Appendix-16E 1. The annual review of performance of eachoperational unit anditscompliancewith the conditions ofapprovalshallbe undertaken by the Development Commissioner before the end ofthe first quarter of the following financial year; 2. A summary of annual performance review will be sent by each Development Commissioner to the Ministry of Commerce for information under the three formats indicated below latest by 30th June every year; Proforma I: Summary of annual performance of the EOU/EPZ/SEZ units, sector-wise with sectoral sub-totals. Proforma II: Comparative statement of performance and monitoring as compared to previous year; Proforma III: Unit-wise statement on NFE and NFEP showing the result of review. 3. The criteria for condoning marginal shortfall, keeping the unit under `watch" or initiating penal action in respect of EOU/EPZ units would be as follows: i) No action - If the EOU/EPZ unit has achieved the NFEP and Export Performance (EP) as per norms in Appendix - I of Exim Policy; ii) Condone - If the shortfall in NFEP and/or export performance (as per norms in Appendix - I) is upto 10% during Ist and IInd year; iii) Watch - If the shortfall in NFEP (as per Appendix - I) is more than 10% but NFEP achieved is not negative and/or shortfall in EP does not exceed 10% of the norm in Appendix - I during first or second year; iv) Penal action - If NFEP achieved is negative and/or shortfall in export performance is more than 10% of the norm in Appendix - I in 3rd or subsequent years the unit should be issued show cause notice by the Development Commissioner. If after consideration of reply of unit, the default is more than permissible limit, the Development Commissioner may initiate penal action under the FT (D&R) Act, 1992; However, cases where NFEP achieved is negative during first year of performance, may also be kept in `condone" category and penal action may be taken only if the trend continues in the second or subsequent year of their operation; v) If penal action has been initiated against a unit on account of shortfall in NFEP/EP as stated above in a particular year and it defaults against in subsequent year(s), fresh penal action will be initiated against the unit. 4. In all cases of debonding where the unit has imported inputs and failed to fulfil the conditions of LOP with regard to NFEP/EP, appropriate steps are to be taken for penal action after issuing Show Cause Notice to the units. Steps may also be initiated for cancellation of LOP/LOA of units which is not operating for more than a year; 5. The Minimum export obligation expressed as minimum FOB value of exports shall be as per the norm for the 5 year period for various sectors given in Appendix-I of Exim Policy from time to time; 6. NFEP is to be calculated as per Para 9.29 of Exim Policy. For purpose of uniformity, guidelines for calculation of NFEP given in Annexure - I, may be followed; and 7. Annual monitoring in the cases of old units which have completed more than five years will be evaluated cumulatively for the last five years (seven years for units with investment of Rs. 200 crores or above) only. In case a unit has completed less than five years from the date of commencement of commercial production it will be monitored for the number of completed years. However, units which have not completed one year, from the date of commercial production, need not be monitored. 8. Development Commissioner will monitor Foreign Exchange realization/remittance of EOU/EPZ units in coordination with the concerned General Manager of RBI as per instructions issued on the subject vide RBI circular No. COEXD. 3109/05.62.05/99-2000 dated 21.2.2000. SEZ units: The criteria for monitoring the performance of SEZ units would be as follows:- (a) The performance of the SEZ units to be monitored annually. However, penal action to be initiated only if NFEP achieved is negative in 3rd or subsequent years. In case of existing EPZ units converting into SEZ scheme, the date of commencement of commercial production under the EPZ scheme will be the date for reckoning the number of years completed by the units for the purpose of monitoring. (b) The performance of the SEZ units shall be monitored by a Committee as provided for in Para 9.40 of the Policy. ....................EXPORT PROCESSING ZONE SUMMERY OF ANNUAL PERFORMANCE REPORT FOR THE YEAR 2000-01

S.No.	Name of the unit with I.D no in case of EOU	Date of commencement of production	Item of manufacture	Value of capital goods imported	Value of imported raw material components etc.	Other out flow of foreign exchange towards knowhow, commission etc.	Total investment made
1	2	3	4	5	6	7	8

Employment generated so far	Value of export obligation for last 5 year or less as applicable	Actual exports (as against obligation in column 10	Short fall in export	Norms as per policy	NFEP achived during the period as per col.10	Shortfall	Value made in DTA	Remarks
9	10	11	12	13	14	15	16	17

