FEMA, Transfer or Issue Security by Person Resident Outside India, Regulations 2000.

Short title and commencement
Definitions
Restriction on issue or transfer of Security by a person resident outside India
Restriction on an Indian entity to issue security to a person resident outside India
Permission for purchase of shares by certain persons resident outside India
Acquisition of right shares
Issue and acquisition of shares after merger or de-merger or amalgamation of Indian companies
Issue of shares under Employees Stock Options Scheme to persons resident outside India
Transfer of shares and convertible debentures of an Indian company by a person resident outside India
Prior permission of Reserve Bank in certain cases for transfer of security
Remittance of sale Proceeds
SCHEDULE I
Annexure A
Annexure B
Annexure ‘C’
Annexure ‘D’
Declaration
Annexure E

Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000

Notification No. FEMA 20/2000-RB dated 3rd May 2000 - In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 ( 42 of 1999), the Reserve Bank makes the following regulations to prohibit, restrict or regulate, transfer or issue security by a person resident outside India, namely:

Short title and commencement :-

1. These regulations may be called the Foreign Exchange Management (Transfer or issue of Security by a Person Resident Outside India) (Amendment) Regulations, 2006
2. They shall come into force from the date of their publication in the official Gazette.
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 145/2005-RB, DT. 06/01/2006)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Fifth Amendment) Regulations, 2005.
2. They shall come into force from the date of its publication in the official Gazette."
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 138/2005-RB, DT. 22/07/2005)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2005.
2. They shall come into force from the date of its publication in the official Gazette.
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 137/2005-RB, DT. 22/07/2005)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Third Amendment) Regulations, 2005.
2. They shall come into force from the date of their publication in the official gazette.
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 136/2005-RB, DT. 19/07/2005)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2005.
2. They shall come into force from the date of 4th day of October, 2004*.
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 131/2005-RB, DT. 17/03/2005)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Amendment) Regulations, 2005.
2. They shall come into force from the date of their publication in the Official Gazette.
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 130/2005-RB, DT. 17/03/2005)

"Pre-Revised

1. These regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fifth Amendment) Regulations, 2004.
2. These amendments come into effect from October 01, 2004".
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 125/2004-RB, DT. 27/11/2004)

"Pre-Revised

1. (i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Fourth Amendment) Regulations, 2004.
2. They shall come into force on the 30th day of August, 2004."
   
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 122/2004-RB, DT. 30/08/2004)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) (Third Amendment) Regulations, 2004.
2. They shall come into force with immediate effect. "
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 118/2004-RB, DT. 16/06/2004)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India)(Amendment) Regulations, 2004.
2. They shall come into force from the date of their publication in the Official Gazette."
   (Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 111/2004-RB, DT. 06/03/2004)

"Pre-Revised

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (First Amendment) Regulations, 2004.
2. They shall come into force from the date of their publication in the Official Gazette.

(Above sub-regulation (i) & (ii) has been amended vide Notification No FEMA 108/2004-RB, DT. 01/01/2004)

1. These Regulations may be called the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) (Fourth Amendment) Regulations, 2003.
2. They shall come into force from the date of their publication in the Official Gazette.

(Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 106/2003-RB, DT. 27/10/2003)

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Third Amendment) Regulations, 2003.
2. They shall come into force from the date of their publication in the Official Gazette.

(Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 100/2003-RB, DT. 03/10/2003)

1. 1. These Regulations may be called the Foreign Exchange Management ( Transfer or Issue of Security by a Person Resident outside India)(Second Amendment) Regulations, 2003.
   2. They shall come into force from the date of their publication in the Official Gazette.

(Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a person Resident outside India) (First Amendment) Regulation, 2003.
2. They shall come into force on their publication in the Official Gazette.

(Above sub-regulation (1) & (2) has been amended vide Notification No FEMA 85/2003-RB, Dt. 17/01/2003)

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Second Amendment) Regulations, 2002.
2. They shall come into force on their publication in the Official Gazette.

(Above sub-regulation (i) & (ii) has been amended vide Notification No. FEMA 76/2002-RB, Dt. 12/11/2002).

1. 1.  These Regulation may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Amendment) Regulations, 2001.
   2. They shall come into force from the date of pulication in the Gazette
      
      "Pre-Revised (ii) They shall come into force with immediate effect."

(Above sub-regulations (i) & (ii) has been amended vide Notification No. FEMA 46/2001-RB, dated 29/11/2001)

1. These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Amendment) Regulations, 2001.
2. They shall come into force with immediate effect."

(Above sub-regulations (1) & (2) had been amended vide Notification No. FEMA 45/2001-RB, dated 20/09/2001)
(Above sub-regulations (i) & (ii) had been amended vide Notification No. FEMA 41/2001-RB, dated 2nd March, 2001)
(Above sub-regulations (i) & (ii) had been amended vide Notification No. FEMA 35/2001-RB, dated 16th February, 2001)

2. Definitions :-
   In these Regulations, unless the context requires otherwise, -
   1. 'Act' means the Foreign Exchange Management Act,1999 (42 of 1999);
   2. 'Capital' means equity shares, preference shares, convertible preference shares, and convertible debentures;
      iia.
      ‘entity incorporated outside India means an entity incorporated/registered under the relevant statutes, laws of the host country.
      (Above clause iia. has been inserted vide Notification No. FEMA 100/2003-RB, DT. 03/10/2003)
   3. 'registered Foreign Institutional Investor (FII)' means the foreign institutional investor registered with SEBI;
      iiia.
      'Foreign Venture Capital Investor' means an investor incorporated and established outside India which proposes to make investment in Venture Capital Fund(s) or Venture Capital Undertaking(s) in India and is registered with SEBI under SEBI (Foreign Venture Capital Investors) Regulations, 2000;
      (Above clause iiia. has been inserted videdated 26th December, 2000)
   4. 'Government approval' means approval from the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India or as the case may be , Foreign Investment Promotion Board (FIPB) of the Government of India,
   5. 'Indian company' means a company incorporated in India;
      va.
      'Indian Venture Capital Undertaking' means a company incorporated in India whose shares are not listed on a recognized stock exchange in India and which is not engaged in an activity under the negative list specified by SEBI;"
      (Above clause va. has been inserted vide Notification No. FEMA 32/2000-RB, dated 26th December, 2000)
   6. 'Investment on repatriation basis' means an investment the sale proceeds of which are, net of taxes, eligible to be repatriated out of India, and the expression 'Investment on non-repatriation basis', shall be construed accordingly;
   7. Joint Venture (JV) and Wholly Owned Subsidiary shall have the meanings respectively assigned to them in the Foreign Exchange Management (Transfer and Issue of Foreign Security) Regulations, 2000;
      (vii a) NRI shall have the same meaning assigned to him under the Foreign Exchange Management (Deposit) Regulations, 2000.
      
