The Annual Performance Report (APR) is a mandatory filing under the Overseas Direct Investment (ODI) framework as prescribed by the Reserve Bank of India (RBI). It applies to all Indian entities and resident individuals who have made overseas investments. Below are the details of this mandatory filing:

Who is Required to File APR?

1. Indian Entities
   • Companies, partnership firms, Limited Liability Partnerships (LLPs), or any other entities incorporated in India that have invested in an overseas joint venture (JV) or wholly owned subsidiary (WOS).
2. Resident Individuals
   • Individuals who have invested in overseas entities under the Liberalized Remittance Scheme (LRS) or the ODI route and hold:
     • Control in the overseas entity.
     • A significant stake in the entity (defined as ≥10% equity ownership or equivalent).

Key Details of APR Filing

1. Purpose:
   • To report the financial performance of the overseas JV/WOS.
   • To monitor compliance with FEMA guidelines.
2. Submission Timeline:
   • Must be filed annually within 6 months of the end of the financial year of the Indian entity.
3. Channel:
   • The APR must be submitted to the Authorized Dealer (AD) Bank through which the original investment was made.
4. Scope:
   • Reporting is required for equity investments, loan/guarantees issued, and any other financial contributions.

Documents Required for APR Filing

Refer to the checklist mentioned earlier for a detailed list of supporting documents. It includes:

• Audited financial statements of the overseas entity.
• Details of outstanding investment.
• Certification from a statutory auditor.

Exemptions from APR Filing

• Dormant Entities: APR filing may be exempt if the overseas entity is dormant and meets RBI-specified conditions.
• Non-Equity Investments: If the investment does not involve equity participation (e.g., pure debt instruments), the APR requirement might not apply.

Consequences of Non-Filing

Failure to submit the APR can lead to:

1. Non-Compliance under FEMA:
   • Penalties under the Foreign Exchange Management Act (FEMA), 1999.
2. Restrictions on Future Investments:
   • The RBI may restrict the entity or individual from making further overseas investments.
3. Scrutiny by Regulatory Authorities:
   • Increased monitoring and potential disqualification of the overseas entity’s operations.

Best Practices

1. Timely Submission: Ensure APR is filed well before the deadline to avoid penalties or complications.
2. Coordination with the Overseas Entity:
   • Obtain audited financials or provisional statements on time.
3. Record Maintenance:
   • Keep a record of previous APR filings and other ODI-related documentation for reference.
4. Consult Professionals:
   • Seek advice from statutory auditors or legal experts to ensure compliance.

Would you like help drafting the APR or understanding its submission process in detail?