MAX.12 MAND.12 MAX.12 MAND.12 MAX.12 MAND
III. 3.2.2 DIFERENCIAS ANCHURA BICANINA Y BIMOLAR.
The objects of the present Rights Issue of our Company are to finance the fund requirement for the following;
1. To meet the expenses of Development and Construction of our ongoing and planned projects 2. Acquisition of land or land development rights
3. General Corporate Purposes and; 4. To meet Issue expenses
The main objects clause of our Memorandum of Association and objects incidental to the main objects enable us to undertake our existing activities and the activities for which funds are being raised by our Company through this Issue.
We intend to utilize the proceeds of the Issue after deducting expenses relating to the Issue (“Net Proceeds”) which is estimated at Rs. [●] lakhs for the above mentioned objects.
The details of the proceeds of the issue are summarized in the table below:
Particulars Amount (Rs. in Lakhs)
Gross Issue Proceeds [●]
Less: Issue Expenses [●]
Net Proceeds of the Issue [●]
*To be finalised upon completion of the Issue.
The fund requirements and the intended use of the proceeds as described herein are based on management estimates, current quotations from suppliers and our current business plan. The fund requirements and intended use of proceeds have not been appraised by any bank or financial institution. In view of the competitive and dynamic nature of the Real Estate and construction industry, we may have to revise our expenditure and fund requirements as a result of variations including in the cost structure, changes in estimates, and external factors, which may not be within the control of our management. This may entail rescheduling, revising or canceling the planned expenditure and fund requirement and increasing or decreasing the expenditure for a particular purpose from its planned expenditure at the discretion of our Board.
In case of variations in the actual utilization of funds earmarked for the purposes set forth above, increased fund requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other purposes for which funds are being raised in this Issue. If surplus funds are unavailable, the required financing will be through our internal accruals and/or debt.
Cost of Project
We intend to utilize Proceeds for financing the above mentioned objects. The details of utilization of Proceeds are as per the table set forth below:
Particulars Total Estimated Expenditure
(Rs. in Lakhs) To meet the expenses of development and Construction of
our ongoing and planned projects
Golden Enclave 846.40
Krishna Marvel 1979.19
Acquisition of land or land development rights 1500.00
General Corporate Purposes [●]
Means of Finance
Particulars Total Estimated Expenditure
(Rs. in Lakhs)
Net Issue Proceeds [●]
Total Fund Requirements [●]
The aforesaid requirement of funds is proposed to be entirely financed by the Net Proceeds of the Issue. Thus, provisions of the SEBI (ICDR) Regulations in connection with firm arrangements of finance through verifiable means towards 75% of the stated means of finance, excluding the amount to be raised through the proposed Issue and internal accruals/ other sources, does not apply to the Company as it do not proposes to avail any borrowed funds for part financing the Object of the Issue
Details of the Objects of Issue
A. To meet the expenses of development and Construction of our ongoing and planned projects Our Company proposes to deploy a part of the proceeds of the Issue towards Development and Construction of our Ongoing Project i.e. Golden Enclave – New Link Road, Charkop, Mumbai – Residential cum commercial Project and our Planned Project i.e. Krishna Marvel – Juhu, Vile Parle, Mumbai - Retail cum Commercial Project. We are in the process of obtaining the relevant certificates and approvals required to commence the construction and development work for the projects. Further details or status of approvals required on our projects are given on page 128. Further details on our projects are provided in the section entitled ― Our Business on page 66.
The details of the projects, including the utilization of the proceeds of the Issue, are as follows:
(Rs. in Lakhs) Sr.
No Project Name Location Saleable Area (Sq. Ft.) Project Commen cement Date Estimated Completion Date Total Estimat ed project Cost Cost Incurred up to 03/12/10 * Balance Cost to be incurred 1 Golden
Enclave Kandivali (West), Mumbai 27,700 September 2010 March, 2013 846.40 423.00 423.40 2 Krishna Marvel Juhu, Vileparle (West), Mumbai 119,891.25 April 2011 March, 2014 1979.19 108.00 1871.19
*As per the certificate issued by M/s. Ramanand & Associates, Chartered Accountants dated December 3, 2010.
Break-up of Costs
The details of the Break-Up of costs for Golden Enclave are given below:
(Rs. in Lakhs) Sr. No. Construction Cost Total Estimated Cost Amount deployed as at
03/12/2010 #
1 Development Cost 761.76 423.00
2 Selling, Marketing, Brokerage,
Administration and other Miscellaneous Cost
84.64 -
Total 846.40 423.00
# The amount has been funded by Our Company through internal accruals as per the certificate from M/s. Ramanand & Associates, Chartered Accountants dated December 3, 2010.
