TMI BlogFEMA (Transfer or Issue Of Security By A Person Resident Outside India) - Sixth Amendment – Amendment In Regulations 2, 5, 10, 12 And Schedules 1, 2, 5, 6 & 7X X X X Extracts X X X X X X X X Extracts X X X X ..... egulations, 2012. (ii) Save as otherwise provided in these Regulations as to the coming into force of any particular provision, the provisions of these Regulations shall come into force from the date of publication of this notification. Amendment to Regulation 2 2. In the principal Regulations, in Regulation 2 , after clause (viii), the following new clause shall be inserted and shall be deemed to have been inserted with effect from the 9th day of August, 2011, namely; (viiia) 'Qualified Foreign Investor' (QFI) means (a) during the period from 9th day of August, 2011 to 15th day of July, 2012, a person who satisfied the following criteria at the relevant time, (i) resident of a country, that is compliant with the Financial Action Task Force (FATF) standards and is a signatory to the IOSCO's Multilateral Memorandum of Understanding (MMoU); and (ii) satisfied the KYC requirements stipulated by SEBI: Provided that such a person is not registered with SEBI as a Foreign Institutional Investor (FII) or Foreign Venture Capital Investor (FVCI). (b) With effect from 16th day of July, 2012, a person who satisfies the following criteria at the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal Regulation, in Regulation 10, (1) in the heading, for the opening words Prior permission , the word Permission shall be substituted and shall be deemed to have been substituted, with effect from 4th day of November 2011 (2) in sub-regulation A, for clauses (b) and (c), the following shall be substituted and shall be deemed to have been substituted with effect from the 4th day of November, 2011, namely: (b) any shares or convertible debentures of an Indian company under the Foreign Direct Investment Scheme, whose activities fall under Annex B to Schedule 1, shall, subject to sectoral limits specified therein, transfer such shares or convertible debentures without prior approval of the Reserve Bank if the same is by way of sale, subject to the following: (i) that the parties concerned adhere to the pricing guidelines, documentation and reporting requirements for such transfers, stipulated by the Reserve Bank from time to time (ii) where the transfer of shares or convertible debentures requires the prior approval of the Foreign Investment Promotion Board (FIPB) as per the extant Foreign Direct Investment (FDI) policy: (a) the requisite approval of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) above. (3) in sub-regulation A, after clause (c) the following shall be inserted and shall be deemed to have been inserted with effect from the 22nd day of April 2009, namely : (d) any shares or convertible debentures by way of sale, shall make an application to the Reserve Bank for its approval if the non-resident acquirer proposes deferment of payment of the amount of consideration (4) in sub-regulation B, after clause (2), the following shall be inserted and shall be deemed to have been inserted with effect from 4th day of November 2011, namely: (3) Where pricing guidelines under the Foreign Exchange Management Act, (FEMA), 1999 are not complied with, a person resident outside India, may transfer shares or convertible debentures of an Indian Company, by way of sale, to a person resident in India, without the prior permission of the Reserve Bank, subject to the following (a) The original and resultant investment are in conformity with the requirements of Schedule 1, other than pricing guidelines; and (b) The pricing for the transaction is compliant with the applicable SEBI regulations/guidelines; and (c) Chartered Accountants Certificate to the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt (in Indian Rupees) maintained in India with an AD bank in accordance with Foreign Exchange Management (Deposit) Regulations, 2000. (b) in the Explanation, after the words as given elsewhere in the Schedule , the words import payables of capital goods by units in Special Economic Zones , shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2003. (c) in the First Proviso, for the words debit to NRE/FCNR(B) account the words debit to NRE/FCNR(B)/Escrow account shall be substituted and shall be deemed to have been substituted with effect from the 2nd day of May, 2011. (IV) In paragraph 9, (a) for sub-paragraph (1) the following shall be substituted and shall be deemed to have been substituted with effect from the 30th day of May 2008, namely: 9. Reporting of issuance of shares of Indian company. (1) An Indian company issuing shares or convertible debentures in accordance with these Regulations shall submit through AD bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the Registered office of the company operates, (A) not later than 30 days from the date of receipt of the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer of shares of Indian company. (i) In case of transfer of shares or convertible debentures of an Indian company by way of sale from a person resident in India to a person resident outside India or vice versa, the transferor/transferee, resident in India, shall submit to the AD bank a report in the form FC-TRS specified in