things, but does not include such activities or sectors which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia for more than one hundred and eighty-two days during the course of the preceding financial year but does not include- (A) A person who has gone out of India or who stays outside India, in either case- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; (B) A person who has come to or stays in India, in either case, otherwise than- (a) for or on taking up employment in India; or (b) for carrying on in India a business or vocation in India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (ii) any person or body corporate registered or incorporated in India, (iii) an office, branch or agency in India owned or controlled by a person resident outside India, (iv) an office, branch or agency outside India owned or controlled by a person resident in India. 2.1.32 'Person resident outside India' means a person who is not a Person resident in India. 2.1.33 ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space and atomic energy and sectors/activities prohibited for foreign investment. 3.1.2 NRIs resident in Nepal and Bhutan as well as citizens of Nepal and Bhutan are permitted to invest in the capital of Indian companies on repatriation basis, subject to the condition that the amount of consideration for such investment shall be paid only by way of inward remittance in free foreign exchange through normal banking channels. 3.1.3 OCBs have been derecognized as a class of investors in India with effect from September 16, 2003. Erstwhile OCBs which are incorporated outside India and are not under the adverse notice of RBI can make fresh investments under FDI Policy as incorporated non-resident entities, with the prior approval of Government of India if the investment is through Government route; and with the prior approval of RBI if the investment is through Automatic route. 3.1.4 (i) An FII/FPI may invest in the capital of an Indian company under the Portfolio Investment Scheme which limits the individual holding of an FII/FPI below 10% of the capital of the company and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Schedule 6 of Notification No. FEMA 20 / 2000 -RB dated May 3, 2000 as amended from time to time. It is also being clarified that SEBI registered FVCIs would also be allowed to invest in securities on a recognized stock exchange subject to the provisions of the SEBI (FVCI) Regulations, 2000, as amended from time to time, as well as the terms and conditions stipulated therein. 3.1.7 Qualified Foreign Investors (QFls) investment in equity shares: 3.1.7.1 QFls are permitted to invest through SEBI registered Depository Participants (DPs) only in equity shares of listed Indian companies through recognized brokers on recognized stock exchanges in India as well as in equity shares of Indian companies which are offered to public in India in terms of the relevant and applicable SEBI guidelines/regulations. QFls are also permitted to acquire equity shares by way of right shares, bonus shares or equity shares on account of stock split/consolidation or equity shares on account of amalgamation, demerger or such corporate actions subject to the prescribed investment limits. QFIs are allowed to sell the equity shares so acquired subject to the relevant SEBI guidelines. 3.1.7.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide India (non-resident entity/individual including an NRI) can invest in such domestic VCF subject to approval of the FIPB. However, if a domestic VCF is set-up as an incorporated company under the Companies Act, 1956, then a person resident outside India (non-resident entity/individual including an NRI) can invest in such domestic VCF under the automatic route of FDI Scheme, subject to the pricing guidelines, reporting requirements, mode of payment, minimum capitalization norms, etc. 3.2.4 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt at the time of issue of the instruments. The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA regulations [the DCF method of valuation for the unlisted companies and valuation in terms of SEBI (ICDR) Regulations, for the listed companies]. 3.3.1.1 Equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares without any option/right to exit at an assured price shall be reckoned as eligible capital instruments. 3.3.1.2 Optionality clauses are allowed in equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares under FDI scheme, subject to the following conditions: (a) There is a minimum lock-in period of one year or a minimum lock-in period as prescribed under FDI Regulations, whichever is higher (e.g. defence and construction development sector where the lock-in period of three years has been prescribed). The lock-in period shall be effective from the date of allotment of such cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey submit to the proposed exchange/regulators also to SEBI for the purpose of Prevention of Money Laundering Act (PMLA). They shall comply with SEBI's disclosure requirements in addition to that of the primary exchange prior to the listing abroad; (c) While raising resources abroad, the listing company shall be fully compliant with the FDI policy in force; (d) The capital raised abroad may be utilized for retiring outstanding overseas debt or for bona fide operations abroad including for acquisitions; (e) In case the funds raised are not utilized abroad as stipulated at (d) above, such companies shall remit the money back to India within 15 days from the date of raising of funds and such money shall be parked only in AD Category-1 banks recognized by RBI and may be used domestically; (f) The ADRs/GDRs shall be issued subject to sectoral cap, entry route, minimum capitalization norms, pricing norms, etc. as applicable as per FDI regulations notified from time to time; (g) The pricing of such ADRs/GDRs to be