Two seprate factories of same company

Hi all, I am working in the Ambarnath based Japanese Machine Manufacturing company. We are 100% Export Oriented Unit and we are planning to start another unit at nearby location. New Unit shall be also Export Oriented Unit and will be added as additional location in the existing Letter of Permission. This new unit will be used for manufacturing of specific range of the machines and molds and we have decided to keep the operations of the both unit separate as far as possible. However , procurement of the material can be common some time. So I would like to know the rules pertaining to Inter Unit Material Transfer. I have heard that Inputs can not be transferred from one unit to another unit as it is and there has to be some or other value addition before sending it to the other unit and such products will be transferred on COP+Profit basis. Now my query is why single company having two units can not procure and store the common raw material in one place and why it need to show profit for inter Company transfer ? what must be the intention of the policy maker. Further if goods are transferred from Unit -1 to Unit2 on cost +profit basis and if transferred once again from Unit 2 to Unit 1 on Cost +Profit basis then this profit will be obviously book entry and will increase the cost and the gap between cost and sale price will be reduced due to this notional profit and ultimate profit will affect. In such case in actual can we adjust this notional profit. I am verymuch new in this area and not able to answer to my management . your valuable inputs will help me to understand this complex situation in easier manner . Thanks in advance.