Draft Report_Modern Foods Kolkata 4.17.14

Valuation report Industrial property located in Taratala, Kolkata i

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

Valuation report of an

Industrial property

Located in Taratala, Kolkata

Prepared on behalf of

Switz Food Pvt Ltd.

Apri l 2014

Contact details:

Swi tz Food P vt Ltd.

Knight Frank India P rivate Limi ted

Paville House, Near Twin Towers,

Off Veer Savarkar Marg, Prabhadevi,

Mumbai - 400025

Pradeep Gandhi: [email protected]

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 ient name Switz Food Private Ltd.

Subject properties and address Modern Food Industries (India) Ltd. (MFIL), Taratala, Budge

Budge Trunk Road

P urpose of valuation Internal

Location Kolkata

Description Valuation of an industrial property

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

Tenure Freehold

Valuation Market approach

Valuation date 14th April

Market value `38.77 mn.

Valuers detai ls 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.

Valuation report Industrial property located in Taratala, Kolkata iii


Abbreviations & Measurements

Abbreviations

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

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 Disclosure and Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1.8 Limitations 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: India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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

Valuation report Industrial property located in Taratala, Kolkata v


4 .2 Rental and Capital value 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. Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Annexure I: General principles and Limiting conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Annexure II: General assumptions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Annexure III: Photographs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Annexure IV: Cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

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

Modern Food Industry, Tarata la, Kolkata

1.1.2 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

Valuation Report Industrial property located in Taratala, Kolkata 3


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 8th 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.

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 14th 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) 9.87%

CRR and SLR 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) 4.50%

2.2 Real estate indicators

Parameter Value

FDI inflow in construction development: Townships, housing, built-

up infrastructure (April 2013 November 2013) 54,350


up infrastructure (April 2012 March 2013) 72,480


up infrastructure (April 2011 March 2012) 152,360


up infrastructure (April 2013 November 2013) 54,350

Source: http://dipp.nic.in

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 micro-

markets 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

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%.

Economic base and drivers

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 Products /

Services

Location Area

(acres)

Industrial Parks Products /

Services

Location

Manikanchan

SEZ

Gems &

Jewellery

Salt

Lake,

Kolkata

5 Manikanchan

SEZ

Gems &

Jewellery

Salt

Lake,

Kolkata

Shilpangan(Light

Engineering Park)

Light Engg.

Products.

Salt

Lake,

Kolkata

2.28 Shilpangan(Light

Engineering Park)

Light Engg.

Products.

Salt

Lake,

Kolkata

Apparel Export

Park

Garments,

Buttons,

Accessories,

Washing /

Processing

Uluberia,

(Howrah

District)

150 Apparel Export

Park

Garments,

Buttons,

Accessories,

Washing /

Processing

Uluberia,

(Howrah

District)

Garment Park Garments Kolkata 9 Garment Park Garments Kolkata

Food Park (Phase

I & II )

Food

processing

Sankrail,

(Howrah

District)

130 Food Park (Phase

I & II )

Food

processing

Sankrail,

(Howrah

District)

Poly Park Polymer Sankrail, 60 Poly Park Polymer Sankrail,



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.

Major constraints -

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.

products (Howrah

District)

products (Howrah

District)

Rubber Park Rubber

footwear,

hoses, tubes,

automotive

rubber

products

Sankrail,

(Howrah

District)

170 Rubber Park Rubber

footwear,

hoses, tubes,

automotive

rubber

products

Sankrail,

(Howrah

District)

Foundry Park Castings,

Forgings and

other Foundry

items

Howrah 924 Foundry Park Castings,

Forgings and

other Foundry

items

Howrah

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.

Role of I T/ITeS in 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 Cap-

ex. 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

Infrastructure D e scriptio n

Airport

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.

Kolkata Airport has been ranked as the 7th spot much ahead of Hyderabad International Airport

(10th Spot), Chennai International 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.

Roads

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

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.

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.

Railways

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.

Port

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

Upco ming

P ro je cts D e scriptio n

New Metropolitan

Highways

Several new highways have been proposed in KMA, some major projects are mentioned below with the

running length in kilometres:

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

Metro Rail Project

The proposed East-West Metro Corridor will run 13 km from Salt Lake to Howrah station and is

set to be operational by 2013.

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.

Bridges/ Flyovers

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

- 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:

Commercial micro-markets in Kolkata

Classif icatio n L o catio ns

Central Business District (CBD) Park Street, Camac Street, Theatre Road, Chowringhee 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.

