SUMMER TRAINING PROJECT REPORT

ON
“WORKING ANALYSIS OF SJRB & ASSOCIATES
LLP”

BACHELOR OF BUSINESS ADMINISTRATION

[2021-2024]
Under the Guidance of
Ms. ASTHA DHUPAR
Submitted By
PREETI
Enrolment no.: 00791101721

SRI GURU TEGH BAHADUR INSTITUTE OF MANAGEMENT

AND INFORMATION TECHNOLOGY {Affiliated to GGSIPU}

1
 DECLARATION

I hereby declare that the project work entitled Summer training project report on
the topic “WORKING ANALYSIS OF AN ORGANISATION” submitted to the
Guru Gobind Singh Indraprastha University is record of an original work done
by me under the guidance of Ms. ASTHA DHUPAR, faculty member, Sri Guru
Tegh Bahadur Institute of Management & Information Technology.

------------------------------

Signature of the scholar

PREETI

Place: Delhi

Date: Enrolment no. 00791101721

2
 CERTIFICATE

This is to certify that PREETI student of Sri Guru Tegh Bahadur Institute of

Management & Information Technology of course BBA Batch {2021-2024},

Has completed her research work titled “Summer training project report” on

Working analysis of an organisation Under my guidance and supervision. The

work submitted is genuine and authentic.

-----------------------------------

Signature of Project In charge

MS. DIVYA SHARMA

-----------------------------------

Signature of Guide

Place: Delhi MS. ASTHA DHUPAR

Date: ----------------------------------

Signature of Scholar

PREETI

3
 ACKNOWLEDGEMENT

With profound sense of gratitude and regard, I express my sincere thanks to my

guide and mentor Ms. ASTHA DHUPAR for her valuable guidance and the

confidence she instilled in me, that helped me in the successful completion of

this Summer training project report. Without her help, this project would have
been a distant affair, her thorough understanding of the subject and professional
guidance was indeed of immense help to me.

I am also greatly thankful to the faculty member of our institute who cooperated
with me and gave me their valuable time.

----------------------------
Signature of the scholar
Place: Delhi PREETI
Date: Enrolment no. 00791101721

4
 INDEX
S.NO. PARTICULARS PAGE NO.

1 CHAPTER 1: INTRODUCTION TO INDUSRTY 6-13

2 CHAPTER 2: INTRODUCTION TO COMPANY 14-20

3 CHAPTER 3: ABOUT THE TOPIC AND 21-24

LITERATURE REVIEW
4 CHAPTER 4: RESEARCH METHODOLOGY 25-29

5 CHAPTER 5: DATA ANALYSIS AND 30-35

INTERPRETATION
6 CHAPTER 6: FINDINGS AND CONCLUSION 36-38

7 CHAPTER 7: RECOMMENDATIONS AND 39-41

SUGGESTIONS

8
BIBLIOGRAPHY 42

5
 CHAPTER -1

INTRODUCTION TO INDUSTRY

LLP was brought in India by way of the Limited Liability Partnership Act, 2008.
The basic premise behind the introduction of LLP is to provide a form of business
entity that is simple to maintain while providing limited liability to the owners.
Since, LLPs have been well received with over 1 lakhs registration so far until
September, 2014.

The main benefit of a Limited Liability Partnership over a traditional partnership

firm is that in an LLP, one partner is not responsible or liable for another partner's
misconduct or negligence. It also provides limited liability safety for the owners
from the debts of the LLP. Therefore, all partners in this company enjoy a form
of limited liability protection for each individual's protection within the
partnership, similar to that of the shareholders of a private limited company.
However, unlike private limited company stockholder, the partners of an LLP
have the right to manage the business directly.

Limited Liability Partnership is one of the simplest forms of business to

incorporate and manage in India. With a simple compliance formalities and easy
incorporation process, LLP is preferred by Professionals, Micro and Small
businesses that are family owned or closely-held. Since, LLPs are not adequate
of issuing equity shares, it should be used for any business that has plans for
raising equity funds during its lifecycle.

6
Provides all types business services

offering service and other startup registration services in like PF ESI Registration,
Producer Company Registration, Society Registration, Patent Registration,
Digital Signature Certificate, LLP Registration, Company Registration, Food
License (FSSAI) Registration, Trademark Registration, NBFC Registration,
Section 8 Foundation Registration, Partnership Firm Registration, GST Return
Filing, Copyright Registration, Sole Proprietor Registration, GST Registration,
Public Limited Company Registration, Chartered Accountant Consultation,
FCRA Registration, Legal Services, Private Limited Company Registration,
ROC Compliance, MSME Udyog Aadhaar Registration, One Person Company
Registration, Nidhi Company Registration, Income Tax Return Filing, Trust
Registration, ISO Certification, 12A 80G Registration, Startup India Registration,
Director KYC Verification, NGO Registration, IEC Certification, etc for fresh
startups and entrepreneurs. We offer the cheapest and fastest professional services
in all cities of Haryana like Kaithal, Yamuna Nagar, Sohna, Fatehabad, Rohtak,
Narwana, Kurukshetra, Taraori, Ambala, Khanda, Panchkula, Rewari, Pehowa,
Ellenabad, Gurugram, Sirsa, Sarsod, Sonipat, Mandi Dabwali, Hansi, Samalkha,
Rania, Palwal, Jhajjar, Bhiwani, Ratia, Shahbad, Narnaul, Safidon, Faridabad,
Gohana, Karnal, Panipat, Nuh, Ladwa, Gurgaon, Mahendragarh, Tohana,
Yamunanagar, Jind, Charkhi Dadri, Hissar, and many other cities across India.

