Final Valuation Report - DMI - FEB 2014

Valuation of a land parcel
Located in Tukwada, Vapi, Gujarat

Prepared on behalf of
DMI Finance Private Ltd.
February 2014
Contact Details:
DMI Finance Pvt. Ltd.
Ashi Bhavan, Ground Floor,
19, Rouse Avenue,
New Delhi - 110002
Knight Frank India Pvt. Ltd.
Paville House, Near Twin Towers,
Off Veer Savarkar Marg, Prabhadevi,
Mumbai - 400025
Pradeep Gandhi: pradeep.gandhi@in.knightfrank.com
T +91 22 6745 0101 F +91 22 6745 0202

Paville House, Near Twin Tower, Off Veer Savarkar Marg, Prabhadevi, Mumbai 400025
KnightFrank.co.in
Knight Frank (India) Pvt. Ltd.
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.
On the instructions received from DMI Finance Pvt. Ltd. (the client) vide an engagement letter
dated January 22, 2014 and our subsequent correspondence, Knight Frank India Pvt. Ltd. has
been appointed to undertake the valuation of a 31.3-acre land parcel located in Vapi. Knight
Frank India Pvt. Ltd. has estimated the market value of the subject property. Based on the
instructions received from the client, we have carried out pre-tax* valuation.
Client Name
DMI Finance Pvt. Ltd.
Address & Location
Tukwada Village, Vapi, Valsad District, Gujarat
Purpose of
Internal
Valuation
Description
Valuation of a 31.3-acre land parcel for proposed industrial use
Land Area
Land parcel measuring 31.3 acres has been converted to non-agricultural industrial
use
Tenure of Land
Freehold
Valuation Approach
Market Approach
Valuation Date
February 3, 2014
Market Value
` 640 mn.
(Land Parcel)
Valuers Details
Pradeep Gandhi, MRICS

Regional Head (West) Research & Advisory Services
In preparing our valuation reports, no allowances are made for any liability which 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.
Valuation Report Valuation of land parcel for proposed industrial use in Vapi, Gujarat
Prepared on behalf of DMI Finance Pvt. Ltd. February 2014
ii
Abbreviations & Measurements

Abbreviations
FSI
Floor Space Index
CBD
Central Business District
Indian Rupee
Mn.
Million
CPI
Consumer Price Index
CRR
Cash Reserve Ratio
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
SLR
Statutory Liquidity Ratio
NA
Not Applicable
USD
United States Dollar
EoU
Export Oriented Unit
MoU
Memorandum of Understanding
SEZ
Special Economic Zone
Measurements
1 acre
43,560 sq. ft.
1 mn.
10 lakh
1 sq. km.
100 Ha.
1 sq. mt.
10.764 sq. ft.
1 Ha.
2.47 acres
iii
Table of Contents
Executive Summary .................................................................................................................... ii
Abbreviations & Measurements ................................................................................................. iii
Table of Contents ....................................................................................................................... iv
1.
Instructions ............................................................................................................... 6
1.1
Engagement of Knight Frank India Pvt. Ltd. .................................................................. 6
1.1.1
Instructions ............................................................................................................... 6
1.1.2
Valuation Standard..................................................................................................... 6
1.1.3
Purpose of Valuation .................................................................................................. 6
1.1.4
Conflict of Interest ...................................................................................................... 6
1.1.5
Currency and Measurement ......................................................................................... 6
1.1.6
Responsibility to Third Parties ..................................................................................... 6
1.1.7
Disclosure and Publication .......................................................................................... 6
1.1.8
Limitations on Liability ................................................................................................. 7
1.1.9
Vetting ....................................................................................................................... 7
1.2
Scope of Enquiries and Investigations ........................................................................... 7
1.2.1
Inspection .................................................................................................................. 7
1.2.2
Enquiries .................................................................................................................... 7
1.2.3
Legal Parameters of Property ........................................................................................ 7
1.2.4
Environmental Aspects ................................................................................................ 7
1.2.5
Information Provided .................................................................................................. 8
1.3
Basis of Valuation ...................................................................................................... 8
1.3.1
Market Value ............................................................................................................. 8
1.3.2
Date of Valuation........................................................................................................ 8
2.
Economic Snapshot: India ........................................................................................... 9
2.1
Economic Indicators (December 2013) .......................................................................... 9
2.2
Real Estate Indicators ................................................................................................. 9
3.
Vapi Overview ........................................................................................................... 10
3.1
Vapi ......................................................................................................................... 10
3.2
Connectivity .............................................................................................................. 10
3.3
Demographics............................................................................................................ 11
3.4
Economic Features ..................................................................................................... 11
4.
Property ................................................................................................................... 14
4.1
Location ................................................................................................................... 14
4.2
Site: ......................................................................................................................... 14
iv
4.3
Legal Aspects ........................................................................................................... 15
4.4
Site Inspection and Observation ................................................................................. 16
4.5
Connectivity and Neighbourhood ................................................................................ 16
5.
Valuation Analysis ..................................................................................................... 17
5.1
Methodology ............................................................................................................ 17
5.2
Valuation Bases ........................................................................................................ 18
5.3
Valuation Assumptions .............................................................................................. 18
5.4
Valuation Consideration ............................................................................................. 18
5.5
Valuation Analysis ..................................................................................................... 19
5.6
Comparable .............................................................................................................. 19
6.
Summary .................................................................................................................. 22
Annexure I: General Principles and Limiting Conditions ............................................................. 23

