Assessment Year 2013-14 Meyer Organics Private Limited Assessment Year 2013-14 Table of Contents Sr. No . Particulars Page No. 1 Abbreviations and Acronyms 2 Executive ummary 3 !or"orate #ac$ground 4 %ndustry Overvie& ' "eci(ed )omestic *ransactions + ,unctions- Assets and .is$s Ana/ysis 0 Economic Ana/ysis 1 ,indings 2 )isc/aimer 10 .e/evant *rans3er Pricing .egu/ations 11 %ndex o3 Princi"a/ )ocuments 2 Meyer Organics Private Limited Assessment Year 2013-14 1. Abbreviations and Acronyms *4e 3o//o&ing abbreviations and acronyms 4ave been de(ned 3or use t4roug4out t4is study re"ort5 Abbreviations and Acronyms Full Name AE Associated Enter"rise !6PM !om"arab/e 6ncontro//ed Price Met4od !PM !ost P/us Met4od ,A. ana/ysis ,unctions- Assets and .is$s ana/ysis ,Y 2012-13 ,inancia/ year ended Marc4 31- 2013 7uidance 8ote 7uidance 8ote on re"ort on internationa/ transactions under section 22E o3 t4e %ncome *ax Act- 12+1 issued by t4e %nstitute o3 !4artered Accountants o3 %ndia Meyer Meyer Organics Private Limited OE!) 7uide/ines *rans3er Pricing 7uide/ines 3or Mu/tinationa/ Enter"rises and *ax Administrations "ub/is4ed by t4e Organisation 3or Economic !oo"eration and )eve/o"ment 8PM 8et Pro(t Margin PL% Pro(t /eve/ indicator PM Pro(t "/it Met4od .PM .esa/e Price Met4od *8MM *ransactiona/ 8et Margin Met4od *4e Act %ncome-tax Act- 12+1 *4e ,irm u$4bir 9 Associates *4e tudy .e"ort *4e *rans3er Pricing tudy .e"ort *4e .u/es %ncome-tax .u/es- 12+2 :# ;6<= :itabiotics Limited- London 3 Meyer Organics Private Limited Assessment Year 2013-14 2. Executive Summary 2515 Meyer 4as engaged t4e services o3 t4e ,irm to "re"are t4e tudy .e"ort documenting t4e revie& o3 t4e arm>s /engt4 nature o3 its internationa/ transactions &it4 its AEs during ,Y 2012-13- 3rom an %ndian trans3er "ricing "ers"ective5 2525 Meyer Organics is one o3 t4e /eading "4armaceutica/ manu3acturers in %ndia- 3ounded in 1212 in tec4nica/ co//aboration &it4 Omega - Meyer Ltd5- ?ersey ;#r5 %s/es=5 Meyer 4as manu3actured innovative 4ea/t4 care "roducts 3or over t4ree decades5 %t is 4ead@uartered in Mumbai- %ndia &it4 g/oba/ "resence in more t4an 30 countries5 *4roug4 s4ared mar$eting $no&-4o& and "romotiona/ su""ort- Meyer OrganicsA strategy is to "rovide "ro3essiona/ and com"re4ensive su""ort 3or its internationa/ "artners5 2535 Be "resent be/o& t4e /ist o3 t4e Associated Enter"rises and t4e corres"onding countriesC Sr. No. Associated Enterrise Country Nature of !elations"i 1 :itabiotics Ltd - :# ;6<= London 2 Ad/er Products Ltd 8igeria 3 :itabiotics ;8igeria= Ltd 8igeria 4 ,armex Meyer Ltd 8igeria ' :ita Aria !o %ran + Omega Meyer 74ana Ltd 74ana 0 :itabiotics *e4ran !o *e4ran 1 P* :itabiotics Dea/t4care %ndonesi a 2545 :# ;6<= is a /imited /iabi/ity com"any 4aving its registered oEce in 6<5 %t is in t4e business o3 manu3acturing and mar$eting "4armaceutica/ "re"aration inc/uding nutraceutica/s in 6< and a/so 4as invested 4uge sums to deve/o" ot4er mar$ets in t4e &or/d5 25'5 Ad/er Products Ltd5 is a /imited /iabi/ity com"any 4aving its registered oEce in 8igeria5 *4e com"any>s main business is manu3acturing and trading in "4armaceutica/ 3ormu/ations and ot4er items viFC "ac$ing materia/ 3or "4arma goods- "/astics- a//ied mac4inery and s"ares- &4ic4 are su""/ied in 8igeria5 4 Meyer Organics Private Limited Assessment Year 2013-14 25+5 :itabiotics ;8igeria= Ltd5 is a /imited /iabi/ity com"any 4aving its registered oEce in Lagos- 8igeria5 *4e com"any>s 4as its o&n manu3acturing 3aci/ities to "roduce "4armaceutica/ 3ormu/ations5 2505 ,armex Meyer Ltd5 is a /imited /iabi/ity com"any 4aving its registered oEce in Lagos- 8igeria5 *4e com"any>s main o"eration o3 business is manu3acturing and trading o3 "4armaceutica/ 3ormu/ations5 2515 :ita Aria is a /imited /iabi/ity com"any 4aving its registered oEce at *e4ran- %ran5 *4e com"any>s main o"eration o3 business is manu3acturing "4armaceutica/ 3ormu/ations5 2525 Omega Meyer 74ana Ltd is a trading com"any &it4 t4e registered oEce at Accra- 74ana5 *4e com"any is in t4e business o3 25105:itabiotics *e4ran !o 4as its registered oEce in *e4ran- %ran5 *4is com"any is engaged in trading in P4arma "roducts in %ran5 25115P* :itabiotics Dea/t4care is a manu3acturing !om"any &it4 its registered oEce in ?a$arta *imur- %ndonesia &it4 t4e 3actory at #andung5 *4is com"any is engaged in manu3acturing in P4arma "roducts in %ndonesia5 25125*4e ,irm "re"ared t4e study re"ort in accordance &it4 t4e %ndian trans3er "ricing "rovisions contained in ections 22 and 22A to 22, o3 t4e Act- read &it4 .u/es 10A to 10E o3 t4e .u/es5 %n revie&ing t4e internationa/ transactions use3u/ in3erences 4ave been made 3rom t4e G*rans3er Pricing 7uide/ines 3or Mu/tinationa/ Enter"rises and *ax Administrations> "ub/is4ed by t4e OE!) 7uide/ines and 7uidance 8ote5 25135ection 22 o3 t4e Act re@uires t4at t4e internationa/ transaction s4a// be com"uted 4aving regard to t4e arm>s /engt4 "rice5 *o "re"are t4e study re"ort- t4e (rm intervie&ed Meyer>s "ersonne/ and revie&ed various documents and (nancia/ data "rovided by Meyer5 25145Be "resent be/o&- t4e a summary o3 t4e internationa/ transactions underta$en bet&een Meyer and its AEs and t4e trans3er "ricing met4od identi(ed as t4e most a""ro"riate met4od5 Sr. No. Nature of Transaction Amount #!s.