7
India has a diversified financial sector undergoing rapid expansion both in terms
of strong growth of existing financial services firms and new entities entering
the market. The sector comprises commercial banks, insurance companies, non-
banking financial companies, co-operatives, pension funds, mutual funds and
other smaller financial entities. The banking regulator has allowed new entities
such as payment banks to be created recently, thereby adding to the type of
entities operating in the sector. However, the financial sector in India is
predominantly a banking sector with commercial banks accounting for more
than 64% of the total assets held by the financial system.

The Government of India has introduced several reforms to liberalise, regulate

and enhance this industry. The Government and Reserve Bank of India (RBI)
have taken various measures to facilitate easy access to finance for Micro,
Small and Medium Enterprises (MSMEs). These measures include launching
Credit Guarantee Fund Scheme for MSMEs, issuing guidelines to banks
regarding collateral requirements and setting up a Micro Units Development
and Refinance Agency (MUDRA). With a combined push by Government and
private sector, India is undoubtedly one of the world's most vibrant capital
markets.

The Financial Services Industry has seen major achievements in the recent past:

 In July 2023, Unified Payments Interface (UPI) recorded 9.96 billion

transactions worth US$ 184.16 billion (Rs. 15.34 Lakh crore).
 The number of transactions through immediate payment service (IMPS)
reached 482.46 million (by volume) and amounted to Rs. 4.66 trillion
(US$ 57.05 billion) in October 2022.
 India’s’s PE/VC investments were at US$ 77 billion in 2021, which was
62% higher than in 2020.
 In 2021, Prosus acquired Indian payments giant BillDesk for US$ 4.7
billion.
 In September 2021, eight Indian banks announced that they are rolling
out—or about to roll out—a system called ‘Account Aggregator’ to
enable consumers to consolidate all their financial data in one place.
 In September 2021, Piramal Group concluded a payment of US$ 4.7
billion (Rs. 34,250 crore) to acquire Dewan Housing Finance Corporation
(DHFL).

8
The financial sector is a segment of the economy composed of companies and
institutions that provide commercial and retail customers with financial
services. A large portion of this sector produces mortgage and loan income,
which increases the value as interest rates decline.

The economy's health is mainly dependent upon the efficiency of its financial
sector. The better the economy is, the safer it is for the country. A weak financial
sector typically means a declining economy.

The financial sector is equated with Dalal Street by many people and the
exchanges that operate on it. However, the financial sector is one of the
essential components of many developed economies. It's made up of brokers,
financial institutions, and money markets—all of which provide the necessary
services to help keep the Main Street going every day.

For an economy to remain stable, a healthy financial sector is required. This

sector is advancing loans for businesses so they can expand, grant homeowners
mortgages, and issue insurance policies to protect individuals, businesses, and
their assets. It also helps to build up retirement savings, which supports millions
of people.

The financial sector generates a good portion of its lending and

mortgage income in a setting where interest rates go down. When the rates are
low, the economic conditions open the doors for more spending
and capital projects. If that happens, the financial sector gains, which means
more economic growth.

9
 Financial Sector

The financial sector consists of many different industries ranging from banks,
investment houses, insurance firms, real estate brokers, consumer finance firms,
mortgage lenders, and real estate investment trusts (REITs).

Primarily, the financial sector includes financial institutions, banks, and non-
banking financial institutions. Financial institutions provide members and
clients with financial services. It is also called financial intermediaries since
they act as intermediaries between savers and borrowers.

India has a variegated financial sector which is experiencing rapid expansion,

both in terms of the healthy growth of existing financial services firms and new
market entry entities. The industry comprises commercial banks, insurance
companies, financial non-banks, cooperatives, pension funds, mutual funds, and
other smaller financial institutions.

However, India's financial sector is predominantly a banking sector with

commercial banks accounting for over 64 per cent of the financial system's total
assets. India's government has introduced several reforms to liberalize, regulate,
and enhance that industry.

10
Future of financial industry in India

India's financial services sector typifies the progress and opportunity

of its economy. The sector will grow rapidly out to 2035, driven by
rising incomes, heightened government focus on financial inclusion
and digital adoption – India's digital payments could pass $1 trillion
by 2030.

India's financial services sector is poised to grow on the back of rising incomes,
significant government attention and the increasing pace of digital adoption.
The long term fundamentals of the sector are sound, but the Indian
Government's openness to private players and foreign participation is likely to
remain patchy. Australia's competitive strengths include an efficiently regulated
domestic sector, high volume of funds under management and niche sector
expertise, which align with India's ambitions for improving its financial services
sector. However, differences in market drivers will limit the transferability of
Australian expertise to an Indian context.