Annexure II: General Assumptions ........................................................................................... 27
Disclaimer ............................................................................................................................ 33
1.
Instructions
1.1
Engagement of Knight Frank India Pvt. Ltd
1.1.1
Instructions
On the instructions received from DMI Finance Pvt. Ltd. (the client) vide an engagement letter
dated January 22, 2014 and our subsequent correspondence, Knight Frank India Pvt. Ltd. has
been appointed to undertake the valuation of a 31.3-acre land parcel located in Vapi. Based on
the instructions received from the client, we have carried out the pre-tax* valuation.
1.1.2
Valuation Standard
The exercise has been carried out in accordance with the International Valuation Standard vide
Red Book published by Royal Institute of Chartered Surveyors (RICS).
1.1.3
Purpose of Valuation
The client has confirmed that the valuation report is required for internal assessment.
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 the quality assurance procedures of Knight Frank India Pvt
Ltd.
1.2
Scope of Enquiries and Investigations
1.2.1
Inspection
We were instructed to carry out an inspection of the property. Our inspection of the property was
undertaken on January 29, 2014 by Mr. Sampuran Das MBA (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 provided with list of survey numbers, area details for the respective survey
numbers and village map. However, we have not been provided with the title and legal
documents pertaining to the property. 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 may have detrimental effect upon the valuation provided.
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 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. We have been provided with the list of survey numbers and the area details of the
land parcel (as per client):
Location
Area (sq. mt.)
Industrial NA Dated 31.12.13
98,034
28,631
Total
Total Area (in acres)
1.3
126,665
31.3
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 freehold interest in the property in its current physical condition is the
basis of valuation.
Valuation has been made on the assumption that the property is sold in the open market
without the benefit of a deferred term contract, leaseback, joint venture, management
agreement or any similar arrangement which would serve to alter the value of the properties.
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 has been considered as February 3, 2014.
2.
Economic Snapshot: India
2.1
Economic Indicators (December 2013)

Parameter
Value
GDP Growth Rate Q1 2013-14 (at 2004-05 prices)
4.80%
Per Capita Income 2012 2013 (Current prices)
` 68,757
Inflation CPI (August 2013; Provisional)
9.52%
CRR and SLR
4.00% and 23.00%
Repo Rate
7.50%
Bank Rate
9.50%
Base Rate
9.70 - 10.25%
`/1 USD
61.8
Risk Free Rate on Government Securities: 6.90 GS 2019
8.0907%
Risk Free Rate on 91 day Government T Bill
9.6947%
Source: MOSPI, RBI
2.2
Real Estate Indicators

Parameter
Value (` mn.)
FDI Inflow in Construction Development: Townships, Housing,

