Valuation report of an

Industrial property
Located in Taratala, Kolkata
Prepared on behalf of
Switz Food Pvt Ltd.
A pri l 20 14

Contact details:
S wi tz Food P vt Ltd.
Kni ght Frank I ndi a P ri vate Li mi ted
Paville House, Near Twin Towers,
Off Veer Savarkar Marg, Prabhadevi,
Mumbai - 400025

Pradeep Gandhi: pradeep.gandhi@in.knightfrank.com

Valuation report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

Executive summary
The executive summary below is to be used in conjunction with the valuation report of which it
forms a part and is subject to the assumptions, caveats and bases of valuation stated herein
and should not be read in isolation
Cl i ent name

Switz Food Private Ltd.

S ubject properties and address

Modern Food Industries (India) Ltd. (MFIL), Taratala, Budge

Budge Trunk Road

P urpose of val uati on

Internal

Locati on

Kolkata

Descri pti on

Valuation of an industrial property

A reas

8191.44 sq. mt ~2.02 acres (as per client)

Tenure

Freehold

V al uati on

Market approach

V al uati on date

14 th April

Market val ue

`38.77 mn.

V al uer s detai l s

Pradeep Gandhi, MRICS

Regional Head (West) Research & Advisory Services

*In preparing our valuation reports, no allowances are made for any liability that may arise for
payment of Corporation Tax or Capital Gains Tax, or any other property related tax, whether
existing or which may arise on development or disposal, deemed or otherwise. No allowances
are made in our valuations for any expenses of realisation, or to reflect the balance of any
outstanding mortgages, either in respect of capital or interest accrued thereon. All valuations
are given without any adjustment for capital based government grants received or potentially
receivable on the date of the valuation.

Abbreviations & Measurements

A bbreviations
FSI

Floor Space Index

CBD

Central Business District

Indian Rupee

MCGM

Municipal Corporation of Greater Kolkata

mn.

Million

BEST

Bombay Electric Supply & Transport Company

Nos.

Numbers

Q1

Quarter One

`/sq. ft.

Rupees per square feet

Q2

Quarter Two

sq. ft.

Square Feet

Q3

Quarter Three

sq. km.

Square Kilometre

Q4

Quarter Four

sq. mt.

Square Metre

FDI

Foreign Direct Investment

GNP

Gross National Product

NPV

Net Present Value

GDP

Gross Domestic Product

TEUs

Twenty Foot Equivalent Units

CPI

Consumer Price Index

NA

Not Applicable

CRR

Cash Reserve Ratio

SLR

Statutory Liquidity Ratio

USD

United States Dollar

Measurements
1 acre

43,560 sq. ft.

1 mn

10 Lakh

1 sq. km.

100 Ha

1 sq. mt.

10.764 sq. ft.

1 hectare

2.47 Acre

Valuation report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

iii

Table of Contents
Executive summary ................................................................................................................ ii
Abbreviations & Measurements ............................................................................................. iii
Table of Contents ..................................................................................................................iv
1.

Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1

Engagement of Knight Frank India Private Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.1

Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.2

Valuation standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.3

Purpose of valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.4

Conflict of interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.5

Currency and Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.6

Responsibility to third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.7

Di sclosure and Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.8

Li mitations on liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.1.9

Vetting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.2

Scope of enquiries and investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.2.1

Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.2.2

Enquiries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.2.3

Legal parameters of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.2.4

Environmental aspects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.2.5

Information provide d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.3

Basis of valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.3.1

Market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.3.2

Date of valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2.

Economic snapshot: I ndia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.1

Economic indicators (March 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.2

Real estate indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.

Ci ty overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.1

Salient features Kolkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.2

Existing & Potential growth corridors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3.3

Key features Economic & Demographic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Economic base and drivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.4

Existing & Upcoming infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4.

Real estate market overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4 .1

Commercial overview:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4 .2

Rental and Capital val ue trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4 .3

Industrial overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

5.

The properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5.1

Location: Taratala Industrial Area (Kolkata Port Trust) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5.2

Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

5.3

Connectivity and Neighbourhood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

5.4

SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

5.5

Legal and Regulatory aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

5.6

Site inspection and Observations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

6.

Valuation analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

6.1

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

6.2

Valuation bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

6.3

Valuation assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

6.4

Valuation considerations: Rent capitalisation method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

7.

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

8.

Di sclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Annexure I: General principles and Li miting conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Annexure II: General assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Annexure III: Photographs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Annexure IV: Cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Valuation report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

1.

Instructions

1.1

Engagement of Knight Frank India Private Limited

1.1.1

Instructions

On the instructions received from Switz Food Pvt ltd (The Client) and our subsequent
engagement letter dated 1s t April 2014, Knight Frank (India) Pvt. Ltd. has been appointed to
estimate pre-tax valuation for the following Industrial property

1.1.2

Modern Food I ndustry, Tarata l a, Kol k ata

Valuation standard

The exercise has been carried out in accordance with the Royal Institute of Chartered Surveyors
(RICS) valuation standards, February 2014 edition.
1.1.3

Purpose of valuation

The client has confirmed that the valuation report is required for internal purposes.
1.1.4

Conflict of interest

We confirm that we have no conflict of interest in providing this report to the client, and that we
are acting as external valuers for the exercise.
1.1.5

Currency and Measurement

The currency used in the report for valuation of the subject property is Indian Rupees (`). This is
the currency normally used for property transactions in India. All measurements are in sq. ft. (1
sq.mt. = 10.764 sq. ft.) as this is the prevailing market practice in India.
1.1.6

Responsibility to third parties

Our valuation report is only for the use of our client and no responsibility is accepted to any
third party for the whole or any part of its contents.
1.1.7

Disclosure and Publication

Neither the whole nor any part of this valuation nor any reference thereto may be included in
any published document, circular or statement, nor published in anyway, without our prior
written approval of the form or context in which it may appear. If our opinion of values is

disclosed to persons other than the addressee of this report, the basis of the valuation should
be stated.
1.1.8

Limitations on liability

No claim arising out of or in connection with this valuation report may be brought against any
member, employee, partner, or consultant of Knight Frank India Pvt. Ltd.

Knight Frank India Pvt. Ltd.s total liability to any direct loss or damage caused by the
negligence or breach of contract in relation to this instruction and valuation report is limited to
the amount specified in the terms of the engagement letter (if any). We do not accept any
liability for any indirect or consequential loss (such as loss of profit)
1.1.9

Vetting

The report has been vetted as per Knight Frank India Pvt. Ltd. quality assurance procedures.