$ %ost Aroriate %et"od 1 !ontract Manu3acturing Activity *8MM 2 Ex"ort o3 Manu3actured 7oods !PM 3 *rading Activity !PM Total 251'5Contract %anufacturing Activity ' Meyer Organics Private Limited Assessment Year 2013-14 )uring ,Y 2012-13- Meyer 4as manu3actured "roducts 3or :# ;6<= o3 .s5 H-5 *4ese transactions are in t4e nature o3 contract manu3acturing5 #ased on t4e ,A. ana/ysis and t4e avai/abi/ity o3 re/iab/e in3ormation- Meyer 4as been se/ected as t4e tested "arty5 Be 4ave se/ected *8MM met4od- using 8PM as PL% to be t4e most a""ro"riate trans3er "ricing met4od 3or determining arm>s /engt4 "rice5 ,or t4e "ur"ose o3 a""/ying *8MM- &e 4ave com"ared t4e 8PM earned by Meyer 3rom its contract manu3acturing activity vis-I-vis 8PM earned by inde"endent com"arab/e com"anies5 ,or ,Y 2012-13- t4e 8PM earned by Meyer 3rom contract manu3acturing activity is 4541 "ercent- and adJusted 8PM earned by inde"endent com"arab/e com"anies is 3501 "ercent5 ,urt4er- &e 4ave com"ared t4e margins stated in t4e )P!O norms to t4e margins earned by Meyer5 ,rom t4is too- &e can state t4at Meyer earns a margin 4ig4er t4an &4at is s"eci(ed by t4ose norms5 #ased on t4e a3oresaid ana/ysis- it is reasonab/e to conc/ude t4at Meyer>s internationa/ transactions &it4 its AE in res"ect o3 t4e contract manu3acturing activity are consistent &it4 t4e arm>s /engt4 standard 3rom an %ndian trans3er "ricing "ers"ective5 251+5Exort of %anufactured &oods )uring ,Y 2012-13- Meyer 4as manu3actured and ex"orted to AEs- "roducts amounting to .s5 H-5 #ased on t4e ,A. ana/ysis and t4e avai/abi/ity o3 re/iab/e in3ormation- Meyer 4as been se/ected as t4e tested "arty5 Be se/ected !PM to be t4e most a""ro"riate trans3er "ricing met4od 3or determining arm>s /engt4 "rice5 ,or t4e "ur"ose o3 a""/ying !PM- &e com"ared t4e gross margin earned by Meyer 3rom its ex"ort to AEs vis-I-vis gross margins earned by its domestic manu3acturing activity H ex"ort to unre/ated "arties H inde"endent com"arab/e com"anies5 ,or ,Y 2012-13- t4e margin earned by Meyer 3rom ex"ort to AEs is 4541 "ercent- and margin o3 its domestic manu3acturing activity H ex"ort to unre/ated "arties H inde"endent com"arab/e com"anies is 3501 "ercent5 #ased on t4e a3oresaid ana/ysis- it is reasonab/e to conc/ude t4at Meyer>s internationa/ transactions &it4 its AE in res"ect o3 t4e ex"ort o3 manu3actured goods are consistent &it4 t4e arm>s /engt4 standard 3rom an %ndian trans3er "ricing "ers"ective5 25105Trading Activity )uring ,Y 2012-13- Meyer 4as trading activity &it4 its AEs amounting to .s5 H-5 #ased on t4e ,A. ana/ysis and t4e avai/abi/ity o3 re/iab/e in3ormation- Meyer 4as been se/ected as t4e tested "arty5 Be se/ected !PM to be t4e most a""ro"riate trans3er "ricing met4od 3or determining arm>s /engt4 "rice5 ,or t4e "ur"ose o3 a""/ying !PM- &e com"ared t4e gross margin earned by Meyer 3rom its trading activity vis-I-vis gross margin earned by its + Meyer Organics Private Limited Assessment Year 2013-14 domestic manu3acturing activity5 ,or ,Y 2012-13- t4e gross margin earned by Meyer 3rom trading activity is 4541 "ercent- and adJusted gross margin o3 its domestic manu3acturing activity is 3501 "ercent5 #ased on t4e a3oresaid ana/ysis- it is reasonab/e to conc/ude t4at Meyer>s internationa/ transactions &it4 its AE in res"ect o3 t4e contract manu3acturing activity are consistent &it4 t4e arm>s /engt4 standard 3rom an %ndian trans3er "ricing "ers"ective5 25115#ased on t4is study re"ort and 4aving regard to economic and commercia/ 3actors- t4e transactions underta$en bet&een t4e com"any and its AEs a""ear to be at arm>s /engt4 3rom t4e %ndian trans3er "ricing "rinci"/es5 '. Cororate (ac)ground 3515 Meyer is an %O 2001 !erti(ed OrganiFation5 Meyer is current/y invo/ved in estab/is4ing and gro&ing existing mar$ets in many countries &or/d&ide5 *4roug4 s4ared mar$eting $no&-4o& and "romotiona/ su""ort- Meyer>s strategy is to "rovide "ro3essiona/ and com"re4ensive su""ort 3or its internationa/ "artners5 3525 )uring t4e ear/y years- Meyer maJor/y ex"orted "roducts5 *4ey s/o&/y en/arged t4eir "resence in %ndia5 %nitia//y Meyer &as main/y de"endent on ex"orts to :# ;6<= 3or its surviva/ be3ore it &as ab/e to "enetrate t4e %ndian mar$et5 *4is re/ations4i" 4as continued &4ic4 is evident 3rom t4e 3act t4at ex"orts to :# ;6<= accounts 3or +2K o3 t4e com"any>s ex"ort turnover5 3535 *4e "rimary business o3 Meyer is manu3acturing o3 P4armaceutica/s Products- es"ecia//y nutrition su""/ements /i$e !a/cimax ,orte *ab- !a/cimax '00 *ab- ?ointace *ab- %mmunace *ab etc5 *4e tota/ revenue during t4e ,Y 2012-13 is .s5 3+1534 crores ;net o3 excise duty=- &4ic4 consists o3 .s5 24'530 crore sa/es o3 manu3actured goods and .s5 112532 crore sa/e o3 traded goods5 3545 *4e organiFationa/ structure o3 t4e com"any 4as been tabu/ated be/o&C Sr. No. Name * Country of s"are"older %arc" '1+ 2,1' 1 )r5 <5*5La/vani - 6< '502K 2 Mrs5 .o4ini <5 La/vani L 6< +500K 3 Mr5 AJit La/vani L 6< 315+0K 4 Mr5 *eJ La/vani L 6< 315+0K ' MHs Omega Meyer Ltd L 6< 24544K + Mrs5 Pus4"a <a/si L %ndia 1520K T-TA. 1,,.,,/ 0 Meyer Organics Private Limited Assessment Year 2013-14 0. 