PROPOSAL FOR FINANCIAL ASSISTANCE TO EXECUTE THE PROJECT.

Name of the Applicant: M/s S. M. Farms

Constitution: Registered Partnership

Names of the Partners & their respective shares in Partnership:

1. Shri. Dilip Motiram Dalal – 36%

2. Shri. Nayan Dilip Dalal – 28%

3. Smt. Pranali Pravin Jage – 11%

4. Shri. Narayan Ramchandra Panvelkar- 25%

Office: Plot No. 54, Sai Siddhivinayak, Kulgaon Society, Badlapur East.

Nature of Project: Constructing & selling of Farm Houses, Construction of Resorts, Agricultural

Training Institute, Agri. Equipments hiring and Family Entertainment Park on

108 Acres of land at Mamnoli Village on Kalyan-Murbad Road.

Loan Amount Requested: INR 15 Crores

Type of Loan: Long Term Loan

Moratorium: 36 months (With payment of interest only)

Repayment Period: 84 months (Total 120 months including Moratorium)

Collateral: Mortgage of 108 Acres of project land having market value of INR 45

Crores as per the valuation of HDFC Realty Ltd. in May 2017

INTRODUCTION

Kalyan as a city has a large industrial belt to its south-east, from Kalyan to Badlapur. After Thane, the
Kalyan-Dombivli region is the next destination for home buyers working in Mumbai. Within the urban
limits of Kalyan-Dombivali- Ambernath most developments are group housing, residential and mixed
developments. Neighborhoods close to the railway station witness mostly high rise developments while
bungalows and villa schemes are developed further into the hinterland.

The nearest semi urban node, Murbad, mostly comprises of farm houses and plotted developments.
Majority of the residential plots are developed as single storey structures. The capital value of
bungalows range between INR 3500/sq. ft and INR 4000/sq. ft and for NA plots the capital values range
between INR 350/sq. ft to INR 400/sq. ft

Proposed Developments by the Government in the project area in near future:

There is proposed railway link from Kalyan to Ahmednagar via Murbad. Shahpur is the nearest railway
station to the subject property. There is a proposed medical college in Murbad which will be operating
on medium scale basis.

The government of India has announced establishing of the Multi-modal High Axle Load Dedicated
Freight Corridor (DFC) between Delhi and Mumbai, covering an overall length of 1483 km passing
through six states including Maharashtra. Mumbai being the financial capital will benefit from this
corridor and hence the nearby area including Murbad will have a major economic and commercial
growth.

SITE OF THE PROJECT:

The subject site is in a village named Mamnoli near Murbad town. Mamnoli is 18 km away from Kalyan,
on NH 61 and 12 km away from Murbad. The subject property can be approached through a narrow
road on the NH 61 near Hindu Sewa Sangh. There is no other approach road to the subject property
other than NH 61. The nearest railway station is in Kalyan.

The primary economic drivers near the subject property are agriculture farming, the dairy industry,
Nursery and farming ancillary activities. There is no major market near the subject area and hence the
people in nearby villages travel to Kalyan, Dombivali and Murbad for employment. Murbad is a
developing town with some upcoming projects, the people nearby subject property travel to Murbad to
for the employment as labor.

Neighborhood Development:

The nearest plotted development is in village named Potgaon which is 5.0 km away from the subject
property. The various plotted developments are in the villages is Potgaon, Ghorale, Kishor, Murbad etc.
The nearest developed town center is Murbad town which 12.0 km away from the subject property.

Market value of the subject property:

