Overview:-
In this article we shall discuss about Annual Performance Report (i.e. APR) & Process of Filing it. Annual Performance Report is a mandatory annual compliance specified under FEMA 1999. Non-filing of the APR before due date will be treated as a violation of FEMA and penalty clause may be invoked for violation of FEMA.
We have come up with this article to provide some minute and simple details for the preparation of Annual Performance Report to avoid any difficulty. We have our own way of discussing and explaining things. Hope this article would help you in gaining some knowledge.
Let’s go through some points: –
APR Full Form: –
APR stands for Annual Performance Report.
Requirement to file APR:-
An Indian Party (IP) / Resident Individual (RI) which has made an Overseas Direct Investment (ODI) has to submit an Annual Performance Report (APR) in Form ODI Part II to the AD Bank within the prescribed time frame in respect of each Joint Venture (JV) / Wholly Owned Subsidiary (WOS) outside India.
This Report is submitted physically by the Indian party to the Authorized Bank.
Due date for Filing of APR:-
The Indian Party is required to submit the Annual Performance Report based on Audited Financial Statements of the overseas JV/WOS by 31st December of every year.
Audited or Unaudited Financials of Overseas JV/WOS:-
If the law of the host country does not mandatorily require auditing of the books of accounts of JV / WOS, the Annual Performance Report (APR) may be submitted by the Indian party based on the Un-audited Annual Accounts of the JV / WOS provided:
a) The Statutory Auditors of the Indian party certify that the law of the host country does not mandatorily require auditing of the books of accounts of JV/WOS and the figures in the APR are as per the un-audited accounts of the overseas JV/WOS.
b) That the un-audited annual accounts of the JV / WOS has been adopted and ratified by the Board of the Indian party.
Note:- In general the Annual Performance Report cannot be submitted on the basis of Unaudited Annual Accounts of the overseas JV/WOS . The above-mentioned circumstances are an exception to the general rule.
Form for APR:-
The Form required for Annual Performance Report is “FORM ODI PART-II”. You can download it from the RBI website or you can also ask your AD bank to provide with the same.
Format of APR:-
The Form ODI PART-II for APR is divided into VI Main Points. The details of the points are explained below: –
POINT I: APR PERIOD
In this we need to mention the APR period for which it has been prepared.
Example:-
If the APR is for FY 2019-20 than please mention 01st April, 2019 to 31st March, 2020.
POINT II: UNIQUE IDENTIFICATION NUMBER (UIN)
In this point we need to mention the UIN number issued by RBI while making ODI. It is a 13 digit Alphanumeric Number. And along side the UIN number we can also mention the “Name of the Company” for which the APR has been prepared.
POINT III: CAPITAL STRUCTURE OF JV/WOS
This point basically requires details of the Capital Structure as on the last day of the Accounting Year of JV/WOS. Under this we need to mention the Share Capital Amount & as well as percentage invested. The Capital Structure should consist of Indian & as well as Foreign Investment. The below example will explain the point clearly: –
Example:-
Amount in Rs.
| Amount | % Share | |
| Indian | 50,00,000 | 100% |
| Foreign | NA | NA |
If only the Indian Company has invested in such JV/WOS than you can fill such Column as per the Financials of the JV/WOS. Let’s Say the Amount of Capital Invested is Rs. 50,00,000 and in terms of Percentage its 100%. We will simply enter the figure accordingly.
And if there are no Foreign investor you can simply write below the table that “There is no Foreign investor in the said JV/WOS”. And enter NA in such column.
POINT IV: OPERATIONAL DETAILS OF JV/WOS
In this point we need to mention Operational Details of the JV/WOS for the last two years. The Operational Details basically includes 3 points i.e. Net profit/Loss, Dividend and Net Worth for the last two years.
In case if the Company is filing its APR for the first time than the Previous Year should be NIL in every 3 points. And the details of the Current Year should be entered as per the Financials of the JV/WOS.
Example:-
The below table explain the above points:-
Amount in Rs.
| Previous Year
(31st March, 2019) |
Current Year
(31st March, 2020) |
|
| i) Net Profit / (Loss) | NIL | Enter details as per the Financials |
| ii) Dividend | NIL | Enter details as per the Financials |
| iii) Net worth | NIL | Enter details as per the Financials |
Note : Previous Year Can only be NIL in case of First APR. In case of Subsequent APR fill the details as applicable.
