KARNATAKA PROFILE

Karnataka Global Agribusiness & Food Processing Meet

Agenda
The present economy India in World trade India Agriculture and Food Processing Karnataka Karnataka Agriculture and Food Processing
One of the fastest growing economy in the world; India is the 10th largest economy based on GDP at current prices

220 of the Fortune 500 companies source software from India.

Karnataka Infrastructure
Karnataka - Government Initiatives Government Initiatives for Foreign Investors Market Entry Options Karnataka Potential investments in agribusiness and allied sectors Contact details
India is among only 6 countries in the world to have satellite launch capabilities.
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India is among only 3 countries in the world to have built its own supercomputer.

India is among only 7 countries in the world to have built a car indigenously.

India A High performance economy

GDP The 10th largest in the World*
2000 1500 1000 500 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

India Trade scenario

350 300 250 200 150 100 50 0 FOREX reserve USD 10,897 Mn

India GDP in USD Bn

USD Bn

CAGR of 8.6% in the last 7 years

Exports Imports 2001 2002 2003 2004 2005 2006 2007 2008 - 02 - 03 - 04 - 05 - 06 - 07 - 08 - 09

RBI

Top FDI destination

3 Ds Powering Indias growth

Rank 1

2
3 4 5

Countries China United States Russian Federation Brazil

India

Demography
UNCTAD

15% of worlds population 550 mn < 25 yrs

Democracy

Rule of law | Property rights | Independent Judiciary | Free press Helped to sustain economic growth and provided immunity against the global recession
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USD 122.68 billion in FDI inflows between April 00 and Oct 10 2nd most promising country for overseas business operations (JBIC Survey)
* at current prices

Domestic Demand

India in World trade

India amongst top 20 exporting countries (2010)
Rank 1 2 3 20 Countries China USA Germany India Share 10.4 8.4 8.3 1.4

Makes it to the top 10 service exports list (2010)

Rank 1 2 3 10 Countries USA Germany UK India Share 14.1 6.3 6.2 3

Import services (2010)

Rank 1 2 3 7 Countries USA Germany China India Share 10.2 7.3 5.5 3.3 Rank 1 2 3 13

Import merchandise (2010)

Countries USA China Germany India Share 12.8 9.1 6.9 2.1

Key enablers
Technology & Entrepreneurship Access to technology as a result of the IT revolution Investor friendly Government initiatives coupled with investment friendly policies Progressive Economic reforms coupled with a strong democracy has resulted in excellent strategic direction

Indian economic liberalisation - Enabling positive change

Globally recognized as one of the most important economies
Active member of the G20 High potential of breaking into the UNSC as a permanent member Witnessed visits from the four leading State representatives in 2010

Young, large and growing Human Capital base

Enabling business environment with greater global participation

Impetus on infrastructure development

Strong market fundamentals

Now Approx $ 3770 Approx. 65% 300 million $ 19 billion USD 10897 Mn $ 49.7 billion
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1991 $ 1,400 52% 15 million $ 100 million USD 2000 Million Nil

Parameter GDP per capita (PPP adjusted) Literacy Rate Middle class households (income between $4200-21000 pa) Foreign Investments Forex Reserves Software and service exports

Agriculture and Food processing sector overview

Grains Fruits &Vegetables Milk and Milk products Processed food & beverages Plantation products Meat & poultry Fisheries
14.6 % of Indias GDP 10.23% of the total exports Employs 55% of the work force 52% cultivable land

Contribution of agriculture to the Indian Economy

India - Agriculture and Food processing

World ranking

In production

1
350 300 250 200 150 100 50 0

st

Milk Wheat Pulses Jute Mangoes

2
98
40

World ranking

nd

In production

Rice Sugarcane Cotton Tea Fruits and Vegetables

292

2nd largest in the world in farm output

All 20 agri climatic zones exist in India

46 out of 60 soil types are present in India

FDI in food processing

(USD Million*)

52% cultivable land compared to 11% world average

100 101

113 39 38

Agri GDP is USD 147.4 Billion and accounts for 14.6% of GDP

Food processing industry is the 5th largest in India

India - Growing production trend (Horticulture)

Production in Horticulture (Million Tonnes)

250
211.2

214.7

200 150 100 50 0

145.8 144.4 153.3

170.8

182.8

191.8

At current levels of production, in 2020, India can supply the following towards (world demand) 76% rice (123 MT) | 75% wheat (101 MT)| 83% sugarcane (412 MT) | 77% soybean (13 MT)|
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India - Fruits & vegetables

Production share
2.90%

Asia dominates the world scene accounting for nearly 60% of Global production India accounts for about 16% of 890 million tonnes of total Global vegetable production

18.60% 38.30% 10.60% 1.90% 1.20% 2.00% 5.30% 6.00% 2.70% Banana Guava Litchi 12.60% 3.30% Citrus Grapes Papaya

The processing of fruits and vegetables is estimated to be around 2.2% of the total production in the country With the implementation of the NHM and other schemes, the production of horticulture crops has increased from 170.8 million tonnes in 2004- 05 to 214.7 million tonnes in 2008-09.