M/s S. M. Farms had engaged HDFC Realty Ltd. for the market valuation of the project property for their
internal purpose. The summary of their valuation is reproduced below:
 Executive Summary-Valuation
Particulars Details
Subject property Land bearing Survey nos. 72, 77, 78, 80, 84, 85, 86, 87, 88, 94, 95,
96, 97 admeasuring 108 acres.
Property details The Subject Property is located situated at Mamnoli Village, Kalyan
tehsil, District Thane, Maharashtra. The subject property is not a
contiguous land but land parcels of 70 acres and 38 acres. The land
parcels can be accessed by a dirt road which connects with the
primary access metal led road, SH 61.
Area to be Valued Land area of Survey no 72, 77, 78, 80, 84, 85, 86, 87, 88, 94, 95, 96,
97 admeasuring 108 acres
Current usage Agricultural. However, the land is not being used for any purpose as
on date
Permitted usage Falls under Green Zone 1. Maximum FSI is 0.2.
Interest Valued Freehold Interest
Basis of value Market Value
Ownership of Subject Property M/s S. M. Farms
Purpose of valuation For internal purposes
Date of site inspection 18th April 2017
Valuation approach Direct Sales Comparison Approach*
Estimated Market Value of INR 45,36,00,000 Only (Indian Rupee Forty Five Crores Thirty
subject property on as – is – six Lakhs Only
where – is basis (INR)
*(This approach estimates the value of the subject property by comparing recent sales/ listings of
similar interests in the properties located in the surrounding area.
By analyzing sales which qualify as ‘arms-length’ transactions, between willing buyers and sellers,
adjustments would be made for size, location, time, amenities and other relevant factors when
comparing such sales price against the subject property. This approach is commonly used to value
standard properties when reliable sales evidence is available.)

Property Details

Property address The Subject Property is located situated at Mamnoli Village,

Kalyan tehsil, District Thane, Maharashtra. The subject
property is not a contiguous land but land parcels of 70
acres and 38 acres with Kalyan-Murbad Road (Which is a
part of national Highway no. 61) passing through.
Property Ownership M/s S. M. Farms
Interest Freehold Interest
Area Land area of Survey no 72, 77, 78, 80, 84, 85, 86, 87, 88, 94,
95, 96, 97 admeasuring 108 acres.
Status of Land Agricultural Land
Current Zoning Green Zone
Condition of the Currently the site is leveled. Internal roads are under
property development. Farm house plotting is completed.
Development Norms
Asset Minimum Area FSI Built-up Area
Required
Farm house 0.4 Ha 0.0375 Minimum of 400 sq.mt.
Eco resort 1.0 Ha 0.20
Research and 10 Ha 0.20 Maximum of 10%
Development Centers
FEC (Amusement 2 Ha 0.20
Park)

The distance chart of important nodes from subject property is shown below:

Urban Centre Distance (km)

Thane 40
South Mumbai 62
Murbad 12
Kalyan 18

The Subject Property is located situated at Mamnoli Village, Kalyan tehsil, District Thane, Maharashtra. The
subject property is not a contiguous land but land parcels of 70 acres and 38 acres with Kalyan-Murbad road
passing through in-between.

The subject micro-market of Kalyan tehsil forms part of Thane District in Maharashtra. The location economic
driver is predominantly agriculture with scattered presence of dairy and poultry industry. Mamnoli is situated on
National Highway 61 connecting Kalyan towards West and Murbad on the east.

The land parcels are defined by the survey numbers 72, 77, 78, 80, 84, 85, 86, 87, 88, 94, 95, 96, 97. Both the land
parcels are in Green Zone – 1, which bears the FSI of 0.2. The land is not a contiguous land and is split into two 70
acre and 38 acre contiguous land parcels. These land parcels have frontage on the Mubadi River. There is high
tension wire passing through the center of the land parcels.
The subject property is in Green Zone-1, and FSI is 0.2 on the whole subject property including both the land
parcels. It can be used only for construction of farm houses, Amusement parks, Research & Development centre,
Petrol Pump/LPG Pump/CNG Pump, LPG godown, ITE with ancillary development, swimming pools, bio-
technology unit.

Access & Connectivity

The subject property has direct access through national highway 61, but is approachable only through the
unleveled road. The National Highway 61 is one of the prominent highway connecting Mumbai and Nirmal
(Telangana). This highway has heavy to moderate traffic throughout the day.

