APR discrepancies

& resolutions
 Type of Discrepancy: 1. APR for the period

Discrepancy Explanation Solution

APR period not matched 1. If the APR is first APR, the ‘from Branch needs to check the accounting year
with the project profile / date’ should be either the mentioned by client by obtaining project profile.
APR period not mentioned remittance date or date of Project Profile can be obtained by raising SR vide
reporting whichever is earlier “Internal Process Management_COG-CQT_ODI
2. If the APR is for subsequent year, Project Profile”. If there is any mismatch in the
then APR period should be the accounting year, same needs to be corrected.
accounting year of Foreign entity

Strictly for internal circulation only

 Type of Discrepancy: 1. APR for the period

• The Accounting year of overseas entity can be checked in the project profile in below section, Point 8. In the
Example, The accounting year is mentioned as ‘January’, it means the accounting year of overseas entity
mentioned by client at the time of doing transaction is ‘Jan-Dec’. The same accounting year to be followed for APR
filing. Incase there is any change in the accounting year of overseas entity, it needs to be changed in the project
profile as mentioned in the next slide

Strictly for internal circulation only

 Type of Discrepancy: 1. APR for the period

Documents Required for change in accounting year:

• CRL with reason for change in accounting year and the effective date of change in accounting year,
delay reason for reporting the change
 Duly filled and certified Sec B and C of Form FC
 Financials with new accounting year

Steps :
• A track to be raised under TMISC_ODI with above documents
• Post TCT approval, another track to be raised under TMISC_Lodgement control for updating
the project profile

Strictly for internal circulation only

 Type of discrepancy: 2. Financial Position of the foreign entity for the last two years

Discrepancy Explanation Solution

Financial positon of the Financial positon i.e. 1. Net-worth should be cross checked with the
Foreign entity not Net profit / (loss), value mentioned in the liabilities section in the
mentioned / details Dividend & Net-worth balance sheet.
mentioned in the foreign should match with the 2. Incase Net-worth is not clear in the balance
position section are not financials of the foreign sheet. Please check for the values mentioned
matched with the financials entity for the ‘share capital’ and ‘Reserves and
Surplus’. Net-worth is the addition of these
values
3. If it is still unclear, please ask for the calculation
separately from client.

Strictly for internal circulation only

 Type of discrepancy: 3. AD certification

Discrepancy Explanation Solution

AD certification 1. Branch has to fill and certify the 1. Certificate by the AD Bank authorized official need to
not provided section mentioned the designation, date, place and sign/seal,
2. The date mentioned in the in the 2nd while confirming 3 points, 1. Evidence of transaction
point of the AD certification should Share certificate, 2. Date, month and year of receiving
match with AD certification date the APR FC form, 3. All the previous year APR's
submitted by the IE/RI have been reported in the
online ODI application

Strictly for internal circulation only

 Type of discrepancy: 4. Capital structure as on the last day of the accounting year of the foreign
entity

Discrepancy Explanation Solution

Capital structure mentioned in Capital structure Please check with customer for the reason for difference in
the APR form not matched with should match with the capital structure, if there is an error, please modify. If there is
project profile / Capital structure project profile a change, please obtain below docs:
not mentioned • Reason for change in capital structure with pre and post
shareholding pattern. Client should also specify the time
period when change in structure implemented
• Shareholding patter containing name of parties involved,
number of shares, percent stake and constitution (Indian
or Foreign) –
• Documentary proof for change in structure

Strictly for internal circulation only

 Type of discrepancy: 4. Capital structure as on the last day of the accounting year of the foreign
entity
• The Percentage stake can be checked from the ‘Party Details’ Section in the project profile. The capital
account can be checked from the ‘Financial Commitment’ section.

Strictly for internal circulation only

 Type of discrepancy: 5. “5 digit NIC code as per NIC 2008”

Discrepancy Explanation Solution

5 digit NIC Code For most of the ODI Please obtain confirmation from customer on the 5
to be provided transactions done prior to FY digit NIC Codes and description as per NIC 2008 over
2021-22, 3 digit NIC codes as registered email or on letter head/white paper
per NIC 1987 and description declaration if individual.
used to be provided by
customer in the ODI form. As The NIC 2008 file can be obtained from below link:
per RBI instructions, 5 digit
NIC code as per NIC 2008 https://mospi.gov.in/documents/213904/0/nic_2008_17
also to be obtained from all apr09.pdf/68a606b2-8ba8-614d-0aa4-
these customers for both 2bb7f32a5d88?t=1620113680142
Indian and foreign entities.