Built-up Infrastructure (April 2013 July 2013)
Built-up Infrastructure (April 2012 March 2013)
20,920
72,480
152,360
75,520
Source: http://dipp.nic.in
3.
Vapi Overview
3.1
Vapi
Vapi is an important industrial town in the southern part of the Indian state of Gujarat. It is
located between Mumbai and Surat. The industrial growth over the last decade has blurred the
physical boundaries between Daman, Vapi and Silvassa. Vapis industrial corridor includes the
areas within the municipal limit and the notified areas of Vapi. It also includes the surrounding
areas of Sarigram, Daman, Bhiland, Umargam, Morai and Silvassa. The industrial corridor
extends across an area of 284 sq. km.
Location Map of Vapi
3.2
Connectivity
Vapi has an excellent transport network. National Highway (NH)-8, which connects Mumbai with
Ahmedabad, bisects Vapi into two parts the eastern part, which includes the industrial and
newly constructed residential areas, and the western part, which is the original location of the
town. Vapi is also an important railway station on the Western Railway (Mumbai-Vadodara main
line) as many important trains halt here. Daman Port and Mumbai Port are at a distance of about
15 km. and 170 km. from the Vapi Industrial Estate respectively. The closest airport is at
10
Mumbai, 170 km. south of Vapi. There is also an air strip at Daman, which is currently used by
the Coast Guards.
3.3
Demographics
According to the 2011 Census, Vapis municipal area has a population of 71,400, while the
notified area has a population of 23,844. Basic information on population (2001) in villages
around Gujarat Industrial Development Corporation (GIDC) Vapi is as follows:
3.4
Villages
Area (Ha.)
Population
Morai
309
951
Bagwada
31
907
Tukwada
815
3,832
Salvav
802
4,046
Balitha
403
34,831
Total
2,360
44,567
Economic Features
Vapi offers a well-developed industrial infrastructure which includes the supply of water
(supplied by the GIDC) and power (supplied by the Gujarat Electricity Board [GEB]). Social
infrastructures like educational institutes, hospitals, communication network, fire department,
etc. are also available here. Many residential areas have developed around this industrial belt.
Vapi has one of the largest common effluent treatment plant (CETP) designed by the National
Environmental Engineering Research Institute (NEERI) in collaboration with Kirloskar. The plant
has a capacity of 55 MLD. of effluent treatment.
Developed by the GIDC, the Vapi Industrial Estate came into existence in 1967-68. The estate is
fully developed and operational. It is spread across 1,140 Ha. and houses nearly 759 industries,
majority of which are small-scale units. It is primarily a chemical estate where about 70 % of the
total industries manufacture chemicals such as dyes and dyes intermediates, pigments,
pesticides, fine chemicals and pharmaceuticals. The remaining 30% include paper mills,
packaging, engineering, plastic, textiles, food processing, printing ink, etc.
Total area of GIDC Vapi: 1,140 Ha.

Area for industrial: 580 Ha.
Area for commercial: 30 Ha.
Area for residential: 103 Ha.
Other PP/utilities: 427 Ha.
11
Economic Base and Drivers for the region

Vapis geographical location and easy accessibility to the port infrastructure have attracted a
large number of manufacturing businesses. There are some 3,000 industrial units and 200
commercial establishments in the industrial estate of Vapi. Some of the key large-scale
industries are enumerated below:
Welspun India Ltd., the largest producer of terry towel in Asia, operates a state-of-theart, fully integrated terry towel unit at Morai Village Vapi, Gujarat.
3.5
Alok Industries operates a large blended cotton fabric plant in Morai Village Vapi.
Raymond's has set up its third worsted fabric unit near Morai Village, Vapi.
Land Price Gradient in GIDC Estates
12
Vapi
Sarigram
Umargam
Vapi
Dungra
Gundlav, Valsad
Pardi
Secondary Rate (INR Mn/acre)