PROFORMA-II I. APPROVAL AND IMPLEMENTATION OF EOUS: a) No. of valid approved units : b) No. of units cancelled : c) No. of units finally debonded : d) No. of exporting units : e) No. of units under implementation : f) No. of units yet to be implemented : II. result of monitoring : EOU /EPZ UNITS EOU/EPZ units last year last to last year a.Units which have achieved the NFEP and export performance as per norms in Appendix–I. b. Units with shortfall in NFEP and/or EO (as per norms in Appendix-I.) upto 10% during 1st and 2nd year. c. Units with shortfall in NFEP (as per norms in Appendix-I) of more than 10% but NFEP achieved is not negative and/or shortfall in EP does not exceed 10% of the sectoral norm during Ist and IInd year. d. Units with negative NFEP and/or shortfall in export performance is more than 10% of the sectoral norm in the 3rd or subsequent years. FTZ UNITS: a. Units which have achieved NFEP and EP as per norms in Appendix-I b. Units with shortfall in NFEP not exceeding 10% of the norm in Appendix-I during first or second year. c. Units with negative NFEP in 3rd or subsequent years. PROFORMA-III NAME OF THE UNIT (Rupees in lakhs/ $ in Million): Month of operation CG Import (Actual): Item of manufacture: Industry Norm of NFEP (%) Date of Commencement: Last 5 years (or less as applicable) Export Obligation for last 5Rs. in lakhd $ in Million years or less as applicable. ( 7 years for units with investment of Rs. 200 crores or more.) Last 5 years Last 5 (or less as applicable) Export : Inter Unity supply : C. G. debit : Imported RM/inputs used : Other outgo of F. E. : Total Imports : NFE : NFEP` : Difference in Export Obligation : DTA Sale : Remarks : ANNEXURE-I CALCULATION OF NFEP While calculating NFEP achieved, following basic components are to be taken into consideration: i. Amortised value of capital goods and technical know how fee ii. Value of import of R. M. (which is consumed during the year) and consumables, spares, etc. iii. Other outflow of foreign exchange towards royalty, interest on external commercial borrowings etc. iv. Value of physical exports effected excluding DTA sales but including supplies made under para 9.10 of the policy. 1. Amortised Value of Capital Goods: For this purpose 20% of the value of CG imported during last 5 years is taken into account. The CG imported prior to the 5 years period is not taken into consideration for the purposes of NFEP since the value of said CG is fully amortised. For instance, determination of NFEP for 1999 –2000 would require 20% value of C. G. to be taken into consideration, which has been imported during the period 1995- 96 to 1999-2000. If any capital goods imported duty free is leased from a leasing company or is taken in loan the CIF value of the capital goods shall be included under the imported inputs. However, on return of such CG its unamortized portion of value would be excluded from the calculation formula. 2. Import of raw material, consumables and spares etc: Whatever R. M. Consumables and spares are imported during the year are taken into account. However, it should be noted that whatever R. M. is in balance at the end of the previous year is added while the RM at the end of the current year is deducted which will give the amount of RM consumed during the year. RM purchased as inter-unit transfer is also included. 3. Other outflow of foreign exchange: All the foreign exchange outflow on account of royalty, dividends, commission on exports, interest on external commercial borrowing etc., during the particular year has to be accounted for while calculating value addition. However outflow on account of know-how fee would be apportioned during a period of five years. 2. Value of exports: While calculating value of exports, DTA sale made during the year are not to be accounted for. However, supplies made in accordance with the para 9.10 of the Policy will be taken into consideration for calculation of NFEP. Given below are details of a unit so as to calculate the NFEP for the year 1992-93, on the presumption that no imported RM was in balance at the end of previous year as well as at the end of 1992-93. In this case, the NFEP for 1992 - 93 is calculated as below: - 1. Amortised value of Capital Goods . (20% of import of CG made during the years 1988- 89 to 1992- 93) i.e., 20% of Rs. 50.00 lakhs 2. Import of raw material etc Rs.100.93 lakhs 3. Other outflow of foreign exchange Rs.10.72 lakhs 4. Value of exports Rs.173.13 lakhs The NFEP comes to = 173.13-(10 + 100.93 + 10.72)x 100 173.13 = 29.73% Note: CALCULATION OF VA ON NOTIONAL/ACTUAL BASIS: While calculating NFEP, FOB value of the capital goods or raw material received free of cost may be taken into account.