1.2

Scope of enquiries and investigations

1.2.1

Inspection

We were instructed to carry out an external site visit of the property. The site visit was
undertaken on 8 th April 2014 by Mr. Sampuran Das Master of Business Administration
(Finance).
1.2.2

Enquiries

In carrying out these instructions we have undertaken verbal / web based enquiries referred to
in relevant sections of the report. We have relied upon this information as being accurate and
complete.
1.2.3

Legal parameters of property

We have been not been provided with copy of extracts from the registered deed of conveyance
indicating the name of owners, carpet area of the property and number of car parks. We have
also not been provided with copy of building plan, office plan, maintenance & property tax bill
and receipt of property tax payment. However, it is recommended that the documents are
subjected to formal legal inspection in order to ensure that there are no elements, restriction or
charges contained which are likely to impact the valuation provided.

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

1.2.4

Environmental aspects

For the purpose of this report we have assumed that the property is not subject to
environmental contamination. However, it is recommended that an appropriate consultant may
be engaged to confirm our assumptions. If the subsequent investigation identifies any
environmental contamination on the site our report may require revision.
1.2.5

Information provided

In this report we have been provided with information about the land area and leasehold nature
of land by the client, its advisors and other third parties. We have relied upon this information
being materially correct in all respects and have not physically measured or verified the same
from any legal documents or government authorities.

1.3

Basis of valuation

In accordance with your instructions, we have provided opinions on valuation of the project on
the following basis:
1.3.1

Market value

The Market Value of the leasehold interest in the property in its current physical condition is the
basis of valuation. No allowance has been made in our valuation for any charges, mortgages or
amounts owing on the Property or for any expenses or taxation, which may be incurred in
effecting a sale.

Unless otherwise stated, it is assumed that the Property is free from

encumbrances, restrictions and outgoings of an onerous nature, which could affect the value.
1.3.2

Date of valuation

The date of valuation is 14 th April 2014.

2.

Economic snapshot: India

2.1

Economic indicators (March 2014)

Parameter

Value

GDP Growth Rate 2012-13 (at 2004-05 prices)

4.50%

Per Capita Income 2012 2013 ( current prices )

` 58,747

Inflation CPI December 2013 (provisional)

CRR and SLR

9.87%
4.00% and 23.00%

Repo rate

8.00%

Bank rate

9.00%

Base rate

10.00% 10.25%

INR/ 1 USD

62.11

Risk Free Rate on Government Securities: 6.90 GS 2019

8.0907 %

Risk Free Rate on 364 day Government T-Bill

9.0046%

GDP Growth Rate 2012-13 (at 2004-05 prices)

2.2

4.50%

Real estate indicators

Parameter
FDI inflow in construction development: Townships, housing, builtup infrastructure (April 2013 November 2013)
FDI inflow in construction development: Townships, housing, builtup infrastructure (April 2012 March 2013)
FDI inflow in construction development: Townships, housing, builtup infrastructure (April 2011 March 2012)
FDI inflow in construction development: Townships, housing, builtup infrastructure (April 2013 November 2013)

Value
54,350

72,480

152,360

54,350
Source: http://dipp.nic.in

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

3.

City overview

3.1

Salient features Kolkata

Kolkata the capital of West Bengal is the main business, commercial and financial hub of
eastern India. The city is situated in the Eastern part of India on the bank of river Ganges and is
the worlds 8th largest urban agglomeration. A city with one foot in its 300 year old heritage and
a richly mixed culture, and the other forward to grab the best of today, Kolkata tends to be a city
that delights with stunning glimpses into a rich culture, history, with amazing oasis of natural
beauty in the heart of the city. Kolkata city has a population of 4,580,544; with an extended
metropolitan population of over 14 million, making it the third-largest urban agglomeration in
India. Kolkata is home to many industrial units operated by large Indian corporations with
products ranging from electronics to jute. Large companies having presence in Kolkata include
TCS, Cognizant, IBM, HSBC, ITC Limited, Bata, Birla Corporation, Tata Tea, Balmer Lawrie, Coal
India, Hindustan Copper, Damodar Valley Corporation, United Bank of India, UCO Bank,
Allahabad Bank and National Insurance.

Figure 1: Map of Kolkata

3.2

Existing & Potential growth corridors

It has been observed over the last 10 years from the citys development pattern that the overall
growth in commercial, residential and retail sectors is shifting to the eastern corridors from
central business districts of the city. Kolkata Metropolitan Area is dotted with several existing
and upcoming Commercial Micro-Markets, the significant ones being CBD (Park Street, AJC Bose
Road), South-Central Kolkata, Salt Lake and New town Rajarhat. Developments at EM Bypass
(near the Eastern Kolkata Township) also indicate an emerging Sub-CBD in the years to come
with a number of businesses relocating from the old CBD to these areas.

Figure 2: CBD and Growth Corridors

Kolkata Metropolitan Area has emerging growth corridors other than the established micromarkets that have witnessed sufficient development in the recent past. Of all the growth
corridors of Kolkata, New Town-Rajarhat & EM Bypass are among the most prominent emerging
commercial micro-markets with a strong presence of global and national level IT players as the
major occupants of the available and upcoming commercial spaces. It not only enjoys nearness
to the Airport but also moderate connectivity with the other important regions of Kolkata, as
well.
The other growth corridors of Kolkata are:

Kona Expressway

Budge Trunk Road Corridor

Baishnabghata - Patuli Township Area

NH2 Growth Corridor

Dankuni - Uttarpara

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

3.3

Key features Economic & Demographic

As per Census 2001, the Kolkata Metropolitan Area (KMA) houses a population of 14,720,000.
Of this, nearly 4.7 million people reside within the Kolkata Municipal Area (KMC). The urban
agglomeration Kolkata Metropolitan Area is 1851 sq. km. in size whereas the Municipal A rea
within this region is about 185 sq. km. By 2025, the population in KMA is expected to be
approximately 22 million. The present density of urban population of Kolkata is 24,760 persons
/ sq. km. At present, the average literacy rate in Kolkata is 81.31%. The Age Sex Ratio in Kolkata
is currently 956 females per 1000 males. The annual growth rate of population for Kolkata is
estimated to be approximately 4 %.

