28 February 2014 ANNUAL REPORT TAXATION ACROSS …sainathinvestment.com/wp-content/uploads/2014/03/TAX-CONSUME… · Namaste Laboratories LLC (turnover of INR5.0b with PBT/PAT of

Chaitanya Arora ([email protected]); +91 22 3982 4927 1

Investors are advised to refer through disclosures made at the end of the Research Report.

28 February 2014

ANNUAL

REPORT

THREADBARE

Stock performance (1 year)

the ART of annual report analysis

ART will present a threadbare portrait of annual reports - statistical, strategic and structured. We believe ART's wide canvas - from accounting and auditing issues to

operating performance to management insights to governance matters - will help readers paint a clearer picture of the stock's investment worthiness.

TAXATION ACROSS CONSUMER COMPANIES

In this note, we analyze the tax structure of Indian consumer companies,

especially the ones with significant international exposure. We note that

effective tax rate for certain companies is much lower v/s standard tax rates

of specified geographies due to various tax exemptions. In the following

pages, we discuss in detail the domestic and international tax structure of

key FMCG companies.

An analysis of our FMCG coverage universe companies (above

USD2b market cap) reveals that the consolidated Effective Tax

Rate (ETR) is lower than the standard tax rates of specified

geographies for Godrej Consumer Products (GCPL) (17.5%), Dabur

India (Dabur) (19.3%), Hindustan Unilever (HUVR) (24.2%),

Colgate-Palmolive India (Colgate) (25.1%), Marico (26.5%) and

Pidilite (27.4%).

Standalone ETR is lower than the domestic corporate tax rate of

34% (including surcharge and cess) due to tax exemptions

available for manufacturing units located in backward areas/

developing locations. As per our analysis and based on

management information, standalone tax rates are likely to

increase during FY15-FY17 for Colgate, HUVR, Marico, with tax

exemptions expiring for certain manufacturing locations (refer

company-wise sections in detailed report).

GCPL, Dabur and Marico have meaningful subsidiaries (more than

20% of consolidated turnover from subsidiaries).

Dabur's lower tax rate is attributable to majority of subsidiary

profits being routed through UAE, a free-trade zone (turnover of

INR6.7b with PBT/PAT of ~INR1b in FY13). Also, its US subsidiaries,

Namaste Laboratories LLC (turnover of INR5.0b with PBT/PAT of

~INR300m in FY13) and Dermovia Skin Essentials INC (turnover

of INR461m with PBT/PAT of INR366m in FY13), have 0% tax. Tax

rates are normally at 40% in the US.

GCPL's FY13 subsidiary tax rate is lower due to: (a) tax rate being

low in Indonesian business due to inter-subsidiary royalty

income, which gets eliminated on consolidation, (b) prior year

tax refunds at Nigerian subsidiary (Lorna Nigeria), which is

eligible for tax exemption for five years and (c) tax exemptions

in Mozambique (Weave Mozambique Limitada) and Lebanon

(Hair Trading (offshore) S.A.L).

Marico's derived subsidiary PBT is INR99m with PAT loss of

INR234m primarily due to loss-making Kaya business. The lower

consolidated tax rate is also attributable to: (a) Vietnam

subsidiary being entitled to 50% tax reduction on its profits till

2014 (reported PBT of INR231m and PAT of INR197m in FY13), (b)

Egyptian subsidiary exempted from tax till Dec 31, 2016 (reported

turnover of INR811m and PBT/PAT of INR167m in FY13).

Effective tax rate for certain consumer

companies is much lower v/s standard

tax rates of specified geographies owing

to various tax exemptions

Tax exemptions/structuring prevalent

across international subsidiaries

Tax rates are likely to increase going

forward with some of these exemptions

expiring/quantum reducing

Ashish Gupta ([email protected]); +91 22 3982 5544

Consolidated tax rate of Indian consumercompanies with domestic operations (%)

Consolidated tax rate of Indian consumercompanies with meaningful internationaloperations (%)

* management guidance of tax rates

* *

* *

28 February 2014 2

ART – Tax Consumer

OUR APPROACH FOR ANALYZING TAX STRUCTURES We shortlisted companies having a market cap in excess of USD2b in our FMCG

coverage universe. Computed the effective consolidated tax rates for these companies. If the consolidated tax rate was significantly below the standard tax rates of

specified geographies, analysis was bifurcated into: Effective tax rate at the standalone entity level Tax rate for all subsidiaries aggregated (derived figure)

Analyzing reasons for lower tax rate at individual entity level, also involving study of global tax structures.

