TMI BlogCONSOLIDATED FDI POLICY EFFECTIVE FROM 1-10-2011.X X X X Extracts X X X X X X X X Extracts X X X X ..... tes/ Press Releases which are notified by the Reserve Bank of India as amendments to the Foreign Exchange Management (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000 ( notification No.FEMA 20/2000-RB dated May 3, 2000). These notifications take effect from the date of issue of Press Notes/ Press Releases, unless specified otherwise therein. In case of any conflict, the relevant FEMA Notification will prevail. The procedural instructions are issued by the Reserve Bank of India vide A.P.Dir. (series) Circulars. The regulatory framework over a period of time thus consists of Acts, Regulations, Press Notes, Press Releases, Clarifications, etc. 1.1.3 The present consolidation subsumes and supersedes all Press Notes/Press Releases/Clarifications/ Circulars issued by DIPP, which were in force as on September 30, 2011, and reflects the FDI Policy as on October 1, 2011. This Circular accordingly will take effect from October 1, 2011. Reference to any statute or legislation made in this Circular shall include modifications, amendments or re-enactments thereof. 1.1.4 Notwithstanding the rescission of earlier Press Notes/Press Releases/Clarificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company held as deposit by a Custodian bank in India. DRs are traded on Stock Exchanges in the US, Singapore, Luxembourg, etc. DRs listed and traded in the US markets are known as American Depository Receipts (ADRs) and those listed and traded anywhere/elsewhere are known as Global Depository Receipts (GDRs). 2.1.9 'Erstwhile Overseas Corporate Body' (OCB) means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty percent by non-resident Indian and includes overseas trust in which not less than sixty percent beneficial interest is held by non-resident Indian directly or indirectly but irrevocably and which was in existence on the date of commencement of the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003 (the Regulations) and immediately prior to such commencement was eligible to undertake transactions pursuant to the general permission granted under the Regulations. 2.1.10 'Foreign Currency Convertible Bond'(FCCB) means a bond issued by an Indian company expressed in foreign currency, the principal and interest of which is payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are specified in the negative list by the SEBI, with approval of Central Government, by notification in the Official Gazette in this behalf. 2.1.20 'Investing Company' means an Indian Company holding only investments in other Indian company/ (ies), directly or indirectly, other than for trading of such holdings/securities. 2.1.21 'Investment on repatriable basis' means investment, the sale proceeds of which, net of taxes, are eligible to be repatriated out of India and the expression 'investment on non-repatriable basis' shall be construed accordingly. 2.1.22 'Joint Venture' (JV) means an Indian entity incorporated in accordance with the laws and regulations in India in whose capital a non-resident entity makes an investment. 2.1.23 'Non resident entity' means a 'person resident outside India' as defined under FEMA. 2.1.24 'Non Resident Indian' (NRI) means an individual resident outside India who is a citizen of India or is a person of Indian origin. 2.1.25 A company is considered as 'Owned' by resident Indian citizens if more than 50% of the capital in it is beneficially owned by resident Indian citizens and / or Indian companies, which are ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans the Reserve Bank of India established under the Reserve Bank of India Act, 1934. 2.1.32 'Resident Entity' means 'Person resident in India' excluding an individual. 2.1.33 'Resident Indian Citizen' shall be interpreted in line with the definition of 'person resident in India' as per FEMA, 1999, read in conjunction with the Indian Citizenship Act, 1955. 2.1.34 'SEBI' means the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992. 2.1.35 'SEZ' means a Special Economic Zone as defined in Special Economic Zone Act, 2005. 2.1.36 'SIA' means Secretariat of Industrial Assistance in DIPP, Ministry of Commerce Industry, Government of India. 2.1.37 'Transferable Development Rights' (TDR) means certificates issued in respect of category of land acquired for public purposes either by the Central or State Government in consideration of surrender of land by the owner without monetary compensation, which are transferable in part or whole. 2.1.38 'Venture Capital Fund' (VCF) means a Fund established in the form of a Trust, a company including a body corporate and registered under Securities and Exchange Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( iii ) A daily statement in respect of all transactions (except derivative trade) has to be submitted by the custodian bank in floppy / soft copy in the prescribed format directly to RBI. 3.1.5 Only SEBI registered FII and NRIs as per Schedules 2 and 3 respectively of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000, can invest/trade through a registered broker in the capital of Indian Companies on recognised Indian Stock Exchanges. 3.1.6 A SEBI registered Foreign Venture Capital Investor (FVCI) may contribute up to 100% of the capital of an Indian Venture Capital Undertaking (IVCU) and may also set up a domestic asset management company to manage the fund. All such investments can be made under the automatic route in terms of Schedule 6 to Notification No. FEMA 20. A SEBI registered FVCI can invest in a domestic venture capital fund registered under the SEBI (Venture Capital Fund) Regulations, 1996. Such investments would also be subject to the extant FEMA regulations and extant FDI policy including sectoral caps, etc. SEBI registered FVCIs are also allowed to invest under the FDI Scheme, as non-resident ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... norms, etc. 3.1.4 FDI in Trusts: FDI in Trusts other than VCF is not permitted. 3.2.5 FDI in Limited Liability Partnerships (LLPs) : FDI in LLPs is permitted, subject to the following conditions: ( a ) FDI will be allowed, through the Government approval route, only in LLPs operating in sectors/activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions (such as 'Non Banking Finance Companies' or 'Development of Townships, Housing, Built-up infrastructure and Construction-development projects' etc.). ( b ) LLPs with FDI will not be allowed to operate in agricultural/plantation activity, print media or real estate business. ( c ) An Indian company, having FDI, will be permitted to make downstream investment in an LLP only if both-the company, as well as the LLP- are operating in sectors where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions. ( d ) LLPs with FDI will not be eligible to make any downstream investments. ( e ) Foreign Capital participation in LLPs will be allowed only by way of cash consideration, received by inward remittance, through n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received on or after May 1, 2007 are considered as debt. Accordingly all norms applicable for ECBs relating to eligible borrowers, recognized lenders, amount and maturity, end-use stipulations, etc. shall apply. Since these instruments would be denominated in rupees, the rupee interest rate will be based on the swap equivalent of London Interbank Offered Rate (LIBOR) plus the spread as permissible for ECBs of corresponding maturity. 