Types of Financial Services in India

 Banking. The financial services sector in India is anchored by the banking

sector

 Professional Advisory

 Wealth Management

 Mutual Funds

 Insurance

 Stock Market

11
  Treasury/Debt Instruments

 Tax/Audit Consulting

Finance are in the form of asset management, financial advisory, retail banking,
planning and taxation, accounting, equity analyst, risk management, business
analyst, sales and trading, personal finance, insurance, etc.

As of July 2023, AUM managed by the mutual funds industry stood at US$
556.81 billion (Rs. 46.38 Trillion) which is around a two-fold increase in the span
of five years. Inflow in India's mutual fund schemes via systematic investment
plan (SIP) stood at US$ 18.09 billion (Rs. 1.5 lakh crore). Equity mutual funds
registered a net inflow of Rs. 22.16 trillion (US$ 294.15 billion) by end of
December 2021. The net inflows were US$ 888 million (Rs. 7,303.39 crore) in
December as compared to a 21-month low of US$ 274.8 million (Rs. 2,258.35
crore) in November 2022.

Another crucial component of India’s financial industry is the insurance industry.

The insurance industry has been expanding at a fast pace. The total first-year
premium of life insurance companies reached US$ 32.04 billion in FY23. In
FY23 (until December 2022) non-life insurance sector premiums reached US$
22.5 billion (Rs. 1.87 lakh crore).

Furthermore, India’s leading bourse, the Bombay Stock Exchange (BSE), will set
up a joint venture with Ebix Inc to build a robust insurance distribution network
in the country through a new distribution exchange platform. In FY23, US$ 7.17
billion was raised across 40 initial public offerings (IPOs). The number of
companies listed on the NSE increased from 135 in 1995 to 2,113 by FY23 (till
December 2022).

12
According to the statistics by the Futures Industry Association (FIA), a
derivatives trade association, the National Stock Exchange of India Ltd. (NSE)
emerged as the world’s largest derivatives exchange in 2020 in terms number of
contracts traded. NSE was ranked 4th worldwide in cash equities by number of
trades as per the statistics maintained by the World Federation of Exchanges
(WFE) for CY2020.

Indian Financial Services Private Limited is an Indian Non-Government

Company. It's a private company and is classified as company limited by shares'.

Company's authorized capital stands at Rs 10.0 lakhs and has 10.0% paid-up
capital which is Rs 1.0 lakhs.

Indian Financial Services Private Limited is majorly in Finance business and

currently, company operations are active.

13
 CHAPTER -2

INTRODUCTION TO THE COMPANY

Sjrb And Associates Llp is a Limited Liability Partnership firm incorporated on

14 January 2020. It is registered at Registrar of Companies, Delhi. Its total
obligation of contribution is Rs. 100,000.

Designated Partners of Sjrb And Associates Llp are Santosh Rani and Aditya
Bansal.

Sjrb And Associates Llp's last financial year end date for which Statement of
Accounts and Solvency were filed is N/A and as per records from Ministry of
Corporate Affairs (MCA), date of last financial year end date for which Annual
Return were filed is N/A.

Registered business Activity of Sjrb And Associates Llp is Business Services.

Business Activity Code of Sjrb And Associates Llp is 74.

Total 2 partners in Sjrb And Associates Llp. Sjrb And Associates Llp is registered
in RoC-Delhi.

14
 TYPE OF CONSULTING SERVICE

Business Consulting

Business Plan Making Customized Reports

Operations Consulting

Process Management

Accounting/ Legal/ Secretarial/ Tax Consulting

Direct Tax Services Indirect Tax Services IP/Trademark

Protection

Financial Advisory/ Investment Banking Service

Valuation For M&A, Fund Raising

DIRECTOR DETAILS

DIN Director Name Designation Appointment Date

08667960 SANTOSH RANI Designated Partner 14 January 2020

08667961 ADITYA BANSAL Designated Partner 14 January 2020

15
 COMPANY DETAILS

LLP Identification Number AAR-6039

Company Name SJRB AND

ASSOCIATES LLP

Company Status Active

RoC RoC-Delhi

Main division of business activity Other Business

to be carried out in India Activities

Description of main division Other Business

Activities

Number Of Partners 0

Number of Designated Partners 2

Date of Incorporation 14 January 2020

Age of Company 3 years, 10 month, 27

days

16
 Registration Details

Registration Year 2020

Registration RoC-Delhi
authorities

Registered for 74
activities

Registration Type Company

Registration

"SJRB & ASSOCIATES LLP is a reputed Chartered Accountants firm in India,

actively engaged in a full service, multi-disciplinary practice across varied
services verticals, viz., – Audit & Assurance, Goods & Service Tax,
Consultancy & Transaction Advisory, Assessments & Appeals, Payroll
Processing, Corporate Taxation, Regulatory etc. The Firm has immense
experience rendering diverse professional services to an extensive base of
national & international clients and is an established name in its field. Our
endeavor is to provide qualitative, expert professional services rendered
efficaciously, sagaciously and with keen attention to details to match clients’
requirements. We provide services pragmatically, innovatively along with due
care ."

17
Vision:

 Be the preferred professional organization, trusted to deliver excellence.

 vision to work with a key principle that is providing innovative, simple &
tailored solutions to its clients and ensuring premium service delivery to
help our clients to grow and develop their business.