Economi c base and dri vers

West Bengal is still Indias third largest economy, producing 10 % of its steel, 20 % of its tea, 22
% of its leather, 4% of Indias production of petroleum products and 13 % of its total polymer
production. Haldia is one of the largest petrochemical hubs in the country, with 705 674 small
scale units, 94 medium scale units and 5 large scale units. As against the present growth rate of
index of industrial production of 11.5 % at the national level, the index of industrial production
in West Bengal stands at 8.1 % (2008-09). The state has slipped to 10th position on per capita
income, it has 5.8 % of the countrys factories, and contributes 5 % of national value add.

Table below highlights the upcoming and operating specialized Industrial Parks in Kolkata:
Industrial Parks
Manikanchan
SEZ

Products /
Services
Gems &
Jewellery

Shilpangan(Light
Engineering Park)

Light Engg.
Products.

Apparel Export
Park

Garment Park

Garments,
Buttons,
Accessories,
Washing /
Processing
Garments

Food Park (Phase

I & II )

Food
processing

Poly Park

Polymer

Location
Salt
Lake,
Kolkata
Salt
Lake,
Kolkata
Uluberia,
(Howrah
District)

Area
(acres)
5

Industrial Parks
Manikanchan
SEZ

Products /
Services
Gems &
Jewellery

2.28

Shilpangan(Light
Engineering Park)

Light Engg.
Products.

150

Apparel Export
Park

Kolkata

Garment Park

Garments,
Buttons,
Accessories,
Washing /
Processing
Garments

Sankrail,
(Howrah
District)
Sankrail,

130

Food Park (Phase

I & II )

Food
processing

60

Poly Park

Polymer

Location
Salt
Lake,
Kolkata
Salt
Lake,
Kolkata
Uluberia,
(Howrah
District)

Kolkata
Sankrail,
(Howrah
District)
Sankrail,

products
Rubber Park

Foundry Park

Rubber
footwear,
hoses, tubes,
automotive
rubber
products
Castings,
Forgings and
other Foundry
items

(Howrah
District)
Sankrail,
(Howrah
District)

products
170

Rubber Park

Howrah

924

Foundry Park

Rubber
footwear,
hoses, tubes,
automotive
rubber
products
Castings,
Forgings and
other Foundry
items

(Howrah
District)
Sankrail,
(Howrah
District)

Howrah

Table 1: Operating Industrial Parks

West Bengals population density is 904/ Sq. Km the highest in the country, 72 % of its
population depends on agriculture. The small and marginal farmers own 84 &of total
agricultural land as against 43 % in the rest of India, and the average land holding is only 0.64
hectares. The net cropped area in West Bengal is already close to 100 % of cultivable land in
most districts and hence cannot be increased. Given that Bengals rice yield is currently 2.5
tons/ha lower that Punjab and Karnataka at 3.8 tons/ha, while China manages 6.26 tons/ha,
the Income of small and marginal landowner in West Bengal is low.

Maj or constrai nts On the other hand industrial revival of the state is faced with land acquisition problems. West
Bengal has only 37,574 hectares of barren land most of it is in areas far from demand and
supply centres. The total area of vested non-agricultural land available for industry is only 9073
hectares. Land required for all the proposals pending before West Bengals commerce and
industries department is 36,437 hectares. The acquisition of 36,437 hectares of land could
displace about 619 thousand

persons (corresponding to the average rural population densities

of Howrah Dist.). Organized retail has the potential to make the market more efficient and
create the necessary backward linkages with agricultural sector. Opposition to FDI is retails
stems from the fact that West Bengal has (3-4.5 million) small shops in the state. About 4
persons earn their livelihood from each shop, an estimated (20 million) people directly
dependent on these stores for their livelihood. About 25-30 people are directly employed by a
10,000-square foot shopping mall, therefore if organized retail gets 20 per cent of retail
demand close to (10 million) jobs may become redundant while only 1,80,000 people will find
employment.

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

Bengal's economy reels under huge debt; about 97 per cent of the state's revenue is spent on
paying interests for loans and salaries. The rest 3 per cent is used for development. Therefore
large government spending on infrastructure may not be feasible. FDI Inflows into the state has
to increase coupled with high dose of private investments to sustain growth.

Rol e of I T/I TeS i n Bengal s Economy According to Nasscom Deloitte Study for every job created in the IT Sector four indirect
employment is created 75% of those employees are SSC/HSC educated. Further output
multiplier of IT industry on other sectors is 2, through non- wage operating expenses and Capex. IT/ITes Sector is expected to be a major growth driver for Bengal since (a) it is not land
intensive (b) knowledge workers are not unionized (c) healthy supply of highly skilled
manpower (d) lower cost of living and wage cost (e) existing urban/telecom infrastructure can
sustain growth of IT sector.

3.4

Existing & Upcoming infrastructure

Ex isting
In frastructure

D e s c riptio n
Kolkatas airport provides both domestic and international connectivity and is located in the north
of Kolkata City in Dum Dum. Kolkata is currently serviced by 14 inte rnational, 8 domestic airlines
and 5 Cargo Airlines. The number of domestic & international passengers in 2006 -07 was around
6 million.

Airport

Kolkata Airport has been ranked as the 7th spot much ahead of Hyderabad International Airport
(10th Spot), Chennai Inte rnational Airport (14th Spot) and New Delhi Indira Gandhi International
Airport (25th spot) in an official statistics regarding the "Top 25 fastest growing airports 2007"
worldwide with a 28.2% increase in the passenger traffic, according to the World Airp ort Traffic
2007 report released by the Airports Council International.
Kolkata has a road space at just 6% of the total city area as against the standard 20% in well planned cities like Delhi. The major road developments in KMA are:

Belghoria Expressway

Kona Expressway

Acharya Jagadish Chandra Bose Road

Eastern Metropolitan Bypass

VIP Road

Rajarhat Arterial Road

Diamond Harbour Road

Basanti Highway

National Highway 2

National Highway 6

National Highway 117

National Highway 34

National Highway 35

National Highway 41

Roads

The Rabindra Setu, the Vivekananda Setu, the Dakshineshwar Bridge and the Second
Vivekananda Bridge, are the vital parts of linkages over the river Hooghly that create better
accessibility to the entire KMA and its periphery.