3.3.2.1 Only equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares, with no in-built options of any type, would qualify as eligible instruments for FDI. Equity instruments issued/transferred to nonresidents having in-built options or supported by options sold by third parties would lose their equity character and such instruments would have to comply with the extant ECB guidelines. 3.3.3 The inward remittance received by the Indian company vide issuance of DRs and FCCBs are treated as FDI and counted towards FDI. 3.3.4 Issue of shares by Indian Companies under FCCB/ADR/GDR ( i ) Indian companies can raise foreign currency resources abroad throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Scheme shall be as per the provisions of Companies Act, 1956 and in a manner in which restrictions on voting rights imposed on ADR/GDR issues shall be consistent with the Company Law provisions. Voting rights in the case of banking companies will continue to be in terms of the provisions of the Banking Regulation Act, 1949 and the instructions issued by the Reserve Bank from time to time, as applicable to all shareholders exercising voting rights. ( vii ) Erstwhile OCBs who are not eligible to invest in India and entities prohibited from buying, selling or dealing in securities by SEBI will not be eligible to subscribe to ADRs/ GDRs issued by Indian companies. ( viii )The pricing of ADR / GDR issues should be made at a price determined under the provisions of the Scheme of issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Government of India and directions issued by the Reserve Bank, from time to time. ( ix ) The pricing of sponsored ADRs/GDRs would be determined under the provisions of the Scheme of issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the FDI Policy, shall not be less than - a . the price worked out in accordance with the SEBI guidelines, as applicable, where the shares of the company is listed on any recognised stock exchange in India; b . the fair valuation of shares done by a SEBI registered Category - I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method, where the shares of the company is not listed on any recognised stock exchange in India ; and c . the price as applicable to transfer of shares from resident to non-resident as per the pricing guidelines laid down by the Reserve Bank from time to time, where the issue of shares is on preferential allotment. 3.4.3 Foreign Currency Account Indian companies which are eligible to issue shares to persons resident outside India under the FDI Policy may be allowed to retain the share subscription amount in a Foreign Currency Account, with the prior approval of RBI. 3.4.4 Transfer of shares and convertible debentures ( i ) Subject to FDI sectoral policy (relating to sectoral caps and entry routes), applicable laws and other conditionalities including security conditions, non-resident investors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction Companies (ARCs), Credit Information Companies (CICs), Insurance, infrastructure companies in the securities market such as Stock Exchanges, Clearing Corporations, and Depositories, Commodity Exchanges, etc.). ( h ) The Form FC-TRS should be submitted to the AD Category-I Bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. ( ii ) The sale consideration in respect of equity instruments purchased by a person resident outside India, remitted into India through normal banking channels, shall be subjected to a Know Your Customer (KYC) check by the remittance receiving AD Category-I bank at the time of receipt of funds. In case, the remittance receiving AD Category-I bank is different from the AD Category-I bank handling the transfer transaction, the KYC check should be carried out by the remittance receiving bank and the KYC report be submitted by the customer to the AD Category-I bank carrying out the transaction along with the Form FC-TRS. ( iii ) Escrow: AD Category-I banks have been given general permission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank would be required, as hitherto. Further, in case approval is granted for a transaction, the same should be reported in Form FC-TRS, to an AD Category-I bank for necessary due diligence, within 60 days from the date of receipt of the full and final amount of consideration. ( ii ) The transfer of capital instruments of companies engaged in sectors falling under the Government Route from residents to non-residents by way of sale or otherwise requires Government approval followed by permission from RBI. ( iii ) A person resident in India, who intends to transfer any capital instrument, by way of gift to a person resident outside India, has to obtain prior approval from Reserve Bank. While forwarding applications to Reserve Bank for approval for transfer of capital instruments by way of gift, the documents mentioned in Annex-3 should be enclosed. Reserve Bank considers the following factors while processing such applications: ( a ) The proposed transferee (donee) is eligible to hold such capital instruments under Schedules 1, 4 and 5 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. ( b ) The gift does not exceed 5 per cent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ) There is an independent valuation of the capital goods/machinery/equipments (including second-hand machinery) by a third party entity, preferably by an independent valuer from the country of import along with production of copies of documents/certificates issued by the customs authorities towards assessment of the fair-value of such imports. ( c ) The application clearly indicating the beneficial ownership and identity of the Importer Company as well as overseas entity. ( d ) Applications complete in all respects, for conversions of import payables for capital goods into FDI being made within 180 days from the date of shipment of goods. (II) pre-operative/ pre-incorporation expenses (including payments of rent etc.), subject to compliance with the following conditions: ( a ) Submission of FIRC for remittance of funds by the overseas promoters for the expenditure incurred. ( b ) Verification and certification of the pre-incorporation/pre-operative expenses by the statuto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue 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 . 