      (Above (vii a) has been substituted vide Notification No. FEMA 122/2004-RB, DT. 30/08/2004)
      
      "Pre-Revised :
      (vii) (a) Non-resident Indian (NRI) shall have the meaning assigned to it in clause (iv) of Regulation 2 of the Foreign Exchange Management (Investment in Firm or Proprietary Concern in India) Regulations, 2000."
      
   8. [DELETED- 'Non-resident Indian (NRI)' ], 'Overseas Corporate Body (OCB)', shall have the meanings respectively assigned to them in the Foreign Exchange Management (Deposit) Regulations,2000.
      (Item (vii)(a) has been inserted & words "Non-resident Indian (NRI)" at item (viii) deleted vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)
   9. 'SEBI' means the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 ( 15 of 1992);
   10. Secretariat for Industrial Assistance" means Secretariat for Industrial Assistance in the Department of Industrial Policy and Promotion , Ministry of Commerce and Industry, Govt. of India;
   11. 'Transferable Development Rights (TDR)' shall have the same meaning as assigned to it in the Regulations made under sub-section (2) of section 6 of the Act;
       xia.
       'Venture Capital Fund' means a fund established in the form of a trust, a company including a body corporate and registered under the Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996 which has a dedicated pool of capital raised in a manner specified under the said Regulations and which invests in venture Capital Undertakings in accordance with the said Regulations;"
       (Above clause xia. has been inserted vide Notification No. FEMA 32/2000-RB, dated 26th December, 2000)
   12. The words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act.
3. Restriction on issue or transfer of Security by a person resident outside India :-
   Save as otherwise provided in the Act, or rules or regulations made thereunder, no person resident outside India shall issue or transfer any security:-
   Provided that a security issued prior to, and held on, the date of commencement of these Regulations, shall be deemed to have been issued under these Regulations and shall accordingly be governed by these Regulations;
   Provided further that the Reserve Bank may, on an application made to it and for sufficient reasons, permit a person resident outside India to issue or transfer any security, subject to such conditions as may be considered necessary.
4. Restriction on an Indian entity to issue security to a person resident outside India or to record a transfer of security from or to such a person in its books :-
   
   Save as otherwise provided in the Act or Rules or Regulations made thereunder, an Indian entity shall not issue any security to a person resident outside India or shall not record in its books any transfer of security from or to such person:-
   
   Provided that the Reserve Bank may, on an application made to it and for sufficient reasons, permit an entity to issue any security to a person resident outside India or to record in its books transfer of security from or to such person, subject to such conditions as may be considered necessary.
5. Permission for purchase of shares by certain persons resident outside India :-
   1. A person resident outside India (other than a citizen of Bangladesh or Pakistan [Deleted - or Sri Lanka ]) or an entity incorporated outside India, "Pre-Revised - or an entity outside India, whether incorporated or not, " (other than an entity in Bangladesh or Pakistan) , may purchase shares or convertible debentures of an Indian company under Foreign Direct Investment Scheme, subject to the terms and conditions specified in Schedule 1.
      
      (In sub-regulatin (1) the words "or Sri Lanka" has been deleted vide Notification No. FEMA 122/2004-RB, DT. 30/08/2004)
      
      (Please refer Circular No. 54/2003-04-RB, DT. 20/12/2003 - Investment by an unincorporated entity under Foreign Direct Investment (FDI) Scheme)
      
      (In sub-regulation (1), the words “or an entity incorporated outside India,” has been substituted vide Notification No. FEMA 100/2003-RB, DT. 03/10/2003)
   2. A registered Foreign Institutional Investor (FII) may purchase shares or convertible debentures of an Indian company under the Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 2.
      
      [OMITTED -
      "Provided that the FII shall not purchase shares or convertible debentures of an Indian company which is engaged in the print media sector".]
      
      (Above proviso has been omitted vide Notification No. FEMA 138/2005-RB, DT. 22/07/2005)
      
      (In sub-regulation 2. above clause added vide Notification No FEMA 35/2001-RB, dated 16th February, 2001)
   3. 1. A Non-resident Indian (NRI) may purchase shares or convertible debentures of an Indian Company on a Stock Exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 3 [OMITTED - , provided that the NRI shall not purchase shares or convertible debentures of an Indian Company which is engaged in Print Media sector. ]
         
         (In sub-regulation (3), clause (i), provisio and the coma has been omitted vide Notification No. FEMA 138/2005-RB, DT. 22/07/2005)
      2. A non-resident Indian or an Overseas Corporate Body may purchase shares or convertible debentures of an Indian company on non-repatriation basis other than under Portfolio Investment Scheme subject to the terms and conditions specified in Schedule 4 [OMITTED - , provided that the NRI or OCB shall not purchase shares or convertible debentures of an Indian Company which is engaged in Print Media sector. ]
         
         (In sub-regulation (3), clause (ii), provisio and the coma has been omitted vide Notification No. FEMA 138/2005-RB, DT. 22/07/2005).
         (Above sub-regulation (3) has been substituted vide Notification No. FEMA 46/2001-RB, dated 29/11/2001)
         
         
      "Pre-Revised
      (3) A non-resident Indian or an overseas corporate body may purchase shares or convertible debentures of an Indian company -
      
      1. on a stock exchange under the Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 3; or/and
      2. on non-repatriation basis other than under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 4."
         "Provided that the NRI/OCB shall not purchase shares or convertible debentures of an Indian company which is engaged in the print media sector".
         