The nearest railway station is Titvala, which is 13.4 km away from the subject property. Kalyan railway station is
18.3 km and is well connected to Mumbai region as well as other states. The Asangaon railway station is 37.3 km
away from the subject property.
The nearest airport is Navi Mumbai International airport, which is 54 km from the subject property. Chhatrapati
Shivaji International Airport is at 63 km from the subject property. The connectivity to the airport is fairly good.
Navi Mumbai International Airport can be reached by State Highway 80, while Chhatrapati Shivaji International
Airport can be reached by National Highway 61-Eastern Express Highway-JVLR.

Marketability

The subject property is in Green zone-1 which bears an FSI of 0.2, and is also near the forest region. Hence the
major economic actions in the nearby region are primary agricultural activities like farming, dairy, nursery and
other farming ancillary activities. The micro does not have much commercial developments like resorts and
amusement parks.

The size of the land parcel is set for a large scale development and the ground water availability with a natural
well increases the marketability of the subject site. There are no major plotted developments like townships or
industrial belt near the subject site, the time period for marketing of the subject site would be higher than the
other land parcels in the micro market. The potential buyers for this asset would be people seeking farm houses
outside Mumbai region. Also the subject property can be a weekend getaway near Mumbai.

According to International Valuation Standards (IVS), Highest and Best Use (HABU) is defined as “The most
probable use of property, which is physically possible, appropriately justified, legally permissible, financially
feasible, and which results in the highest value of the property being valued.”

The subject property is located in a predominantly forest area. The use of land is mainly for developing farming
plots. Also, the subject property is located where fewer commercial or habitation activities are possible to be
undertaken as per the zoning regulations. Thereby, the highest and best use of the subject property is farming.

Development Strategy & Viability

Present Scenario in the area:
Farming: -
Mamnoli and nearby villages don’t use updated methods and techniques of irrigation hence the yield is very less.
The soil is potent of growing some vegetables; hence this opportunity should be explored to the core.
The average land holding of each household at Mamnoli is around 1-1.5 acre. Hence there is no large scale
development in farming. So the yields from the farms get fewer returns comparatively. Large scale farming will
ensure timely revenue generation, rotation of crops eventually best use of the subject property. The correct
proportion of the farm use will also give revenue streams which have regular returns, profit making returns and
opportunity returns.

Storage & Machine Sheds: -

There is no facility nearby to store the yield for a longer period of time. Also the farm owners don’t have the
equipment to process the raw yield.
These facilities are proposed to be made available to the farmers in the area for better yield & storage.
Agriculture Institute & Training center: -
Nearest agricultural institute is in Saralgaon. The students over there are from vicinity and distant places. He
project wishes to establish a Agriculture Training centre for the farmers in the vicinity in 10.71 acres which will
include facilities like classrooms, technology labs for conducting experiment on the crops, area for farming
practical’s for students, administration office.
This will help the farming community in the area to get to know the modern methods of farming which will again
help them to increase their yield.

Current state of agriculture at Mamnoli: -

The current conditions in the Mamnoli village are such that major portion of the people in the village are
unemployed. The major source of income for the people is agriculture only. Cultivation of paddy is the most
employed as there is no facility to grow other crops. People are majorly dependent on the rainfall for irrigation
water, which is also the only source of water for crops. There are no irrigation facilities provided to the village. The
irrigation starts as soon as the onset of monsoon, approximately in the month of June, and harvesting is done in
the month of Feb/March. Farmers are only dependent on the rainfall for irrigation water.
Some farms have the access to river water and hence the yield is proportional. The yield from the crops is mostly
used by the farmers for their perusal. There is no proper system of selling the yield of the crops to APMC or any
such markets. People are dependent on the farmers market, which gives them some source of income.
According to farmers in the vicinity, the following crops can be grown if proper facilities are provided:
Zaid crops: Cucumber, Agnail, cluster beans, pointed gourd, bell pepper.
Horticulture crops: Medicinal plants, fruits, vegetables, nuts, seeds, herbs Cash crops: Ground nut. Seasonal
fruits: Mango.
The average yield per acre of the various crops prevailing in Mamnoli and nearby areas is as under:
• Rice = 5-7 quintals in one season
• Cucumber = 5-6 quintals in one season
• Chili = 15-20 quintals in one season
• Ground nut = 15-17 quintals in one season
It is therefore observed that all horticulture crops yield between 5 to 7 quintals per acre per harvest using the
current methods of cultivation and irrigation. The farmers in the nearby village are not provided with any kind of
training for the techniques and methods of farming. People are not known to various cropping pattern, soil
capability to grow, various alternate options to cultivation, machines used in farming, government recognized
organization for farmers, government policies etc. The people in the vicinity do not have access to the knowledge
for the cultivation of crops in a systematic manner.
On this background, there exists opportunities for development of an agricultural training center to bridge this
gap of skills and knowledge in the local farming community. Also given the socio-economic conditions of the
households; it will be a good strategy to adopt farm equipment rentals as business model which can assist the
local farmers in implementing the skills learnt and having higher than average yield per acre.