Annex F to this Schedule, within 60 days from the date of receipt or payment of the amount of consideration. The onus of submission of the form FC-TRS within the specified time shall be on the transferor/transferee, resident in India. (ii) Reserve Bank may, by notification, modify from time to time the Form FC-TRS specified in Annex F to this Schedule. (iii) The IBD/FED/nodal branch of the AD bank shall submit a consolidated monthly statement in respect of all such transactions reported by its branches, to the Reserve Bank in the form and manner stipulated by Reserve Bank, Foreign Exchange Department, Central Office, from time to time. (iv) The sale consideration in respect of shares or convertible debentures remitted into India through normal banking channels, shall be subjected to a KYC check by the remittance receiving AD bank at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) In paragraph 1, the following shall be substituted , namely: Permission to Foreign Institutional Investors for purchase of securities. (1) A registered Foreign Institutional Investor (FII) may purchase, on repatriation basis, either directly from the issuer of such securities or through a registered stock broker on a recognized Stock Exchange in India the following securities, subject to the terms and conditions as specified by the SEBI and the Reserve Bank from time to time: (a) dated Government securities/treasury bills; (b) listed non-convertible debentures/bonds issued by an Indian company; (c) commercial papers issued by an Indian company; (d) units of domestic mutual funds; (e) Security Receipts issued by Asset Reconstruction Companies provided that the total holding by a single FII in each tranche of scheme of Security Receipts shall not exceed 10 per cent of the issue and the total holdings of all FIIs put together shall not exceed 49 per cent of the paid up value of each tranche of scheme of Security Receipts issued by the Asset Reconstruction Companies; (f) Perpetual Debt instruments eligible for inclusion as Tier I capital and Debt capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exchange traded derivative contracts as specified in sub-Regulation 6 of Regulation 5. (ii) in paragraph 2, in sub-paragraph 1(A), after clause (iii), the following shall be inserted and shall be deemed to have been inserted with effect from the 22nd day of November 2011, namely, (iv) bonds/units issued by Infrastructure Debt Funds, subject to sock-in period and residual maturity as stipulated by the Reserve Bank and SEBI from time to time, provided that a Non-Resident Indian may trade such bonds/units amongst the eligible non-resident investors for Infrastructure Debt Funds within the lock-in period. (iii) after paragraph 1, the following shall be inserted and shall be deemed to have been inserted with effect from the 9th day of August 2011, namely: Permission for Qualified Foreign investors for purchase of securities 1A (i) A QFI may purchase on repatriation basis, subject to the terms and conditions stipulated by the SEBI and the Reserve Bank in this regard from time to time in the following rupee denominated units of: (a) equity schemes of SEBI registered domestic mutual funds, (b) debt scheme of SEBI registered domestic mutual funds which invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be deemed to have been inserted with effect from the 22nd day of November 2011. Permission to Other Non-Resident investors for purchase of securities 1B (i) Long term investors like Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and High Networth Individuals which are registered with SEBI as eligible non-resident investors in Infrastructure Debt Funds may purchase on repatriation basis Rupee denominated bonds/units issued by Infrastructure Debt Funds subject to lock-in period and residual maturity as stipulated by the Reserve Bank and SEBI from time to time provided that aforementioned investors may trade such bonds/units amongst the eligible non-resident investors for Infrastructure Debt Funds within the lock-in period . (vii) in paragraph 1B, after clause (i), the following shall be inserted and shall be deemed to have been inserted with effect from the 25th day of June 2012. (ii) Long term investors like Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks registered with SEBI may purchase, on repatriation basis, dated Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n equity shares of Indian companies which are offered to public in India in terms of the relevant and applicable SEBI guidelines/regulations. (iii) equity shares by way of rights shares, bonus shares or equity shares on account of stock split/consolidation or equity shares on account of amalgamation, demerger or such corporate actions. (b) Sale : QFIs shall be allowed to sell the equity shares so acquired by way of sale (i) Through recognized brokers on recognized stock exchanges in India; or (ii) In an open offer in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; or (iii) In an open offer in accordance with the SEBI (Delisting of Securities) Guidelines, 2009; or (iv) Through buyback of shares by a listed Indian company in accordance with the SEBI (Buyback) Regulations, 1998. Pricing 3. The pricing of all eligible transactions and investment in all eligible instruments by QFIs