fema latest circulars - bangaloreicai.org 2 objects of fera, 1947 fera, 1973 fema, 1999 conserving,...

5/5/2010

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FEMA LATEST CIRCULARS STUDY CIRCLE ON 28-04-2010

@ BANGALORE BRANCH OF ICAI

Chandra Shekar B DPartner M/s. Shekar & Yathish

Chartered Accountants, Bangalore

History -FEMA

• Period of World War – II under Defence of IndiaRules, Exchange Control Law – Foreign ExchangeRegulation Act, 1947.

• FERA, 1973.

• First wind of change in 90’s – LERMS (LiberalisedExchange Resource Management System)

– Series of notification and ADMA Circulars

• WTO & IMF requirement

– Opportunity to participate in Global business system

– Govt introduced FEMA , 1999

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Objects of

FERA, 1947 FERA, 1973 FEMA, 1999

Conserving,regulating andcontrollingforeign exchangeresources of thecountry

Consolidate,regulatingdealing in foreignexchange. Properutilisation in theinterest of theeconomicdevelopment ofthe country

Facilitatingexternal trade &payments & forpromotingorderlydevelopment &maintenance ofForeign Exchangemarket in India

FEMA Updates

• RBI (FOREIGN EXCHANGE DEPT) CENTRAL OFFICE MUMBAI

– Notifications

– Circulars • AP (DIR SERIES)

– AUTHORISED PERSON

– FORMS• AP (DIR SERIES)

– Master circulars

– DIPP Circulars (Department of Industrial Policy & Promotion )

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Features

• Not entirely self contained Law

• Practitioners should have working knowledge of– Company law

– Securities law

– Income tax

– Property law

– Law relating to citizenship and domicile

Models in India

• Foreign Company

• WOS / JV

• Branch Office

• Liaison Office

• Project office

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Definition• Branch – Sec 2(9) of Companies Act, 1956, means

– any estd described as a branch by the company; or

– any estd carrying on either the same or substantially the same activity as that carried on by the head office of the company; or

– any estd engaged in any production, processing or manufacture

– but does not include any establishment specified in any order made by the CG

• Liaison office –Reg 2(e) of FEM (Est…..) Reg, 2000, means

– A Place of business to act as a channel of communication

– Between Principal place of business or head office

– Does not undertake

• Any Commercial/trading/industrial activity

• Directly or indirectly

– Maintains itself out of inward remittances received from abroad thro normal banking channel

Branch Office/Liaison Office

• Regulated by FEM(Establishment in India of Branchor Office or Other Place of Business) Regulation,2000.

• Come into force from 01-06-2000.• Notification No 22/2000-RB dt 03-05-2000 issued by

RBI, (Exchange Control Department)• Issues:

– No Procedural guidelines – No eligibility criteria– Scope of activities permitted– Practical difficulty in getting approvals

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Recent Notifications / Circulars

BO/LO

Guidelines for establishing of BO/LO In India by Foreign Entity

• AP (DIR Series) Circular No. 23 dated 30-12-09

– Objective

• Greater transparency

– Issued by RBI containing 4 annexes

• Annex A – Broad criteria regarding eligibility foropening of BO/LO, Documentation

• Annex B – Scope of activity permitted and proceduralguidelines regulating functionality of BO/LO in India

• Annex C – Form FNC – Foreign entity desirous ofestablishing a BO /LO apply to RBI thro’ AD Cate -1 bank

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BO/LO In India by Foreign Entity-Cont…..1

• Annex D – Letter of comfort. Co’s who don’t satisfythe eligible criteria and are subsidiary of the parentcompany. Parent company to satisfy the eligiblecriteria

• Allotment of Unique Identification Number (UIN) forexisting as well as new BO/LO

• UIN to be quoted – RBI and AD Bank

• BO/LO to obtain PAN

• Report of same in Annual Activity Certificate

BO/LO- Powers of RB/GOI

• RB or GOI – reserves right to reject an application for nonfulfillment of any conditions not specifically referred toannexes, fulfillment of which in the opinion of the Reservebank/GOI is necessary for grant of such permission or inpublic interest.

• Reserve Bank /GOI also reserves the right toverify/examine the activities of the BO/LO of the foreignentity established in India or withdraw the permissionalready granted after due notice, if circumstances sowarrant or due to changes in the policy.