3.5.5 Issue of shares under Employees Stock Option Scheme (ESOPs) ( i ) Listed Indian companies are allowed to issue shares under the Employees Stock Option Scheme (ESOPs), to its employees or empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Reserve Bank; ( c ) the Statutory Auditor has certified that the borrowing company will utilized / has utilized the proceeds of the ECB for the permitted end use/s only. (B) Non-resident holding shares of an Indian company, can pledge these shares in favour of the AD bank in India to secure credit facilities being extended to the resident investee company for bonafide business purpose, subject to the following conditions: ( i ) in case of invocation of pledge, transfer of shares should be in accordance with the FDI policy in vogue at the time of creation of pledge; ( ii ) submission of a declaration/ annual certificate from the statutory auditor of the investee company th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l cases where: ( i ) An Indian company is being established with foreign investment and is owned by a nonresident entity or ( ii ) An Indian company is being established with foreign investment and is controlled by a nonresident 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 shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition etc. or ( iv ) The ownership of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident Indian citizens, will be/is being transferred/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to non-resident entities through amalgamation, merger/demerger, acquisition etc. ( v ) It is clarified that these guidelines will not apply to sectors/activities where there are no foreign investment caps, that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 6.2.24 of this Circular. 3.10.3.2 Those companies, which are Core Investment Companies (CICs), will have to additionally follow RBI's Regulatory Framework for CICs. 3.10.3.3 For infusion of foreign investment into an Indian company which does not have any operations and also does not have any downstream investments, Government/FIPB approval would be required, regardless of the amount or extent of foreign investment. Further, as and when such a company commences business(s) or makes downstream investment, it will have to comply with the relevant sectoral conditions on entry route, conditionalities and caps. Note: Foreign investment into other Indian companies would be in accordance/ compliance with the relevant sectoral conditions on entry route, conditionalities and caps. 3.10.4 Downstream investment by an I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include all types of foreign investments i.e. FDI; investment by FIIs(holding as on March 31); NRIs; ADRs; GDRs; Foreign Currency Convertible Bonds (FCCB); fully, compulsorily and mandatorily convertible preference shares and fully,compulsorily and mandatorily convertible Debentures regardless of whether the said investments have been made under Schedule 1, 2, 3 and 6 of FEM (Transfer or Issue of Security by Persons Resident Outside India) Regulations, 2000 . 4.1.3 Guidelines for calculation of total foreign investment i.e. direct and indirect foreign investment in an Indian company. ( i ) Counting the Direct Foreign Investment: All investment directly by a non-resident entity into the Indian company would be counted towards foreign investment. ( ii ) Counting of indirect foreign Investment: ( a ) The foreign investment through the investing Indian company would not be considered for calculation of the indirect foreign investment in case of Indian companies which are 'owned and controlled' by resident Indian citizens and/or Indian Companies which are owned and controlled by resident Indian citizens. ( b ) For cases where condition ( a ) above is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company(s) to the Government of India at the time of seeking approval. ( b ) In any sector/activity, where Government approval is required for foreign investment and in cases where there are any inter-se agreements between/amongst share-holders which have an effect on the appointment of the Board of Directors or on the exercise of voting rights or of creating voting rights disproportionate to shareholding or any incidental matter thereof, such agreements will have to be informed to the approving authority. The approving authority will consider such inter-se agreements for determining ownership and control when considering the case for approval of foreign investment. ( c ) In all sectors attracting sectoral caps, the balance equity i.e. beyond the sectoral foreign investment cap, would specifically be beneficially owned by/held with/in the hands of resident Indian citizens and Indian companies, owned and controlled by resident Indian citizens. ( d ) In the I B and Defence sectors where the sectoral cap is less than 49%, the company would need to be 'owned and controlled' by resident Indian citizens and Indian companies, which are owned and controlled by reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, past and future, would come under the ambit of these new guidelines. CHAPTER 5 FOREIGN INVESTMENT PROMOTION BOARD (FIPB) 5.1 CONSTITUTION OF FIPB: 5.1.1 FIPB comprises of the following Secretaries to the Government of India: ( i ) Secretary to Government, Department of Economic Affairs, Ministry of Finance-Chairperson ( ii ) Secretary to Government, Department of Industrial Policy Promotion, Ministry of Commerce Industry ( iii ) Secretary to Government, Department of Commerce, Ministry of Commerce Industry ( iv ) Secretary to Government, Economic Relations, Ministry of External Affairs ( v ) Secretary to Government, Ministry of Overseas Indian Affairs. 5.1.2 The Board would be able to co-opt other Secretaries to the Central Government and top officials of financial institutions, banks and professional experts of Industry and Commerce, as and when necessary. 5.2 LEVELS OF APPROVALS FOR CASES UNDER GOVERNMENT ROUTE 5.2.1 The Minister of Finance who is in-charge of FIPB would consider the recommendations of FIPB on proposals with total foreign equity inflow of and below Rs.1200 crore. 5.2.2 The recommendations of FIPB on pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstitutes ( i ) Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). 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. 6.2 PERMITTED SECTORS In the following sectors/activities, FDI up to the limit indicated against each sector/activity is allowed, subject to applicable laws/ regulations; security and other conditionalities. In sectors/activities not listed below, FDI is permitted upto 100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. Wherever there is a requirement of minimum capitalization, it shall include share premium received along with the face value of the share, only when it is received by the company upon issue of the shares to the non-resident investor. Amount paid by the transferee during post-issue transfer of shares beyond the issue price of the share, cannot be taken into account while calculating minimum capitalization requirement; Sl. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covers l Rearing of animals under intensive farming systems with stall-feeding. Intensive farming system will require climate systems (ventilation, temperature/humidity management), health care and nutrition, herd registering/pedigree recording, use of machinery, waste management systems. l Poultry breeding farms and hatcheries where micro-climate is controlled through advanced technologies like incubators, ventilation systems etc. u In the case of pisciculture and aquaculture, scope of the term 'under controlled conditions' covers - l Aquariums l Hatcheries where eggs are artificially fertilized and fry are hatched and incubated in an enclosed environment with artificial climate control. u In the case of apiculture, scope of the term 'under controlled conditions' covers l Production of honey by bee-keeping, except in forest/wild, in designated spaces with control of temperatures and climatic factors like humidity and artificial feeding during lean seasons. 