Logistics in India Part 3

7/30/2019 Logistics in India Part 3

1/21

Logistics in India 1

G lo B a l t r a n S P o r t

Logistics in

IndiaPart 3

K P MG i nt e r n at i o n a l

2011 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG

International. KPMG International provides no client services. All rights reserved.


2/21

CONTENTS

4Foreign Direct Investment (FDI) Regulations in the

Indian Logistics Industry

6Routes of Entry into India

8Tax Incentives for Foreign Investors in the


9Emerging Investment Themes for Foreign Investors

10Market Entry Tiger Traps

14The Way Forward for Foreign Investors

16Conclusion

17Acknowledgements

18About KPMG

2011 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG n etwork of independent firms are affiliated with KPMG



3/21

Foreword

This is the third and final part of our three-part white paper on the Indian logistics opportunity. In the

first two parts, we covered both the macro opportunity in the logistics industry as well as a deeper dive into

the transportation, storage and service sub-sectors.

In this part of our study, we focus on how foreign companies and investors can participate in the

Indian logistics story. Specifically, we will cover the logistics regulatory landscape in India including

foreign investment norms, emerging investment themes for foreign investors, investment risks andmitigants and the way forward for foreign companies.

Regulations in the Indian logistics industry permit 100 percent foreign direct investment (FDI) in most

sub-segments. Foreign investors can also enjoy benefits such as tax breaks and incentives when

investing in key sub-sectors such as cold storage, agricultural warehouses and free trade warehousing zones

(FTWZ).

Historically, foreign investors in the Indian logistics industry have entered the market either by

investing in greenfield core infrastructure projects (such as a ports), setting up subsidiaries or joint

ventures in India, or through acquisitions. Partnering with or acquiring an existing company offers

international logistics companies ready access to an existing network and customer relationships, which are

often hard to develop ground-up.

Like any industry, there are risks involved in both greenfield investments and acquisitions or

partnerships. Greenfield infrastructure projects often take years to develop, and involve a number of

clearances (such as environmental approvals) which foreign investors need to be aware of. Similarly,

foreign investors need to carry out necessary due diligence on partners and acquisition targets to

ensure that they comply with requisite corporate governance standards, have clean books of accounts

and offer a good organizational fit with their existing businesses in other parts of the world. However,

what is often most difficult for foreign investors is to evaluate whether their sectors of interest are indeed

attractive in India, and whether there are attractive acquisition targets in these sectors.

To succeed in the Indian logistics market, foreign companies should consider the following questions:

i) Which segments of the Indian logistics industry are attractive for entry?

ii) What are the opportunities and risks in the segment of your choice?

iii) What are the tax and regulatory considerations for the segment?

iv) What are the key considerations for direct market entry?

v) Who are the potential joint venture partners you can tie up with?

vi) Are there any attractive acquisition targets?

vii) What kind of due diligence do you need to do before a JV or acquisition?

viii) How do you integrate an acquisition with your global operations?

ix) What do you need to do to run an efficient operation in India?

This white paper attempts to address some of these questions at a high level.




4/21

4 Logistics in India

The Government of India has actively pursued pro-active policies to promote foreign direct investment

(FDI) into the Indian logistics industry. Investments by foreign companies into India can be made

through two possible routes:

The Automatic Route where foreign investors do not require any approval from the Reserve Bank

of India (RBI India's central bank) or the Government of India; and

The Government Route for all activities, which are not covered under the Automatic Route, a prior

approval of the Government of India, through the Foreign Investment Promotion Board (FIPB), is required.

The table below summarizes the route permitted as well as the extent of FDI allowed in a particular

segment:1

Automatic/% of FDI

Type of Industry

Ports and Harbours

Courier services for

carrying packages, parcels

and other items which do

not come within the ambit

of the Indian Post Office

Act, 1898

FIPB approval

route

Automatic

FIPB Approval

permitted

100%

100%

Restrictions/Conditions imposed

Allowed under the automatic route for:

Leasing of existing assets of ports

Construction/creation and maintenance of

assets such as container terminals, bulk /

break bulk / multipurpose and specialized

cargo berths, warehousing, container freight

stations, storage facilities and tank farms,

carnage / handling equipment, setting up of

captive power plants, dry docking and ship

repair facilities

Leasing of equipment for port handling andleasing of floating crafts

Captive facilities for port-based industries

Allowed subject to existing laws, i.e. The Indian

Post Office Act 1898, and exclusion of activities

relating to the distribution of letters

Storage and Warehousing Automatic 100%

including warehousing ofagricultural products with

refrigeration (cold storage)

1Department of Industrial Policy and Promotion Ministry of Commerce and Industry Government of India Consolidated FDI Policy

(Effective From April 1, 2010)




5/21


Foreign Direct Investment (FDI) Regulations in the


Type of Industry

Transport and Transport

Support Services

Automatic/

FIPB approval

route

Automatic

% of FDI

permitted

100%

Restrictions/Conditions imposed

Allowed for:

Pipeline transport, ocean and water transport,

inland water transport

Transport Support Services:

- Support services to land transport such as

operation of highway bridges, toll roads, and

vehicular tunnels.

- Support services to water transport such

as operation and maintenance of piers,

loading and discharging of vessels

- Services incidental to transport, such as

cargo handling incidental to land, water andair transport

- Rental and leasing of motor vehicles

without operators, for passenger transport,

freight and refrigerated / cold transport

- Renting of transport equipment without

operators, of other transport equipment

Air Transport Services

Scheduled Air Transport

Service/ Domestic

Scheduled Passenger

Airline Non-Scheduled Air

Transport Service/

Non-Scheduled airlines,

Chartered airlines, and

Cargo airlines

Helicopter services

/ seaplane services

requiring Directorate

General of Civil Aviation

(DGCA) approval

FDI ceilings in otherservices under the Civil

Aviation sector

Automatic

Automatic

Automatic

49% FDI

49% FDI

100%

FDI via automatic route up to 49% and on the

government route beyond 49% and up to 74%

Ground Handling Services-FDI up to 74% and

investment by non-resident Indians (NRIs) up

to 100% allowed. FDI under the automatic

route up to 49% and through the government route

beyond 49% and up to 74%. This will be

subject to sectoral regulations and security

clearances

Maintenance and Repair organizations; flying

training institutes; and technical traininginstitutions - FDI up to 100% allowed on the

automatic route

Source: Consolidated FDI Policy issued by Department of Industrial Policy and Promotion, Ministry of Commerce, Government of India (Effective from April 1, 2010)




6/21


outes of Entry into India

Through M&A

M&A has been a popular route of entry into the Indian market. Over the past few years, several

leading global companies have established a presence in the country through acquisitions of both regional

and pan-Indian logistics companies.

Some Recent Inbound M&A Transactions in India

Acquirer Target Year Segment

Broekman Group

CH Robinson

FedEx

TNT

Kerry Logistics

Phoenix International Freight Services

Sembcorp Marine

Tropical Dimension

DP World

Oxbow Corporation

Louis Dreyfus Armateurs

Toll Group

PSA International

Hitachi Transport System

NYK Line

Courcan Cargo

Triune Freight

Prakash Air Freight

Associated Road Carriers

Reliable Freight Forwarders

Eastern Logistics

Gujarat Pipavav Port

Kakinada Seaports

Chennai Container Terminal

United Shippers

ABG LDA Bulk Handling

BIC Logistics

Chennai Container Terminal

Flyjac

Tata Martrade International Logistics

2006

2006

2006

2006

2006

2006

2007

2007

2008

2008

2009

2009

2010

2010

2010

Express Cargo

Freight Forwarding

Express Cargo

Transportation

Freight Forwarding

Freight Forwarding

Ports

Ports

Ports

Shipping

Bulk Cargo Handling

Transportation

Ports

Transportation

Port Services

Source: VC Circle, Mergermarket, Deal Curry, News Reports

Through the Organic Route

Apart from the inorganic route, foreign companies can initiate operations in India through the

following routes:

Joint Ventures

Wholly Owned Subsidiaries

Liaison / Representative Office

Project Office

Branch Office




7/21


Liaison Office

Project Office

Branch Office

Wholly

Owned

Subsidiary

('WOS')

