Guidelines for calculation of total foreign investment in an Indian company The total foreign investment is sum total of Direct

Foreign Investment of: (i) Direct Foreign Investment which means all investment directly by a non resident entity into the Indian Company is counted towards direct investment (ii) Indirect Foreign Investment which means the entire investment by the investing company which is owned and controlled by non resident entities into the subject Indian company is considered as Indirect Foreign Investment Note: Foreign investment through the Indian company is not considered as Indirect foreign investment The above calculation apply at every stage of investment into Indian companies and to each and every Indian Company Additionally companies need to fulfill conditions li e furnishing full details of the foreign investment including ownership details! information control about the company! informing about the agreement which have effect on the appointment of the board of Directors or on the e"ercise of voting rights or creating voting rights disproportionate to shareholding or incidental matters thereto for see ing #overnment approval$ In all sectors attracting sectoral caps! the balance e%uity i$e$ beyond the sectoral foreign investment cap! would specifically be beneficially owned by&held with&in the hands of resident Indian citi'ens and Indian companies! owned and controlled by resident Indian citi'ens$ In the I( ) and Defence sectors where the sectoral cap is less than *+,! the company would need to be owned and controlled by resident Indian citi'ens and Indian companies! which are owned and controlled by resident Indian citi'ens$ The policy and methodology does not apply to Insurance -ector and to the foreign investment already made in accordance with the guidelines in e"istence prior to February ./! 011+ will not re%uire any modifications to confirm to these guidelines

Summary on Foreign Direct Investment #overnment of India with the objective of attracting and promoting foreign direct investment has put in place transparent! predictable and comprehensive policy framewor on Foreign Direct Investment$ The Department of Industrial 2olicy and 2romotion 3DI224! 5inistry of Commerce (

Industry ma es policy pronouncements on FDI through 2ress Notes& 2ress 6eleases$ The same are notified by 6eserve )an of India as amendments to the Foreign 7"change 5anagement 3Transfer or Issue of -ecurity by 2ersons 6esident 8utside India4 6egulations! 0111$ In case of any conflict! the relevant F75A Notification will prevail$ The present consolidation is effective from April 9! 01./ and subsumes and supersedes all 2ress Notes&2ress 6eleases&clarifications&circulars issued by DI22$ FDI is prohibited in: 3a4 :ottery )usiness including #overnment &private lottery! online lotteries! etc$ 3b4 #ambling and )etting including casinos etc$ 3c4 Chit funds 3d4 Nidhi company 3e4 Trading in Transferable Development 6ights 3TD6s4 3f4 6eal 7state )usiness or Construction of Farm ;ouses 3g4 5anufacturing of Cigars! cheroots! cigarillos and cigarettes! of tobacco or of tobacco substitutes 3h4 Activities & sectors not open to private sector investment e$g$ Atomic 7nergy and 6ailway Transport 3other than 5ass 6apid Transport -ystems4$ Note: Foreign technology collaboration in any form including licensing for franchise! trademar ! brand name! management contract is also prohibited for :ottery )usiness and #ambling and )etting activities