6.2.2 Tea Plantation 6.2.2.1 Tea sector including tea plantations Note: Besides the above, FDI is not allowed in any other plantation s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the public sector. Vide Resolution No. 8/1(1)/97-PSU/1422 dated 6th October 1998 issued by the Department of Atomic Energy laying down the policy for exploitation of beach sand minerals, private participation including Foreign Direct Investment (FDI), was permitted in mining and production of Titanium ores (Ilmenite, Rutile and Leucoxene) and Zirconium minerals (Zircon). Vide Notification No. S.O. 61(E) dated 18.1.2006, the Department of Atomic Energy re-notified the list of "prescribed substances" under the Atomic Energy Act 1962. Titanium bearing ores and concentrates (Ilmenite, Rutile and Leucoxene) and Zirconium, its alloys and compounds and minerals/concentrates including Zircon, were removed from the list of "prescribed substances". ( i ) FDI for separation of titanium bearing minerals ores will be subject to the following additional conditions viz. : (A) value addition facilities are set up within India along with transfer of technology; (B) disposal of tailings during the mineral separation shall be carried out in accordance with regulations framed by the Atomic Energy Regulatory Board such as Atomic Energy (Radiation Protection) Rules, 2004 and the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture. The issue of Industrial License is subject to a few general conditions and the specific condition that the Industrial Undertaking shall undertake to export a minimum of 50% of the new or additional annual production of the MSE reserved items to be achieved within a maximum period of three years. The export obligation would be applicable from the date of commencement of commercial production and in accordance with the provisions of section 11 of the Industries (Development Regulation) Act 1951. 6.2.6 DEFENCE 6.2.6.1 Defence Industry subject to Industrial license under the Industries (Development Regulation) Act 1951 26% Government 6.2.6.2 Other conditions : ( i ) Licence applications will be considered and licences given by the Department of Industrial Policy Promotion, Ministry of Commerce Industry, in consultation with Ministry of Defence. ( ii ) The applicant should be an Indian company / partnership firm. ( iii ) The management of the applicant company / partnership should be in Indian hands with majority representation on the Board as well as the Chief Executives of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use. The nominated quality assurance agency would inspect the finished product and would conduct surveillance and audit of the Quality Assurance Procedures of the licensee. Self-certification would be permitted by the Ministry of Defence on case to case basis, which may involve either individual 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s up-linking, HUB etc. (1) Setting up of Up-linking HUB/ Teleports 49% (FDI FII) Government (2) Up-linking a Non-News Current Affairs TV Channel 100% Government (3) Up-linking a News Current Affairs TV Channel subject to the condition that the portfolio investment from FII/ NRI shall not be "persons acting in concert" with FDI investors, as defined in the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations, 1997 26% (FDI FII) Government 6.2.7.5.1 Other conditions: ( i ) All the activities at (1), (2) and (3) above will be further subject to the condition that the Company permitted to uplink the channel shall certify the continued compliance of this requirement through the Company Secretary at the end of each financial year. ( ii ) FDI for Up-linking TV Channels will be subject to compliance with the Up-linking Policy notified by the Ministry of Information Broadcasting from time to time. 6.2.8 Print Media 6.2.8.1 Publishing of Newspaper and periodicals dealing with news and current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncludes aerodrome as defined in clause (2) of section 2 of the Aircraft Act, 1934; ( ii ) "Aerodrome" means any definite or limited ground or water area intended to be used, either wholly or in part, for the landing or departure of aircraft, and includes all buildings, sheds, vessels, piers and other structures thereon or pertaining thereto; ( iii ) "Air transport service" means a service for the transport by air of persons, mails or any other thing, animate or inanimate, for any kind of remuneration whatsoever, whether such service consists of a single flight or series of flights; ( iv ) "Air Transport Undertaking" means an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward; ( v ) "Aircraft component" means any part, the soundness and correct functioning of which, when fitted to an aircraft, is essential to the continued airworthiness or safety of the aircraft and includes any item of equipment; ( vi ) "Helicopter" means a heavier-than -air aircraft supported in flight by the reactions of the air on one or more power driven rotors on substantially vertical axis; ( vii ) "Scheduled air transport service" means an air transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 74% FDI (100% for NRIs) Automatic up to 49% Government route beyond 49% and up to 74% (2) Maintenance and Repair organizations; flying training institutes; and technical training institutions 100% Automatic 6.2.10 Courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act, 1898 and excluding the activity relating to the distribution of letters. 100% Government 6.2.11 Construction Development: Townships, Housing, Built-up infrastructure 6.2.11.1 Townships, housing, built-up infrastructure and construction-development projects (which would include, but not be restricted to, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure) 100% Automatic 6.2.11.2 Investment will be subject to the following conditions: (1) Minimum area to be developed under each project would be as under: ( i ) In case of development of serviced housing plots, a minimum land area of 10 hectares ( ii ) In cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment plans, would monitor compliance of the above conditions by the developer. Note: ( i ) The conditions at (1) to (4) above would not apply to Hotels Tourism, Hospitals, Special Economic Zones (SEZs), Education Sector, Old age Homes and investment by NRIs. ( ii ) FDI is not allowed in Real Estate Business. 6.2.12 Industrial Parks New and existing 100% Automatic 6.2.12.1 ( i ) "Industrial Park" is a project in which quality infrastructure in the form of plots of developed land or built up space or a combination with common facilities, is developed and made available to all the allottee units for the purposes of industrial activity. ( ii ) "Infrastructure" refers to facilities required for functioning of units located in the Industrial Park and includes roads (including approach roads), water supply and sewerage, common effluent treatment facility, telecom network, generation and distribution of power, air conditioning. ( iii )"Common Facilities" refer to the facilities available for all the units located in the industrial park, and include facilities of power, roads (including approach roads), water supply and se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts notified by the Department of Telecommunications will need to be complied with for all services. 