Mission:

 To provide consistent, high-quality services which exceeds expectations.

 To have a practical and problem-solving approach.
 To be responsive and versatile.
 To develop knowledgeable and committed professionals as leaders.

Competitors:

 PWC
 RSM International
 Luthra & Luthra

Company size:

25-40 employees

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STRENGTHS

 Performance in typical situations

 High Speed
 Capacity to handle various types of tasks simultaneously
 Accuracy guaranteed in Government & in Other Departmental work
 Goodwill in Public Mind

WEAKNESSES

 Lack of Communication Skills

 Lack of Day to Day Time Management
 Overloaded Work
 Poor Concentration

OPPORTUNITIES

 Case preparation – file charges

 If still it is complicated; it is referred to another expert for second
opinion.
 Accordingly treatment is made.

THREATS
 Lacking time management
 Lacking advance learning of Computers
 Lack of trained people
 Increasing complexity in the tax laws, fema, auditing etc.

19
 Sjrb And Associates Llp Overview

General Details

Company name Sjrb And Associates Llp

Ownership Type limited liability

partnership

Primary Business type mca provider

Main Language English

Corporate Identification AAR-6039

Number (CIN)

Year of Establishment 14/01/2020

Age of Company 3 Years 10 Months 27

Days

Primary Location Panchkula

20
 CLIENT OF THE COMPANY

Mahakali Developers & Resorts Pvt Ltd

Report on valuation of shares

21
 CHAPTER -3
ABOUT THE TOPIC AND LITERATURE REVIEW

Mahakali Developers and Resorts Private Limited (hereinafter referred as “the

Company” or “MDRPL”) is a private limited company incorporated under the
Companies Act, 1956 and having its registered office situated in the state of
Punjab. The Company is engaged in the business of real estate activities including
development of land and sale/purchase of land and buildings.
We, SJRB and Associates LLP, have been engaged by MDRPL to determine the
fair value per equity share as per the Internationally Accepted Valuation
Principles as on the valuation date i.e., 08th August 2022.

The valuations have been carried out for the purpose of determination of relative
fair value per share of the Company as on 08th August 2022.

The Management has also informed us that there are no material change in
business and assets of the company as provided to us (present and future).

This report is subject to the scope, assumptions, exclusions, limitations, and

disclaimers detailed hereinafter. As such, the report is to be read in totality and
not in parts and in conjunction with the relevant documents, annexure etc. as
referred to therein.

The information contained herein, and our report is confidential. It is intended

only for the sole use of the Company. It is to be noted that any reproduction,
copying or otherwise quoting of this report or any part thereof can be done only
with our prior permission in writing.

22
Background of the Company

MDRPL is a private limited company incorporated under the Companies Act,

1956 and having its registered office situated in the state of Punjab. The Company
is engaged in the business of real estate activities including development of land
and sale/purchase of land and buildings.
The shareholding of MDRPL as on 31st March 2022 is tabulated below:

Name of Share Holder Number of Shares Shareholding

held

Ashish Mahajan 1,822,375 50.56 percent

Anil Kumar Sethi 314,400 8.72 percent

Vinod Bandhari 287,372 7.97 percent

Megha Mahajan 224,000 6.21 percent

Shikha Mahajan 202,100 5.61 percent

Others 753,970 20.93 percent

Total 3,604,217 100 percent

Industry Overview

Real estate sector is one of the most globally recognized sectors. It comprises of
four sub sectors - housing, retail, hospitality, and commercial. The growth of this
sector is well complemented by the growth in the corporate environment and the
demand for office space as well as urban and semi-urban accommodations. The

23
construction industry ranks third among the 14 major sectors in terms of direct,
indirect, and induced effects in all sectors of the economy.
In India, the real estate sector is the second-highest employment generator, after
the agriculture sector. It is also expected that this sector will incur more non-
resident Indian (NRI) investment, both in the short term and the long term.

24
 CHAPTER -4

RESEARCH METHODOLOGY

STUDY OBJECTIVES

 To evaluate the share price

 Valuation of shares

SCOPE OF STUDY

Analyze share price of MDRPL.

SAMPLING METHOD

Overall Market share price of the company.

TOOLS FOR ANALYSIS

The collected data are analyzed using tables, graphs .

COLLECTION OF DATA

Primary data is used to evaluate share price.

25
Valuation Methodology
The valuation methodology to be adopted varies from case to case depending
upon different factors affecting valuation. The basis of valuation would depend
on the purpose of valuation, nature of business, future prospects of the company,
industry and other attendant circumstances.

Different methodologies are adopted for valuation of manufacturing, investment,

property, technology, or trading companies. The value arrived is specific to the
point in time and may change with the passage of time. The value is derived in
the context of existing environment that includes economic conditions and state
of industry/market etc. on the appointed date of valuation.

Different Methodologies Used for the Purpose of Valuation

are:

A. Underlying Asset approach:

The asset-based valuation technique is based on the value of the underlying net
assets of the business, either on a book value basis or realizable value basis or
replacement cost basis.

