All about Foreign Liabilities & Assets (FLA)

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ALL ABOUT FOREIGN LIABILITIES ASSETS (FLA)

• ENTERSLICE
• E-57, SECTOR-63, NOIDA, UP 201301 (INDIA)

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Foreign Liabilities Assets (FLA)
All liabilities i.e. obligation to pay off to
person other than Indian Residents and Assets
i.e. right to receive/receivables from person
other than Residents India, required to report
under direction of Circular A.P. (DIR Series) No.
145 dated 18th June, 2014 issued by Reserve Bank
of India by virtue of section 10(4) and 11(1) of
FEMA Act, 1999.
FLA return is to be submitted to authority dully
filled either in Excel or Word file and send via
electronic mail (registered mail in RBI) to
fla_at_rbi.org.in by 15th July of each year
irrespective of audited books or not subject to
having foreign liabilities and assets in
preceding years or current year.
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Once you download the excel version of Return,
the first is to enable the options and insert the
year of reporting like 2017 or 2018, as the case
may be. Under FLA Return, this section required
basic details of reporting entity and contact
person. Fill each column accordingly as required
or instructed in sheet. If the reporting entity
is Listed, once you choose yes then share price
on closing date of reference period to be given.
Current Year Face Value of Share as well as
Market Value of Share of Last and Current Year to
be reported.
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Section II(Financial Details)
Need to report on Capital Structure of reporting
entity with No. of Shares and Amount (in Rs.
Lakhs) for last and current year.
Under this reporting entity required to provide
no. of shares and its amount in Lakhs for both
previous year and current year for each type of
category given in Point No. 1 to 12 as
applicable. Once fill up the details of Non
Resident Equity Participating Preference Share
Capital is Auto-populated as per details fill
in.
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Continued
Form is clear and as stated, the reporting entity
has to report amount in lakhs and during the year
transaction at all to be given.
Reserve Surplus of reporting entity given in
Note 3 of Schedule 3-Balance Sheet to be given in
this image excluding Profit Loss Account
Balance of Current Year.
Only if reporting Company is Subsidiary Company
of Foreign Company, required to fill. The details
of Purchase and Sale in Amount in Lakhs as shown
in Image.
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Section III(Foreign Liabilities)
Reporting entity require to furnish here the
outstanding investment made under the FDI Scheme
in India by Non-Resident Direct investors, who
were individually holding 10 or more OR less
than 10 ordinary/equity preference shares of
reporting company on the reporting date. However
in less than 10 holding, entity does not require
to provide Name of the Non-Resident
Company/Individual rather county wise
consolidated information to be provided.
Other Capital includes all other liabilities and
claims at Nominal Value, except equity and
participating preference shares (i.e. trade
credit, loan, debentures, Non-participating share
capital, other accounts receivable and payables
etc.) of Reporting company with its investor.
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Continued .
Reporting entity require to furnish here the
outstanding investment by non-resident investors
, other than those made under Foreign Direct
Investment Scheme in India.
Note To report any investment under Section III,
Valuation rule is prescribed by authority. If
reporting entity is listed companies then equity
should be valued using share price on closing
date of reference period.In case of Unlisted
Companies, Own Fund of Book Value (OFBV) method
to be used, explained later.
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Section IV(Foreign Assets)
Entity is required to report here the total
equity of Direct Investment Enterprises (DIE),
equity held by reporting company, reserve
(excluding PL Account) and profit loss account
of those DIEs in each of which reporting company
hold 10 or more equity shares on the reference
date. Exchange rate of reporting foreign currency
against Indian Rs should be given as on closing
date of reference period.
Direct investment It is a category of
international investment in which a resident
entity in one economy i.e. Direct Investor (DI)
acquires a lasting interest in an enterprises
resident in another economy i.e. Direct
Investment Enterprises (DIE). It consists of two
components, viz. Equity Capital and Other
Capital.
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Continued .
Reporting entity should furnish the market value
of outstanding investments in DIE, made by itself
under the ODI Scheme, in each reporting company
hold 10 or more OR less than 10 equity shares
on the reference date. Where if less than 10 is
holding, reporting entity does not require to
give name of non-resident direct investment
enterprises (DIE).
Other Capital is same as earlier discussed in
previous sheet.
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Continued
Kindly furnish the market value of outstanding
investment in non-resident enterprises, other
than those made under ODI scheme.
Note Country wise consolidated information
pertaining to each type of Investment should be
reported separately.
Note To report any investment under Section IV,
Valuation rule is prescribed by authority. If
Overseas entity is listed companies then equity
should be valued using share price on closing
date of reference period. In case of overseas
entity is unlisted Companies, Own Fund of Book
Value (OFBV) method to be used, explained later.
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Section IV-A Outward Foreign Affiliates Trade
Statistics (Outward FATS)
It is applicable or activated only if more than
50 equity holding by Indian Reporting
Company. Under this section, reporting company
has to report import, export, total sales and
total purchase of Direct Investment Enterprises
(DIE) abroad.
Name of DIE has to be given from which Import or
Export, if any transaction done during the year
to be reported and currency of transaction has
to be stated.
Reporting include both last year and current year.
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Section V (other Assets and Liabilities with
Foreign unrelated parties)
This is a residual category that includes all
financial outstanding liabilities and claim not
considered as Direct Investment or Portfolio
Investment
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Miscellaneous Point to be Noted
Valuation of Equity Investment using OFBV method
in case of Unlisted Company
S.No Particulars Previous March Latest March
A Equity Share Capital    
B Participating Preference Share Capital    
C Total A B A B
D Reserve Surplus    
E Net Worth of the Company C D C D
F Equity Share Capital held by Non-Resident Direct Investor (NRDI)    
G Participating Preference Share Capital held by NRDI    
H Total F G F G
I Equity Participating Preference Share holding Percentage H/C H/C
J FDI at Market Value EI EI

• Note
• Share issued to non-resident on Non-Repatriable
  basis should not be reported in Annual.
• Trade Debt Securities should be valued at market
  price, while all other types of debt viz., loan,
  trade credit, deposits, and other accounts
  payable/receivable should be valued at Nominal
  Value.

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Continued .

• Non-Participating Preference Share do not have
  following rights-
• To receive dividend, out of surplus profit after
  paying the dividend to equity shareholders
• To have share in surplus assets remaining after
  the entire capital is paid in case of winding up
  of the company.

Special Purpose Vehicle (SPV) It is a legal
entity (usually a limited company of some type
or, sometimes, a limited partnership) created to
fulfill narrow, specific or temporary objectives.
SPV have little or no employment, or operations,
or physical presence in the jurisdiction in which
they are created by their parent enterprises,
which are typically located in other economies
jurisdictions. They are often used as devices to
raise capital or to hold assets and liabilities
and usually do not undertake significant
productions.
Public Private Partnership (PPP) It describes a
government service or private business venture
which is funded and operated through a
partnership of government and one or more private
sector companies. PPP involves a contract between
a public sector authority and a private party, in
which the private party provides a public service
or project and assumes substantial financial,
technical and operational risk in the project.
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