Valuation Analysis

Fair Value of Equity Shares:

Choice Corporate Services Private Limited

Valuation Report for ascertaining FMV of Equity Shares of Choice Corporate Services Private Limited

Ref.: VR/F25/232

Date: 30th October, 2024

To,

Choice Corporate Services Private Limited

Sunil Patodia Tower, Plot No. 156-158 J.B. Nagar, Andheri (East),

Mumbai, Maharashtra, India - 400099.

Dear Sir/Madam,

Sub: Valuation report on fair value of equity shares of the Company

This is with reference to our discussion between Choice Corporate Services Private Limited (“CCSPL” or

“Company”) and Mr. Anurag Singal (“Registered Valuer”), we are pleased to submit the following

valuation report (“the report”) summarizing our analysis pertaining to fair valuation of equity shares of

CCSPL. Based on our discussions with the management of CCSPL (“the management”), the effective date

of this valuation is September 30, 2024 (“valuation date”).

For the purpose of section 50CA, the fair market value of the share of a company other than a quoted

share, shall be determined in the manner provided in sub-clause (b) or sub-clause (c),as the case may be,

of clause (c) of sub-rule (1) of rule 11UA and for this purpose the reference to valuation date in the rule

11U and rule 11UA shall mean the date on which the capital asset, being share of a company other than

a quoted share, referred to in section 50CA, is transferred, the Income Tax Rules, 1962.(Refer Point 5)

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For the Purpose of Internal Reporting, we have determined the fair value of equity shares. We have

examined the provisional financial statements for the periods 1st April, 2024 to 30th September, 2024 as

well as projected cash flows / financial statements for the period from 1st October, 2024 to 31st March,

2031. The valuation of shares has been done in accordance with Discounted Cash Flow Method (DCF).

(Refer Point 6)

Fair value conclusion

As per the computation, the fair value of the Equity shares as on 30th September, 2024, may be taken as:
Methods Equity Value Value per Share
(INR in lakhs) (INR)
Fair Value under Rule 11UA - 373.18

Discounted Cash Flow Method 1,000 10,000

# Total number of equity shares outstanding as on 30.09.2024: 10,000

The Valuation Report is attached to this certificate.

The Certificate is based on the information provided to us by the management. The work has been
performed subject to the assumptions and limiting conditions described at the end of the report.

Anurag Digitally signed by Anurag Singal

Singal
Date: 2024.10.30 [Link] +05'30'

Anurag Singal

Registered Valuer – Securities & Financial Assets

Registration No.: IBBI/RV/06/2022/14679

ICAI RVO Membership No.: ICAIRVO/06/RV-P005/2022-2023

UDIN: 24067099BKAWJQ7173

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Contents
1. Scope and Purpose of this Report ....................................................................................................... 5
2. Background of the Company................................................................................................................ 6
3. Limitations and Disclaimer ……………………………………………………………………………………………………………..7

4. Valuation Approach and Methodologies ............................................................................................ 8

5. VALUATION METHOD - Determination of Fair Value as per Rule 11UA .......................................... 18
6. VALUATION METHOD – DISCOUNTED CASH FLOW METHOD .......................................................... 19

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1. Scope and Purpose of this Report
1.1 Scope of the report

The scope of work is limited to the use of valuation approaches, methods and procedures to arrive at
the value conclusion. The scope includes determining the fair value of equity shares of the Company
as of the valuation date. Included in the scope are all necessary procedures required to arrive at the
value conclusion including a review of the marketplace and industry in which the Company operates,
research of guideline companies and the Company's expectation of future business operations.

1.2 Purpose of the report

The report, its underlying analyses and conclusions are to be used only in their entirety, by the
management for determining the fair value of equity shares for the purpose of compliance of rule
11UA of Income tax Rules, 1962 and for internal reporting. This report is not intended to be used for
any purpose other than stated above.

For the aforesaid purpose i.e compliance of rule 11UA of Income tax Rules, 1962 , We have used Net
Asset Value (NAV) method as the valuation methodology and for Internal reporting purpose we have
used Discounted Cash Flow Method (DCF) as the valuation methodology.