under this scheme shall be in accordance with the relevant and applicable SEBI guidelines only. Mode of payment/repatriation 4. For QFI investments under this scheme open a single non-interest bearing Rupee Account with an AD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 8. In addition to the reporting to SEBI as may be prescribed by them, QDPs and AD Category-I banks (maintaining QFI accounts) will also ensure reporting to the Reserve Bank of India in a manner and format as prescribed by the Reserve Bank of India from time to time *************************** Annex A Sectors Prohibited for FDI 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 Farm Houses (g) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes (h) Activities/sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). Note: Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business and Gambling and Betting activities. Annex B Sector-specific policy for foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from time to time. (iv) Undertaking of business activities involving the use of genetically engineered cells and material shall be subject to 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: '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 protected cultivation under green houses, net houses, poly houses or any other improved infrastructure facilities where microclimatic conditions are regulated anthropogenically. In case of Animal Husbandry, scope of the term 'under controlled Conditions' covers - Rearing of animals under intensive farming systems with stall-feeding. Intensive, farming system will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject 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 3.3 Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities 3.3.1 Mining and mineral separation of titanium bearing minerals ores, its value addition and integrated activities subject to sectoral regulations and the Mines and Minerals (Development and Regulation) Act 1957 100% Government 3.3.2 Other conditions: India has large reserves of beach sand minerals in the coastal stretches around the country. Titanium bearing minerals viz. Ilmenite, rutile and leucoxene, and Zirconium bearing minerals including zircon are some of the beach sand minerals which have been classified as prescribed substances under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chieved, the conditions prescribed at (i) (A) above shall be deemed to be fulfilled. 4 Petroleum Natural Gas 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 the private sector, subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies 100% Automatic 4.2 Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. 49% Government MANUFACTURING 5 Manufacture of items reserved for product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven to original equipment manufacturers or design establishments, and companies having a good track record of past supplies to Armed Forces, Space and Atomic energy sections and having an established R D base. (vi) There would be no minimum capitalization for the FDI. A proper assessment, however, needs to be done by the management of the applicant company depending upon the product and the technology. The licensing authority would satisfy itself about the adequacy of the net worth of the non-resident investor taking into account the category of weapons and equipment that are proposed to be manufactured. (vii) There would be a three-year lock-in period for transfer of equity from one non-resident investor to another non-resident investor (including NRIs erstwhile OCBs with 60% or more NRI stake) and such transfer would be subject to prior approval of the Government. (viii) The Ministry of Defence is not in a position to give purchase guarantee for products to be manufactured. However, the planned acquisition programme for such equipment and overall requirements would be made available to the extent possible. (ix)The capacity norms for production will be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime frame of 10 weeks from the date of acknowledgement. SERVICES SECTOR INFORMATION SERVICES 7. Broadcasting 7.1 Broadcasting Carriage Services 7.1.1 (1) Teleports (setting up of up-linking HUBs/Teleports); (2) Direct to Home (DTH); (3) Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability); (4) Mobile TV; (5) Headend-in-the Sky Broadcasting Service (HITS) 74% Automatic up to 49% Government route beyond 49% and up to 74% 7.1.2 Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalization and addressability and Local Cable Operators (LCOs). 