         (In sub-regulation 3. above clause added vide Notification No. FEMA 35/2001-RB, dated 16th February, 2001)
   4. A non-resident Indian or an overseas corporate body or a registered FII may purchase securities, other than shares or convertible debentures of an Indian company, subject to the terms and conditions specified in Schedule 5.
   5. A Foreign Venture Capital Investor registered with SEBI may make investment in a Venture Capital Fund or an Indian Venture Capital Undertaking, in the manner and subject to the terms and conditions specified in Schedule 6.
      
      [OMITTED - "Provided that the Foreign Venture Capital Investor shall not purchase shares or convertible debentures of an Indian company which is engaged in the print media sector". ]
      
      (Above proviso has been omitted vide Notification No. FEMA 138/2005-RB, DT. 22/07/2005)
      
      (Above clause 5. has been inserted vide Notification No. FEMA 32/2000-RB, dated 26th December, 2000)
      (In sub-regulation 5. above clause added vide Notification No. FEMA 35/2001-RB, dated 16th February, 2001)
   6. A registered Foreign Institutional Investor (FII) having valid approval under FERA, 1973 or under FEMA 1999 may trade in all exchange traded derivative contracts approved by SEBI from time to time subject to the limits as prescribed in by SEBI.
   7. A Non-Resident Indian (NRI) may invest in exchange traded derivative contracts approved by SEBI from time to time out of INR funds held in India on non-repatriable basis subject to the limits prescribed by SEBI. Such investments will not be eligible for repatriation benefits.
      (Above Sub-Regulation (6) & (7) has been added vide Notification No. FEMA 85/2003-RB, Dt. 17/01/2003)
      
6. Acquisition of right shares :-
   1. A person resident outside India may purchase equity or preference shares or convertible debentures offered on right basis by an Indian company which satisfies the conditions specified in sub-regulation (2).
   2. An Indian company which satisfies the following conditions, may offer to a person resident outside India, equity or preference shares or convertible debentures on right basis, namely:-
      1. The offer on right basis does not result in increase in the percentage of foreign equity already approved, or permissible under the Foreign Direct Investment Scheme in terms of these Regulations;
      2. The existing non-resident shareholders may apply for issue of additional shares, and the investee company may allot the same subject to the condition that the overall issue of shares to non-residents in the total paid-up capital does not exceed the sectoral cap.
      3. The existing shares or debentures against which shares or debentures are issued by the company on right basis were acquired and are held by the person resident outside India in accordance with these Regulations;
      4. The offer on right basis to the persons resident outside India is at a price which is not lower than that at which the offer is made to resident shareholders;
         
         (Above sub-regulation (2)(ii) has been new added & previous (2)(ii),(iii) renumbered vide Notification No. FEMA 76/2002-RB, Dt. 12/11/2002).
   3. The right shares or debentures purchased by the person resident outside India shall be subject to same conditions including restrictions in regard to repatriability as are applicable to the original shares against which right shares or debentures are issued:-
      
      Provided that the amount of consideration for purchase of right shares or debentures is paid by way of inward remittance in foreign exchange through normal banking channels or by debit to NRE/FCNR account, when the shares or debentures are issued on repatriation basis:-
      
      Provided further that in respect of the shares or debentures issued on non-repatriation basis, the amount of consideration may also be paid by debit to NRO/NRSR/NRNR account.

 6A. Acquisition of Bonus shares :-
An Indian company may issue bonus shares to its non-resident shareholders, subject to the following conditions:

1. the shares against which bonus shares are issued by the company ( hereinafter referred to as ‘the original shares’) were acquired or held by the non-resident shareholder in accordance with the Rules/ Regulations applicable to such acquisition;
2. the bonus shares acquired by the non-resident shareholder shall be subject to the same conditions including restrictions in regard to repatriability as are applicable to the original shares.

6B. Report to RBI: -

A company issuing right shares or bonus shares in terms of Regulation 6 or Regulation 6A as the case may be, shall, within thirty days from the date of issue, report the transaction in Form FC-GPR to the Regional Office of the Reserve Bank of India under whose jurisdiction the Registered Office of the company is situated.

(Regulation 6A. & 6B. has been inserted vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)

7. Issue and acquisition of shares after merger or de-merger or amalgamation of Indian companies :-
   1. Where a Scheme of merger or amalgamation of two or more Indian companies or a reconstruction by way of de-merger or otherwise of an Indian company, has been approved by a Court in India, the transferee company or, as the case may be, the new company may issue shares to the shareholders of the transferor company resident outside India , subject to the following conditions, namely:
      1. the percentage of shareholding of persons resident outside India in the transferee or new company does not exceed the percentage specified in the approval granted by the Central Government or the Reserve Bank, or specified in these Regulations:-
         
         Provided that where the percentage is likely to exceed the percentage specified in the approval or the Regulations, the transferor company or the transferee or new company may, after obtaining an approval from the Central Government, apply to the Reserve Bank for its approval under these Regulations.
      2. the transferor company or the transferee or new company shall not engage in agriculture, plantation or real estate business or trading in TDRs; and
      3. the transferee or the new company files a report within 30 days with the Reserve Bank giving full details of the shares held b persons resident outside India in the transferor and the transferee or the new company, before and after the merger/amalgamation/reconstruction, and also furnishes a confirmation that all the terms and conditions stipulated in the scheme approved by the Court have been complied with.
8. Issue of shares under Employees Stock Options Scheme to persons resident outside India :-
   1. An Indian company may issue shares under the Employees' Stock Options Scheme, by whatever name called, to its employees or employees of its joint venture or wholly owned subsidia3ry abroad who are resident outside India, directly or through a Trust:-
      Provided that
      1. the scheme has been drawn in terms of regulations issued under the Securities Exchange Board of India Act, 1992; and
      2. face value of the shares to be allotted under the scheme to the non-resident employees does not exceed 5% of the paid-up capital of the issuing company.
   2. The Trust and the issuing company shall ensure that value of shares held by persons resident outside India under the scheme does not exceed the limit specified in clause (b) of sub-regulation (1).
   3. The issuing company shall furnish to the Reserve Bank , within thirty days from the date of issue of shares under the scheme, a report giving the following particulars/documents, -
      1. names of persons to whom shares are issued under the scheme and number of shares issued to each of them;
      2. a certificate from the Company Secretary of the issuing company that the value of shares issued under the scheme does not exceed 5% of the paid up capital of the issuing company and that the shares are issued in compliance with the regulations issued by the SEBI in this behalf.
9. Transfer of shares and convertible debentures of an Indian company by a person resident outside India :-
   1. Subject to the provisions of sub-regulation (2), a person resident outside India holding the shares or debentures of an Indian company in accordance with these Regulations, may transfer the shares or debentures so held by him, in compliance with the conditions specified in the relevant Schedule of these regulations.
   2. 1.  A person resident outside India, not being a non- resident Indian or an overseas corporate body, may transfer by way of sale or gift, the shares or convertible debentures held by him or it to any person resident outside India;
      2. A non-resident Indian or an overseas corporate body may transfer by way of sale or gift, the shares or convertible debentures held by him or it to another non-resident Indian or overseas corporate body only;
         