30-45
40-45
40-45
40-50
24-30
28-35
Based on our interaction with market intermediaries, we understand that Vapi & Dungra GIDC
secondary land prices have appreciated by (15-20) % due to scarcity; this has led to investors
and industries shifting towards villages of Morai, Tukvada and Pardi GIDC. Further Sarigram &
Umergam GIDC land price have appreciated by (15-20) % due the proposed new port at
Umgargam. Overall land prices have appreciated by 10-15% is past one year.
13
4.
Property
4.1
Location
The subject property is a 31.3-acre land parcel located in Tukwada Village, Desai Falia, Vapi,
Valsad District, Gujarat. The map below depicts the approximate location of the subject
property.
4.2
Site:
As per the client, the land area details have been stated below:
Location
Area (sq. mt.)
98,034
28,631
Total
126,665
31.3
The industrial non-agricultural (NA) certificate has been received by M/s Roha Agri Developers
Pvt. Ltd. under section 65/B of the Bombay Land Revenue Code, 1879. The subject land parcel is
located 2.5 km. off NH-8 in Tukwada. Currently, it is under private plantation which includes
plantation of orchards, mango, chiku, sal Wood/teakwood and papaya; the plantations divides
this large land parcel in different sectors/zones, connected by internal (kutcha rasta) farm
pathways. Further we have observed presence a small farm house, greenhouse and nursery. The
property is accessible through an internal village road off NH-8.
14
The internal Tukwada village road, from the NH-8 side is being widened to accommodate future
growth; however, as of now it is not a tarmac road. The access road to the subject land parcel is
a narrower section of the village road (less than 15 ft in width). The subject property has (1000 ft
approx.) frontage on the narrow section of the village road.
From our understanding based on interactions with locals, the approach road would also be
widened in due time however as of now no such activity was observed. Based on our
interactions with market participants, we understand that, in general minimum 30 ft road width
is necessary for getting Industrial NA conversion. The land parcel is plain land with large
number of trees and plantation of varied species. The subject property is bounded by a
river/canal on the southern side (the river is adjoined with the land parcel, currently there is
industrial type pump installed to provide irrigation for the large plantation). Further, being a
large land parcel, no clear demarcation of boundary was observed.
4.3
Legal Aspects
Legal Title
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
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,
restrictions, encumbrances or outgoings.
We have not received any clarification/confirmation 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 freehold.
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
light as a result of your legal advisors review, we recommend that these matters are
referred back to us, as this information may have an important bearing on the values.
15
4.4
Site Inspection and Observation
As stated in the general terms of business, we have not undertaken a site survey of the
property.
During our limited site inspection, we did not inspect any inaccessible areas.
We have not been provided with a copy of the ground condition report for the site. We
have assumed that there is 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. 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 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.
4.5
Connectivity and Neighbourhood:
The immediate neighbourhood of the property primarily consists of an agricultural land parcel.
The subject land parcel is located on the outskirts of Vapi city. Distances of the property from
the nearest civic amenities and transport nodes have been given below:
Hospitality
Fortune Hotel about 9 km.
Residential Area
Vapi City- 10 km.
Industrial Area
Railway Station
Morai Industrial Area about 3 km.