49% Automatic 7.2 Broadcasting Content Services 7.2.1 Terrestrial Broadcasting FM (FM Radio), subject to such terms and conditions, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from time to time, shall require to be security cleared. In case of the appointment of Directors on the Board of the Company and such key executives like Managing Director/Chief Executive Officer, Chief Financial Officer (CFO), Chief Security Officer (CSO), Chief Technical Officer (CTO), Chief Operating Officer (COO), etc., as may be specified by the Ministry of Information and Broadcasting from time to time, prior permission of the Ministry of Information and Broadcasting shall have to be obtained. It shall be obligatory on the part of the company to also take prior permission from the Ministry of Information and Broadcasting before effecting any change in the Board of Directors. (iv) The Company shall be required to obtain security clearance of all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract, and consultancy or in any other capacity for installation, maintenance, operation or any other services prior to their deployment. The security clearance shall be required to be obtained every two years. Permission vis-a-vis Security Clearance (v) The permission shall be subject to permission holder/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government or its authorized representative, provide necessary facilities for continuous monitoring for any particular aspect of the company's activities and operations. Continuous monitoring, however, will be confined only to security related aspects, including screening of objectionable content. (xiv) The inspection will ordinarily be carried out by the Government of India, Ministry of Information Broadcasting or its authorized representative after reasonable notice, except in circumstances where giving such a notice will defeat the very purpose of the inspection. (xv) The company shall submit such information with respect to its services as may be required by the Government or its authorized representative, in the format as may be required, from time to time. (xvi) The permission holder/licensee shall be liable to furnish the Government of India or its authorized representative or TRAI or its authorized representative, such reports, accounts, estimates, returns or 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 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on 4.12.2008. 8.3 Publishing/printing of Scientific and Technical Magazines/specialty journals/periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. 100% Government 8.4 Publication of facsimile edition of foreign newspapers 100% Government 8.4.1 Other Conditions: (i) FDI should be made by the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India (ii) Publication of facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the provisions of the Companies Act, 1956. (iii) Publication of facsimile edition of foreign newspaper would also be 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 Informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Civil Aviation; (x) Seaplane means an aeroplane capable normally of taking off from and alighting solely on water; (xi) Ground Handling means (i) ramp handling, (ii) traffic handling both of which shall include the activities as specified by the Ministry of Civil Aviation through the Aeronautical Information Circulars from time to time, and (iii) any other activity specified by the Central Government to be a part of either ramp handling or traffic handling. 9.2 Airports (a) Greenfield projects 100% Automatic (b) Existing projects 100% Automatic upto 74% Government route beyond 74% 9.3 2 Air Transport Services (1) Scheduled Air Transport Service/Domestic Scheduled Passenger Airline 49% FDI (100% for NRIs) Automatic (2) Non-Scheduled Air Transport Service 74% FDI (100% for NRIs) Automatic upt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Other services under Civil Aviation sector (1) Ground Handling Services subject to sectoral regulations and security clearance 74% FDI (100% for NRIs) Automatic upto 49 Government route beyond 49% and up to 74% (2) Maintenance and Repair organizations; flying training institutes; and technical training institutions 100% Automatic 10 Courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act, 1898 and excluding the activity relating to the distribution of letters. 100% Government 11 Construction Development: Townships, Housing, Built-up infrastructure 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plans, developing internal and peripheral areas and other infrastructure facilities, payment of development, external development and other charges and complying with all other requirements as prescribed under applicable rules/bye-laws/regulations of the State Government/Municipal/Local Body concerned. (7) The State Government/Municipal/Local Body concerned, which approves the building/development plans, would monitor compliance of the above conditions by the developer. Note : (i) The conditions at (1) to (4) above would not apply to Hotels Tourism, Hospitals, Special Economic Zones (SEZs), Education Sector, Old age Homes and investment by NRIs. (ii) FDI is not allowed in Real Estate Business. 12 Industrial Parks - new and existing 100% Automatic 12.1 (i) Industrial Park is a project in which quality infrastructure in the form of plots of developed land or built up space or a combination with common facilities, is developed and made available to all the allottee units for the purposes of industrial activity. (ii) Infrastructure refers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l allocable area. 13 Satellites - Establishment and operation 13.1 Satellites - Establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO 74% Government 14 Private Security Agencies 49% Government 15 Telecom Services Investment caps and other conditions for specified services are given below. However, licensing and security requirements notified by the Department of Telecommunications will need to be complied with for all services. 