Commercial

consideration

To undertake limited

activities like liaisoning,

establishing communication

channels, data collection and

conducting market surveys

Generally set up to execute a

specific project, e.g. EPC

and dredging contracts

To carry out permitted

activities like export/import

of goods, professional

and consultancy services

(manufacturing generally not

permitted)

Permitted to carry out all

activities except regulated /

prohibited activities

Permitted activities

Foreign Exchange Management Act (FEMA) Regulations

The following four activities are permitted to be carried out:

Representing the parent company/group companies

in India

Promoting export / import from / to India

Promoting technical / financial collaborations between

parent / group companies and companies in India

Acting as a communication channel between the parent

company and Indian companies

Only activities relating to and incidental to the execution of

the project are permitted

The following eight activities are permitted to be carried out:

Export / Import of goods

Rendering of professional or consultancy services

Carrying out research works, in which parent company is

engaged

Promoting technical or financial collaborations between

Indian companies and overseas parent companies

Representing the parent company in India and acting as

buying / selling agent in India

Rendering services in information technology and

development of software in India

Rendering technical support to the products supplied by

parent / group companies; and

Airlines / Shipping activities

Any activity specified in the Memorandum of Association of

WOS wide range of activities permitted, subject to

FDI regulations

Source: Foreign Exchange Management (Establishment in India of Branch or Office or Other place of B usiness) Regulations, 2000 (Regulations)

The setting up of a presence in India in any of the above forms depend on the FDI policies of the Indian

government, coupled with the taxability of profits arising therefrom under Indian tax regulations, and the

exposure of their treatment as a permanent establishment of a foreign company.

Currently, over 70 percent of the world's Top 50 logistics companies have a presence in India having

entered the market via a variety of modes including acquisitions, JVs and the establishment of a local

subsidiary.




8/21


ax Incentives for Foreign Investors in

e Indian Logistics Industry

The Indian Government, with a view to attract investments in infrastructure and the logistics industry,

has introduced various tax incentives either in the form of profit-linked incentives or capital-based

deductions.

Some of the key incentives available to foreign investors include:

Section underSectors Type of Activity Amount of Deduction

the Act

Food

Processing

Cold Chain

Facility

Warehouse

Facility

Special

Economic

Zones andFTWZs

80-IB

35AD

35AD

80IAB

Business of processing, preservation

and packaging of:

Fruits and vegetables or meat and

meat products or poultry or marine

or dairy products, or from the

integrated business of handling,

storage and transportation of

food grains

Setting up and operating of cold chain

facilities on or after 1 April, 2009

Setting up and operating a warehousing

facility for the storage of agricultural

produce

Undertaking engaged in development

of SEZ / FTWZ

100% of the profits for the first

5 years

30% of the profits for the next

5 years

For a period of ten consecutive

assessment years, beginning with

the initial assessment years

100% deduction of capital

expenditure incurred during the year

(other than acquisition of land or

goodwill or financial instruments)

Same as above

100% deduction of profits derived

from such business for ten

consecutive assessment years out of15 years beginning from year in

which SEZ is notified by the Central

Government

Source: Income Tax Act, 1961 (Government of I ndia)

The Indian Government is planning the introduction of a Direct Tax Code (DTC), effective 1 April,

2011. Under a recent draft of the DTC, circulated for review, all of the above incentives offered to the

logistics sector will continue to apply.

2011 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are a ffiliated with KPMG



9/21


Emerging Investment Themes for Foreign

Investors

1

2

Storage based Plays(e.g. FTWZs. LPS, CFS/ ICDs , aircargo centres, bulk terminals)

Industry-focused Plays

Potential Upsides

Collateralized investment

(capital safety)

Long term attractiveness andgrowth story

Capital intensive, high entry barrier

Strong regulatory drivers (e.g. GST)

Better customer pricing and margins

Strong differentiation for LSPs

Potential Risks

Short term asset utilization and

realizations

Potential asset price fluctuations

Underdeveloped exit options

High dependence on regulatory

interface

Cyclicality risk of user industries

Targets likely to be small in size

(e.g. 3PL / 4PL, reverse logistics

cold chain) High hockey stick growth potential due

to large demand supply gap

Potential to invest in companies with

long and good performance

Potentially long gestation periods

Turning profitable and further

3

4

Transportation Plays(e.g. coastal logistics, rail-linked

logistics, project logistics,

LTL trucking)

track records

Opportunity to bring about

fundamental market shifts and realize

improved profits

Flexibility to combine asset light and

asset heavy models selectively

Opportunity to invest in established

and long-running businesses

Captive volume potential

expanding margins could

be challenging

Arms length captive relationships may

be difficult to (re)establish

Potentially not geared towards profit

Captive Spin-off / Bolt-on Plays(e.g. auto logistics, retail logistics)