GIDC about 8 km.
Railway Station about 10 km.
Education
Poddar International School about 2.5 km.
Police Station
Police Station about 2.7 km.
Mall
Empress Mall (McDonalds) 3 km.
16
Photographs of the Subject Property
5.
Valuation Analysis
5.1
Methodology
Depending upon the type, nature, location of the property, purpose of valuation and market
dynamics, we have used a combination of comparison method under market approach. This
method is applicable to all the properties that are capable of being bought and sold in the
market. A comparison is made for the purpose of valuation with similar properties that have
recently been sold or are available for sale in the market.
Market Approach Sales Comparison Method
This method is applicable to all properties that are capable of being bought and sold in the
market. A comparison is made for the purpose of valuation with similar properties that have
recently been sold in the market and have a transaction price. The sales comparison approach
is the preferred approach when sales data are available.
Sales prices of comparable properties are usually considered the best evidence of market value
of the property being valued. Sales comparison method models the behaviour of the market by
comparing the property being appraised with similar properties that have recently been sold or
for which offers to purchase have been made. Comparable properties are selected for similarity
17
to the subject property considering attributes like age, size, shape, quality of construction,
building features, condition, design, gentry, etc. Their sale/quoted prices are then adjusted for
their difference from the subject property.
As per the prevailing micro-market practice, once achievable rates are established based on
comparable instances, we apply an aggregation and consolidation premium to arrive at the final
market value of the subject property.
5.2
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.
5.3
Valuation Assumptions
Our valuation is based on a number of assumptions which have been drawn to your attention in
General Principles and Limiting Conditions (Annexure I), General Assumptions (Annexure II),
and within this report.
5.4
Valuation Consideration
In estimation of the market value of the subject property, we have considered the property
to be freehold and free from all encumbrance and charges.
We have been informed by the client that the subject property has been converted to NA
industrial use before the date of valuation.
The market value of the land parcel has been assumed depending upon the individual
characteristics of the land parcel.
The subject property has been compared with the instances of comparable properties at the
subject micro-market. Instances have been sourced from market intermediaries and
participants.
18
5.5
Valuation Analysis
We have been appointed to estimate the pre-tax valuation of a land parcel admeasuring 31.3
acres located in Tukwada Village, Vapi, Valsad District, Gujarat. As per the client, the land area
details have been stated below:
Location
Area (sq. mt.)
98,034
28,631
Total
126,665
31.3
Market inquiries have been made for similar land parcels that have recently been sold or have
been offered for sale in the vicinity of the subject property. Our sources of market survey and
enquiries include market participants like
-
Landlords, Government employees of local authorities (Sub Registrar, etc.),
Local residents, Real estate developers, Real estate agents, etc.
In Gujarat, we have witnessed favourable government policies that have been believed to
accelerate industrialisation. Such policies have led to availability of large land parcels for
industrialisation.
5.6
Transaction/ Sales Comparable
During our market survey, we came across following instances that are available for sale in the
vicinity of subject property:
19
Comparable
Locations
Land Use
Area (acres)
Rate (INR/acre)
L1
Morai Village, next to Aloke Industries
Agricultural
10.0
15
L2
Morai Village
Agricultural
5.0
12.5
L3
Salvav Village, Vapi
Agricultural
27.0
15
Not Applicable
GIDC, Vapi
Industrial
34
Parameter
L1
L2
L3
The comparable property is smaller in The comparable property is smaller in The comparable property is similar
Physical Site Attributes
size than the subject property; size than the subject property; therefore in size than the subject property;
(Size & Topography)
therefore appropiate discount has appropiate
discount
has
been therefore no discount has been
been considered
considered
considered
Premium has been considered for Premium has been considered for No premium or discount has been
Frontage
Frontage
Frontage
assumed
Given
the
comparable
is
Given the comparable is Agricultural Given the comparable is Agricultural
Agricultural Land, Key Industrial
Land, Key Industrial Infrastructure Land, Key Industrial Infrastructure like
Infrastructure like Roads (of min 30
like Roads (of min 30 ft width), Roads (of min 30 ft width), Industrial
ft width), Industrial Power Supply,
Industrial Power Supply, Water Power Supply, Water Supply, Industrial
Industrial Infrastructure
Water Supply, Industrial Gas,
Supply, Industrial Gas, Effluent Gas, Effluent Treatment, Warehouse is
Effluent Treatment, Warehouse is
Treatment, Warehouse is absent in absent in the comparable property
absent in the comparable property
the comparable property therefore no therefore no discount has been
therefore no discount has been
discount has been considered
considered
considered
The comparable property 5 km
The subject property is located on
from NH8; therefore premium has
The comparable property is closer to narrow village road, 2.5 Km from NH 8.
been considered, road to Salvav
Connectivity, Accessibility NH8; therefore discount has been The comparable property is at a similar
village is inferior to Tukvada.
considered
distance from NH8; therefore no
Therefore premium has been
discount has been conside
considered
Valuation of Land
Sales Comparison Method
Subject
Property
Land Comparables
L1
L2
L4
Tukwada,
Desai Falia,
(Near Poddar
Int School)
Vapi
Morai Village,
Taluk: Pardi,
Vapi
(Near Aloke
Industries)
NA
Jan-13
Jul-13
Oct-13
Transaction Structure
NA
Sales
Transaction
Sales
Transaction
Sales
Transaction
Owner/Seller
NA
Company
Company
Individual
Location
Month of Transaction (Tentative)
Land/Plot Size (acres)
Morai Village,
Taluk: Pardi,
Vapi
Salvav Village
(off NH) Before
Tukwada
31.3
10
27
Non
Agricultural
(NA)
Agricultural
Agricultural
Agricultural
Known Transaction Price (INR Mn)
NA
NA
NA
NA
Land rate (INR Mn/Acre)
NA
15.00
12.50
15.00
Land Rate (INR/Sq. Ft.)
NA
344
287
344
Discount on negotiation (%)
NA
0%
0%
0%
Effective Land rate (INR Mn/Acre)
NA
15
12.5
15
Effective Land rate (INR/Sq. Ft.)
NA
344
287
344
Weightage
L1
L2
L4
Known Land Use Status
Parameter for Comparison
20
Size & Topography
30%
-5.00%
-5.00%
0.00%
Frontage
10%
10.00%
10.00%
0.00%
30%
0.00%
0.00%
0.00%
Location, Connectivity &