issued to a person resident outside India shall be determined in accordance with sub-paragraph 3.3.4 (viii) below; (h) The number of underlying equity shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and distributed among the resident investors who had offered their Rupee denominated shares for conversion. These proceeds can be kept in Resident Foreign Currency (Domestic) accounts in India by the resident shareholders who have tendered such shares for conversion into ADRs/GDRs. 3.4 Issue/Transfer of Shares 3.4.1 The capital instruments should be issued within 180 days from the date of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 transfer of subscriber's shares), of an Indian company under private arrangem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (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- residents as well as transfer of shares from/to the non- residents. 3.4.5 Prior permission of RBI in certain cases for transfer of capital instruments 3.4.5.1 Excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. The original and resultant investment are in line with the extant FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum capitalization, etc.), reporting requirements, documentation, etc.; ii. The pricing for the transaction is compliant with the specific/explicit, extant and relevant SEBI regulations/guidelines (such as IPO, Book building, block deals, delisting, exit, open offer/substantial acquisition/SEBI SAST, buy back); and iii. Chartered Accountants Certificate to the effect that compliance with the relevant SEBI regulations/guidelines as indicated above is attached to the form FC-TRS to be filed with the AD bank. B. Transfer of shares from Resident to Non-Resident: i) where the transfer of shares requires the prior approval of the Government conveyed through FIPB as per the extant FDI policy provided that: a) the requisite approval of the FIPB has been obtained; and b) the transfer of share adheres with the pricing guidelines and documentation requirements as specified by the Reserve Bank of India from time to time. ii) where the transfer of shares attract SEBI (SAST) Regulations subject to the adherence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident collaborators. (ii) General permission is also available for issue of shares/preference shares against lump sum technical know-how fee, royalty due for payment, subject to entry route, sectoral cap and pricing guidelines (as per the provision of para 3.4.2 above) and compliance with applicable tax laws. (iii) Issue of equity shares under the FDI policy is allowed under the Government route for the following: (I) import of capital goods/ machinery/ equipment (excluding second-hand machinery), subject to compliance with the following conditions: (a) Any import of capital goods/machinery etc., made by a resident in India, has to be in accordance with the Export/Import Policy issued by Government of India/as defined by DGFT/FEMA provisions relating to imports. (b) The application clearly indicating the beneficial ownership and identity of the Importer Company as well as overseas entity. (c) 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convertible preference shares over and above their rights share entitlements. The investee company can allot the additional rights share out of unsubscribed portion, subject to the condition that the overall issue of shares to non-residents in the total paid-up capital of the company does not exceed the sectoral cap. 3.5.4 Acquisition of shares under Scheme of Merger/Demerger/Amalgamation Mergers/demergers/ amalgamations of companies in India are usually governed by an order issued by a competent Court on the basis of the Scheme submitted by the companies undergoing merger/demerger/amalgamation. Once the scheme of merger or demerger or amalgamation of two 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. 3.5.4.1 Issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge of Shares: (A) A person being a promoter of a company registered in India (borrowing company), which has raised external commercial borrowings, may pledge the shares of the borrowing company or that of its associate resident companies for the purpose of securing the ECB raised by the borrowing company, provided that a no objection for the same is obtained from a bank which is an authorised dealer. The authorized dealer, shall issue the no objection for such a pledge after having satisfied itself that the external commercial borrowing is in line with the extant FEMA regulations for ECBs and that: i) the loan agreement has been signed by both the lender and the borrower, ii) there exists a security clause in the Loan Agreement requiring the borrower to create charge on financial securities, and iii) the borrower has obtained Loan Registration Number (LRN) from the Reserve Bank: and the said pledge would be subject to the following conditions: a) the period of such pledge shall be co-terminus with the maturity of the underlying ECB; b) in case of invocation of pledge, transfer shall be in accordance with the extant FDI Policy and directions issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of India is required. Proposals for foreign investment under Government route, are considered by FIPB. 3.6.2 Guidelines for establishment of Indian companies/ transfer of ownership or control of Indian companies, from resident Indian citizens to non-resident entities, in sectors with caps: In sectors/activities with caps, including inter-alia defence production, air transport services, ground handling services, asset reconstruction companies, private sector banking, broadcasting, commodity exchanges, credit information companies, insurance, print media, telecommunications and satellites, Government approval/FIPB approval would be required in all cases where: (i) An Indian company is being established with foreign investment and is