India - Animal Husbandry

Infrastructure (in numbers)
10227

Meat export market size is 5 mn tonne per annum accounting for USD 1.25 Bn ranking 6th in the exports of bovine meat

India is the largest producer of milk in the world Produces 105 mn tonne per annum
4569

Among top 6 egg producing and top 5 chicken producing countries in the world.

India produces 7 million tonnes of fish ranking 3rd after China and Japan and 2nd largest producer of fresh water fish

150

166

288

651

1047

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Karnataka
One of Indias most progressive states and is considered to be a leading investment destination within the country

More than half of Indian Biotech companies in the state

States Hutti Mines are the only primary gold producing source in the country

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Karnataka - Strategic location

STRATEGIC LOCATION FOR INTERNATIONAL & DOMESTIC MARKET

Home to an international community with international investor finding immense benefits from the state Located at the West Coast of India and well connected with major airports and ports worldwide. Excellently connected with 5 airports, 14 national highways, 114 state highways and railways. 300 KM long coast line with 1 major and 10 minor ports.

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Destination Karnataka
Bangalore, the State's capital, is aptly called the: Silicon Valley of India, IT Hub of Asia, and IT Capital of India with many global players

8.2% growth in GSDP US$ 60.84 Billion economy

Among top 5 industrialized states in India
Industrial production registered a 11.3% growth in 2009-10 50% of CMM Level 5 IT companies in the world are located in Karnataka Bangalore is the Biotech capital of India with the largest Biotech cluster Karnataka accounts for 13.3% of the national exports

Bangalore is known as Silicon Valley of India

Ranks 3rd in India in terms of FDI inflow

Third largest producer of fruits & fifth largest producer of vegetables in India Karnataka is the most favoured investment destination in India

Bangalore is known as the high tech capital of India

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Karnataka One of the leading states in India

Contribution to State GDP Contribution to Indias GDP

16.22%
Agriculture

14.60%

55.17% 28.61%

Industry Service

55.20% 30.20%

Agriculture Industry Service

Karnataka Indicators Population Literacy Rate Gross Income at current prices (2009-10) Gross per capita Income at current prices (2009-10) Unit in 000s % INR crore INR

India Karnataka 52,851 66.60 343,010

(~USD 76 Bn)

India 1,028,737 64.84 6,133,230 (~USD 1363 Bn) 52,421

58,582

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Karnataka : Agriculture and Food Processing

Comprehensive development of agriculture and allied sectors

Extending linkages between agriculture and industries throughout the state

Procuring modern technology and necessary capital from national and international sources

It is proposed to establish an Agriculture Infrastructure Fund with a minimum annual capital of Rs 500 crore, to attract investment towards infrastructure for agriculture and allied areas

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Karnataka Agriculture overview

9 Soil types Wide crop diversification 10 Agroclimatic zones

32% net irrigated land

First State to propose an Agri-Budget

Rich in soil nutrients

Karnataka is one of the few States in India which has escaped soil deterioration due to natural interventions and injudicious use of land. Itcultivable land 64.6% has been identified as one of the states within the country having excellent soil nutrients including manganese, potassium and sulphur besides nitrogen

States low on the mentioned nutrients

10 Agro-climatic zones

GoK has allotted Rs. 40 Crore for extending the Bhoo Chetana (soil enrichment programme)

1 5
Among top

India ranking

st

Coffee Medicinal crop Tropical fruits

in production

states

in production

Flowers Fruits Sugar Vegetable crops Spices

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Karnataka - Horticulture
Production trend for Fruits in Karnataka (Million MT) Production trend for Vegetables in Karnataka (Million MT) Production trend for Flowers in Karnataka (Million MT)

6 4 2 0 2005 2006 2007 2008 2009

8 6 4 2 0 2005 2006

0.2 0.1 0 2005 2006

2007

2007

2008

2008

Overview New initiatives through introduction of more beneficial programmes Processing and Value Addition Measures