1ndustry -vervie2 4515 *4e %ndian P4armaceutica/ %ndustry current/y to"s t4e c4art amongst %ndiaAs science-based industries &it4 &ide ranging ca"abi/ities in t4e com"/ex (e/d o3 drug manu3acture and tec4no/ogy5 *4e %ndian P4armaceutica/ %ndustry ran$s very 4ig4 amongst a// deve/o"ing countries- in terms o3 tec4no/ogy- @ua/ity and t4e vast range o3 medicines t4at are manu3actured5 4525 *4e country no& ran$s 3rd in terms o3 vo/ume o3 "roduction ;10 "er cent o3 g/oba/ s4are= and 14t4 /argest by va/ue ;15' "er cent o3 g/oba/ s4are=5 One reason 3or /o&er va/ue s4are is t4e /o&est cost o3 drugs in %ndia ranging 3rom ' "er cent to '0 "er cent /ess as com"ared to deve/o"ed countries5 %ndian "4armaceutica/ industry gro&t4 4as been 3ue//ed by ex"orts and its "roducts are ex"orted to a /arge number o3 countries &it4 a siFeab/e s4are in t4e advanced regu/ated mar$ets o3 t4e 6 and Bestern Euro"e5 4535 Many g/oba/ "4armaceutica/ maJors are outsourcing manu3acturing to %ndian com"anies- &4ic4 enJoy muc4 /o&er costs ;bot4 ca"ita/ and recurring= t4an t4eir &estern counter"arts5 %ndian com"anies are "roving to be better at deve/o"ing Active P4armaceutica/ %ngredients ;AP%s= t4an t4eir com"etitors 3rom target mar$ets and t4at too &it4 non-in3ringing "rocesses5 %ndian com"anies are entering in to contract manu3acturing agreements 3or su""/ying com"/ex under-"atent mo/ecu/es5 %ndia gained its 3oot4o/d on t4e g/oba/ scene &it4 its innovative engineered generic drugs and active "4armaceutica/ ingredients- and it is no& see$ing to become a maJor "/ayer in outsourced c/inica/ researc4 as &e// as contract manu3acturing and researc45 4545 P4armaceutica/ ex"orts 3rom t4e country during 2012-13 stood at 6M145+ bi//ion- u" 3rom 6M1352 bi//ion t4e "revious year5 *4e %ndian "4armaceutica/ industry &ou/d continue to ex"erience strong gro&t4 as structura/ gro&t4 drivers continue to remain im"ervious5 *4e industry is ex"ected to ac4ieve a gro&t4 o3 10-12 "ercent in 2013-14- according to a study by %!.A5 45'5 *4e "4armaceutica/ mar$ets are /i$e/y to &itness a !A7. o3 3-+K over 2012-1+- to reac4 a mar$et va/ue o3 6 M152 tri//ion5 *4e $ey gro&t4 drivers 3or 3uture inc/ude an increasing s4i3t to t4e use o3 generics medicines- accom"anied by "atent ex"iries and vo/ume-driven gro&t4 in "4armerging mar$ets5 %ar)et 2,1232,14 CA!&#/$ %ar)et 5alue by 2,14#6S 7 in billion$ 7/oba/ 3 L + 110' - 120' )eve/o"ed 1 L 4 ++0 - +20 1 Meyer Organics Private Limited Assessment Year 2013-14 E6' ;-1= L 2 13' L 1+' P4armerging 12 L 1' 34' L 30' .oBN 2 L ' 140 L 100 .oBN - .est o3 t4e Bor/d 45+5 *4e "4armaceutica/ contribution o3 deve/o"ed mar$ets is /i$e/y to dec/ine 3rom 03K in 200+ to '0K by 201+ due to ex"iring "atents- decreasing s"ending on branded "roducts- and 4ig4er cost containment measures by "ayers5 4505 7/oba/ s4are o3 s"ending on medicines by E6' is /i$e/y to 3a// 3rom 12K in 200+ to 13K by 201+- due to a s/o&do&n in economic gro&t4 and aggressive cost containment measures 4515 P4armaceutica/ s"ending 3rom t4e emerging mar$etsNN is estimated to Jum" 3rom 14K in 200+ and contribute 30K to t4e g/oba/ "4armaceutica/ s"ending by 201+5 *4is gro&t4 &i// be 3aci/itated by rising "o"u/ation- rising "er-ca"ita income- im"roving medica/ in3rastructure and economic gro&t45 ;NN!4ina- #raFi/- %ndia- :eneFue/a- Po/and- Argentina- *ur$ey- Mexico- :ietnam- out4 A3rica- *4ai/and- %ndonesia- .omania- Egy"t- Pa$istan- 6$raine and .ussia5= 8. 1nternational Transactions '515 List o3 re/ated "arty internationa/ transactions coveredC Sr. No . Name * Country of AE Nature of transaction A9 2,1'3 10 Amount %et" od 6sed 1 :itabiotics Ltd - London Ex"ort o3 Manu3actured 7oods +'0-101-+3 0 *8MM a/es o3 *rading 7oods 223-040-00 1 !PM a/es o3 !onsumab/es 9 Ot4er u""/ies 2'-'+2-02+ !PM Purc4ase o3 .a& Materia/ 9 consumab/es +-02+-+43 !6P 2 Ad/er Products Ltd - 8igeria Ex"ort o3 Manu3actured 7oods 12-220-210 *8MM a/es o3 *rading 7oods 2-+12-002 !PM a/es o3 !onsumab/es 9 Ot4er u""/ies 2-+'+-'04 !PM 3 :itabiotics ;8igeria= Ltd L 8igeria a/es o3 !onsumab/es 9 Ot4er u""/ies 43-20'-212 !PM 4 ,armex Meyer Ltd L 8igeria a/es o3 !onsumab/es 9 Ot4er u""/ies 2-00+-104 !PM ' :ita Aria !o L %ran a/es o3 !onsumab/es 9 12-130-+01 !PM 2 Meyer Organics Private Limited Assessment Year 2013-14 Ot4er u""/ies a/es o3 *rading 7oods 11-01+-0'' !PM + Omega Meyer 74ana Ltd ;74ana= a/es o3 !onsumab/es 9 Ot4er u""/ies 2-230 !PM Ex"ort o3 Manu3actured 7oods 2'-301-401 *8MM a/es o3 *rading 7oods 2-0'1-204 !PM 0 :itabiotics *e4ran !o ;*e4ran= Ex"ort o3 Manu3actured 7oods 32-'30-10' !PM 1 P* :itabiotics Dea/t4care ;%ndonesia= a/es o3 !onsumab/es 9 Ot4er u""/ies 2-012-401 !PM T-TA. 1+1:0+,'' +;1' '525 %t is "ertinent to note t4at t4e manu3acturing 3or :itabiotics 6< is in t4e nature o3 !ontract Manu3acturing Arrangement- &4ereby Meyer manu3actures "roducts 3or t4em on t4e basis o3 /ong term manu3acturing contract5 Manu3acture is 3u//y according to 7ood Manu3acturing Practice ;7MP= under conditions a""roved by re/evant aut4orities suc4 as t4e M!A- ,)A5 Present/y Meyer 4as a tota/ ex"ort turnover o3 .s 132522 crores &4ic4 is main/y attributab/e to :itabiotics Ltd L 6<5 4. Functions+ Assets and !is)s Analysis +515 ection 