XX Ltd is a company for which we have to perform TP study.

Considering the risk profile and

service performed we have selected TNMM is the appropriate method. To justify the arm's
length price we have performed benchmark analysis for 8 comparable companies. Results of the
NCP ( Net Cost Plus) of those companies are given below to find out the average profit.

Nature of company Service company

NCP 7.75
Compareable companies 8

In USD
Year 2012 2013 2014 2015 2016 2017 Average Profit (%)

X Ltd 5 4 2 1 2 3 2.83
Y Ltd 8 10 12 7.5 8 8 8.92
Z Ltd 18 20 17.5 18 19 20 18.75
C Ltd 1 2 1.3 1.2 2 2.5 1.67
D Ltd 5 4 4 4 4.5 4.6 4.35
CB Ltd 18 22 21.5 21.5 22 22.5 21.25
BB Ltd 12 10.8 8.58 9.58 10 10.25 10.20
CC Ltd 1 0.9 1.25 1.25 1.8 1.84 1.34

Minimum 1.34
Median 6.63 2%
25th Percentile 2.54
30 Percentile 2.99
60th Percentile 9.17
70th Percentile 10.07
75th Percentile 12.34
Maximum 21.25
First Quartile 2.54
3rd Quartile 12.34

Interquartile range ( Between the First to 3rd Quartile) 7.75 Say this is the actual Net Cost Plus (N

For above analysis current NCP 7.75% is within the range of 30 to 70 Percentile. Hence we can
say that NCP is within the range of arm's Length Price.
XX Ltd is a company for which we have to perform TP study. Considering the risk profile and
service performed we have selected TNMM is the appropriate method. To justify the arm's
length price we have performed benchmark analysis for 8 comparable companies. Results of the
NCP ( Net Cost Plus) of those companies are given below to find out the average profit.

Nature of company Service company

NCP 7.75
Compareable companies 8

In USD
Year 2012 2013 2014 2015 2016 2017 Average Profit (%)

Z Ltd 18 20 17.5 18 19 20 18.75

D Ltd 5 4 4 4 4.5 4.6 4.35
CB Ltd 18 22 21.5 21.5 22 22.5 21.25
BB Ltd 12 10.8 8.58 9.58 10 10.25 10.20
CC Ltd 1 0.9 1.25 1.25 1.8 1.84 1.34

Mean 11.18
7.75

Interquartile range ( Between the First to 3rd Quartile) 7.75 Say this is the actual Net Cost Plus (NCP

For above analysis current NCP 7.75% is within the range of 30 to 70 Percentile. Hence we can
say that NCP is within the range of arm's Length Price.
the actual Net Cost Plus (NCP)