Valuation Report
The Brookes County
Bhimtal, Uttarakhand
Prepared on behalf of –
Kumaon Cottages Private Limited
March 2013
(Final Valuation Report Number: VAL/2013/GVL302/FLV1/PR0/MAR)
Contact Details:
Kumaon Cottages Private Limited
J – 1868, First Floor, Chittaranjan Park
New Delhi - 110019
Knight Frank India Private Limited
201-202, Tower A,
Signature Towers, South City I,
Gurgaon - 122001
Sarad Kundu: sarad.kundu@in.knightfrank.com
KF Ref. No.: GVL/302
Executive Summary
The executive summary below is to be used in conjunction with the valuation report to which it
forms part and is subject to the assumptions, caveats and bases of valuation stated herein and
should not be read in isolation.
Client Name
Kumaon Cottages Private Limited
Property Address
“The Brookes County”, Bhimtal, Nainital, Uttarakhand
Purpose of
Internal reporting by the Client
Valuation
Location
Uttarakhand
Description
Valuation of residential property at Bhimtal, Nainital, Uttrakhand
Areas
Saleable/leasable Area: 2,508 sq. m. , i.e. 27,000 sq. ft.
Valuation Date
26th March 2013
Value of Property
` 22.86 million (Indian National Rupees Twenty Two Million and Eight
Hundred Sixty Thousand)
Valuer’s Details
Sarad Kundu
Regional Head (North) – Research & Advisory Services
Maneesh Jain, MRICS
Lead Consultant (North) – Research & Advisory Services
Wasif Mukhtar
Associate Consultant – Research & Advisory Services
*In our analysis, 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 analysis for any expenses of realization, 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 analysis.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
1
Abbreviations & Measurements
Abbreviations
FAR
Floor Area Ratio
`
Indian National Rupee
FSI
Floor Space Index
` /sq. ft.
Rupees per square feet
Mn
Million
sq. ft.
Square Feet
No.
Numbers
sq. Km.
Square Kilometre
sq. m.
Square Metre
Q1
Quarter One
Q2
Quarter Two
Q3
Quarter Three
Q4
Quarter Four
Measurements
1 sq. mt.
10.764 sq ft
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
2
Table of Contents
Executive Summary ...................................................................................................................... 1
Abbreviations & Measurements ................................................................................................... 2
Table of Contents ......................................................................................................................... 3
1.
Instructions .................................................................................................................... 5
1.1
Engagement of Knight Frank India Pvt. Ltd. ...................................................................... 5
1.1.1
Instructions .................................................................................................................... 5
1.1.2
Valuation Standard ......................................................................................................... 5
1.1.3
Purpose of Valuation ....................................................................................................... 5
1.1.4
Conflict of Interest........................................................................................................... 5
1.1.5
Currency and Measurement ............................................................................................. 5
1.1.6
Responsibility to Third Parties ......................................................................................... 5
1.1.7
Disclosure and Publication .............................................................................................. 5
1.1.8
Limitations on Liability ....................................................................................................6
1.1.9
Vetting ............................................................................................................................ 6
1.2
Scope of enquiries and investigations ..............................................................................6
1.2.1
Inspection ....................................................................................................................... 6
1.2.2
Enquiries......................................................................................................................... 6
1.2.3
Legal Parameters of Property ........................................................................................... 6
1.2.4
Environmental Aspects ....................................................................................................6
1.2.5
Information Provided ....................................................................................................... 7
1.3
Basis of Valuation ........................................................................................................... 7
1.3.1
Market Value Estimation .................................................................................................. 7
1.3.2
Date of Valuation ............................................................................................................. 7
2.
The Property .................................................................................................................. 8
2.1
Location ......................................................................................................................... 8
2.2
Site ................................................................................................................................ 8
2.3
Neighbourhood & Connectivity ........................................................................................ 9
2.4
Market Commentary ...................................................................................................... 10
3.
Valuation ...................................................................................................................... 12
3.1
Methodology................................................................................................................. 12
3.2
Cash Flow Considerations .............................................................................................. 12
3.3
Assumptions ................................................................................................................. 13
3.4
Cash Flow Analysis ........................................................................................................ 13
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
3
A.
Development .................................................................................................................. 13
B.
Construction and other costs .......................................................................................... 13
C.
Revenue ......................................................................................................................... 14
D.
Absorption Analysis ...................................................................................................... 14
4.
Summary ...................................................................................................................... 15
5.
Disclaimer ..................................................................................................................... 16
Annexure I: General Principles and Limiting Conditions .............................................................. 17
Annexure II: General Assumptions .............................................................................................. 21
Annexure III: Property Photographs ............................................................................................ 23
Annexure IV: Cash Flows ............................................................................................................ 24
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
4
1.