CONCLUSION OF OUR ANALYSIS An analysis of our FMCG coverage universe companies (above USD2b market cap) reveals that consolidated Effective Tax Rate (ETR) is lower than the standard tax rates of specified geographies for GCPL (17.5%), Dabur (19.3%), HUVR (24.2%), Colgate (25.1%), Marico (26.5%) and Pidilite (27.4%).

Indian consumer companies details for FY13 (INR b) Company name Standalone Subsidiaries (Derived) Consolidated

Turnover PBT PAT Tax rate (%) Turnover PBT PAT Tax rate (%) Turnover PBT PAT Tax rate (%)

Asian Paints 90 15 11 30.7 20 1 1 21.4 110 17 12 29.9 Colgate 32 7 5 25.1

Dabur 43 7 6 21.2 18 2 2 12.0 62 9 8 19.3 GCPL 36 6 5 19.3 28 4 3 14.6 64 10 8 17.5 GSK Consumer 32 6 4 32.7

HUVR 258 50 38 23.4 12 1 0 60.5 270 51 38 24.2 ITC 299 107 74 30.6 17 4 3 34.7 316 111 77 30.7 Marico 34 5 4 20.8 12 0 0 Loss 46 6 4 26.5 Nestle India 83 16 11 31.2

Pidilite 33 6 5 25.6 3 0 0 Loss 37 6 4 27.4 United Spirits 86 5 3 33.7 21 -4 -4 Loss 107 1 -1 Loss

Source: Company annual report, MOSL

Indian consumer companies details for FY12 (INR b) Company name Standalone Subsidiaries (Derived) Consolidated Turnover PBT PAT Tax rate (%) Turnover PBT PAT Tax rate (%) Turnover PBT PAT Tax rate (%) Asian Paints 80 14 10 29.7 17 1 1 31.8 96 15 10 29.8 Colgate 27 6 4 24.1

Dabur 38 6 5 21.1 15 2 2 11.1 53 8 6 18.5 GCPL 30 8 6 20.4 19 2 1 32.7 49 10 8 23.1 GSK Consumer 28 5 4 34.3

HUVR 221 35 27 22.4 13 2 1 28.8 234 36 28 22.7 ITC 251 89 62 30.7 14 3 2 40.9 265 92 63 31.0 Marico 30 4 3 15.7 10 0 0 Loss 40 4 3 19.5 Nestle India 75 14 10 30.7

Pidilite 28 4 3 24.7 3 0 0 Loss 31 4 3 25.4 United Spirits 76 5 3 32.0 17 -2 -2 Loss 92 3 2 44.2


28 February 2014 3


A) STANDALONE TAX STRUCTURE Standalone tax rate for the above highlighted companies is lower than the

standard domestic corporate tax rate of 34% (including surcharge and cess) due to manufacturing unit(s) of these companies being located in backward areas which make them eligible for exemptions under income tax.

However, these tax exemptions are available for specified period of time and will expire for certain manufacturing locations.

Standalone tax rate of Indian consumer companies inching up in FY13, except GCPL


As per management information, the following companies have tax exemptions

ending/reducing in quantum going forward: (a) Colgate will see its Baddi plant (in Solan district, HP) moving out of income-

tax and excise duty benefits from April 2015, resulting in higher tax rates FY16 onwards.

(b) Dabur will continue to pay tax as per the MAT rate (current MAT rate @ 21% of book profits) for the foreseeable future.

(c) GCPL will also continue to pay tax as per the MAT rate (current MAT rate @ 21% of book profits) for the foreseeable future.