 'Book value' is considered in case where there is no significant movement

either side, in the actual value of assets. Since it represents only the historic
cost, it is generally not prudent to value a company based on its book value.
 'Realizable value' is considered in case where the valuation exercise is being
carried out on an ordinary sale/distress sale basis. In other words, when the
company is likely to be sold or liquidated.
 'Replacement value' and Present values are considered for estimating the Fair
Value of assets of a company on a going concern basis.
 In the 'Net Asset Value (NAV)' method, the net asset value is computed based
on the latest available audited / unaudited Balance Sheet of the Company. The

26
 starting point of this method is the valuation of the total assets that the
Company owns. The loan funds are deducted. Contingent liabilities, to the
extent that in the opinion of the management can be fairly expected to impair
the net asset value of the business, are also deducted.

The resultant figure represents the net worth of the business on the given day.

B. Discounted Free Cash Flow Method (DCF)

The Discounted Cash Flow (DCF) methodology expresses the present value of a
business as a function of its future cash earnings capacity. This methodology
works on the premise that the value of a business is measured in terms of future
cash flow streams, discounted to the present time at an appropriate discount rate.
It recognizes that money has a time value by discounting future cash flows at an
appropriate discount factor.

 This method is used to determine the present value of a business. The DCF
methodology depends on the projection of the future cash flows and the
selection of an appropriate discount factor.
 When valuing a business on a DCF basis, the objective is to determine a net
present value of the cash flows ("CF") arising from the business over a future
select period of time (say 5years), which period is called the explicit forecast
period. Free cash flows are defined to include all inflows and outflows
associated with the project prior to debt service, such as taxes, amount
invested in working capital and capital expenditure. Under the DCF
methodology, value must be placed both on the explicit cash flows as stated
above, and the ongoing cash flows a company will generate after the explicit
forecast period.
 The discount rate applied to estimate the present value of explicit forecast
period free cash flows as also continuing value, is taken at the "Weighted
Average Cost of Capital" (WACC). One of the advantages of the DCF
27
 approach is that it permits the various elements that make up the discount
factor to be considered separately, and thus, the effect of the variations in the
assumptions can be modelled more easily. The principal elements of WACC
are cost of equity (which is the desired rate of return for an equity investor
given the risk profile of the company and associated cash flows), the post-tax
cost of debt and the target capital structure of the company (a function of debt
to equity ratio). In the absence related competitive data, the const of equity is
derived from the previous return as desired by preference shareholders and
with a premium added for risk.
 Value obtained by using DCF method gives us the Enterprise Value; and
adjustment for the loans as on the valuation date gives us the Equity Value.

This method is generally used when there is reasonable certainty on the timing,
quantum and quality of the cash flows.

C. Market approach

The Market Approach derives an estimation of value based on price of the

company listed on the stock exchange or estimating the value of the Company
from a peer company / group of companies listed in stock exchange or estimating
the price of the Company from a similar transaction.

Listed Share Price: Under this approach, the market price of an equity shares as
quoted on a stock exchange is normally considered as the fair value of the equity
shares of that company. Where such quotations are arising from the, shares being
regularly and freely traded in, subject to the element of speculative support that
may be inbuilt in the value of the shares.

Market Multiple Method: Another method of valuing of shares of the company is

by Market Multiple Method. This method involves the comparison of the various
operational metrics (ROE, ROCE etc.) and valuation multiples (EV/EBIDTA,

28
EV/Sales etc.) of the listed peer companies to the subject company for valuing
the business.

It should be understood that the valuation of any business /company or its assets
is inherently subjective and is subject to certain uncertainties and contingencies,
all of which are difficult to predict and or beyond our controls. In addition, this
valuation will fluctuate with changes in prevailing market conditions, the
conditions and prospects, financial and otherwise, of the companies, and other
factors which generally influence the valuation of business/companies and their
assets.

The application of any particular method of valuation depends on the purpose for
which the valuation is done although different values may exist for different
purpose, it cannot be to strongly emphasized that a valuer can only arrive at one
value for one purpose. Our choice of methodology of valuation has been arrived
at using usual and conventional methodologies adopted for transactions of a
similar nature and our reasonable judgment, in an independent and bona fide
manner, based on our previous experience of assignments of a similar nature.

LIMITATIONS OF STUDY
• Lack of availability of data.

• The time available for study is less.

• the limitations detailed in the respective engagement letters. Provision of

valuation opinions and considerations of the issues described herein are areas of
our regular practice. The services don’t represent accounting, assurance,
accounting/ tax due diligence, consulting or tax related services that may
otherwise be provided by us or our affiliates.

29
 CHAPTER -5

DATA ANALYSIS AND INTERPRETATION

The facts as made known to us have been considered till the date of the report.
For the purpose of this valuation report, we have relied upon the following
information and documents made available to us by the company:

a) Copies of audited financial statements for the years ending 31 st March 2020
and 31st March 2021.
b) Copy of unaudited financial statements for the year ending 31st March 2022.
For our analysis and independent checks, we have relied on published and
secondary sources of data available in the public domain and which can be
generally relied upon.
In addition to the above, we have also relied upon the information provided to us
and compiled in the Management Representation Letter.
Wherever required, all the accounts, projections and schedules listed above have
been duly certified by the management of the Company.
We have also relied upon verbal explanation and information given to us by the
management of the Company during the course of our exercise.
It may be noted that no future business plans for the company except for
projections have been provided to us.
During the discussions with the management, we have also obtained explanations
and information considered reasonably necessary for our exercise. The
management has been provided with the opportunity to review the draft report
(without value recommendations) as part of our standard practice to make sure
those factual inaccuracies/omissions are avoided in our final report.

