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28-06-2023
Prepared for the Study Circle Meeting organized by the Bengaluru Chapter of the Institute of Company Secretaries of India
FILING OF FLA ANNUAL RETURN
&
FORM FC-GPR
By – CS Della Santhosh T, Associate, Fox Mandal & Associates, Bengaluru
Disclaimer
The views and opinions expressed in this presentation and on the following slides are solely those of the presenter and not necessarily those of Fox Mandal.
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What is FLA?�
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Background of the Return/ Evolution�
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From April 20,2007 Part B of FCGPR has to be submitted to RBI
From March 15, 2011 ‘Annual Return on Foreign Liabilities and Assets’ (A. P. (DIR Series) Circular No.45 dated March 15, 2011) has been introduced, date of filing was July 15 of every year
From June 20, 2012, Filing through e-mail introduced ( A.P. (DIR Series) Circular No.133 dated June 20, 2012)
June 28, 2019 online filing in https://flair.rbi.org.in is introduced (A.P. (DIR Series) Circular No. 37 dated June 28, 2019
Persons required to file FLA Annual Return
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Who is not required to file the return?
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FLA FILING Applicability
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What is the purpose for introduction of this return? �Why RBI collects such information from entities ?
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Filing Due Date…
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30 September of the year-
Revised return in case of revisions in provisional data as compared to audited figures with approval
July 15 every year
-can be filed with audited or unaudited figures
Consequence of delay filing FLA �
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Penalty for non-filing of FLA Return
Query: Whether penalty is still applicable above LSF in case of delay filing?
No
-clarified in RBI circular no. RBI/2022-23/122 A.P. (DIR Series) Circular No.16 dated September 30, 2022 – states :
-The facility for opting for LSF shall be available up to three years from the due date of reporting/ submission.
-In case a person responsible for any submission or filing under the provisions of FEMA, neither makes such submission/filing within the specified time nor makes such submission/filing along with LSF, such person shall be liable for penal action under the provisions of FEMA, 1999.�
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Continues…�
Whether compounding can be done for contravention in the filing of FLA Return?
Yes, The Regional Office of the RBI has the power to compound.
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Some important terms/Faqs in FLA
-Direct investment is a category of international investment in which a resident entity in one economy [Direct Investor (DI)] acquires a lasting interest in an enterprise resident in another economy [Direct Investment Enterprise (DIE)].
-It consists of two components, viz., Equity Capital and Other Capital.
If the Indian company has issued the shares to non-resident entities under the FDI scheme in India.
If the reporting Indian company also holds the equity shares in its DI company abroad.
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Some important terms/Faqs in FLA
What is “Other Capital” under Direct Investment?
-covers the outstanding liabilities or claims arising due to borrowing and lending of funds, investment in debt securities, trade credits, financial leasing, share application money etc., between direct investors and DIEs and between two DIEs that share the same direct Investor.
-Non-participating preference shares owned by the direct investor are treated as debt securities & should be included in ‘other capital’.
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Some important terms/Faqs in FLA
Participating preference shares are those shares which have one or more of the following rights:
(a) To receive dividend, out of surplus profit after paying the dividend to equity shareholders.
(b) To have share in surplus assets remaining after the entire capital is paid in case of winding up of the company.
On the other hand, Non-participating Preference Shares are those shares which do not have any of the above said rights.
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Some important terms/Faqs in FLA
Whether equity participation includes equity shares as well as compulsorily convertible debentures (CCD)?
NO, CCD held by Non-Resident direct investor should be reported under Other capital.
-if the investor holds only CCD as on end March, then it should be reported in Portfolio Investment in India.
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Some important terms/Faqs in FLA
Q.In the FLA Return, whether FDI should be reported based on the country of immediate investor or country of ultimate holding company? Where should we report the receivable/ payables with non-resident ultimate holding company?
While filling the FLA return, FDI reporting should be based on the country of immediate investor. However, if there are any receivables/payables with the non-resident ultimate holding company, then same should also be reported at ‘Other capital’
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Some important terms/Faqs in FLA
outstanding equity investments (secondary / stock market investment) by non-resident investors, other than those made under Foreign Direct Investment Scheme in India
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FLAIR APPLICATION�
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FLA User Registration�
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Continued….
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Continued
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HOW TO CHANGE THE AUTHORISED PERSON FOR THE ENTITY?�
STEP-1
Deactivate the existing account by email requestto surveyfla@rbi.org.in along with company name, CIN , username etc.
STEP-2
Re-register your entity with new authority letter and verification letter.