(d) HUVR will see its major units of Haridwar and Baddi (in Solan, HP) move out of income-tax exemptions completely (from current 30% exempted profits).

(e) Marico’s Dehradun plant will go out of income tax and excise benefits completely in FY17; currently it enjoys 30% exemption. Paonta Sahib, Himachal Pradesh will move into 30% exemption (from current 100%) in FY15 and Baddi, HP in FY16.

Refer Annexure A for company-wise manufacturing

locations and Annexure B, C and D

for details on income tax exemptions rules

28 February 2014 4


B) SUBSIDIARIES TAX STRUCTURE Of the above companies, only Dabur, GCPL and Marico have meaningful

subsidiaries (more than 20% of consolidated turnover from subsidiaries). Dabur India Lower tax rate is the result of majority of subsidiary profits being routed through

UAE, a free-trade zone. Dabur International has a turnover of INR6.7b with PAT and PAT of ~INR1b in FY13 (FY12: Turnover – INR4.8b; PBT and PAT – INR0.6b).

Also, two subsidiaries – Namaste Laboratories LLC (turnover of INR5.0b and PBT/PAT of INR0.3b in FY13) and Dermovia Skin Essentials INC (turnover of INR0.5b and PBT/PAT of INR0.4b in FY13) which are incorporated in the US, have 0% tax on their profits contributing to lower subsidiary tax rate. Normal tax rates in the US are 40%.

Dabur subsidiaries (INR m)

Name of subsidiaries FY12 FY13

Turn-over

PBT PAT Tax rate

Turn-over

PBT PAT Tax rate

Country of incorporation

Tax rates for countries

DOMESTIC H & B Stores Ltd 435 -116 -116 0.0 620 -83 -83 0.0 India Loss-making, hence no tax

OVERSEAS Dabur International Ltd 4,812 644 644 0.1 6,655 993 992 0.1 UAE Free trade zone - 0%

Namaste Laboratories LLC 5,503 663 687 -3.6 4,991 299 299 0.0 US Normally, companies are liable for 40% tax rate

Dabur Nepal Pvt Ltd 4,292 4 -1 120.5 4,625 265 217 17.9 Nepal

Standard corporate tax rate is 25%. However, certain exemptions are available on fulfilment of certain conditions

Naturelle LLC 2,252 8 8 0.0 3,346 13 13 0.0 UAE Free trade zone - 0%

Dabur Egypt Ltd 1,473 252 202 19.7 1,922 338 244 27.9 Egypt Domestic corporate tax rate @ 25%

RA Pazarlama 1,159 18 16 15.8 1,519 -6 -9 Loss Turkey Corporate tax rate of 20% Hobi Kozmetik 1,122 59 45 24.0 1,453 162 130 19.8 Turkey Corporate tax rate of 20%

Asian Conumer Care Pvt Ltd 471 14 11 19.4 806 104 62 40.3 Bangladesh Unlisted companies in Bangladesh are taxed @ 37.5%

African Consumer Care Ltd 494 50 49 1.4 553 57 57 0.0 Nigeria Corporate tax rate is 30%

Dermovia Skin Essentials INC 481 401 236 41.2 461 366 366 0.0 US Normally, companies are liable for 40% tax rate


Godrej Consumer Products Lower tax rate in subsidiaries is primarily due to tax-free profits at Indovest

Capital, subsidiary domiciled in Labuan territory of Malaysia. Indovest Capital has a turnover of INR1.8b with PBT and PAT of INR1.7b in FY13.

This has increased from PAT of INR304m in FY12 on a turnover of INR311m. As explained by management, the subsidiary owns the trademarks for brands

sold in Indonesia, and the turnover includes royalty received from Indonesian subsidiaries, which is eliminated on the consolidated level.