1.3 Information Relied Upon

We have based this opinion on information provided and represented by the management of CCSPL.
Our review and analysis included, but was not necessarily limited to, the following steps:

 Interviews with management concerning its assets, financial and operating history and
forecasted future operations of the Companies;
 Management certified provisional financial statements for the periods 1st April, 2024 to 30th
September, 2024.
 Projected cash flows / financial statements from the period 1st October, 2024 to 31st March,
2031.

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 2. Background of the Company
2.1. About the Company
Choice Corporate Services Private Limited / “The Company” was incorporated under The Companies Act
2013 on 09/03/2011 (CIN U51909WB2021PTC249752) having Registered Office at Sunil Patodia Tower,
Plot No. 156-158 J.B. Nagar, Andheri (East), Mumbai, Maharashtra, India - 400099. Choice Corporate
Services Private Limited is involved in Activities auxiliary to financial intermediation, except insurance
and pension funding.
The directors of the company are:

DIN Director’s Name

02819581 Arun Kumar Poddar
09489670 Suyash Sunil Patodia

The Authorised and Issued, subscribed and Paid-up Capital of the company is as follows:
Particulars No. of Shares Amount (INR.)
Authorised: Equity Share of INR.10/- each 10,000 1,00,000
Total 1,00,000
Issued, subscribed and Paid-up: Equity Share of INR.10/- 10,000 1,00,000
each
Total 1,00,000

Identity of the Valuer and any other Experts involved in the Valuation.
Anurag Singal is a Valuer registered with the Insolvency and Bankruptcy Board of India vide Registration
number- IBBI/RV/06/2022/14679 under the Securities and Financial Assets category. He is also a
member of the Institute of Chartered Accountants of India. He has also earned his MBA from IIM
Ahmedabad.

No other experts have been involved in the valuation.

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3. Limitations and Disclaimers
3.1. Scope Limitation

This valuation report has been prepared based on discussions with the management of the Company
and other publicly available information. The valuation exercise was carried out under the following
limitations and assumptions:

3.1.1 The Valuation analysis of shares is based upon the information provided by the Company and
various assumptions made by the Company and any change in these assumptions may have
an impact on the conclusions of this report.
3.1.2 We have not made an appraisal or independent valuation of any of the assets or liabilities of
the investee companies and have not conducted an audit or due diligence or
reviewed/validated the financial data provided by the management. We assume no
responsibility for technical information furnished by the Company. However, nothing has
come to our attention to indicate that the information provided was materially
misstated/incorrect or would not afford reasonable grounds upon which to base the report.
3.1.3 The scope of our work has been limited, both, in terms of the areas of the business and
operations which we have reviewed and the extent to which we have reviewed them. There
are matters, other than those noted in this report, which might be relevant in the context of
the transaction and that a wider scope might uncover.
3.1.4 The determination of share value is not an exact science. The numbers arrived at are
subjective and are based on individual judgment. Therefore, there is no single undisputed
share value. Our valuation might differ from others.

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4. Valuation Approach and Methodologies
Valuation of a business is not an exact science and ultimately depends upon what it is worth to a
serious investor or buyer who may be prepared to pay a substantial goodwill. This exercise may be
carried out using various methodologies, the relative emphasis of each often varying with:

• whether the entity is listed on a stock exchange

• industry to which CCSPL belongs

• past track record of the business and the ease with which the growth rate in cash flows to perpetuity
can be estimated

• extent to which industry and comparable Company information is available.

The results of this exercise could vary significantly depending upon the basis used, the specific
circumstances and professional judgment of the valuer. In respect of going concerns, certain valuation
techniques have evolved over time and are commonly in vogue. These approaches can be broadly
categorized as follows:

1. Cost Approach

2. Market Approach

3. Income Approach

4.1. Cost Approach

This method determines the worth of a business by the assets it possesses. It involves examining every
asset held by the Company, both tangible and intangible. The value of intangibles is referred to as the
Company's goodwill, the difference in value between the Company's hard assets and its true value.
The value arrived at under this approach is based on the financial statements of the business and may
be defined as Shareholders’ Funds or Net Assets owned by the business. The Net Asset Value is
generally used as the minimum break-up value for the transaction since this methodology ignores the
future return the assets can produce and is calculated using historical accounting data that does not
reflect how much the business is worth to someone who may buy it as a going concern. Pursuant to
accounting convention, most assets are reported on the books of the subject Company at their
acquisition value, net of depreciation where applicable. These values must be adjusted to fair value
wherever possible. Further, the balance sheet values are to be adjusted for any contingent liabilities
that are likely to materialize.
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 Intrinsic value is at the core of fundamental analysis since it is used in an attempt to calculate the
value of the total assets of the business and then compare it with the fair value.