POINT V: REPATRIATION FROM THE JV/WOS
In this point we need to enter Any Repatriation made by JV/WOS to the Indian party. Repatriation basically means sending of money back to one’s own country. This point contains XI sub points. Check the Financials of the JV/WOS properly and enter the amount applicable to such points. The details of such XI sub points have been mentioned in the below table for better understanding: –
Example:- Amount in Rs.
| Current Year
(31st March, 2020) |
Since commencement of business | |
| (i) Dividend | ||
| (ii) Repayment of Loan | ||
| (iii) Non-Equity Exports Realized (in INR) | ||
| (iv) Royalties | ||
| (v) Technical Know-how Fees | ||
| (vi) Consultancy Fees | ||
| (vii) Others (Please specify) | ||
| (viii) Profit | ||
| (ix) Retained Earnings | ||
| (x) FDI by JV/ WOS/ SDS into India | ||
| (xi) Refund of excess share application money @ Transaction No. |
POINT VI: INVESTMENT IN EITHER WHOLLY OWNED OF A JOINT VENTURE STEP DOWN SUBSIDIARY (SDS) OF JV/ WOS
This is the last details require to be entered in the Form ODI PART-II. This point basically requires details of the Investment in Step down Subsidiary if any of the JV/WOS. In case if the Company is not having any Step-Down Subsidiary, we simply need to write NOT APPLICABLE in the columns. And if applicable enter the details accordingly. The below table will clearly explain the point:-
Example:-
| (i) | Name, Level and Country name of SDS | |||||||
| (ii) | Name, Level and Country name of the parent of SDS | |||||||
| (iii) | Investment Amount in FCY and Date of investment (if any) | Currency: Amount: | Date: | |||||
| (iv) | Investment type | WO SDS | JV SDS | |||||
| (v) | Type of Step Down Subsidiary | SPV/ Holding company | Operating | Operating Cum SPV
|
||||
| (vi) | Activity code as per 1987 | |||||||
| (vii) | % stake held in SDS | |||||||
| (viii) | Is the activity of SDS into financial services (tick) | Yes | No | |||||
Certificates required with APR:-
Along with APR we also need to submit two Certificates with the AD Bank which are Certificate from Indian Party / Resident Individual and Certificate of the Statutory Auditor. These both are the Mandatory Certificates.
1. Certificate from Indian Party / Resident Individual – This Certificate should be printed on the Indian Parties Letterhead. And it should be signed and stamped by the Director of such company.
2. Certificate of the Statutory Auditor – This Certificate should be printed on the Statutory Auditor’s Letterhead. And it should be signed and stamped by the Statutory Auditor of such company.
Note:- These both certificates are the part of the Form ODI PART-II. The form includes both the certificate below the APR.
Signing, Stamping &Printing of the APR:-
The APR should be signed by the Director and Statutory Auditor of such Indian Company. Every page of the APR should be signed & stamped by the director of the Company. And last page of the APR should be signed & stamped by the Director and as well as Statutory Auditor of the company.
APR is printed on the Normal A4 sheet it does not require to be printed on the Letterhead.
Documents to be submitted with APR:-
The documents require to be submitted along with APR are follows: –
1. Latest Audited Financials of the JV/WOS
2. Latest Audited Financials of the Holding Company
3. APR Form dully filled and Signed (i.e. Form ODI PART-II)
4. Certificate of the Indian Party
5. Statutory Auditor Certificate
6. Copy of the Share Certificate for previous Equity remittances done to the subsidiary
7. Covering Letter for APR
Mode of Submission of APR:-
The APR along with supporting documents need to be submitted physically to the Authorized Bank of such company. While submitting the documents do not forget to take the Acknowledgement copy for the same from the Bank for your record.
Do avoid submitting the APR on the Last days. Kindly make it a practice of submitting it before the deadline occurs. If you submit it on the last days and if any observations are raised by the Bank you must not be having sufficient time to get it corrected and submit it before the deadline. So kindly avoid it.
Conclusion:-
Author has tried the level best to cover all the possible relevant aspect related to the APR Filing. The minute details have also been discussed for better understanding of this topic. This article has been drafted keeping in mind every possible professional (New or Fresher or Experienced etc.) or Trainee or Intern etc. whosoever required clarity on this topic. Hope you find this article helpful & related.
In case of any suggestion or improvement please feel free to contact. This will boost our Morale and will help in sharing our knowledge. The author can be reached through Email which is available on the cover page.
Email:- [email protected]
DISCLAIMER:-
This article is based on the best of my knowledge and moreover in no event author shall be liable for any direct or indirect result from this article. This will only be treated as a knowledge sharing initiative provided solely for information. This article does not guarantee a professional advice or recommendation.
Author Bio
Hi,
I have a query relating to Audited Financials, if my WOS has a SDS then is it mandatory to audit the financial statements of that SDS?
whether consilidated financials of WOS need to be provided?
Regards,
subash.
i have one question regarding period of APR.
