Annexure XIV Continued… - Edelweiss

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of
India and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which
foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise
manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted,
foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any
prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such
investment.
The consolidated FDI Policy issued by the Department of Industrial Policy and Promotion, Ministry of
Commerce and Industry, GoI (“DIPP”) by circular 1 of 2011, with effect from April 1, 2011 (the
“Consolidated FDI Policy”), consolidates and supercedes all previous press notes, press releases and
clarifications on FDI issued by the DIPP. The DIPP currently intends to update the circular every six months
and the next update is expected on October 1, 2011.
The Consolidated FDI Policy provides that:
(i) FDI up to 100% under the automatic route is permitted for coal and lignite mining for captive
consumption by power projects, and iron and steel and cement units and other eligible activities permitted
under and subject to the provisions of the Coal Mines (Nationalisation) Act, 1973.
(ii) FDI up to 100% under the automatic route is permitted for setting up coal processing plants like washeries
subject to the condition that the company shall not do coal mining and shall not sell washed coal or sized
coal from its coal processing plants in the open market and shall supply the washed or sized coal to those
parties who are supplying raw coal to coal processing plants for washing or sizing.
(iii) FDI up to 100% on the automatic route is permitted for power including generation (except Atomic
energy) transmission, distribution and power trading subject to the provisions of the Electricity Act, 2003.
Therefore applicable foreign investment up to 100% is permitted in our Company under the automatic route.
Subscription by foreign investors (NRIs/FIIs)
By way of a circular no. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to shares of an
Indian company in a public offer without the prior approval of the RBI, so long as the price of the shares is not
less than the price at which the shares are issued to residents. Transfers of equity shares previously required the
prior approval of the FIPB. However, by an RBI circular dated October 4, 2004 issued by the RBI, the transfer
of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the
RBI, provided that (i) the activities of the investee company are under the automatic route under the FDI
Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997; (ii) the non-resident shareholding is within the sectoral limits under the FDI
policy; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI / RBI.
Representation from the Bidders
No person shall make a Bid in Issue, unless such person is eligible to acquire Equity Shares of the Company in
accordance with applicable laws, rules, regulations, guidelines and approvals. Investors that Bid in the Issue
will be required to confirm and will be deemed to have represented to the Company, the Selling Shareholders,
the Managers and their respective directors, officers, agents, affiliates and representatives, as applicable, that
they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares
of the Company and will not offer, sell, pledge or transfer the Equity Shares of the Company to any person
who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares
of the Company. The Company, the Selling Shareholders, the Managers and their respective directors, officers,
agents, affiliates and representatives, as applicable, accept no responsibility or liability for advising any
investor on whether such investor is eligible to acquire Equity Shares of the Company.
There is no reservation for non-residents, NRIs, FIIs, foreign venture capital funds, multi-lateral and bilateral
development financial institutions and any other foreign investor. All non-residents, NRIs, FIIs and foreign
venture capital funds, multi-lateral and bilateral development financial institutions and any other foreign
investor applicants will be treated on the same basis with other categories for the purpose of allocation.
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