22) o3 t4e Act and t4e "rescribed ru/es t4ere under re@uires every "erson &4o 4as entered into an internationa/ transaction to $ee" and maintain inter a/ia- a descri"tion o3 t4e 3unctions "er3ormed- ris$s assumed and assets em"/oyed or to be em"/oyed by t4e tax"ayer and by t4e AEs invo/ved in t4e internationa/ transaction or s"eci(ed domestic transaction5 +525 ,A. ana/ysis revie&s t4e 3unctions "er3ormed- assets uti/iFed and ris$s assumed by t4e tax"ayer and its AEs 3or t4e s"eci(c internationa/ transaction or s"eci(ed domestic transaction under revie&5 #y "roviding a descri"tion o3 t4e 3unctions and assets and t4eir /ocation &it4in a cor"orate grou"- t4e ,A. ana/ysis "rovides t4e (rst ste" in eva/uating t4e re/ative contribution to "ro(t o3 various re/ated entities5 +535 ,A. ana/ysis enab/es ma""ing o3 t4e economica//y re/evant 3acts and c4aracteristics o3 transactions bet&een AEs &it4 regard to t4eir 3unctions- assets and ris$s and "rovides t4e 3actua/ 3oundation 3or estab/is4ing a trans3er "ricing met4odo/ogy consistent &it4 t4e arm>s /engt4 standard set 3ort4 in t4e re/evant trans3er "ricing regu/ations contained in t4e Act and t4e .u/es5 10 Meyer Organics Private Limited Assessment Year 2013-14 +545 *4e 3unctions to be "er3ormed by Meyer and its AEs in re/ation to t4e transactions under revie& are based on in3ormation obtained in t4e course o3 discussions &it4 t4e res"ective "ersonne/ o3 Meyer and are "resented be/o&5 +5'5 Functions erformed 4.8.1. Contract %anufacturing Activity +5'51515.esearc4 and )eve/o"ment :# ;6<= originates t4e "roduct idea and as$s Meyer to do 3urt4er researc4 and deve/o"ment5 #ased on t4e "roduct idea- Meyer researc4es and deve/o"s ne& "roducts &it4 tec4nica/ su""ort o3 :# ;6<=5 Meyer sends a sam"/e o3 t4e ne& "roducts to :# ;6<= &4o must a""rove it5 A3ter a""rova/- :# ;6<= "/aces orders 3or t4e "roduct and Meyer commences "roduction5 +5'51525.a& Materia/ Procurement Meyer is res"onsib/e 3or "rocurement o3 ra& materia/ and a// re/ated @ua/ity testing etc5 Meyer must ensure t4at t4e ra& materia/ meets t4e standards "rescribed by :# ;6<=5 Meyer sources su""/iers- negotiates "rices and stores ra& materia/ at its 3actories5 +5'51535Manu3acturing Meyer manu3actures t4e "roducts t4roug4 its manu3acturing 3aci/ities at *4ane and #anga/ore to meet t4e needs o3 :# ;6<=5 .egu/ar orders are received 3rom :# ;6<=O 4ence continuous manu3acturing is carried out5 6sua//y "roducts are manu3actured in batc4es and "roduction is "/anned so as to minimiFe inventory5 +5'51545%nventory Management Meyer manu3actures t4e "roducts at its 3actories in %ndia on/y based on orders received 3rom :# ;6<=5 Pro"er "roduction "/anning is done so t4at t4e "roduction "rocess is com"/eted Just be3ore t4e ex"ort date5 Dence- Meyer $ee"s minima/ stoc$5 Once t4e "roducts are des"atc4ed out o3 %ndia- inventory management becomes t4e res"onsibi/ity o3 :# ;6<=5 +5'515'5Mar$eting :# ;6<= underta$es t4e a// mar$eting activity re/ated to t4e "roducts and is res"onsib/e 3or deve/o"ment and im"/ementation o3 suitab/e mar$eting strategies5 Meyer on/y acts as a contract manu3acturer and t4ere3ore does not incur any mar$eting ex"enses5 ,or mar$eting o3 "roducts- Meyer "rovides some o3 11 Meyer Organics Private Limited Assessment Year 2013-14 t4e re/evant mar$eting materia/ &4ic4 :# ;6<= uses &4i/e mar$eting t4e "roducts5 +5'515+5Pua/ity !ontro/ Pua/ity contro/- or P! 3or s4ort- is a "rocess by &4ic4 entities revie& t4e @ua/ity o3 a// 3actors invo/ved in "roduction5 !ontro/s inc/ude "roduct ins"ection- &4ere every "roduct is examined visua//y be3ore t4e "roduct is so/d into t4e externa/ mar$et5 Meyer is res"onsib/e 3or maintaining t4e @ua/ity o3 "roducts it su""/ies to :# ;6<=5 %t 4as a @ua/ity contro/ de"artment 3or t4is "ur"ose5 :# ;6<= may reJect and return any "roducts due to de(ciency in @ua/ity5 +5'51505Pac$aging Pac$aging is t4e tec4no/ogy o3 enc/osing or "rotecting "roducts 3or distribution- storage- sa/e- and use5 Meyer "ac$s t4e "roducts in /arge sea/ed a/uminum bags containing 1000-+000 untis and s4i"s t4em to :# ;6<=5 :# ;6<= t4en re"ac$ages t4e "roducts into sma//er stri"s be3ore se//ing it 3urt4er5 +5'51515A summary o3 t4e 3unctions "er3ormed by eac4 com"any is tabu/ated be/o&C Function %eyer 5( #6<$ .esearc4 9 )eve/o"ment Procurement o3 .a& Materia/s Manu3acturing %nventory Management Mar$eting Pua/ity !ontro/ Pac$aging +5'525 Ex"ort o3 Manu3actured 7oods +5'52515.esearc4 and )eve/o"ment (put expanation from !ard report" Meyer 4as an in-4ouse de"artment dedicated to researc4 and deve/o"ment5 +5'52525Manu3acturing and Pua/ity !ontro/ Meyer manu3actures t4e "roducts t4roug4 its manu3acturing 3aci/ities at *4ane and #anga/ore to meet t4e needs o3 its g/oba/ customers5 %t 4as its o&n @ua/ity team to su""ort and maintain its manu3acturing o"erationsO t4ereby monitors and ensures t4e "roduction "rocess to ac4ieve t4e desired out"ut &it4 t4e de(ned @ua/ity /eve/5 +5'52535%nventory Management 12 Meyer Organics Private Limited Assessment Year 2013-14 Meyer manu3actures goods 3or AEs on/y on t4e basis on orders received 3rom t4em &4i/e in case o3 non-AEs- Meyer estimates demand based on "ast ex"erience5 Meyer $ee"s minima/ inventory o3 "roducts at its &are4ouses5 +5'52545Mar$eting o3 goods Meyer usua//y does not underta$e any mar$eting activity and business is received on/y 3rom continuing customers5 Most ne& customers come t4roug4 re3erra/s 3rom existing customers5 Meyer a/so se//s business "romotion materia/ to its AEs and non AEs &it4 &4ic4 t4ey mar$et t4e "roducts5 ,urt4er- 3or certain non-AEs- Meyer may even de"ute "ersonne/ to train t4em on mar$eting tec4ni@ues- etc5 +5'525'5Pac$aging A// "ac$aging is done by Meyer &4ic4 se//s t4e "roducts in (na/ "ac$ed 3orms5 +5'525+5%nvoicing and co//ection Meyer is res"onsib/e 3or bi//ing 9 co//ection i5e5- 3o//o&-u" &it4 t4e customers 3or t4e rea/iFation o3 t4e sa/e "roceed5 +5'52505A summary o3 t4e 3unctions "er3ormed by eac4 com"any is tabu/ated be/o&C Function %eyer AEs .esearc4 9 )eve/o"ment Procurement o3 .a& Materia/s Manu3acturing %nventory Management Mar$eting Pua/ity !ontro/ Pac$aging +5'535 *rading Activity +5'53515Order Procurement AEs &4o re@uire goods 3rom %ndia contact Meyer 3or "rocurement o3 suc4 goods5 Meyer engages in trading on/y on suc4 s"eci(c orders 3rom AEs5 +5'53525Logistics Meyer "rovides /ogistic su""ort 3or t4e goods to be sent to its AEs5 A// 3unctions /i$e vendor sourcing- trans"ort arrangement- etc are "er3ormed by Meyer5 +5'53535Mar$eting 13 Meyer Organics Private Limited Assessment Year 2013-14 *4ere is a/most no mar$eting activity invo/ved in t4ese transactions since it is on/y an incidenta/ activity5 %3 any AE re@uires a certain "roduct- t4ey contact Meyer5 Meyer does not active/y mar$et t4e "roducts5 +5+5 Assets em"/oyed +5+515 Any business re@uires assets ;tangib/e or intangib/e= &it4out &4ic4 it cannot carry out its activities5 An understanding o3 t4e assets em"/oyed and o&ned by Prosa/es and its AE "rovides an insig4t into t4e resources de"/oyed by t4em and t4eir contribution to t4e business "rocessesHeconomic activities5 +5+525 %n t4e case o3 a// "roducts manu3actured 3or :# ;6<=- :# ;6<= o&ns t4e intangib/es /i$e trademar$- brand names- etc5 o3 t4e "roducts5 :# ;6<= 4as given Meyer "ermission to use certain brand names to manu3acture and se// in t4e domestic mar$et but does not c4arge any roya/ty 3or suc4 use5 +5+535 ,or a// ot4er manu3actured "roducts- Meyer o&ns t4e brand names5 +5+545 Meyer o&ns t&o 3actories- one at *4ane- Ma4aras4tra and one at #anga/ore- <arnata$a- 3rom &4ere it manu3actures t4e "roducts5 %t ensures t4at t4e 3actories com"/y &it4 a// t4e re/evant /a&s and regu/ations5 +505 .is$s assumed +50515 !ontract Manu3acturing Activity +5051515Mar$et .is$ Mar$et ris$ arises &4en a (rm 3aces adverse sa/es conditions resu/ting 3rom eit4er increased com"etition in t4e mar$et"/ace- dec/ines in demand &it4in t4e mar$et- or t4e inabi/ity to mar$et or "osition "roducts 3or targeted customers5 #ot4 Meyer and :# ;6<= bear t4is ris$ as adverse mar$et conditions &i// cause sa/es o3 :# ;6<= to dec/ine5 *4is &i// in turn resu/t in va/ue o3 orders 3rom :# ;6<= dec/ining5 *4is may resu/t in a signi(cant im"act on Meyer as sa/es to :# ;6<= 3orm a /arge "art o3 t4e turnover5 +5051525!redit .is$ A (rm 3aces customer credit ris$ &4en it su""/ies services to a customer and t4e customer 3ai/s to ma$e "ayment or t4e "ayment is de3erred5 14 Meyer Organics Private Limited Assessment Year 2013-14 Meyer se//s t4e "roducts on/y to :# ;6<=- &4o ma$es "rom"t "ayments- usua//y &it4in 30 days5 Any de3au/ts by customers o3 :# ;6<= are borne by :# ;6<=5 Dence- Meyer does not bear any credit ris$5 +5051535%nventory .is$ %nventory ris$s arise 3rom various 3actors suc4 as ra"id tec4no/ogica/ c4ange- t4e3t- damage- obso/escence- s"oi/age or reduced demand5 A// signi(cant inventory ris$s are borne by :# ;6<=5 Once t4e "roducts are so/d to :# ;6<=- t4ey cannot be returned 3or any reason ot4er t4an de3ects5 +5051545.eturn .is$ Meyer is res"onsib/e 3or maintaining t4e @ua/ity standard o3 "roducts s"eci(ed by :# ;6<=5 :# ;6<= 4as t4e rig4t to return any "roducts not meeting t4e standard5 +50515'5,oreign Exc4ange ,/uctuation .is$ *4is ris$ re/ates to t4e "otentia/ im"act on "ro(ts t4at may arise because o3 c4anges in 3oreign exc4ange currency rates over a "eriod o3 time5 Meyer invoices :# ;6<= in 6 )o//ars5 Dence- bot4 "arties bear some 3oreign exc4ange Quctuation ris$5 +50515+5A summary o3 t4e ris$s assumed by eac4 com"any is tabu/ated be/o&C !is) %eyer 5( #6<$ Mar$et .is$ !redit .is$ %nventory .is$ .eturn .is$ ,oreign Exc4ange ,/uctuation .is$
