Note on External Commercial Borrowings (ECB) External Commercial Borrowings are permitted under the Automatic Route subject

to the following terms and conditions. The Lending Overseas Corporate Body shall have a minimum 25 equity stake in the Indian Company. The borrowing shall be for a minimum period of 3 years. The maximum interest rate shall be LIBOR + 3% for maturity of loans between 3 and 5 years. The maximum Interest rate shall be LIBOR + 5% for loans with maturity of 5-7 years. The funds shall not be applied for Working Capital or General Corporate purposes and shall be applied only for Capital Investment. The Currency of Borrowing shall need to be a currency traded on the London Inter Bank and shall have a LIBOR Rate. The currencies that are popularly used in India are USD, GBP, Euro, Swiss Franc, Australian Dollar, Canadian Dollar and New Zealand Dollar. Up to USD 5 Million shall be possible based on the above. In excess of USD 5 Million there are additional guidelines. Procedures to be followed: Loan Agreement shall be entered into between the borrower and the lender. Form 83 shall be filled and submitted to the Authorised Dealer in Duplicate (the Bank through which the funds would be received) within 7 days from the date of entering into loan agreement. The Form 83 shall be certified by a Company Secretary or Chartered Accountant of the Company. The Authorised Dealer shall forward the same to RBI and obtain a Loan Key Number. After receipt of the Loan Key Number the funds can be received in India. Monthly reporting in ECB 2 shall be submitted to Authorised Dealer certified by Chartered Accountant till such time as the ECB is fully repaid.