• Necessary amendments to FEM (Remittance of Assets)Regulations, 2000 and FEM (Establishment in India ofBranch or Office or other place of Business) Regulations,2000 are being issued separately.

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BO/LO In India by Foreign Entity-Annex A

• Eligibility Criteria

Application from a Foreign Entity shall be consideredon two criteria viz., Basic & Additional

– Basic Criteria• RBI Route

– This criterion applies where principal business of foreignentity falls under sectors in which 100 percent FDI ispermissible under automatic route

• Govt Route

– This criterion applies where principal business of foreignentity falls under sectors in which 100 percent FDI is notpermissible under automatic route. Applications fromentities falling under this category are considered by theRBI in consultation with GOI, Ministry of Finance

BO/LO In India by F E- Annex A

– Additional Criteria

• Track Record– For BO – Profit making - immediately preceding 5 years in

home country

– For LO - Profit making - immediately preceding 3 years in homecountry

• Net Worth– BO – Not less than 1,00,000 USD or its equivalent

– LO – Not less than 50,000 USD or its equivalent

– NW = Total Paid-up Capital (+) Free Reserves (-) Intangibles

as per latest Audited Balance Sheet/Account Statement –certified by CPA or Registered Accounts Practitioner or whatever called

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BO/LO In India by F E- Annex A

• Applicants who do not satisfy the eligible criteria and aresubsidiaries of other companies may submit a letter ofcomfort – Ann- D, subject that the parent co satisfies theeligibility criteria.

• Application form FNC along with Letter of comfort (ifapplicable) to be submitted along with documentsprescribed to be filed with Reserve bank.– Certificate of Incorporation/registration –attested by Notary

Public in country of registration

– Latest Audited balance sheet of Applicant Company – No audit -attested by CPA/ Registered Accounts practitioner

– Bankers report from the applicant’s banker in the hostcountry/country of registration showing number of years –banking relation with the bank

BO/LO In India by F E- Annex B

i. Permitted activities

• Branch office

– Export/Import of goods

– Rendering professional & consultancy services

– Carry Research work which parent co is engaged

– Promoting technical or financial collaborations betweenIndian Co and parent/overseas group co

– Representing Parent co in India & act as buying/sellingagent

– Render services in IT & development of software in India

– Foreign airlines/shipping co

Normally branch is engaged in activity of parent

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BO/LO In India by F E- Annex B

i. Permitted activities

• Liaison Office

– Representing parent co/group co in India

– Promoting export/import from/to India

– Promoting technical/financial collaborations betweenparent co/group co and co in India

– Acting as a communication channel between parent coand Indian companies

BO/LO – Additional offices

• Application for additional offices/activities– Submit Form to RBI

– Fresh Form FNC duly signed by authorisedsignatory of Foreign Entity in home country.

– If no changes documents need not beresubmitted.

– No of offices > 4, justification is necessary

– One office to be designated as nodal office.

– Request for additional activities other than what ispermitted. Submitted through AD -1 Bank.

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LO – Extend validity

• Request on letter head of LO submitted to AD Bankhaving jurisdiction – LO/Nodal office before expiry.

• Application from Foreign banks and insurance co’sdirectly recd and examined by Dept of BankingOperations and development, reserve Bank and IRDArespectively.

• No extension for LO’s which are NBFC’s andConstruction and development sectors(excludinginfrastructure development companies)– On expiry either to close down or converted into a

JV/WOS, in conformity with the extant of FDI Policy.

Winding up of LO/BO• Request to be submitted to AD Category 1 bank by BO/LO or Nodal office.

Application with following docs:

a) Copy of RB permission for establishing BO/LO

b) Auditor Certificate

i. Indicating manner of amt remittable with supporting statementof assets & liabilities and manner of disposal of assets

ii. Confirming the liabilities in India including arrears of gratuityand other benefits are properly met and provided for

iii. confirmation that no income accruing from sources outsideIndia has remained unrepatriated to India

c) No objection / Tax clearance certificate from IT authority

d) Confirmation from applicant/parent co that no legal proceedings inany courts in India are pending and no legal impediment to theremittance

e) Report of ROC – Compliance with provisions in case of winding up(Notification 198/2009-RB DT 24-09-2009

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BO/LO – Delegation of powers

• View of liberalising - Powers delegated to AD category 1 banks

• Application in Form FNC (other than banking and insurance co’s)

– Submit to AD-1 Bank

– AD-1 Bank Forwards the application to RBI, FX division, ForeignInvestment Division, Central Office Mumbai

– AD Bank has to do the due diligence in respect of applicantsback ground, promoters history, nature and activity of business,sourcing of funds, compliance of KYC norms and then forwardthe application to RBI with comments/recommendations.