6.2.15.1 ( i ) Telecom services 74% Automatic up to 49% Government route beyond 49% and up to 74% 6.2.15.1.1 Other conditions : (1) General Conditions : ( i ) This is applicable in case of Basic, Cellular, Unified Access Services, National/ International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added Services. ( ii ) Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institutional Investors (FIIs), Non-resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entity. In any case, the `Indian' shareholding will not be less than 26 per cent. ( iii ) FDI in the licensee company/Indian promoters/investment companies including their holding companies shall require ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ( 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 (BTS location) at a given point of time. ( xi ) The Remote Access (RA) to Network would be provided only to approved location(s) abroad through approved location(s) in India. The approval for location(s) would be given by the Licensor (DOT) in consultation with the Ministry of Home Affairs. ( xii ) Under no circumstances, should any RA to the suppliers/manufacturers and affiliate(s) be enabled to access Lawful Interception System(LIS), Lawful Interception Monitoring(LIM), Call contents of the traffic and any such sensitive sector/data, which the licensor may notify from time to time. ( xiii )The licensee company is not allowed to use remote access facility for monitoring of content. ( xi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is. 6.2.15.2 ( a ) ISP with gateways ( b ) ISP's not providing gateways i.e. without gate-ways (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 up to 49% Government route beyond 49% and up to 74% 6.2.15.3 ( a ) Infrastructure provider providing dark fibre, right of way, duct space, tower (IP Category I) ( b )Electronic Mail ( c ) Voice Mail Note: Investment in all the above activities is subject to the conditions that such companies will divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. 100% Automatic up to 49% Government route beyond 49% 6.2.16 TRADING 6.2.16.1 ( i ) Cash Carry Wholesale Trading/ Wholesale Trading (including sourcing from MSEs) 100% Automatic 6.2.16.1.1 Definition : Cash Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies 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 Test marketing of such items for which a company has approval for manufacture, provided such test marketing facility will be for a period of two years, and investment in setting up manufacturing facility commences simultaneously with test marketing. 100% Government 6.2.16.4 Single Brand product trading 51% Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment Route. Such investments have to be strictly in the nature of FDI. Investments by FIIs 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 Security Interest Act, 2002. 6.2.18 Banking Private sector 6.2.18.1 Banking Private sector 74% including investment by FIIs Automatic up to 49% Government route beyond 49% and up to 74% 6.2.18.2 Other conditions: (1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by FIIs, NRIs and shares acquired prior to September 16, 2003 by erstwhile OCBs, and continue to include IPOs, Private placements, GDR/ADRs and acquisition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 bank will be permitted to establish a wholly-owned subsidiary either through conversion of existing branches into a subsidiary or through a fresh banking license. A foreign bank will be permitted to establish a subsidiary through acquisition of shares of an existing private sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract for the delivery of goods and which is not a ready delivery contract. ( v ) "Commodity derivative" means- l a contract for delivery of goods, which is not a ready delivery contract; or l 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. 6.2.20.2 Policy for FDI in Commodity Exchange 49% (FDI FII) [Investment by Registered FII under Portfolio Investment Scheme (PIS) will be limited to 23% and Investment under FDI Scheme limited to 26% ] Government 6.2.20.3 Other conditions: ( i ) FII purchases shall be restricted to secondary market only and ( ii ) No non-resident investor/ entity, including persons acting in concert, will hold more than 5% of the equity in these companies. 6.2.21 Credit Information Companies (CIC) 6.2.21.1 Credit Information Companies 49% (FDI FII) Government 6.2.21.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv ) Forex Broking ( xv ) Credit Card Business ( xvi ) Money Changing Business ( xvii ) Micro Credit ( xviii ) Rural Credit 100% Automatic 6.2.24.2 Other Conditions: (1) Investment would be subject to the following minimum capitalisation norms: ( i ) US $0.5 million for foreign capital up to 51% to be brought upfront ( ii ) US $ 5 million for foreign capital more than 51% and up to 75% to be brought upfront ( iii ) US $ 50 million for foreign capital more than 75% out of which US$ 7.5 million to be brought upfront and the balance in 24 months. ( iv ) 100% foreign owned NBFCs with a minimum capitalisation of US$ 50 million can set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital. The minimum capitalization condition as mandated by para 3.10.4.1, therefore, shall not apply to downstream subsidiaries. ( v ) Joint Venture operating NBFCs that have 75% or less than 75% foreign investment can also set up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also complying wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No objection or Tax clearance certificate from Income Tax Department for the remittance. b . Auditor's certificate confirming that all liabilities in India have been either fully paid or adequately provided for. c . Auditor's certificate to the effect that the winding up is in accordance with the provisions of the Companies Act, 1956. d . In case of winding up otherwise than by a court, an auditor's certificate to the effect that there are no legal proceedings pending in any court in India against the applicant or the company under liquidation and there is no legal impediment in permitting the remittance. 7.1.2 Repatriation of Dividend: Dividends are freely repatriable without any restrictions (net after Tax deduction at source or Dividend Distribution Tax, if any, as the case may be). The repatriation is governed by the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time. 7.1.3 Repatriation of Interest: Interest on fully, mandatorily compulsorily convertible debentures is also freely repatriable without any restrictions (net of applicable taxes). The repatriation is governed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Statutory Auditor or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. ( c ) The report of receipt of consideration as well as Form FC-GPR have to be submitted by the AD Category-I bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the registered office of the company is situated. ( d ) Annual return on Foreign Liabilities and Assets (Annex 7) should be filed on an annual basis by the Indian company, directly with the Reserve Bank. This is an annual return to be submitted by 31st of July every year, pertaining to all investments by way of direct/portfolio investments/reinvested earnings/other capital in the Indian company made during the previous years ( i.e. the information submitted by 31st July will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments made into the company which is outstanding as on the balance sheet date. The details of overseas investments in the company both under direct/portfolio investment may be separately indicated. ( e ) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed 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 ADR/GDR mechanism is either repatriated to India or utilized abroad as per the extant Reserve Bank guidelines. 