30
 Market Size

By 2040, real estate market will grow to

Rs. 65,000 crore (US$ 9.30 billion) from
Rs. 12,000 crore (US$ 1.72 billion) in
2019. Real estate sector in India is
expected to reach US$ 1 trillion in market
size by 2030, up from US$ 200 billion in
2021 and contribute 13% to the country’s GDP by 2025. Retail, hospitality, and
commercial real estate are also growing significantly, providing the much-needed
infrastructure for India's growing needs.
India’s real estate sector saw over 1,700 acres of land deals in the top 7 cities in
1 year. Foreign investments in the commercial real estate sector were at US$ 10.3
billion from 2017-21. As of February 2022, Developers expect demand for office
spaces in SEZs to shoot up after the replacement of the existing SEZs act.
As per ICRA estimates, Indian firms are expected to raise >Rs. 3.5 trillion (US$
48 billion) through infrastructure and real estate investment trusts in 2022, as
compared with raised funds worth US$ 29 billion to date.
The office market in the top eight cities recorded transactions of 22.2 msf from
July 2020 to December 2020, whereas new completions were recorded at 17.2
msf in the same period. In terms of share of sectoral occupiers, Information
Technology (IT/ITeS) sector dominated with a 41% share in the second half of
2020, followed by BSFI and Manufacturing sectors with 16% each, while Other
Services and Co-working sectors recorded 17% and 10%, respectively.
Around 40 million square feet were delivered in India in 2021. It is expected that
the country will have a 40% market share in the next 2-3 years. India is expected
to deliver 46 million square feet in 2022.
According to Savills India, real estate demand for data centres is expected to
increase by 15-18 million sq. ft. by 2025.
31
In 2020, the manufacturing sector accounted for 24% of office space leasing at
5.7 million square feet. SMEs and electronic component manufacturers leased the
most between Pune, Chennai and Delhi NCR, followed by auto sector leasing in
Chennai, Ahmedabad and Pune. The 3PL, e-commerce and retail segments
accounted for 34%, 26% and 9% of office space leases, respectively. Of the total
PE investments in real estate in Q4 FY21, the office segment attracted 71% share,
followed by retail at 15% and residential and warehousing with 7% each.
India’s gross leasing volume in the top 8 cities stood at 16.2 this was 12.4%
quarter to quarter growth in 2021. India’s net absorption of the office market
stood at 11.56 million square feet in quarter four of 2021. This was an 86% rise
QoQ.
Between July 2021 and September 2021, a total of 55,907 new housing units were
sold in the eight micro markets in India (59% YoY growth).
In the third quarter of 2021 (between July 2021 and September 2021), new
housing supply stood at ~65,211 units, increased by 228% YoY across the top
eight cities compared with ~19,865 units launched in the third quarter of 2020.
In 2021-22, the commercial space is expected to record increasing investments.
For instance, in October 2021, Chintels Group announced to invest Rs. 400 crore
(US$ 53.47 million) to build a new commercial project in Gurugram, covering a
9.28 lakh square feet area.
According to the Economic Times Housing Finance Summit, about 3 houses are
built per 1,000 people per year compared with the required construction rate of
five houses per 1,000 population. The current shortage of housing in urban areas
is estimated to be ~10 million units. An additional 25 million units of affordable
housing are required by 2030 to meet the growth in the country’s urban
population.

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 Investments/Developments

Indian real estate sector has witnessed high growth in the recent times with rise
in demand for office as well as residential spaces. According to Colliers India, a
property consultant, institutional investments in the Indian real estate sector are
expected to increase by 4% to reach Rs. 36,500 crore (US$ 5 billion) in 2021,
driven by rising interest of investors towards capturing attractive valuations
amid the pandemic. According to a recent report by Colliers India, private
equity investments in Indian real estate reached US$ 2.9 billion in the first half
of 2021, which was a >2x increase from the first half in 2020.
Exports from SEZs reached Rs. 7.96 lakh crore (US$ 113.0 billion) in FY20 and
grew ~13.6% from Rs. 7.1 lakh crore (US$ 100.3 billion) in FY19.
In July 2021, the Securities and Exchange Board of India lowered the minimum
application value for Real Estate Investment Trusts from Rs. 50,000 (US$
685.28) to Rs. 10,000-15,000 (US$ 137.06 - US$ 205.59) to make the market
more accessible to small and retail investors.
According to the data released by Department for Promotion of Industry and
Internal Trade Policy (DPIIT), construction is the third-largest sector in terms of
FDI inflow. Construction is the third-largest sector in terms of FDI inflow. FDI
in the sector (including construction development & activities) stood at US$
52.48 billion between April 2000 to December 2021.