Railways

Port

Two recent significant developments are the SVTB (Second Vivekananda Tollway Bridge) and the
Garia Metro Extension (operational by 2009) both of which have made a significant impact on
traffic mobilization by improving connectivity and reducing travel-time.
Kolkata has two major long distance railway stations at Howrah Station and Sealdah. Howrah
station connects to rest of India and Sealdah station to north of Bengal and northeastern part of
the country. It also has The Suburban Railway connecting to the suburbs surrounding the city of
Kolkata.
The Kolkata Metro is the underground rail network in Kolkata, India. It is run by the Indian
Railways and is the first underground built in India with service starting in 1984. The line begins at
Dum Dum in the north and continues south through Park Street, Esplanade in the heart of the city
till the southern end in Kavi Nazrul.
The Port of Kolkata is a riverine port in the city of Kolkata, India. It is the oldest operating port in
India, having originally been constructed by the British East India Company. The Port has two
distinct dock systems - Kolkata Docks at Kolkata and a deep-water dock at Haldia Dock Complex,
Haldia.
Table 2: Existing Infrastructure

Figure 3: Infrastructure Map

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

11

U pc o m in g
P ro je c ts

D e s c riptio n
Several new highways have been proposed in KMA, some major projects are mentioned below with the
running length in kilometres:

New Metropolitan
Highways

Dum-Dum Barrackpore Expressway

- Madhyamgram to Belghoria: 6.0 km

Eastern Expressway
- NH 34 to Taki: 8.0 km
- Taki to B N Dey Road: 22.5 km
- B N Dey Road to Baruipur and NH 34 to Barrackpore -Kalyani Road: 30.1 km

Southern Expressway
- Baraipur to Diamond Harbour Road: 15.5 km
- Diamond Harbour Road to Budge Budge to Bauria to NH 6: 22.7 km
- Bridge over / tunnel under Hooghly

Serampur-Barrackpore-Barasat Expressway
- Connecting NH 2 and Eastern Expressway: 22.5 km

Western Riverfront Expressway

- Andul Road to Bauria Connector: 14.0 km
The proposed East-West Metro Corridor will run 13 km from Salt Lake to Howrah station and is
set to be operational by 2013.

Metro Rail Project

The 12 stations on the route will be Howrah, Mahakaran, Central, Bowbazar, Sealdah,
Phoolbagan, Salt Lake stadium, Bengal Chemical, City Centre, Central Park, Karunamoyee and
Sector V.

The route will intersect the existing North-South Metro Corridor at Central Station.

KMDA along with international fund houses like JBIC (Japan Bank of International Co-operation) has
proposed construction of several flyovers/ bridges at critical junctions some of which have been
shown below:

Over crossing of Jessore Road and Dum Dum Road (2007-2013)

Salt Lake Bypass across J K Saha Bridge (2007-2013)

Along Anwar Shah Road across Raja Subodh Mallick Road (2007-2013)

Esplanade RA Kidwai Road

Bridges/ Flyovers

Across Park Street (2013 onwards)

Across Loudon Street (2013 onwards)

Across Camac Street (2013 onwards)

Elevated Ring Road Corridor around Kolkata with entry and exit ramps
-

Across Strand Bank Road-Strand Road-Diamond Harbour Road-Alipore-Prince Anwar

Shah Road-EM Bypass-VIP Road-Circular Canal-Bagabazar (2013 onwards)

Elevated Road from Park Circus to Parama Island (2013 onwards)

Patipukur Underpass on Jessore Road (2013 onwards)

EM Bypass to VIP Road (2013 onwards)

Vivekananda Road Flyover Phase I : Howrah to CR Avenue crossing ( 2013 onwards)

Vivekananda Road Flyover Phase II : CR Avenue crossing to Airport ( 2013 onwards)

Table 3: Upcoming Infrastructure Initiatives

4.

Real estate market overview

4.1

Commercial overview:
Commerci al mi cro-mark ets i n Kol k ata
Clas s if ic atio n

L o c atio n s

Central Business District (CBD)

Park Street, Camac Street, Theatre Road, Chowring hee Road, AJC Bose Road

Old Central Business District (CBD)

Dalhousie Square, India Exchange Place, NS Road, RN Mukherjee Rd

Suburban Business District (SBD)

Topsia, Ruby, Park Circus

Peripheral Business District (PBD)

Salt Lake, New Town

Source: Knight Frank Research

The commercial leasing activity in Kolkata is primarily driven by IT/ITES, BFSI sector. First
quarter 2013 witnessed a significant increase driven by the telecom, BFSI and IT sectors that
accounted for around 70% of the aggregate leasing activity. The city witnessed a net absorption
at 180,000 square feet, which is higher than the previous quarter. 85.0% of total absorption
took place in Grade-A developments in the peripheral locations of Salt Lake and Rajarhat/New
Town. The market observed small to mid-size deals in the range of 1,500-15,000 sf. large format
transactions have not happen since 2013, depicting the cautious approach adopted by
occupiers and general market sentiment.
S tock & V acancy S napshot
Co mmercial

Sto c k

Vacancy

YT D Absor ptio n

R e n tal

s q.f t

P e r sq.f t pe r m o n th

11%

13000

110-130

10%

22000

90-110

s q.f t
Grade-A

1,541,115

Other
Grades

4.2

4,750,405

Rental and Capital value trends

The following charts show the capital and rental value trend for office properties across various
micro-markets of Kolkata:
M icro-marke ts

R e n ts

Capital Valu e

pe r sq.f t pe r m o n th

pe r s q.f t

90-120

12500-19000

Old CBD

60-75

9000-13500

Topsia

70-85

9000-11000

Ruby/Kasba

70-85

9000-11000

Salt Lake Sec-V

40-45

4400-5500

CBD

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

13

New Town

30-40

3500-4500

Old CBD: Dalhousie Sq., Strand Rd, RN Mukherjee,

Brabourne Rd, India Exchange Place, Red Cross Place, NS
Road
CBD: Park St, Camac St, Chowringhee Rd, Theatre Rd

A verage Rental Trend (Rs/sq.ft/month)

120
100
80
60
40
20
0
FY2006

FY 2007

Park St/ Camac St

Ruby/Rashbehari

FY2008

FY2009

FY2010

Dalhousie
Rajarhat/New Town

FY2011

FY2012

FY2013

Park Circus/Topsia
Salt Lake

In the first quarter 2013, the weighted average rentals for Grade A office space increased
significantly in the CBD and Rashbehari Connector micro-markets due to the infusion of new
supply at higher rents. However the older commercial buildings in these micro-markets
continue to remain stable. In other micro-markets, the weighted average rentals have remained
stable. The Grade A vacancy level increased to 33% due to the infusion of supply in locations
such as Salt Lake, Rajarhat. The overall vacancy level for the city has increased to 28%.
Considering the rise in vacancy levels, most of the developers have slowed down the pace of
construction of projects in PBD and SBD locations. A significant development is a few IT
companies shifted their operations and vacated large spaces from the PBD locations.