Strictly for internal circulation only

 Type of discrepancy: 6. Unique Identification Number (UIN)

Discrepancy Explanation Solution

UIN not mentioned / UIN number should be If UIN is not mentioned, Branch needs to fill
UIN number mentioned mentioned in the APR form the UIN in the APR form by checking with
is wrong customer or UIN letter submitted by client.
If there is a mistake in the UIN no, cross check
with the UIN no. mentioned in the UIN letter
or check with client.

Strictly for internal circulation only

 Type of discrepancy: 7. Currency

Discrepancy Explanation Solution

Currency not matched Currency is to be mentioned wherever Branch needs to check if the currency
with the project profile the amount has been mentioned. The is mentioned in the APR form
/ Currency not currency also should be uniform across wherever the amount is mentioned.
mentioned in the APR the form and it should match with Incase it is not mentioned, kindly fill.
form financials. The currency mentioned in the form
should match with financials & Project
profile. Incase there is any mismatch
in currency, please mention the
uniform currency in the form and
provide the conversion rate taken

Strictly for internal circulation only

 Type of discrepancy: 7. Currency

Currency needs to be mentioned in these different sections of APR form

Strictly for internal circulation only

 Type of discrepancy: 7. Currency

Currency needs to be mentioned in these different sections of APR form

Strictly for internal circulation only

 Type of discrepancy: 7. Currency

Currency needs to be mentioned in these different sections of APR form

Strictly for internal circulation only

 Type of discrepancy: 8. Control

Discrepancy Explanation Solution

In the APR form Control section need to be If Yes, audited financials are mandatory for APR
control section not selected either “Yes/No” filing.
selected

Strictly for internal circulation only

 Type of discrepancy: 9. Repatriation from the foreign entity

Discrepancy Explanation Solution

Repatriation section To be filled only if the amount is Branch needs to cross check the Repatriation
not filled / mention ‘REPATRIATED’ to India else it is not details provided by the client. Incase there is any
“NA” if not applicable required and to be marked as Nil or NA. repatriation, the documentary evidence for the
same needs to be submitted
If details not available then “NA” or “Nil” need to
mention

Strictly for internal circulation only

 Type of discrepancy: 10. Details of the Step down subsidiary

Discrepancy Explanation Solution

SDS details not filled / To be filled only if there is any Step down Branch need to check with customer if there is
mention “NA” if not subsidiary by the overseas company else any SDS, if yes, then details to be filled. If there
applicable it should be kept as NA is no SDS, NA to be mentioned. If there are
multiple Step down subsidiaries, then attach a
separate sheet if necessary.

Strictly for internal circulation only

 Type of discrepancy: 11. Declaration from the Indian Entity/ Resident Individual

Discrepancy Explanation Solution

Please strike off the points Please ensure that the points which are Branch need to cross check the
which are not applicable in not applicable are striked off. The points points which are not applicable.
declaration by the IE/RI should not be removed. It should be
striked off only.

Strictly for internal circulation only

 Type of discrepancy: 12. Certificate of the Statutory Auditor (In case of Indian entity) / Chartered
Accountant In case of Resident Individual

Discrepancy Explanation Solution

Please strike off the 1. Please ensure that the points which are not applicable are Branch need to cross
points which are not striked off. The points should not be removed. check the points which
applicable in declaration 2. Statutory Auditor certification is needed incase of are not applicable.
by the SA certification companies. UDIN number should be mentioned
3. Incase of individual, CA certification would be sufficient.

