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The Tax Publishers CLARIFICATION 1 Fresh Guidelines for Euro Issues : 1994-95Source : Press Note [S-11(25)/CCI-MF 89-NRI], dt. 28-10-1994. The Guidelines for Euro Issues-1994-95 were announced by the Government of India on 11-5-1994. At that time it was indicated that the guidelines would be reviewed periodically. During the first half of the Fiscal Year Indian companies have mobilised in excess of US$ 1 billion through issue of GDRs and Euro Convertible Bonds. This indicates a healthy and sustained interest by overseas investors. The guidelines have been reviewed on the basis of experience in this period and various representations received. The following modifications are being made : (a) The guidelines had stipulated that Euro Issues would be permitted only for certain specific end-uses to be incurred within one year from the date of issue. Several representations have been received by the government requesting review of the stipulation that the Euro Issue proceeds should be utilised for the approved end-uses within a period of one year from the date of issue on the plea that capital expenditure projects often have a long gestation period and that it would be difficult for companies to comply with the one year restriction. These representations have been considered and the guidelines are being modified to remove the stipulation that Euro Issue proceeds should be utilised for the approved end-uses within a period of one year from the date of issue. Instead, issuing companies would be required mandatorily to retain the Euro Issue proceeds abroad to be repatriated as and when expenditure for the approved end-uses (including up to 15 per cent earmarked for general corporate restructuring uses) are incurred. This will enable companies to tap make to abroad for approved purposes while also avoiding monetary expansion as a consequence of Euro Issue inflows in advance of the need for funds. This requirement will be added to all final approvals given henceforth. Information regarding periodic repatriation of Euro Issue proceeds into the country and the manner of their deployment for the approved end uses should be furnished in detail in the quarterly statements that the issuing companies are required to submit to the government at the end of every calendar quarter duly vetted by the auditors. (b) A relaxation of the approved end-use criteria will be allowed to enable select All India Financial Institutions to access the Euro market considering the multiplier effect and generally beneficial impact for small and medium industries who are unable themselves to access the Euro market. (c) Companies will not be permitted to issue warrants along with their Euro Issues. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers
CLARIFICATION 1
Fresh Guidelines for Euro Issues : 1994-95Source : Press Note [S-11(25)/CCI-MF 89-NRI], dt. 28-10-1994.

The Guidelines for Euro Issues-1994-95 were announced by the Government of India on 11-5-1994. At that time it was indicated that the guidelines would be reviewed periodically. During the first half of the Fiscal Year Indian companies have mobilised in excess of US$ 1 billion through issue of GDRs and Euro Convertible Bonds. This indicates a healthy and sustained interest by overseas investors. The guidelines have been reviewed on the basis of experience in this period and various representations received. The following modifications are being made :

(a) The guidelines had stipulated that Euro Issues would be permitted only for certain specific end-uses to be incurred within one year from the date of issue. Several representations have been received by the government requesting review of the stipulation that the Euro Issue proceeds should be utilised for the approved end-uses within a period of one year from the date of issue on the plea that capital expenditure projects often have a long gestation period and that it would be difficult for companies to comply with the one year restriction. These representations have been considered and the guidelines are being modified to remove the stipulation that Euro Issue proceeds should be utilised for the approved end-uses within a period of one year from the date of issue. Instead, issuing companies would be required mandatorily to retain the Euro Issue proceeds abroad to be repatriated as and when expenditure for the approved end-uses (including up to 15 per cent earmarked for general corporate restructuring uses) are incurred. This will enable companies to tap make to abroad for approved purposes while also avoiding monetary expansion as a consequence of Euro Issue inflows in advance of the need for funds. This requirement will be added to all final approvals given henceforth. Information regarding periodic repatriation of Euro Issue proceeds into the country and the manner of their deployment for the approved end uses should be furnished in detail in the quarterly statements that the issuing companies are required to submit to the government at the end of every calendar quarter duly vetted by the auditors.

(b) A relaxation of the approved end-use criteria will be allowed to enable select All India Financial Institutions to access the Euro market considering the multiplier effect and generally beneficial impact for small and medium industries who are unable themselves to access the Euro market.