Eco-tourism: -
There are some eco-tourism spots on the Mumbai-Nashik highway, which are doing quite well. Hence it would be
a challenging opportunity to develop such an asset in the near future .
The firm has decided to fully develop the subject property which is proposed into 2 phases as follows: -

Development Phasing:

Phase Development
Phase 1 Farming plots & Agri. Raining Institute
Phase 2 Eco-tourism resort and FEC

Proposed broad breakup of development for the complete 108 acre land parcel:

Proposed Development Percentage of total area Area (acres)

Farm house plots 53% 57.16 (59.80)
Agricultural Training Centre 10% 10.71 (5.60)
Storage Yard Structure 2.5% 2.80 (2.80)
Resort 5.8% 6.32 (6.32)
FEC 7.5% 8.08 (7.13)
Car park 3% 3.23 (2.85)
Internal Roads and Recreation ground 18.2% 19.56 (21.60)
Total 100% 107.86 (106.10)

Proposed Phase-wise development: -

Development in Phase-1 (Plot A- 70 Acres)

The development of subject property in the above manner will help ensure periodic revenue from various sources
of the asset class.

As the subject property is in green zone, the most favorable source of revenue is farming plots. The land parcel of
70 acres would farm plots of 1.0 acre; hence whole land can be used for cultivating crops. Hence total of 42 acres
of land of the 70 acre land parcel will have 42 farm plots. This will ensure the farming done will give definite
revenue each year.

The proposed development has Agricultural Training centre. Agriculture Training centre for students should be
developed in 10.71 acres which will include facilities like classrooms, technology labs for conducting experiment
on the crops, area for farming practical’s for students, administration office.

According to the DCR, 10% of the total plot area should be reserved for the recreation ground. Also for
construction of farmhouses, the minimum area of 0.4 Hectare should be provided. Hence there cannot be farm
plots of sizes 0.5 acre or 0.25 acre.

There should space for storage of yield, machine/equipment shed and other ancillary activities. The proposed
development has 5% of the net area reserved for the same.
Development in Phase-2 (Plot – 38 Acres)

The development in this phase will be restricted to entertainment purposes. A total of 28.50acres is to be
developed in this phase. Major portion of the land is reserved for the farm plots and total 12 acres of the land is to
be used for developing such farm plots. As per client’s instruction there has been inclusion of Eco-tourism resorts
and FEC in the subject property. The resort is being allocated the total area of 7.13 acres, which will include
facilities like water rides, adventure sports, swimming/wave pool, F&B area, area reserved for operations of the
rides etc.

The remaining area i.e. 2.85 acre should be reserved for the development of parking area for the visitors of eco-
resort and FEC. The proposed development has 85% area reserved for LMV which is 2.42 acres, while 15% area is
reserved for HMV which is 0.43 acres.

Project Development Schedule It is determined that the entire development shall be undertaken in 36 months as
the application for approvals for the proposed developments are underway. It is important that back end
infrastructure be completed before the operations of resort, amusement park and training center commence.