4.3

Industrial overview

Dankuni
It is a fast-growing industrial township in Kolkata, it is part of the Hoogly District within the
administrative area covered by KMDA (Kolkata Metropolitan Development Authority) It is well reachable by road or trains from Howrah & Sealdah and Santragachi and is on Dankuni junction
rail station is The Airport, situated 25 Km from Dankuni. Major Industries like Mother Diary,Coca
Cola, Dankuni Coal Complex Ltd., Food Corporation of India, Anmol Biscuits and Nestle
Warehouse have been established. A Standard Design Factory is being developed by South City
Group. According to the Kolkata Metropolitan Development Authority (KMDA) the Dankuni
Industrial Township project area is 4,846 acres (19.61 km2) of which 4,069 acres (16.47 km2) is
township area and 777 acres (3.14 km2) is earmarked as industrial area.
Uttarpara near Dankuni has the manufacturing units of United Spirits Distilliery, Shalimar Wire
Products, and Hindustan Motors.

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

15

Bantal a
Calcutta accounts for 25% of Indias leather production. The Calcutta Leather Complex at
Bantala in east Kolkata is a 1,100-acre complex was earmarked Leather Complex and a special
economic zone (SEZ) for information technology (IT) companies. A large large part of the 500
tanneries that operate in Kolkata has been relocated here. The park was developed by ML
Dalmiya & Co Ltd. on Built-Operate-Transfer model.
Howrah
Once called The Sheffield of the East, Howrah was the heart of Industrial Kolkata. Burn Standard
Company was established in 1781, a major company in heavy engineering industry, which is
now part of Bharat Bhari Udyog Nigam Limited (BBUNL). Shalimar Paints (established in 1902 by
ICI) was the first major paint manufacturing plant in India. There are a large number of Jute Mills
and small foundry Industries. There are small engineering firms all over Howrah, particularly
around Belilios Road area near Howrah station.
BT Road
Barrackpore Trunk Road is an impotant industrial corridor, manufacturing units in the locality
include WIMCO, Emami, Titagarh Wagons, Ishapore Gun Factory (OFB), Cossipore Gun and Shell
factory established in 1801, is one of the worlds oldest operating armament factory in the
world.
Taratal a-Garden Reach-Budge Budge Truck Road
It is one of the oldest Industrial corridors of the city Garden Reach Shipbuilders & Engineers was
establaished in 1884 and the Port of Kolkata was commissioned in 18 70. It has manufacturing
units from various industries like Phillips, Britannia, Eveready, ITC, Vesuvius India, Linde and
Apeejay Industries. It is home Batas largest plant in India.

5.

The properties

Knight Frank (India) Pvt. Ltd. has been appointed to estimate pre-tax valuation for the following
commercial property

5.1

Modern Food I ndustri es, Budge Budge Trunk Road, Taratal a

Location: Taratala Industrial Area (Kolkata Port Trust)

The subject micro-market is an established industrial area with an extensive range of industries
present in the locality, where Modern Food Industries (India) Ltd. (MFIL) is also situated. The
vicinity also hosts industries varying from food processing to household appliances, electrical
to heavy engineering to refractoriness, ship building & other marine based facilities, etc. Some
of the prominent industrial groups operating in this vicinity area are Garden Reach Ship
Builders, HLL, KEC, Britannia Biscuits, Phillips, ONGC, Balmer & Lawrie, Hindustan Petroleum,
Coca Cola, Ingersoll Rand, Webel Power Electronics, Union Carbide, ESAB India, Vesuvius India
Ltd., etc. Several reputed educational institutes like the Institute of Hotel Management Catering
Technology & Applied Nutrition and Marine Engineering College & Research Institute are also
present in this vicinity. Moreover, there are a number of industrial godowns in the locality that
only adds to the merits of this area. The vicinity also hosts highly advanced medical centres that
are in close distant to the citys industrial belt.

(Source: Knight Frank Research, Google Maps)

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

17

5.2

Site

Modern Food Industries (India) Ltd. (MFIL) was set up in 1965 as Modern Bakeries (India)
Limited. It was set up under the Colombo Plan and was a wholly central government owned PSU
until 2000, when it was taken over by HUL.

The building is surrounded at its boundary by the following:

Northern side: Industrial area

Southern side: Britannia Industries / Stone India

Eastern side: Institute of Hotel Management, catering technology and nutrition

Western side: Industrial area

5.3

Connectivity and Neighbourhood

The immediate neighbourhood of the property primarily comprises industrial and educational
institutes like the Marine Engineering College.

The property is located in close proximity to several civic amenities such as educational
institutes, recreational areas, employment destinations, shopping areas, hospitals, police
station etc. Distance of the civic amenities and transport nodes from the property is mentioned
below:
H o spitality

Taj Bengal 9 km.

R e sidential Area

Alipore 1 km.

In dustrial Area
Co mmercial Area

0 km
Park Street 10 km.

P o rt
Airport

2 km.
25 km. NSC Bose International Airport

Bu s Depot

0 km. CSTC Bus Depot

Education

0 km.

P o lice Station

1 km. Taratala Police Station

5.4

SWOT analysis
Stre n g th

We akn e s s

The industrial land parcel is situated in the heart

of Kolkata, near Kolkata Port and is easily
accessible from the Howrah Railway Station.

Taratala is an old industrial estate and its

Old established industrial estate comprises

roads are relatively congested, therefore

diverse industries, warehouse s, logistical and

resulting in a slower movement of the cargo.

service support. Synergy created by an industrial

ecosystem.
Oppo rtu n ity

Land leased by the KoPT is at a nominal rate when

T hre ats

compared to the market value of the freehold

land on the Diamond Harbour Road.

Decline of the KoPT as a major port is due to

the high cost of dredging.

Emergence of other Industrial townships like

Dankuni.

5.5

Legal and Regulatory aspects

Legal ti tl e

As stated in the general terms of business, we do not undertake searches or

inspections of any kind (including web based searches for title information, searches in
any publicly available land registers or land revenue cards).

We have not been provided by any land registry entries, title documents or reports on
the title.

In our report, we have assumed a clear and marketable title and that all documentation
is satisfactorily drawn.

We have assumed that the property is not subject to any unusual or onerous covenants.
However restrictive covenants of the lease, with respect to transfer of lease have been
assumed to be possible with the permission of KoPT; however change is land use may
not be possible.

We have not received any information from the client regarding the ownership of the
subject land parcel. For the purpose of this report, we have assumed that the title of the
property is leasehold; wherein the lessor is Kolkata Port Trust.