4.2. Market Approach

The value of a business is determined by comparing the company’s accounting ratios with other
companies of the same nature and size. This approach is used, where the value of a stock is estimated
based upon its current price relative to variables considered to be significant to valuation, such as
earnings, cash flow, book value, or sales of various business of the same nature. Business appraisal
includes comparative transaction method and publicly traded company method. Through this, it
derives a relationship between performance, revenues and selling price.

4.3. Income Approach- Discounted Free Cash Flow Method (DCF)

 Under the DCF method the projected free cash flows from business operations after considering
fund requirements for projected capital expenditure and incremental working capital are
discounted at the Weighted Average Cost of Capital ('WACC'). The sum of the discounted value of
such free cash flows and the discounted value of a perpetuity is the value of the business.

 The free cash flows represent the cash available for distribution to both the owners and the
creditors of the business. The free cash flows are determined by adding back to profit before tax,
(i) interest on loans if any, (ii) depreciation and amortizations (non-cash charge), and (iii) any non-
operating item. The cash flow is adjusted for outflows on account of (i) capital expenditure, (ii)
incremental working capital requirements, and (iii) tax

 WACC is considered as the most appropriate discount rate in the DCF Method since it reflects
both the business and the financial risk of the company. In other words, WACC is the weighted
average of the company's cost of equity and debt.

 To the value so arrived, appropriate adjustments have been made for loan funds and cash and
cash equivalents after considering the tax impact wherever applicable to arrive at the equity
value.
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  The value as arrived above is divided by the outstanding number of equity shares to arrive at the
fair value per share.

To estimate the fair value of the equity value of the Company, we have used the Discounted Cash
Flow (“DCF”) method under Income Approach and Net Asset Value (NAV) under Cost Approach.

4.4. Valuation Approach and Methodologies

A. The fair market value of unquoted equity shares as per Rule 11UA shall be the value, on the
valuation date, of such unquoted equity shares as determined in the following manner,
namely: —
The fair market value of unquoted equity shares = (A+B+C+D-L) × (PV)/(PE), where,

 A= book value of all the assets (other than jewellery, artistic work, shares, securities, and
immovable property) in the balance sheet as reduced by, —
I. any amount of income-tax paid, if any, less the amount of income-tax refund claimed,
if any; and
II. any amount shown as asset including the unamortized amount of deferred
expenditure which does not represent the value of any asset;
 B = the price which the jewellery and artistic work would fetch if sold in the open market
on the basis of the valuation report obtained from a registered valuer;
 C = fair market value of shares and securities as determined in the manner provided in
this rule;
 D = the value adopted or assessed or assessable by any authority of the Government for
the purpose of payment of stamp duty in respect of the immovable property;
 L= book value of liabilities shown in the balance sheet, but not including the following
amounts, namely: —
I. the paid-up capital in respect of equity shares;
II. the amount set apart for payment of dividends on preference shares and equity
shares where such dividends have not been declared before the date of transfer at a
general body meeting of the company;

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 III. reserves and surplus, by whatever name called, even if the resulting figure is negative,
other than those set apart towards depreciation;
IV. any amount representing provision for taxation, other than amount of income-tax
paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of
the excess over the tax payable with reference to the book profits in accordance with
the law applicable thereto;
V. any amount representing provisions made for meeting liabilities, other than
ascertained liabilities;
VI. any amount representing contingent liabilities other than arrears of dividends
payable in respect of cumulative preference shares;
PV= the paid-up value of such equity shares;

PE = total amount of paid-up equity share capital as shown in the balance sheet;

B. the fair market value of unquoted shares and securities other than equity shares in a company
which are not listed in any recognized stock exchange shall be estimated to be price it would
fetch if sold in the open market on the valuation date and the assessee may obtain a report
from a merchant banker or an accountant in respect of which such valuation.

Conclusion over selection of appropriate valuation methodology:

Considering the above analysis of each method, nature of the industry and stage of business are
at high growth stage of operations we have considered the Discounted Cash Flow (DCF) Method
as most appropriate for the valuation of the Equity Value of the Company required for Internal
Reporting purpose. For the purpose of transfer of shares, Fair Value of Equity Shares is determined
under Rule 11UA.