• Applications – Banking and Insurance co’s

– Directly with the department of banking operations anddevelopment of the Reserve bank and the Insurance Regulatoryand Development authority respectively.

BO/LO – Delegation of powers

• Approval of RB is not required to establish a branch/unit in SEZ forundertaking manufacturing and service activities, subject to compliancewith the Notification No FEMA 102/2003-RB dt 03-10-2003

• Submission of Annual Activity Certificate (AAC)

– Present - AAC by Auditors to CO/RO of RB.

– Wef 1-2-2010. ending March 31st to be submitted before 30th April.

– Now doc’s to be submitted to AD Cate 1 bank and a Copy to DirectorGeneral of Income tax(International Taxation) by

• Sole BO/LO

• Multiple BO/LO – Nodal office of BO/LO – COMBINED AAC.

– AD to scrutinize the AAC and ensure activities undertaken by BO/LOare as per the terms and conditions of approval.

– Adverse findings to be reported immediately to RO/CO of RBI

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Extension of LO

• Extension of validity period of LO– Wef 01-02-2010, extend validity period of 3 years from the

date of original approval/extension granted by RB.– Conditions are satisfied

• AAC submitted for existing LO. AD can confirm about the timelysubmission of AAC for previous years by LO

• Account has been operated in accordance with terms andconditions – approval

• Extension to be granted within One month from requested dateand intimate RO of RBI.

– Banking and Insurance – directly apply to IRDA/RBI– No extension to LO of NBFC and Construction &

development sector (excluding infrastructure)– Upon expiry – close or convert to JV or WOS – in line with

FDI Policy

Closure of BO/LO

• Reg 6(1)(iii) of Notn No FEMA 13/2000 viz FEM(Remittanceof deposits) Regulation, 2000

• Conditions and formalities as discussed earlier in winding upof BO/LO are to be submitted

• Additional docs as specified by RBI approval• AD Bank to ensure AAC filed with RBI for existing BO/LO• Confirmation from CO/RO of RBI in case of BO/LO

concerned• On satisfaction allow closure account maintained by them

and remit proceeds to the overseas entity.• Closure report – CO/RO of RBI• if documents are not found in order then forward the

application to RBI with observations for necessary action.

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FEM(Remittance of Assets)Reg,2000

• Amendment to regulation 6

• New condition to be satisfied in case ofremittance of winding up of branch office:

– Report from Registrar of companies regardingcompliance with provisions of the Companies Act,1956, in case of winding up of the office in India.

• Notification 198/2009-RB DT 24-09-2009

Look alike……….

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NRI Vs PIO• Significant difference - NRI & PIO

• NRI - A person resident of outside India who is a citizen of India

• PIO – Various definitions – changing conditions

• One of the definitions of PIO – means an individual (not being acitizen of Pakistan / Bangladesh / Srilanka /Afghanistan / China /Iran / Nepal / Bhutan), who

– at any time held an Indian passport

– who or either his father or grand father was a citizen of Indiaby virtue of the Constitution of India or the Citizenship Act,1955

• PIO – Citizen of another country but roots are in India

• FEM(Remittance of assets) Reg 2000 – ‘the person is a spouse ofan Indian Citizen or a person referred’

PIO Definition– Inclusion of mother & grand mother• Defn – PIO – Reg 2( c) of FEM(Acquisition and Transfer

of Immovable Property in India), 2009 has beenamended to include ‘mother’ and ‘grand mother’.

• Notification 200/2009-RB dt. 05-10-2009• PIO can acquire immovable property in India other

than agricultural property, plantation or a farm house.– Sale consideration – funds in normal banking channel –

foreign currency

• Sell immovable property to a person resident in India• Can gift –immovable prop- resident / citizen of India• Acquire immovable property – gift/inheritance

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FCEB

Foreign Currency Exchangeable bond

• Governed by Foreign Exchange Management (Transfer or issue ofany Foreign Security) Regulations, 2004

• Finance Ministry notified FCEB Scheme 2008

• Notification FEMA 188/2009-RB dt 03-02-2009 – Retrospectiveamendment 23-09-2008