7.3 ADHERENCE TO GUIDELINES/ORDERS AND CONSEQUENCES OF VIOLATION FDI is a capital account transaction and thus any violation of FDI regulations are covered by the penal provisions of the FEMA. Reserve Bank of India administers the FEMA and Directorate of Enforcement under the Ministry of Finance is the authority for the enforcement of FEMA. The Directorate takes up investigation in any contravention of FEMA. 7.3.1 Penalties ( i ) If a person violates/contravenes any FDI Regulations, by way of breach/non-adherence/non-compliance/contravention of any rule, regulation, notification, press note, press release, circular, direction or order issued in exercise of the powers under FEMA or contravenes any conditions subject to which an authorization is issued by the Government of India/FIPB/Reserve Bank of India, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. Any second or subsequent contravention committed after the expiry of a period of three years from the date on which the contravention was previously compounded shall be deemed to be a first contravention. The Compounding Authority may call for any information, record or any other documents relevant to the compounding proceedings. The Compounding Authority shall pass an order of compounding after affording an opportunity of being heard to all the concerns as expeditiously and not later than 180 days from the date of application made to the Compounding Authority. Compounding Authority shall issue order specifying the provisions of the Act or of the rules, directions, requisitions or orders made thereunder in respect of which contravention has taken place along with details of the alleged contraventions. Annex 1 FC-GPR (To be filed by the company through its Authorised Dealer Category-I bank with the Regional Office of the RBI under whose jurisdiction the Registered Office of the company making the declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02 Preferential allotment/private placement 03 Rights 04 Bonus 05 Conversion of ECB 06 Conversion of royalty (including lump sum payments) 07 Conversion against import of capital goods by units in SEZ 08 ESOPs 09 Share Swap 10 Others (please specify) Total ( b ) Type of security issued No. Nature of security Number Maturity Face value Premium Issue Price per share Amount of inflow* 01 Equity 02 Compulsorily Convertible Debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 FVCIs 05 Foreign Trusts 06 Private Equity Funds 07 Pension/Provident Funds 08 Sovereign Wealth Funds 09 Partnership/Proprietorship Firms 10 Financial Institutions 11 NRIs/PIO 12 Others (please specify) Sub Total ( b ) Resident Total DECLARATION TO BE FILED BY THE AUTHORISED REPRESENTATIVE OF THE INDIAN COMPANY: (Delete whichever is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied 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 accordance with paragraph 8 of Schedule 1 to Notification No. FEMA 20/2000-RB dated May 3, 2000. ( ii ) A certificate from Statutory Auditors/SEBI registered Category I Merchant Banker/Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India. 5. Unique Identification Numbers given for all the remittances received as consideration for issue of shares/convertible debentures (details as above), by Reserve Bank. R R (Signature of the Applicant)* : ______________________________________ (Name in Block Letters) : ______________________________________ (Designation of the signatory) : ________ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares, by way of sale under private arrangement by a person resident in India to a person resident outside India. ( ii ) Transfer of shares, by way of sale under private arrangement by a person resident outside India to a person resident in India. 2.2 Transfer by Resident to Non-resident ( i.e. to incorporated non-resident entity other than erstwhile OCB, foreign national, NRI, FII) Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are: ( a ) listed on a recognized stock exchange in India ,shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines , as applicable, provided the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date pf purchase or sale of shares, ( b ) not listed on a recognized stock exchange in India ,shall not be less than the fair value to be determined by a SEBI registered Category I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method. The price per share arrived at should be certified by a SEBI registered Category I Merchant Banker o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts have been blocked by Reserve Bank. 5. Documentation Besides obtaining a declaration in the enclosed Form FC-TRS (in quadruplicate), the AD branch should arrange to obtain and keep on record the following documents: 5.1 For sale of shares by a person resident in 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. In case there is no formal Sale Agreement, letters exchanged to this effect may be kept on record. ( ii ) Where Consent Letter has been signed by their duly appointed agent, the Power of Attorney Document executed by the seller/buyer authorizing the agent to purchase/sell shares. ( iii ) The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India showing equity participation of residents and non-residents category-wise ( i.e. NRIs/OCBs/foreign nationals/incorporated non-resident entities/FIIs) and its percentage of paid up capital obtained by the seller/bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andle such transactions. These branches could be staffed with adequately trained staff for this purpose to ensure that the transactions are put through smoothly. The ADs may also designate a nodal office to coordinate the work at these branches and also ensure the reporting of these transactions to the Reserve Bank. 6.2 When the transfer is on private arrangement basis, on settlement of the transactions, the transferee/his duly appointed agent should approach the investee company to record the transfer in their books along with the certificate in the Form FC-TRS from the AD branch that the remittances have been received by the transferor/payment has been made by the transferee. On receipt of the certificate from the AD, the company may record the transfer in its books. 6.3 The actual inflows and outflows on account of such transfer of shares shall be reported by the AD branch in the R-returns in the normal course. 