frequently asked questions - sainath...

INDIAREIT Fund Advisors Pvt. Ltd

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FREQUENTLY ASKED QUESTIONS

Prepared by

INDIAREIT Fund Advisors Pvt Ltd (IFAPL)

INDIAREIT Fund Scheme V

Last Update: April 2013

Disclaimer This publication has been prepared by INDIAREIT Fund Advisors Pvt Ltd solely for the information of its clients. This document is being furnished on a strictly confidential basis. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is meant for use by the recipient and not for circulation and is not to be copied or made available to others. This document is for information purposes only and does not constitute an offer for participating in INDIAREIT Fund. Any investment in INDIAREIT Fund must be done on the basis of Private Placement Memorandum and Offering Documents of the respective Fund and this report may only be distributed to those eligible to receive those documents. As a general report, this document represents the views of INDIAREIT Fund Advisors Pvt Ltd in relation to the Indian economy and the real estate industry. The information is based on material that is believed to be reliable. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, INDIAREIT Fund Advisors Pvt Ltd makes no representation as to its accuracy or completeness. The information herein is subject to change without notice. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment. Neither INDIAREIT Fund Advisors Pvt Ltd, INDIAREIT Offshore Fund, INDIAREIT Investment Management Co, any of the INDIAREIT Funds nor any of their officers or employees accept any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents. The information provided herein is subject to being updated at regular intervals


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Table of Contents

1. WHY REAL ESTATE FUNDS?

2. ABOUT INDIAREIT

3. EMPLOYEE & COMPENSATION DETAILS

4. INVESTMENT TEAM, STRATEGY & RESEARCH

5. FUND INFORMATION / INVESTMENT OBJECTIVE

6. INDIVIDUAL INVESTEE PROJECTS

7. LAND ACQUIREMENT, OWNERSHIP RIGHTS, REAL ESTATE DEVEPMENT & TAXATION

8. CORPORATE GOVERNANCE/SPONSORS


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GLOSSARY OF TERMS USED IN THIS DOCUMENT

1. INDIAREIT Domestic Fund Scheme I – First domestic scheme launched by INDIAREIT

in April 2006. Also referred to hereinafter as Domestic Fund I or Domestic Scheme I

2. INDIAREIT Offshore Fund – Offshore fund (domiciled in Mauritius) launched by

INDIAREIT in October 2006. Also referred to hereinafter as Offshore Fund or IOF

3. INDIAREIT Domestic Fund Scheme III – Second domestic scheme launched by

INDIAREIT in July 2007. Also referred to hereinafter as Domestic Fund III or Domestic

Scheme III

4. INDIAREIT Domestic Fund Scheme IV – Third domestic scheme launched by

INDIAREIT in October 2009. Also referred to hereinafter as Domestic Fund IV or

Domestic Scheme IV

5. Mumbai Redevelopment Fund – Fourth domestic scheme launched by INDIAREIT in

March 2012. Also referred to hereinafter as MRF.

6. INDIAREIT Fund Advisors Pvt Ltd – Investment Manager to Domestic Scheme I,

Domestic Scheme III, Domestic Scheme IV and Investment Advisor to IOF. Also

referred to hereinafter as IFAPL

7. INDIAREIT Investment Management Co – Manager (domiciled in Mauritius) to IOF.

Also referred to hereinafter as IIM Co

8. INDIAREIT Funds – Collectively, the Domestic Fund I, Domestic Fund III, Domestic

Fund IV, MRF, Domestic Fund V and IOF.

9. Domestic Funds – Collectively, the INDIAREIT Domestic Fund Scheme I, INDIAREIT

Domestic Fund Scheme III, INDIAREIT Domestic Fund Scheme IV, INDIAREIT

Mumbai Redevelopment Fund and INDIAREIT Domestic Fund Scheme V

10. Private Placement Memorandum for INDIAREIT Domestic Fund Scheme V - Also

referred to hereinafter as PPM for INDIAREIT Domestic Fund Scheme V


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11. Offering documents - Includes the PPM, Contribution Agreement, and the marketing

documents including the Presentation for INDIAREIT Fund Scheme V

Section 1: Why Real Estate Funds ? 1.1 What is the

general benefit of investing in a real estate fund?

A real estate fund typically reduces the risk profile of real estate as an asset class by offering a diversified investment portfolio managed by experienced fund managers. Thus, it provides the dual benefit of a defensive investment alternative as well as a hedge mechanism by offering an alternative asset class. Hedging occurs through portfolio diversification, which is through large location spread and number of projects included in the corpus. Also, given the large sums of money typically available at the disposal of real estate funds, their cost of procurement is generally expected to be lower than for investments made by individuals. The INDAIREIT Funds enter a project typically at land cost stage. Thus, the entry cost of the fund’s investment is far lower than that of an individual investor.

1.2 How should investors look at investing into Real Estate funds vis-à-vis investment into direct real estate property in the current market?

The key risks involved with investing directly in to real estate projects as compared to investing in real estate funds are as under: Concentration Risk (Please refer 1.1 above)

• A real estate fund enables diversification of an investors investments into various geographic locations, sectors and developers thus spreading the risks across a broader portfolio

• Investing directly into real estate exposes an investor to risks of a specific location and sector

Execution risk

• Investments by a real estate fund are managed by professionals and are subject to rigorous due-diligence as well as compliance norms for cost, quality and timely implementation

• Further, with the assistance of real estate experts – a real estate fund is able to leverage this skill set across its various investments

• Direct investments into real estate might expose the investments to execution capability risks of a single/few developers

• Further, with extensive legal clearances required before commencing real estate development in India and myriad of land


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title regulations, investments through a real estate fund helps to mitigate these risks

Entry/Financial risks

• As with any investment, the entry cost is a significant determinant of the return potential

• Fund allows entry at same level as a developer, which an individual flat buyer cannot enter

Further, with its defined structure – returns from a real estate fund might be more professionally disbursed back to the investors, rather than in case of individual investments – wherein there might not be any pre-defined exit/closure durations

1.3 Indian Real Estate Going Ahead

The coming decade will be different from what the Indian Real Estate industry has witnessed in the past one. In the residential market, sentiments are lukewarm, but not significantly weakened. Markets where the prices have maintained their levels are performing well despite higher interest rates due to reasonable affordability. The commercial market segment in the country was under severe stress over the past couple of years due to the global economic slowdown. However, the sector has consolidated itself and is now entering a growth phase. Key factors which will determine the future growth of Indian Real Estate are easing liquidity, right product mix with size / pricing to ensure affordability, ability to preserve value / ride cycles and strong execution capabilities.

Section 2: About INDIAREIT

2. 1 Name & Address of the Indian Fund Manager / Indian Advisor

INDIAREIT Fund Advisors Pvt. Ltd. Ground Floor, Piramal Towers, Peninsula Corporate Park, G.K.Marg, Lower Parel, Mumbai – 400013, Maharashtra India INDIAREIT Fund Advisors Pvt. Ltd. acts as the Manager to Domestic Funds and as the Indian Advisor to INDIAREIT Offshore Fund

Name of contact persons

Bhushan Sawant, Director - Investor Relations at IFAPL

Telephone Tel: (91)(22) 6151 3440 Fax: (91)(22) 6151 3444

Email mail to: [email protected]

Website www.indiareit.com

2. 2 What is IFAPL has its registered office at Mumbai, India and was incorporated in


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the legal status of the INDIAREIT entities?

July 2005 as a private limited company under the Companies Act, 1956. INDIAREIT Domestic Funds are registered as domestic venture capital funds under SEBI (Securities & Exchange Board of India). The norms and statutes of SEBI govern the functioning of the Domestic Funds. The Domestic Funds are organized as trust(s) under the INDIAN TRUSTS ACT, 1882. IL& FS Trust Company acts as a Trustee and performs the fiduciary duties on behalf of the investors. INDIAREIT Offshore Fund is a company incorporated in Mauritius in September 2006 as a public limited liability company and registered with the Financial Services Commission, Mauritius as a Category I Global Business License Company to conduct the business of private equity investment in Indian real estate

2. 3 Please supply us with a brief history of the INDIAREIT Funds.

INDIAREIT has raised and advises a corpus over US$900m spread across five funds and two third party mandates and across the unlisted and listed space:

Domestic Funds Size INRCr

Offshore & Special Situation Size

Domestic Fund Scheme 430 Offshore Fund I $200m Domestic Fund Scheme III 585 Trinity Capital Plc (AIM

listed) $206m

Domestic Fund Scheme IV 892 Trafalgar / F&C REIT $36m

Mumbai Redevelopment Fund 400

• 3i Investments was the cornerstone investor in INDIAREIT Offshore Fund(with an investment of USD 40 Mn)

• INDIAREIT Offshore Fund has a mix of Institutional Investors and High Net Worth Individual Investors

• Over 6,000 investors have chosen INDIAREIT for their asset allocation into real estate through the Domestic offerings

Funds Deployed & Exits

• The respective series of Domestic and Offshore funds are committed across 25 different projects

• Total area under development exceeds 64 Mn Sqft • Proven and consistent track record of round tripping investments,

with exits across each of our funds and across majority of development partners and asset types

Fund Type Commitment Corpus RetunedDomestic Fund I 100% 66% Offshore Fund 100% 43% Domestic Fund III 100% 24% Domestic Fund IV 90% -

Funds Valuations


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• Please find below the Terminal Valuation:

Fund Type Valuations (Money Multiple) *

Apr 20071

Mar 20082

Mar 20093

Mar 20104

Mar 20114

Mar 20125

1st Domestic Fund

1.81x

2.27x 1.99x

1.74x 1.74x 1.67x

1st Offshore Fund

NA 2.60x 2.18x

1.84x 2.02x 1.80x

2nd Domestic Fund

NA NA 1.54x

1.44x 1.90x 1.78x

3rd Domestic Fund

NA NA NA NA NA 1.92x

1.Pre tax multiple by Trammel Crow Meghraj in Apr’07 2.Pre tax multiple by Knight Frank in Mar’08 3.Pre tax multiple by DTZ in Mar’09 4. Pre tax multiple by JLL in Mar’10 & Mar’11 5. Pre tax multiple by CBRE in Mar 12 – post tax multiple for 3rd Domestic Fund

Please refer the newsletters for further updates. 2. 4 What

makes you different from competing real estate fund managers / advisors?