Phase I Development - % wise Expenses projections

Particulars 2017 2018 2019

Land Development - 70 100%
acre
Land Development - 38 100%
acre
Road Development 50% 50%
Irrigation Development 50% 50%
Pumping Station 100%
Other Infrastructure 50% 50%
Storm Water Drains 25% 75%
Over Head Reservoir 100%
Agricultural Training 100%
Centre
Equipment Yard 100%

Phase II Development - % wise Expenses projections

Particulars 2017 2018 2019

Pumping Station 100%
Water Treatment Plant 100%
Sewerage Treatment 100%
Plant
Filtration Plant 100%
Other Infrastructure 25% 75%
Storm Water Drains 75% 25%
 Resort Development 50% 50%
FEC Development 50% 50%

The following are the cost assumptions for the developments proposed for the subject property

S. No. Particulars Unit Value

A Land Development Cost IR/Sq. Ft. 10
Infrastructure Development
Road Development Cost INR/running km 20.00.000
Storm Water Drains INR/running mtrs 3,500
Irrigation Infrastructure INR/acre 70,000
Other Infrastructure (street lights, signages INR/sq. ft 6
etc)
Marketing Costs INR/month 15,00,000
Administration Costs INR/month 7,50,000
Brokerage Costs % of Sale Value 2.00%
Approval Costs % of CoC 3.00%
Design & PMC Services % of CoC 5.00%
Contingency % of CoC 2.00%
Escalation in CoC % 5.00
B Cost of Construction - Phase I
Agricultural Training Centre INR/sq. ft 1,400
Compound Wall INR/Running Mts 900
Storage Yard Structures INR/sq. ft 750
Water Pumping Room INR 2,10,000
Over Head Reservoir 10,00,000
C Cost of Construction - Phase II
Resort Rooms INR/key 22,50,000
FEC Structures INR/sq. ft 850
Water Filtration Plant INR 45,00,000
Sewerage Treatment Plant INR 25,00,000
Water Pumping Room INR 5,00,000
D Resort - Revenues & Operations
Average Room Rent INR/day 2,000
Average Occupancy - Start of Operations % 35%
F&B Revenue INR/person 750
MOD Revenue Rev 15.0%
Escalation of Revenues % 5.0%
F&B Operations Cost % of F&B Rev 35.0%
MOD Costs % of MoD Rev 45.0%
HR/ Personnel Costs % of Gross Rev 9.0%
Energy (HLP) Costs % of Gross Rev 11.0%
Repair and Refurbishment Cost % of Gross Profit 2.5%
Marketing Cost % of Room Rev 2.0%
E Revenue Assumptions
 Sale Rate for Farmhouse Plots INR/acre 40,00,000
Leaseback of Farmhouse Plots INR/acre 60,000
Share of Agricultural Yield on Plots % 50.0%
Course Fee - Training Centre INR/student 50,000
Farming Equipment Lease - Light Equipment % of Capex/day 0.15%
Farming Equipment Lease - Heavy equipment % of Capex/day 0.20%
Price Per Quintal Horticulture INR/Quintal 3,000
F Agricultural Operations - Gross
Labor Cost INR/day 220
Escalation in Costs % 10.0%
Cultivation Cost - Horticulture INR/acre 35,000
Cultivation Cost - Medicinal Plants INR/acre 60,000
Cultivation Cost - Plantations INR/acre 50,000
G FEC Operations
Cost of Set-up _Water Rides INR/ride 14,00,000
Cost of Set-up Adventure Rides INR/ride 25,00,000
Operation Expenditure % of Rev 9.00%
Repair & Maintenance Cost % of Rev 2.00%
Total No. of Rides Nos 8
Water Rides Nos 6
Total Rides per Hour Nos 6
Admission Tickets INR/ticket 100
Ride Tickets INR/ticket 50
Escalation in Ticket Prices % per annum 10%
Concessionaire Rental INR/month 25
Locker Room Rentals INR/locker/hour 10
F&B Concessionaire Rental INR/month 50
Escalation in Rentals % per annum 5.0%
Rental Capitalization Rate % 10%
Capital Rate of FEC Revenue % 12.5%
H Cost of Capital
Cost of Debt % 12%

All these proposed activities such as Resorts, Agricultural Training Institute, Equipment Leasing, Family
entertainment Park etc. will be generating local employment apart from agricultural development in the area
which will be an additional advantage. Detailed Financial Projections are attached separately.

For & on behalf of

M/s S. M, Farms,

(Partners)