5Greenfield Infrastructure Plays

(e.g. ports, roads)

Source: KPMG analysis

Potentially large businesses

(ticket size barrier)

Potential to augment capability

gaps with smaller bolt on or rollup

acquisitions

Significant opportunity to participate

in the Indian infrastructure story-over

USD 1bn in investment opportunity

over the next 5 years

Large demand supply gap could imply

high asset utilization and returns

Organization capabilities may be

more geared towards execution than

business or solution development

Longer gestation projects

Approval and clearance process

potentially lengthy and multi layered

Foreign companies do not enjoy

incentives offered to Indian

consortiums / bidders




10/21


Depending on the chosen route of entry organic or inorganic a foreign investor in the Indian

logistics industry should be aware of some of the complexities and risks involved in the entry process.

India is not a particularly easy place to do business, but having the right entry strategy, choosing

appropriate segments to focus on, engaging with the right partners and leveraging M&A fully can

make all the difference in unlocking the tremendous value that the Indian logistics industry has to offer.

Doing Business in IndiaRanking Among 183 Economies India China Brazil Russia

Overall Ease of Doing Business 133 89 129 120

Starting a Business 169 151 126 106

Dealing with Construction Permits 175 180 113 182

Employing Workers 104 140 138 109

Registering Property 93 32 120 45

Getting Credit 30 61 87 87

Protecting Investors 41 93 73 93

Paying Taxes 169 130 150 103

Trading Across Borders 94 44 100 162

Enforcing Contracts 182 18 100 19

Closing a Business 138 65 131 92

Source: The World Bank: Doing Business 2010 (India)

Infrastructure Development Considerations

Infrastructure development in India is often a complex and long-winded process that entails obtaining

clearances and approvals from multiple agencies. Even after these approvals are acquired, there are often

risks involved at the development and operating stage. These risks are particularly relevant for port, road and

airport projects.




11/21


Market Entry Tiger Traps

Some of these approvals include:

FIPB clearances for certain sectors where

government approval is required, or where

foreign investors intend to have stakes greater

than those specified through the

automatic route

Environmental clearances for infrastructure

developments in ecologically sensitive zones

such as coastal regions and forests, or in

regions where the development of the project is

likely to impact the human population or the

biodiversity of the region, the environmental

clearance process can be a time-consuming

process

Some key project development risks include:

Ministry clearances specific ministry approvals

are needed for the development of specific

assets (e.g. from the Ministry of Shipping

for ports)

Rehabilitation and relocation clearances for

populations displaced by the development of

the project, developers need to consider

options for suitable employment in the project,

compensation for loss of livelihood or relocation

to other suitable regions

Land acquisition risk since most infrastructure projects require large tracts of land for

development, developers often need to liaise with the government and individual landowners to

aggregate these contiguous parcels of land. This is accompanied by the risk of not being able to

accumulate connecting land or having to pay high or escalating valuations to do so

- Mitigants: Developers need to conduct a detailed assessment of available land tracts and

appoint reputable agents or brokers to carry out acquisitions expeditiously and confidentially

(to avoid speculative price run-ups). Prior assurances from the government, where applicable,

should be sought




12/21


Some key project development risks include:

Traffic and utilization risk for many port, road and airport projects that are built on concession

models or otherwise, the financial feasibility of the project is highly contingent on the projected

traffic throughput of the asset. The development of suitable cargo generating catchments or

supporting eco-systems (such as a freight forwarding or customs clearance network) has also been

blamed for the failure of several projects in India. There have been instances in the past

where traffic projections have not been realized, leading to payback delays and financial losses