IFAPL believes that it stands apart from other managers/advisors on account of the following: Team Structure & Investment Strategy

• A team of investments professionals led by an experienced ex-developer

• Project structuring with an aim to balance safety as well as returns

• Investments focused on Growth Cities • Proactive sectoral analysis to identify key gaps in demand supply • Multi-pronged Investment screening • Rich experience base in real estate development enables intrinsic

capabilities to carefully analyse various trade nuances while finalizing deals

• Careful deal structuring with in-built downward protection • Leveraging partnerships with leading third-party valuers, auditors

and investment banks • Complete support to developer partners • Participation and involvement in projects, beyond the role of

passive investors

Key Milestones Achieved


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• One of the fastest deploying funds • One of the first to undertake development of projects • First fund to declare independent valuations • First fund to complete exit in the projects and return capital to

investors • Large city focused fund - Projects spread across Mumbai, Pune,

Chennai, Bangalore & Hyderabad • Largest portfolio of assets in Mumbai – Key business centre with

huge pent up housing demand • Developer focused fund – Multiple deals with development

partners, with over 64 million sq. ft of area under development 2. 5 Please

comment on IFAPL’s target market expected returns for the INDIAREIT Funds versus expected returns for Asia-Pacific institutional grade property?

IFAPL advises only India focused funds and hence cannot comment on returns in the Asia Pacific Market at large. For Domestic Fund V, gross target IRR is 24% +.

2. 6 When do you plan to raise the next fund? What is the policy with regard to running two funds simultaneously?

IFAPL will advise on the launch of the next series when the previous funds advised by it have respectively been able to successfully deploy at least 70% of their existing fund corpus and there is an identified potential pipeline of forthcoming projects. IFAPL may also advise on the launch of other parallel schemes with a different objective/investment charter – for e.g. mezzanine fund / yield based fund / redevelopment.

2. 7 Will a current fund take over investments from, or co-invest with, earlier funds or active funds beside the investments made parallel with the onshore

Any new fund will have its own independent investments and will not take over any of the investments from earlier funds. However, domestic and offshore schemes invest in parallel and also co-invest into projects that meet the relevant regulatory requirements.

For deals which are in excess of Rs 100 crores and which are compliant with FDI policy, the Investment Advisor may offer co-investment opportunity to any of the Offshore Funds/investors being advised by it. Such allocation to offshore fund / other investors could be up to 70% of the deal size as may be determined by the Investment Committee. Further, for any investment opportunity where the Investment Committee decides not to take up the entire portion of the investment


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fund under the same General Partner? What is the policy?

opportunity for any reason including but not limited to risks related to concentration, the Investment Advisor may at its discretion offer such excess portion of the available investment opportunity to the Sponsor Group and / or other investors. In such a situation, the terms of the investments by the Sponsor Group and/or the third party investor will not be better than the terms at which Fund V may invest in Investee Companies.

2. 8 Please provide us with a list of the largest investors in each Fund

INDIAREIT Domestic Fund Scheme I (final close April 2006) • Piramal Enterprises Limited – INR 300 Mn • General Insurance Corporation – INR 100 Mn • United India Insurance Company – INR 50 Mn

INDIAREIT Offshore Fund(final close October 2006)

• 3i Investments Plc – USD 40 Mn (Cornerstone Investor) INDIAREIT Domestic Fund Scheme III (first close July 2007)

• Piramal Enterprises Limited– INR 350 Mn

INDIAREIT Domestic Fund Scheme IV (first close June 2010) • Piramal Enterprises Limited– INR 350 Mn

INDIAREIT Mumbai Redevelopment Fund (first close April 3, 2012)

• Piramal Enterprises Limited – INR 37.5 Cr 2. 9 Give

details of major developers that the INDIAREIT Funds are working with

Neptune Group • First generation Indian real estate development company, which

has created a diversified portfolio of real estate development projects mainly in Mumbai Metropolitan region since its inception in 2004

• It has completed projects of over 3 million sq. ft. It has ongoing projects in and around Mumbai with an area under development ~ 20 million sq. ft. and developable land in Nagpur, Hyderabad, Cochin, Chennai, Vishakapatnam.

• Indiareit had 2 investments with Neptune group – Neptune Evolution Park, a premium commercial area development in Mumbai which has been completely exited in 2011 with an IRR of ~ 30% and an entity level investment where the fund has exposure to all the projects being developed by Neptune Group.

Ariisto Group

• More than 3 decades of experience in real estate • Executed few of the biggest Slum Rehabilitation Projects in the

country for the agencies of Government of Maharashtra for the prestigious projects of Mumbai Urban Transport and Infrastructure Projects (MUTP & MUIP). Has also developed a number of other standalone luxury Apartment Buildings having


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over 300 apartments in suburban Mumbai • Primarily a Mumbai based developer with ~ 20 million sq. ft.

under Development in Mumbai. • Indiareit had done two investments with Ariisto Group – A

Residential project in Santacruz and a Residential cum Retail project in Goregaon while the other investment in a Transferrable Right project at Mahul, Chembur. Both the investments have been partially exited.

Marvel

• Marvel group promoted by Mr Vishwajeet Jhavar, aged 43, an engineering graduate has been into real estate development in Pune city for more than a decade

• Strong execution capability with 1.3 Mn sq ft (16 projects) already delivered and a further 15.3 Mn sq ft (38 projects) under construction

• Excellent market reputation in obtaining prime city centric land parcels, quick project execution and delivery of premium residential apartments to end customers

• Strong network amongst HNI landowners and intermediaries with de-facto RoFR (Right of First Refusal) on premium city-centric parcels;

• Strong client network of HNI clients enabling developer to have loyal base of investors for sale of apartments and powerful brand in Pune synonymous with luxury residential projects enabling the developer to command a premium on selling prices vis a vis competition

• The group has a team strength of more than 800 personnel, experienced and professional management at the helm of affairs with a very strong in house development and sales teams

Paranjape Schemes (Construction) Ltd

• ISO 9001:2000 accredited company, with over two decades of experience

• Has already completed over 150 projects with more than 8 Mn sq ft. of saleable area

• Ongoing 45 projects, with saleable area of more than 20 Mn sq ft.

Srinivasa Shipping & Property Developers (SSPDL) Group

• Listed on the Bombay Stock Exchange with over 18 years of experience in real estate development


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• It has successfully executed various residential/ commercial projects in Chennai, Bangalore, Secunderabad and Hyderabad

• INDIAREIT has partnered with SSPDL Ltd for developing projects spread over 3 locations in Chennai, Bangalore and Hyderabad

Skyline Group

• 25-year old group, active in South India • Has concluded more than 60 projects, spread over 4 million

sq ft • More than 2.5 million sq ft under construction – with a value

of USD 160 Million • INDIAREIT has 2 investments with Skyline Group with

projects spread across Bangalore, Mangalore, Cochin, Chennai & Mysore

Amsri Group • More than decade of experience in Hyderabad • Developed over 3 mn sq ft • Land bank of over 1,700 acres to be jointly developed with

various renowned partners/investors like INDIAREIT, Smith Management LLC and DLF

• INDIAREIT has partnered with Amsri for developing ~ 13 mn sq. ft. spread over 4 projects in Hyderabad

Samira Habitats • Has more than a decade of experience in Alibag & Navi Mumbai • Executed primarily residential layout development projects of

over 400 acres across Alibaug • INDIAREIT has partnered with Samira Group for developing

projects spread across multiple land parcels in Alibaug & Panvel

Omkar Realtors & Developers Private Limited (ORDPL) • Established in 2003, ORDPL has developed into one of the

leading real estate developers in Mumbai for Slum Rehabilitation Scheme (SRS) • In the early years, they specialised in vacating slum sites and

securing all relevant SRA approvals. Subsequently they sold freesale FSI / slum TDR in the open market

• ORDPL moved into execution of real estate residential projects on a larger scale since 2007-08. Since then, ORDPL has successfully completed 9 residential & commercial projects with 1.8 Mln sq. ft. of construction area

• ORDPL has 26 ongoing projects with approx. saleable area of 12.44 Mn Sq. Ft

Ambience Group

• More than 3 decades of experience in real estate • Executed more than 250 small and big projects over the years in

and around Delhi and Gurgaon, some of the major ones of which are as follows: ‐ "Ambience Mall", Gurgaon (the largest operational retail

shopping mall in India (Source: Jones Lang LaSalle Meghraj) popular all over India for one km of shopping experience on


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each floor, ‐ the "Lagoon" residential complex (a ready-to-move-in

residential apartment complex with 345 units) ‐ an eight-floor corporate office tower ‐ constructed "Leela Kempinski" (a hotel with 322 rooms and

90 service apartments) owned by a Group Entity All the above a part of the group’s premium "Ambience Island" township at Gurgaon

‐ "Ambience Mall", Vasant Kunj, New Delhi (strategically located adjacent to Nelson Mandela Road, which is enroute to the international airport)

‐ The Kempinski Ambience Hotel, Shahdara, Delhi – a 480 room 5 star hotel which was recently opened

‐ Apart from above, Ambience has also developed various residential/commercial properties in posh colonies of South Delhi.