In our case, our subsidiary company has been incorporated in out of country in March-22 and we have remitted equity money in m/o Sep-22 to our subsidiary from India as there was no operation started in the company in this period.
now please tell about the APR period :
it should be March -22 to Dec-22
or
Sep-22 to Dec-22
Please clarify.
Hi Magha,
We regularly file APR through Authorised Bank. For the year 2021-22, we submitted APR on 16.12.2022 to our Bank and got acknowledgement. All queries were replied. It seems they have not filed APR with RBI. They don’t reply regarding filing. Kindly guide me how to escalate this matter with RBI.
If the Indian entity, Wholly owned subsidiary and Step down subsidiary all follow the FY, then what will the due date of APR if WOS & SDS acquired by the Indian Entity during the period Aug-Sep, 2022?
Hi Jegadeesan,
Thank You for taking out your precious time and going through the Article.
The query asked by you contains 3 points:-
1. The UIN is mandatory to be mentioned in the APR as per RBI guidelines. And as you say you have not got it so you need to contact your AD Bank for this for better understanding.
2. The APR needs to be mandatorily prepared in Foreign Currency as per the latest notification issued by RBI. Now there is no concept of furnishing APR to the AD Bank in Indian Currency.
3. The Capital structure should consists of Foreign & as well as Indian Investment. If you clearly look at the APR format issued by RBI and also in my Article containing Point No. III. You will better understand the point.
Hope we are able to understand your query and give you the suitable answer.
In case of any further detailed information you can contact your AD Bank for better understanding.
Thank You
Megha Agrawal
Hi Megha ,
I would like to convey my thanks for your wonderful article.
Further I would like to clarify some doubts regarding APR
Whether Individual should mention UIN in APR while they have not got the same at the time of Investment Since some people have remitted from their account to certain accounts or brokers account directly to invest in Foreign Subsidiary of Indian Company in which they are being the directors?
Further Capital structure as on the last day of the accounting year of the foreign entity should be given in Foreign Currency or should be mention in INR ?
What value should be given, entire Capital of Foreign Entity or only the value of Investment held by the Indian Company in that Foreign Entity?
Hi Megha
Just wanted to know if the periods for APR can be different. That is, if a company prepares APR for 15 July 2020-14 July 2021 (with its audited FS) and submits the same by 31 December 2021, can the company prepare APR for Apr-Mar period for submission by 31 Dec 22 with its audited FS?
Hi Megha,
Thanks for the detailed information.
I have a question. Whether any CA other than statutory auditor can sign the APR?
Hi Diamond,
Thank You taking out your time to go through our Article.
The APR of any Company can only be signed by their respective statutory Auditor of that company.
Hope you got your point.
And for further clarification you can contact your AD Bank or go through the RBI website.
Thanks Megha for an insightful article.
What compliances are required to be met in case indian company is having a step down subsidiary in a foreign company.
For Example: ‘A Ltd’ an Indian Company having WOS ‘B Ltd’ in America. B Ltd is having a 99.95% share in ‘C Ltd’. Since B Ltd is the parent company for C Ltd,it now becomes the step down subsidiary of A Ltd. Please let me know what compliances are required to be met by A Ltd in case of its step down subsidiary C Ltd in terms of RBI forms & other compliances
Hi Jyothsna,
Thank You for writing it us.
As per my view and opinion the Section VI – INVESTMENT IN EITHER WHOLLY OWNED OF A JOINT VENTURE STEP DOWN SUBSIDIARY (SDS) OF JV/ WOS
This deals specifically with the Step Down Subsidiary details.
So i guess you need to enter your details accordingly into this colloumn.
For further information you can contact your AD Bank for better clarification.
Thank You
Megha Agrawal
Hi Megha,
The AD Banker is asking for a Board Resolution in case of un-audited annual accounts of the WOS stating in Board Resolution that it has been adopted and ratified by the Board of the Indian party. Can you please confirm, if this is required and provide a standard format of that board resolution, if any.
Hi Yashwant,
Thank you for writing it to us.
As we have filed APR with Audited finacials so this point was not our concern.
And if in your case the Bank has asked to submit Board resolution then it must be mandatory. And we need to follow what the Bank says.
And i am really sorry I do not have any BR format so could not help you in this.
Thank You
Megha Agrawal
Hi,
I saw one of your response to the comments.
I want to understand the period of reporting APR, when the Financial Year of the Host Country is 1st January to 31st December. So let’s take example of Singapore where they follow calendar year. So for Jan 2020 to December 2020, the APR will have to be filed by 31st December 2021? Also, in this case if the there was investment lets say in the month of January 2020, then it should be added in the APR filed by December 31, 2021. Is my understanding correct ?