Land Area -1,800,000 hectares Production 13,638,000 tones of output Area expansion, assistance to farmers, supply of seeds and seedlings, micro irrigation, control of pests and diseases, post harvest management and marketing etc. Post harvest management of horticulture produce and processing programmes like grape dehydration, red chilli powdering, construction of storage godown etc. Introduction of new varieties of vegetables; establishment of Karnataka grape wine board; mango development board; modern areca nut dehusking machine; KSHDA

The total value of horticultural output is more than Rs 18,000 crore

New interventions

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Karnataka - Flowers
An area of about 20,000 hectare is under floriculture One of the largest area under modern cut flowers in the country

Traditional flowers
Rose (open cultivation) Chrysanthemum Marigold Jasmine Tuberose

Non traditional flowers

Gladiolus Aster Zinnia Gaillardia Statice Lilies Gerberas Carnations

It is proposed to provide Rs 10 crore towards an International Flower Auction Centre for establishing a special floriculture zone on the outskirts of Bangalore
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Karnataka - Oilseeds
Karnataka contributes 5% national oilseed production to the
Yield (qntls/ha)
800 700 600 500 400 300 200 100 0 679 589 496

Groundnut, sunflower and soybean are the key Oilseeds Karnatakas production is about 10 to 12 lakhs metric tonnes Portfolio includes Groundnut, soybean, sunflower, safflower, castor, Niger, linseed, rapeseed, mustard are the oilseed crops cultivated in the state. The yield of oilseeds and cotton has increased by 32% and 38% respectively

Groundnut

Soyabean Yield (qntls/ha)

Sunflower

Accelerated Oilseed Production Programme has been launched during 2010-11 with the objectives to increase productivity by 30 percent, to impart improved technology practices to farmers by scientists/ specialists.

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Karnataka - Food grains

Area under Principal Crops Production in 2008-09 Unit Karnataka (Mn ton) 000 ha 1,514 0.38 000 ha 1,068 0.3 000 ha 1,382 0.16 000 ha 269 0.025 000 ha 266 0.018 000 ha 2,088 0.1

The production of food grains increased from less than 1.1 million tonnes in 2009-10 to more than 1.25 million tonnes during the current year

Karnataka remains a major contributor towards the production of Jowar, Maize and Pulses

Item Paddy Maize Jowar Wheat Bajra Pulses

The food grains production is likely to record a growth of 15% from 2009-10 to 2010-11. Though the area under cultivation has increased only by 3%, this record growth in production was due to the impressive growth in productivity.

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Karnataka - Animal husbandry

1.85 1.43

1.35

1.39

32.8 million livestock in the state; among the highest in the country and an annual sector growth of 5% Ranks 3rd in India in egg production towards Karnataka is a key contributor production of meat, wool and eggs Ranks 11th in milk production

2003-04

42 chilling centers having 1.5 million liters of chilling capacity

2004-05
2005-06 2014-2015

Value of Output from Livestock sector in Karnataka (in US$ Bn)

In the year 2009-10, the output from animal husbandry sector is estimated to be at Rs 13,273 crore. This is 19% higher in comparison to the previous year.
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Karnataka - Sericulture

90 80 70 60 50 40 30

77.3

82.1 53.4 54.3

50.8 51.7

Involves mulberry cultivation, production of cocoons, silk reeling, and raw silk production The area under mulberry cultivation in the State is about 66.89 thousand hectares

20
10 0

Area under mulberry Production of Quantum of cocoon ('000 Ha) cocoons ('000 MT's) marketed ('000 MT's)
2008 -09 2009 - 10

Karnataka leads the country in silk production with close to 25% of the share

A target has been set to increase silk production from 7500 to 8500 tonnes and increase the mulberry cultivation to an area of 2 lakh acres.
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Karnataka - Dairy
Milk Produced in 2008 -09 No. engaged in dairy farming No of Dairy Cooperatives No of dairy plants Per capita milk availability No of milch bovine 4.5 Million tonnes 2 million farmers 10500 15 215 gms/day 61,18,000

10th largest milk producer in India 9th largest bovine population in India
Milk Production in '000 MT
5000 4800 4600 4400 4200 4000 3800 3600

CAGR = 4.6%
4313 4022 4124

4821 4538

2005-06

2006-07

2007-08

2008-09

2009-10

Milk production in the State has increased to 48 lakh tonne from 41.24 lakh tonne during 2006-07.
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Karnataka - Fisheries
Length of coastline Continental shelf area Length of river/canal Total water body area Fisheries export Fishermen population
300 Kms 0.027 Mn Sq. Km 9000 Km 0.56 Million Ha. US$ 85.43 Million 767,484 Rich in inland water resources Rich in pelagic resources Ideal for aquaculture USD 300 million contribution towards GSDP of Karnataka Vibrant demography with emerging market for VAPs