• The group is promoted by Raj Singh Gehlot, a Chartered Accountant with vast experience in construction and real estate industry

Section 3: Employee & Compensation Details

3.1 Please detail IFAPL staff resources split by function and geography and give brief profile

Profile of the Key Members of the Investment Team Khushru Jijina – Managing Director

Mr. Khushru Jijina is a Chartered Accountant with an illustrious career spanning over 2 decades in the field of real estate, corporate finance and treasury management and has been with the Piramal Group for around 12 years. He was a key member of the founding team of INDIAREIT in 2006 and was instrumental in raising two domestic funds (together Rs. 1,014 crores) and the Offshore Fund (US $ 200 mn) and was also responsible in deploying a large proportion of these investments. Mr.Jijina was reinducted in the senior management of INDIAREIT in September 2012 and is now designated as the Managing Director. From 2010, as the Managing Director of Piramal Realty, Mr.Jijina was spearheading the group’s foray into real estate development - Piramal Realty has rapidly built a pipeline of over 20 million sq. ft. in Mumbai and aspires to build high quality living and work spaces through customer centric design and strong execution. Prior to this, Mr.Jijina was the Executive Director in PiramalSunteck Realty, where he was responsible for a portfolio of projects spanning Mumbai, Navi Mumbai, Nagpur, Jaipur and Oman and oversaw all aspects of their execution. Mr.Jijina joined the Piramal Group in 2001 as the Vice President-Treasury and had been instrumental in securing debt at the lowest cost for the group, setting new benchmarks in the debt market. He started his career with Rallis, a TATA Group company, where he held several important positions in corporate finance over a span of 12 years.


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Arvind Pahwa – Executive Director

Mr. Pahwa has over 30 years of experience in Indian real estate in all aspects of the business including development, investment and asset management. Prior to joining Indiareit, Mr. Pahwa was the CEO of South Asian Real Estate Group (2010-2011) a PE and development platform. For the period of 2009-2012 he was also a Non Executive Director on the Board of Trinity PLC an AIMS listed RE fund .Preceding that he was the head of JP Morgan RE Fund (2006-2009) in India where he was involved in raising USD 350mn and investing USD 170mn. During the same time Mr. Pahwa has held several senior real estate positions in the country, including President Reliance Land (1995-2005) and CEO of Lokhandwala developers (1981-1994) one of the largest residential real estate developers in India. Mr. Pahwa is a Graduate from the Delhi University and holds a masters degree in management from JBIMS Mumbai. He is fellow member of RICS. SACHIN DEODHAR, Chief Financial Officer Sachin is responsible for monitoring finance, accounts and compliance. He has over 17 years of experience in financial services in India, including operational functionalities of mutual funds, venture capital funds, hedge funds, equity broking houses and clearing exchanges. Prior to joining INDIAREIT, Sachin was at Kotak India Realty Fund as Chief Financial Officer, wherein he was primarily responsible for investors' relations, audit, compliance and fund structuring. He has exposure to various functions including treasury, loan syndication, assurance/audit, portfolio management, MIS, budgeting, internal audits, consulting, due diligence and risk management. He is a qualified Chartered Accountant. He has joined INDIAREIT on 17th July 2007 PAWAN SAWHNEY, Partner - Investments Pawan is responsible for leading new investments and monitoring existing investments in South India. He has over 14 years of experience in the field of Real Estate, Strategy Consulting, Technology and Infrastructure. Prior to joining INDIAREIT in 2008, he worked with IBM, UK, based out of London where he was involved in developing Business Strategies for the various European and Middle East clients within the financial sector. Prior to his MBA, Pawan worked for the Global Equities division of Deutsche Bank, Singapore. There he worked as a Business and Technology analyst for Equity systems of the bank. During his MBA, Pawan was a summer intern with Corporate Strategy Group of The World Bank, Washington D.C. He is a B.Tech from IIT, Mumbai and an MBA from Oxford University, UK. He has joined INDIAREIT on 4th June 2008 AMIT DIWAN, Partner - Investments Amit is responsible for leading new investments and monitoring existing


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investments in North India. He has over 10 years of experience in financial services with the last 5 years being in real estate investments in Southeast Asia and India. Prior to joining INDIAREIT in 2010, Amit was a Director at Jones Lang LaSalle's (JLL) Asia Pacific Capital Markets team. Prior to JLL, Amit had setup GE Real Estate's Singapore office, and as head of investments, led transactions in excess of US$ 250 million in Singapore, Thailand, Malaysia, and Philippines. Amit has also worked for 5 years at Marakon Associates as a management consultant, and advised CEOs & CFOs of MNCs in over 10 countries across Asia-Pacific. He holds an MBA from Indian Institute of Management, Ahmedabad (IIMA), and a Bachelors Degree in Economics from Shri Ram College of Commerce (SRCC). He has joined INDIAREIT on 1st June 2010

3.2 Who at IFAPL is in charge of the back office, name, qualifications and experience?

The back office operations are currently being monitored by the Chief Financial Officer – Mr. Sachin Deodhar. Please refer above for details of CFO – Mr.Sachin Deodhar

3.3 Indicate the turnover (number of people) that has occurred in your Property teams as a whole during the past five years

The investment team at IFAPL has witnessed 4 exits. However, the team has been further strengthened with new members with significant real estate experience joining in Investment and Asset Management team.

3.4 Please include an explanation for any unusual turnover listed above

Exits were on account of personal reasons .

3.5 Are there any plans to change the team structure or staffing levels in the near future? Is it common for people to progress their careers within your organization or are the

Senior level positions as far as possible are filled with internal resources thereby giving them growth opportunities while ensuring continuation in the policy, guidelines and philosophy of the fund.


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majority of senior positions recruited externally?

3.6 Give details for

the preparation for unexpected incapacitated and retirement of core members

• The INDIAREIT Funds and IFAPL endeavour to document all major activities which in turn ensures a smooth transition if necessitated by any changes in the core team

• Besides, IFAPL follows a flat organization structure and believes in maximizing interaction and awareness amidst its entire team to ensure that operations are not dependent on any one individual

• Focus on quality manpower and an effective second line of management is also being nurtured to ensure perpetuity in business without excessive dependence on any one member of the core team

3.7 What is the

most and the least number of employees in the last three years?

IFAPL was incorporated in 2005, the minimum number of people in the organization over the last 3 years has been 15 and the maximum 27.

3.8 How does the firm attract new people?

Presently, the team members have been identified on internal reference basis and through leading head hunters / HR consultants

As INDIAREIT envisions expanding its team, it has also hired services of specialist consultants

3.9 Please provide a description of your firm’s compensation system for key investment management professionals & carry split.

The compensation for the key investment professionals comprises a competitive salary and a share in the carry pool.

IFAPL is entitled to a 40% share in the total carry due from the INDIAREIT Funds. A major portion thereof is reserved for the key team members of IFAPL Please refer PPM for more details on carry structure

Section 4: Investment Team, Strategy & Research 4.1 Please give

details of the investment committee of the various INDIAREIT Funds.

Investment Committee of the Domestic Funds consist of following members:

1. Ajay Piramal Ajay Piramal is an eminent business personality in the global corporate world. His educational qualifications are B.Sc. (Hons.) from Bombay University, Master in Management Studies from Jamnalal Bajaj Institute of Management Studies and Advanced Management Programme, Harvard.


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Ajay Piramal is the Chairman of Piramal Enterprisess Limited and heading an industrial group of over Rs. 4,500 crores, having diversified interests in pharmaceuticals, glass containers, etc. Within the group the leading companies are Piramal Enterprises Limited (largest pharmaceutical company in the domestic market), Allergan India Private Limited (a joint venture), Gujarat Glass Private Limited (packaging products for pharmaceutical and perfumery industries), etc.

2. Khushru Jijina (See Profile above)

3. Niraj Bhukhanwala

Niraj Bhukhanwala is a MBA from INSEAD, France. He has done his Bachelors in Electrical Engineering from The Indian Institute of Technology, Mumbai and also done his Master in Electrical Engineering from the University of Maryland, College Park. On the professional front he was a part of the team that set up Intel's venture capital operations in India. There he focused on early stage technology investments. Prior to Intel, he has worked with Mckinsey and Company in London focusing on pan European strategies in the telecom and Enterprises sector. At present, he is Director of Bhukhanwala Holdings Private Limited It is a closely held boutique investment company and the primary investment vehicle for the Bhukhanwala Group, one of the pre-eminent Indian business groups. It is a registered NBFC with the Reserve Bank of India with investments across various asset classes with a focus on private equity investments. 4. R. A. Shah, Independent Member

A solicitor and senior partner at M/s Crawford Bayley& Co., R.A. Shah specialises in abroad spectrum of Corporate Law in general with a special focus on Foreign Investments, Joint Ventures, Technology and License Agreements, Intellectual Property Rights, Mergers & Acquisitions, Industrial Licensing, Anti- Trust and Competition Laws.

Apart from being a Chairman of leading publicly traded companies in India, R.A. Shah is also a Member of the Managing


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Committee of Bombay Chamber of Commerce, Indo German Chamber of Commerce and president of Society of Indian Law Firms (Western Region).

5. Shitin Desai, Independent member

Shitin Desai is Executive Vice Chairman of DSP Merrill Lynch, and is one of its founding Directors. He has been advising various large corporate organizations in formulating, structuring and implementing financial packages for various projects across sectors and is recognized as one of the leading investment bankers in the country today. He was a member of the Committee on Take overs appointed by SEBI and was a Member of: RBI Capital Markets Committee, Advisory Group for Securities Market of RBI and Insider Trading Committee of SEBI. He was also a Member on the Executive Committee (Futures & Options Segment) of National Stock Exchange of India.