If it is correct then I got the mail from RBI for late filing of form APR.
Please explain what will be the reporting period for the example given above.
Hi Binal,
Thnak you for going through our post.
In this case the financials of both the country shoulld be in sinked. One can not follow calender year and other Financial year.
You need to get both the financials parallel.
I think you have filed documents with FY & CY as we to RBI.
Thats you have received mail from RBI.
This is as per my view and observation.
You can contact AD Bank for further clarification.
Whether APR can be filed basis Special Purpose Financial Statements of Foreign subsidiary or it is mandatorily audited by the local auditor of that country.
Hey Megha, What if the Holding Company is a new Company and hence does not have audited financials for submission but the bank is asking for audited financials. Is there any option in this case?
Hi Tanuj,
Thank you for reaching to us.
APR is filed on the basis of Audited financials to the AD bank. And for this the RBI has given us the plenty of time to prepare our audited financials.
Lets say If you are new company incorporated in the year 2021. Than you have time till 31st Dec, 2022 to file your APR. And during this period you can easily get your financials audited by any PCA.
And can file your Audited financials with APR to the AD Bank. As per my view there is no other option. And for further enquiry you can directly contact your AD Bank for further clarification.
Regards
Megha Agrawal
Hi,
I saw one of your response to the comments. So let’s take example of Germany where they follow calendar year. So for Jan 2020 to December 2020, the APR will have to be filed by 31st December 2021? Also, in this case if the there was another investment lets say in the month of June 2020, then it should be added in the APR filed by December 31, 2021. Is my understanding correct ?
Hi Roop,
Thank you for reaching out to us.
You are absolutely correct the transactions made in the month of June, 2020 automatically falls under the JAN-DEC 2020 Calendar year.
So the details of this transaction will be taken and considered in the APR to be filed in the Year 2021.
Hope I am able to make you understand.
Regards
Megha Agrawal
I want to understand the period of reporting APR, when the Financial Year of the Host Country is 1st January to 31st December. In this case how come the Indian Party be able to report APR by 31st December?
Also, when the transaction was made on 23rd May, then what will be the period of reporting of APR?
Hi Anuj,
The Reporting period of the APR totally depends upon the host country.
If Host Country follows Calendar Year than the financials or the data should be taken accordingly.
The APR needs to be submitted after closure of the accounting period.
Eg: If the financials are for 1/01/2020 to 31/12/2020. Then the APR needs to be submitted till December, 2021 of the next year.
So there would not be any confusion.
If the transaction is for the month of May than check host country follows Calendar Year than it should be taken in the same year of its occurrence.
And if it follows Financial Year than accordingly it should be taken.
Hope you got your answer.
Thank You
Megha Agrawal
Very good article. Thank you for sharing your knowledge in detail.
Thank You Suresh for taking out your time and going through the article.
This really motivate us for sharing our knowledge.
In retained earnings column only positive numbers to be considered? In case negative number zero is to be mentioned? Also in retained earnings since the commencement
You have not mentioned provisions regarding filing of APR by an Individual
Hi Monika,
Thank You taking out your time to go through our Article.
We tried our best to provide some important information regarding FLA. If anything has been skipped, we are really sorry for the inconvenience caused to you.
For detailed information, you can go through the RBI website. As its really difficult to sum-up every aspects in a single article.
Treat this as a information oriented only.
Hope you understand.
Thank & Regards
Megha Agrawal
Hi Megha, was the due date extended for filing APR returns for FY 2019-20 and FY 2020-21 amidst the pandemic scenario across the nation
Hi Priyanka,
Thank you for taking out your time to go through this article.
The due date for filing APR for FY2019-20 was till 31st dec, 2020.
And similarly in case for this FY 2020-21 it would be till 31st, dec 2021.
Hope you got your answer.
Hello,
Isn’t in the one of the replies by you above, the due date should be 31st Dec, 2021 & 31st Dec, 2022.
The due date for filing APR for FY2019-20 was till 31st dec, 2020. And similarly in case for this FY 2020-21 it would be till 31st, dec 2021.
The Article is in good detail. However, i think due date of filing APR is wrongly captured. It should be 31st December. Earlier it was 30th June.
Thank You Kavita for taking out your precious time and going through the Article.
You are absolutely correct. It might have got the previous data typed by mistake.
Will edit my post .
Thank you for pointing out .
Regards
Megha Agrawal
Can you please provide year wise due date (historical period) from FY2006 to till date for APR filling.
Thank You Piyush for taking out your precious time and going through the Article.
The details related to the Due Date for APR filing has clearly been explained in the article. I think you can calculate easily by looking at the above mentioned details.
Hope you understand.
Thank You
Megha Agrawal