not owned by a resident entity or (ii) An Indian company is being established with foreign investment and is not controlled by a resident entity or (iii) The control 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 shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.10.2 For the purpose of this chapter, (i) 'Downstream investment' means indirect foreign investment, by one Indian company, into another Indian company, by way of subscription or acquisition, in terms of Paragraph 4.1. Paragraph 4.1.3 provides the guidelines for calculation of indirect foreign investment, with conditions specified in paragraph 4.1.3 (v). (ii) 'Foreign Investment' would have the same meaning as in Paragraph 4.1 3.10.3 Foreign investment into an Indian company engaged only in the activity of investing in the capital of other Indian company/ies (regardless of its ownership or control): 3.10.3.1 Foreign investment into an Indian company, engaged only in the activity of investing in the capital of other Indian company/ies, will require prior Government/FIPB approval, regardless of the amount or extent of foreign investment. Foreign investment into Non-Banking Finance Companies (NBFCs), carrying on activities approved for FDI, will be subject to the conditions specified in paragraph 6.2.17.8 of this Circular. 3.10.3.2 Those companies, which are Core Investment Companies (CICs), will have to additionally follow RBI's Regulatory Fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 accruals are permissible, subject to the provisions of paragraphs 3.10.3 and 3.10.4.1. Chapter 4: Calculation of Foreign Investment 4.1 Total Foreign Investment i.e. Direct and Indirect Foreign Investment in Indian Companies 4.1.1 Investment in Indian companies can be made both by non-resident as well as resident Indian entities. Any non-resident investment in an Indian company is direct foreign investment. Investment by resident Indian entities could again comprise of both resident and non-resident investment. Thus, such an Indian company would have indirect foreign investment if the Indian investing company has foreign investment in it. The indirect inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany 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 Y (i.e. Company Y owns 100% shares of Company X), then only 75% would be treated as indirect foreign equity and the balance 25% would be treated as resident held equity. The indirect foreign equity in Company X would be computed in the ratio of 75:25 in the total investment of Company Y in Company X. (iii) The total foreign investment would be the sum total of direct and indirect foreign investment. (iv) The above methodology of calculation would apply at every stage of investment in Indian companies and thus to each and every Indian comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dian 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 counted as foreign investment. 4.1.4 The above mentioned policy and methodology would be applicable for determining the total foreign investment in all sectors, except in sectors where it is specified in a statute or rule there under. The above methodology of determining direct and indirect foreign investment therefore does not apply to the Insurance Sector which will continue to be governed by the relevant Regulation. 4.1.5 Any foreign investment already made in accordance with the guidelines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoved/increased and the activities placed under the automatic route; provided that such additional investment along with 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.fipbindia.com). Chapter 6: Sector Specific Conditions on FDI 6.1 Prohibited Sectors: FDI is prohibited in: (a) Lottery Business including Government/private lottery, online lotteries, etc. (b) Gambling and Betting including casinos etc. (c) Chit funds (d) Nidhi company (e) Trading in Transferable Development Rights (TDRs) (f) Real Estate Business or Construction of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance 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: (i) '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 culture medium are controlled artificially. Control in these parameters may be effected through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% Automatic 6.2.3.2 Coal and Lignite (1) Coal Lignite mining for captive consumption by power projects, iron steel and cement units and other eligible activities permitted under and subject to the provisions of Coal Mines (Nationalization) Act, 1973. consumption by power projects, iron steel and cement units and other eligible activities permitted under and subject to the provisions of Coal Mines (Nationalization) Act, 1973. 100% Automatic (2) Setting up coal processing plants like washeries subject to the condition that the company shall not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rutile or Titanium Slag as an intermediate value added product. (2) The objective is to ensure that the raw material available in the country is utilized for setting up downstream industries and the technology available internationally is also made available for setting up such industries within the country. Thus, if with the technology transfer, the objective of the FDI Policy can be achieved, the conditions prescribed at (i) (A) above shall be deemed to be fulfilled. 6.2.4 Petroleum Natural Gas 6.2.4.1 Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitted. (ii) FPI/FII(through portfolio investment) in companies holding defence licence as on 22 August, 2013 (date of issue of Press Note 6 of 2013 ) will remain capped at the level existing as on the said date. No fresh FPI/FII(through portfolio investment) is permitted even if the level of such investment falls below the capped level subsequently. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l items, or group of items manufactured by the licensee. Such permission would be for a fixed period and subject to renewals. (xiii) Purchase preference and price preference 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) All applications seeking permiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Terrestrial Broadcasting FM (FM Radio), subject to such terms and conditions, as specified from time to time, by Ministry of Information Broadcasting, for grant of permission for setting up of FM Radio stations 26% Government 6.2.7.2.2 Up-linking of 'News Current Affairs' TV Channels 26% Government 6.2.7.2.3 Up-linking of Non-'News Current Affairs' TV Channels/ Down-linking of TV Channels 100% Government 6.2.7.3 FDI for Up-linking/Down-linking TV Channels will be subject to compliance with the relevant Up-linking/Down-linking Policy notified by the Ministry of Information Broadcasting from time to time. 6.2.7.4 Foreign investment (FI) in companies engaged in all the aforestated services will be subject to relevant regulations and such terms and conditions, as may be specified from time to time, by the Ministry of Information and Broadcasting. 6.2.7.5 The foreign investment (F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The security clearance shall be required to be obtained every two years. Permission vis- -vis Security Clearance (v) The permission shall be subject to permission holder/licensee remaining security cleared throughout the currency of permission. In case the security clearance is withdrawn, the permission granted is liable to be terminated forthwith. (vi) In the event of security clearance of any of the persons associated with the permission holder/licensee or foreign personnel being denied or withdrawn for any reasons whatsoever, the permission holder/licensee will ensure that the concerned person resigns or his services terminated forthwith after receiving such directives from the Government, failing which the permission/license granted shall be revoked and the company shall be disqualified to hold any such Permission/license in future for a period of five years. Infrastructure/Network/Software related requirement (vii) The officers/officials of the licensee companies dealing with the lawful interception of services will be resident India citizens. (viii) Details of infrastructure/network diagram (technical details of the network) could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other relevant information and at such periodic intervals or such times as may be required. (xvii) The service providers should familiarize/train designated officials or the Government or officials of TRAI or its authorized representative(s) in respect of relevant operations/features of their systems. National Security Conditions (xviii) It shall be open to the licensor to restrict the Licensee Company from operating in any sensitive area from the National Security angle. The Government of India, Ministry of Information and Broadcasting shall have the right to temporarily suspend the permission of the permission holder/Licensee in public interest or for national security for such period or periods as it may direct. The company shall immediately comply with any directives issued in this regard failing which the permission issued shall be revoked and the company disqualified to hold any such permission in future for a period of five years. (xix) The company shall not import or utilize any equipment, which are identified as unlawful and/or render network security vulnerable. Other Conditions (xx) Licensor reserves the right to modify these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to the Guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by Ministry of Information Broadcasting on 31.3.2006, as amended from time to time. 6.2.9 Civil Aviation The Civil Aviation 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDI (100% for NRIs) Automatic (2) Non-Scheduled Air Transport Service 74% FDI (100% for NRIs) Automatic up to 49% Government route beyond 49% and up to 74% (3)Helicopter services/seaplane services requiring DGCA approval 100% Automatic 6.2.9.3.1 Other Conditions: (a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air Transport Services, helicopter and seaplane services. (b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned above. (c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be subject to the following conditions: (i) It would be made under the Government approval route. (ii) The 49% lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% Automatic (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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices (PMRTS), Global Mobile Personal Communications Services (GMPCS), All types of ISP licenses, Voice Mail/Audiotex/UMS, Resale of IPLC, Mobile Number Portability Services, Infrastructure Provider Category-I (providing dark fibre, right of way, duct space, tower) except Other Service Providers. 100% Automatic up to 49% Government route beyond 49% 6.2.15.1 Other Condition: FDI up to 100% with 49% on the automatic route and beyond 49% on the government route subject to observance of licensing and security conditions by licensee as well as investors as notified by the Department of Telecommunications (DoT) from time to time, expect Other Service Providers , which are allowed 100% FDI on the automatic route. 6.2.16 Trading 6.2.16.1 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, indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day basis. (d) WT of goods would be permitted among companies of the same group. However, such WT to group companies taken together should not exceed 25% of the total turnover of the wholesale venture (e) WT can be undertaken as per normal business practice, including extending credit facilities subject to applicable regulations. (f) A Wholesale/Cash carry trader cannot open retail shops to sell to the consumer directly. 