INVESTMENT UPDATE - Khaleeji Commercial Bank

Reporting Period Covered
16th November 2008 to 15th ISSUE 2
August 2009
INVESTMENT
UPDATE
DANAT INDIA INVESTMENT COMPANY

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Confidentiality: This Investment
Update Report has been prepared
by Khaleeji Commercial Bank
(“KHCB” or the “Bank”) for
information purposes only and is
issued to investors (the “Investors”)
in Danat India Investment
Company (the “Company”) strictly
on a confidential basis. No
representation, expressed or
implied, is made as to the fairness,
accuracy, completeness or
correctness of the information and
opinions contained in this report.
All opinions and estimates
expressed in this report constitute
our present judgment and are
subject to change without notice.
Investors and any other persons
who receive this Investment
Update Report agree that they will
hold the contents of the Investment
Update Report in the strictest
confidence and that they will not
utilize such information to the
detriment of KHCB and the
Company. This document may not
be reproduced, redistributed, and
quoted, in whole or in part, without
the prior written consent of KHCB.
1. INTRODUCTION
Danat India Investment Company (the
“Company”) was established by Khaleeji
Commercial Bank (the “Bank”) as a Cayman
Islands Exempted Company with the
principal purpose of acquiring 100% of the
equity of the Holding Company. The Holding
Company through its subsidiaries will acquire
a stake in Alliance Promoters Limited (the
“Project Company”) which holds a 500 acre
site at Hasanpur within the boundaries of
New Delhi (India) and the rights to develop a
township targeting India’s fast growing
middle class (the “Project”).
The project has an expected target return on
investment (ROI) of 83% over the 3 year
Investment Tenor.
2. KEY COMPANY PARTICULARS
Closing Dates
Investment Tenor
Maturity Dates
Expected ROI
Company Size
• First Closing – 09th March 2008
• Second Closing – 31st May 2008
3 years from the Closing Date,
with an option to extend by a
further year
• First Closing Maturity –
08th March 2011
• Second Closing Maturity –
30th May 2011
83%
USD 163,500,000
3. LAND SOURCING UPDATE
i. 433 acres of the Project land (the “Land”)
has been secured in Title Deeds (“TD”)
(86.6% of the land acquisition/registration
has been completed). The balance 67
acres are being procured and will be
submitted for registration shortly.
ii. The Land is expected to be
procured / registered in full with all
approvals/clearances by the end of Q3
2009.
The delay in procuring the Land has been due
to volatility in the market conditions but also
to the uncertainty caused by the Indian federal
election held in May 2009.
4. LAND VALUATION
The Bank, on behalf of the Project Company,
has undertaken an independent Land
valuation. The Land valuation was done by
Jones Lang LaSalle Meghraj (“JLLM”) in
February 2009. The Land is valued at INR
7,655 per yd2 compared to the previous INR
6,000 per yd2. This is a 27.8% increase in
price since inception.
5. APPOINTMENT OF OPUS
PROPERTIES LIMITED (“OPUS”)
As per the Private Placement memorandum
(“PPM”), Project Company has entered into a
Management Development Agreement
(“MDA”) with Opus.
Opus is a Indian company registered under
the Companies Act of 1956. Opus will be
overall responsible for the project and their
major responsibilities are as follows:-
a. Assistance in obtaining Licenses / permits /
Approvals / Sanctions.
b. Appointment of various agencies i.e.
architects, surveyors, engineers,
contractors and other agencies required
with regard to development of the project.
c. Dealing with governmental authorities and
others to ensure smooth functioning of the
work.
d. Ensuring timely availability of all resources
for smooth functioning of the project and
timely completion.
e. Project supervision, monitoring and
reporting. This will involve supervising
elements such as; timing, costs and project
issue resolution.

