You are the management and investment consultant to Surgical Equipments Limited. (i) Briefly explain FEMA regulations for ODI proposed in financial…

(i) As per the Overseas Investment Rules, 2022 read with the Schedule I which outlines the manner of making Overseas Direct Investment by Indian entity. An Indian entity may make ODI by way of investment in equity capital for the purpose of undertaking bonafide business activity in the manner and subject to the limits and conditions provided in this Schedule. 1. The ODI may be made or held by way of- (i) subscription as part of memorandum of association or purchase of equity capital, listed or unlisted; (ii) acquisition through bidding or tender procedure; (iii) acquisition of equity capital by way of rights issue or allotment of bonus shares; 2. An Indian entity not engaged in financial services activity in India may make ODI in a foreign entity, which is directly or indirectly engaged in financial services activity [except banking or insurance] subject to the condition that such Indian entity has posted net profits during the preceding three financial years: Provided that an Indian entity not engaged in the insurance sector may make ODI in general and health insurance where such insurance business is supporting the core activity undertaken overseas by such an Indian entity. 3. Limit for financial commitment (1) The total financial commitment made by an Indian entity in all the foreign entities taken together at the time of undertaking such commitment shall not exceed 400 percent of its net worth as on the date of the last audited balance sheet or as directed by the Reserve Bank, in consultation with Central Government from time to time. Surgical Equipments Limited (an Indian entity) may engage in financial services activities in the UK, subject to compliance with the above-stated ODI regulations under FEMA. (ii) A business model explains how a business works and the economic logic behind it. It is a way of representing and communicating how an organisation creates values for itself while delivering products or services to customers. Margretta proposed that a business model should include all the activities associated with two key components – a. Producing or making something. b. Selling something. But in 2008, Johnson along with Christensen & Kaggerman extended the scope and proposed that a business model also needs a value proposition; a business model should contain three components – a. Customer value processes proposition. b. Profit formula. c. Key resources and processes. Surgical Equipments Limited plans to establish a financial services venture in the UK through Overseas Direct Investment, adopting the Christensen & Kaggerman business model. The proposed model focuses on delivering a strong Customer Value Proposition by offering affordable financing to healthcare SMEs/ firms. Its Profit Formula relies on interest income and service fees with a lean cost structure. Key Resources may include digital platforms, capital, and skilled personnel, while Key Processes involve, credit risk profiling, and regulatory compliance-ensuring a scalable, tech-enabled, and customer-centric approach.