         Provided that the person to whom the shares are being transferred, in terms of clause (i) and (ii), has obtained prior permission of Central Government to acquire the shares if he has previous venture or tie up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called in the same field or allied field in which the Indian company whose shares are being transferred is engaged.
         
         Provided further that the restriction in clauses (i) and (ii) shall not apply to the transfer of shares to International financial institutions such as Asian Development Bank(ADB), International Finance Corporation(IFC), Commonwealth Development Corporation (CDC), Deutsche Entwicklungs Gescelscchaft (DEG) and transfer of shares of an Indian company engaged in Information Technology sector.
      3.  A person resident outside India holding the shares or convertible debentures of an Indian company in accordance with these Regulations,
         1. may transfer the same to a person resident in India by way of gift;
         2. may sell the same on a recognized Stock Exchange in India through a registered broker.
            (Sub-regulation (2) has been substituted vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)
            
      "Pre-Revised
      (2)
      1. A person resident outside India, not being a non-resident Indian or an overseas corporate body, may transfer by way of sale, the shares or convertible debentures held by him to any person resident outside India:-
         
         Provided that the person to whom the shares are being transferred has obtained prior permission of Central Government to acquire the shares if he has previous venture or tie up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called in the same field or allied field in which the Indian company whose shares are being transferred is engaged.
      2. A non-resident Indian or an overseas corporate body may transfer by way of sale, the shares or convertible debentures held by him or it to another non-resident Indian or an overseas corporate body only.
      3. A person resident outside India may transfer any security held by him, to a person resident in India by way of gift."
10. Prior permission of Reserve Bank in certain cases for transfer of security :-
    1. Transfer by way of gift or sale by a person resident in India not being erstwhile OCBs
       A person resident in India who proposes to transfer to a person resident outside India not being erstwhile OCBs: -
       (In A. words "not being erstwhile OCBs" has been added vide Notification No. FEMA 131/2005-RB, DT. 17/03/2005)
       1. 1.  any security, by way of gift, shall make an application to the Reserve Bank for its approval.
          2. The Reserve Bank may grant such approval on being satisfied of the following conditions:
             1. The donee is eligible to hold such a security under Schedules 1, 4 and 5 of these Regulations.
             2. The gift does not exceed 5% of the paid up capital of the Indian company/each series of debentures/each mutual fund scheme.
             3. The applicable sectoral cap/ foreign direct investment limit in the Indian company is not breached.
             4. The donor and the donee are relatives as defined in section 6 of the Companies Act, 1956.
             5. The value of security to be transferred by the donor together with any security transferred to any person residing outside India as gift in the calendar year does not exceed the rupee equivalent of USD 25,000.
             6. Such other conditions as considered necessary in public, interest by the Reserve Bank.
          3. The application for approval referred to in sub clause (i) shall contain the following information/ documents:
             1. Name and address of the donor and the donee.
             2. Relationship between the donor and the donee.
             3. Reasons for making the gift.
             4. In case of Government dated securities and treasury bills and bonds, a certificate issued by a Chartered Accountant on the market value of such securities.
             5. In case of units of domestic mutual funds and units of Money Market Mutual Funds, a certificate from the issuer on the Net Asset Value of such security.
             6. In case of shares and debentures, a certificate from a Chartered Account on the value of such securities according to the guidelines issued by the Securities & Exchange Board of India or the erstwhile CCI with regard to listed companies and unlisted companies respectively.
             7. Certificate from the concerned Indian company certifying that the proposed transfer of shares/convertible debentures, by way of gift, from resident to the non-resident shall not breach the applicable sectoral cap/FDI limit in the company and that the proposed number of shares/convertible debenture to be held by the non-resident transferee shall not exceed 5% of the paid up capital of the company.
                (In Regulation 10, sub-regulation A, Clause (a) has been substituted vide Notification No. FEMA 137/2005-RB, DT. 22/07/2005)
                
                "Pre-Revised-
                a)any security, by way of gift, shall make an application to the Reserve Bank furnishing the following information, namely:
                1. Name and address of the transferor and the proposed transferee
                2. Relationship between the transferor and the proposed transferee
                3. Reasons for making the gift. "
       2. any share/convertible debenture of an Indian Company whose activities fall under Annexure B to Schedule 1, other than items nos. 1, 2, and 3 and subject to the Sectoral Limits specified therein, shall transfer such shares/debentures without prior approval of Government and RBI if the same is by way of sale subject to the following:
          1. that the Indian Company whose shares or convertible debentures are proposed to be transferred is not engaged in rendering any financial service;
          2. that the transfer does not fall within the purview of the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997; and
          3. that the concerned parties adhere to pricing guidelines, documentation and reporting requirements for such transfers as may be specified by Reserve Bank, from time to time.
             
             Explanation:- For the purpose of this Regulation, “financial services” shall mean service rendered by banking and non-banking companies regulated by the Reserve Bank, insurance, companies regulated by Insurance Regulatory and Development Authority (IRDA) and other companies regulated by any other financial regulator as the case may be.
             