Karnataka coast also known as Mackerel coast

Policy orientation towards developing complete value chain

Fish production has increased in the state from 2.97 lakh tonne during 2007-08 to 4.90 lakh tonne during 2010-11
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Karnataka - Key export items

Exports of key crops from Karnataka

Crops Coffee and its products Cashew and its products

USD Million (2009-10) 212.64 92.84

Processed food
Spices and its products Marine products Total

92.06
52.19 58.67 525.09

To promote, develop and to increase exports of agriculture and horticulture produce from the state, an

organization namely Karnataka State Agricultural Produce Processing and Export Corporation Limited (KAPPEC)
was established in 1996. The said organization from its inception up to December 2010 has handled 532543 MTs of various agricultural and horticultural produce worth Rs. 91580 lakhs
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Infrastructure Agri - education

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Karnataka infrastructure: Agri education

3 agricultural universities 1 horticultural university and more 7 national level research institutes in agricultural & horticultural sectors 1162 Industrial Training Institutes largest in India (15% of the countrys total)

University of Agricultural Sciences

Established in 1964
6 colleges across the State - the University runs undergraduate and postgraduate programmes covering all aspects of agricultural sciences

Karnataka
Engineering Colleges Medical

No of Institutions 72 114

The Agricultural College in Dharwad

Polytechnics
Pharmacy Colleges Industrial Training Institutes R&D Centres

273
69 1,162 103
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Karnataka infrastructure Agri education

The Defence Food Research Laboratory (DFRL)
Specialized institutes involved in food R&D It has, to its credit packaged food for zero-gravity environs of a spaceship begun work on the technology to prepare food for Indias first astronauts who will lift off into space in 2015

The Imperial Institute of Animal Husbandry and Dairying

Established in 1923 in Bangalore Leader in dairy education programmes in India Conducts basic research to support the dairy livestock Technological achievements include increasing the shelf life of dairy products

Institute of Horticultural Research

Premier University in India Dedicated to increasing horticultural productivity in the country Concentrates on research, training and consultancy and extension services Has developed several indigenous technologies e.g., grape rootstocks, high-density planting in bananas and pineapple

Other important institutions offering courses relevant to agriculture

National Institute of Technology (formerly REC), Suratkal Indian Institute of Science, Bangalore Indian Institute of Management, Bangalore Vishweshwaraiah Industrial Trade Centre, Bangalore

The Karnataka Veterinary, Animal and Fisheries Sciences University (KVAFSU), Bidar
Focus on education concerning veterinary and animal sciences, dairy sciences, fisheries and other allied sciences

The Central Food Technological Research Institute (CFTRI)

Set in Mysore in 1950 ISO 9001 certification a mark of high quality CFTRI has also established the International Food Training Technology Centre in collaboration with the FAO and the International School of Milling Technology, an Indo-Swiss venture.

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Karnataka infrastructure : Agri - education

Select agro-related education/ training institutes in Karnataka
Regional Research Station of Sugarcane Breeding Institute, Jamkhandi
Directorate of Biological Control, Bangalore National Research Centre For Cashew, Dakshina Kannada National Institute of Animal Poultry (NIANP), Bangalore

Indian Veterinary Research Institute, Bangalore

Division of Oil Seeds Research Station, Raichur Centre For Reproductive Biology, Indian Institute of Science, Bangalore College of Agricultural Engineering, Raichur College of Fisheries, Magya Nagar, Mangalore Department of Veterinary Training, Keesargatta, Bangalore College of Agriculture and Regional Research Station, Krishinagar, Dharwad

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Karnataka infrastructure - Transportation

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Karnataka infrastructure - Transportation

State is well connected with road, rail, sea and air networks allowing access to other parts of the country and abroad.
Aviation International airports at Bangalore and Mangalore connecting India and the World The other major airport in Karnataka - Mysore airport has been upgraded for commercial traffic Airports planned at Hassan, Shimoga, Bellary, Bijapur & Gulbarga A helipad each is planed for all 30 districts

Bangalore International Airport Ltd. - BIAL Third busiest airport in India handling 10 million passengers a year First Airport built on PPP with an ability to handle 3000 passengers per hour A helipad each is planned for 30 districts

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Karnataka infrastructure - Transportation

Roadways
More than 150,000 km road network in the State Targets to improve the network through various national and state level initiatives Monorail projects in Bangalore

Railways
3,300 km railway line across State. High-speed rail link to the Bangalore airport planned Two mono rail projects in Bangalore

Ports and Shipping

Long shoreline of 300 km.