15.1 (i) Telecom services 74% Automatic upto 49% Government route beyond 49% and upto 74% 15.1.1 Other conditions: (1) General Conditions: (i) This is applicable in case of Basic, Cellular, Unified Access Services, National/International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial Officer (CFO), if held by foreign nationals, would require security clearance by Ministry of Home Affairs (MHA). Security clearance shall be required on yearly basis. In case something adverse is found during the security clearance, the direction of MHA shall be binding on the licensee. (viii) The Company shall not transfer the following to any person/place outside India:- (a) Any accounting information relating to subscriber (except for international roaming/billing) (Note: it does not restrict a statutorily required disclosure of financial nature); and (b) User information (except pertaining to foreign subscribers using Indian Operator's network while roaming). (ix) The Company must provide traceable identity of their subscribers. However, in case of providing service to roaming subscriber of foreign companies, the Indian Company shall endeavour to obtain traceable identity of roaming subscribers from the foreign company as a part of its roaming agreement. (x) On request of the licensor or any other agency authorised by the licensor, the telecom service provider should be able to provide the geographical location of any subscriber (B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tele-marketing, tele-education, etc, and are registered with DoT as OSP. Such OSPs operate the service using the telecom infrastructure provided by licensed telecom service providers and 100% FDI is permitted for OSPs. As the security conditions are applicable to all licensed telecom service providers, the security conditions mentioned above shall not be separately enforced on OSPs. (3) The above General Conditions and Security Conditions shall also be applicable to the companies operating telecom service(s) with the FDI cap of 49%. (4) All the telecom service providers shall submit a compliance report on the aforesaid conditions to the licensor on 1st day of July and January every year. 15.2 (a) ISP with gateways (b) ISP's not providing gateways i.e. without gateways (both for satellite and marine cables) Note : The new guidelines of August 24, 2007 Department of Telecommunications provide for new ISP licenses with FDI up to 74%. (c) Radio paging (d) End-to-End bandwidth 74% Automatic upto 49 Government route beyond 49% and upto 74% 15.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Authority, reflecting that the entity/person holding the license/registration certificate/membership certificate, as the case may be, is itself/himself/herself engaged in a business involving commercial activity; or (iii) Entities holding permits/license etc. for undertaking retail trade (like tehbazari and similar license for hawkers) from Government Authorities/Local Self Government Bodies; or (iv) Institutions having certificate of incorporation or registration as a society or registration as public trust for their self-consumption. Note: An Entity, to whom WT is made, may fulfil any one of the 4 conditions. (c) Full records indicating all the details of such sales like name of entity, kind of entity, registration/license/permit etc. number, amount of sale etc. should be maintained on a day to 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 turnovers the wholesale venture (e) WT can be undertaken as per normal business practice, including extending credit facilities subject to applicable regulations. (f) A Wholesal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investing entity shall provide evidence to this effect at the time of seeking approval, including a copy of the licensing/franchise/sub-licence agreement, specifically indicating compliance with the above condition. (e) In respect of proposals involving FDI beyond 51%, sourcing of 30% of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen in all sectors. The quantum of domestic sourcing will be self-certified by the company, to be subsequently checked, by statutory auditors from the duly certified accounts which the company will be required to maintain. This procurement requirement would have to be met, in the first instance, as an average of five years; total value of the goods purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual basis. For the purpose of ascertaining the sourcing requirement, the relevant entity would be the company, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is exceeded, the industry shall not qualify as a 'small industry' for this purpose. This procurement requirement would have to be met, in the first instance, as an average of five years' total value of the manufactured/processed products purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual 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 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; In States/Union Territories not having cities with population of more than 10 lakh as per 2011 Censu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). 