Stock & Vacancy Snapshot

Co mmercial Sto ck Vacancy YT D Absorptio n Re ntal

sq.f t sq.f t P e r sq.f t pe r mo nth

Grade-A

1,541,115 11% 13000 110-130

Other

Grades

4,750,405 10% 22000 90-110

4.2 Rental and Capital value trends

The following charts show the capital and rental value trend for office properties across various

micro-markets of Kolkata:

Micro-marke ts Re nts Capital Value

pe r sq.f t pe r mo nth pe r sq.f t

CBD 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

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

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.

0

20

40

60

80

100

120

FY2006 FY 2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

Average Rental Trend (Rs/sq.ft/month)

Park St/ Camac St Dalhousie Park Circus/Topsia

Ruby/Rashbehari Rajarhat/New Town Salt Lake



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.

Bantala

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.

Taratala-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 1870. 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

Modern Food Industries, Budge Budge Trunk Road, Taratala

5.1 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)

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:

Ho spitality Taj Bengal 9 km.

Re sidential Area Alipore 1 km.

Industrial Area 0 km

Co mmercial Area Park Street 10 km.

P o rt 2 km.

Airport 25 km. NSC Bose International Airport

Bus Depot 0 km. CSTC Bus Depot

Education 0 km.

P o lice Station 1 km. Taratala Police Station



5.4 SWOT analysis

Stre ngth We akne ss

The industrial land parcel is situated in the heart

of Kolkata, near Kolkata Port and is easily

accessible from the Howrah Railway Station.

Old established industrial estate comprises

diverse industries, warehouses, logistical and

service support. Synergy created by an industrial

ecosystem.

Taratala is an old industrial estate and its

roads are relatively congested, therefore

resulting in a slower movement of the cargo.

Oppo rtunity T hre ats

Land leased by the KoPT is at a nominal rate when

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 tle

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

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.

Regulatory 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.

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.

Income approach Rent capi tal i sation 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 sation factor or Dual rate years 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 25

Rent for Structure 15

Yield @ 12% on

Replacement

Cost of Rs 1500

Ground Coverage 60%

Effective Market Rent for underlying land 6.00

6.2 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.

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

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 7

Capital Value in Case of Lease Transfer 38,772,665

Remunerative Rate (on Capital) i 12% (can be interpreted as

Bank rate % + LT inflation)

Accumulative or Sinking Fund Rate s 2.5% Nominal SB Deposit Rate

No of income receipt during the term n 30

YP (Year's Purchase) 7.00

# please refer annexure IV for detailed cash flows.



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 INR 38.77 million (Rupees Thirty Eight Mi l l ion Seven

Hundred and Seventy Seven) is fair and reasonable.

For Knight Frank (India) P rivate Limi ted,

P radeep K. Gandhi

MRICS, Regional Head (West) Research and Advisory Services

Raj iv P arekh

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

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) Confidential 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) 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 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.

4) Legal ti tle

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 ) 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 ) 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



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 tions

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

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

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.



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.

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.



Annexure III: Photographs

Modern Food Industries (India) Ltd. (MFIL)

Bri tannia Industries

Budge Budge Trunk Road at Taratala

Annexure IV: Cash flows

RENT PER MONTH (x) 12 RENT PER

ANNUM

(AxB)

%INCREASE

IN RENT

PER ANNUM

10% KMC MC TAX

PER ANNUM

GROSS RENT

(C+I)

(Rs.) (Rs.) (Rs.) (Rs.)

A B C D E J

Yr 1 249,757 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 15.00% 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 15.00% 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 15.00% 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 15.00% 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 15.00% 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 15.00% 693,244 7,625,681

CALCULATION OF RENT BEING PAID TO KOLKATA PORT TRUST BY MODERN AS ON APRIL 2014



RENT PER

MONTH PER

SMT.

X 12

RENT

PER

ANNUM

PER SMT.

RENT PER

ANNUM

% INCREASE

IN RENT

PER ANNUM

10% KMC MC

TAX

GROSS RENT

(E+I)

(Rs.) (Rs.) (Rs.) (Rs.)

A B C E G J

Y1 64.56 12.00 774.72 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 15% 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 15% 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 15% 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 9,651,583 965,158 10,616,741

Y20 11,099,320 15% 1,109,932 12,209,252

Y21 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 15% 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 15% 1,467,885 16,146,736

MARKET RENT CALCULATION AS ON April 2014

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Draft Report_Modern Foods Kolkata 4.17.14

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