We recommend that our understanding of all legal title issues is referred to your legal
advisors for their confirmation that our understanding is correct. If any matters come to

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

19

light as a result of your legal advisors review, we recommend that these matters are
refereed back to us, as this information may have an important bearing on the values.

Regul atory aspects

As per client, the land measuring 8194.44 sq.m has been given to Modern Food
Industries (India) Ltd. (MFIL) on lease for a period of 99 years by the Kolkata Port Trust.

We have not reviewed the said lease agreement between the Kolkata Port Trust and
Modern Food Industries (India) Ltd. (MFIL), and the terms & conditions therein.

The general terms of lease for Kolkata Port Trust Land is restriction on transfer of lease
and sub-lease therefore transferring, assigning, subletting, under letting, parting with
possession of the subject premises shall be strictly prohibited.

However, on the specific instructions of the clients the valuation exercise has been
based on the assumption that the transfer of lease will be permitted by the Kolkata Port
Trust.

The current land usage of the subject property is industrial. Based on discussions with
the concerned authorities of KoPT and Kolkata Metropolitan Development Authority, it
was revealed that current change in land usage is hardly possible.

In any case of transfer of lease, it would be treated as a fresh lease. The rentals of the
properties will be as per those fixed by the landlord of the property i.e. KoPT. Further the
initial lease period would be 30 years instead of the earlier period of 99 years.

5.6

Site inspection and Observations

As stated in the general terms of business, we have not undertaken a building or site
survey of the property. We have only conducted an external site inspection of the
property.

We have not been provided with a copy of the ground condition report for the site. We
have assumed that there are no adverse ground or soil conditions and that the load
bearing capacity of the site is sufficient for the buildings constructed / being
constructed / proposed to be constructed.

Our site observation did not bring out any significant flood risk to the site and hence for
the purpose of the valuation we have considered the site to be under low flood risk.

Knight Frank is not qualified to undertake scientific investigations of sites or buildings

to establish the existence or otherwise of any environmental contamination, nor do we
undertake searches of public archives to seek evidence of past activities which might
identify potential for contamination.

Subject to above, while carrying out our valuation inspection, we have not been made
aware of any uses conducted at the subject property that would give cause for concern
as to possible environmental contamination. Our valuation based on an assumption
that the subject property is unaffected.

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

21

6.

Valuation analysis

6.1

Methodology

Depending upon the type, nature, location of the property, purpose of valuation, and market
dynamics, we have used the rent capitalisation method under the income approach to estimate
the value for the subject property.

I ncome approach Rent capi tal i sati on method

The method adopted for valuing such land is the Net Rental Capitalised Method or simply the
Rental Method of Valuation, i.e., finding out the capitalised value of the net income receivable
by the virtue of possessing the asset.

The land belonging to Kolkata Port Trust is a leasehold land. The current land usage of the
subject property is industrial and the total land has been categorised into first belt, i.e., land
within 50 mt. from the main road and second belt, i.e., the subject land thus is in first belt.

The land valuation has been done keeping in mind the lessees interest in the subject land on
which it had invested capital on acquiring it on lease and with the intention of deriving benefits
from it by way of carrying on business and subsequent generation of profits out of it.
Dual rate capi tal i sati on factor or Dual rate year s purchase

A Year Purchase (YP) is used to capitalise income from a depreciating investment (e.g.: a
leasehold interest). By providing a sinking fund the investor is able to regard this leasehold
interest/investment as a perpetual investment.

The capital value of the lease interest is obtained by multiplying this factor (YP) to a project
income from an investment; such that the investor receives a (1) remunerative return on capital,
similar to long term investment (2) a notional sinking fund is set aside at a accumulative rate of
return to replace the original cost of investment at the end of useful life.

(
YP=

)
(

(i)= remunerative rate

Sn= sinking fund factor
(s)=sinking fund rate
(n)= number of income receipt during the lease term

Further, market rentals may remain indifferent irrespective of the change in land usage of the
subject property as the rentals are fixed by KoPT currently at price of Rs. 3,000 3,059 per 100
sq. mt. per month i.e. Rs. 3 per sq. ft. per month.

As per our market survey the prevailing market rentals of the industrial warehouse in areas
under KoPT like Budge Budge Truck Road, Taratala, Hide Road, Garden Reach, is in the range of
Rs 22-26 per sq.ft per month excluding property tax and CAM Charges. The market rent of land
has been calculated from the market rate of the warehouse prevailing within KoPT area as
follows:

Warehouse Rent

Rent for Structure

Ground Coverage
Effective M arket Rent
for underlying land

6.2

25

15
60%

Yield @ 12% on
Replacement
Cost of Rs 1500

6.00

Valuation bases

The valuation base for the report is market value. Market value is defined within RICS valuation
standards as:

The estimated amount for which an asset or liability should exchange on the date of valuation
between a willing buyer and a willing seller in an arms length transaction after proper
marketing wherein the parties had each acted knowledgeably, prudently, and without
compulsion.

6.3

Valuation assumptions

Our valuation is based on a number of assumptions that have been drawn to your attention in
general principles and limited conditions (Annexure I), General assumptions (Annexure II), and
within this report

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

23

6.4

Valuation considerations: Rent capitalisation method

In estimation of the market value of the subject property, we have considered long
term lease and vacant possession of the property

Valuation has been done on as is where basis is considering the property is designed
to be an industrial unit in the light manufacturing sector

Location and locational advantages / disadvantages

Characteristics of the land (i.e., freehold / leasehold)

Shape & size of the land

Utilisation & usage possibilities

Period of the lease ( upon transfer of lease, KoPT will enter into a new lease agreement
for 30 years)

Present market lease rental per month as ground rent for the leased land/or industrial
asset

Prevailing municipal rules and regulations

The FSI utilisation of 0.6 has been assumed in line with the land usage and norms for
the Kolkata Port Trust land.

TOTAL GROSS RENT FOR 30 YEARS#

148,625,184

NO.OF YRS.

30

(30 yr) AVG GROSS LEASE RENT =

4,954,173

(30 y) AVG MARKET GROSS RENT#

10,490,042

RENT PROFIT

5,535,870

Dual Rate Capitalization Factor or Year Purchase

Capital Value in Case of Lease Transfer

Remunerative Rate (on Capital) i

12%

Accumulative or Sinking Fund Rate s

2.5%

No of income receipt during the term n

YP (Year's Purchase)

# please refer annexure IV for detailed cash flows.

30
7.00

7
38,772,665

(can be interpreted as
Bank rate % + LT inflation)
Nominal SB Deposit Rate

7.