Government Initiatives

Government of India along with the governments of respective States has taken
several initiatives to encourage development in the sector. The Smart City

33
Project, with a plan to build 100 smart cities, is a prime opportunity for real
estate companies. Below are some of the other major Government initiatives:
 In October 2021, the RBI announced to keep benchmark interest rate
unchanged at 4%, giving a major boost to the real estate sector in the
country. The low home loan interest rates regime is expected to drive the
housing demand and increase sales by 35-40% in the festive season in 2021.
 Under Union Budget 2021-22, tax deduction up to Rs. 1.5 lakh (US$
2069.89) on interest on housing loan, and tax holiday for affordable housing
projects have been extended until the end of fiscal 2021-22.
 The Atmanirbhar Bharat 3.0 package announced by Finance Minister Mrs.
Nirmala Sitharaman in November 2020 included income tax relief measures
for real estate developers and homebuyers for primary purchase/sale of
residential units of value (up to Rs. 2 crore (US$ 271,450.60) from
November 12, 2020 to June 30, 2021).
 In order to revive around 1,600 stalled housing projects across top cities in
the country, the Union Cabinet has approved the setting up of Rs. 25,000
crore (US$ 3.58 billion) alternative investment fund (AIF).
 Government has created an Affordable Housing Fund (AHF) in the National
Housing Bank (NHB) with an initial corpus of Rs. 10,000 crore (US$ 1.43
billion) using priority sector lending short fall of banks/financial institutions
for micro financing of the HFCs.
 As of January 31, 2021, India formally approved 425 SEZs, of which 265
were already operational. Most special economic zones (SEZs) are in the IT/
BPM sector.

Road Ahead

The Securities and Exchange Board of India (SEBI) has given its approval for
the Real Estate Investment Trust (REIT) platform, which will allow all kind of

34
investors to invest in the Indian real estate market. It would create an
opportunity worth Rs. 1.25 trillion (US$ 19.65 billion) in the Indian market in
the coming years. Responding to an increasingly well-informed consumer base
and bearing in mind the aspect of globalisation, Indian real estate developers
have shifted gears and accepted fresh challenges. The most marked change has
been the shift from family-owned businesses to that of professionally managed
ones. Real estate developers, in meeting the growing need for managing
multiple projects across cities, are also investing in centralised processes to
source material and organise manpower and hiring qualified professionals in
areas like project management, architecture and engineering.
The residential sector is expected to grow significantly, with the central
government aiming to build 20 million affordable houses in urban areas across
the country by 2022, under the ambitious Pradhan Mantri Awas Yojana (PMAY)
scheme of the Union Ministry of Housing and Urban Affairs. Expected growth
in the number of housing units in urban areas will increase the demand for
commercial and retail office space.
The current shortage of housing in urban areas is estimated to be ~10 million
units. An additional 25 million units of affordable housing are required by 2030
to meet the growth in the country’s urban population.
The growing flow of FDI in Indian real estate is encouraging increased
transparency. Developers, in order to attract funding, have revamped their
accounting and management systems to meet due diligence standards. Indian
real estate is expected to attract a substantial amount of FDI in the next two
years with US$ 8 billion capital infusion by FY22.

35
 CHAPTER 6

FINDINGS AND CONCLUSIONS

FINDINGS

 The determination of a share value is not a precise science and the conclusions
arrived at in many cases will, of necessity, be subjective and dependent on the
exercise of individual judgment. There is, therefore, no single undisputed
share value. While we have provided our recommendation of the share value
based on the information available to us and within the scope of our
engagement, others may have a different opinion. The final responsibility for
the determination of the share value at which the proposed allotment of shares
shall take place will be with the board of directors of the companies who
should take into account other factors such as their own assessment of the
proposed investment and input of other advisors.
 In the course of the valuation, we were provided with both written and verbal
information including information as detailed in the section-sources of
information; we have not audited, reviewed or otherwise investigated the
financial information provided to us. Accordingly, we don’t express an
opinion or offer any form of assurance regarding the truth and fairness of the
financial position as indicated in the financial statements. Also, with respect
to explanation and information sought from the company, we have been given
to understand by the company that they have not omitted any relevant and
material factors and that they have checked the relevant materiality of any
specific information to the present exercise with us in case of any doubt.
 Our conclusions are based on the assumptions and information given by/on
behalf of the companies. The management as indicated to us that they have

36
 understood that any omissions, inaccuracies or misstatements may materially
affect our valuation analysis /results. Also, we assume no responsibilities for
technical information furnished by the company. However, nothing has come
to our attention to indicate that the information provided was materially mis -
stated/incorrect or would not afford reasonable grounds upon which to base
the report.
 We don’t imply and it should not be construed that we have verified any of the
information provided to us, or then our inquiries could have verified any
matter, which a more extensive examination might disclosed.
 The report assumes that the company complies fully with relevant laws and
regulations applicable in all its areas of operations unless otherwise stated, and
that the companies will be managed in a competent and responsible manner.
Further, except as specifically stated to the contrary, this valuation report has
given no consideration to matters of a legal nature including issues of legal
titles and compliance with local laws, and litigation and other contingent
liabilities that are not recorded in financial statements of the company. This
report does not look into the business/commercial reasons behind the proposed
investment nor the likely benefits arising out of the same. Similarly, it doesn’t
address the relevant merits of the proposed investment as compared with many
other alternative fund raisings, or other alternatives, or whether or not such
alternatives could be achieved or are available.

