FFIINNAALL RREEPPOORRTT OONN VVAALLUUAATTIIOONN OOFF LLAANNDD UUNNDDEERR VVIISSAAKKHHAAPPAATTNNAAMM PPOORRTT TTRRUUSSTT,, AATT VVIISSAAKKHHAAPPAATTNNAAMM,, AANNDDHHRRAA PPRRAADDEESSHH,, OWNED BY VISAKHAPATNAM PORT TRUST Mumbai, India, March 2018 0 | Page V-1015-18 VALUATION OF LAND UNDER VISAKHAPATNAM PORT TRUST, VISAKHAPATNAM, ANDHRA PRADESH TABLE OF CONTENTS 1. EXECUTIVE SUMMARY 2 1.1 SCOPE OF WORK 2 1.2 OVERVIEW 2 1.3 PROCESS FLOW 2 1.4 SUBJECT ASSET 3 1.5 VALUATION APPROACH AND METHODOLOGY 4 1.6 SUMMARY 7 2. INTRODUCTION 10 2.1 INSTRUCTION 10 2.2 DATE OF INSPECTION 10 2.3 DATE OF VALUATION 10 2.4 PURPOSE OF VALUATION 10 3. VALUATION APPROACH & METHODOLOGY 11 3.1 VALUATION APPROACH 11 3.2 VALUATION METHODOLOGY 13 4. ABOUT VISAKHAPATNAM PORT TRUST 17 4.1 INTRODUCTION 17 4.2 HISTORY 18 4.3 CONSTRUCTION FEATURES OF PORT 18 4.4 LOGISTICS 18 4.5 HANDLING FACILITIES 18 4.6 HARBOUR FACILITIES 20 4.7 BERTHING FACILITY 21 4.8 SOCIAL MEASURES 22 5. SUBJECT ASSETS 23 5.1 LOCATION 23 5.2 AREA SCHEDULE 23 5.3 ZONE DESCRIPTION AND VALUATION 24 6. SUMMARY 86 ANNEXURE A – ASSUMPTIONS AND LIMITING CONDITIONS 1 | Page V-1015-18 VALUATION OF LAND UNDER VISAKHAPATNAM PORT TRUST, VISAKHAPATNAM, ANDHRA PRADESH Date: 17th March 2018 1. EXECUTIVE SUMMARY 1.1 SCOPE OF WORK Assessment of fair market value of land situated at 12 zones of VPT falling under 28 different villages of Visakhapatnam (Urban & Rural), Gajuwaka, Parwada and Bheemili mandals, Visakhapatnam district of Andhra Pradesh state for the quinquennium period 2018-2023. 1.2 OVERVIEW • Kanti Karamsey & Company, a firm of Govt. Registered Valuers; has been appointed by Visakhapatnam Port Trust (VPT), for Assessment of fair market value of land of the fixed assets i.e. a total of 7618 acres of land area of VPT, situated at 12 zones of VPT falling under 28 different villages of Visakhapatnam (Urban & Rural), Gajuwaka, Parwada and Bheemili mandals, Visakhapatnam district of Andhra Pradesh state. • It is understood that the purpose of this assignment is to aid VPT revise their Schedule of Rates (SOR) for the quinquennium period 2018- 2023. • In order to assess the Market Value of each of the zone, a detailed market research and prevailing circle rates for each of the zone, the current occupants and the nature of their business / activity, balance/ surplus land available for lease has been considered to arrive at a Market Value for the land. 1.3 PROCESS FLOW A. DATA COLLECTION Following data/ information was provided by VPT a) Final zonal plan map b) Proposed land use plan 2020 map c) General layout of village wise survey number d) VPT-Schedule of rates-2013 till 2018 for 12 zones e) Statement showing the zone-wise market values fixed per sq. yd for the V.P.T lands for quinquennium 2018-2023 by Joint Collector, Visakhapatnam. f) Analysis of the Highest accepted tender-cum-auction rates for each zone as provided by VPT. B. SITE VISIT Conducted between 29.01.2018 to 05.02.2018 by Mr. Kunal Vikamsey (Government Registered Valuer), Mr. Sandeep Gage (Civil Engineer) and Mr. Shem Joash Mathews (Civil Engineer) in the presence of Mr. Subba rao (Junior Engineer, VPT), Mr. V Kondal Rao (Deputy Surveyor, VPT) and Mr. Raju (Senior Land Guard, VPT). 2| Page V-1015-18 VALUATION OF LAND UNDER VISAKHAPATNAM PORT TRUST, VISAKHAPATNAM, ANDHRA PRADESH C. MARKET RESEARCH AND DATA ANALYSIS • A detailed market research in the micro market abutting each zone was undertaken to understand the prevailing market trends and rates for land under residential, commercial and industrial. • Review at the office of the sub-registrar was undertaken to establish the rate of land as per recorded transactions in each zone. • The Development Control Regulation / Building Byelaws of VUDA were studies to establish the permissible FAR (Floor Area Ratio) in each of the micro market abutting the respective zone. 1.4 SUBJECT ASSET Location Geographically spread across 12 different zones falling in 28 villages of Visakhapatnam (Urban), Visakhapatnam (Rural), Lankepalam village in Parwada Mandal and Mulakudu village in Bheemli mandal in Andhra Pradesh state. Where the first 10 zones lies at a radius of 8 to 10 kms of Vishakhapatnam city and zone 10 & 11 lies in Lankepalam and Mulakudu village which is approx. 