6. Ashish Dalal, Independent member

Ashish Dalal has till recently been a partner of Dalal & Shah, Chartered Accountants and has also been a partner of Price Waterhouse & Co. He has been actively practicing in various fields relating to Mergers, Acquisitions, Strategic Alliances, Business Valuations, Specialised Investigations, Due Diligences, Foreign Collaborations & Joint Ventures and has acted as a domestic counsel for cross border transactions. He has also held directorships in Wyeth Limited, Akzo Nobel Chemicals (India) Ltd., ICICI Investment Management Co. Ltd., Financial Technologies (India) Ltd. and Multi Commodity Exchange of India Ltd. Additionally, he is a non-executive independent director and the chairman of the audit committee of MPS Limited.

7. Tara Subrahmanium Tara Subramaniam is a Director with the Sun Group. Her current assignment is with a venture between the Sun Group and Forest City called Sun Forest City. Forest City is the largest listed real


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estate developer in the US who have tied up with Sun Group to develop real estate spaces across various asset classes in India. Earlier, Tara was a part of HDFC Limited as Deputy General Manager, Commercial Real Estate where she was a part of a team which was formulating funding and underwriting strategies. She was also responsible for managing client relationships ensuring compliances on the legal front such as title due diligence, documentation, regulatory filings, etc. In this role, she was also associated with managing close association with various real estate participants, which primarily involved developers and various other real estate bodies. Tara is a Bachelor of General Law from Government Law College, Mumbai.

4.2 How long would the investment advisory committee typically take on due diligence of each project?

Projects are recommended to the Investment Committee after a multi level screening at the Investment Advisor level with inputs from independent third party consultants who may be hired for due diligence on land titles etc. The total process of conducting due diligence post identification of a project takes about 4 – 8 weeks. Thereafter, the project is presented to the investment committee, which accepts or declines an investment proposition. Post, acceptance by the investment committee, the project can take anywhere between 4 – 6 weeks for the conclusion of the deal.

4.3 Please give an outline of your firm’s investment guidelines, restrictions and its investment philosophy

Fund V will attempt to achieve its objectives by investing in equity, equity related, and debt instruments of unlisted real estate companies across various cities in India and across various segments of real estate. Fund V’s investment will be in construction and development projects which shall be identified on the basis of in-depth research and analysis of the demographic profile, infrastructure developments, and the growth drivers emerging in various cities. In addition, Fund V's investments will be in accordance with generally accepted CSR guidelines. Fund V's investment philosophy will be to focus on: Focus Segment • Geographic concentration driven by robust and established

demand o Metros and Tier-I cities including but not limiting to

Bangalore, Pune and Mumbai and also opportunistic deals in Tier 2 cities


19

• Focus on Residential - Self liquidating asset with minimal exit risk; seek to reduce exit risk through pre sales which results in negative working capital for construction and thus minimising need for leverage

• Mixed use projects – Higher Residential componentas it helps generating cash flows for commercial construction thereby reducing requirement of debt/leverage

Strong Partner selection and control • Partner with developer with strong execution track record

o Align economic interest with developer o Milestone based / delivery driven staggered payments;

focus on developing long term relationship • Strong Governance rights

o Right for key decision making and appointment of key personnel in relation to the project

o Adequate Financial and project controls and right to appoint third auditors

Downside Protection

• Investment primarily for execution capital with preferred return • Entry at land cost at which end user affordability metric is met • Non-speculative underwriting with no zoning, title or aggregation

risk o Not considering ancillary revenue opportunities such as

floor rise, parking, deposits and amenity income (club house fees, etc)

• Priority distributions o Prioritised return of capital; Focus on IRRs rather than

Money Multiple

Investment Structuring

• Investments by way of Equity, Equity related, Debt and related instruments

• Investments with pre determined/ high fixed returns with adequate security

• Structured investments with downside protection by way of a preferred IRR and an equity upside

• Pure Equity Investments in case of investments where entry price is very attractive and to ensure upsides

• Well defined exit mechanism with definite time lines o


20

Concentration Limits Fund V will not invest more than 20% of aggregate Capital Commitments at the time of the investment in any one Investee Company. Where an investment is proposed to exceed such threshold, approval of Super-Majority of the Investment Committee (as defined herein below)will be required. For Cities other than Mumbai, the Investment Advisor will limit the non-residential elements to 20% (i.e. the projects would be at least 80% residential). For Mumbai, the Investment Advisor will retain the flexibility to go up to 40% of the non-residential projects on account of the market being less oversupplied in commercial space and also that this would give the leeway to consider the 'hospitality development' sector where higher floor space index is available. In these particular cases, the Investment Advisor will restrict the ‘hospitality development to the construction of serviced apartments that would be targeted as far as feasible to be sold to residential buyers. Fund V will have the following internal prudential norms in terms of various parameters:

Serial number

Particulars Maximum % of Total Portfolio

Value I. Single project 20

II. Overall exposure in a single group

40

III. Single City (Metros) 70 IV. Non Metro Cities 40 V. Single segment Residential –

Minimum 70 Commercial/Others –

30 VI. Development Focused

Investments 100

4.4 As for reliance on professionals and consultants, who will be involved in each task?

Some of the external professionals and consultants retained by IFAPL and the INDIAREIT Funds for various aspects of its business processes is as under:

Audit and Accounts - Grant Thornton, Mumbai

Financial and Legal - Nishith Desai Associates & Kanga & Company

Project Valuation - JLL/CBRE/ DTZ /Knight Frank/Cushman Weikfield


21

Could you provide names of external professionals and their specific tasks?

External Marketing – Citi Bank, ICICI Bank, HDFC Bank, ABN Amro Bank, Standard Chartered

Fund Administration - IL&FS Trust Company Ltd, as Trustees

Fund Accounting – Confisys Solutions for Fund Accounting

Backoffice Service Provider - CAMS for collection and backoffice support

4.5 What are the items for due diligence

Due Diligence may be broadly sub-divided into Commercial, Technical and Legal due diligence. Commercial due diligence establishes demand, rate and off-take potential for the property. Technical due diligence validates, regulations, plans, architectural nuances etc. Legal due diligence establishes the title of the property and feasibility of sanctions and approvals. Further, the team also conducts due diligence on the delivery capability of the developer including his financial solvency. In addition, the team also engages the services of local municipal experts in various regions to understand the sanctions feasibility for any given project.

4.6 Describe in detail the firm’s due diligence process. Provide examples of reports and working papers, where available

Detailed due-diligence of a developer / property is undertaken at various levels of analysing and recommending the investment opportunity. Some of the parameters considered include:

• Verifying promoter’s credentials and track record. This is done through actual site visits to developer’s existing sites; third-party referrals and analysing published data

• Accessibility and market potential study of the site • Primary market survey of competing developments – thus

understanding the sectoral opportunities • Due diligence on our development partners by a third party

entity on a case by case basis • Analysis of key past trends to help ascertain the future scenario • Status of various approvals required for the development at a

site and availability of the same with the developer • Land title scrutiny through employing services of legal

consultants • Confirmation of FSI details assumed • Compliance with guidelines on environmental protection, social

and rehabilitation issues, if any • Verifying the project cost and financials indicated by the

developer. This may be done by commissioning independent valuation report as well as a geographical analysis of a given site, by relevant consultants

• Verifying key assumptions made by the promoter • Detailed financial analysis with sensitivity analysis • Estimation of project IRR and equity IRR under varying scenarios • Possible exit strategies, clearly indicating timing and key

assumptions on which it relies • Assessment of potential risks and proposed mitigations • Proposed optimal deal structure including taxation • Detailed evaluation and understanding of proposed terms on

offer


22

For areas not covered under initial review, a further detailed analysis is carried out during the ‘Due-Diligence’ stage of the project evaluation. The analysis is then presented to the relevant Investment Committee for its approval. A copy of the ‘Investment Committee’ Note and Presentation for a typical deal can be shared with the investors during their due diligence

4.7 Will any expected price correction impact entry and exit valuations for the investments advised by IFAPL?

IFAPL believes that investments made by the INDIAREIT Funds are backed by extensive prudential norms and are structured to provide downward protection. We build in conservative assumptions in all our projects with regard to the business plans, costs and revenues. Additionally INDIAREIT has the right to extend the exit period by 2 periods of one year each in case market conditions are not conducive for exits. Hence, INDAIRET Funds should normally not foresee significant change in their targeted net return to the investors.

Section 5: Fund Information / Investment Objective for INDIAREIT Fund Scheme V

5.1 What is the investment objective of the fund? Please include:

-Target market by sector (including any limits on individual sectors split by %) -Target IRR excluding gearing -Target/maximum gearing (debt/GAV) on both an individual property basis and total fund basis -Length of investment period

1. Investment objective of Fund V

The primary objective of Fund V is to invest predominantly in equity and equity related and debt instruments of companies engaged in real estate development with a focus on residential development and real estate related activities as well as property management, infrastructure and allied sectors (including but not limited to warehousing, port related logistics, special economic zones and industrial parks) in India with an objective of generating long-term capital appreciation and rental income so as to deliver regular distributions to the Investors with a competitive rate of return on their investment.

Fund V shall seek returns by way of dividends and interest income from Investee Companies and capital gains on exiting from Investee Companies. The targeted IRR expected by the Fund V is in excess of 24%.