37
 CONCLUSIONS
The basis of valuation would have to be determined after taking into considering
all the factors and methodologies mentioned hereinabove. However, in the instant
case, since the company is engaged in real estate business, the company’s
business model is such that the book value of assets is not representative of the
value of the business for adopting NAV method and is unlisted and hence, market
approach is not applicable. In these circumstances, it is imperative to choose DCF
method for arriving at the fair value of shares.

In order to determine the fair value of the business under the DCF Method,
appropriate discount rate is to be applied to the free cash flows which reflect the
opportunity cost to all the capital providers (namely shareholders and creditors),
weighted by their relative contribution to the total capital of the company. The
Opportunity cost to the equity provider equals the rate of return the capital expects
to earn on the other investments of equivalent risk. Based on the information
provided by the management regarding the cost of capital of debt and equity a
discounting factor of 10.00% is deemed appropriate for the purposes of
discounting cash flows. The terminal value has been estimated in the last year of
forecast period and the present value of the same is added to the present value of
all cash flows. Growth rate is taken @ 6% and EV/EBITDA multiple as 9.25x.

In the light of the above and on consideration of all the relevant factors and
circumstances as discussed and outlined hereinabove, we recommend that the fair
value of equity share of MDRPL is INR 200 per share. (As per Annexure 1).

38
 CHAPTER 7

RECOMMENDATIONS AND SUGGESTIONS

 This report its contents and the results herein or (i) specific to the purpose of
valuation agreed as per the terms of our engagement; (ii) the valuation date
and (iii) are based on the data detailed in the section -sources of information.
an analysis of this nature is necessarily based on the prevailing market,
financial, economic and other conditions in general industry trends in
particular as in effect on, the information made available to us as of, the
Valuation date. Events occurring after the date hereof may affect this report
and the assumption used in preparing it, and we do not assume any obligation
to update, revise or reaffirm this report. We have been informed that the
business activities of the Valuation Subjects have been carried out in the
normal and ordinary course between 31 March 2022 and the Report Date and
that no material changes have occurred in their respective operations and
financial position between 31 March 2022 and the Report Date. Thus, the
recommendation contained herein is not intended to represent value at any
time other than the Report date of 08th August, 2022 (“Report Date” or
“Valuation Date”).
 Valuation analysis and results are specific to the purpose of valuation and as
per the agreed terms of the respective engagements. It may not be valid for
and other purpose or as of any other date. Also, it may not be valid if done on
behalf of any other entity. The recommendation rendered in this report only
represent our recommendation based upon information till date, furnished by
the management (or its representatives) and other sources and the said
recommendation shall be considered to be in the nature of non -binding advice,
(our recommendation will however not be used for advising anybody to take
buy or sell decision, for which specific opinion needs to be taken from expert
advisors)

39
 No investigation/inspection of the company’s claim to title of assets have been
made for the purpose of this report and the company’s claim to such right has
been assumed to be valid.
 No consideration has been given to liens or encumbrances against the assets,
beyond the loans disclosed in the accounts. therefore, no responsibility is
assumed for matters of a legal nature.
 The fee for the engagement is not contingent upon the results reported.
 We will not be liable for any losses, claims, damages or liabilities arising out
of the actions taken, omission of or advice given by any third party to the
companies. In no event shall we be liable for any loss, damages, cost or
expenses arising in any way from fraudulent acts misrepresentation or willful
default on part of the companies their directors, employees, or agents.
 We don’t accept any liability to any third party in relation to the issue of this
report. It is understood that this analysis doesn’t represent in a fairness opinion
on the share exchange ratio. This report is not a substitute for the third party’s
own due diligence/appraisal/ enquiries/independent advice that the third party
should undertake for the purpose.
 Valuation is for the future and it is future streams of earnings which are of
utmost significance in the process of valuation. Therefore, valuation results
may sometimes be based on forecast of revenues, expenses, assets to be
employed and liabilities to incur for the business. It must be understood that
financial projections are the responsibility of the management and we do not
guarantee any form of assurance or accuracy on the same. No detailed
examination of the validity of such projections, financial or otherwise, has
been carried out by us and we do not accept any responsibility or liability of
any impact of such errors or omissions in the projections provided by the
management of the Company. There will be some differences in the estimated
and the actual data as events and circumstances generally do not occur exactly

40
 as expected. The conclusion arrived at is a valuation result or a calculation
result depends upon the nature of financial information and business plan
provided by the management of the Company and the reliance placed on the
same by the valuer. This valuation report is subject to the laws of India.
 This report and the information contained herein are confidential and intended
only for the sole use of the purpose mentioned in this report.

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 CHAPTER 8
BIBLIOGRAPHY

Websites:
 https://www.zaubacorp.com/company/SJRB-AND-ASSOCIATES-
LLP/AAR-6039
 https://mergerdomo.com/consultant/ONPTLREB
 https://connect2india.com/SJRB-AND-ASSOCIATES-LLP/6157101
 https://www.startupcaservices.com/llpfirm/haryana/s/sjrb-and-
associates-llp-aar-6039
 https://lextechsuite.com/SJRB-AND-ASSOCIATES-LLP--AAR-
6039--96364776

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