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4.5. Rejected approaches

The Market approach has been disregarded for the valuation analysis due to non-availability of listed
comparable companies or transaction with target companies operating in similar geography, service
areas and stage of development as the Company.

Valuation Premise

Premise of Value refers to the conditions and circumstances how an asset is deployed. Determining the
business value depends upon the situation in which the business or a business interest is valued, i.e. the
events likely to happen to the business as contemplated at the valuation date. In a given set of
circumstances, a single premise of value may be adopted while in some situations multiple premises of
value may be adopted.

Standard of value

The standard of value used in the valuation of equity shares is fair value (“FV”). The term FV is defined by
the Institute of Chartered Accountants of India (“ICAI”) valuation standard 101: Definitions as follows:
“The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the valuation date”.

Premise of value

ICAI Valuation Standard 101 defines premise of value as “the conditions and circumstances how an asset
is deployed”. It defines going-concern value as “…the value of a business enterprise that is expected to
continue to operate in the future”. The premise of value for our analyses is going concern value as there
is neither a planned or contemplated discontinuance of any line of business nor any liquidation of the
Company.

Subsequent facts after the valuation date

The Valuation date is 30th September 2024 and the Valuation Report is issued on 30th October 2024. There
are no subsequent material facts after the valuation date till the date of the valuation report.

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Valuation standards

The Report has been prepared in compliance with the Valuation Standards issued by the Registered
Valuers Organisation - Institute of Chartered Accountants of India- The detailed workings are attached to
this Report.

Caveats and Statement of Limiting Conditions:

Restriction on use of Valuation Report

This document has been prepared for the purposes stated herein and should not be relied upon for any
other purpose. Our client is the only authorized user of this report and is restricted for the purpose
indicated in the engagement letter. This restriction does not preclude the client from providing a copy of
the report to third -partyadvisors whose review would be consistent with the intended use. We do not
take any responsibility for the unauthorized use of this report.

Responsibility of Registered Valuer

We owe responsibility to only to the client that has appointed me under the terms of the engagement
letters. We will not be liable for any losses, claims, damages or liabilities arising out of the actions taken,
omissions or advice given by any other person. In no event shall we be liable for any loss, damages, cost
or expenses arising in any way from fraudulent acts, misrepresentations or wilful default on part of the
client or companies, their directors, employees or agents.

We are not advisors with respect to accounting, legal, tax and regulatory matters for the proposed
transaction. This Report does not look into the business/commercial reasons behind the proposed
transaction nor the likely benefitsarising out of it. Similarly, it does not address the relative merits of the
proposed transaction as compared with any other alternative business transaction, or other alternatives,
or whether or not such alternatives could be achieved or are available.

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Accuracy of Information

While our work has involved an analysis of financial information and accounting records, our engagement
does not include an audit in accordance with generally accepted auditing standards of the client existing
business records. Accordingly, we assume no responsibility and make no representations with respect to
the accuracy or completeness of any information provided by and on behalf of you and the client. Our
report is subject to the scope and limitations detailed hereinafter. As such the report is to be read in
totality, and not in parts, in conjunction with the relevant documents referred to herein and in the context
of the purpose for which it is made.

In the course of the valuation, we were provided with both written and verbal information. We have
however, evaluated the information provided to us by the Company through broad inquiry, analysis and
review but have not carried out a due diligence or audit of the information provided for the purpose of
this engagement. Our conclusions are based on the assumptions, forecasts and other information given
by/on behalf of the Company.

Achievability of the forecast results

We do not provide assurance on the achievability of the results forecast by the Management/owners as
events andcircumstances do not occur as expected; differences between actual and expected results may
be material. We express no opinion as to how closely the actual results will correspond to those
projected/forecast as the achievement of the forecast results is dependent on actions, plans and
assumptions of Management.

Post Valuation Date Events

The user of this valuation report should read the basis upon which the valuation has been done and be
aware of the potential for later variations in value due to factors that are unforeseen at the valuation
date. Due to possible changes in market forces and conditions, this valuation report can only be regarded
as relevant as at the valuation date.