Summary

On the basis of assumptions, methodology of valuation and on the belief that there are no
onerous restrictions, covenants or unusual outgoings, we are of the opinion that the achievable
market value of the subject property as I NR 38.77 million ( Rupees Thirty Ei ght Mi l l i on S even

Hundred and S eventy S even) is fair and reasonable.

For Kni ght Frank (I ndi a) P ri vate Li mi ted,

P radeep K. Gandhi
MRICS, Regional Head (West) Research and Advisory Services

Raj i v P arekh
Lead Consultant Research and Advisory Services

S ampuran Das
Consultant Research and Advisory Services

Note:
Our valuation is only for use of the party to whom it is addressed and no responsibility is
accepted to any third party for the whole or any part of its content

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

25

8.

Disclaimer

The statements, information and opinions expressed or provided in this publication are
intended only as a guide to some of the important considerations that relate to property
investment. Although we believe they are correct and not misleading, with every effort having
been made to ensure that they are free from error, they should not be taken to represent, nor are
they intended to represent, investment advice or specific proposals, which must always be
reviewed in isolation due to the degree of uniqueness that will attach thereto.

Neither Knight Frank nor any persons involved in the preparations of this publication give any
warranties as to the contents nor accept any contractual, tortuous or other form of liability for
any consequences, loss or damage which may arise as a result of any person acting upon or
using the statements, information or opinions in the publication. This publication is
confidential to the addressee and is not to be the subject of communication or reproduction
wholly or in part.

Knight Frank (India) Private Limited

1s t and 2nd Floor, Paville House
Off Veer Savarkar Road
Prabhadevi
Kolkata 25
Tel: (022) 67450101
Fax: (022) 67450202
www.knightfrank.com

Annexure I: General principles and Limiting conditions

General principles adopted and Limiting conditions in the preparation of valuations and reports
These are the general principles and limiting conditions upon which our valuation and reports
are normally prepared; they apply unless we have specifically mentioned otherwise in the body
of the report.

1)

Confi denti al i ty
Our valuation and reports are confidential to the client or to whom they are addressed for
the specific purpose to which they refer.

They may be disclosed to other professional

advisors assisting the client in respect of that purpose, but the client shall not disclose the
report to any other party. No responsibility is accepted to any other party and neither the
whole, nor any part, nor reference thereto may be included in any published document,
statement or circular, or published in any way, nor in any communication with third parties,
without our prior written approval of the form and context in which it will appear.

2) Use of report
The opinion of value expressed in this Report shall be used for the purpose stated in this
report only. We are not responsible for any consequences arising from the Valuation being
quoted out of context.

3) S ource of i nformati on
Where it is stated in the Report that information has been supplied by the sources listed,
this information is believed to be reliable and no responsibility is accepted should it prove
not to be so. All other information stated without being attributed directly to another party
is obtained from our searches of records, examination of documents or enquiries with the
relevant authorities. This report has been prepared on the basis that full disclosure of all
information and facts that may affect the valuation have been made known to ourselves and
we cannot accept any liability or responsibility in any event, unless such full disclosure has
been made.

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

27

4) Legal ti tl e
Whilst we may have inspected the title of the property as recorded in the Register Document
of Title, we cannot accept any responsibility for its legal validity.

5) Town pl anni ng and other statutory regul ati ons

Whilst we may make verbal enquiries or gather information on Town Planning, we do not
normally carry out requisitions with the various public authorities to confirm that the
property is not adversely affected by any public schemes such as road and drainage
improvements. If reassurance is required, we recommend that verification be obtained from
your lawyers or other professional advisors.

Our Valuations are prepared on the basis that the premises and any improvements thereon
comply with all relevant statutory regulations. It is assumed that they have been, or will be
issued with a Certificate of Fitness for Occupation by the competent authority.

6) Leases and Tenanci es

Enquiries as to the financial standing of actual or prospective lessees or tenants are not
normally made unless specifically requested. Where properties are valued with the benefit
of lettings, it is therefore assumed that the lessees or tenants are capable of meeting their
obligations under the lease or tenancy and that there are no arrears of rent or undisclosed
breaches of covenant.

7) Devel opment agreements

Unless otherwise stated, no allowances are made in our valuation for any joint venture
agreement, development right agreement or other similar contracts.

8 ) S i te surveys
We have not conducted any boundary checks; however, we assume that the dimensions
correspond with those shown in the title document, certified plan or any relevant
agreement.

9 ) S tructural surveys
We have neither carried out a building survey nor any testing of services, nor have we
inspected those parts of the property which are inaccessible.

We cannot express an

opinion about or advice upon the condition of uninspected parts and this Report should not
be taken as making any implied representation or statement about such parts. Whilst any
defects or items of disrepair are noted during the course of inspection, we are not able to
give any assurance in respect of rot, termite or pest infestation or other hidden defects.

10 ) S i te condi ti ons
We do not normally carry out investigations on the property or neighbouring land (including
the past and present uses) in order to determine the suitability of the ground conditions
(including contamination or potential for contamination) and services for the existing or any
new development, nor have we undertaken any archaeological, ecological or environmental
surveys.

Unless we are otherwise informed, our Valuations are on the basis that these

aspects are satisfactory and that, where development is proposed, no extraordinary

expenses or delays will be incurred during the construction period.

11) Del eteri ous or Hazardous materi al s

No investigation was carried out to determine whether or not any deleterious or hazardous
materials have been used in the construction of the properties, or have since been
incorporated and we are therefore unable to account or report for such in our report.

12) Di seases and I nfestati ons

Whilst due care is taken to note the presence of any disease or infestation, we have not
carried out any test to ascertain possible latent infestations or diseases affecting crops or
stock. We are therefore unable to account for such in our Report.

13) Outstandi ng debts

In the case of buildings where works are in hand or have recently been completed, we do
not normally make allowance for any liability already incurred, but not yet discharged, in
respect of completed works, or obligations in favour of contractors, sub-contractors or any
members of the professional or design team.
14 ) Taxati on, Encumbrances, S tatutory noti ces and Outgoi ngs
Unless otherwise stated, no allowances are made in our valuation for any expense of
realisation or for taxation which might arise in the event of a disposal, deemed or
otherwise. We have considered the property as if free and clear of al l charges, lien and all

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

29

other encumbrances which may be secured thereon. We also assumed the property is free
of statutory notices and outgoings.

15) A ttendance
The instruction and the valuation assignment do not automatically bind us to attendance in
court or to appear in any enquiry before any government or statutory bodies in connection with
the analysis unless agreed when the instruction is given.