• FCEB is a foreign currency bond, issued by an Indian IssuingCompany (IC) and subscribed to by a person who is a residentoutside India. FCEBs are exchangeable into equity shares of anoffered company (OC)

– Parent /Group Co A

– Issuing Co B

– Offered Co C

– Person who is a resident outside India I

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FCEB- Chart

I

(Resident

outside India)

Exchanged /

Redeemed into

Shares

B

(Issuing

Company)

C

(Offered

Company)

A

(Parent / Group

Company)

Issue

FCBHolds

shares

FCEB - Objective

• Objective– Indian corporate houses to raise funds overseas,

for acquisitions or Greenfield projects

– essentially meant for promoter companies tounlock their investments

• Difference between FCCB & FCEB– Of Same Company whereas IC & OC are of same

Group/Parent Co

– Fresh issue of shares on conversion whereas IC/PCshould hold shares of OC

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FCEB – Who can issue

– Issuing Company must be an Indian company, which:

• Is part of the promoter group of OC;

• Holds the offered shares in OC; and

• Is eligible to raise funds from the Indian securitiesmarket.

– Offered Company should be Indian listed company, which:

• Is engaged in a sector eligible to receive foreigninvestment; and

• Is eligible to issue/avail FCCB or ECB.

• Investor can be any person resident outside India who ispermitted to invest in OC, under the FDI (foreign directinvestment) policy.

FCEB - Proceeds

• End use of FCEB proceeds– Issuing Co

• Direct Investment outside India in JV or WOS – Guidelines to be followed

• In Promoter Group Co’s

– Parent Co • May utilise by complying with ECB regulations

– FCEB proceeds cannot be invested in real estate and capital market

– FCEB scheme does not mandate that the investment in group companies should necessarily be by way of equity.

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FCEB-Approvals

• An FCEB issue would require the following approvals:– From the RBI, by IC.– From the FIPB (Foreign Investment Promotion Board), if the

investment in OC is not under the automatic route.– From IC's board and shareholders, as per company law.– From OC's board.

• How FCEB redemption/exchange works?– FCEBs provide an option to the investor for redemption or

exchange into shares of OC. The minimum maturity period forredemption must be 5 years.

– Exchange option can be exercised any time before redemption.– Investors are freely permitted to sell OC shares received upon

exchange;– however, cash settlement upon exchange is not permitted.

FCEB –Pricing, drawbacks, etc• Pricing of FCEB

– The minimum benchmark exchange price shall be higher of 2week or6-month average weekly closing prices of OC in a stock exchange,with reference to the board resolution date of IC.

• All in cost

– Interest payable and issue expenses incurred in foreign currencyshall be as provided under the FEM(Borrowing or lending in ForeignExchange) Regulations, 2000 viz., not exceed Libor (London interbank offer rate) plus 250 bps (basis points)

• Drawbacks on IC

– The offered shares shall be kept free from all encumbrances.

– IC cannot transfer, mortgage, make collateral offer of, or trade in,OC shares offered as part of FCEB issue, till itsredemption/exchange.

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FCEB – Domestic Tax laws• The tax provisions governing FCEBs?

– FCEB interest payments shall attract tax withholding at10 percent, as per Section 115AC of IT Act.

– Taxation of dividend as per Sec 115 AC– A non-resident should be eligible to claim treaty benefits– The scheme specifically provides that transfer of FCEBs

between non-residents shall be exempt from tax in India.– Section 47(xa) exempts from capital gains tax any transfer by

way of conversion of FCEBs into OC shares.

• Would IC get interest deduction?

– The deductibility of interest payments in the hands of IC wouldbe subject to funds being utilised for the purpose of itsbusiness, as mandated under Section 36(1)(iii) of the IT Act.

Bank guarantees / Advance remittances

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Enhanced limit for issue of BG on behalf of service importers

• Import of services– limit for issue of BG by ADCategory-1 banks stands enhanced from USD100000 toUSD-500000 .

• In favour of a NR service provider on behalf of aresident customer who is a service importer.

• Conditions to be satisfied– Banker to be satisfied of a bonafides of the transaction

– Documentary evidence for import of services

– Guarantee to secure a direct contract between residentand non resident

• AP (DIR Series) Cir No 11, dated 5-10-2009

Enhance BG in case of PSC

• Enhancement Not applicable to

– Public Sector Companies

– Dept or Undertaking of Govt of India or State government

• Approval from the Ministry of Finance, GOI would berequired to be obtained for BG exceeding USD100,000 or equivalent.