49% of paid-up capital of ARC Government 17.2 Other conditions: (i) Persons resident outside India, other than Foreign Institutional Investors (FIIs), can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank only under the Government Route. Such investments have to be strictly in the nature of FDI. Investments by Flls are not permitted in the equity capital of ARCs. (ii) However, FIIs registered with SEBI can invest in the Security Receipts (SRs) issued by ARCs registered with Reserve Bank. FIIs can invest up to 49 per cent of each tranche of scheme of SRs, subject to the condition that investment by a single FII in each tranche of SRs shall not exceed 10 per cent of the 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 Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to the Reserve Bank of India (RBI) for consideration in consultation with the Insurance Regulatory and Development Authority (IRDA) in order to ensure that the 26 per cent limit of foreign shareholding applicable for the insurance sector is not being breached. (d) Transfer of shares under FDI from residents to non-residents will continue to require approval of RBI and Government as per para 3.6.2 of DIPP's Circular 1 of 2012 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 criteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modity Exchanges. 2. For the purposes of this Chapter, (i) Commodity Exchange is a recognized association under the provisions of the Forward Contracts (Regulation) Act, 1952, as amended from time to time, to provide exchange platform for trading in forward contracts in commodities. (ii) recognized association means an association to which recognition for the time being has been granted by the Central Government under section 6 of the. Forward Contracts (Regulation) Act, 1952 (iii) Association means anybody 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 Forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II can invest only through purchases in the secondary market 23 Insurance 23.1 Insurance 26% Automatic 23.2 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. 24 Non-Banking Finance Companies (NBFC) 24.1 Foreign investment in NBFC is allowed under the automatic route in only the following activities: (i) Merchant Banking (ii) Under Writing (iii) Portfolio Management Services (iv) Investment Advisory Services (v) Financial Consultancy (vi) Stock Broking (vii) Asset Management (viii) Venture Capital (ix) Custodian Services (x) Factoring (xi) Credit Rating Agencies (xii) Leasing F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cards, charge cards, debit cards, stored value cards, smart card, value added cards etc. (ii) Leasing Finance covers only financial leases and not operating leases. (2) The NBFC will have to comply with the guidelines of the relevant regulator/s, as applicable 25 Pharmaceuticals 25.1 Greenfield 100% Automatic 25.2 Existing Companies 100% Government 26 Power Exchanges 26.1 Power Exchanges under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 49% (FDI Fll) Government (for FDI) 26.2 Other conditions: (i) Such foreign investment would be subject to an FDI limit of 26 per cent and an FII limit of 23 per cent of the paid-up capital; (ii) FII investments would be permitted under the automatic route and FDI would be permitted under the government approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Address Country 3. Date of receipt of funds 4. Amount In foreign currency In Indian Rupees 5. Whether investment is under Automatic Route or Approval Route Automatic Route / Approval Route If Approval Route, give details (ref. no. of approval and date) 6. Name of the AD through whom the remittance is received 7. Address of the AD A Copy of the FI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers 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 shares/ convertible debentures/others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution/Nature of the investing Entity [Specify whether 1. Individual 2. Company 3. FN 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/PIO 12. Others (please specify)] Date of incorporation 4 Particulars of Shares/Convertible Debentures/others Issued (a) Nature and date of issue Nature of issue Date of issue Number of shares/convertible debentures/others 01 IPO/FPO 02 Preferential allotment/private placement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 Others (please specify) Total (i) In case the issue price is greater than the face value please give breakup of the premium received. (ii) *In case the issue is against conversion of ECB or royalty or against import of capital goods units in SEZ, a Chartered Accountant's Certificate certifying the amount outstanding on the date of conversion (c) Break up of premium Amount Control Premium Non-competition fee Others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 Pension/Provident Funds 08 Sovereign Wealth Funds 09 Partnership/Proprietorship Firms 10 Financial Institutions 11 NRIs/PIO 12 Others (please specify) Sub-total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB, dated May 3, 2000. (ii) A certificate from SEBI registered Merchant Banker/Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. 