Shriram City Union Finance Limited - Karvy

Foreign Direct InvestmentFDI in an Indian company is governed by the provisions of the FEMA read with the FEMA Regulations and theForeign Direct Investment Policy (“FDI Policy”) by the DIPP. FDI is permitted (except in the prohibited sectors) inIndian companies either through the automatic route or the approval route, depending upon the sector in which FDIis sought to be made. Under the automatic route, no prior Government approval is required for the issue of securitiesby Indian companies/ acquisition of securities of Indian companies, subject to the sectoral caps and other prescribedconditions. Investors are required to file the required documentation with the RBI within 30 days of such issue/acquisition of securities.Under the approval route, prior approval from the FIPB or RBI is required. FDI for the items/ activities that cannotbe brought in under the automatic route (other than in prohibited sectors) may be brought in through the approvalroute. Further:(a)(b)As per the sector specific guidelines of the Government of India, 100% FDI/ NRI investments are allowedunder the automatic route in certain NBFC activities subject to compliance with guidelines of the RBI inthis regard.Minimum Capitalisation Norms for fund based NBFCs:(i)(ii)(iii)For FDI up to 51% - US$ 5 Lakhs to be brought upfrontFor FDI above 51% and up to 75% - US $ 50 Lakhs to be brought upfrontFor FDI above 75% and up to 100% - US $ 500 Lakhs out of which US $ 75 Lakhs to be broughtupfront and the balance in 24 months(c)(d)(e)Minimum capitalization norm of US $5 Lakhs is applicable in respect of all permitted non fund basedNBFCs with foreign investmentForeign investors can set up 100% operating subsidiaries without the condition to disinvest a minimum of25% of its equity to Indian entities, subject to bringing in US$ 500 Lakhs as at (b) (iii) above(without anyrestriction on number of operating subsidiaries without bringing in additional capital)Joint ventures operating NBFC’s that have 75% or less than 75% foreign investment will also be allowed toset up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also complying withthe applicable minimum capital inflow i.e. (b) (i) and (b) (ii) above.Where FDI is allowed on an automatic basis without FIPB approval, the RBI would continue to be the primaryagency for the purposes of monitoring and regulating foreign investment. In cases where FIPB approval is obtained,no approval of the RBI is required except with respect to fixing the issuance price, although a declaration in theprescribed form, detailing the foreign investment, must be filed with the RBI once the foreign investment is made inthe Indian company. The foregoing description applies only to an issuance of shares by, and not to a transfer ofshares of, Indian companies. Every Indian company issuing shares or convertible debentures in accordance with theRBI regulations is required to submit a report to the RBI within 30 days of receipt of the consideration and anotherreport within 30 days from the date of issue of the shares to the non resident purchaser.Laws relating to EmploymentShops and Establishments legislations in various statesThe provisions of various Shops and Establishments legislations, as applicable, regulate the conditions of work andemployment in shops and commercial establishments and generally prescribe obligations in respect of inter aliaregistration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measuresand wages for overtime work.181