6.2.16.2 E-commerce activities 100% Automatic 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 Single Brand product retail trading 100% Automatic up to 49% Government route beyond 49% (1) Foreign Investment in Single Brand pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, incorporated in India, which is the recipient of FDI for the purpose of carrying out single-brand product retail trading. (f) Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of single-brand retail trading. (3) Application seeking permission of the Government for FDI exceeding 49% in a company which proposes to undertake single brand retail trading in India would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy Promotion. The applications would specifically indicate the product/product categories which are proposed to be sold under a 'Single Brand'. Any addition to the product/product categories to be sold under 'Single Brand' would require a fresh approval of the Government. In case of FDI up to 49%, the list of products/product categories proposed to be sold except food products would be provided to the RBI. (4) Applications would be processed in the Department of Industrial Policy Promotion, to determine whether the proposed investment satisfies the notified guidelines, before being considered by the FIPB for Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al basis. (v) Self-certification by the company, to ensure compliance of the conditions at serial nos. (ii), (iii) and (iv) above, which could be cross-checked, as and when required. Accordingly, the investors shall maintain accounts, duly certified by statutory auditors. (vi) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census or any other cities as per the decision of the respective State Governments, and may also cover an area of 10 kms around the municipal/urban agglomeration limits of such cities; retail locations will be restricted to conforming areas as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking. (vii) Government will have the first right to procurement of agricultural products. (viii) The above policy is an enabling policy only and the State Governments/Union Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those States/Union Territories which have agreed, or agree in future, to allow FDI in MBRT un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may hold more than 50% of the shareholding in an ARC either by way of FDI or by routing it through an FII/FPI controlled by the single sponsor. (iii) The total shareholding of an individual FII/FPI shall be below 10% of the total paid-up capital. (iv) FIIs/FPIs can invest in the Security Receipts (SRs) issued by ARCs registered with Reserve Bank. FIIs/FPIs can invest up to 74 per cent of each tranche of scheme of SRs. Such investment should be within the FII/FPI limit on corporate bonds prescribed from time to time, and sectoral caps under extant FDI Regulations should also be complied with. (v) All investments would be subject to provisions of section 3(3) (f) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 6.2.17.2 Banking- Private Sector 6.2.17.2.1 Banking- Private Sector 74% including investment by FIIs/FPIs Automatic up to 49% Government route beyond 49% and up to 74% 6.2.17.2.2 Other Conditions: (1) This 74% l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equire approval of RBI and Government as per para 3.6.2 above as applicable. (e) The policies and procedures prescribed from time to time by RBI and other institutions such as SEBI, D/o Company Affairs and IRDA on these matters will continue to apply. (f) RBI guidelines relating to acquisition by purchase or otherwise of shares of a private bank, if such acquisition results in any person owning or controlling 5 per cent or more of the paid up capital of the private bank will apply to non-resident investors as well. (ii) Setting up of a subsidiary by foreign banks (a) Foreign banks will be permitted to either have branches or subsidiaries but not both. (b) Foreign banks regulated by banking supervisory 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 ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cognition for the time being has been granted by the Central Government under Section 6 of the Forward Contracts (Regulation) Act, 1952 (iii) Association means any body of individuals, whether incorporated or not, constituted for the purposes of regulating and controlling the business of the sale or purchase of any goods and commodity derivative. (iv) Forward contract means a contract for the delivery of goods and which is not a ready delivery contract. (v) Commodity derivative means- - a contract for delivery of goods, which is not a ready delivery contract; or - a contract for differences which derives its value from prices or indices of prices of such underlying goods or activities, services, rights, interests and events, as may be notified in consultation with the Forward Markets Commission by the Central Government, but does not include securities. 6.2.17.4.2 Commodity Exchange 49% (FDI + FII/FPI) [Investment by Registered FII/FPI under Portfolio Investment Scheme (PIS) will be limited to 23% and Investment under FDI Scheme limited to 26% ] Automatic 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insurance Brokers (iii) Third Party Administrators (iv) Surveyors and Loss Assessors 26% (FDI+FII/FPI+NRI) Automatic 6.2.17.7.2 Other Conditions: (1) FDI in the Insurance sector, as prescribed in the Insurance Act, 1938, is allowed under the automatic route. (2) This will be subject to the condition that Companies bringing in FDI shall obtain necessary license from the Insurance Regulatory Development Authority for undertaking insurance activities. (3) The provisions of paragraphs 6.2.17.2.2(4)(i) (c) (e), relating to 'Banking-Private Sector', shall be applicable in respect of bank promoted insurance companies. (4) Indian Insurance