- Mitigants: Investors in projects should conduct detailed traffic studies prior to investing in such

projects. Traffic linked royalty payments could be affected where projections are uncertain. Also,

the cargo catchment and hinterland should be understood in depth to fundamentally

assess the viability of the project. Steps should be taken to tie-up suitable project partners and

ancillary industries early on in the project, so that development risks are shared. The projectconceptualization and design should also account for seamless interfacing with these key eco-

system partners

Connectivity development risk for projects that rely on cargo reaching the asset through a

connecting feeder transportation network, the state of development of these networks has often

become a stumbling block in the successful operation of the project. For example, several port

projects in India have been constrained by the lack of suitable road or rail connectivity, which has

led to shipping lines ignoring the port altogether

- Mitigants: Project developers should understand the long term development plan for the region,

including master plans and road maps. They should also understand the broader economic

development of the region that would support the evolution of the supporting infrastructure

Project cost escalation riskmany projects in India are burdened by rising project costs that have

not been initially estimated. Delays in land acquisition or construction or rising cost of materials

and equipment can seriously impact returns from a project

- Mitigants: The project planning process should be stringently carried out and stress tests for

unfavourable conditions should be budgeted. A strong project management team is needed to

minimize this risk

Greenfield Investment Considerations

Going solo in the Indian market can be both a rewarding and a daunting experience. For foreigninvestors looking at setting up their own operations ground-up, without any partnerships or

acquisitions, there are a number of risks that they need to consider and plan for.

Some key greenfield-specific risks include:

Procedural delays as with infrastructure investments, getting procedural approvals from various

authorities such as the local municipal council, sanitation and utility departments, environmental

department, fire department and others, is a time consuming process. According to World Bank

estimates, it takes 37 procedures and 195 days to construct a warehouse in India. Often, having

access to an experienced local Indian logistics partner can help dramatically reduce

these timelines




13/21


Some key greenfield-specific risks include:

Organization building risk the logistics industry in India is severely labour constrained at all

levels including workers and management. In the past, several foreign companies have

found it difficult to source local management bandwidth for their operations and have had to

offer significant salary differentials to attract employees, which have often constrained profits.

Expatriate staff often do not understand the Indian cultural subtext and customers (especially

smaller and mid size companies) are often wary of dealing with foreigners

Customer acquisition risk customer relationships in the Indian logistics industry, particularly in

warehousing and transportation, have often been built over years and foreign companies have

often found it difficult to convert these relationships. Often, logistics services providers customize

assets and services to the specific needs of customers, and breaking this stickiness

is challenging

Building a brand barring some of the top global logistics companies who have managed to

leverage their brand and credentials to attract business, it is often difficult for lesser known

international companies to gain customer mindshare and win business

Steeper learning curve many foreign companies have found it difficult to introduce their

international business models to the Indian market. The state of evolution of the market, and

the willingness and ability of customers to pay for truly world-class services, is still evolving and foreign

companies often need to 'customise' offerings to suit the Indian context, while preparing

for a marathon rather than a sprint

M&A and JV Considerations

M&A and JV targets in India are often risky, and foreign investors should seek to conduct detailed

due diligence studies including commercial, financial, tax, legal, environmental and promoter due

diligences prior to investing or partnering. However, M&A remains the easiest and most preferred

route of entry into India, and, provided a suitable partner is identified, many of the risks and delays

associated with greenfield entry and infrastructure development are significantly reduced.

No separation between ownership and management

Auditor not independent

Weak internal control environment

Inadequate document trail for capture of in formation

Financial statements driven by fiscal consider actions

Weakk

W ea

Weak internal controls

Quality and reliability of information is poor

Complex group structures - difficult to unwind,

ccorporatee

orporatWeak

W ea

k

ggovandardsce

o vernan

ernance

S ystemss

Sy s tem

"hidden owners especially other factions of

Related party supplier / customer sstandardst

C omplexfamily

"Associated companies avoidance)" may need

relationships on non-commercialRRelated

elated

oComplex ip

wners h

to be consolidated which may bring in more

terms,pparty

a rty

ownership s

s ue

liabilities/value enhancers

No formal arrangements

Funds deployment in non-core

transactions

transactions

IIs

ssues s

ues

to

iissuess Minority interests may have a disproportionate

amount of power

activities/related party companies

Taxx

Ta

E

valluatte

E va ua e

Organisation

eexxposuress posure


14/21

Orgculti

ure tion

an sa

culture

Aggressive tax management (tax UUnclearrnclea

PPoorr GAAPPDecision making concentrated with the owners

planning vs tax avoidance) vis ion and

vision and

s trategy

strategy

compliance

oo G A A

compliance

Risk of regulatory violations

Business plan not backed up

Promoter unclear about strategy

Aggressive management estimates with

respect to provisions/write downs

Weak book closing processes

Capitalisation of pre-operative expenditure

Source: KPMG analysis




15/21


he Way Forward for Foreign Investors

Foreign investors should evaluate the following when planning an India market entry:

Understanding the Indian logistics market logistics in India is a collection of dozens of sub-

segments, some of which are very attractive and some of which are not. Even within the unattractive

segments, foreign investors have been able to introduce new business models in the past and havebeen successful. Foreign companies need to understand the fundamental attractiveness of and

opportunity in various segments in terms of:

Size and growth prospects

Sustainability of growth drivers

Regulations, tax policies and incentives available

Profitability of the segment

Returns on investment

Competitive intensity

Ability of customers to pay and accept better quality of services

Potential to differentiate services and products and gain market share

Developing an India market entry strategy based on the attractiveness of the segment(s) studied,

foreign investors need to develop a focused strategy to play in the Indian market. This

includes some of the following considerations:

Products and services (including differentiators) planned for India

Operating model and business plan

Entry road map

Mode of entry Greenfield versus M&A

Understanding the tax and regulatory aspects foreign investors should evaluate the appropriate operating

model when evaluating the Indian logistics market. Some foreign investors choose to initially

set up liaison offices to initially gain a better understanding of the market, some choose to participate

in projects and some choose a direct and full market entry. There are often regulatory approvals

required and tax jurisdiction planning that foreign investors need to do when evaluating market entry into

India.

Shortlisting, profiling and meeting partners there are hundreds of companies in the Indian

logistics industry, operating across one or multiple sub-segments, on either a regional or a pan-

Indian basis, and with marginal or leadership market positions. Only a fraction of these companies are

listed on Indian stock exchanges, and it is often a daunting task to find the right partner for a JVor acquisition. Cultural fit and a personal rapport with promoters is often the differentiating factors

between a good partner and a difficult one. As we have discussed, M&A vastly simplifies the market entry

process, but finding an appropriate partner is a critical step in this direction.




16/21


Some of the typical issues evaluated by due diligence procedures include:

Commercial Issues

Many companies have commoditized offerings with declining or at-risk growth or profitability

Operations may not be streamlined or in line with leading industry practices

M&A targets often inflate their business projections to arrive at attractive valuations

Financial and Tax Issues

Logistics in India is often a cash intensive business and this has led some companies to

improperly account for this cash and understate or overstate profits

Assets such as trucks and warehouses may not be properly capitalized

Quality of earnings is not strong and there may be one-off items that have historically contributed

to profits

Promoters often have speculative real estate interests which supersede their logistics interest

and are often used to divert cash from core businesses

There may be instances where taxes have been avoided, or where significant tax liabilities exist

Legal Issues

Some businesses and projects lack the appropriate land and environment clearances, therefore

running the risk of closure or penalties

Business contracts often do not exist, or are not watertight

There may be pending litigations or cases against the company or the promoter

Carrying out detailed due diligence procedures simply finding a partner is not enough. Carrying

out appropriate due diligence procedures is critical in evaluating whether that partner will truly add

value.

Valuation, negotiation and deal closuremany M&A deals in India fall apart on valuation

differences, and investors often appoint neutral third-party advisors to prepare independent valuation

reports or assist in negotiations with targets. Closure of transactions requires obtaining requisite regulatory

and tax clearances.




17/21


Conclusion

The concluding part of this three part white paper has focused

on the practical aspects that foreign companies should consider

when evaluating an entry into the Indian logistics market. We have

seen that there are a number of market, regulatory, tax and

partnering issues that foreign investors need to be aware of, and

tide over, when planning their market entry. For those

companies that successfully negotiate this path, the returns from

participating in the India growth story can indeed be very

attractive.