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No Responsibility to the Actual Price of the subject asset if sold or transferred/ exchanged

The actual market price achieved may be higher or lower than our estimate of value depending upon the
circumstances of the transaction (for example the competitive bidding environment), the nature of the
business (for example the purchaser’s perception of potential synergies). The knowledge, negotiating
ability and motivationof the buyers and sellers and the applicability of a discount or premium for control
will also affect actual market price achieved. Accordingly, our valuation conclusion will not necessarily be
the price at which actual transactionwill take place.

Reliance on the representations of the owners/clients, their Management and other third parties

The client/owner and its Management/representatives warranted to us that the information they
supplied was complete, accurate and true and correct to the best of their knowledge. We have relied upon
the representations of the owners/clients, their Management and other third parties concerning the
financial data, operational data, other investments as specifically stated to the contrary in the report. We
shall not be liable for any loss, damages, cost or expenses arising from fraudulent acts,
misrepresentations, or wilful default on part of the companies, their directors, employee or agents.

No procedure performed to corroborate information taken from reliable external sources

We have relied on data from external sources also to conclude the valuation. These sources are believed
to be reliable and therefore, we assume no liability for the truth or accuracy of any data, opinions or
estimates furnished by others that have been used in this analysis. Where we have relied on data, opinions
or estimates from external sources, reasonable care has been taken to ensure that such data has been
correctly extracted from those sources and /or reproduced in its proper form and context.

Compliance with relevant laws

The report assumes that the Company complies fully with relevant laws and regulations applicable in its
area of operations and usage unless otherwise stated, and that the Company will be managed in a
competent and responsible manner. Further, as specifically stated to the contrary, this report has given no
consideration to matters of a legal nature, including issues of legal title and compliance with local laws, and

15
litigations and other contingentliabilities that are not recorded/reflected in the balance sheet provided to
us.

Multiple factors affecting the Valuation Report

The valuation report is tempered by the exercise of judicious discretion by the valuer, taking into account
the relevant factors. There will always be several factors, e.g., Management capability, present and
prospective competition, yield on comparable securities, market sentiment, etc. which may not be
apparent from the Balance Sheet but could strongly influence the value.

Management’s Responsibility

We have provided our recommendation of the Valuation based on the information available to us and
withinthe scope of our engagement, others may have a different opinion. The final responsibility for value
at which the proposed transaction shall take place will be with the Board of Directors of the Company/
investors, who should take into account other factors such as their own assessment of the proposed
transaction and input ofother advisors.

We have relied on the judgment of the Management as regards contingent and other liabilities.
Accordingly, our valuation does not consider the assumption of contingent liabilities other than those
given to us as likely to crystallize. If there were any omissions, inaccuracies or misrepresentations of the

information provided tous, it may have the effect on our valuation computations.

Caution to users of the report

This report has been prepared as general information for private use of investors to whom the report has
been distributed, but it is not intended as a personal recommendation of particular financial instruments
or strategies and thus it does not provide individually tailored investment advice, and does not take into
account the individual investor’s particular financial situation, existing holdings or liabilities, investment
knowledge and experience, investment objective and horizon or risk profile and preferences. The investor
bears the risk of losses in connection with an investment. Before acting on any information in this
publication or report, it is recommendable to consultone’s financial advisor. The information contained in

16
this publication or report does not constitute advice on the tax consequences of making any particular
investment decision.

The valuer assumes no liability as regards to any investment, divestment or retention decision taken by the
investor on the basis of this publication or report. In no event will entities of the Group or other associated
and affiliated companies be liable for direct, indirect or incidental, special or consequential damages
resulting from the information in this publication or report.

The risk of investing in certain financial instruments is generally high, as their market value is exposed to
a lot of different factors such as the operational and financial conditions of the relevant company, growth
prospects, change in interest rates, the economic and political environment, foreign exchange rates, shifts
in market sentiments etc. Where an investment or security is denominated in a different currency to the
investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value,
price or income of or from that investment to the investor. Past performance is not a guide to future
performance. Estimates of future performance are based on assumptions that may not be realized.

Others
A valuation analysis is necessarily based on the prevailing stock market, financial, economic and other
conditionsin general and industry trends in particular as in effect on, and the information made available
to us as of, the date hereof. Events occurring after the date hereof may affect this report and the
assumptions used in preparing it, andwe do not assume any obligation to update, revise or reaffirm this
Report.