             (Above clause (b) has been substituted vide Notification No. FEMA 131/2005-RB, DT. 17/03/2005)
             
             "Pre-Revised
             b) any share/convertible debenture of an Indian company, by way of sale, shall obtain the Government approval for the transfer and thereafter apply to the Reserve Bank for its approval, which may be granted subject to such conditions as are considered necessary by Reserve Bank, including the price at which such sale may be made."
    2. Transfer by way of sale not covered by Regulation 9 by a person resident outside India
       "Pre-Revised-
       1. Transfer by way of sale not covered by Regulation 9 by a person resident outside India of the shares/convertible debentures held by him to a person resident in India, shall require prior permission of the Reserve Bank, for which application in form TS 1 may be made to the Reserve Bank."
       2. A person resident outside India, may transfer share or convertible debenture of an Indian Company, without the prior permission of the Reserve Bank, by way of sale, to a person resident in India subject to the adherence to pricing guidelines, documentation and reporting requirements for such transfers as may be specified by Reserve Bank from time to time.
          
          (Above clause 1. has been deleted and clause 2. substituted vide Notification No. FEMA 131/2005-RB, DT. 17/03/2005)
          
          "Pre-Revised
          2. While considering the grant of permission, the Reserve Bank shall take into account the following factors, namely:
          1. where the shares of an Indian company are traded on stock exchange,
             1. the sale is at the prevailing market price on stock exchange and is effected through a merchant banker registered with Securities and Exchange Board of India or through a stock broker registered with the stock exchange;
             2. if the transfer is other than that referred to in clause (i), the Reserve Bank will satisfy itself that the shares are proposed to be sold at a price arrived at by taking the average quotations (average of daily high and low) for one week preceding the date of application with 5 percent variation. Where, however, the shares are being sold by the foreign collaborator or the foreign promoter of the Indian company to the existing promoters in India with the objective of passing management control in favour of the resident promoters the proposal for sale will be considered at a price which may be higher by upto a ceiling of 25 percent over the price arrived at as above,
          2. where the shares of an Indian company are not listed on stock exchange or are thinly traded,
             1. if the consideration payable for the transfer does not exceed Rs.20 lakh per seller per company, at a price mutually agreed to between the seller and the buyer, based on any valuation methodology currently in vogue, on submission of a certificate from the statutory auditors of the Indian company whose shares are proposed to be transferred, regarding the valuation of the shares, and
             2. if the amount of consideration payable for the transfer exceeds Rs.20 lakh per seller per company, at a price arrived at, at the seller's option, in any of the following manner, namely:
                1. a price based on earning per share (EPS linked to the Price Earning (P/E) multiple ,or a price based on the Net Asset Value (NAV) linked to book value multiple, whichever is higher,
                   or
                2. the prevailing market price in small lots as may be laid down by the Reserve Bank so that the entire shareholding is sold in not less than five trading days through screen based trading system
          3. where the shares are not listed on any stock exchange, at a price which is lower of the two independent valuations of share, one by statutory auditors of the company and the other by a Chartered Accountant or by a Merchant Banker in Category 1 registered with Securities and Exchange Board of India.]
             Explanation:
             1. A share is considered as thinly traded if the annualised trading turnover in that share, on main stock exchanges in India, during the six calendar months preceding the month in which application is made, is less than 2 percent (by number of shares) of the listed stock.
             2. For the purpose of arriving at Net Asset Value per share, the miscellaneous expenses carried forward, accumulated losses, total outside liabilities, revaluation reserves and capital reserves (except subsidy received in cash) shall be reduced from value of the total assets and the net figure so arrived at shall be divided by the number of equity shares issued and paid up. Alternatively, intangible assets shall be reduced form the equity capital and reserves (excluding revaluation reserves) and the figure so arrived at shall be divided by the number of equity shares issued and paid up. The NAV so calculated shall be used in conjunction with the average BV multiple of Bombay Stock Exchange National Index during the calendar month immediately preceding the month in which application is made and BV multiple shall be discounted by 40 per cent.
             3. For computing the price based on Earning Per Share, the earning per share as per the latest balance sheet of the company shall be used in conjunction with the average Price Earning Multiple of Bombay Stock Exchange National Index for the calendar month preceding the month in which application is made and Price Earning shall be discounted by 40 per cent.
11. Remittance of sale Proceeds :-
    1. No remittance of sale proceeds of an Indian security held by a person resident outside India shall be made otherwise than in accordance with these Regulations and the conditions specified in the relevant Schedule.
    2. An authorised dealer may allow the remittance of sale proceeds of a security (net of applicable taxes) to the seller of shares resident outside India:-
       Provided -
       1. the security was held by the seller on repatriation basis;
       2. either the security has been sold on a recognised stock exchange in India through a stock broker at the ruling market price as determined on the floor of the exchange, or the Reserve Bank's approval has been obtained in other cases for sale of the security and remittance of the sale proceeds thereof; and
       3. a no objection/tax clearance certificate from the Income Tax authority has been produced.