2. Investment Opportunity

Indian residential real estate market remains continues to remain stable, although the developers are stressed for liquidity due to limited access to capital. Hence, the current environment presents a unique opportunity of earning higher equity return with


23

-Estimated length of time before the fund will be invested (excluding follow-on investments) -Expected investment holding period -Expected numberportfolio investments, including any minimum and maximum

proportionately lower risk. 1. Residential Market Resilience in Tier 1 Cities

• Residential market has been relatively stable given supply

demand imbalance and strong desire for home ownership • Only 120,000 new middle class units are being built

annually; well short of demand (7 million) • Attractive investment environment for residential real

estate expected to continue • Strong long term fundamentals • Urbanization leading to population migration to top 6

cities • “Back to Basics” after 2005-2008 market anomaly • Renewed focus on debt reduction and land bank

monetization

2. Demand for capital by Developers

• All time high leverage levels • Developers searching for alternate sources of funding • Realize maximum potential by capitalising on this

opportunity

3. Funding getting tighter, costlier and selective

• Strict RBI Regulations • High interest rate regime • Volatile capital markets with no interest in real estate • FDI in real estate / construction down drastically • Global slowdown

4. Presents an arbitrage opportunity for Fund V to earn high

equity like return with proportionately lower risk

3. Investment Strategy

Fund V will attempt to achieve its objectives by investing in equity, equity related, and debt instruments of unlisted real estate companies across various cities in India and across various segments of real estate. Fund V’s investment will be in construction and development projects which shall be identified on the basis of


24

in-depth research and analysis of the demographic profile, infrastructure developments, and the growth drivers emerging in various cities. In addition, Fund V's investments will be in accordance with generally accepted CSR guidelines. Fund V's investment philosophy will be to focus on: Focus Segment • Geographic concentration driven by robust and established

demand o Metros and Tier-I cities including but not limiting to

Bangalore, Pune and Mumbai and also opportunistic deals in Tier 2 cities

• Focus on Residential - Self liquidating asset with minimal exit risk; seek to reduce exit risk through pre sales which results in negative working capital for construction and thus minimising need for leverage

• Mixed use projects – Higher Residential component as it helps generating cash flows for commercial construction thereby reducing requirement of debt/leverage

Strong Partner selection and control • Partner with developer with strong execution track record

o Align economic interest with developer o Milestone based / delivery driven staggered payments;

focus on developing long term relationship • Strong Governance rights

o Right for key decision making and appointment of key personnel in relation to the project

o Adequate Financial and project controls and right to appoint third auditors

Downside Protection

• Investment primarily for execution capital with preferred return • Entry at land cost at which end user affordability metric is met • Non-speculative underwriting with no zoning, title or aggregation

risk o Not considering ancillary revenue opportunities such as

floor rise, parking, deposits and amenity income (club house fees, etc)

• Priority distributions o Prioritised return of capital; Focus on IRRs rather than

Money Multiple


25

Investment Structuring

• Investments by way of Equity, Equity related, Debt and related

instruments • Investments with pre determined/ high fixed returns with

adequate security • Structured investments with downside protection by way of a

preferred IRR and an equity upside • Pure Equity Investments in case of investments where entry

price is very attractive and to ensure upsides • Well defined exit mechanism with definite time lines

Concentration Limits Fund V will not invest more than 20% of aggregate Capital Commitments at the time of the investment in any one Investee Company. Where an investment is proposed to exceed such threshold, approval of Super-Majority of the Investment Committee (as defined herein below)will be required. For Cities other than Mumbai, the Investment Advisor will limit the non-residential elements to 20% (i.e. the projects would be at least 80% residential). For Mumbai, the Investment Advisor will retain the flexibility to go up to 40% of the non-residential projects on account of the market being less oversupplied in commercial space and also that this would give the leeway to consider the 'hospitality development' sector where higher floor space index is available. In these particular cases, the Investment Advisor will restrict the ‘hospitality development to the construction of serviced apartments that would be targeted as far as feasible to be sold to residential buyers. Fund V will have the following internal prudential norms in terms of various parameters:

Serial number

Particulars Maximum % of Total Portfolio

Value I. Single project 20

II. Overall exposure in a single 40


26

group III. Single City (Metros) 70 IV. Non Metro Cities 40 V. Single segment Residential –

Minimum 70 Commercial/Others –

30 VI. Development Focused

Investments 100

To build in further downward protection and ensure value preservation, Investment Advisor will also consider following while investing:

• Ensure that developer contributes capital to project to ensure

cost, quality and time bound delivery (‘skin in the game’) • Strict veto rights at SPV level • Third party execution at Fund’s discretion • Joint bank account signatory rights across development partners • No sales price escalation or fringe income taken into account –

entire project modelled on conservative and static basis • Take over rights if project not delivered • Right to appoint Project Management Consultant (PMC) • Local city presence through combination of Investment / Asset

level team Fund V will approach a partnering philosophy and will provide strategic inputs to the Investee Companies to help them achieve their own objectives in a professional and transparent manner and to build value for their projects. Fund V will invest only in private limited structure and other structure as approved by VCF Regulations.It shall be guided by the following sectoral and regional exposure limits, which may be reviewed periodically based on market conditions. Target IRR • Gross IRR of 24% plus Investment Period • 2+1 years from interim close

Expected Investment Holding Period • 4 - 5 years Expected number of investments • 6-10 depending upon the size of investment opportunity


27

5.2 What is the nature of instrument / unit allotted to Investors

Please refer to the Offering Documents of the Fund for details on units.

5.3 Who can invest in Domestic Fund V?

Resident Indian investors (Institutions, Corporates and HNI)

5.4 Is there any lock-in period for investment? Is there a provision for early exit?

There is a structural lock in for investment, since return of capital is limited to actual exits. Also the fund does not buyback units and also units are also not listed in the market. So till such time project don’t mature / exit and cash flow is not received from the project, investment cannot be redeemed. Investor has an option of third party sale of fund units. Disinvested amount has to be returned to the customers and cannot be reinvested. Please refer to PPM for further details on lock-in.

5.5 Will the Fund declare an NAV?

None of the INDIAREIT Funds declare an NAV. However, each Fund issues a quarterly Newsletter to its investors that detail the various developments at the Fund level. As provided in each Fund’s constitutive documents, an independent valuation by a reputed international property consultant is commissioned annually (Half yearly on a best case basis) and a summary of the same is shared with the investors. All investments are shown at cost till the project is exited.

5.6 What are the reporting procedures to the investors?

Following reports are sent to the investors: • Quarterly newsletters providing details on status of various

projects, summary on markets and price movements in invested locations. Developments in the real estate sector and analysis on its impact on the market and various invested projects

• Annual audited financial statements • Annual third party valuation reports by International Property

Consultants • Annual Income Statement

5.7 Are audit reports available to the investors? Provide sample

Yes, annual audit reports for Domestic Funds can be made available to potential investors on request.

5.8 Can you answer sudden inquiries by investors?

IFAPL has a robust Investors Relations cell in place, which answers any investor query quickly. Since most of the investors are being referred to us through leading banks, the investors’ queries are primarily answered directly by


28

How often do you organize a team to have a face-to-face explanation for investors?

relationship/investment advisors – who in turn are free to approach us for any queries.

5.9 What if the investor wants to exit before the investment period of the Fund?

Is there a buy back option?

Investor with a minimum of 6 years holding capacity should invest as there are no mid way exit options. There is no buy back option available.

5.10 What happens if an investor cannot honour subsequent requests for drawdown?

If the investor does not honour a draw down notice, the fund can either levy penalty for the delay in payments and in case of non – payment, forfeit the contribution already made by the investor. Please refer to the PPM for further details

5.11 At what price will the shares be issued after the Initial Closing?

Units issued on par value of INR 100,000.

Please refer to the PPM for further details.

5.12 In case I have any concern or grievance whom can I approach?

IFAPL has an ‘Investor Relations’ team that is dedicated to directly answer investor queries. E-mail: [email protected] Phone: +91-22-6151 3440

5.13 What is the concept of Interim Closing?

The initial closing of Fund V has been held upon receiving capital commitment of INR 50 crores. The Investment Advisor will hold “Interim Closing” on receiving Capital Commitments equal to or more than INR 300 crores. However, the Investment Advisor may, at its sole discretion declare Interim Closing upon receiving Capital Commitments for an amount lower than INR 300 crores.

5.14 What are some of the

The upcoming deal pipeline can be shared on request.


29

indicative upcoming projects that IFAPL is evaluating?

5.15 Do you also

expect to advise Domestic Fund V to invest in other developing companies and portfolio of other funds?

No.

5.16 Can the proposed fund invest in publicly listed companies? Indicate what the limitations are, and what your policy is regarding hostile take-overs?

NA

5.17 Please detail the investment process for INDIAREIT Funds?

INDIAREIT funds have established best practices and good governance systems in its project evaluation and monitoring processes. The investment process is summarized below:


30

i. Sourcing / Initial vetting of deals: The Investment Advisor will identify potential deals though extensive research, tender invitations, tie-ups with reputed real estate consulting firms, merchant bankers, investment advisors and through relationships. The Domestic Fund V will lay down sound principles and processes for identifying builders/developers of repute and track record. Due weight will be given to the professional approach of the developer. The Investee Companies will be selected based on a combination of management teams, professional skills, track record and growth potential, existence of a sound business plan, and availability of sound exit options

ii. Filtration: The Investment Advisor will vet the deal, to filter out those that do not match

the Fund investment criteria. Here the focus will be on the Mumbai Market with early stage entry, well-defined exits, low cash out to developer, structured to provide downside protection

iii. Preliminary evaluation: Emphasis here will be on in-depth research both at macro and

micro levels. For example the macro level analysis for a mixed-use development would cover the sectoral trends, demographic patterns, economic growth, social infrastructure such as educational institutes and infrastructure projects like connectivity, water and power supply proposed for the city. This would enable the fund to identify potential green field projects with high potential of capital appreciation. At the micro level, emphasis would be on the project location, capabilities of the developer, existence of rights and title of property, etc.