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f. Coordination of sales and marketing
activities of the project.
6. Master Planning Update
The world’s largest architectural firm, HOK
International (Singapore) Private Limited
(“HOK”) (Source: World Architecture
magazine 2006) had presented three different
alternative concepts. These were initially
reviewed by Opus and C. P. Kukreja &
Associates, an architect firm; who submitted
their comments. HOK modified and
submitted the fourth revised Master Plan
(“MP”) concept. This MP was presented by
HOK to the Board of Directors (“BOD”) of the
Project Company in the last meeting on 26th
March 2009 in Mumbai.
Considering the global financial crisis and its
impact on the market conditions it was then
decided to conduct a Consumer Preference
and Perception study (“Market Survey”) by
AC Nielsen ORG- MARG (“NOM”) to suggest
the ideal product mix for the Project. NOM
has submitted its market Survey report taking
into account the change in market scenario
and by-laws.
The revised product mix submitted is as
follows:-
Product Mix Earlier Revised
Township 50% 38%
Commercial 5% 10%
IT/ Nonpolluting
Industry - 6%
Entertainment Area - 4%
Public Open Space 15% 15%
Community
Use/ Amenities 10% 9%
Others 20% 18%
Note: Please note that as per the revised
by-laws an additional saleable area of 4%
(Entertainment area) has been made
available. This has the same value as the
Commercial area.
The Project Company forwarded the revised
product mix to HOK. In turn, HOK has
incorporated the corresponding changes in
their Conceptual Master Plan and have
submitted a Draft revised conceptual master
plan. The revised draft is currently under
finalisation and is being discussed by the
Project Company with the local government
body to ensure compliance with by-laws and
its acceptability.
Concurrently, the Detailed Project Report
(“DPR”) application is also being finalised
which includes detailed drawings with
respect to specific development no
components such as built-up area, roads,
utilities and infrastructure.
On completion of the above HOK will then
prepare the Final Conceptual Master Plan
along with the DPR application which will be
submitted to the Board for their perusal and
approval. On approval it will be submitted to
the local government for necessary clearance
permits. We expect the DPR approval to be
obtained by late Q3/early Q4 2009.
7. SELECTION OF CONTRACTORS:
The Project Company is currently in
discussion with a number of reputed
construction contracting companies who
have broad exposure and extensive
experience in the Indian market. The
following construction companies have been
short-listed:-
• Nam Fatt Construction Sdn Bhd,
Malaysia
• UEM Builders Berhad, Malaysia
• Sunway Construction Sdn Bhd, Malaysia
• Shapoorji Pallonji & Co Limited, India
• B. E. Billimoria & Co. Limited, India
The Project drawings will be provided to the
construction companies for them to submit
their tenders which will then be evaluated.
The selection criteria of the contractor would

Confidentiality: This Investment
Update Report has been prepared
by Khaleeji Commercial Bank
(“KHCB” or the “Bank”) for
information purposes only and is
issued to investors (the “Investors”)
in Danat India Investment
Company (the “Company”) strictly
on a confidential basis. No
representation, expressed or
implied, is made as to the fairness,
accuracy, completeness or
correctness of the information and
opinions contained in this report.
All opinions and estimates
expressed in this report constitute
our present judgment and are
subject to change without notice.
Investors and any other persons
who receive this Investment
Update Report agree that they will
hold the contents of the Investment
Update Report in the strictest
confidence and that they will not
utilize such information to the
detriment of KHCB and the
Company. This document may not
be reproduced, redistributed, and
quoted, in whole or in part, without
the prior written consent of KHCB.
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be based on their experience, know how,
suitability to the project and cost proposal.
We expect the appointment of the contractor
for the project to be finalised by Q4 2009
with infrastructure development works
commencing shortly there after.
8. RECRUITMENT OF KEY PERSONNEL
BY PROJECT COMPANY
The Project Company have appointed key
professionals whose positions are as follows:-
a. Vice President – Projects
b. General Manager – Infrastructure
c. General Manager – MEP Services
d. General Manager – Sales & Marketing
e. General Manager – Architect
f. Liaison Manager
g. Engineer Planning & QS
Other support staff are in the process
appointed and a full fledged office is
expected to be operational shortly.
9. SALES AND MARKETING UPDATE
a. As indicated previously the Project
Company has undertaken Market Survey
(with MIS,AC Nielsen, ORG). based on
which the plans and development will be
performed. This will tremendously
enhance the value of the Project and
make it easily marketable.
b. Opus office is expected to be opened
shortly with all the project operational
staff.
c. Project proto-types and display models
are being prepared.
d. Development of market strategy and plan
is under process. Branding of the Project
will also be considered in the market
strategy. Development of brochures and
other related marketing materials will be
prepared based on approval of the market
strategy plan.
e. Participation in Trade shows and events
will be done for marketing of the Project.
This will be considered in the market
strategy plan.
f. The Pre-Sales are expected to commence
by Q4 2009 if all goes to plan.
10. INDIAN ECONOMIC OVERVIEW
• India’s GDP is forecasted to grow at an
average rate of 4.0% ~ 6.0% for year
2009-2010 (Reserve Bank of India).
• During May 2009 and following the
finalization of the Indian parliamentary
elections, shares on the stock market leapt
by 17% on the first day as the Indian
markets gained confidence over the
Congress party-led alliance’s emphatic
victory.
• Falling inflation, a positive byproduct of
global crisis, enable the central bank to
loosen monetary policy more
aggressively. As indicated earlier, the RBI
lowered the cash reserve ratio (CRR)
requirements of banks from 9 per cent to
5 per cent, statutory reserve ratio (SLR)
requirements from 25 per cent to 24 per
cent and the repo rate (the rate at which
it lends to banks overnight), from 9 per
cent to 5 per cent and reverse repo rate
(the rate at which RBI borrows from
banks) from 6 per cent to 3.5 per cent.
INDIA – GDP SNAPSHOT
• Real GDP Growth 2008-09: 6.6%
• Projected Real GDP Growth
2009-2010: 4.0% ~ 6.0%
• GDP as per Economic Activity- Sector
Contribution;
✔ Trade, hotels, transport and
communication – 12.0%
✔ Financing, insurance, real estate &
business services – 12.0%
✔ Construction – 10.0%
Source: Reserve Bank of India
NEXT INVESTOR UPDATE:
The next Investor Update will be sent in
February 2010.