ROOTER SPORTS

TECHNOLOGIES
PRIVATE LIMITED

Valuation Report

Aprif 2017
 Disclaimer

Important Notice

Ashok Maheshwary & Associates LLP ('AKM Global') has prepared this valuation
report exclusively for Rooter Sports Technologies Private Limited ('RSTPL' or
'Company') on their specific request for the purpose of transfer of shares of the company

Valuation has been computed assumins a reasonably good economic and business
environment factoring all known risk factors The methodology adopted may not be the
soie criteria for vaiuing the business and may vary for different categories of
stakeholjers. The analysis is based on facts presented to us by the Managemreflt of the
Company with no independent venfication.

We have used reasonable skill anci care in carrying out this assignment. ln no event shaii
Ashok idaheshwary & Associates LLP be liable for any loss, damage. cost or expense
arising in any way from fraudulent acts, misrepresentations or willful default on part of
the company, its partners, employees or agents. We will also not be liable for any loss.
damage, cost or expense arising in any way from the action taken by the management or
promoters on the basis of information provided by us.

Our work did not constitute an audit. due diligence or validation of financial statemens
of the company Our work did not constitute independent valuation of any asset or
habilities of the company. Our view, finding or opinions, should not be construed to be a
representation as to the future.

Our report is being provided solely for the use of the company, its management for
specific purposes and shall be treated in strict confidence and shall not confer any rights
or remedies upon any other person not intended therein.

This valuation has reference date of 3Oth April, 2017 (i.e. Valuation Date)

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 A. PREAMBLE

Rooter Sports Technologies Private Limited (RSTPL) is a private company domiciled

in India and incorporated under the provisions of the Companies Act, 2013 in
2016. It is classified as Indian Non-Government Company and is registered at
Registrar of Companies, Delhi. Its authorized share capital is INR 1,000,000 and its
paid up capital is INR I77,7oo as on 30ft Apil,2017.

B. PI]RPOSE OF VALUATION

This Report ("Opinion") has been prepared at the request of RSTPL for the purpose
of proposed Right Issue by the company.

C. RELIANCE

This Opinion has been prepared for our client based on information as supplied to us
by them and its management and executives. We have not verified independently any
of the information contained herein.

For the purpose of determining the value per equity share, reliance has been placed on
the following documents/information provided to us by our client:

a. Provisional Financials as on 31"1March 2077 as provided by the management;

b. Financial projections for the next 5 years as provided by the managemenq and

c. Explanations and clarifications on the data provided, from time to time.

Further, this Opinion is based on certain statements, estimates and projections with
respect to future projections of the company which are based on assumptions made by

the management of the company concerning anticipated results. Such assumptions

may or may not prove to be correct. No representations or warranties are made as to
the accuracy of such statements, estimates and projections.

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 Subject to the foregoing and having regard to Such legal consideration as we
deem relevant, we express our opinion as follows:

D. PREMISE OF VALUB

The valuation has been done on a going-concern basis assuming the company will
operate in future as an ongoing business enterprise.

E. VALUATIONMETHODOLOGY

Business Valuation is a process and a set of procedures used to estimate the economic

value of a business. Valuation is a perception of the value of a business at a given

point of time. A realistic business valuation requires more than merely looking at last
year's financial statements. It requires a thorough analysis of several years of the
business operation and an opinion about the future outlook of the industry, the

economy and how the company will compete under different conditions.

The valuation of a privately held company can be conducted under three approaches:
l. Cost or Asset-based approach,
2. Market approach and
3. Income approach

In performing a valuation, the valuer should consider all the three approaches and
select the most appropriate approach or approaches. The seiection should consicier

factors such as the history, nature, and stage of development of the company; the
nature of its assets and liabilities, its capital structure; and the availability of reliable,

comparable and verifiable data that will be required to perform the analysis.

1. Cost or Asset-based approach

The cost approach arrives at valuation in terms of stated net worth ofthe company. [t
is usually not a good indicator of the value of a going concern as it ignores business
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 potential, does not take intangibles into account and is impacted by accounting
practices.

Under the Asset-based approach, the valuation may be done by Net Asset Value
(NAV Method) as explained hereunder:

Net Asset Value Method (NAV Method)

The Asset Based Value Method arrives at a valuation in terms of the tangible net
worth of the entity as at the valuation date" It attempts to measure the value of net
assets of the company. It is computed by taking the value of the company's total
assets. subtracting there from the debts. dues. borrowings and liabilities (including
current and likely contingent liabilities) and preference shareholders' claims. Net
worth is more popularly calculated based on the book values of assets and

liabilities. Under this method, reliance is placed on the historical cost.

Alternatively, the net wofth of the Company may also be calculated by adding the
equity share capital and free reserves of the Company and deducting there from
any contingent Iiabilities.