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Advance remittance for Import of services

• Similar provisions to BG’s

• Limit increased for Advances for Import ofservices from USD 100,000 TO USD 500,000

• In case of public sector companies, approvalof Ministry of finance, GOI for advanceremittance without Bank guarantee foramount > USD 100,000.


CHANGESIN ECB

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ECB

• ECB refers to a commercial loans in the formof bank loans, buyers credit, suppliers credit,securitized instruments (ex. Floating ratenotes and fixed rate bonds) availed from anon-resident lenders with a minimum averagematurity of 3 years.

Pledge of shares for securing ECB

• Looks like to bring parity with FCEB

• FEM (Tfr or issue of Security by a Person ResidentOutside India) Reg, 2000.

• Notification 202/2009-RB dated 10-11-09 w.r.e.f11-07-2008.

• New Regulation 12 introduced:– Any person who is promoter of a co registered in India

– Raised ECB, may pledge shares of the borrowing co orassociate resident co for securing ECB.

– Before pledging – No objection from AD bank

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Pledge of shares-ECB –Cont…..

• AD bank should be satisfied –– Strictly compliance of ECB guidelines– Loan agreement signed by lender and borrower, borrower

obtained Loan Registration Number from RBI– Security clause in the Loan Agreement requiring the

borrower to create charge on financial securities.

• Additional conditions– Period of pledge & maturity of ECB have to be co-terminus– Invocation of pledge, tfr in accordance with FDI policy &

direction of RBI– Certificate of Statutory Auditor – Borrower Co will

utilise/d proceeds of ECB for permitted end use/s only.

FCCB

• Discontinuing facility of buy back of Foreign Currency

Convertible Bonds (FCCB)

– Indian Companies were allowed to buy back till 31-12-

2009 under both the approval route and automatic route.

– Reasons for discontinuation

• Macro economic conditions and global developments

• Improvement in stock prices


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Telecom Sector


– Earlier Payment for obtaining license/permit for3G Spectrum is an eligible end-use for thepurpose of ECB under automatic route.


– Now the eligible borrowers are permitted toborrow ECB in the Telecommunication Sector forpayment of spectrum allocation.

Restoration of ‘All-In-Cost Ceiling’ in respect of ECB under Approval Route

• All-in-cost includes– Rate of Interest, other fees and expenses in foreign currency except

commitment fee, pre-payment fee, and fees payable in India rupees.

– However payment of with holding tax in Indian rupees is excluded forcalculating the all-in-cost.

• Withdrawal of existing relaxation in all-in-cost ceiling underapproval route for ECB’s

– (such ceilings were not applicable till 31-12-2009 vide AP(Dir series) circular No 64.)

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All-In-Cost Ceiling – Cont….

• RBI has again prescribed such all-in-costs ceilings in respect of Loanagreements which have been signed on or after January 1, 2010 asunder:

Average Maturity period All-in cost ceiling over 6 month Libor

3-5 years 300 basis points

> 5years 500 basis points

• If ECB agreement are signed on or before 31-12-09, where all costsexceed ceilings, then furnish a copy of loan agreement with RBI.

• Such Proposals would continue to be considered under approvalroute


NBFC-ECB

• Under Approval route

• Existing Co – Borrow from– Multilateral/regional financial institutions

– Government owned development financial institutions

• Thrust given for development of infrastructure sector

• Allowed to borrow– From Recognised lender category including International banks

– Subject to complying with prudential standards prescribed by RBI

– Borrowing entities should hedge their currency risks

• AD Category 1 bank should certify compliance with prudentialnorms by the borrowing NBFC

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NBFC-ECB …..

• Recognised lender category

– International banks

– International capital markets

– Multilateral financial Institutions such as IFC, ADB, CDC, etc

– Export credit agencies

– Suppliers of equipments

– Foreign collaborators

– Foreign Equity holders


Integrated townships with ECB

• Earlier corporates engaged in the development of integratedtownships were permitted to avail ECB under the approvalroute until 31-12-2009.

• Press note 3 (2002 series) dated 04-01-2002 issued by DIPP(Department of Industrial Policy and Promotion) , Ministry ofCommerce & Industry, Govt of India

• Extended by one year till 31-12-10.

• All other terms and conditions stipulated remain unaltered.


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Integrated townships

• Integrated Townships –

– Housing, commercial premises, hotel, resort, city and regionallevel urban infrastructure facilities such as roads and bridges,mass rapid transport systems and mfr of building materials.