SCHEDULE I
[See Regulation (5) (1)]
Foreign Direct Investment Scheme

1. Purchase by a person resident outside India of equity/preference/convertible preference shares and convertible debentures issued by an Indian company.
   1. A person resident outside India referred to in sub-regulation (1) of Regulation 5, may purchase shares or convertible debentures issued by an Indian company up to the extent and subject to the terms and conditions set out in this schedule.
   2. If the person purchasing the shares under this Scheme proposes to be collaborator or proposes to acquire the entire share holding of a new Indian company, he should obtain a prior permission of Central Government if he has a previous venture or tie-up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called in the same field or allied field in which the Indian company issuing the shares is engaged.
2. Automatic Route of Reserve Bank for Issue of shares by an Indian company
   1. An Indian company which is not engaged in any activity, or in manufacturing of item included in Annexure 'A' to this Schedule, may issue shares or convertible debentures to a person resident outside India, referred to in paragraph 1 upto the extent specified in Annexure B, subject to compliance with the provisions of the Industrial Policy and Procedures as notified by Secretariat for Industrial Assistance (SIA) in the Ministry of Commerce and Industry, Govt. of India, from time to time.
      Provided that:
      1. the activity of the issuer company does not require an industrial licence under the provisions of the Industries (Development & Regulation) Act, 1951 or under the locational policy notified by Government of India under the Industrial Policy of 1991 as amended from time to time.
      2. the shares or convertible debentures are not being issued by the Indian company with a view to acquiring existing shares of any Indian company.
         Explanation:
         A company which proposes to embark on expansion programme to undertake activities or manufacture items included in Annexure B to this schedule may issue shares or debentures out of fresh capital proposed to be issued by it for the purpose of financing expansion programme , upto the extent indicated in Annexure B, subject to compliance with the provisions of this paragraph.
   2. A trading company incorporated in India may issue shares or convertible debentures to the extent of 51 per cent of its capital, to persons resident outside India referred to paragraph 1, subject to the condition that remittance of dividend to the shareholders outside India is made only after the company has secured registration as an Export/Trading/Star Trading /Super Trading House from the Directorate General of Foreign Trade, Ministry of Commerce, Government of India, New Delhi.
   3. A company which is a small scale industrial unit and which is not engaged in any activity or in manufacture of items included in Annexure A, may issue shares or convertible debentures to a person referred to in paragraph 1, to the extent of 24% of its paid-up capital;
      
      Provided that such a company may issue shares in excess of 24% of its paid up capital if
      1. it has given up its small scale status;
      2. it is not engaged or does not propose to engage in manufacture of items reserved for small scale sector, and
      3. it complies with the ceilings specified in Annexure B.
   4. Notwithstanding anything contained in clause (3) an Export Oriented Unit or a Unit in Free Trade Zone or in Export Processing Zone or in a Software Technology Park or in an Electronic Hardware Technology Park may issue shares or convertible debentures to a person resident outside India referred to in paragraph 1 in excess of 24 per cent provided it complies with the ceilings specified in Annexure B.
   5. An Indian company, otherwise eligible to issue shares under this Schedule may issue equity/preference shares, subject to pricing guidelines as given in paragraph 5 of this Schedule, to a person resident outside India,
      1. being a provider of technology/technical know-how, against Royalty/Lumpsum fees due for payment;
      2. against External Commercial Borrowing (ECB) (other than import dues deemed as ECB or Trade Credit as per RBI Guidelines) :
         
         Provided, that the foreign equity in the company after the conversion of Royalty/Lumpsum fee/ECB into equity is within the sectoral cap notified, if any.
         
         (Above Sub-paragraph (5) has been added vide NTF. NO. FEMA 125/2004-RB, DT. 27/11/2004)
3. Issue of shares by a company requiring the Government approval
   
   A company which is engaged or proposes to engage in any activity specified in Annexure 'A' or which proposes to issue shares to a person resident outside India beyond the sectoral limits stipulated in Annexure 'B' either directly or by conversion of ECB/Royalty/Lumpsum fee or which is otherwise not eligible to issue shares to a person resident outside India, may issue shares to a person resident outside India referred to in paragraph 1, provided it has secured prior approval of Secretariat for Industrial Assistance or, as the case may be of the Foreign Investment Promotion Board of the Government of India and the terms and conditions of such an approval are complied with.
   
   (In Paragraph 3, the words "either directly or by conversion of ECB/Royalty/Lumpsum fee" has been added vide NTF. NO. FEMA 125/2004-RB, DT. 27/11/2004)
4. 4. Issue of Shares by International offering through ADR and/or GDR
   1. An Indian company may issue its Rupee denominated shares to a person resident outside India being a depository for the purpose of issuing Global Depository Receipts (GDRs) and/ or American Depository Receipts (ADRs),
      Provided the Indian company issuing such shares
      1. has an approval from the Ministry of Finance, Government of India to issue such ADRs and/or GDRs or is eligible to issue ADRs/ GDRs in terms of the relevant scheme in force or notification issued by the Ministry of Finance, and
      2. is not otherwise ineligible to issue shares to persons resident outside India in terms of these Regulations, and
      3. the ADRs/GDRs are issued in accordance with the Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued by the Central Government thereunder from time to time.
   2. The Indian company issuing shares under sub-paragraph (1), shall furnish to the Reserve Bank, full details of such issue in the form specified in Annexure 'C', within 30 days from the date of closing of the issue.
   3. The Indian company issuing shares against ADRs/GDRs shall furnish a quarterly return in the form specified in Annexure 'D' to Reserve Bank within fifteen days of the close of the calendar quarter.
   4. Pending repatriation or utilisation of foreign exchange resources raised in terms of clause (1) the Indian company may invest the foreign currency funds in -
      1. deposits with or Certificate of Deposit or other instruments offered by banks who have been rated by Standard and Poor, Fitch, IBCA or Moody’s etc.; and such rating not being less than the rating stipulated by Reserve Bank from time to time for the purpose.
         
         (Clause a) has been replace vide Notification No. FEMA 118/2004-RB, DT. 16/06/2004)
         
         "Pre-Revised :
         a) deposits with or Certificate of Deposits or other instruments of banks who have been rated not less than A1+ by Standard and Poor or P1 by Moody's for short term obligations,"
      2. deposits with branch outside India of an authorised dealer in India, and
      3. treasury bills and other monetary instruments with a maturity or un-expired maturity of the instrument of one year or less.

4A. A registered broker in India may purchase shares of an Indian Company on behalf of a person resident outside India, for the purpose of converting the shares so purchased into ADRs/GDRs,

Provided that

1. the shares are purchased on a recognized stock exchange;
2. the Indian company has issued ADRs/GDRs;
3. the shares are purchased with the permission of Custodian of the ADRs/GDRs of the concerned Indian company and are deposited with the Custodian;
4. the number of shares so purchased shall not exceed ADRs/GDRs converted into underlying shares and shall be subject to sectoral caps as applicable;
5. the non-resident investor, broker, Custodian and the overseas depository comply with the provisions of the Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued thereunder by the Central Government from time to time.