2. Market approach

The market approach to business valuation is rooted in the economic principle of

competition: that in a free market the supply and demand forces will drive the price of
business assets to ceftain equilibrium. Under the market approach, the methods
available are as hereunder:

a) Guideline Public Company Method

Guideline Public Company method entails a comparison of the subject company

to publicly traded companies" The comparison is generally based on published
data regarding the public companies' stock price and earnin-es, sales, or revenues,

which is expressed as a fraction known as a "multiple." lf the guideline public

companies are sufficiently similar to each other and the subject company to
permit a meaningful comparison, then their multiples should be similar. The
public companies identified for comparison purposes should be similar to the

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 subject company in terms of industry, product lines, market, growth, margins and
risk.

b) Guideline Transaction Method or Direct Market Data Method

Using this method, the valuation analyst may determine market multiples by
reviewing published data regarding actual transactions involving either minority
or controlling interests in either publicly traded or closely held companies.

3. Income approach

Discounted Cash Flow Method ('DCF') under the Income Approach is one of the
most recognized and widely used methods for valuing companies. The DCF model is
one of the most scientific among all the valuation methods in terms of conceptual
framework. As per this method, value is defined as following:

Value : present value of future cash flows that can be withdrawn from the
company

The value so derived is not impacted by accounting practices, as it is based on cash

flows and not book profrts. The method incorporates all the factors relevant to
business. DCF analysis tails three broad steps:

a) Projecting cash flows that are available to an enterprise, i.e., Free Cash Flows
to Firm ('FCFF') for foreseeable future. Typically, cash flows forecasts are

developed for a period of 3-5 years depending on operations of the subject

company and the industry/economy in which it operates.

FCFF is calculated as: Earnings before Interest, Tax and Depreciation (+)/(-)
Cash outflow due to changes in working capital and capital expenditure
requirements (-) Tax o\n Earnings Before Interest.

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 b) Estimating the terminal equity value, an estimate of the enterprise value of the
company at a future date as of the end of the forecast period. The terminal
value is generally calculated by assuming an implicit growh rate till
perpetuity and capitalizing the free cash flows corresponding to the last period

in the forecast period.

c) Selection ofdiscount rate that reflects the expected rate ofreturn (adjusted for
risks associated with the investment) to prospective investors in similar
investment opportunities. The Weighted Average Cost of Capital ('WACC')
is used as the indicator of relevant discount rate and is defined as the weighted

combination of the Cost of Equity Capital ('COEC') and the Cost of Debt
Capital ('CODC')

The COEC as per the Capital Asset Pricing Model ('CAPM') is arithmetically
expressed as follows:

Ke:rf+(.m-rD*0
Where:

Ke the required rate of return on equity

rf the risk free rate

rm - rf: the market risk premium

rm the expected market return

0: beta coefficient: unsystematic risk

F. FINANCIALPROJECTIONS

Financial Projections are key in assessing the future value of a company as they are
the reflection of the company's performance going forward.

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 We bave been provided with projections for the next five years ranging liom the
financial year ending March 31,2018 to the financial year ending March 31,2022.

Projected financial statements of business are presented below:

Profit & Loss Account Projections (Figures in INR)

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 Projected Balance Sheets (Figures in INR)

FY 19-20
Assets

Fixed Assets (Net) 339,648 1,030,898 2,015,690 2.580.898 2,876,940

Cash & Cash

l,2l 8,508 10,498,797 17,274,117 30,672,667 47,432,589
Equivalent

Loans & Advances I 10,000 165,000 330,000 495,000 594,000

1,669,157

Liabilities
Shareholders Fund

(Share Capital and 163,412 9,478,100 17,101,206 30,949,308 47,541,320

Reserves & Surplus)
Other Current
1,504,744 2,216,595 2,518,601 2,799,258 3,362,210
Liabilities

Total

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 G. VALUATION METHOD SELECTED

In our fair value analysis of RSTPL, we have considered all valuation approach

mentioned below-

Net Asset Value Method

The Asset Based Value Method arrives at a valuation in terms of the tangible net
worth of the entity as at the valuation date. It attempts to measure the value of net
assets of the company. It is computed by taking the net value of the company's assets,
subtracting there from the amount of the liabilities and preferred shareholders' claims.
Net wofth is more popularly calculated based on the book values of assets and
liabilities. We have not considered this method for valuing the company as it is a
going concern and only its shares are to be allotted by the company to an
investor.

Nlarket Price Method

The market price method is based on Market quotes of shares of the subject company
overan appropriate period. Equity shares of RSTPL are not listed on any ofthe stock
exchange. Hence in our opinion the above method is inappropriate in the present case.