Accessibility
30%
-5.00%
0.00%
15.00%
Total
100%
-2.0%
-0.5%
4.5%
337
286
360
15.00%
15.00%
10.00%
Time factor
1.15
1.23
1.02
Time adjusted rate (INR/sq.ft)
388
352
369
Effective (weighted average)

discount/appreciation
Land rate in comparison to the
comparable properties (INR per
sq.ft.)
Time Adjustment
Average appreciation / market
correction of land value from the
point of transaction (% per
annum)
Material Date of Valuation
Average land rate for Agricultural

(INR per sq.ft)
Premium for Cost of Conversion
(Industrial NA) (INR/sq.ft)
Market Value of Industrial NA land
(Subject Land Parcel) (INR/sq.ft)
Average land rate (INR Mn per
acre)
Plot area of subject property
(acres)
Market Value of the Subject Land
Parcel (INR mn.)
3-Feb-14
370
100*
470
20.5
31.3
640
*Based on our interactions with market intermediaries, the official and admin fees for
conversion of agricultural land for Industrial purpose would be in the range of Rs 80-100/sq.ft.
Further the timelines required for the same would be about 3-6 months.
21
6.
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 properties listed in the table below is fair and reasonable.
Location
Tukwada, Vapi, Valsad District, Gujarat
Property
Area
Market Value
Description
(acres)
(` mn.)
31.3
640
Land
(Industrial NA)
For Knight Frank India Pvt Ltd,
Pradeep Gandhi
MRICS, Regional Head (West) Research and Advisory Services
Binita Patel
Lead Consultant Research and Advisory Services
Sampuran 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.
22
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)
Confidentiality
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) Source of Information
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 which 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.
23
4) Legal Title
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 Planning and other Statutory Regulations

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 Tenancies

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) Development Agreements
Unless otherwise stated, no allowances are made in our valuation for any joint venture
agreement, development right agreement or other similar contracts.
8) Site 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) Structural 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
24
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) Site Conditions

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) Deleterious or Hazardous Materials

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) Diseases and Infestations

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) Outstanding 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) Taxation, Encumbrances, Statutory Notices and Outgoings
Unless otherwise stated, no allowances are made in our valuation for any expense of
realization 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 all charges, lien and all
25
other encumbrances which may be secured thereon. We also assumed the property is free
of statutory notices and outgoings.
15) Attendance
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.
26
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 realization 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.
27
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 consultant may be engaged to confirm our
assumptions.
If
the
subsequent
investigation
identifies
any
environmental
contamination on the site, our report may require revision.
28
Annexure III: Alternative Valuation Based on (Quoted Comparable)