+50525 Ex"ort o3 Manu3actured 7oods +5052515Mar$et .is$ #ot4 A)PL and Prosa/es bear t4is ris$5 Even t4oug4 most o3 t4e em"/oyees &4o do t4e mar$eting are on t4e "ayro// o3 AP)L- t4e cost is s4ared bet&een t4em in "ro"ortion to revenues5 Dence- i3 revenue o3 eit4er com"any dec/ines- t4e cost s4ared by t4at com"any &i// automatica//y reduce5 +5052525!redit .is$ A)PL and Prosa/es are in t4e business o3 direct mar$eting &4ere t4eir c/ients are ban$s and 8#,!s5 *4e revenue is boo$ed 1' Meyer Organics Private Limited Assessment Year 2013-14 based on contracts &it4 t4em &4ic4 are usua//y continuous in nature5 Dence- t4e occurrence o3 bad debts is rare5 +5052535%nventory .is$ Meyer bears t4e inventory ris$ as any unso/d goods +5052545Barranty .is$ +50525'5,oreign Exc4ange ,/uctuation .is$ +50525+5A summary o3 t4e ris$s assumed by eac4 com"any is tabu/ated be/o&C !is) AS=P. Prosales Mar$et .is$ !redit .is$ +50535 *rading Activity *rading is "ure/y an incidenta/ activity 3or Meyer5 Meyer on/y "rovides /ogistic su""ort 3or AEs &4o &is4 to "rocure certain items 3rom %ndia5 *4us Meyer bears no signi(cant ris$5 :. Economic Analysis 0515 e/ection o3 t4e Most A""ro"riate Met4od 051515 As "er t4e %ndian trans3er "ricing "rovisions- t4e income arising 3rom an internationa/ transaction &it4 an associated enter"rise must be com"uted 4aving regard to t4e arm>s /engt4 "rice5 *4e ca/cu/ation o3 t4e arm>s /engt4 "rice 4as to be done by using t4e most a""ro"riate met4od5 *4e most a""ro"riate met4od must be se/ected 3rom t4e 3o//o&ing met4odsC !om"arab/e 6ncontro//ed Price ;R!6PS= Met4odO .esa/e Price Met4od ;R.PMS=O !ost P/us Met4od ;R!PLMS=O Pro(t "/it Met4od ;RPMS=O or *ransactiona/ 8et Margin Met4od ;R*8MMS=5 051525 .u/e 10! ;2= o3 t4e %ncome *ax .u/es /ists t4e 3actors t4at s4ou/d be ta$en into account in se/ecting t4e most a""ro"riate met4od5 ome o3 t4e 3actors areC 1+ Meyer Organics Private Limited Assessment Year 2013-14 T *4e avai/abi/ity- coverage and re/iabi/ity o3 data necessary 3or t4e a""/ication o3 t4e met4odO T *4e extent to &4ic4 re/iab/e and accurate adJustments can be made to account 3or diUerences- i3 any- bet&een t4e internationa/ transaction or s"eci(ed domestic transaction and t4e com"arab/e uncontro//ed transaction or bet&een t4e enter"rises entering into suc4 transactionO and T *4e nature- extent and re/iabi/ity o3 assum"tions re@uired to be made in a""/ication o3 a met4od5 051535 !om"arab/e 6ncontro//ed Price Met4od ;!6PM= *4e !6PM s4ou/d be a""/ied &4ere AEs buy or se// simi/ar goods or services in com"arab/e transactions &it4 unre/ated enter"rises or &4en unre/ated enter"rises buy or se// simi/ar goods or services- as is being done bet&een t4e AEs5 %nterna/ !6P invo/ves com"arison o3 "rices "aid H c4arged bet&een one o3 t4e "arties to t4e contro//ed transaction and an unre/ated t4ird "arty in uncontro//ed conditions- &4ereas an externa/ !6P invo/ves com"arison o3 "rices "aidHc4arged bet&een t&o unre/ated t4ird "arties in uncontro//ed conditions5 !ontract Manu3acturing Activity Ex"ort o3 Manu3actured 7oods *rading Activity 051545 .esa/e Price Met4od ;.PM= *4e .PM eva/uates t4e arm>s /engt4 nature o3 a contro//ed transaction by re3erence to t4e gross "ro(t margin rea/iFed in a com"arab/e uncontro//ed transaction5 *4e .PM measures t4e va/ue o3 3unctions "er3ormed and is ordinari/y a""ro"riate in cases invo/ving t4e "urc4ase and resa/e o3 tangib/e goodsHservices in &4ic4 t4e buyerHrese//er does not add substantia/ va/ue to t4e goods by "4ysica//y a/tering t4em or by using mar$eting intangib/es5 *4e met4od may become /ess re/iab/e &4en t4ere are diUerences in t4e 3unctions "er3ormed or ris$s assumed bet&een t4e contro//ed and uncontro//ed transactions5 %t is "ertinent to note t4at &4en t4e resa/e "rice margin used is t4at o3 an inde"endent enter"rise in a com"arab/e transaction- t4e re/iabi/ity o3 t4e resa/e "rice met4od may be aUected i3 t4ere are materia/ diUerences in t4e &ay t4e AEs and inde"endent enter"rises carry out t4eir businesses5 !ontract Manu3acturing Activity Ex"ort o3 Manu3actured 7oods 10 Meyer Organics Private Limited Assessment Year 2013-14 *rading Activity 0515'5 *ransactiona/ 8et Margin Met4od ;*8MM= 6nder t4e *8MM- t4e standards o3 com"arabi/ity are /ess stringent re/ative to t4e ot4er met4ods &it4 on/y broad simi/arity o3 3unctions re@uired5 *4is met4od com"ares t4e norma/ net "ro(t margin- com"uted in re/ation to costs incurred or sa/es eUected or assets em"/oyed or 4aving regard to any ot4er re/evant base- rea/iFed by AEs- to t4e net "ro(t margin rea/iFed by unre/ated enter"rises 3rom com"arab/e uncontro//ed transactions5 *4e *8MM 4as t4e 3o//o&ing "ractica/ advantagesC T %n t4e case o3 *8MM- t4e net margins ;e5g5 return on assets- o"erating income to sa/es- and "ossib/y ot4er measures o3 net "ro(t= are /ess aUected by transactiona/ diUerences t4an is t4e case &it4 "rice- as used in t4e !6PO T *4e net margins may a/so be more to/erant to some 3unctiona/ diUerences bet&een t4e contro//ed and uncontro//ed transactions t4an gross "ro(t marginsO T *4e diUerences in 3unctions "er3ormed bet&een enter"rises are o3ten reQected in variations in o"erating ex"enses5 !onse@uent/y- enter"rises may 4ave a &ide range o3 gross "ro(t margins but sti// earn broad/y simi/ar /eve/s o3 "ro(tsO !ontract Manu3acturing Activity Ex"ort o3 Manu3actured 7oods *rading Activity 0515+5 Pro(t "/it Met4od ;PM= *4e PM is norma//y used in situations invo/ving trans3er o3 uni@ue intangib/es or in mu/ti"/e internationa/ transactions or s"eci(ed domestic transactions- &4ic4 are so c/ose/y interre/ated t4at t4ey cannot be eva/uated se"arate/y 3or determining t4e arm>s /engt4 "rice5 %n t4e instant case- t4e "ro(tabi/ity o3 Prosa/es can be tested more re/iab/y and easi/y t4roug4 ot4er met4ods &it4out ma$ing arbitrary assum"tions5 Moreover- t4e transactions do not invo/ve t4e use o3 uni@ue intangib/es5 !ontract Manu3acturing Activity Ex"ort o3 Manu3actured 7oods *rading Activity 11 Meyer Organics Private Limited Assessment Year 2013-14 051505 !ost P/us Met4od ;!PM= *4e !PM can be em"/oyed in cases invo/ving manu3acture- assemb/y or "roduction o3 tangib/e "roducts or "rovision o3 services t4at are so/d H "rovided to re/ated "arties5 %t com"ares t4e norma/ gross "ro(t mar$-u" on costs ;bot4 direct and indirect= earned by a manu3acturer H service "rovider to t4e gross "ro(t mar$-u" earned by uncontro//ed manu3acturers H service "roviders5 7ross "ro(t margin needs to be adJusted to ta$e into account 3unctiona/ and ot4er diUerences bet&een t4e internationa/ transaction or s"eci(ed domestic transaction and t4e com"arab/e uncontro//ed transaction- or bet&een t4e enter"rises entering into suc4 transaction- &4ic4 cou/d materia//y aUect t4e mar$-u" in t4e o"en mar$et5 A c/ose degree o3 com"arabi/ity &it4 t4e "roducts H services "rovided by uncontro//ed manu3acturers H service "roviders and &it4 t4e 3unctions "er3ormed and ris$s assumed by t4e uncontro//ed manu3acturers H service "roviders &i// "roduce a more re/iab/e resu/t under t4e !PM5 !ontract Manu3acturing Activity Ex"ort o3 Manu3actured 7oods *rading Activity 0525 ,indingsC As discussed above- t4e direct met4ods ;!6PM and .PM= cannot be a""/ied to estab/is4 arm>s /engt4 va/ue o3 Prosa/es> internationa/ transaction5 ,urt4er *8MM and PM a/so cannot be a""/ied 3or t4e reasons discussed above5 *4us 3or t4e internationa/ transaction under revie&- !PM a""ears to be t4e most a""ro"riate met4od 3or benc4mar$ing5 >. Findings 1515 !ontract Manu3acturing ActivityC *4e com"any 4as transactions in t4e nature o3 contract manu3acturing &it4 :# ;6<=5 *4is activity 3orms a maJor "art o3 t4e ex"ort turnover o3 Meyer5 :# ;6<= sends regu/ar "urc4ase orders to Meyer5 Meyer se//s "roducts to :# ;6<= in bu/$ "ac$ages5 :# ;6<=- t4en re"ac$s and /abe/s t4e "roducts be3ore se//ing t4em5 1525 Ex"ort o3 Manu3actured 7oods *ransactions &it4 8igeria and )ubai cannot be com"ared asC 151515 *4ey are diUerent geogra"4ica/ mar$ets 12 Meyer Organics Private Limited Assessment Year 2013-14 8igeria is a deve/o"ing country /ocated in t4e continent o3 A3rica &4i/e )ubai is a deve/o"ed city in t4e 6nited Arab Emirates5 *4us t4e mar$et is signi(cant/y diUerent in terms o3 ty"e o3 customers and t4eir re@uirements5 151525 :o/ume o3 transactions is diUerent 151535 !ontinuity o3 business 1525 *rading Activity )uring t4e year- Prosa/es 4ad reimbursed certain ex"enses to its AE at actua/ cost and t4ere is no e/ement o3 any "rovision o3 services5 A detai/ed &or$ing o3 t4e ex"enses reimbursed is contained in Annexure %5 A (na/ &or$ing based on t4e audited (gures o3 A)PL 9 Prosa/es 4as been made and is contained in Annexure %%5 *4e diUerence bet&een t4e ex"enses to be trans3erred as "er t4e (na/ &or$ing and t4e ex"enses a/ready trans3erred &or$s out to .s5 2-'3-14+H- or 05'1K o3 ex"enses trans3erred5 *4is is /o&er t4an t4e materia/ity t4res4o/d o3 2K as "er t4e cost s4aring agreement and t4us no adJustment is re@uired5 ;. Conclusion 1,. 1ndex of Princial =ocuments *4is study re"ort contains certain in3ormationHdocuments t4at are re@uired under t4e .u/e 10) o3 t4e .u/es5 A com"/ete /ist o3 t4e re@uired "rinci"a/ documents and- i3 a""/icab/e- t4eir /ocation in t4is study re"ort 3o//o&s5 Ot4er "rinci"a/ documents are maintained by t4e tax"ayer- in addition to bac$ground documents5 S.N o. Primary =ocumentation !e?uirements .ocation 1 )escri"tion o3 t4e o&ners4i" structure o3 t4e assessee enter"rise &it4 detai/s o3 s4ares or ot4er o&ners4i" interest 4e/d t4erein by ot4er enter"rises V.u/e 10);1=;a=WO Paragrap# 3 and $t#er ree%ant documents& if any& are maintained 'y t#e (ompany 2 Pro(/e o3 t4e grou" o3 &4ic4 t4e assessee enter"rise Paragrap# 3 20 Meyer Organics Private Limited Assessment Year 2013-14 S.N o. Primary =ocumentation !e?uirements .ocation is a "art a/ong &it4 t4e name- address- /ega/ status and country o3 tax residence o3 eac4 o3 t4e enter"rises com"rised in t4e grou" &it4 &4om internationa/ transaction or s"eci(ed domestic transactions 4ave been entered into by t4e assessee- and o&ners4i" /in$ages among t4em V.u/e 10);1=;b=WO and $t#er ree%ant documents& if any& are maintained 'y t#e (ompany 3 #road descri"tion o3 t4e business o3 t4e assessee and t4e industry in &4ic4 t4e assessee o"erates- and o3 t4e business o3 t4e associated enter"rises &it4 &4om t4e assessee 4as transacted V.u/e 10);1=;c=WO Paragrap# 3 ) 4 and $t#er ree%ant documents& if any& are maintained 'y t#e (ompany 4 *4e nature and terms ;inc/uding "rices= o3 internationa/ transaction or s"eci(ed domestic transactions entered into &it4 eac4 associated enter"rise- detai/s o3 "ro"erty trans3erred or services "rovided and t4e @uantum and t4e va/ue o3 eac4 suc4 transaction or c/ass o3 suc4 transaction V.u/e 10);1=;d=WO Paragrap# 4 ' )escri"tion o3 t4e 3unctions "er3ormed- ris$s assumed and assets em"/oyed or to be em"/oyed by t4e assessee and by t4e associated enter"rises invo/ved in t4e internationa/ transaction or s"eci(ed domestic transaction V.u/e 10);1=;e=WO Paragrap# * + .ecord o3 t4e economic and mar$et ana/yses- 3orecasts- budgets or any ot4er (nancia/ estimates "re"ared by t4e assessee 3or t4e