Comparable Companies Multiples Method

This method applies derived valuation muhiples of comparable listed companies to
the maintainable earnings of the subject company. We were unable to find a similar
company having same type of business nature in order to make an appropriate
comparison; hence we have not been able to appiy this method while valuing rhe
company"

Comparable Transactions Multiples Method

This method applies derived transaction multiples of comparable transactions to the
maintainable earnings of the company. We w-ere not able to find any such

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 transactions that took place for any similar company in the near past. Hence we have
we have not been able to apply this method while valuing the company.

Discounted Cash Flows Method

Valuation based on earnings is a popular method for valuation; the predetermined rate
of return expected bythe investoron investment is used which is equal to the simple
rate of return on capital employed. From earnings, last declared by the company, the

items such as tax, preference dividend, are deducted and net earnings taken for
calculation. The estimated average future maintainable profit after deducting the
preference rights is capitalized at an appropriately selected rate. Another viewpoint is
that instead of using the accounting rate of return for valuation, the Price Earnings
Ratio could be used.

H. VALUATION UNDER DISCOUNTED FREE CASH FLOWS METHOD

OFCF METHOD)

Under the income approach, the valuation under DFCF method is based on the
premise that the value of a company is a function of the future cash flows generated
b,v the business, discorlnted back to its present value by a risk adjusted cost of capital.
As future cash flows considered under this method are to be factored for pay-offs
expected to be obtained from both tangible assets as well as intangible assets (like
brand equity and service network), the valuation as per this method is normally
considered to be a sood indicator of the fair value of the business.

The projections for the next five years ranging from the financial year ending March
31.2018 to the financial year ending March 31,2022, as provided to us by the

management, have formed the basis for projected cash flows and profitability.

It may be noted that the Valuation under DFCF Method has been prepared for our
client based on information as supplied to us by it and its management and
executives. We have not verified independently any of the information contained
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 herein. Further, this Valuation is based on certain statements, estimates and
predictions with respect to future projections of the Company which are based on
assumptions made by the management of the Company. Such assumptions may or
may not prove to be correct. No representations or u'arranties are made as to the
accuracy of such statements, estimates and projections.

The Weighted Average Cost of Capital is calculated at 16.01%.

Due to the non-availability of Beta forthis industry, we have assumed p value of the
company as 1.0 considering it as moderate risk.

For the purpose of calculation of Terminaf Value the operational cash flows in the last
financial ,vear in the projected period are taken into consideration Company to operate
at a stable growth rate of 3%o.

Based on the projections provided by the management and subject to the

assumptions used by the management while preparing these projections,
considering a limited time frame of 3 years, Weighted Average Cost of Capital at
16.01" and Terminal Growth Rate of 37o, the valuation of each Equity Share of
the Company as per DFCF Method, comes to INR 6,444.

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Valuation of Equitv Shares Fisures in INR

16.01"
Discounted values
of Net Cash Florvs

2017-18 0.862 (151,426) 30,525)

(I
2018-r9 0"743 7,661,568 5.692.517
2019-20 0.640 7.1 85.1 66 4,601,684
2020-21 0.552 13,419,899 7,408.369
2021-22 0.476 13,678,369 6,508,802
Terminal Value 0.476 108.266.504 51.518.217

NPV of cash flows from 24.080.846

vear 1-5
Add: Terminal Value 51.518.217
Enterprise Value 75.599.063
Add: Cash & Bank Balance 246,331

Value Per Share Rs. 6,-lJ{

L ASSUMPTIONS AND LIMITING CONDITIONS

The Company and its representatives warranted to us that the information supplied to
us was complete and accurate to the best oftheir knowledge. We have not carried out
any further verification and have accepted the information supplied to us as correct.

This valuation reflects facts and conditions existing or reasonably foreseeable at the
valuation date. Subsequent events have not been considered, and we have no
obligation to update our report for such events and conditions.

No change of any item in this valuation report shall be made by anyone other than our
firm, and we shall have no responsibility for any such unauthorized change.
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 J. CONCLUSION

Based on DCF approach applied, the value of the company attributable to the
Equity Shareholder is Rs. 6,4441- per share.

Further, this is to confirm that:

a. The statements of fact represented in this report are correct to the best of our
knowledge.
b. The reported analyses, opinion and conclusions are limited by the reported
assumptions and limiting conditions.
c. We have no bias with respect to the subject of this report or to the parties
involved with this assignment.
d. We have no financial interest or contemplated financial interest in the
business that is the subject of this report.
e. Our fee is not contingent upon any action or event resuhing from these
analyses, opinions or conclusions in, or the use of this report.

For & On Behalf Of

Ashok Maheshwarv & Associates LLP
Chartered Accountants

Partner: Sunnit Maheshwari

M. No. fl47n
Date: l5e May,2017
Plaee: G.urgaon

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