Instructions
1.1
Engagement of Knight Frank India Pvt. Ltd.
1.1.1
Instructions
On the instructions received from Kumaon Cottages Private Limited (The Client) and our
subsequent engagement letter dated 27th February 2013, Knight Frank (India) Pvt. Ltd. has been
appointed to establish the fair value for residential property at Bhimtal, Nainital.
1.1.2
Valuation Standard
The exercise has been carried out in accordance with the Royal Institute of Chartered Surveyors
(RICS) valuation standards, March 2012 edition.
1.1.3
Purpose of Valuation
The client has confirmed that the valuation report is required for the purposes of internal
reporting.
1.1.4
Conflict of Interest
We confirm that we have no conflict of interest in providing this report to 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 the analysis of the subject property is Indian National Rupees
(`). This is the currency normally used for property transactions in India. All measurements are
in sq ft (1 sq m = 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  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
5
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
amount specified in the terms of 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.’s quality assurance procedures.
1.2
Scope of enquiries and investigations
1.2.1
Inspection
We were instructed to carry out an internal inspection of the property. Our inspection of the
property was undertaken on 13th March 2013 by Mr. Darshan Shah.
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 not been provided with legal documents related to the subject 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 are likely to have detrimental
effect upon the market value 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
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
6
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.
In particular we detail the following:

Plot area – 8,027 sq. m

No of cottages – 12

Proposed structure – G+1

Saleable/leasable area (cottages) – 2,508 sq. m, i.e. 27,000 sq. ft.
For the purpose of this exercise, we have adopted the area and property details provided by the
client and the same has not been verified from any legal documents or government authorities.
1.3
Basis of Valuation
In accordance with your instructions, we have provided opinions on market value of the project
on the following basis:
1.3.1
Market Value Estimation
The analysis 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 market value of the
Property.
No allowance has been made in our analysis 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 value.
1.3.2
Date of Valuation
The date of valuation is 26th March 2013
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
7
2.
The Property
2.1
Location
Bhimtal is a town in Nainital district in the state of Uttarakhand, India. Bhimtal Lake, with an
island at its centre is a major attraction in the city. About 22 kms from Nainital, nestled in a
beautiful pristine valley, this jem of a lake is the largest around Nainital. The beauty is
enhanced by a small island surrounded by crystal blue water. This island in the centre of the
lake used to have a restaurant, which was later developed as an aquarium on the island.
Subject Property, known as “Brooks County” is a complex of 12 cottages. It is located along the
Jungaliya Gaon road, approximately 3.5 km from Daat bus stand and approximately 6 km from
Bhimtal town. The location map of the subject property is illustrated in the map below.
Source: Knight Frank
2.2
Site
The subject site is approximately 9,600 sq. yd. with a proposed built-up area of approximately
27,000 sq ft. in twelve cottages. Of the twelve proposed cottages, two shall be 3,350 sq. ft.
each; two shall be 2,800 sq. ft. each; two shall be 2,400 sq. ft. each; three shall be 1,800 sq. ft.
each and three shall be 1,500 sq. ft. each. Each cottage has a G+1 structure. In addition, “The
Brookes County” has a club house, restaurant and swimming Pool.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
8
2.3
Neighbourhood & Connectivity
Subject property is located along the Jungaliya Gaon road, approximately 3.5 km from Daat bus
stand. The immediate neighbourhood of the subject property doesn’t have any existing
residential development as majority of the residential projects are located in Bhimtal and
Bhowali which are at a distance of 6 km and 13 km from the subject development.
Kathgodam Railway Station is the narest railway station at a distance of 25 km from the subject
property. The nearest Airport is Pantnagar airport, located at a distance of 56 km from subject
property.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
9
2.4
Market Commentary
The immediate catchment of the subject property doesn’t have any major residential development expect for two upcoming developments which are in
nascent stage. These developments shall have 4,320 sq. yd. and 8,400 sq. yd. area and are currently in land development stage. The secondary catchment of
the subject property has five major projects which are detailed in the below table,
Property Description
Area
S No.
Name
1
2
3
4
Nirvana (Sunny Lake0
Rama Lake Breeze Enclave
Plot Area
(sq. yd.)
200
Built-up
area (sq. ft.)