Subsidiaries (calculated) tax rate (%): GCPL shows sharp dip in FY13; Dabur stable

Note: Related party transactions have not been eliminated; Marico has net

loss, hence, not included above

11

33

1215

Dabur GCPL

FY12 FY13

28 February 2014 5


Indonesian subsidiaries taxation structure

Source: Company, MOSL

An African subsidiary, Lorna Nigeria had a PBT of INR35m for FY13, however,

generated PAT of INR200m. As explained by management, subsidiary has received tax refund for previous years resulting in higher PAT. The subsidiary has a pioneer tax status, resulting in 0% corporate income tax for 5 years. Standard corporate tax rate in Nigeria is 30%.

Hair Trading (offshore) S. A. L incorporated in Lebanon has profits of ~INR400m in FY13 (FY12: INR11m) with 0% tax. Standard corporate tax rate in Lebanon is 15%.

In addition to this, the company also has tax exemptions in the Mozambican subsidiary, Weave Mozambique Limitada.

28 February 2014 6


GCPL subsidiaries (INR m) Name of subsidiaries FY12 FY13

Turn-

over PBT PAT

Tax rate

Turn-over

PBT PAT Tax

rate Country of

incorporation Tax rates for countries

PT Intrasari Raya

9,770

20

14

28.6

12,454

50

58 -17.1 Indonesia Corporate tax rate is 25%

PT Megasari Makmur

7,606

678

461

31.9

10,197

1,156

804 30.5 Indonesia Corporate tax rate is 25%

Laboratoria Cuenca

1,979

165

103

37.5

3,074

162

100 38.2 Argentina Corporate tax rate is 35%

Keyline Brands Limited (UK)

2,220

168

110

34.7

2,793

215

155 28.0 U.K.

Corporate tax rate reduced for 26% in FY12 to 24% in FY13. It will be further reduced to 23% in FY14, 21% in FY15 and 20% thereafter

Subinite (Pty) Ltd.

1,139

128

92

28.0

2,048

68

49 28.1 South Africa Corporate tax rate is 28%

Hair Trading (offshore) S. A. L

34

11

11 -

1,939

399

399

0.0 Lebanon Tax rate @15%. Various incentives are granted for eligible investments

Lorna Nigeria 1,194 476 317 33.3 1,912 35 200 -478.6 Nigeria

Company has received tax credit for prior year's tax in FY13. Pioneer tax status, resulting in 0% corporate income tax for 5 years. Standard corporate tax rate is 30%.

Cosmetica Nacional - - -

1,836

80

60

25.3 Chile Corporate tax rate is 20%

Indovest Capital

311

304

304

0.1

1,800

1,691

1,691 0.0 Malaysia

Domestic corporate tax rate @ 25%. Profit includes royalty income from other subsidiar(y) /(ies) which gets eliminated on consolidation

Weave Mozambique Limitada

536

226

152

32.7

1,444

398

390 2.0 Mozambique

Corporate tax rate is 32%. However, it is also a free-trade zone resulting in lower taxes

Godrej South Africa (Pty) (earlier known as Rapidol (Pty))

1,057

255

183

28.0

1,083

248

178

28.0 South Africa Corporate tax rate is 28%

Style Industries Limited - - -

1,043

137

90

33.8 Kenya

Corporate tax rate @ 30%. For branches @ 37.5%. However, there are several exemptions available subject to certain conditions

Argencos SA

852

46

40

14.1

731

(24)

(17) Loss Argentina Corporate tax rate is 35%

Godrej Household Products (Bangladesh) Pvt. Ltd.

474

(36)

(39) Loss

600

(33)

(36) Loss Bangladesh

Loss-making company, hence no tax

Godrej Nigeria Ltd.

470

29

25

15.4

488

24

16 34.8 Nigeria Corporate tax rate is 30%


Marico The Vietnamese subsidiary, International Consumer Products, generates PBT of

INR231m in FY13 (4% of consol PBT), and is eligible for tax reduction. This reduction is likely to end in 2014.

Egyptian subsidiary is exempted from tax till Dec 31, 2016 (reported turnover of INR811m and PBT/PAT of INR167m in FY13).