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FLA Online form
Home page
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Details disclosed in FLA
Section I: Identification particular of entity
Section II: Financial details
Section III: Foreign Liabilities
Section IV: Foreign Assets
Section V: Variation report
Section I: Entity particulars
Sr. No. | Field Name | Field Description |
1 | Name of the Indian Company* | Pre-filled, non-editable as per the FLA registration form |
2 | PAN number* | Pre-filled, non-editable as per the FLA registration form |
3 | CIN number* | Pre-filled, non-editable as per the FLA registration form |
4 | Name of the Contact Person* | Enter the name of the contact person |
5 | Telephone No. (with extension) * | Mention the telephone number with extension |
6 | Mobile Number* | Provide valid mobile number |
7 | E-Mail ID (Head of the institution) * | Pre-filled, non-editable as per the FLA registration form |
8 | E-Mail of Contact person* | Enter the Email ID of the contact person |
9 | Designation* | Mention the designation of the contact person |
10 | Website (if any) | Enter the website of the company, if any |
11 | Account Closing date* | Choose the date of closing account for submission of current FLA return from the side arrow of calendar |
12 | Nature of Business (As per National Industrial Classification (NIC) 2008 Code) * | Choose the nature of business as per National Industrial Classification (NIC) 2008 Code from the drop-down menu. Refer the Annex-1 for the list of National Industrial Classification (NIC) 2008 Codes |
Section I: Entity particulars
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13 | Whether your company is merged/amalgamated during year* | Select Yes or No. In case of Yes is selected, then provide the details of new company merged/amalgamated, number of merged companies and the name of merged entity. |
| Details of paid -up capital |
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14 | Whether the company is listed? * | Yes/No |
15 | Identification of the reporting company (in terms of inward FDI) * | Choose appropriate option from the drop-down menu.
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16 | Type of company* | To be selected from drop down |
17 | Whether the Company is Asset Management Company? * | Select Yes or No.
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18 | Whether the Company has Technical Foreign collaboration? * | Select Yes or No.
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19 | Whether the company has any business activity during latest financial year? * | Select Yes or No.
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Section II: Financial Details
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1.Paid-up Capital of Indian Company | ||
1.0 | Total Paid-up Capital | Auto-calculated Paid-up capital of a company cannot be zero or blank. |
1.1 | Total Equity & Participating Preference share Capital | Auto-calculated (sum of ordinary/equity share and Participating Preference share) |
(a) | Ordinary/Equity Share | -in actual -Amount will be Auto-calculated. -In case of different class of Equity Shares, consolidated figure should be reported |
(b) | Participating Preference Share | Amount will be Auto-calculated. |
1.2 | Non-Participating Preference share | Amount will be Auto-calculated. |
2 | Non-Resident Holdings | Details like Equity and Participating Preference Share Capital and Non- Participating Preference Share
Category- Individual, Company FIIs, Financial Institution, PIO etc.
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3. | Profit and Loss Account (from P/L Account)
| Profit (+) / Loss (-) before tax and after Tax Dividend(Interim and Final Dividend) Tax on Dividend (if any) Retained Profit (AC) |
4. | Reserves & Surplus | 4.1 Reserves and Surplus (from Balance sheet) 4.2 Of which, Profit(+) and Loss(-)account balance 4.3 Net worth of Company(AC) |
5. | Sales and Purchase made during the financial Year
| Domestic Sales Exports Domestic Purchase Imports
Total sales and Total Purchases will be AC |
6. | Employee Information of reporting Indian company(in actual) | Enter actual number of employees on payroll at the end of March (current year as well as previous year) |
Section III: Foreign Liabilities(investment made In India
FDI - Foreign Direct Investment |
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1. Investment in India under Foreign Direct Investment (FDI) scheme (10% or more Equity Participation |
As FDI 1- Name of the Non-Resident Company/ Individual, Country percentage of shareholding, Share capital
As FDI 2 ….As FDI 3 etc
When it comes to Share capital details following to be noted
1.0 Equity and PPS Capital 1.1 Liabilities to Direct Investor (AC) 1.2 Claims on Direct Investor (Reverse Investment)
2.0 Other Capital 2.1 Liabilities to Direct Investor 2.2 Claims on Direct Investor 3.0 Disinvestments in India during the year
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2.Investment in India under Foreign Direct Investment (FDI) scheme (Less than 10% Equity Holding) | - |
Portfolio Investment in India | outstanding investments by non-resident investors, other than those made under Foreign Direct Investment Scheme in India like Equity securities, Debt Securities, Money Market Instruments etc. |
Other Investment (Outstanding Liabilities with Foreign Unrelated Parties)
| 1.1 Trade Credit 1.2 Loans 1.3 Currency and Deposits 1.4 Other payable accounts |
Section IV: Foreign Assets (investment Abroad)
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Note: | - exchange rate as at end-March Previous FY and end-March Latest FY -Listed company: Equity as per share price on closing date of reference period -Unlisted company: Equity- Own Fund of Book Value (OFBV) Method should be used for the valuation.
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1. Equity Capital (PUC), Reserves & Surplus of Direct Investment Enterprise (DIE) Abroad (10% or more equity holding by Indian reporting company).
| -total equity of DIE -equity held by the DI -reserves (excluding P&L Account) -Net worth of DIE -Profit & Loss Account of those DIEs -Sales -Purchases -No.of employees -Under “Equity and PPS capital” the details of claims on DIE and Liabilities to DIE -Under “other Capital” the details of claims on DIE and Liabilities to DIE |
2. Direct Investment Abroad (Less than 10% equity holding) | - |
3. Portfolio Investments abroad | - |
4.Other Investment (Outstanding Claims on Foreign Unrelated Parties) | 1.1 Trade Credit 1.2 Loans 1.3 Currency and Deposits 1.4 Other payable accounts |
Section V: Variation Report
Some important aspects to be noted ….