Annexure II: General assumptions

We assume that information provided by client or its representative for this valuation
for all relevant projects is true and accurate. It includes details of measurements of land
and built up area, etc.

We have not gone through the legal aspects like documents of title deed, lease deed,
revenue records, court matters (if any), and documentation like joint development with
other companies. We also assume for this valuation assignment that the title and
development rights of all the properties lies with the Company and is clear, marketable
and free of all encumbrances, restrictions, easements or charges which may have
detrimental effect upon the value of the property. It is also assumed that company has
paid all property related taxes.

We have neither carried out any soil testing nor structural surveys nor are we experts in
the field of structural survey. Therefore, we do not give any assurance that properties
are free from structural defect. If any investigation identifies any structural defect in the
property our report may require revision. Neither are we the experts in the town
planning to factor the town planning aspects in the project. Sewers, main services and
the roads giving access to the property have been provided.

We assumed that all the constructed structures and proposed construction is/will be
free from harmful materials and/or techniques. Our valuation is on the basis that no
such materials or techniques have been used.

Unless advised by the company or representative of the company, we do not normally

make allowance for any liability already incurred, but not yet discharged, in respect of
balance land cost, completed works, or obligations in favour of contractors,
subcontractors or any other professional.

We have assumed that demand; supply, pricing, fiscal and monetary policies of
Government, taste of public will remain same as on date of valuation over the period of
time of development. All of these factors are in strong relation with the value of
property. Any radical change in any of the factor may affect estimation at large.

Unless advised by the company or representative of the company, no allowance is

made for any expense of realisation or for taxation, which may arise in the event of a
disposal. The property is considered as if free and clears of all mortgages or other
charges that may be secured thereon.

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

31

For the purpose of this report we have assumed that the property is not subject to
environmental contamination. However, as we are not experts in this field, we
recommend that an appropriate
assumptions.

If

the

subsequent

consultant may be engaged to confirm our

investigation

identifies

contamination on the site, our report may require revision.

any

environmental

Annexure III: Photographs

Modern Food I ndustri es (I ndi a) Ltd. (MFI L)

Bri tanni a I ndustri es

Budge Budge Trunk Road at Taratal a

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

33

Annexure IV: Cash flows

CALCULAT ION OF RENT BEING PAID T O KOLKAT A PORT T RUST BY MODERN AS ON APRIL 2014
RENT PER MONT H

(x) 12 RENT PER %INCREASE 10% KMC MC T AX GROSS RENT

ANNUM
IN RENT
PER ANNUM
(C+I)
(AxB)
PER ANNUM

(Rs.)

(Rs.)

(Rs.)

12

2,997,084

299,708

3,296,792

Yr 2

2,997,084

299,708

3,296,792

Yr 3

2,997,084

299,708

3,296,792

Yr 4

2,997,084

299,708

3,296,792

Yr 5

3,446,647

344,665

3,791,311

Yr 6

3,446,647

344,665

3,791,311

Yr 7

3,446,647

344,665

3,791,311

Yr 8

3,446,647

344,665

3,791,311

Yr 9

3,446,647

344,665

3,791,311

Yr 10

3,963,644

396,364

4,360,008

Yr 11

3,963,644

396,364

4,360,008

Yr 12

3,963,644

396,364

4,360,008

Yr 13

3,963,644

396,364

4,360,008

Yr 14

3,963,644

396,364

4,360,008

Yr 15

4,558,190

455,819

5,014,009

Yr 16

4,558,190

455,819

5,014,009

Yr 17

4,558,190

455,819

5,014,009

Yr 18

4,558,190

455,819

5,014,009

Yr 19

4,558,190

455,819

5,014,009

Yr 20

5,241,919

524,192

5,766,111

Yr 21

5,241,919

524,192

5,766,111

Yr 22

5,241,919

524,192

5,766,111

Yr 23

5,241,919

524,192

5,766,111

Yr 24

5,241,919

524,192

5,766,111

Yr 25

6,028,207

602,821

6,631,027

Yr 26

6,028,207

602,821

6,631,027

Yr 27

6,028,207

602,821

6,631,027

Yr 28

6,028,207

602,821

6,631,027

Yr 29

6,028,207

602,821

6,631,027

Yr 30

6,932,438

693,244

7,625,681

Yr 1

249,757

(Rs.)

15.00%

15.00%

15.00%

15.00%

15.00%

15.00%

RENT PER
MONT H PER
SMT .

MARKET RENT CALCULAT ION AS ON April 2014

RENT
% INCREASE
PER
IN RENT
10% KMC MC
X 12
RENT PER
ANNUM
PER ANNUM
T AX
ANNUM
PER SMT .

(Rs.)

Y1

64.56

12.00

774.72

GROSS RENT
(E+I)

(Rs.)

(Rs.)

(Rs.)

6,346,072

634,607

6,980,680

Y2

6,346,072

634,607

6,980,680

Y3

6,346,072

634,607

6,980,680

Y4

6,346,072

634,607

6,980,680

Y5

7,297,983

729,798

8,027,782

Y6

7,297,983

729,798

8,027,782

Y7

7,297,983

729,798

8,027,782

Y8

7,297,983

729,798

8,027,782

Y9

7,297,983

729,798

8,027,782

Y10

8,392,681

839,268

9,231,949

Y11

8,392,681

839,268

9,231,949

Y12

8,392,681

839,268

9,231,949

Y13

8,392,681

839,268

9,231,949

Y14

8,392,681

839,268

9,231,949

Y15

9,651,583

965,158

10,616,741

Y16

9,651,583

965,158

10,616,741

Y17

9,651,583

965,158

10,616,741

Y18

9,651,583

965,158

10,616,741

Y19

9,651,583

Y20

11,099,320

Y21

15%

15%

15%

965,158

10,616,741

1,109,932

12,209,252

11,099,320

1,109,932

12,209,252

Y22

11,099,320

1,109,932

12,209,252

Y23

11,099,320

1,109,932

12,209,252

Y24

11,099,320

1,109,932

12,209,252

Y25

12,764,218

1,276,422

14,040,640

Y26

12,764,218

1,276,422

14,040,640

Y27

12,764,218

1,276,422

14,040,640

Y28

12,764,218

1,276,422

14,040,640

Y29

12,764,218

1,276,422

14,040,640

Y30

14,678,851

1,467,885

16,146,736

15%

15%

15%

Valuation Report Industrial property located in Taratala, Kolkata

Prepared on behalf of Switz Food Pvt. Ltd. Apr 2014

35