1,650
120
1,000
150
1,100
200
1,500
200
1,200
Nature View Cottages
Shikhar Heights
Type
3 BHK
(Duplex)
2 BHK
(Duplex)
2 BHK
(Duplex)
3 BHK
(Duplex)
2 BHK
(Duplex)
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
No of
Cottages
Lauch Date
Cottages
Sold
Phase I - 77
2001
Sold Out
Phase II - 55
2009
51
Phase III - 35
2013
0
Ticket size
(` lacs)
75
Rate
(` per sq.
ft.)
4,545
Location
7 km from
Bhowali
(towards
Bhimtal)
2 km from
Bhimtal (along
Nauchukia Taal
road)
40
Jan-13
4
32.5
3,250
10
Oct-12
5
46
4,182
10
Oct-12
5
55
3,667
1.5 km from
Bhowali Main
Market
47
May-12
39
45.5
3,792
Bhowali
10
The ticket size per cottage in the micro market ranges from ` 27 lacs to ` 75 lacs which indicates
a per sq. ft. rate in the range of ` 1,800 to 4,545 per sq. ft. The above projects indicate an
average sale velocity of 1 cottage per month.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
11
3.
Valuation
3.1
Methodology
Our analysis has been undertaken using the following appropriate methodology and our
professional judgement.
Discounted Cash Flow (DCF) Method
DCF method/analysis is a financial modelling technique based on explicit assumptions
regarding the prospective income arising out of the development to be carried out on the
subject land parcel. In case of a valuation of a large land parcel like the subject property, where
the development potential is realized over a period of time (i.e. time value of money comes into
the picture), DCF method considering relevant potential developments of the project is used.
The DCF method requires the entire development cash flows to be drawn up and assumptions
made about the market performance over the entire project time frame. This requires an indepth understanding of
- the demand / supply dynamics,
- transaction values and quantum,
- construction costs, quality and infrastructure requirements/constraints,
- time frame of the project,
- profit / returns etc.
All of this market data has to be compiled (as relevant to the subject site) in order to create a
financial model that captures all market drivers and value impacting parameters.
3.2
Cash Flow Considerations
The current capital value of residential projects in the micro market varies from ` 3,250 per sq.
ft. to ` 4,545 per sq. ft. based on the location, accessibility, type of development and extent of
project completion.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
12
3.3
Assumptions
Our analysis is based on a number of assumptions which have been drawn to your attention in
general principals and limited conditions (Annexure I), and the general assumptions (Annexure
II), within this report.
3.4
Cash Flow Analysis
A. Development
Following are the area details of the proposed development:
Area Statement
S. No.
Particulars
sq. mt
sq. ft
Acres
Units
1
Area of land
8,027
86,400
1.98
-
2
Proposed built-up area (sq. ft.) – Cottages
2,508
27,000
-
-
3
Total saleable area (sq. ft.)
2,508
27,000
-
12
4
No. of floors
G+1
-
-
-
5
Area sold (sq. ft.)
-
0
-
0
6
Balance area to be sold (sq. ft.)
-
27,000
-
12
7
Club Area
8,000
Source: As provided by the Client
B. Construction and other costs
The construction costs of a project depend on a variety of factors like grade of proposed
development, positioning in the market, target buyers, pricing and amenities offered.
Developments targeting high end customers differentiate themselves from lower grade projects
in terms of amenities Moreover, factors like labour cost, material cost and nature & location of
the property also affect the construction cost.
Based on these factors, and as per the information received from the client, cost of construction
for the proposed residential development, amenities area, approvals and consultants’ fees,
corporate expenses and overheads is considered to as follows.
Particulars
Residential
Club
`/sq. ft.
1,200
1,350
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
13
Other Costs
 The contingency cost is assumed as 5% of the construction cost.
 The land development cost is estimated at ` 110 per sq. ft. and 5% escalation every year.
 The landscaping cost is estimated at ` 60 per sq. ft. and 5% escalation every year.
 Brokerage and marketing charges are estimated at 2% of the revenue.
C. Revenue
Based on the comparable developments mentioned in the previous section, discounts
pertaining to current market conditions, expected corrections in property prices and the factors
like location, size of the project, amenities offered in the project, developer‘s brand repute,
grade of space, status of the project, proposed construction phasing etc., we have considered
an average selling price of ` 4,400 per sq. ft. for our residential development. An annual
appreciation of 5% is assumed in the sale price.
D. Absorption Analysis
There are few residential developments being undertaken in Bhimtal which expected to launch
in the coming year. Demand has always demonstrated a positive trend in the region.
Considering the strong demand dynamics of the region the absorption for the subject
development is estimated to be 2 years.
Detailed cash flow statements and calculations have been included in Annexure IV of the report.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
14
4.
Summary
On the basis of assumptions, methodology used and on the belief that there are no onerous
restrictions, covenants or unusual outgoings, we are of the opinion that the market value of the
subject property listed in the table below is fair and reasonable.