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5. VALUATION METHOD - Determination of Fair Value as per Rule 11UA
Calculation of Net asset value of equity shares in accordance with section 56(2)(x) read with Rule 11UA and Rule 11UAA of the Income-Tax
Rules, 1962

Particulars Amount in INR Lakhs

'A' refers to the below 128.22

Book value of the assets in the Balance Sheet as on the valuation date 131.43
Less:
(i) Any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any 3.21
(ii) Any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of
any asset -
(iii) Book value of shares and securities -
(iv) Jewellery and artistic work -
(v) Immovable property (Land)

'B' refers to the below -

The price which the jewellery and artistic work would fetch if sold in the open market on the basis of the valuation report obtained
from a registered valuer -

'C' refers to the below -

Fair market value of shares and securities -

'D' refers to the below -

The value adopted or assessed or assessable by any authority of the government for the purpose of payment of stamp duty in
respect of the immovable property -

'L' refers to the below 90.91

Book value of liabilities in the Balance Sheet as on the valuation date 131.43
Less:
(i) the paid-up capital in respect of equity shares 1.00
(ii) the amount set apart for payment of dividends on preference shares and equity shares -
(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards
depreciation 35.49
(iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax
claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with -
the law applicable thereto
(v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities 4.04
(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference
-
shares

'PE' refers to the below

Total amount of paid up equity share capital as shown in Balance Sheet 1.00

PV' refer to the below

The paid up value of such equity shares (in INR) 10.00

FMV (in INR) = (A + B + C + D - L) / PE * PV 373.18

Computation of FMV as at 30.09.2024

Particulars UoM Amount

Book Value (as computed) (BV) INR in lakhs 37.32

Paid up value of each equity share (PV) INR 10.00
Total amount of paid up equity share capital
INR in lakhs 1.00
as shown in the balance-sheet (PE)
Value per Equity Share (BV)*(PV)/(PE) INR 373.18

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Notes:

1) as reduced by,
 any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if
any;
 any amount shown as asset including the unamortised amount of deferred expenditure
which does not represent the value of any asset.

2) But not including the following amounts, namely:

 the paid-up capital in respect of equity shares;
 the amount set apart for payment of dividends on preference shares and equity
shares where such dividends have not been declared before the date of transfer at a
general body meeting of the company;
 reserves and surplus, by whatever name called, even if the resulting figure is negative,
other than those set apart towards depreciation;
 any amount representing provision for taxation, other than amount of income-tax
paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of
the excess over the tax payable with reference to the book profits in accordance with
the law applicable thereto;
 any amount representing provisions made for meeting liabilities, other than
ascertained liabilities;
 any amount representing contingent liabilities other than arrears of dividends
payable in respect of cumulative preference shares.

6. VALUATION METHOD – DISCOUNTED CASH FLOW METHOD

We are required to arrive at the fair valuation of equity value of the Company as per any generally
accepted valuation methodology for valuation of securities on arm's length basis.
Basis the analysis undertaken in previous paragraph; we have used Discounted Cash Flow
approach in our analysis for computing the fair value of equity value of the Company.
The DCF method is considered the most theoretically sound approach and scientific and
acceptable method of determination of the value of a business.

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 Application of the DCF methodology for valuation of the Company entailed the following stages:
 Estimation of the net cash flows of the Company to be generated from October 01, 2024 to
March 31, 2031 based on financial projections. This estimate has been produced from financial
projections supplied and approved by the Management. Refer Annexure 2 for Projected
Financial Statements.
 The future free cash flows are derived considering, inter alia, the changes in the working
capital, and any capital expenditure. They are an aggregation of free cash flows during the
explicit forecast period – prepared based on the business plan – and during the post explicit
forecast period, estimated using an appropriate method, and are available to Company’s
stakeholders.
 Calculation of the discount rate based on Weighted Cost of Capital (“WACC”). The discount
rate on the capital that the provider expects to earn on other investments of equivalent risk.
Refer Annexure 1 for computation of discount rate.
 Application of the discount rate to the Free Cash Flows attributable to stakeholders through
2031 to arrive at the Net Present Value (“NPV”) of those cash flows.
 Computation of terminal value. We have assumed a terminal value growth rate of 3%.
 Estimation of equity value calculated as summation of terminal value and present value of
cash flows till March 31, 2031 and adjusted by surplus assets and liabilities. Refer Annexure 3
for computation of Equity Value.