(4B)

1. An Indian company may sponsor an issue of ADRs/GDRs with an overseas depository against shares held by its shareholders at a price to be determined by the Lead Manager.
2. The proceeds of the issue shall be repatriated to India within a period of one month.
3. The sponsoring company shall comply with the provisions of the Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines issued thereunder by the Central Government from time to time;
4. the sponsoring company shall furnish full details of such issue in a form specified in Annexure C to the Foreign Investment Division, Exchange Control Department, Reserve Bank of India, Central Office, Mumbai within 30 days from the date of closure of the issue."
   
   (Above para 4A. & 4B has been added vide Notification No. FEMA 41/2001-RB, dated 2nd March, 2001)

5. Issue price
   Price of shares issued to persons resident outside India under this Schedule, shall not be less than
   1. the price worked out in accordance with the SEBI guidelines as applicable, where the issuing company is listed on any recognised stock exchange in India, and
      
      (In above paragraph 5, clause (a) words "as applicable" has been inserted vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)
   2. fair valuation of shares done by a chartered accountant as per the guidelines issued by the erstwhile Controller of Capital Issues, in all other cases.

   5A. Issue price of ADRs/GDRs
   
   Price of ADRs/GDRs to be issued to a person resident outside India may be decided by the Indian company-

   1. where the issue is on public offer basis, in consultation with the Lead Manager to the issue; and
   2. in other cases , as provided in paragraph 5 above.

6. Dividend Balancing
   
   Where a company is engaged in any of the industries in the consumer goods sector, specified in Annexure E, or in any other activity where the condition of dividend balancing has been stipulated in terms of the provisions of Industrial Policy and Procedures notified by Secretariat for Industrial Assistance, the cumulative outflow of foreign exchange on account of payment of dividend over a period of seven years from the date of commencement of commercial production to investors outside India shall not exceed cumulative amount of export earning of the company during those years.
   
   Provided that
   1. the restriction under this paragraph shall not apply
      1. in respect of shares held in such a company by International Finance Corporation (IFC), the Deustche Entwicklungs Gescelschaft (DEG), the Commonwealth Development Corporation (CDC) and Asian Development Bank (ADB).
      2. to a company that has completed a period of seven years from the date of commencement of commercial production,
         
         to obligations arising out of dividends declared/remitted after 14th July 2000 i.e. the date on which conditions of dividend balancing was withdrawn
         
         (Above para has been added vide Notifiation No. FEMA 94/2003-RB, DT. 18/06/2003)
         
         
      [Deleted-
   2. in case of an existing company that has issued fresh equity to persons resident outside India under these Regulations, the restriction shall apply to the fresh shares from the date of their issue.]
      
      (Above sub-clause (b) has been deleted vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)
7. Rate of Dividend on Preference Shares
   
   The rate of dividend on preference shares or convertible preference shares issued under these Regulations shall not exceed 300 basis points over the Prime Lending Rate of State Bank of India prevailing as on the date of the Board meeting of the company in which issue of such shares is recommended.
8. Mode of payment for shares issued to persons resident outside India
   A company in India issuing shares or convertible debentures under this Schedule to a person resident outside India shall receive the amount of consideration for such shares -
   1. by inward remittance through normal banking channels, or
   2. by debit to NRE/FCNR account of the person concerned maintained with an authorised dealer/authorised bank.
      Explanation: Conversion of Rayalty/Lumpsum fee due for payment or conversion of ECB, as given elsewhere in this Schedule, shall be treated as consideration for issue of shares within the meaning of this paragraph.
      
      (Above Explanation has been added vide Notification No. FEMA 125/2004-RB, DT. 27/11/2004)
9. Report by the Indian company
   1. An Indian company issuing shares or convertible debentures in accordance with these Regulations shall submit to Reserve Bank,
      1. not later than 30 days from the date of receipt of the amount of consideration, a report indicating:
         1. Name and address of the foreign investors
         2. Date of receipt of funds and their rupee equivalent
         3. Name and address of the authorised dealer through whom the funds have been received, and
         4. Details of the Government approval, if any.
      2. not later than 30 days from the date of issue of shares, a report in form FC-GPR together with,
         1. a certificate from the Company Secretary of the company accepting investment from persons resident outside India certifying that
            1. all the requirements of the Companies Act, 1956 have been complied with;
            2. terms and conditions of the Government approval, if any, have been complied with;
            3. the company is eligible to issue shares under these Regulations; and
            4. the company has all original certificates issued by authorised dealers in India evidencing receipt of amount of consideration in accordance with paragraph 9;
         2. a certificate from Statutory Auditors or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.
            Provided that, in addition to above, the company shall report the conversion of ECB into equity, in ECB¬2 Return of the respective month in case of full conversion of ECB. In case of partial conversion of ECB, the converted portion shall be reported in Form FC-GPR to the concerned Regional Office of the Reserve Bank and non-converted portion in Form ECB -2.
            
            (Above proviso has been added vide Notification No. FEMA 125/2004-RB, DT. 27/11/2004)
10. Permission for retaining share subscription money received from persons resident outside India in a foreign currency account
    
    Reserve Bank may, on an application made to it and on being satisfied that it is necessary so to do, permit an Indian company issuing shares to persons resident outside India under this Schedule, to retain the subscription amount in a foreign currency account, subject to such terms and conditions as it may stipulate.

Annexure A
(See paragraph 2)

(A) List of Activities for which Automatic Route of RBI for investment by person resident outside India is not available

[Deleted - 1. Domestic Airlines]

1. Petroleum Sector (except for private sector oil refining)
2. Investing companies in Infrastructure & Services Sector Natural Gas/LNG Pipelines
3. Defence and Strategic Industries
4. Atomic Minerals
5. Print Media
6. Broadcasting
7. Postal services
8. Courier Services
9. Establishment and Operation of satellite
10. Development of Integrated Township
11. Tea Sector

(Item No. 1 has been deleted & 2 to 12 renumbered as 1 to 11 and Bold words "Natural Gas/LNG Pipelines" added at item No. 2, vide Notification No. FEMA 130/2005-RB, DT. 17/03/2005)

(B) List of activities or items for which FDI is prohibited.