31

iv. Detailed evaluation, due diligence and structuring of proposal: Emphasis here will be on continued in-depth research and due diligence to minimize the risk. The financial and legal due diligence would include the entire business model, the organization, the legal framework, and regulatory compliance. Financial engineering to optimize returns would be conducted and risk mitigation measures put in place. This would result in maximizing the returns for the contributors by way of capital appreciation. Subsequent to detailed evaluation and due diligence Investment Advisor will prepare the proposed final terms of investment.

v. Investment Committee approval & execution of investment agreements: The structured

project together with the terms of investment including investment protection rights and exit options will be put up to the Investment Committee for consideration. Investment Committee approves the investment terms specifying the terms relating to pre-commitment and pre-disbursement conditions. Upon satisfactory compliance of such conditions the investment agreements will be drafted and vetted by the Fund’s legal counsel. Such agreements will contain agreed contractual rights and obligations of each of the parties including board seats, customary veto rights, warranties, representations, anti-dilution and exit provisions for the Fund. Depending on the investment size, the Domestic Fund V may also obtain a say in the important decisions of the Investee Companies through participation/representation in management. Upon finalization of investment agreements Domestic Fund V and the Investee Company shall execute the same

vi. Post investment monitoring: Investment monitoring will be done through participation

in key project decisions and/or monitoring the progress of the project through periodic project updates and company visits. Domestic Fund V can provide value addition to the project by helping in identifying the proper mix of consultants such as master planners, design architects, constructors etc.

5.18 Do INDIAREIT Funds invest in each project as a sole investor, or do you co invest with other funds?

As of now, all investments under the INDIAREIT Funds have been solo investments. However, the INDIAREIT Funds are open to participate with other funds/ investors.

5.19 What are the checks and balances that the Fund adheres to prior to making investment decision?

Pursuant to preliminary analysis of the investment proposal by investment advisor, a detailed evaluation, due diligence and structuring of the proposal is done. Here emphasis will be on continued in-depth research and due diligence to minimize the risk.

• The financial and legal due diligence would include the entire business model, the organization, the legal framework, and regulatory compliance

• Financial engineering to optimize returns would be conducted and risk mitigation measures put in place with a view to maximizing the returns for the contributors by way of capital appreciation

• Developer balance sheet is analysed to determine financial strength of the developer to fulfil its commitments


32

• Secure adequate collateral where necessary • Backend upside to the developer • Escrow account for project cash flow • Joint signatories on bank accounts • Equal representation on the board with voting rights and

stringent reserved matters Investments by the Fund shall be approved post internal deliberations of the Investment Committee which is constituted of independent advisors, promoter representatives who have an understanding of the legalities and structuring issues related to real estate transactions. Investments by the Investment Committee of the Fund shall be approved post internal deliberations of the Committee which is constituted of promoter representatives and independent advisors who have an understanding of the legalities and structuring issues related to real estate transactions.

5.20 How does IFAPL select developers?

IFAPL evaluates developers on multiple criteria before taking an investment decision. Some of these include:

• Experience in real estate development with the developer in the particular geography where the investment is proposed

• Total built up area developed in the past and the proportion of development in the particular segment (residential, commercial, etc) with the developer

• Track record in terms of timely delivery, quality, dealings with various stakeholders like land owners, buyers, financial institutions ascertained through reference checks and third party due diligence through international property consultants where deemed necessary

• Organizational structure, books of accounts, internal MIS for the past transactions and manpower profile of the developer

5.21 Elaborate on guidelines/requirements in terms of disclosures expected from developers

Some of the basic details that developers are expected to share/disclose include:

• Title and legal status of the project • Various approvals required and current status of the same

to carry on desired development • Various assumptions undertaken • Basis of financial projections • Detailed architectural/structural plans • Details on competing projects in the site vicinity • Any market data to support demand/sales projections • Details of various business partners they plan to engage for

project • Corporate structure/existing shareholders and their

holdings in the company • Last 3 years financial details, balance sheets etc. for the

company


33

This is just an indicative list and more details may be required to be disclosed, depending on the project.

Developers are also encouraged to partner with consultants recommended by IFAPL to carry independent valuations and due-diligence.

EXIT STRATEGIES 5.22 Please provide

details of exit strategies / procedures including: Details of preferred exit scenarios. The Limited Partners Role in the decision making process. For example, the degree of approval / advice sought from Limited Partners on exit strategies

Exit strategies in respect of investments made by Fund V shall include but not be limited to:

(a) Direct sale of product to end customers, especially for residential project

(b) Sale to existing REITs, funds, funds of funds or other similar entities;

(c) Asset securitisation either onshore or offshore; or (d) En-bloc sale to institutional investors. (e) Potential listing in case of Enterprises level investments (f) Sale of stake to development partner or third party buyer

5.23 As to the properties being developed, are they going to be sold to third parties after completion or will they be rented out? Are they going to be sold/rented out by the building (as opposed to by the floor, room, etc.), or is it case by case?

INDIAREIT Funds expect to maintain a portfolio of primarily residential properties. INDIAREIT may also choose to invest in commercial properties if the opportunity is deemed to be favourable. The residential properties would be sold to third party buyers to generate consistent cash flow. The commercial properties may be developed, leased out and sold to earn an optimal mix of lease rentals and capital gains. The Funds will seek buyers for the entire buildings/ properties depending upon tax incidence and the regulatory framework including opening up of REITS/ listing potential for the investee company holding such property, etc. Overall, the exits will be done on case-to-case basis, taking into account the tenure of the fund and the nature of the real estate market.

5.24 How will you assess the value of property when

Sales will be undertaken by the developer right through the project execution phase. The sale price will depend on prevailing market conditions in the area that the project is taking place.


34

you sell it? Could you provide the details with an example? In order to ensure adequacy of assessment, will there be an appraisal report by a third party?

5.25 What is the property valuation process while project is in progress? Are there are any third party agencies appointed to review the valuations?

The Funds are required to conduct an annual valuation exercise, the results of which are shared with investors. This is typically done by reputable companies including C Jones Lang LaSalle, CBRE, Colliers International, Knight Frank, Cushman & Wakefield, , DTZ International etc.

5.26 Who will carry out actual tasks of exit strategy?

The responsibility of managing exits will rest with the Funds, under advice from IFAPL and approval of the relevant IC. However, IFAPL and the Funds will retain services of leading tax and legal experts to ensure tax optimal and seamless exit from its investee companies.

5.27 In case you rent out completed properties, what is your stance on the holding period (rent-out period)? How long do you expect to hold properties for renting, from the time of project construction start until the Fund sells it out to a third party?

This could be subject to fund tenure. IFAPL expects most of the Fund projects to have a development/ construction horizon of 4-5 years. Where the properties are rented out, IFAPL will seek to maintain a rent out period to ensure exits are within the tenure of the Fund.

5.28 Is there any possibility that Fund V shall go

It is not envisaged that Fund V will go public


35

public? 5.29 Please specify

controls in place with regards to: - Any conflict with other funds under management - Use of independent valuers to secure stock

As a policy, IFAPL will advise on the launch of fresh schemes under the Domestic or Offshore umbrella only once the existing Domestic or Offshore Fund has been committed at least 70% for investment. Further, there are co-investments by the existing Domestic and Offshore funds as described in the co-investment plan. Currently the Offshore fund is fully deployed and hence co –investment is not foreseen until a new Offshore fund is raised. The portfolio investments are made as per the guidelines for maximum investments as described in Section 2 and 4. The exit strategies are the same for different funds, thus, there should be no conflict of interest within different funds.

5.30 Describe IFAPL’s proposed risk management philosophy and methodology

Predevelopment Risk Mitigation measures Exit Risk

5.31 How does

IFAPL address downside performance?

Downside risk is protected by one or more of the following mechanisms

• Work on a preferred return of capital, with a minimum-return benchmark, with the developer. In such arrangements, the developer gets rewarded through higher share of profits post reaching benchmark deliverables

• Entry at land cost stage only with no premium over the land

Non-availability of land and/or clear title

Sanction feasibility

Process driven project evaluation

Detailed due diligence before investing

Establish guidelines for investees for amendments to and controlling designs, costs and quality

In-depth analysis of approval process

Milestone-driven investments

Poor construction quality

Cost and time overruns

Delays in local approvals

Adverse demand situation

Regulatory Risk

Tracking of market conditions

De-risking through pre-sales

Periodic portfolio review and evaluation

Development Risk


36

cost being paid to the developer. In such arrangements, the INDIAREIT Funds may take a higher percentage of cost sharing even-though the profit share is on an equitable basis. But, such capital is treated as preferred capital and returned to the INDIAREIT Funds prior to profit share trigger

• De-risking through establishing pre-sales and/or lease options during construction phase itself thus ensuring minimal outflow towards construction while also establishing a base level selling price for the properties being developed under any given project

• Staggered payments to the developer linked at actual deliverables like construction schedules, concluded sales, etc

• INDIAREIT Funds also appoint their own nominees on the Board of Directors of the project, with veto power as well as strict reserved matters

• INDIAREIT Funds also ensure their interests in the investee companies by building provisions to take over control of the company on non-performance both on cost as well as time criterion

• All project cash flows are escrowed to ensure proper disbursal and collection of funds at the SPV level

IFAPL expects to continue with the same measures for investments by the Fund V.