Under Discounted Cash Flow Method

Annexure 1: Estimate of Discount Rate

The WACC is considered as appropriate discount rate to calculate current values at September 30,
2024.

WACC Calculation:

WACC = Kd x (1-Tc) x (D/(D+E)) + Ke x (E/(D+E))

where,

Kd = Estimated Pre-Tax Cost of Debt

Tc = Company Tax Rate

D = Debt

E = Equity

Ke = Cost of Equity

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 Cost of Equity (“Ke”)

Ke has been estimated based on the CAPM. This model calculates the cost of equity of a Company as
the sum of the risk-free rate and a Company specific equity risk premium, the latter of which
represents the risk of Company in question as compared to the market risk premium:

Calculation of Cost of Equity:

Cost of equity = Rf + b x (Rm-Rf) + CSRP

where,

Rf = Risk-free rate

Rm = Expected market equity risk premium

b = Measure of observed volatility compared to the market
CSRP = Company specific risk premium

Computation of Beta
For calculation of cost of equity, beta has to be calculated and the guideline companies chosen for the
purpose of calculation of beta need to be selected based on comparability of similar business and
products, services offered by the Company. We have taken Industry wise Beta- Hospitals/Healthcare
Facilities as per the Aswath Damodaran.

Annexure 2: Projected Financial Statements:

Profit & Loss Statement (Figures in INR Lakhs except value per share and number of shares)
FY 2025 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Particulars 6 months 6 Months 12 Months 12 Months 12 Months 12 Months 12 Months 12 Months
Actuals Projected Projected Projected Projected Projected Projected Projected
Revenue from Operations:
Sales 83.08 95.73 159.12 253.41 361.02 472.80 616.80 792.57
Total Revenue 83.08 95.73 159.12 253.41 361.02 472.80 616.80 792.57

Expenses
Employee Benefit Expenses 40.12 45.95 71.61 121.64 173.29 212.76 277.56 356.65
Admin and other Cost 11.91 12.27 24.42 25.15 25.90 26.68 27.48 28.30
Payout 23.13 23.93 39.78 63.35 90.26 118.20 154.20 198.14
Total Expenses 75.15 82.15 135.80 210.14 289.45 357.64 459.24 583.10
EBITDA 7.92 13.58 23.32 43.27 71.57 115.16 157.56 209.46
Depreciation & amortization 2.51 1.81 3.44 3.09 2.78 2.51 2.25 2.03
EBIT 5.41 11.77 19.89 40.18 68.79 112.65 155.30 207.44
Finance Cost 0.91 0.78 0.64 0.50 0.37 0.23 0.09 -
Other Income 0.14 - - - - -
PBT 4.64 10.99 19.24 39.67 68.42 112.42 155.21 207.44
Tax 25.17% 1.00 2.77 4.84 9.99 17.22 28.29 39.06 52.21
PAT 3.64 8.23 14.40 29.69 51.20 84.13 116.15 155.23

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Balance Sheet (Figures in INR Lakhs except value per share and number of shares)
FY 2025 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Particulars 6 Months 6 Months 12 Months 12 Months 12 Months 12 Months 12 Months 12 Months
Provisionals Projected Projected Projected Projected Projected Projected Projected
I. Equity and Liability
Share Capital 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Reserves and Surplus 35.49 43.72 51.94 66.34 96.03 147.24 231.36 347.51
Total Shareholders Equity 36.49 44.72 52.94 67.34 97.03 148.24 232.36 348.51

Non-Current Liabilities
Provisions 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20
Deferred Tax Liability 1.42 1.42 1.42 1.42 1.42 1.42 1.42 1.42
Total Non Current Liabilities 4.62 4.62 4.62 4.62 4.62 4.62 4.62 4.62

Current Liabilities
Financial Liabilities
Short term borrowings 66.90 56.90 46.90 36.90 26.90 16.90 6.90 -
Trade Payable 5.66 1.84 3.05 4.86 6.92 9.07 11.83 15.20
Other financial Current Liabilities 6.09 3.83 5.97 10.14 14.44 17.73 23.13 29.72
Other Current Liabilities 10.83 10.83 10.83 10.83 10.83 10.83 10.83 10.83
Short term Provisions 0.84 0.84 0.84 0.84 0.84 0.84 0.84 0.84
Total Current Liabilities 90.32 74.23 67.59 63.56 59.93 55.37 53.53 56.59