Comparable:
During our market survey, we came across following instances that are available for sale in the
vicinity of subject property:
Instance 1 L1:
The instance property is an agricultural land parcel measuring 25 acres located at
Tukwada. It is available for sale at a rate of ` 30 mn. per acre. The property is accessible
via an internal village road off NH-8.
Instance 2 L2:
The instance property is an industrial land parcel measuring 16 acres (excluding land &
building of cable factory) located at Udwada. It is available for sale at a rate of ` 25 mn.
per acre. The property is accessible via a 30-ft. road off NH-8. Further, this land parcel
has an existing cable factory on it; the land & building of the existing factory is not part
of the sale. The 16 acres surplus land has been demarcated separately with provision
for creating entry exit from the approach road.
Instance 3 L3:
The instance property is an industrial land parcel measuring 10 acres at Udwada after
the toll plaza on NH-8. It is available for sale at a rate of ` 35 mn. per acre.
Limitation: The enquiries were made for Industrial land parcels, with the perspective of setting
up a manufacturing unit. Further as communicated by us entire transaction amount would be
reflected in our books. Given the prevalence of off-balance sheet transactions in the market, the
quotes received may have been higher due to tax adjustments for sellers point of view. Keeping
in view the actual transacted values and appreciation in land value; for our valuation therefore
we have considered higher discount for negotiation.
29
Parameter
L1
The comparable property is smaller in
Physical
Site
size than the subject property; therefore
Attributes (Size &
appropiate
discount
has
been
Topography)
considered
Current land use is agricultural however;
NA Convertion is possible with
permisible residential, low intensity
Land Use
polluting industries like Pharma.
Premium has been considered since NA
Certificate is available for the subject
land parcel
Key Industrial Infrastructure like Roads
(of min 30 ft width), Industrial Power
Supply, Water Supply, Industrial Gas,
Industrial
Effluent Treatment, Warehouse is
Infrastructure
absent in the comparable property
therefore no discount has been
considered
The subject property is located on
narrow village road, 2.5 Km from NH 8.
Connectivity,
The comparable property is adjacent to
Accessibility
NH8; therefore discount has been
considered
L2
L3
The comparable property is smaller in
The comparable property is smaller in size
size than the subject property; therefore
than the subject property; therefore
appropiate
discount
has
been
appropiate discount has been considered
considered
Industrial NA certificate is avialable for
the subject land parcel. Land Use for the
comparable property is industrial,
therfore no discount has been used.
Industrial NA certificate is avialable for

the subject land parcel. Land Use for the
comparable property is industrial, therfore
no discount has been used.
Key Industrial Infrastructure like Roads

(of min 30 ft width), Industrial Power
Supply, Water Supply, Industrial Gas,
Effluent Treatment, Warehouse is present
in the comparable property therefore
discount has been considered
Key Industrial Infrastructure like Roads (of

min 30 ft width), Industrial Power Supply,
Water Supply, Industrial Gas, Effluent
Treatment, Warehouse is present in the
comparable property therefore discount
has been considered
The subject property is located on narrow

The subject property is located on narrow
village road, 2.5 Km from NH 8. The
village road, 2.5 Km from NH 8. The
comparable property is 3 km off NH 8
comparable property is on NH8;
however its on district road (more than
therefore discount has been considered
30ft )
The subject property is well connected on The subject property is well connected on
The subject & comparable property are district road hence discount was been district road hence discount was been
Location, Connectivity
adjacent; hence no discount or premium assumed, however we have also assumed, however we have also assumed
& Accessibility
has been considered
assumed a premium as the location is a premium as the location is after toll
after toll plaza
plaza
30
Valuation of Land
Sales Comparison Method
Location
Month of Transaction
Transaction Structure
Owner/Seller
Land/Plot Size (acres)
Known Land Use Status
Known Transaction Price (INR
Mn)
Land rate (INR Mn/Acre)
Land Rate (INR/Sq. Ft.)
Discount on negotiation (%)
Effective Land rate (INR
Mn/Acre)
Effective Land rate (INR/Sq.
Ft.)
Parameter for Comparison
Size & Topography
Land Use
Frontage
Location, Connectivity &
Accessibility
Total
Effective (weighted average)
discount/appreciation
Land rate in comparison to the
comparable properties (INR
per sq.ft.)
Time Adjustment
Average appreciation / market
correction of land value from
the point of transaction (% per
annum)
Material Date of Valuation
Time factor
Time adjusted rate (INR Mn
per acre)
Average land rate (INR per
sq.ft)
Average land rate (INR Mn per
acre)
Plot area of subject property
(acres)
Market Value of the Subject
Land Parcel (INR mn.)
Subject
Property
Land Comparables
L2
L4
Zynium Cables,
Udwada Pariya
Road, Vapi
Udwada, on NH
Vapi (after Toll
Plaza)
NA
Quoted
Individual/Broker
16
NA
Quoted
Individual/Broker
10
Agricultural
Industrial NA
Industrial NA
NA
NA
NA
NA
NA
NA
NA
30.00
689
-20%
25.00
574
-15%
35.00
803
-20%
NA
24
21
28
NA
551
488
643
Weightage
20%
20%
10%
25%
L1
-10.00%
5.00%
-10.00%
0.00%
L2
-15.00%
-10.00%
-5.00%
-10.00%
L4
-20.00%
-10.00%
-20.00%
-10.00%
25%
-10.00%
-10.00%
-20.00%
-4.5%
-10.5%
-15.5%
526
437
543
0.00%
0.00%
0.00%
526
437
543
Tukwada,
Desai Falia,
(Near Poddar
Int School)
Vapi
NA
NA
NA
35
Non
Agricultural
(NA)
L1
Tukwada,
Taluk: Pardi,
Vapi
(Near Poddar
Int School)
NA
Quoted
Company
25
100%
0%
3-Feb-14
502
22
31.3
684
31
32
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 Pvt. Ltd.