5.32 Explain procedures and preparation for catastrophic real estate market conditions

• Since the INDIAREIT Funds enter into the project at ‘land cost stage’, which is an inherent asset and is unaffected by market movements owing to its pertinent rarity and over-demand, IFAPL believes that such investments are well-guarded against catastrophic real estate market conditions – which would largely effect the ‘development costs’ and final sales price of the ‘developed product’ – but will not significantly influence the ‘land cost’ of a project

• Effective structuring to protect investors from the volatile market conditions

• Detailed sensitivity analysis – considering various market scenarios – and ‘minimal rate-of-return’ clause in the agreement, provide sufficient cushion and buffer before making any investments.

• Early de-risking by means of pre-sales in residential projects.

• Higher share of residential projects that ensures continuous cash flow further reduce the project risk in catastrophic conditions

• Conservative assumptions on business plan

5.33 Discuss the NA


37

kinds of problems that have arisen in properties realized or valued below cost. State how these problems were solved.

5.34 In case a developer fails to complete a project and the INDIAREIT Funds take it over, how smoothly will the Funds be able to take over and complete the Project?

The team at IFAPL is confident that it will be able to advise on or manage the take over any incomplete project and execute it smoothly given the involvement of the team in the development of the project at each stage, including appointment of third party civil contractors and other third party service providers. With Mr Khushru Jijina at the helm, supported by a strong asset management team, we have competence within the team to complete a project should the developer fail to do so.

5.35 Which deals from the earlier funds proved successful and which deals proved unsuccessful?

INDIAREIT Funds have successfully completed four exits in its Domestic Fund Scheme I, III & Offshore Fund:

• Maiden investment in residential project (Signature Island) exited in Sept. ’08 with 2.22x net money multiple

• Exit from commercial project (Neptune Evolution – Kurla) in Nov’10, translating into 2.97x net money multiple.

• Partial exits done from Bangalore Retreat, Ariisto Sapphire, Samira, Alpha City, Ariisto TDR

5.36 Will there be

an opportunity for the clients to express their investment views (what are the criteria for an investor to be a member of an advisory committee?)

Depending on the size of the fund, each of the INDIAREIT Funds might have one or more cornerstone investor(s) that will have contributed to a sizable portion of the total fund, and is in a position to add value to the fund. Such a cornerstone investor may have a seat on the Investment Committee as well as a Board seat and will accordingly get an opportunity to express his views on the investment opportunities available to the Fund.

Cash Flows 5.37 Within how

many days after receiving the Drawdown notice, the investor needs

21 working days


38

to remit the money?

5.38 How is the Residual Value intended to be allocated at the end of the winding-up of Fund V?

The Fund will endeavour to realize cash proceeds from all its investments within the term of the Fund. IFAPL believes that the average holding period of investments advised by it will be 4-5 years. The Fund may only make in-specie distributions if it is unable to dispose of its investments within the term of the Fund.

5.39 What is the policy regarding re-investment of investment proceeds?

The Fund shall not make reinvestments of Distribution Proceeds.

5.40 Describe the management fee structure of Fund V

2.0%, 1.75% and 1.5% p.a. for Class A, B & C units respectively

5.41 What are the expenses that shall be borne by Fund V?

The Fund’s initial expenses, including setting up costs, legal fees, incorporation and registration expenses and fees, placement and distribution fees and commissions to be paid to intermediaries, (“Initial Expenses”) shall be borne by the Fund, and shall not exceed 2% of the aggregate Capital Commitments of the Company. The Investment Advisor shall bear any Initial Expenses that exceed 2% of the aggregate Capital Commitments of the Company The annual Fund Expenses to be borne by the Fund shall include the following:

• All operating expenses of the Company and the Alternative Investment Vehicles, if any

• Management fees • Expenses payable to all service providers, including,

Administrators, auditors and lawyers • Incidental expenses including expenses relating to execution

of any agreements, for purposes other than consummation of the transactions

• Expenses incurred by the Company for collection of the Capital Commitments;

• Placement/distribution fees/commissions in connection with sale of Shares of the Company

• Legal and statutory expenses • Travel expenses of directors of the Company • Fees for seeking professional advice • Taxes imposed on the Company and the Investments • Banking charges • Costs of preparing and circulating financial and tax reports to

shareholders; and • Insurance premiums

In addition to the above, the Board of Directors shall approve such


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Fund Expenses (including any other extra-ordinary and non-recurring expenses) in any given fiscal year, as it deems fit.

5.42 Explain the terms ‘Carry Ratio of Profits’ and ‘Hurdle’?

‘Hurdle’ is a milestone rate of return. The ‘Carry-ratio of profits’ of 82.5:17.5 ( 85:15 for commitment INR 1 crore to INR <10 crores and 87.5:12.5 for commitment more than INR 10 crores ) between the Investors and the Fund Advisor is shared on the entire corpus only after achieving the minimum preferred rate of 12% p a in the case of Domestic Fund V. After the investors get the entire principal and a minimum return at the preferred rate of 12% back, the Investment Advisor becomes eligible to share the profits. While computing distribution of profits, the Investment Advisor has the right to catch up with the return already given to the investors (in terms of the 12% preferred rate given) such that the entire profits continue to be shared in the ratio of 82.5:17.5 (subject to scheme). Subsequent profits are divided equitably in the ratio of 82.5:17.5 between the investors and the Investment Advisor.

5.43 What is the policy for treatment of profits arising out of the projects? Will these profits be ploughed back in the fund or will be distributed upfront to the shareholders/ investors?

The Fund has no re-investment policy and the proceeds will be distributed amongst investors on pro-rata basis.

Section 6: Individual Investee Projects 6.1 You have set

limits on the amount to invest in a single segment. How do you categorize segments?

Segments are categorized as under: (a) Commercial (b) Residential (c) Mixed Use (d) Retailing (e) Hospitality Industry and Service Apartments (f) IT and IT Enabled Services / Biotech Parks (g) Special Economic Zones

(h) Enterprise Level Investment


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6.2 What is the basic structure of the individual investee entities?

Each investee company is in the form of a special purpose vehicle created to undertake the specific projects and its legal status is that of a private limited company incorporated under the Indian Companies Act, 1956 and registered with the Registrar of Companies.

6.3 Do individual

investee entities (Special Purpose Companies) have other investors than the INDIAREIT Funds? (i.e. developers, constructors, etc.)

The special purpose vehicle is the entity in which the developer and the INDIAREIT Funds have an economic interest. It is possible that the SPV has other investors, including other financial investors.

6.4 Who will bear the cost incurred at each investment (including initial and annual costs)?

All expenses relating to the initial transaction costs of making an investment are borne either by the Fund or by the SPV. All recurring or annual operating expenses of the SPV are borne by the SPV. Please refer to the Offering Documents for details on Fund

expenses.

6.5 What kind of countermeasures do you have against cost overrun and time overrun?

The following measures are used: Firstly, outsourcing the construction to contractors/ developers at a fixed price. Secondly, having an asset manager at the developer’s site, to track the developments at the construction site and to guide, liaison with the Project Managers and the Developers. Thirdly, hiring project managers for the development helps in giving

a direction, guidance in terms of cost, quality and time required.

6.6 Discuss your specific “value-add” to your portfolio companies

IFAPL believes that its management team is unique in that it is headed by an experienced ex-developer and backed by professional managers. IFAPL believes that this allows the team a better appreciation of the nuances of the trade including the risks and their mitigation options during land acquisition, development and exit from investments. As a result, IFAPL believes that the team brings considerable value to the investments advised by it which include:

• Choice of consultants to deal with basic permissions and

sanctions including land title • Vision to develop state of art signature properties and access

to leading architects, civil contractors, international property consultants and sales network

• Understanding of the market which allows the right spread in terms of stage wise sales to ensure optimal returns with


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minimal risks • Monitoring of cost, quality and timing of delivery through

tight monitoring and control over projects and understanding of the market place

• Recommendation on structuring of exit

6.7 What are the typical rights that the funds have at the SPV level? Do you typically take a Board Seat in the portfolio companies?

Typically, the shareholders agreements provide for veto rights on all important decisions of its investee companies including but not limited to:

• Cost, quality and timely delivery schedules • Shareholding structure, dividend policy, exit rights and first

rights of refusal pertaining to all major events involving the partner developer

• Right to take over the project and complete it if the developer is unable to complete the project within a pre-agreed time line

• Policy matters regarding purchase of materials, choice contractors and suppliers, sales process and treatment of sales proceeds

IFAPL serves as a director on the SPVs as a nominee of the INDIAREIT Funds to effectively monitor and control the project.

Section 7: Land Acquirement, Ownership Rights, Real Estate Development, Taxation 7.1 What is the

conventional form of development (types of developer, builder, other related businesses and what kinds of contracts are in place)?

Contracts are typically either development agreements (refers to construction) / conveyance between land lords (refers to joint development agreements where the land lord may form a party to the project by taking consideration in kind, i.e. finishes property instead of money) / auctioning agencies and the developer. There are works contracts between developer and various contractors who actually undertaken the job of physical construction of the property.

7.2 What is the legal Real estate ownership of the companies in which the Funds invest?

The INDIAREIT Funds acquire equity ownerships in Real Estate projects that are structured as Special Purpose Vehicles (SPVs). These SPVs are incorporated as private limited companies. The real estate is acquired by the SPV either as a freehold land or long term leasehold land.

7.3 Is there any record from the past to be noted as to regulations on land acquisition, such

Land acquisition, past ownership claims etc are possible. However, the same may be verified from the revenue records and local civic authorities prior to acquisition of the property. This is part of the legal due diligence conducted by our solicitors/ lawyers. Title, entitlement is typically taken care of to a great extent through this process, however, the same can never be fool proof.


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as denial of ownership?