6. Unique Identification Numbers given for all the remittances received as consideration for issue of shares/convertible debentures/others (details as above), by Reserve Bank. R R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ANNEX-E 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 Department of Statistics and Information Management, RBI, Mumbai) Please read the guidelines/definitions carefully before filling-in the Return (Respondents are encouraged to submit the e-form of this return, which can be downloaded from the FEMA Forms section under the 'Forms' category on the RBI website www rbi.org.in. The e-form is easy-to-fill with user guidance and consistency checks. The duly filled-in e-form should be emailed to fla@rbi.org.in 1. Name and Address of the Indian Company: Name of the Company: Address: City: State: Pin: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If yes, please specify the Company's old Name Company's old Name:_________ Effective Date (DD/MM/YYYY) 8. Whether the Company is listed (Y/N)? If yes, please furnish the share price on closing date of reference period Face Value (Per Share) Market Value (Per Share) Latest March Previous March Latest March Ordinary Equity Share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.0 Non-resident Holdings (at face value in Rs. lakh) 2.1 Equity Participating Preference share capital (Sum of item-1 to item-12) 1. Individuals 2. Companies 3. Foreign Institutional Investors (FIIs) 4. Foreign Venture Capital Investors (FVCIs) 5. Foreign Trusts 6. Private Equity Funds 7. Pension Provident Funds 8. Sovereign Wealth Fund (SWF) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.4 Net worth of Company ( = 1.1 + 4.3) Block 1D: Sales and Purchase made during the Financial Year Note : To be filled in by company where single foreign direct investor holding is equity (i.e. If reporting Indian company is subsidiary of Foreign company). Item Amount in Rs. lakh (During the year) Previous March Latest March 5.1 Domestic Sales 5.2 Exports 5.3 Total Sales ( = 5.1 + 5.2) 5.4 Domestic purchase 5.5 Imports 5.6 Total Purchase ( = 5.4 + 5.5) SECTION III (FOREIGN LIABILITIES) CARE: Information should be reported for all the reference period, i.e. Previous March and Latest March. If reporting period is different from Account Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDI) scheme (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 10 than per cent ordinary/equity and participating preference shares of your company on the reporting date]. Country-wise consolidated information should he provided below : 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) 1.1 Liabilities to Direct Investor 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 ..... d 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 valuation of equity investment. Block-3: Equity Capital, Reserves Surplus of Direct Investment Enterprise (DIE) Abroad (10% or more equity holding by Indian Reporting company) [Please report here the total equity of DIE, equity held by your company, reserves (excluding P L Account) and P L Account of those DIEs in each of which your company hold 10% or more equity shares on the reference date.] Name of the DIE Item Currency Amount in Foreign Currency as at the end of (in actual) Previous March Latest March 3.1 Total Equity of DIE 3.2 Equity of DIE held by you 3.3 Reserves (Excluding P L Account) 3.4 Profit and Loss Account balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere 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. Type of Capital Country of 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) 1.1 Claims on Direct Investment Enterprise 1.2 Liabilities to Direct Investment Enterprise (Reverse investment) 2.0 Other Capital (=2.1 -2.2) # 2.1 Claims on Direct Investment Enterprise 2.2 Liabilities to Direct Investment Enterprise Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2 Loans 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 F Form FC-TRS Declaration regarding transfer of shares/compulsorily and mandatorily convertible preference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyer Constitution/Nature of the investing Entity Specify whether 1. Individual 2. Company 3. FII 4. FVCI 5. Foreign Trust 6. Private Equity Fund 7. Pension/Provident Fund 8. Sovereign Wealth Fund (SWF ○ ) 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. Others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquire the shares compulsorily and mandatorily convertible preference shares/debentures/other of the company in terms of the FDI Policy. If is not a transfer relating to shares compulsorily and mandatorily convertible preference shares/debentures/others 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/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 transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution/ Nature of Business of the Seller No. of Shares transferred Face Value Sale price per share Total Inflow (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Outflow - Transfer from non-resident to resident [Amount in Rs.] Date of Transaction Name of the Company Activity NIC Code Name of the Seller Constitution/ Nature of Business of the Seller Name of the Buyer Constitution/ Nature of Business of the Buyer No of shares transferred Face Value Sale Price per share Total Inflow (1) (2) (3) (4) (5) (6) (7) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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