The details of the Break-Up of costs for Krishna Marvel are given below:
(Rs. in Lakhs) Sr. No. Construction Cost Total Estimated Cost Amount deployed as at
03/12/2010 #
1 Development Cost 1781.27 108.00
2 Selling, Marketing, Brokerage,
Administration and other Miscellaneous Cost
197.92 -
Total 1979.19 108.00
# The amount has been funded by Our Company through internal accruals as per the certificate from M/s. Ramanand & Associates, Chartered Accountants dated December 3, 2010.
B. Acquisition of land or land development rights
As a part of our business strategy, we continue to focus on acquiring land or land development rights or investment in joint development for development in the near- to medium-term for developing new projects. We may undertake such acquisition or development either directly or as a part of joint venture with other parties or in any other manner. We may also look at acquiring land holding companies as a means of acquiring land and/or land development rights. For a real estate company, such as us, land is the basic raw material and acquisition of attractive parcels of land or land development rights on a continuous basis is critical for the growth of our business. However, at present we have not entered into any definitive agreement with any party for acquisition of any particular identified land or land development rights thereon nor have we made any advance payments for the same.
Availability of financial resources at the time of any such acquisition opportunity is a big competitive advantage for any real estate developer.
We propose to acquire land or land development rights primarily in the Mumbai Metropolitan Region. Costs of acquiring land or land development rights will vary depending on various factors, such as, location of land in prime areas or otherwise, profile of the population in the surrounding areas, type of project that can be developed, general economic conditions and the extent of negotiations between us and the parties from whom we propose to acquire land. Further, besides the purchase price payable for the acquisition of land, the cost of acquisition would include various other components, such as brokerage, cost of title searches, stamp duty, taxes, legal fees, cost of conversion of the status of land and the cost of obtaining approvals. Typically for the acquisition of land or land development rights, we are required to pay an advance at the time of executing transaction agreements, with the remaining purchase price due upon completion of the acquisition. We may acquire lands through an auction and prior to bidding in the auction, we may be required to pay a refundable deposit or earnest money. In certain cases, we may be required to furnish a bank guarantee for which we would be required to pay the applicable bank charges. The estimated costs described in this section include such advances, deposits and bank charges. All these elements would be a part of the cost of acquisition of land or land development rights.
We intend to utilize the entire amount earmarked for the acquisition of land or land development rights from FY 2012 to FY 2013. As currently we have not identified the land which we propose to acquire, the proposed deployment of funds from FY 2012 to FY 2013 may vary from year to year. However, we anticipate that the entire amount would be utilized for acquisition of land or land development rights by FY 2013. The process of acquisition of land or land development rights is a time consuming process which requires exhaustive set of due diligence procedures to assess the title and is influenced by other factors. In the event we are unable to utilize the funds earmarked towards acquisition of land or land development rights by the end of FY 2013, we may, with the approval of the Board of Directors, utilize the earmarked funds towards financing the construction expenses of such of our ongoing or planned projects as may be determined by the Board of Directors.
C. General Corporate Purposes
The Net Proceeds from the Issue will be first utilized towards the aforesaid items and the balance is proposed to be utilized for general corporate purposes including strategic initiatives, brand building exercises and strengthening of our marketing capabilities.
Our management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently our funding requirement and deployment of funds may also change. This may also include rescheduling the proposed utilization of Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of Net Proceeds. Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes.
D. Expenses related to the Issue
The Issue related expenses consist of fees payable to Lead Manager to the Issue, Legal Counsel, Bankers to the Issue, Escrow Bankers and Registrars to the Issue, Printing and Distribution expenses, Advertising and Marketing expenses, Depository fees and all other incidental and miscellaneous expenses for listing the Equity Shares on the Stock Exchange. We intend to use about Rs. [●] lakhs towards these expenses for the Issue. All expenses with respect to the Issue will be borne out of Issue proceeds.
Sr.
No Particulars Amount
% of total expenses of
issue % of total issue size
1 Lead Merchant Bankers [●] [●] [●]
2 Registrars to the Issue [●] [●] [●]
3 Legal Advisors [●] [●] [●]
4 Bankers to the Issue [●] [●] [●]
5 SCSB Commission [●] [●] [●]
6 Auditors [●] [●] [●]
7
Others (listing fees ,Stamp duty and other expenses, Advertisement and marketing expenses, Printing &
Stationery (including courier
and transportation charges) ) [●] [●] [●]
Total [●] [●] [●] Schedule of Implementation
The breakdown of the proposed utilization of the Net Proceeds and the deployment of the Issue Proceeds, as currently estimated by the Company, during fiscals FY 2011, FY 2012, FY 2013 and FY 2014, and the expenditure incurred as of December 3, 2010, is set forth below.
(Rs. in Lakhs) Particulars Estimated Schedule of deployment of proceeds of the issue
Already Deployed
FY2011 FY2012 FY2013 FY2014