18/21


Acknowledgements

For the purposes of this study, we relied on KPMG industry

knowledge and prior engagement experiences. We also spoke with a

number of logistics industry participants, who we would like to

thank for their time and insights.

This white paper has been authored by Sankalpa Bhattacharjya,

with Tax and Regulatory inputs from Girish Mistry from

KPMG in India.




19/21


About KPMG To meet the challenging demands of the transportation industry, KPMG member firms delivera range of Audit, Tax and Advisory services geared to industry needs. Think of KPMG's global

Transportation and Logistics practice as an extra resource one that aims to be available asand when you need it. We understand the financial and operational drivers of the transportation

and logistics sector and can assist clients in dealing with current and emerging issues.

The Indian industry, as a whole, faces a fiercely competitive and volatile business

environment. It must fund high levels of ongoing investment to overcome infrastructure

constraints and accommodate technological innovation, as well as changing customer

demands. Few transport entities possess the resources to manage all these issues. This is where

KPMG's Transportation & Logistics practice can help. Our professionals can complement in-

house capabilities, contribute to improved business decision making and performance, help

reduce business risk and enhance management confidence as well as

peace of mind. KPMG professionals can assist you with the following:

Planning an India market entry

KPMG's Strategic and Commercial Intelligence (SCI) practice advises international

companies on their India market entry plans, by helping them evaluate the attractiveness of

various segments of the logistics industry (in terms of size, growth drivers, competitive

landscape, profitability and returns), and assists them with the development of their strategy

and business plan for the Indian market. KPMG's Tax practice, in parallel, can help companies

devise an optimal tax and corporate structure for market entry.

Creating value through transactions

KPMG's global Finance andTransaction professionals help realize the potential of mergers,

acquisitions, divestments and other capital transactions. If you are seeking to acquire a

company in India, we can help you find suitable targets, evaluate them, negotiate and close

transactions, and even assist with post-merger integration services.

Driving the audit further

KPMG's independent insight and robust audit methodology aims to provide high quality

audit opinions.

Managing tax strategically

KPMG's Tax practice advises clients on effective tax management and compliance.

Managing risk to create value

KPMG firms can help organizations adopt an enterprise-wide approach to identify,

prioritize, manage and monitor risk.

Enhancing internal controls

Internal audit is the foundation of a comprehensive assurance framework. KPMG firms can

increase existing internal capabilities, either on a project basis or on a continuing basis.

Improving performance

KPMG firms can help organizations enhance their strategic and operational performance.

Responding to regulatory change

KPMG firms assists organizations in transforming regulatory compliance from just

another cost and management issue to an important business value driver.Funding infrastructure

KPMG's Advisory professionals work with public and private infrastructure providers to

create funding strategies.




20/21


Contact Us

Dr Ashley Steel

Partner

Global Chair - Transport

KPMG in the UK

+44 20 7311 6633

[email protected]

Justin Zatouroff

Partner

Global Head of Logistics

KPMG in the UK

+44 20 7311 8415

[email protected]

Manish Saigal

Executive Director

National Industry Leader - Transport & Logistics

KPMG in India

[email protected]

Tel: +91-22-3090 2410

Sankalpa Bhattacharjya

Associate Director

Strategic and Commercial Intelligence

KPMG in [email protected] Tel: +91-

124-334 5089

Girish Mistry

Executive Director

Tax

KPMG in India

[email protected]

Tel: +91-223-090 2707




21/21

kpmg.com

The information contained herein is of a general nature and is not intended to address the

circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely

information, there can be no guarantee that such information is accurate as of the date it is received or that

it will continue to be accurate in the future. No one should act on such information without appropriate

professional advice after a thorough examination of the particular situation.

2011 KPMG International Cooperative ("KPMGInternational"), a Swiss entity. Member firms of theKPMG network of independent firms are affiliated withKPMG International. KPMG International provides no clientservices. No member firm has any authority to obligate orbind KPMG International or any other member firm vis--visthird parties, nor does KPMG International have any suchauthority to obligate or bind any member firm. All rightsreserved.

KPMG and the KPMG logo are registered trademarks of

KPMG International Cooperative ("KPMG International"), aSwiss entity.

Designed by Evalueserve.

Publication name: Logistics in I ndia

Publication number: 173085

Documents

Logistics in India Part 3