Company is defined as a company: (a) which is formed and registered under the Companies Act, 1956; (b) in which the aggregate holdings of equity shares by a foreign company either by itself or through its subsidiary companies or its nominees, do not exceed 26% paid-up equity capital of such Indian insurance company; (c) whose sole purpose is to carry on life insurance business or gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 bank can allow the remittance of sale proceeds of a security (net of applicable taxes) to the seller of shares resident outside India, provided the security has been held on repatriation basis, the sale of security has been made in accordance with the prescribed guidelines and NOC/tax clearance certificate from the Income Tax Department has been produced. (iii) Remittance on winding up/liquidation of Companies AD Category-I banks have been allowed to remit winding up proceeds of companies in India, which are under liquidation, subject to payment of applicable taxes. Liquidation may be subject to any order issued by the court winding up the company or the official liquidator in case of voluntary winding up under the provisions of the Companies Act, 1956 . AD Category-I banks shall allow the remittance provided the applicant submits: a. No objection or Tax clearance certificate from Income Tax Department for the remittance. b. Auditor's certificate confirming that all liabilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany 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 Authorized Dealer of the company, who will forward it to the Reserve Bank. The following documents have to be submitted along with the form: (a) A certificate from the Company Secretary of the company certifying that: (A) all the requirements of the Companies Act, 1956 have been complied with; (B) terms and conditions of the Government's approval, if any, have been complied with; (C) the company is eligible to issue shares under these Regulations; and (D) the company has all original certificates issued by authorized dealers in India evidencing receipt of amount of consideration. Note: For companies with paid up capital with less than Rs.5 crore, the above mentioned certificate can be given by a practicing company secretary. (b) A certificate from SEBI registered Merchant Banker or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. (c) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) In case of partial conversion of ECB, the company shall report the converted portion in Form FC-GPR to the Regional Office concerned as well as in Form ECB-2 clearly differentiating the converted portion from the non-converted portion. The words ECB partially converted to equity shall be indicated on top of the Form ECB-2 . In the subsequent months, the outstanding balance of ECB shall be reported in Form ECB-2 to DSIM. 7.2.5 Reporting of FCCB/ADR/GDR Issues The Indian company issuing ADRs/GDRs has to furnish to the Reserve Bank, full details of such issue in the Form enclosed as Annex 9, within 30 days from the date of closing of the issue. The company should also furnish a quarterly return in the Form enclosed as Annex 10, to the Reserve Bank within 15 days of the close of the calendar quarter. The quarterly return has to be submitted till the entire amount raised through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained 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 complaint has been made for being heard before imposing any penalty. (ii) The Central Government may appoint as per the provisions contained in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 , an Appellate Authority/ Appellate Tribunal to hear appeals against the orders of the adjudicating authority. 7.3.3 Compounding Proceedings Under the Foreign Exchange (Compounding Proceedings) Rules 2000 , the Central Government may appoint 'Compounding Authority' an officer either from Enforcement Directorate or Reserve Bank of India for any person contravening any provisions of the FEMA. The Compounding Authorities are authorized to compound the amount involved in the contravention to the Act made by the person. No contravention shall be compounded unless the amount involved in such contravention is quantifiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Investee Company with City, District and State clearly mentioned Telephone Fax e-mail State Registration No. given by Registrar of Companies and Date of Incorporation. Whether existing company or new company (strike off whichever is not applicable) Existing company / New company (Brownfield) (Greenfield) If existing company, give registration number allotted by RBI for FDI, if any 2 Description of the main business activity NIC Code Location of the project and NIC code for the district where the project is located a) Detailed address including Name, City, District and State b) Code for District c) Code for State Percentage of FDI allowed as per FDI policy (Sectoral cap under FDI Policy) State whether FDI is allowed under Automatic Route or Approval Route (strike out whichever is not applicable) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Share Swap 10 Others (please specify) Total (b) Type of security issued No. Nature of security Number Number Face value Premium Issue Price per security Amount of inflow * 01 Equity 02 Compulsorily Convertible Debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o of shares Amount (face Value) Rs % No of Shares Amount (Face Value) Rs. % a) Non-Resident 01 Individuals 02 Companies 03 FIIs 04 FVCIs#* 05 Foreign Trusts 06 Private Equity Funds 07 Pension/ Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-merger or otherwise of an Indian company, duly approved by a court in India. OR d)Shares are issued under ESOP and the conditions regarding this issue have been satisfied 3. Shares have been issued in terms of SIA /FIPB approval No.