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Fema - clarification under master circular on direct investm

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27 July 2012 Company has audited balance sheet as under;

1) 31-3-2011 (12 month)
2) 31-3-2012 (12 month)
3) 30-9-2012 (6 month)

Question : Can 6 months audited balance sheet be considered to determine networth in terms of Clause B.1(1) of Master Circular on Direct Investment by Residents in Joint Venture (JV) /
Wholly Owned Subsidiary (WOS) Abroad (RBI issued on July 02, 2012). For your ready reference, i produce relevant para as under

Section B - Direct Investment Outside India
B.1 Automatic Route
(1) In terms of Regulation 6 of the Notification, an Indian party has been permitted to make investment in overseas Joint Ventures (JV) / Wholly Owned Subsidiaries (WOS), not exceeding 400 per cent of the net worth2 as on the date of last audited balance sheet of the Indian party, i.e. a company incorporated in India or a body created under an Act of Parliament or a partnership firm registered under the Indian Partnership Act, 1932, making investment in a JV/WOS abroad and includes any other entity in India excluding individuals as may be notified by the Reserve Bank.
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Amol S Joglekar

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Amol S Joglekar (Expert)
27 July 2012 No. It can not be taken on 6 monthly basis; on GENERAL permission. You need to take 'SPECIAL permission'
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