Strictly for internal circulation only

 Type of discrepancy: 13. Change in the share holding pattern during the reporting year in the
foreign entity

Discrepancy Explanation Solution

Capital structure If there is any change in the Fill the capital structure accordingly wherever changes
not updated capital structure during the happens during the APR period. If there is no change,
APR period, those details please mention as Not applicable.
need to be mentioned in the
share holding pattern

Strictly for internal circulation only

 APR checklist

• Covering letter as per format given in Annexure ODI2

• Form APR
• RBI letter/Mail allotting UIN
• Standalone Audited financial statements of the overseas Joint venture/Wholly owned
subsidiary (JV/WOS).
• Share certificates
• Documentary evidence if there is any repatriation from overseas company
• Confirmation from customer on the 5 digit activity codes of Indian Party and foreign entity as
per NIC 2008.
• Annexure ODI20 from branch

Strictly for internal circulation only

 Basic checkpoints in APR filing by branch before raising track

• AD certification to be done on APR form

• ODI20 to be filled and attached in the track.
• Submission of share certificates: After every ODI remittance in equity, client needs to
submit share certificates within 6 months and the same needs to be uploaded vide track
TMISC_Lodgement Control. Before raising the track, please check if client had submitted
share certificates and the same have been raised under TMISC_Lodgement Control.
• Branch to mark the receiving stamp along with date on the CRL. Customer to mention
delay reason on CRL if not submitted on time. If delay is from branch end, imemo
approval is needed.

Strictly for internal circulation only

 Instructions to fill APR form

• A person resident in lndia acquiring equity capital in a foreign entity which is reckoned as ODI, shall
submit an APR with respect to each foreign entity every year till the person resident in India is
invested in such foreign entity, by December 31st and where the accounting year of the foreign
entity ends on December 31st, the APR shall be submitted by December 31st of the next year.
• The APRs shall not be submitted in the following cases,
• If a person resident in India is holding less than 10 percent of the equity capital without control
in the foreign entity and there is no other financial commitment other than by way of equity
capital.
• When the foreign entity is under liquidation, from the date of initiation of the liquidation
process.
• For the broken period (i.e. full year not completed) at the time of disinvestment. However, the
details of transactions if any that had been undertaken during the time from the date of
submission of the last APR till the date of disinvestment/initiation of liquidation process may be
duly reported in the Form FC.
• The person resident in lndia shall report the details regarding acquisition/ setting up / winding up/
transfer of an SDS or alteration in the shareholding pattern in the foreign entity during the repoding
year in the APR, failing which it shall amount to non-submission of APR.
• The person resident in lndia shall ensure that all the previous year APRs have been submitted to the
designated AD bank.

Strictly for internal circulation only

 Instructions to fill APR form

• The APR shall be based on the audited financial statements of the foreign entity. Where the person
resident in India does not have ’control’ in the foreign entity and the laws of the host jurisdiction
does not provide for mandatory auditing of the books of accounts, the APR may be submitted
based on unaudited financial statements certified as such by the statutory auditor of the lndian
entity or by a chartered accountant where the statutory audit is not applicable including in case of
resident individuals.
• In case more than one person resident in India have made ODI in the same foreign entity, the
person resident in India holding the highest stake in the foreign entity shall be required to submit
APR. In case of holdings being equal, APR may be filed jointly by such persons resident in lndia. It is
also clarified that where APR is required to be filed jointly, either one investor may be authorized by
other investors, or such persons may jointly file the APR.
• In Para VII (ii), Redemption of preference shares (not in the nature of compulsorily convertible
preference shares (CCPS)) should also be reported.
• In Para VII (vii), other receipts which are not mentioned in the table like interest on loan or license fee
etc. shall be mentioned.

Strictly for internal circulation only

 Instructions to fill APR form

• In Para IX, the part of the profits of the foreign entity which is retained and reinvested in such
foreign entity shall be mentioned. The retained earnings are to be calculated as per the procedure
laid down by the International Monetary Fund in the latest version of their
publication “Balance of Payments and International Investment Position Manual”. It is to be noted
that the negative retained earnings is to be treated as ‘0’ (zero).
• The level of step-down subsidiary (SDS) shall be calculated treating the foreign entity as the parent.
So, an SDS directly under the foreign entity should be treated as first level SDS. Accordingly, an
SDS under the first level SDS would be treated as second level SDS and so on and so fodh.
• In case of Para XII, the structure of SDS should be in compliance with the structural requirements of
the foreign entity i.e the structure of such subsidiary/ SDS shall also have limited liability where the
foreign entity's core activity is not in strategic sector. The investee entities of the foreign entity
where such foreign entity does not have control may not be treated as SDSs and therefore may not
be reported.
• In case of Para XII (vi), if the SDS is engaged in the activity of financial services, the investment shall
be in compliance to the provisions contained in Para 2 of Schedule I of OI rules.

Strictly for internal circulation only

Thank you