___________________ dated ____________________ 4 The foreign investment received and reported now will be utilized in compliance with the provision of a Prevention of Money Laundering Act 2002 (PMLA) and Unlawful Activities(Prevention) Act, 1967 (UAPA). We confirm that the investment complies with the provisions of all applicable Rules and Regulations 5. We enclose the following documents in compliance with Paragraph 9 (1) (B) of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000 : (i) A certificate from our Company Secretary certifying that (a) all the requirements of the Companies Act, 1956 have been complied with; (b) terms and conditions of the Government approval, if any, have been complied with; (c) the company is eligible to issue shares under these Regulations; and (d) the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated May 3, 2000. (Name Signature of the Company Secretary) (Seal) FOR USE OF THE RESERVE BANK ONLY: Registration Number for the FC-GPR: R Unique Identification Number allotted to the Company at the time of reporting receipt of remittance R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign national, NRI, FII, FPI) 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 from a resident to a non-resident as given at para 2.2 above. 2.4 After the lock-in period, as applicable above, and subject to FDI Policy provisions, if any, in this regard, the non-resident investor exercising option/right in shares or convertible debentures issued under FDI Scheme shall be eligible to exit without any assured return, as per pricing/valuation guidelines issued by RBI from time to time. 3. Responsibilities / Obligations of the parties All the parties involved in the transaction would have the responsibility to ensure that the relevant regulations under FEMA are complied with and consequent on transfer of shares, the relevant individual limit/sectoral caps/foreign equity participation ceilings as fixed by Government are not breached. Settlement of transactions will be subject to payment of applicable taxes, if any. 4. Method of payment and remittance/credit of sale proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g equity participation of residents and non-residents category-wise (i.e. NRIs/OCBs/foreign nationals/incorporated non-resident entities/FIIs,FPIs) 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 sectoral limits and Pricing Guidelines have been complied with. vii. Undertaking from the FII/sub account to the effect that the individual FII/ Sub account ceiling as prescribed by SEBI has not been breached, till it gets registered as FPI. 5.2. For sale of shares by a person resident outside India i. Consent Letter duly signed by the seller and buyer or their duly appointed agent indicating the details of transfer 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. ii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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, Reserve Bank, Foreign Investment Division, Central Office, Mumbai in soft copy (in MS- Excel) by e-mail to [email protected] 6.5 Shares purchased / sold by FIIs/FPIs under private arrangement will be by debit /credit to their Special Non-Resident Rupee Account. Therefore, the transaction should also be reported in Form LEC by the designated bank of the FII/FPI concerned. 6.6 Shares/convertible debentures of Indian companies purchased under Portfolio Investment Scheme by NRIs, OCBs cannot be transferred, by way of sale under private arrangement. 6.7 On receipt of statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Dealer Category-I bank, with the Regional Office of the Reserve Bank under whose jurisdiction the Registered Office of the company making the declaration is situated, not later than 30 days from the date of receipt of the amount of consideration, as specified in para 9 (I) (A) of Schedule I to Notification No. FEMA 20/2000- RB dated May 3, 2000 ) Permanent Account Number (PAN) of the investee company given by the IT Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 RESERVE BANK OF INDIA Annual Return on Foreign Liabilities and Assets as on 31 March, 20 _ _ (Return to be filled under A.P. (DIR Series) Circular No. dated and submitted to the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... please furnish the share price on closing date of reference period Face Value ( Per Share) Market Value (Per Share) Latest March Ordinary/Equity Share 9. Identification of the reporting Company (in terms of inward FDI) a) Subsidiary of Foreign entity a) Subsidiary of Foreign entity (c) Public Private Partnership (d) Special Purpose Vehicle (d)Other 10. Whether the Company is Asset Management Company (Y/N)? 11. Whether the Company has Technical Foreign collaboration (Y/N)? 11. Whether the Company has Technical Foreign collaboration (Y/N)? Section II (Financial Details) Block 1: Financial Detail of Reporting Company CARE : Information should be reported for all the reference period, i.e. Previous March and Latest March. If reporting period is different from Account Closing Period, then information should be given on internal assessment Block 1A: Total Paid- up Capital of Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 Financial Institutions 11 NRIs/PIO 12 Others non-resident holdings 2.2 Non-Participating Preference share 3.0 Non Resident Equity Participating Preference share capital % Block 1B : Profit and Loss Account (from P/L Account) Item Amount in Rs lakh Previous Year (April - March) Latest Year (April - March) 3.1Profit (+) /Loss (-) before tax (During the Year) 3.2 Profit (+) / Loss (-) after tax (During the Year) 3.3 Dividend (Interim Final Dividend) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under the FDI Scheme in India by Non-resident Direct investors, who were individually holding 10 per cent or more ordinary/equity preference shares of your company on the reporting date] Name of the non- resident