1. Retail Trading
2. Atomic Energy
3. Lottery Business
4. Gambling and Betting
5. Housing and Real Estate business
6. Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisiculture and Cultivation of vegetables, mushrooms etc. under controlled conditions and services related to agro and allied sectors) and Plantations (Other than Tea plantations)

Annexure B
(See paragraph 2)
Sectoral cap on Investments by persons resident outside India

Annexure ‘C’
[Refer to paragraph 4(2) of Schedule I]

Return to be filed by an Indian company who has arranged issue of GDR/ADR

Instructions :

The form should be completed and submitted to the Reserve Bank of India,

Foreign Investment Division, Central Office, Mumbai.

Certified that all the conditions laid down by Government of India and Reserve Bank of India have been complied with.

Annexure ‘D’
[Refer to paragraph 4(3) of Schedule I]

Quarterly Return

(to be submitted to the Reserve Bank of India, Foreign Investment Division, Central Office, Mumbai)

Certified that funds raised through ADRs/GDRs have not been invested in stock market or real estate.

“FORM FC-GPR”

(To be filed with the Regional Office of the RBI under whose jurisdiction the registered office of the company making the declaration is situated)

We (Name of the Company)--------------------------

Declare that, being eligible to issue shares to non-residents under the permission granted under Notification No.FEMA 20/2000-RB dated 3rd May 2000, furnish the following information in connection with shares issued.

1. Name and address (Registered office)
   Of the Indian company issuing
   shares to non-residents
   
2. Whether existing company or new
   company recently formed
   
3. Activities of the company
   
   NIC Code
   Description (In case no NIC code has been allotted to the activity, the company may classify in the nearest broad category. In case it is not at all possible to classify the activity under the NIC Code, only description may be given).
   
4. Particulars of shares/convertible debentures issued
   1. Name and country of the foreign investor
   2. Category of investor (Foreign National/NRI/OCB/FII/Foreign Company, Foreign Venture Capital Fund, Foreign Venture Capital Company etc.)
   3. Whether the shares are issued under Automatic Route/Government Approval or on rights/bonus basis (Please quote SIA/FIPB approval number where applicable)
   4. Details of shares/convertible debentures issued (Please furnish details for equity shares, preference shares and convertible debentures separately)

      No. of shares/ convertible debentures Issue Price	Face value of shares At par (RS.)/premium of Rs. - per share, control premium non-competition fee etc	Total face value Ratio in case of bonus shares
      Total inflow on account of issue of shares to non-residents (including premium if any) }	} } }	Rs.

      
      (d)
      1. We are a listed company, price in terms of SEBI guidelines per share is Rs.
         OR
      2. The company is not listed, fair value of the share in terms of guidelines issued by the
         erstwhile CCI is Rs.
         OR
      3. Shares are issued on rights basis
         OR
      4. Shares have been issued as a result of merger/de-merger/amalgamation

Declaration

We hereby declare that :

1. We have carefully followed the procedure for issue of shares as laid down under the Automatic Route as indicated in the Notification No. FEMA 20/2000-RB dated 3rd May 2000.
   
2. Foreign equity(ies)(other than individuals) to whom we have issued shares does/do not have any previous joint venture or technical collaboration or trade mark agreement in India in the same or allied field.
   
3. We don’t require an Industrial Licence under the Industries (Development and Regulation) Act, 1951 or in terms of locational policy notified by the Government under the new Industrial Policy of 1991.
   
4. We are an SSI unit & the investment limit of 24 % has been observed, OR we are not an SSI unit.
   
   (Delete whichever is not applicable under signature)
   
5. Our proposal is within the sectoral policy/cap permissible under the automatic route of RBI.
   
   ORII Shares have been issued in terms of SIA/FIPB approval No. --------------------- dated ------------------------.
   
   ORIII Shares have been issued on rights basis and the shares are issued to non-residents at a price that is not lower than that at which shares issued to residents.
   
   ORIV Shares issued are bonus shares.
   
   ORV Shares have been issued under a scheme of merger and amalgamation of two or more Indian companies or reconstruction by way of demerger or otherwise of an Indian company, duly approved by a court in India.

For-------------------------------(Name of the company /seal)
Signature
Name : (-----------------------------------------)
*Designation : ----------------------------------

Date :
Place :
(* To be signed by senior official/responsible person in the company)

(Annexure A, B, C, D and Form FC-GPR has been substituted vide Notification No. FEMA 94/2003-RB, DT. 18/06/2003)

Annexure E
(See paragraph 6 of Schedule I)

List Of 22 Industries In Respect Of Which Dividend
Balancing Is Applicable

1. Manufacture of food and food products
   
2. Manufacture of dairy products
   
3. Grain mill products
   
4. Manufacture of bakery products
   
5. Manufacture and refining of sugar (vacuum pan sugar factories)
   
6. Production of common salt
   
7. Manufacture of Hydrogenated oil (Vanaspati)
   
8. Tea processing
   
9. Coffee
   
10. Manufacture of beverages, tobacco and tobacco products
    
11. Distilling, rectifying and blending of spirits, wine industries, malt liquors and malt, production of country liquors and toddy
    
12. Soft drinks and carbonated water industry
    
13. Manufacture of cigar, cigarettes, cheroot and cigarette tobacco
    
14. Manufacture of wood and wood products, furniture and fixtures
    
15. Manufacture of leather and fur/leather products
    
16. Tanning, curing, finishing, embossing and japanning of leather
    
17. Manufacture of footwear (excluding repair) except vulcanised for moulded rubber or plastic footwear
    
18. Manufacture of footwear made primarily of vulcanised or moulded products
    
19. Prophylactics (rubber contraceptive)
    
20. Motor cars
    
21. Entertainment electronics(VCRs, Colour TVs, CD Players, Tape Recorders)
    
22. White goods(Domestic Refrigerators, Domestic Dishwashing Machines, Programmable Domestic Washing Machines, Microwave Ovens, Airconditioners).