– Development of land and providing allied infrastructure formsan integrated part of township development

– Minimum area to be developed should be 100 acres. Normsand standards as per local bye laws/rules.

– In absence of byelaws, a minimum of 2000 dwelling units forabout 10,000 population will need to be developed.

FCCB’s – BUYBACK -Discontinued

• RBI keeping in viewing the prevailing macro-economic conditions and global developmentsespecially improvement in stock prices.

• Buyback of FCCB’s is discontinued with effectfrom 1-1-2010.

• Earlier Indian co’s were allowed to buybackunder both automatic as well as approvalroute. Facility remain valid till 31-12-2009

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Export or Import of Currency

• FEM(Export & Import of Currency) Reg, 2000

• Amendment Reg 3– Enhance the limit of export or import of Indian

currency notes from Rs 5000 to Rs 7500.

– A person can take outside India / at time of returningto India after temporary visit to any foreign countrycan bring into India.

– Both the conditions of export and import excluded forNepal & Bhutan

• Notn 195/2009-RB dated 7-7-2009

Exchange Earners Foreign Currency (EEFC) Account by SEZ Developers

• FEM(Foreign Currency A/c by a personresident of India) Reg, 2000

• Para 1A of Schedule– Eligibility to open, hold and maintain EEFC account

by SEZ developers

– All categories of foreign exchange earners areallowed credit upto 100% of foreign exchangeearnings


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Data on ECB/FCCB – Nov 2009

Sl No Route Equivalent Amount in USD

1. Under Approval Route ( incl FCCB of USD 1,300,000,000)

1,632,171,848

2. Under Automatic Route (incl FCCB of USD 105,000,000)

721,493,738

TOTAL OF ECB/FCCB 2,353,665,587

IDR

FOREIGN CO’S-PLEDGE SHARES

DEPOSITORY IN INDIA

TRADED AS IDRIN INDIAN MARKET

IN RUPEES

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Issue of IDR

• Companies (Issue of Indian Depositary Receipts)Rules, 2004 called ‘IDR Rules’– Facilitates companies resident o/s India – Issue IDR’s

through Domestic depository– Persons residing in India and o/s India can purchase,

possess, transfer and redeem IDR’s– IDR’s shall be issued in Indian rupees– FEMA regulations not applicable to person Resident

of India– FII & NRI may also invest, purchase, hold & transfer

subject to FEM (Transfer or issue of Security by aperson resident outside India) Regulations, 2000

Issue of IDR – cont…..

– NRI can invest in IDR’s out of NRE/FCNR (B) A/c

– Provides procedures for transfer and redemptionof IDR’s.

– Pre-condition

• IDR shall not be redeemable into Equity shares beforeexpiry of One year period from the date of issue of IDR


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Money Changing Activities –Suspicious Transaction Reporting

• All authorised persons are brought within thedefinition of Financial institutions.

• Suspicious transaction report to Financial IntelligenceUnit-India(FIU-IND) within 7 days.

• Sole responsibility of franchisor to the reportingrequirements.

• Change in revision of KYC norms, AMLstandards, Combating the financing ofTerrorism(CFT) for money changing activities

Money Changing Activities –Suspicious Transaction Reporting

• Non compliance – Penal provisions under– FEMA, 1999;– PMLA, 2002 AND– PML(Maintenance of records of the nature and value of

transactions, the Procedure and Manner of Maintaining andTime for Furnishing Information and Verification andMaintenance of records of Identity of the Clients of the BankingCompanies, Financial institutions and Intermediaries) Rules,2005, as amended from time to time.

• Retention of Records – shall be maintained for a period ofTEN YEARS.

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Hot News……..

CA’s, CS told to report frauds directly to Home ministry

• Economic times – Saturday-24-04-2010• Sec 51A of Unlawful Activities (Prevention) Act• Suspicious activities include cases where an

entity approaching them for investing intofinancial instruments or immovable property orarrange for incorporating a company as adirector, share holder or partner

• Professionals to report suspicious transactionswithin 24hours.

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Private Equity – Stiff valuations

• Economic Times dt 26-04-2010

• Foreign Private Equity firms -

• Buying stake in Unlisted Co’s

• Valuation on discounted cash flow

• Earlier CCI GUIDELINES

– Average of

• Profit earning capacity value method

• Net Asset Value method

Thank you [email protected]

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