6.4 In addition the AD branch should submit two copies of the Form FC-TRS received from their constituents/customers together with the statement of inflows/outflows on account of remittances received/made in connection with transfer of shares, by way of sale, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res to be held by the non-resident transferee shall not exceed 5 per cent of the paid up capital of the company. ( viii )An undertaking from the resident transferor that the value of security to be transferred together with any security already transferred by the transferor, as gift, to any person residing outside India does not exceed the rupee equivalent of USD 25,000 during a calendar year. Annex - 4 Definition of "relative" as given in section 6 of Companies Act, 1956. A person shall be deemed to be a relative of another, if, and only if: ( a ) they are members of a Hindu undivided family ; or ( b ) they are husband and wife ; or ( c ) the one is related to the other in the manner indicated in Schedule IA (as under) 1. Father. 2. Mother (including step-mother). 3. Son (including stepson). 4. Son s wife. 5. Daughter (including step-daughter). 6. Father s father. 7. Father s mother. 8. Mother s mother. 9. Mother s father. 10. Son s son. 11. Son s son s wife. 12. Son s daughter. 13. Son s daughter s husband. 14. Daughter s husband. 15. Daughter s son. 16. Daughter s son s wif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non-resident investor Registered Name of the Remitter/Investor (Name, if the investor is an Individual) Registration Number (Unique Identification Number* in case remitter is an Individual) Registered Address (Permanent Address if remitter Individual) Name of the Remitter's Bank Remitter's Bank Account No. Period of banking relationship with the remitter * Passport No., Social Security No., or any Unique No. certifying the bona fides of the remitter as prevalent in the remitter's country We confirm that all the information furnished above is true and accurate as provided by the overseas remitting bank of the non-resident investor. (Signature of the Authorised Official of the AD bank receiving the remittance) Date : Place: Stamp : Annex 7 Annual Return on Foreign Liabilities and Assets (Return to be filled under A.P. (DIR Series) Circular No.45 dated March 15, 2011 to the Department of Statistics and Information Management, RBI, Mumbai) Please read the guidelines/definitions carefully before filling-in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Transportation ( ) 10. Petroleum Natural Gas ( ) 11. Chemicals (other than fertilizers) ( ) 12. Construction ( ) 13. Software and ITES/BPO ( ) 14. Pharmaceutical ( ) 15. Other ( ) For RBI s use (Industry Code) 8. Whether your company is listed in India [please tick ( )]? Yes No 9. Whether your company has any Foreign Collaboration? Yes No If yes, please indicate whether it is (please tick the appropriate one) ( a ) Technical collaboration ( b ) Financial collaboration (foreign equity participation) ( c ) Both Block 1A : Total Paid up Capital of Indian Company Item End-March of previous FY End-March current FY Number of Shares Amount in lakh Number of Shares Amount in lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding 10 per cent or more ordinary/equity shares of your company on the reporting date] If this block is Non-NIL, then please give the Name Addresses of your subsidiary in India, if any, in BLOCK 9. Name of the non-resident Company/Individual Type of Capital Country of non-resident investor Equity Holding (%) Amount in lakh as at the end of March Previous FY December Current FY March Current FY 1.0 Equity Capital (1.0 = 1.2-1.1) 1.1 Claims on Direct Investor 1.2 Liabilities to Direct Investor 2.0 Other Capital(2.0 = 2.2-2.1) 2.1 Claims on Direct Investor 2.2 Liabilities to Direct Investor 3.0 Disinvestments in India during the year Note: ( i ) if investor is a company, then country is the countr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes (original maturity more than 1year) 2.2 Money Market Instruments (original maturity upto1year) 3.0 Disinvestments in India during the year Note: Data pertaining to each type of investment are to be reported consolidating the information country wise. If more countries are involved to report the data for the particular type( s ) of investment, it should be reported in the same format using additional sheets separately for each country. Block 3B: Financial Derivatives (with non-resident entities only) Please furnish here the outstanding foreign liabilities on account of financial derivatives contract entered into with non-residents. Financial Derivatives Country of non-resident investor Amount in lakh as at the end of ( i ) Notional Value March Previous FY March Current FY ( ii ) Mark to market value Note: If more countries are involved to report the data for the particular type( s ) of investment, it should be reported in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore Equity shares on the reporting date]. If this block is Non-NIL, then please furnish the information in BLOCK 6. Name of the non-resident Direct Investment Enterprise (DIE) Type of Capital Country of non-resident DIE Equity holding (%) Amount in lakh as at the end of March Previous FY December Current FY March Current FY 1.0 Equity Capital (1.0 = 1.1-1.2) 1.1 Claims on Direct Investment Enterprise 1.2 Liabilities to Direct Investment Enterprise 2.0 Other Capital(2.0 = 2.1-2.2) 2.1 Claims on Direct Investment Enterprise 2.2 Liabilities to Direct Investment Enterprise 3.0 Disinvestments made abroad during the year Note: Please use separate sheets in the above format to report for separate DIEs Block 4B: Foreign Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.0 Disinvestments Abroad during the year Note: Data pertaining to each type of investment are to be reported consolidating the information country wise. If particular type( s ) of investment spreads over more than one country, it should be reported in the above format using separate additional sheet for each country. Block 5B: Financial Derivatives (with non-resident entities only) Please furnish here the outstanding claims on non-residents on account of financial derivatives contract entered into with Non-residents. Financial Derivatives Country of non-resident enterprise Amount in lakh as at the end of March Previous FY March Current FY ( i ) Notional Value ( ii ) Mark to market value Note: If particular type( s ) of investment spreads over more than one country, it should be reported in the above format using separate additional sheet for each country. Block 5C: Other Investment (Outstanding claims on Unrelated Parties): This is a residual category that includes all financial ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bilities [Please report here the relevant details about the contingent foreign liabilities of your company] Description of Contingent Liability Country Currency# Amount in Foreign Currency as at the end of (in actual) March Previous FY March Current FY (1) (2) (3) (4) (5) Note: # Currency of denomination of the contingent foreign liability should be mentioned in Col. 3. Refer to the details on Contingent liabilities given in Annex. Block 8: Employee Information of reporting Indian company As at the end-March of Previous FY Current FY No. of Employees on Payroll BLOCK 9: Name( s ) Address (es) of your subsidiary in India Sr. Nos. Name of Subsidiary in India* Your Equity holding in subsidiary % Address Retained profit/loss of your subsidiary in India during the current FY (Amount in lakh) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery, land building( s ) by a direct investor to a DIE by equity participation; (3) Acquisition by a DIE of shares in its direct investor, termed as Reserve investment ( i.e. claims on DI). ( a ) Foreign Direct Investment in India (Block 2A, 2B) If the Indian company has issued the shares to non-resident entities under the FDI scheme in India, then it should be reported under the Foreign Direct Investment in India (Liabilities), section II of the return. If the non-resident entity holds the 10 per cent or more equity/ordinary shares in the reporting Indian company, then it should reported under Block 2A (item 1.2, liabilities to direct investment). However, if the non-resident entity holds less than 10 per cent of the equity capital of reporting Indian company, then it should be reported under Block 2B (item 1.2, liabilities to direct investment). In both the cases, the investing non-resident entity is called as the Direct Investor (DI) while the reporting Indian company is called as Direct Investment Enterprise (DIE). If the reporting Indian company also holds the equity shares in its DI company abroad and if its share is less than 10 per cent of equity capital of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian company in foreign shares and/or debt securities, apart from the investment made under the Overseas Direct Investment Scheme, reported under Block 5A (Portfolio assets). ( ii ) Equity Securities (Block 3A 5A, Item 1.0) Equity securities are instruments acknowledging the holders claim to the residual income of the issuing enterprise after the claims of all creditors have been met. These include ordinary shares, stocks, participating preference shares, depository receipts (ADRs/GDRs) denoting ownership of equity securities issued to non-residents, shares/units in mutual funds investment trusts, equity securities that are sold under repurchase agreement, equity securities that are sold under securities lending arrangement. ( iii ) Debt Securities (Block 3A 5A, Item 2.0) These include bonds and notes, money market instruments. ( iv ) Bonds and Notes (Block 3A 5A, Item 2.1) This category includes debt securities with original contractual maturities of more than one year (long-term). It includes the long-term securities such as Debentures, Non-participating preference shares, Convertible bonds, Negotiable certificates of deposit, Perpetual bonds, Collateral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other loans and advances. Financial leases and repurchase agreements are also considered loans. Note that loan received from the non-resident direct investor should be reported under Other Capital of Block 2A or 2B while loan extended to your subsidiaries/associates abroad should be reported under Other Capital of block 4A or 4B. These outstanding loans should be reported under the loan item of Block 3C or 5C. ( iii ) Other Liabilities and Assets (Block 3C 5C, Item 6.0) These are the residual items that include all external financial liabilities and assets not recorded elsewhere in the liabilities/assets. These are miscellaneous accounts receivable and payable such as accounts relating to interest payments in arrears, loan payments in arrears, wages and salaries outstanding, prepayments of insurance premiums, taxes outstanding the like. ( iv ) Long-term and Short-term Investment (Block 3C 5C) Long-term investment is defined as investment with an original contractual maturity of more than one year. Short-term investment includes currency, investment payable on demand or with an original contractual maturity of one year or less. E. Disinvestments in India and Abr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e India. iii. Certificate indicating fair value of shares from a Chartered Accountant. iv. Copy of Broker s note if sale is made on Stock Exchange. v. Declaration from the buyer to the effect that he is eligible to acquire shares/compulsorily and mandatorily convertible preference shares/debentures under FDI policy and the existing sectoral limits and Pricing Guidelines have been complied with. vi. Declaration from the Fll/sub account to the effect that the individual FII/Sub account ceiling as prescribed has not been breached. Additional documents in respect of sale of shares/compulsorily and mandatorily convertible preference shares/debentures by a person resident outside India vii. If the sellers are NRIs/OCBs, the copies of RBI approvals, if applicable, evidencing the shares held by them on repatriation/non-repatriation basis. viii. No Objection/Tax Clearance Certificate from Income Tax Authority/Chartered Accountant. 1 Name of the company Address (including e-mail, telephone Number, Fax No.) Activity NIC Code No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Price as per Valuation guidelines* Price as per Chartered Accountants */** Valuation report (CA Certificate to be attached) Declaration by the transferor/transferee I/We hereby declare that : i. The particulars given above are true and correct to the best of my/our knowledge and belief. ii. I/We, was/were holding the shares compulsorily and mandatorily convertible preference shares/debentures as per FDI Policy under FERA/FEMA Regulations on repatriation/non repatriation basis. iii. I/We, am/are eligible to acquire the shares compulsorily and mandatorily convertible preference shares/debentures of the company in terms of the FDI Policy. It is not a transfer relating to shares compulsorily and mandatorily convertible preference shares/debentures of a company engaged in financial services sector or a sector where general permission is not available. iv. The Sectoral limit under the FDI Policy and the pricing guidelines have been adhered to. Signature of the Declarant or his duly authorised agent Date: N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After Issue ( a ) Authorised Capital ( b ) Issued and Paid-up Capital ( i ) Held by persons Resident in India ( ii ) Held by foreign investors other than FIIs/NRIs/PIOs/OCBs (a list of foreign investors holding more than 10 per cent of the paid-up capital and number of shares held by each of them should be furnished) ( iii ) Held by NRIs/PIOs/OCBs ( iv ) Held by FIIs Total Equity held by non-residents ( c ) Percentage of equity held by non-residents to total paid-up capital 13. Whether issue was on private placement basis. If yes, please give details of the investors and GDRs/ADRs issued to each of them 14. Number of GDRs/ADRs issued 15. Ratio of GDRs/ADRs to underlying shares 16. Issue Related Expenses ( a ) Fee paid/payable to Merchant Bankers/Lead Manager ( i ) Amount (in US$) ( ii ) Amount as percentage to the total issue ( b ) Other expenses 17. Whether funds are kept abroad. If yes, name and address of the bank 18. Details of the listing arrangement Name of Stock Exchange Date of commencement of trading 19. The date on which GDRs/ADRs issue was launched 20. Amount raise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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