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FEMA –

01 May
RBI/2010-11/426 March 15, 2011
A.P. (DIR Series) Circular No. 44
Exim Bank's Line of Credit of USD 50 million to the Government of the
Republic of Malawi
RBI/2010-11/427 March 15, 2011 
A.P. (DIR Series) Circular No. 45
Part B of form FC-GPR replaced with annual return on Foreign Liabilities
and Assets reporting by Indian Companies
In order to capture the statistics relating to Foreign Direct Investment
(FDI), both inward and outward in a more comprehensive manner as also
to align it with international best practices, the RBI has notified a revised
procedure for reporting of all Foreign Direct Investment (FDI), both
inward and outward. Accordingly RBI has replaced Part B of the Form FCGPR (annual filing by Indian companies for foreign investment) by a
separate 'Annual Return on Foreign Liabilities and Assets'.
This return should be submitted by all the Indian companies which have 
received FDI and/or made FDI abroad (i.e. overseas investment) in the
previous year(s) including the current year by July 15 of every year along
with a copy of audited Balance Sheet for the reporting year. In case
accounts are not audited, information should be submitted based on unaudited figures. On completion of audit, if there are major differences in
the reported figures, revised return may be submitted along with a copy
of audited balance sheet. The return needs to be submitted to the
Director, External Liabilities and Assets Statistics Division, Department of
Statistics and Information Management (DSIM), Reserve Bank of India,
C8, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.
• For the purposes of this return, RBI has provided methodology for
valuation of foreign liabilities and foreign assets as under:
– Debt securities should be valued at market price, while all other
types of debt, viz., loan, trade credit, deposits, other accounts
payable/receivable should be valued at nominal value.
– For the valuation of the outstanding investment, use the
c o r r e s p o n d i n g  e n d - M a r c h / e n d - D e c e m b e r  m a r k e t
price/exchange rate.
– For listed companies, the share price on the closing date of
reporting period should be used for valuation of Equity
– For unlisted companies, use the concept of "Own Funds at Book
Value (OFBV)" for valuation of Equity, to have consistency in
valuation. OFBV reflects the value of enterprise recorded in the
book of Direct Investment Enterprise, which is the sum of (i)
paid-up capital (excluding any shares on issue that the
enterprise holds in itself and including share premium
accounts); (ii) all types of reserves identified as equity in the
enterprise's balance sheet (including investment grants when
accounting guidelines considered them company reserves);
and (iii) cumulated reinvested earnings (which may be
negative), which would take into account charges for
consumption of fixed capital.
• Details of Foreign Liabilities and Foreign Assets shall be provided
separately under separate sections and blocks mentioned therein.
The form is broadly divided into three sections viz. Section I:
"Identification Particulars", Section II: "Foreign Liabilities" and
Section III: "Foreign Asset".
–  U n d e r  S e c t i o n  I :  " I d e n t i f i c a t i o n  P a r t i c u l a r s "  g e n e r a l
identification details of the Company shall be provided.
o Nature of business giving appropriate group of activity to
which principal line of business pertains and applicable NIC
code shall also be provided.
o Henceforth position of Free Reserves & Surplus and
Retained Profit shall be provided for the current year and
previous year in Block 1B.
– Under Section II: "Foreign Liabilities" details of foreign liabilities
of the Indian Company shall be provided in the following
manner:
o Block 2A & 2B: Foreign Direct Investment in India by Nonresident Direct Investor shall be provided in two blocks viz.
Block 2A for Non-resident Direct Investor holding 10% or
more in the Indian Company and Block 2B for Non-resident
Direct Investor holding less than 10%.
o Block 3A: Details of outstanding investments by nonresident investors (unrelated parties) under the Portfolio
Investment scheme in India shall be provided under this
section.
o Block 3B: Notional value and Mark to market value of
outstanding foreign liabilities on account of Financial
Derivatives contracts (with non-resident entities only) shall
be provided under this section.
o Block 3C: This is a residual category that includes all financial
outstanding not considered as direct investment or
p o r t f o l i o  i n v e s tme n t  ( o u t s t a n d i n g  l i a b i l i t i e s wi t h
Unrelated Parties) viz. Trade Credit, Loans and Other
Liabilities.
– Under Section III: "Foreign Asset" details of foreign assets of
the Indian Company shall be provided in the following manner:
o Block 4A & 42B: Direct Investment Abroad in non-resident
enterprises (Direct Investment Enterprises [DIE]) under
the Overseas Direct Investment Scheme (ODI) by Indian
Company shall be provided in two blocks viz. Block 4A for
investment in each company for 10% or more and Block 4B
for investment in each company for less than 10%.
o Block 5A: Details of outstanding investments in nonresident enterprises other than those made under ODI
(unrelated parties) under the Portfolio Investment shall be
provided under this section.
o Block 5B: Notional value and Mark to market value of
outstanding foreign claims on non-resident on account of
Financial Derivatives contracts (with non-resident entities
only) shall be provided under this section.
o Block 5C: This is a residual category that includes all
financial outstanding not considered as direct investment
or portfolio investment (outstanding claims with
Unrelated Parties) viz. Trade Credit, Loans and Other
Liabilities.
o Block 6: Position of equity capital, free reserves and
surplus of each DIE in which Indian Company is holding
more than 10%.
– Block 7: Details of contingent foreign liabilities of Indian
Company shall be provided under this section.
– Block 8: Information of employee of the reporting Indian
Company shall be provided under this section.
– Block 9: Details of subsidiary in India of the Indian Company
(downstreaminvestment) shall be provided under this section.
In case the reporting company is a Group company, a consolidated return
covering all the Branches/Offices in India is required to be furnished.
RBI has also explained the concepts and definitions useful in filing the
Annual Return on Foreign Liabilities and Assets.
Notifications amending the Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident outside India) Regulations, 2000
and the Foreign Exchange Management (Transfer or Issue of any Foreign
Security) Regulations, 2004 will be issued separately.
The above circular is available on RBIwebsite.
 

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