Company/ Individual Type of Capital Country of non-resident investor Equity Participating Preference share capital holding per cent as at the end of latest year (%) Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Capital ( = 1.1 - 1.2) 1.0 Equity Capital ( = 1.1 - 1.2) 1.2 Claims on Direct Investor (Reverse investment) 2.0 Other Capital # ( = 2.1 - 2.2 ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Value) 2.0 Debt Securities ( =2.1+2.2) 2.1 Money Market Instruments (original maturity upto1year) 2.2 Bonds and Other instruments (original maturity more than 1year) Please ensure that Non-resident Equity Participating Preference share capital mentioned at item 2.1 of block 1(A) should be reported in either Block-2A or Block-2B or Block-2C at Market Value i.e. sum of equity % in Block-2A, Block-2B Block-2C must be equal to the item 3.0 of Block-1A for the latest march. Section IV (FOREIGN ASSETS) 1. Please use the exchange rate as at end-March Previous FY and end-March Latest FY (as applicable) of reporting year while reporting the foreign Assets in Rs lakh. 2. If overseas company is listed; equity should be valued using share price on closing date of reference period. 3. If overseas company is unlisted, Own Fund of Book Value (OFBV) Method should be used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.0 Other Capital ( =2.1-2.2) # 2.1 Claims on Direct Investment Enterprise 2.2 Liabilities to Direct Investment Enterprise Block-4B: Direct Investment Abroad (Less than 10% equity holding). Please furnish here the market value of outstanding investments in DIE, made by your company under the ODI Scheme, in each of which your company hold less than 10 % equity shares on the reference date. Country of Type of Capital non-resident DIE Equity holding per cent as at the end of latest year (%) Amount in Rs lakh as at the end of Previous March Latest March 1.0 Equity Capital (=1.1-1.2) 1. 1Claims on Direct Investment Enterprise 1.2 Liabilities to Direct Investment Enterprise (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. 3 Currency Deposits 6. 4 Other receivable and payable accounts [e-Form version of this Return is available on the FEMA Forms section under the Forms category on the RBI website (www.rbi.org.in). System Requirement: MS-Excel 2003 and above, with macro enabled] Declaration The foreign investment received and reported have been utilized in compliance with the provision of a Prevention of Money Laundering Act 2002(PMLA) and Unlawful Activities(Prevention) Act, 1967 (UAPA). We confirm that the investment complies with the provisions of all applicable Rules and Regulations Place: Signature and Name of the Authorized person Date: Seal/Stamp of the Company Annex 8 Form FC-TRS Declaration regarding transfer of shares / compulsorily and mandatorily convertible preference shares (CMCPS) / debentures /others by way of sale from resident to non resident / non-resident to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual 2. Company 3. FII 4. FVCI # 5. Foreign Trust 6. Private Equity Fund 7. Pension/ Provident Fund 8. Sovereign Wealth Fund * 9. Partnership / Proprietorship firm 10. Financial Institution 11. NRIs / PIOs 12. others Date and Place of Incorporation Address of the buyer (including e-mail, telephone number. Fax no.) 5 Name of the seller Constitution / Nature of the disinvesting 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)* 9. Partnership/ Proprietorship firm 10. Financial Institution 11. NRIs/PIOs 12. Othersi Date and Place of Incorporation Address of the seller (including e-mail, telephone Number Fax no) 6 Particulars of earlier Reserve Bank / FIPB a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares / compulsorily and mandatorily convertible preference shares / compulsorily and mandatorily convertible debentures/ others 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 / compulsorily and mandatorily convertible debentures/ other from non-resident to resident the declaration has to be signed by the non-resident seller. Certificate by the AD Branch It is certified that the application is complete in all respects. The receipt / payment for the transaction are in accordance with FEMA Regulations / Reserve Bank guidelines. Signature Name and Designation of the Officer Date : Name of the AD Branch AD Branch Code 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Annex - 9 Form DR [Refer to paragraph 4(2) of Schedule I] Return to be filed by an Indian company who has arranged issue of GDR/ADR Instructions: The Form should be completed and submitted to the Reserve Bank of India, Foreign Investment Division, Central Office, Mumbai. 1. Name of the Company : 2. Address of Registered Office : 3. Address for correspondence : 4. Existing Business (Please give the NIC Code of the activity in which the company is predominantly engaged) : 5. Details of the purposes for which GDRs/ADRs have been raised. If funds are deployed for overseas investment, details thereof. : 6. Nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of India and Reserve Bank of India have been complied with. Sd/- Chartered Accountant Sd/- 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 2. Address 3. GDR/ADR issue launched on 4. Total No. of GDRs/ADRs issued 5. Total amount raised 6. Total interest earned till end of quarter 7. Issue expenses and commission etc. B. Amount repatriated 9. Balance kept abroad - Details (i) Banks Deposits (ii) Treasury Bills (iii) Others (please specify) 10. No. of GDRs/ADRs still outstanding 11. Company's share price at the end of the quarter 12. GDRs/ADRs price quoted on overseas stock exchange as at the end of the quarter Certified that the funds raised through GDRs/ADRs have not been invested in stock market or real estate. Sd/- Chartered Accountant Sd/- Authorised Signatory 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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