28 February 2014 7


Marico subsidiaries (INR m) Name of subsidiaries FY12 FY13

Turnover

PBT PAT Tax rate Turnover

PBT PAT Tax rate

Country of incorporation

Tax rates for countries

Marico Bangladesh Limited 3,749 436 333 23.7 4,253 813 603 25.9 Bangladesh

Domestic corporate tax rate @ 24.75%

International Consumer Products

1,448 131 30 77.0 2,004 231 197 14.7 Vietnam

For manufacturing activities, Company has to pay tax @15% of taxable profits for 12 years starting from its commercial operations and @ 25% for the years thereafter. For other activities, Company pays @25%. Company is entitled to tax exemption for 3 years commencing with the first year of making profits, and 50% reduction for following seven years. The Company made its initial profit in 2004.

Kaya Limited 1,296 -30 -29 1.0 1,433 -298 -298 0.0 India Loss-making company, hence no tax

Kaya Middle East FZE 902 -440 -440 0.0 1,153 -185 -185 0.0 UAE Loss-making company, hence no tax

Marico Middle East FZE 2,092 -10 -10 0.0 1,036 -552 -552 0.0 UAE Loss-making company, hence no tax

Marico South Africa (Pty) Limited

1,043 12 8 33.1 962 1 -2 250.0 South Africa

Corporate tax rate is 28%. However, no provision for tax has been made because of carried forward loss of ~INR80m

Marico Egypt Industries Company

605 80 80 0.0 811 167 167 0.0 Egypt

Domestic corporate tax rate @ 25%. However, company is exempted from tax from Jan 1, 2007 till Dec 31, 2016.

Halite Personal Care India Private 737 121 94 22.1 India Domestic corporate tax rate @ 34%


28 February 2014 8


ANNEXURE A: Location of major manufacturing plants of Indian FMCG companies

HINDUSTAN UNILEVER PIDILITE DABUR 1. Solan, Himachal Pradesh 1. Mahad, Maharashtra 1. Baddi, Himachal Pradesh 2. Rajpura, Punjab 2. Panvel, Maharashtra 2. Pantnagar, Uttaranchal 3. Haridwar, Uttarkhand 3. Taloja, Maharashtra 3. Sahibabad, Uttar Pradesh 4. Etah, Uttar Pradesh 4. Vapi, Gujarat 4. Jammu, Jammu & Kashmir

5. Jalaun, Uttar Pradesh 5. Surat, Gujarat 5. Silvassa, Dadra & Nagar

Haveli 6. Sumerpur, Uttar Pradesh 6. Daman, Daman & Diu 6. Nasik, Mahrashtra

7. Tinsukia, Assam 7. Kala Amb, Himachal

Pradesh 7. Alwar, Rajasthan 8. Haldia, West Bengal 8. Baddi, Himachal Pradesh 8. Katni, Rajasthan

9. Kolkatta, West Bengal 9. Secunderabad, Andhra

Pradesh 9. Narendrapur, Rajasthan 10. Bangalore, Karnataka

10. Pithampur, Rajasthan

11. Mangalore, Karnataka

11. Newai, Rajasthan 12. Mysore, Karnataka

12. Siliguri, West Bengal

13. Chennai, Tamilnadu

14. Hosur, Tamilnadu

15. Hyderabad, Andhra Pradesh

16. Cochin, Kerala

17. Pondicherry

18. Chhindwara, Madhya Pradesh

19. Chiplun, Maharashtra

20. Buldhana, Maharashtra

21. Mumbai, Maharashtra

22. Nasik, Maharashtra

23. Goa

24. Silvassa, Dadra & Nagar

Haveli

COLGATE MARICO GODREJ CONSUMER

PRODUCTS 1. Aurangabad,

Maharashtra 1. Pallakad, Kerala 1. Kathua, Jammu & Kashmir 2. Solan, Himachal

Pradesh 2. Jalgaon, Maharashtra 2. Baddi, Himachal Pradesh 3. Goa 3. Goa 3. Namchi, Sikkim 4. Pondicherry 4. Guwahati, Assam 5. Dehradun, Uttaranchal 5. Rebhoi, Meghalaya