Filing of Form FC-GPR
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FC-GPR – Foreign Currency- Gross Provisional Return
Who should file :Indian Company receiving Foreign Direct Investment (FDI) shall report on the investment to in FC-GPR.
Reporting requirement - under Regulation 4 of Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019
-Timeline for reporting- not later than thirty days from the date of issue of equity instruments.
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FIRMS (Foreign Investment Reporting and Management System) Application�
The Link to firm portal https://firms.rbi.org.in/firms/faces/pages/login.xhtml
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Entity User Registration and Creation of Entity Master
Entity User:
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Continued…
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Creation of Business User
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Mandatory attachment to FC-GPR
A declaration (plain paper) may be attached that the rights issue to person’s resident outside India is not less than the price offered to persons resident in India.
The valuation certificate should not be more than 90 days old as on the date of allotment of shares.
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FORMAT COMPANY SECRETARY CERTIFICATE
The certificate from CA/ CS to be submitted along with forms filed will cover the following:
i) all the requirements of the Companies Act, 2013/ Limited Liability Partnership Act, 2008/ any relevant rules/ regulations have been complied with.
ii) appropriate Government approvals, wherever required, have been obtained and the terms and conditions of such government approval, if any, have been complied with.
iii) the transaction is in compliance with the provisions under Foreign Exchange Management Act, 1999 and/ or the rules and regulations framed, or directions issued thereunder, as amended from time to time and as applicable.
iv) The company has all certificates (e.g., KYC, FIRC) issued by AD banks evidencing receipt of amount of consideration in accordance with extant rules/ regulations of FEMA, 1999.
Note: 1.UDIN applicable
2.AD insist same format and clauses as provided in the format
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FIRC- Foreign Inward Remittance Certificate
remittance received
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Delay filing FC-GPR –New LSF Calculation w.e.f 30/09/2022
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Sr. No. | Type of Reporting delays | LSF Amount (INR) |
1 | Form ODI Part-II/ APR, FCGPR (B), FLA Returns, Form OPI, evidence of investment or any other return which does not capture flows or any other periodical reporting | 7500 |
2 | FC-GPR, FCTRS, Form ESOP, Form LLP(I), Form LLP(II), Form CN, Form DI, Form InVi, Form ODI-Part I, Form ODI-Part III, Form FC, Form ECB, Form ECB-2, Revised Form ECB or any other return which captures flows or returns which capture reporting of non-fund transactions or any other transactional reporting | [7500 + (0.025% × A × n)] |
a) “n” is the number of years of delay in submission rounded-upwards to the nearest month and expressed up to 2 decimal points.�b) “A” is the amount involved in the delayed reporting.�c) LSF amount is per return.
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Launch of rationalised version of FIRMS
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7. LSF payment done- concerned RO will update the status in the FIRMS portal -the new status will be communicated to applicant through a system-generated email, which can also be accessed in the FIRMS portal.
8. Where there is delay more 3 years – AD approves subject to Compounding
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Sample Auto Acknowledgment email
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Email advise for LSF payment
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Email on Mode of Payment
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Specific instructions In case of LSF paid through NEFT/RTGS mode
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MAIL TO BE SENT TO CONCERNED RBI’s REGIONAL OFFICE FOR SUBMITTING NEFT/RTGS DETAILS��
SUBJECT: NEFT/RTGS Details for LSF payment as advised vide FIRMS email dated dd/mm/yyyy for FIRMS Form Reference No. _ _ _ _ _ (Provide Form No.)
Sir/ Madam,
This is with reference to the trailing autogenerated email (forward LSF autogenerated email in trail) received from FIRMS advising payment of LSF of ₹__ (mention LSF amount).
2. In this regard, it is brought to your notice that the above-mentioned LSF amount has been paid. Transaction details are as below:
FIRMS Form Reference No.:
NEFT/RTGS Transaction No.:
Name of A/c holder:
A/c No.:
IFSC:
Branch Name:
Bank Name:
Date of payment:
3. In view of the above, you are requested to take the aforesaid LSF payment on record.
Regards
XYZ
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Processing of form FC-GPR
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FCGPR Form –Details
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FCGPR Form –Section II – Foreign investor Details �
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FC-GPR Details –Section III-Amount of issue
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FC-GPR Details –Section III-Particulars of issue
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FC-GPR Details –Section V: Shareholding pattern
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Tracking status of FC-GPR forms filed
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Contact Details:
For any queries, please reach out to :
Della Santhosh T | Associate
Fox Mandal & Associates LLP |
FM House, 6/12, Primrose Road, Bangalore – 560025
Karnataka, INDIA
M : +91 9526753402| P : +91 80 2559 5911
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