Location
The Brookes County, Bhimtal, Nainital,
Uttarakhand
Saleable Area
Capital Value
(sq. ft.)
(`million)
27,000
22.86
For Knight Frank (India) Private Limited,
Sarad Kundu
Regional Head (North) – Research & Advisory Services
Maneesh Jain - MRICS
Lead Consultant – Research and Advisory Services
Wasif Mukhtar
Associate Consultant – Research & Advisory Services
Note:
Our analysis is only for use of the party to whom it is addressed and no responsibility is
accepted to any third party for the whole or any part of its content
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
15
5.
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
201-202, Tower ‘A’,
Signature Towers, South City – 1,
Gurgaon 122001, India
Tel: 4075030
Fax: 4075034
www.knightfrank.com
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
16
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 analysis and reports
are normally prepared; they apply unless we have specifically mentioned otherwise in the body
of the report.
1)
Confidentiality
Our analysis 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 on estimated market 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 estimated market value 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 market value have been made known to
ourselves and we cannot accept any liability or responsibility in any event, unless such full
disclosure has been made.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
17
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 analysis 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 analysis 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.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
We cannot express an
18
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 analysis is 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 analysis 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
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
19
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 estimation of market value assignment does 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.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
20
Annexure II: General Assumptions

We assume that information provided by client or its representative for this analysis 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 analysis 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 market 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 analysis 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 analysis over the period of
time of development. All of these factors are in strong relation with the market value
estimation of the 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.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
21

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.
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
22
Annexure III: Property Photographs
Under construction Cottages
Under construction Villa
Top View
Front View
Interior view
Bedroom
Dining Hall
Completed Cottages
Drawing Room
Washroom
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
23
Annexure IV: Cash Flows
Assumptions
1
Cost of Construction (` per sq. ft.) [COC] – Cottages
1,200
Cost of Construction (` per sq. ft.) [COC] – Club
2
1,350
Other Costs
Contingencies (% of Cost of Construction [COC])
5.00%
Land Development Cost (Cutting, filling, dressing, transporting excess of earth, backfilling
& preparing the surface) (` per sq. ft.)
Landscaping (horticulture, roads & pavement, sewage system and cabling) (` per sq. ft.)
3
Consultants (Architect, Landscape Architect, Civil and Services Provider, Real Estate
Consultant, Lawyers, Publicity) Fee (% of Construction Cost)
Capital Values (`)
110
60
10.00%
4,400
4
Brokerage Charges @ % of total revenue
2.00%
5a
Escalation in Cost of Construction Every Year
5.00%
5b
Escalation in Capital Values
5.00%
6
Discounting Rate
25.00%
Development Schedule
Construction Phasing (in %)
Land Development
Cottages
Club
Landscaping
Year 0
1-Mar-13
100.00%
65.00%
30.00%
70.00%
Year 1
1-Mar-14
0.00%
35.00%
70.00%
30.00%
Year 2
1-Mar-15
0.00%
0.00%
0.00%
0.00%
Land Development
Cottages
Club
Landscaping
Total
9,504,000
21,060,000
3,240,000
3,628,800
37,432,800
11,907,000
7,938,000
1,632,960
21,477,960
-
Contingencies
1,871,640
1,073,898
Consultants Fee
3,743,280
2,147,796
Total
5,614,920
3,221,694
-
TOTAL COST
(43,047,720)
Year 0
1-Mar-13
0%
(24,699,654)
Year 1
1-Mar-14
40%
Year 2
1-Mar-15
60%
-
10,800
16,200
Cost
[COC] Cost of Construction (in `)
[OC] Other Costs (in `)
Marketing Schedule
Marketing Phasing (in %)
-
Area Sold (sq. ft.)
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
24
Revenue Schedule
Outright Sales (` per sq.ft.per annum)
Year 0
4,400
Year 1
4,620
Year 2
4,851
0
49,896,000
78,586,200
-
32,432,400
17,463,600
Total
-
32,432,400
78,586,200
96,049,800
Brokerage
-
648,648
(43,047,720)
25.00%
22.86
22,861,993
31,783,752
7,084,098
(in `)
Receivables from sold area
Payment Schedule for Cottages sold in Year 1
Payment Schedule for Cottages sold in Year 2
Net Revenue
Net Cash Flow (in `)
Discount Rate
Value of Project
Valuation Report  The Brookes County, Bhimtal, Nainital, Uttarakhand
Prepared on Behalf of Kumaon Cottages Private Limited  March 2013
1,920,996
94,128,804
94,128,804
millions `
`
25