6. Paonta Sahib, Himachal

Pradesh 6. Bhind, Madhya Pradesh 7. Baddi, Himachal Pradesh 7. Goa 8. Erode, Tamil Nadu 8. Pondicherry

9. Mannadipet Commune

10. Karaikal, Tamil Nadu

11. Maraimalainagar, Tamil

Nadu

Note: Bold indicates exempted units Source: Company annual report, MOSL

28 February 2014 9


ANNEXURE B: States specified under income tax for claiming exemptions of 100% profit for first 5 years and 30% profit for next 5 years for units set up between April 1993 and March 2004 States 1. Arunachal Pradesh 2. Assam 3. Goa 4. Himachal Pradesh 5. Jammu and Kashmir 6. Manipur 7. Meghalaya 8. Mizoram 9. Nagaland 10. Sikkim 11. Tripura 12. Andaman and Nicobar Islands 13. Dadra and Nagar Haveli 14. Daman and Diu 15. Lakshadweep 16. Pondicherry

28 February 2014 10


ANNEXURE C: Districts specified for claiming exemption of 100% profit for first 5 years under Category A / 3 years under Category B and 30% profit for next 5 years for units set up between October 1994 and March 2004

CATEGORY ‘A’ CATEGORY ‘B’ District State District State District State Godda Bihar Srikakulam Andhra Pradesh Ghazipur Uttar Pradesh Gumla Bihar