Total Equity and Liabilities 131.43 123.57 125.15 135.53 161.59 208.22 290.51 409.72

II. Assets
Non-Current Assets
Property, Plant and Equipment 36.17 34.36 30.93 27.83 25.05 22.55 20.29 18.26
Other Financial assests 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Income Tax Assests 3.21 3.21 3.21 3.21 3.21 3.21 3.21 3.21
Total Non Current Assets 40.38 38.57 35.14 32.04 29.26 26.76 24.50 22.47

Current Assets
Trade receivables 67.10 7.87 13.08 20.83 29.67 38.86 50.70 65.14
Cash and cash equivalents 22.18 75.36 75.17 80.89 100.89 140.84 213.55 320.34
Loans 1.55 1.55 1.55 1.55 1.55 1.55 1.55 1.55
Other Current Assets 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22
Total Current Assets 91.05 85.00 90.01 103.48 132.33 181.47 266.01 387.25

Total Assets 131.43 123.57 125.15 135.53 161.59 208.22 290.51 409.72

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 Annexure 3: Computation of Equity Value

Choice Corporate Services Private Limited

Calculation of NPV of Explicit Period INR(Lakhs)
Particulars Explicit Period FY24-25 FY25-26 FY26-27 FY27-28 FY28-29 FY29-30 FY30-31
(6 months)
Revenue 2,751.44 95.73 159.12 253.41 361.02 472.80 616.80 792.57
EBIT 616.02 11.77 19.89 40.18 68.79 112.65 155.30 207.44
Less: Tax @ 25.17% -155.05 (2.96) (5.01) (10.11) (17.31) (28.35) (39.09) (52.21)
Add: Depreciation 17.91 1.81 3.44 3.09 2.78 2.51 2.25 2.03
Less: Capex - - - - - - - -
Less: Change in WC -35.12 (53.14) 1.86 1.77 2.48 3.75 3.67 4.48
Free Cash Flow for Project 443.75 (42.52) 20.17 34.93 56.74 90.56 122.14 161.74
Discounting factor using mid year convention 0.25 1.25 2.25 3.25 4.25 5.25 6.25
Present value of Discounting factor at WACC 12.01% 0.97 0.87 0.77 0.69 0.62 0.55 0.49
NPV of Explicit Period 245.38 (41.34) 17.51 27.06 39.25 55.93 67.35 79.62

Calculation of Terminal Value

Particulars INR (Lakhs)
Terminal year cash flow(FY 31(1+g)) 167
Long term Growth Rate 3%
Required rate of return 12.01%
Discounting factor 0.49
Present Value of Terminal Value 910.45

Calculation of Enterprise and Equity Value

Particulars INR (Lakhs)
Present Value of Cash Flows of Explicit Period 245.38

Present Value of Terminal Value 910.45

Enterprise value 1,155.83
Less: Total Debt as on 30.9.2024 66.90
Add: Surplus Cash as on 30.9.2024 22.18
Equity Value 1,111.12
Minus: Illiquidity Discount 10%
Equity value (Minority, Non-marketable basis) 1,000

Number of Equity Shares outstanding as on 10,000

30.09.2024
Fair Market Value per Equity Share of Rs 10/- 10,000
each (INR)
*Bank Balance,FDs and Investment

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Basis for WACC Calculation

Computation of WACC

Cost of Debt 9.00%

Tax Rate 25.17%
Cost of Debt ( post-tax) 6.73%

Debt % 65%
Equity % 35%

WACC 12.01%

Calculation of Cost of Equity ( Ke) and WACC

Risk Free Rate 6.75% 10 year G-Sec as on 30.09.2024
Here Beta as per Aswath
Damodaran report of Beta
Unlevered Beta 0.38 Analysis as per
Sector(Brokerage & Investment
Banking )
Debt/Equity 1.83
Relevered Beta 0.90
10 year CAGR for Sensex
Market Return 12.21%
between 2014 and 2024
Cost of Equity (Ke) 11.67% Rf+Beta*Market Return
Company Specific Risk
10.00% Assumed
Premium
Cost of Equity (Ke) 21.67%

****END OF REPORT****

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