30 km away from Visakhapatnam. Area Schedule Totally admeasuring 7,618 acres land which is divided into 12 different zones spread across 28 villages, Mentioned in the next slide is the zone wise division of land present in 28 villages along with the respective mandals derived through zonal plan as provided by VPT. Tabulated below is the list of zones with respective villages and mandal and area: Zone Village Mandal Land Area in Acres Kancharaplem VSP Urban 1A 1370 Kancharapalem ( Ward) VSP Urban 1B Kancharapalem VSP Urban 185 Fort Ward VSP Urban 2 152 Seet Rama Swami Temple VSP Urban Dolphin Nose Hill Gajuwaka 3 924 Malkapuram VSP Urban Gullalapalem VSP Urban Malkapuram VSP Urban Kapparada VSP Urban 4 2498 Mulagada Gajuwaka Mindi Gajuwaka Akkireddipalem Gajuwaka 5 Buchiraju Palem VSP Urban 747 3| Page V-1015-18 VALUATION OF LAND UNDER VISAKHAPATNAM PORT TRUST, VISAKHAPATNAM, ANDHRA PRADESH Zone Village Mandal Land Area in Acres Kapparada VSP Urban Mindi Gajuwaka Buchiraju Palem VSP Urban Gopalpatnam VSP Rural Akkireddipalem Gajuwaka 6 816 Tungalam(Nathyyapalem) Gajuwaka Venkatapathi Raju Peta Gajuwaka Pullam Botla Palem VSP Rural Buchiraju Palem VSP Urban 7 30 Maripalem VSP Urban Allipuram Ext Ward VSP Urban Dondaparthi Ward VSP Urban 8 269 Adavivaram VSP Rural Kancharapalem ( Ward) VSP Urban Harbour Park(Waltair Ward) VSP Urban 9 32 Maharanipeta Ward( Block No 4) VSP Urban 10 Mulakuddu Bhimunipatnam 307 11 Lankelapalem Parawada Mandal 288 1.5 VALUATION APPROACH AND METHODOLOGY For the purpose of assessment of Market Value of the subject land of VPT, Market Approach as has been adopted. Market Approach (Direct Comparison Method): The Direct Comparison Method involves a comparison of the subject property to same or similar properties that have actually sold in arms–length transactions or are offered for sale. During the course of market research following market data points have been sourced: a) Review of the transactions registered in Sub-Registrar office. b) Circle rate/Guideline value/Ready Reckoner rates as per Department of Stamps and Revenue Government of Andhra Pradesh for the corresponding villages for each of the 12 zones of VPT. c) APIIC land rates at Autonagar, Visakhapatnam for Industrial land. y Data analysis and Value working: For arriving at the value for different zones we have considered suitable premiums and discounts on the prevailing circle rate and rates provided by Joint Collector Visakhapatnam for land zoned for residential and commercial. Whereas for land zoned for Industrial, the APIIC land allotment rate at Autonagar (which is within 2 to 3 kms radius of majority of the zones of VPT) at Visakhapatnam has been considered as a base 4| Page V-1015-18 VALUATION OF LAND UNDER VISAKHAPATNAM PORT TRUST, VISAKHAPATNAM, ANDHRA PRADESH To these base rates following premium /discounts have been allocated for the following factors: a. General Factors: • 30% discount for Large Extent of VPT land (since the land being allotted by VPT run into multiple acres of land area as compared to the transactions/ circle rate- which is for a per sq. yd. area) • 25% discount for leasehold nature of VPT land (since the tenure of land being leased by VPT is for 30 yrs. lease period, with only leasehold rights on the VPT land) • 20% discount for present FAR of 1.00 on VPT land (since as per the Building bye laws of Visakhapatnam Urban Development Authority – VUDA the permissible FAR ranges between approximately 1.25 to 2.5 for residential and commercial land in Visakhpatnam city). b. Zone specific Factors: • Premiums ranging between 5% to 15% towards connectivity, infrastructure, location • Discount ranging between 5% to 10% towards height restrictions, development restrictions due to proximity to mangroves and Meghadri Channel, undeveloped nature of land, etc. Reference for considering the above mentioned factors is as per Guidelines for Immovable Properties 2009 as per Director of Income tax for valuation of land, as well as the Internationally accepted Valuation Standards. Further, during the course of the assignment a review of the Highest accepted tender-cum- auction rates on the VPT land various zones were studied. It was observed that only a handful of tenders/ auctions carried out in the last past three years are for different sizes of plots for setting up of warehousing, garage and cold storage purposes. The rate determined through tenders is basically depended on the factors such as availability of infrastructure such as rail and road connectivity and those are all developed land which can be treated as premium for the plots specifically and the prices determined through the tender mainly depends on the essential factors like demand and supply, purpose, size of the plot. Therefore the rates determined for specific plot through tender don’t reflect the realistic value of the remaining land of the zone. As the proposed rates of SOR are applicable throughout the zone for all the of plots of different sizes, different nature of uses, developed/ undeveloped, connectivity etc, the rates discovered through tender cum auction for these five plots cannot be considered as these are applicable for the transactions for equal size of land parcels and 5| Page V-1015-18 VALUATION OF LAND UNDER VISAKHAPATNAM PORT TRUST, VISAKHAPATNAM, ANDHRA PRADESH similar usage of land and their characteristics. Those 5 plots of land including their specific characteristics are discussed below: • In Zone 4, the Highest accepted tender-cum-auction rate per sq.