Mahbubnagar Andhra Pradesh Ballia Uttar Pradesh

Araria Bihar

Katiyar Bihar Jaunpur Uttar Pradesh Gadchiroli Maharashtra

Bhagalpur Bihar Sitapur Uttar Pradesh

Madhepura Bihar

Gopalganj Bihar Jalaun Uttar Pradesh Sidharthanagar Uttar Pradesh

Darbhanga Bihar Unnao Uttar Pradesh

Dumka Bihar

West Champaran Bihar Faizabad Uttar Pradesh Mandla Madhya Pradesh

Saran Bihar Kanpur Dehat Uttar Pradesh

Khagaria Bihar

Bhojpur Bihar Mainpuri Uttar Pradesh Kishanganj Bihar

Samastipur Bihar Gonda Uttar Pradesh

Malda West Bengal

Deoghar Bihar Farukhabad Uttar Pradesh Palamau Bihar

Nalanda Bihar Sultanpur Uttar Pradesh

Phulbani Orissa

Gaya Bihar Mirzapur Uttar Pradesh Madhubani Bihar

Muzaffarpur Bihar Mau Uttar Pradesh

Kalahandi Orissa

Rohtas Bihar Purulia West Bengal Jehanabad Bihar

Bankaskantha Gujarat Birbhum West Bengal

Saharsa Bihar

Sabarkantha Gujarat Midnapore West Bengal West Dinajpur West Bengal

Bidar Karnataka

Nawadah Bihar

Seoni Madhya Pradesh Bahraich Uttar Pradesh

Tikamgarh Madhya Pradesh

Sitamarhi Bihar

Shivpuri Madhya Pradesh Sahebganj Bihar

Balaghat Madhya Pradesh

Murshidabad West Bengal

Jhabua Madhya Pradesh Cooch Behar West Bengal

Sidhi Madhya Pradesh

Bankura West Bengal

Vidisha Madhya Pradesh Panna Madhya Pradesh

Raigarh Madhya Pradesh

Pratapgarh Uttar Pradesh

Morena Madhya Pradesh Maharajganj Uttar Pradesh

Betul Madhya Pradesh

Jalore Rajasthan

Rajgarh Madhya Pradesh Aurangabad Bihar

Rajnandgaon Madhya Pradesh

East Champaran Bihar

Sagar Madhya Pradesh Banda Uttar Pradesh

Beed Maharashtra

Barmer Rajasthan

Bolangir Orissa Purnia Bihar

Mayurbhanj Orissa

Bastar Madhya Pradesh

Balasore Orissa Siwan Bihar

Ganjam Orissa

Vaishali Bihar

Dungarpur Rajasthan Basti Uttar Pradesh

Dholpur Rajasthan

Sarguja Madhya Pradesh

Sawai Madhopur Rajasthan Chamoli Uttar Pradesh

Tonk Rajasthan

Jaisalmer Rajasthan

Nagaur Rajasthan Lohardagga Bihar

Jhalawar Rajasthan

Chhatarpur Madhya Pradesh

Sikar Rajasthan Uttarkashi Uttar Pradesh

Hardoi Uttar Pradesh

Churu Rajasthan

Lalitpur Uttar Pradesh Wayanad Kerala

Hamirpur Uttar Pradesh

Idukki Kerala

Badaun Uttar Pradesh Jalpaiguri West Bengal

Fatehpur Uttar Pradesh

Almora Uttar Pradesh

Azamgargh Uttar Pradesh Pithoragarh Uttar Pradesh

Etah Uttar Pradesh

Tehri Garhwal Uttar Pradesh

Barabanki Uttar Pradesh The Dangs Gujarat

Etawah Uttar Pradesh

Banswara Rajasthan Deoria Uttar Pradesh

Source: Income Tax Act, MOSL

28 February 2014 11


ANNEXURE D: Specified products, for which manufacturing units set up in North East, Sikkim, Himachal Pradesh & Uttaranchal between December, 1997 and March, 2012 can claim exemption of 100% profit for first 5 years and 30% for next 5 years FOR THE NORTH-EASTERN STATES 1. Fruit and Vegetable Processing industries 2. Meat and Poultry Product industries 3. Cereal Based Product industries 4. Food and Beverage industries 5. Milk and milk based product industries 6. Food packaging industry 7. Paper products industry 8. Jute and mesta products industry 9. Cattle or poultry or fishery feed products industry 10. Edible Oil processing or vanaspati industry 11. Processing of essential oils and fragrances industry 12. Processing and raising of plantation cropstea, rubber, coffee, coconuts, etc. 13. Gas based Intermediate Products Industry 14. Agro forestry based industry 15. Horticulture industry 16. Mineral based industry 17. Floriculture industry 18. Agrobased industry FOR THE STATE OF SIKKIM 1. Eco-Tourism including Hotels, Resorts, Spa, Amusement Parks and Ropeways 2. Handicrafts and handlooms 3. Wool and silk reeling, weaving and processing, printing, etc 4. Floriculture 5. Precision Engineering including watch making 6. Electronics including computronics hardware and software and Information

Technology (IT) related industries 7. Food processing including Agro-based industries. Processing, preservation and

packaging of fruits and vegetables (excluding conventional grinding/extraction units)

8. Medicinal and aromatic Herbs-Plantation and Processing 9. Raising and processing of plantation crops, i.e., tea, oranges and cardamom 10. Mineral based industry 11. Pharma products 12. Honey 13. Biotechnology

28 February 2014 12


FOR THE STATE OF HIMACHAL PRADESH AND THE STATE OF UTTARANCHAL 1. Floriculture 2. Medicinal herbs and aromatic herbs, etc., processing 3. Honey 4. Horticulture and agro-based industries 5. Food Processing Industry 6. Sugar and its by-products 7. Silk and silk products 8. Wool and wool products 9. Woven fabrics (Excisable garments) 10. Sports goods and articles and equipment for general physical exercise and

equipment for adventure sports/activities, tourism (to be specified, by notification, by the Central Government)

11. Paper and paper products 12. Pharma products 13. Information and Communication Technology Industry, Computer hardware, Call

Centres 14. Bottling of mineral water 15. Eco-tourism including hotels, resorts, spa, entertainment/amusement parks and

ropeways 16. Industrial gases (based on atmospheric fraction) 17. Handicrafts 18. Non-timber forest product-based industries

28 February 2014 13


N O T E S

28 February 2014 14


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Disclosure of Interest Statement COMPANIES WHERE THERE IS INTEREST 1. Analyst ownership of the stock No 2. Group/Directors ownership of the stock Marico, Nestle India 3. Broking relationship with company covered No 4. Investment Banking relationship with company covered No

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