1st and 2nd Floor, Paville House,
Off Veer Savarkar Road,
Prabhadevi,
Mumbai 400025
Tel: (022) 67450101
Fax: (022) 67450202
www.knightfrank.com
33

Final Valuation Report - DMI - FEB 2014

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Final Valuation Report - DMI - FEB 2014

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Valuation of a land parcel

Located in Tukwada, Vapi, Gujarat

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

T +91 22 6745 0101 F +91 22 6745 0202

DMI Finance Pvt. Ltd.

Address & Location

Tukwada Village, Vapi, Valsad District, Gujarat

Valuation of a 31.3-acre land parcel for proposed industrial use

Pradeep Gandhi, MRICS

Abbreviations & Measurements

Floor Space Index

Central Business District

Consumer Price Index

Cash Reserve Ratio

Rupees per square feet

Foreign Direct Investment

Gross National Product

Net Present Value

Gross Domestic Product

Twenty Foot Equivalent Units

Statutory Liquidity Ratio

United States Dollar

Export Oriented Unit

Special Economic Zone

43,560 sq. ft.

10.764 sq. ft.

Engagement of Knight Frank India Pvt. Ltd. .................................................................. 6

Purpose of Valuation .................................................................................................. 6

Conflict of Interest ...................................................................................................... 6

Currency and Measurement ......................................................................................... 6

Responsibility to Third Parties ..................................................................................... 6

Disclosure and Publication .......................................................................................... 6

Limitations on Liability ................................................................................................. 7

Scope of Enquiries and Investigations ........................................................................... 7

Legal Parameters of Property ........................................................................................ 7

Environmental Aspects ................................................................................................ 7

Information Provided .................................................................................................. 8

Basis of Valuation ...................................................................................................... 8

Market Value ............................................................................................................. 8

Economic Snapshot: India ........................................................................................... 9

Economic Indicators (December 2013) .......................................................................... 9

Real Estate Indicators ................................................................................................. 9

Vapi Overview ........................................................................................................... 10

Economic Features ..................................................................................................... 11

Legal Aspects ........................................................................................................... 15

Site Inspection and Observation ................................................................................. 16

Connectivity and Neighbourhood ................................................................................ 16

Valuation Analysis ..................................................................................................... 17

Valuation Bases ........................................................................................................ 18

Valuation Assumptions .............................................................................................. 18

Valuation Consideration ............................................................................................. 18

Valuation Analysis ..................................................................................................... 19

Annexure I: General Principles and Limiting Conditions ............................................................. 23

Engagement of Knight Frank India Pvt. Ltd

Currency and Measurement

Responsibility to Third Parties

Disclosure and Publication

Scope of Enquiries and Investigations

In carrying out these instructions, we have undertaken verbal/web-based enquiries referred to

Legal Parameters of Property

be engaged to confirm our assumptions. If the subsequent investigation identifies any

Area (sq. mt.)