Major port in New Mangalore

handles in excess of 36.02 MT and 7% of the countrys total traffic in major ports 10 minor ports in Karwar,

Belekeri, Tadri, Honnavar,

Bhatkal, Kundapur, Hangarkatta, Malpe, Padubidri and Old Mangalore. Tadadi and Haldipur ports set for expansion

on PPP basis.

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Karnataka infrastructure - Power

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Karnataka infrastructure - Power

Power generation in Million Units Generation 2009-10 2008-09 2007-08 Thermal Diesel + Hydro + Wind + Solar Total 13,263 12,757 11,717 13,363 10,876 14,737

26,020

25,080

25,613

Karnataka power profile

Highest thermal generation of 13263 Million Units (2009-10) Highest capacity addition of 730 MW, in 2008-2009 Current installed capacity at 1200 MW with action to elevate it to 1600 MW

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Government initiatives
Government of Karnataka has earmarked Rs. 17,857 crore (USD 397.62 Mn)for agriculture, allied and irrigation sector development for 2011-12 in the nations first agriculture budget

Rs 1,000 Crore for Suvarna Bhoomi Yojna (reviving lives of 10,00,000 farmers) Rs 1,000 Crore for Revolving fund Rs 500 Crore for Agriculture Infrastructure fund Rs 200 Crore for Organic Farming Rs 125 Crore to encourage Bio-Fuels Rs 100 Crore for Drip Irrigation subsidy Rs 100 Crore for construction of small harbours Rs 40 Crore provision for making available a modern mobile unit in each taluk to carry out extension work in agriculture, horticulture and animal husbandry Rs. 40 Crore for extending the Bhoo Chetana (soil enrichment) an Rs 10 Crore for floriculture development Diploma courses for agriculture related subjects

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Karnataka - Recent investments

The Global Investors Meet: 3-4 June 2010 Expected total investment from the Meet about Rs 473000 crores (USD 104,976 Mn) Employment potential of 85,000 new jobs Vibrant Gujarat Summit 2011 Partner state 20 MOUs/Expression of Interests have been signed Expected investments of Rs.24,759 crore in 10 sectors (USD 5,494.979 Mn) Employment Potentials of 24,795 persons
State Level Single Window Clearance Committee (SLSWCC) has approved 378 projects with an investment of Rs.6087.37 crore (USD 1351 Mn), with an employment potential of 1.03 lakhs. State High Level Clearance Committee (SHLCC) has cleared 130 projects with an investment of Rs. 146566.89 crore, and employment potential of 4.63 lakhs persons

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List of abbreviations
GDP FDI JBIC MT NHM GSDP IT KSHDA GoI Gross Domestic Product Foreign Direct Investments Japan Bank for International Cooperation Million Tonnes National Horticulture Mission Gross State Domestic Product Information Technology Karnataka State Horticulture Development Agency Government of India PPP MW KUM KIADB VAT NABARD BT Ha GoK Public Private Partnership Mega Watts Karnataka Udyog Mitra Karnataka Industrial Areas Development Board Value Added Tax National Bank for Agriculture and Rural Development Biotechnology Hectares Government of Karnataka

References
Economic Survey of India UNCTAD Reserve Bank of India Karnataka Economic Survey Karnataka Agriculture Budget 2010-11 Indian Horticulture Database Department of Sericulture, Government of Karnataka Ministry of Food Processing Industries, Government of India Infrastructure Development Department Government of Karnataka Karnataka Power Corporation Limited Ministry of External Affairs, Government of India IBEF Department of Animal Husbandry, Dairying & Fisheries, Government of India

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Contact
The Managing Director Karnataka State Agricultural Produce Processing and Export Corporation Limited (A Government of Karnataka Enterprise) No.17, Richmond Road Bangalore 560025 INDIA Phone: +91 80 2227 1194 / 2224 3082 Fax: +91 80 2227 8974

Email: kappec@dataone.in
Additional Information http://www.bounteouskarnataka.com

Disclaimer: This presentation has been prepared for general guidance on matters of interest only. The reader should not act upon the information contained in this presentation without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this presentation, and, to the extent permitted by law, GoK, its consultants, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of reader or anyone else acting, or refraining to act, in reliance on the information contained in this presentation or for any decision based on it.

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