business as a &4o/e and 3or eac4 division or "roduct se"arate/y- &4ic4 may 4ave a bearing on t4e internationa/ transaction or s"eci(ed domestic transactions entered into by t4e assessee V.u/e 10);1=;3=WO +ot appica'e 0 .ecord o3 uncontro//ed transactions ta$en into account 3or ana/yFing t4eir com"arabi/ity &it4 t4e internationa/ transaction or s"eci(ed domestic transactions entered into- inc/uding a record o3 t4e nature- terms and conditions re/ating to any Ree%ant documents& if any& are maintained 'y t#e 21 Meyer Organics Private Limited Assessment Year 2013-14 S.N o. Primary =ocumentation !e?uirements .ocation uncontro//ed transaction &it4 t4ird "arties &4ic4 may be o3 re/evance to t4e "ricing o3 t4e internationa/ transaction or s"eci(ed domestic transactions V.u/e 10);1=;g=WO (ompany 1 .ecord o3 t4e revie& "er3ormed to eva/uate com"arabi/ity o3 uncontro//ed transactions &it4 t4e re/evant internationa/ transaction or s"eci(ed domestic transaction V.u/e 10);1=;4=WO Ree%ant documents& if any& are maintained 'y t#e (ompany 2 )escri"tion o3 t4e met4ods considered 3or determining t4e arm>s /engt4 "rice in re/ation to eac4 internationa/ transaction or s"eci(ed domestic transaction or c/ass o3 transaction- t4e met4od se/ected as t4e most a""ro"riate met4od a/ong &it4 ex"/anations as to &4y suc4 met4od &as so se/ected- and 4o& suc4 met4od &as a""/ied in eac4 case V.u/e 10);1=;i=WO Paragrap# , 10 .ecord o3 t4e actua/ &or$ing carried out 3or determining t4e arm>s /engt4 "rice- inc/uding detai/s o3 t4e com"arab/e data and (nancia/ in3ormation used in a""/ying t4e most a""ro"riate met4od- and adJustments- i3 any- &4ic4 &ere made to account 3or diUerences bet&een t4e internationa/ transaction or s"eci(ed domestic transaction and t4e com"arab/e uncontro//ed transactions- or bet&een t4e enter"rises entering into suc4 transactions V.u/e 10);1=;J=WO Paragrap# - ) Annexure . to t#e study report 11 *4e assum"tions- "o/icies and "rice negotiations- i3 any- &4ic4 4ave critica//y aUected t4e determination o3 t4e arm>s /engt4 "rice V.u/e 10);1=;$=WO +ot appica'e 12 )etai/s o3 t4e adJustments- i3 any- made to trans3er "rices to a/ign t4em &it4 arm>s /engt4 "rices determined under t4ese ru/es and conse@uent adJustment made to t4e tota/ income 3or tax "ur"oses V.u/e 10);1=;/=WO +ot appica'e 13 Any ot4er in3ormation- data or document- inc/uding in3ormation or data re/ating to t4e associated enter"rise- &4ic4 may be re/evant 3or determination o3 t4e arm>s /engt4 "rice V.u/e 10);1=;m=W5 Ree%ant documents& if any& are maintained 'y t#e (ompany 11. =isclaimer 22 Meyer Organics Private Limited Assessment Year 2013-14 11515Our vie&s contained in t4is study re"ort are based on t4e com"/eteness and accuracy o3 t4e in3ormation "rovided by "ersonne/ o3 Prosa/es andHor any assum"tions made by Prosa/es t4at &ere re/ied u"on 3or t4e "ur"ose o3 t4is study re"ort5 Be disc/aim any /iabi/ity 3or advice based on incorrect or inaccurate in3ormation "rovided to us re/ating to t4e o"erations and t4e internationa/ transactions o3 Prosa/es &it4 its AE5 %3 any o3 t4e in3ormation and assum"tions "rovided by Prosa/es is not com"/ete or accurate- it is im"erative t4at &e be in3ormed according/y- as t4e inaccuracy or incom"/eteness t4ereo3 cou/d 4ave a materia/ eUect on our (ndings5 11525*4e ana/ysis and (ndings out/ined in t4is study re"ort are s"eci(ca//y in res"onse to a re@uest 3or advice by Prosa/es5 *4is study re"ort is con(dentia/ and 4as been "re"ared so/e/y 3or t4e use by Prosa/es5 %t s4ou/d not be co"ied or disc/osed to any t4ird "arty- in &4o/e or in "art- &it4out our "rior &ritten consent5 Do&ever- t4is study re"ort may be "resented ;eit4er in 3u// or "art= by Prosa/es to t4e tax aut4orities s4ou/d t4ere be an in@uiry into its trans3er "ricing arrangements5 8eit4er t4e ,irm nor any o3 its members or em"/oyees underta$e res"onsibi/ity in any &ay &4atsoever to any "erson or com"any ot4er t4an Prosa/es- 3or any error or omission in t4e advice given- 4o&ever caused5 Our vie&s are not binding on any aut4ority or !ourt and 4ence- no assurance is given t4at a "osition contrary to our vie&sHo"inions ex"ressed 4erein &i// not be asserted by any aut4ority andHor sustained by an a""e//ate aut4ority or a !ourt o3 /a&5 *4e res"onsibi/ity 3or any taxesH "ena/ties arising 3rom t4e course o3 assessments &ou/d not rest on t4e ,irm5 11535%n t4e "re"aration o3 t4is study re"ort- &e 4ave re/ied on t4e "rovisions o3 t4e Act- t4e .u/es- and Judicia/ and administrative inter"retations t4ereo3- &4ic4 are subJect to c4ange or modi(cation by subse@uent /egis/ation or regu/atory c4anges or administrative "ronouncements or Judicia/ decisions5 Any suc4 c4ange- &4ic4 cou/d be "ros"ective- retros"ective or retroactive- cou/d aUect t4e va/idity o3 t4e ana/ysis 4erein5 6n/ess s"eci(ca//y re@uested ot4er&ise- &e s4a// not u"date t4is study re"ort 3or subse@uent c4anges or modi(cations to t4e /a&- to t4e ru/esH regu/ations- or to t4e Judicia/ and administrative inter"retations t4ereo35 23
(Proceedings of the International Conferences on Basement Tectonics 2) Warren B. Hamilton (Auth.), Mervin J. Bartholomew, Donald W. Hyndman, David W. Mogk, Robert Mason (Eds.)-Basement Tectonics 8_ Ch