7.4 What is the tax treatment for any distributions that will be made by INDIAREIT Fund?

Under the SEBI (AIF) Regulations, 2012 as notified, existing funds (including Domestic Fund V), shall be governed under Regulation 3(2) thereof. The concerned regulation clarifies that such funds would continue to be regulated under the VCF Regulations till it is wound up, including raising commitments up to its targeted corpus. The only restriction is that it may not be permissible for such funds to raise its targeted corpus. In respect of taxation of VCFs, there has been an amendment in the regime of taxation for under Section 10(23FB) of the Income tax Act, 1961 (“ITA”), the tax exemption status for venture capital funds has been restored for investments in venture capital undertakings, irrespective of the sectors in which the venture capital undertaking is engaged. Revisions made to Section 115U make the VCF a true ‘pass through’. This is by way of (1) the nature of income earned by the investors would be identical to the nature of income earned by the VCF; and (2) the income distributed by the portfolio companies can be taxed in the hands of its Investors directly on accrual basis as and when accrued by the Fund, or at the end of the year, income accrued to the fund and not distributed to the Investors shall be taxable in the hands of contributors, i.e., on a deemed receipt basis.

7.5 Do the projects/SPVs in which the INDIAREIT Funds invest have any earthquake, fire and other disaster insurance?

In the pre-construction phase, i.e. under-construction buildings – the contractor, mandatorily, has to take the 'CAR' (Contractors' All Risk) policy from a general insurance company.

Post the construction; the residents/developers form a society -

which charges regular maintenance fees. A part of these fees is 'Sinking Fund' - which is kept by the society and is to be used for necessary repairs, post the recommendations from structural audit, conducted by a registered architect/engineer, after a stipulated time period.

As far as the insurance for earthquakes/fires is concerned - this has

to be a private initiative of the owner of the said building, as this is not mandatory yet. All leading insurance companies offer this insurance service to individual home-owners/corporates. However, as part of all building sanctions, all buildings need to obtain NOC from respective authorities, stating whether the said building is built within safe norms and has adequate fire-fighting arrangements - before they can be allowed for occupancy.

These are some general provisions with respect to earthquake/fire

insurance. 7.6 Please tell us The standard compliance procedure entails continuous monitoring of


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how your compliance department carries out inspections. If there is any case where your compliance department's checking system prevented doubtful actions from taking place please let us know.

investee projects at three levels: • 'Conditions Precedence' checks: Since the disbursements to

various projects are largely milestone-driven, a check is kept on various projects on various updates and how are they progressing vis-à-vis terms mentioned in definitive agreements, entered into with developers at the time of initiation. Respective investment team managers generate these reports monthly

• 'Project level reporting' - These could be half-yearly reports, which look into at both construction/implementation schedules as well as any material changes in macro environment, which could have impact on project implementation as well as returns

• 'Performance Reports' - These could be quarterly or half-

yearly reports, which compile external reports on given projects including audit reports by 'Project Management consultants', financial audit reports, internal audit reports as well as any 'exception audits' - which need to be mutually discussed between the Fund & particular developer

Regular compliance on one of our residential projects highlighted

cost over-runs. The issue was immediately highlighted to the developer and detailed action plan was undertaken to put these construction costs in compliance with expected levels. These included helping the developer team up with alternate

civil contractors & other measures to check the escalation. 7.7 Can you ensure

the quality of workers during the construction rush?

The civil implementation and construction of a given investee project is the responsibility of the developer and IFAPL largely plays a monitoring role. It works closely with developers in finalisation of civil contractors. IFAPL’s past

team expertise has enabled sufficient exposure & experience in understanding the quality of workers with various civil contractors

as well as their retention policies. The 'Project implementation consultants' and respective investment teams keep track on construction schedules and report

any exceptions. 7.8 Are there

Engineering Reports (on soil pollution, earthquake resistance, compliance to the construction law etc)? If there are, who are making

The SPV and the developer do hire civil consultants, local municipal consultants as well as 'project management consultants' to look into

these technical reports.


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them? Section 8: Corporate Governance/ Sponsors 8.1 Who are the

sponsors? Piramal Enterprises Ltd is the sponsor of the Domestic Funds and IFAPL acts as the Investment Advisor to the Offshore Funds and the Investment Manager to the Domestic Funds.

8.2 Please provide some background about the promoter group.

Piramal Enterprises Ltd (PEL), a flagship company of the Piramal Group, is a globally integrated Enterprises company. PEL has diverse product portfolio spanning several therapeutic areas. It is also one of the largest custom manufacturing companies with a global footprint of assets across North America, Europe and Asia. PEL has now ventured into financial services for lending and fund management for Infrastructure and other sectors. It has a growth track record of above 29% CAGR since 1988.

Ajay Piramal is the Chairman of the Piramal Group and heading a multibillion dollar industrial group, having diversified interests in pharmaceuticals, glass containers, financial services and real estate development. Within the group, the leading companies are, inter alia, Piramal Enterprises Limited, Piramal Life Sciences Limited, Allergan India Limited, Piramal Glass Limited and Piramal Realty Limited.

8.3 How is Piramal

Enterprises involved in each project?

Piramal Enterprises is not involved in the day to day running or management of any project / investment made by any of the INDIAREIT Funds. The independent management team at IFAPL, with adequate experience and understanding of the Indian Real Estate market, is involved in the management and monitoring of various Fund projects.

8.4 In contractual terms, who is the leader of each development project? Developers, or the promoters of the fund?

The Developer is the leader/promoter of each development project.

8.5 What are the relationships between the developer, builder/constructor, the Piramals and the Fund (in terms of the contracts)?

Decision making of the respective Funds is governed by its Investment Committee, which is detailed above in Section 3 (constitution of the IC) and Section 5 (investment process). Each of the INDIAREIT Funds enters into an agreement as a

financial investor with third party developers. However, IFAPL closely monitors the progress of the project to ensure timely, cost efficient and quality output.

8.6 What are the profiles of the board members

Ajay Piramal


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of the Fund? Ajay Piramal is an eminent business personality in the global corporate world. His educational qualifications are B.Sc. (Hons.) from Bombay University, Master in Management Studies from Jamnalal Bajaj Institute of Management Studies and Advanced Management Programme, Harvard. Ajay Piramal is the Chairman of Piramal Enterprisess Limited and heading an industrial group of over Rs. 4,500 crores, having diversified interests in pharmaceuticals, glass containers, etc. Within the group the leading companies are Piramal Enterprises Limited (largest pharmaceutical company in the domestic market), Allergan India Private Limited (a joint venture), Gujarat Glass Private Limited (packaging products for pharmaceutical and perfumery industries), etc.

Khushru Jijina

Mr.Khushru Jijina is a Chartered Accountant with an illustrious career spanning over 2 decades in the field of real estate, corporate finance and treasury management and has been with the Piramal Group for around 12 years. He was a key member of the founding team of INDIAREIT in 2006 and was instrumental in raising two domestic funds (together Rs. 1,014 crores) and the Offshore Fund (US $ 200 mn) and was also responsible in deploying a large proportion of these investments. Mr.Jijina was reinducted in the senior management of INDIAREIT in September 2012 and is now designated as the Managing Director. From 2010, as the Managing Director of Piramal Realty, Mr.Jijina was spearheading the group’s foray into real estate development - Piramal Realty has rapidly built a pipeline of over 20 million sq. ft. in Mumbai and aspires to build high quality living and work spaces through customer centric design and strong execution. Prior to this, Mr.Jijina was the Executive Director in Piramal Sunteck Realty, where he was responsible for a portfolio of projects spanning Mumbai, Navi Mumbai, Nagpur, Jaipur and Oman and oversaw all aspects of their execution. Mr.Jijina joined the Piramal Group in 2001 as the Vice President-Treasury and had been instrumental in securing debt at the lowest cost for the group, setting new benchmarks in the debt market. He started his career with Rallis, a TATA Group company, where he held several important positions in corporate finance over a span of 12 years.


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Vallabh Bhansali Vallabh Bhansali is a leading investment banker, venture capitalist and investor of India. He is the co-founder and Chairman of Enam – a reputed financial services group. Vallabh Bhansali is a rank-holding Chartered Accountant. Vallabh Bhansali’s professional association is across a large number of organizations & chambers of Commerce including SEBI, Bombay Stock Exchange, Investor Grievances Forum, etc. He has been serving on various Committees of these bodies. He is a Trustee of the BSE. Niraj Bhukhanwala Niraj Bhukhanwala is a MBA from INSEAD, France. He has done his Bachelors in Electrical Engineering from The Indian Institute of Technology, Mumbai and also done his Master in Electrical Engineering from the University of Maryland, College Park. On the professional front he was a part of the team that set up Intel's venture capital operations in India. There he focused on early stage technology investments. Prior to Intel, he has worked with Mckinsey and Company in London focusing on pan European strategies in the telecom and Enterprises sector. At present, he is Director of Bhukhanwala Holdings Private Limited It is a closely held boutique investment company and the primary investment vehicle for the Bhukhanwala Group, one of the pre-eminent Indian business groups. It is a registered NBFC with the Reserve Bank of India with investments across various asset classes with a focus on private equity investments.

8.7 Does IFAL or the

fund get any incentives from the developers?

Neither the Funds nor IFAPL get any incentives from the developer.

8.8 Are there any financial-relations with developer as

No, there are no financial relations between the developer and the administrative company.


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well as administrative company?

8.9 What is the relationship with Peninsula Land Management Company, which is headed by Mr. Rajeev Piramal? Is there a corporate relationship to manage real estate business of INDIAREIT Fund, or are conflicts or competitive environment expected to emerge?

INDIAREIT has no relationship to Peninsula Land Management Company. Both operate in their independent capacities in their distinct spheres.