K Electro-Chemicals Private Limited

Computation of Value of An Equity Share as per Adjusted Net Asset Method

Premise of Value : Going Concern
Standard of Value : FMV

A.

Immovables Fixed Assets

1 Factory Land & Building
2 Office premises
Sub Total

Amount
Amount
As at 31.3.08 Valuation
(Audited)
Adjustments
( Book Values)
Rs/lacs
Rs/lacs

Amount
As
Adjusted
FMV
Rs/lacs

44.87
1.08
45.95

28.03
8.67
36.70

72.90
9.75
82.65

B.

Other fixed Assets( at book value)

13.90

13.90

C.

Total Fixed Assets ( A+B)

59.85

36.70

96.55

D.

Current Assets, Loans & Advances

97.61

97.61

E.

Total Assets (C+D)

157.46

36.70

194.16

F.

Current Liabilities & Provisions

38.93

38.93

G.

Unsecured Borrowings

68.36

68.36

H.

Deferred Tax liability, Net

On Increase in Immovable Assets
Less : Deferred Tax Assets on Unabsorbed
Losses/Depreciation etc.
Net Deferred Tax Liability

I.

Net Assets (E-F-G-H)

12.47
(6.63)
0.00

5.84

5.84

50.17

30.86

81.02

30.00
58.80
(38.63)

0
0
30.86

30.00
58.80
-7.77

50.17

30.86

81.03

Represented By :
Share Capital
Share premiun
Less Debit Balance in Profit & Loss a/c
J.

Net worth

K.

No. of Equity Shares ( Rs. 10/- per share)

L.

Value per Share ( Rs./ Share)

300,000

300,000

16.72

27.01

UNDERLYING ASSUMPTIONS :
1 Market Value of Factory Land & Building and Office Premises has been taken based on Valuation Reports of a
approved valuer.
2 Deferred Tax Liability on increase in value of immovable properties has been taken @ 33.99% ( being the
income tax rate on companies)

K Electro-Chemicals Private Limited

Profit Earning Capacity Value Method

Amount

Amount

2007-08

2006-07

(Audited)
Rs/lacs

(Audited)
Rs/lacs

Revenue

190.00

139.33

Less Costs

162.65

122.61

27.35

16.72

4.35

4.40

23.00

12.32

69.00

24.64

Earnings before Interest & Taxes

Less : Interest & Finance Charges
Earnings before Taxes
Weights Assigned
Product
Weighted Average Earnings after Taxes

18.82

Less : Tax @ 33.99%

6.40

7.82

4.19

Earnings after Taxes

12.42

15.18

8.13

0.07
0.29
0.06

0.80
0.04

Capitalisation Rate
Capitalised Future Maintainable Profits
No. of Equity Shares ( Rs. 10/- per share)
Value per Share ( Rs./ Share)

15%
82.82
300,000
27.61

Exclusion from Total Revenue

( being non-recurring/extra ordinary items)
Miscellaneous Income
Sundry Balance Written Back
Interest on Bank FDs

Gain /(Loss)on Disposal of Fixed Assets

0.24
0.66

0.84

3.01
4.21
10.21
0.11
17.54

0.01
4.89
5.41
0.08
10.39

Exclusion from Total Costs

( being non-recurring/extra ordinary items)
Prior Period Expenses
Foreign Exchange Fluctuations
Bad & Doubtful Debts written off
Sundry Balances written off

Computation of the Fair Value as per erstwhile CCI Formula

Method of Valuation

Net Assets Value Method

Value of
Share
Rs./Share
16.72

Profit Earning Capacity Value Method

27.61

Average

22.17

Less : Discounting by 15% to account for

restricted mobility ( being unlisted share)
Fair Value

3.32
18.84

Amount
2005-06

(Audited)
Rs/lacs
118.60
94.33
24.27
4.99
19.28
1
19.28

6.55
12.73

0.00
0.24

0.24

0.47
12.88
2.75
0.12
16.22

-0.01

K Electro-Chemicals Private Limited

Computation of the Fair Value of An Equity Share as per FEMA Guidelines
A.

Value of Equity Share based on EPS linked to Price Earning Multiple

Earning per share (EPS)
( as per latest audited financial statements
for the year ended 31.3.2008)
Average P/E Multiple of BSE National ( BSE 100) Index for November, 08
Discounted P/E Multiple at 40%

PEC Price per Share ( Rs./ Share)-

B.

Value of Equity Share based on NAV linked to Book Value Multiple

Net Asset Value (NAV)
( as per latest audited financial statements
for the year ended 31.3.2008)
Average Price to Book Value Multiple ( P/B) Multiple- for Nov,08
Discounted P/B Multiple at 40%
Price per Share baesd on P/B Multiple ( Rs./ Share)

C.

Higher of A & B

A Guidelines

1.98

13.41
8.05

15.93

16.72

2.31
1.39
23.18
23.18

K Electro-Chemicals Private Limited

Computation of Value of An Equity Share as per Income Approach
Free Cash Flow
2008-09
Expected
Cash Flow

2007-08
2006-07
2005-06
Normalized Normalized Normalized
Rs/lacs
Rs/lacs
Rs/lacs

Revenue

190.00

139.33

118.60

Less Costs

155.65

114.99

85.91

34.35

24.34

32.69

7.00

7.62

8.42

27.35

16.72

24.27

82.05

33.44

24.27

9.50

9.30

5.68

8.25

18.45

18.05

11.04

16.02

EBITDA
Less Depreciation
EBIT
Weights assigned
Products
Weighted Average

23.29

Expected EBIT taking growth of 20%

27.95

Less : Tax assumed @ 33.99%

Earnings after Taxes
Less : Interest & Finance Charges
( Net of Tax)
PAT

3.39

2.87

2.90

3.29

15.06

15.18

8.13

12.73

Less : ( Capex- Depreciation)

Less : Increase in Working Capital
Less : Debts repaid

1.00
1.50
11.04

-6.53
8.35
4.37

1.52

8.99

Net Cash Flow to Equity

UNDERLYING ASSUMPTIONS:
1 Since there is no discernible trend in the profits during the past years, the weighted average of historical
results for the last 3 years have been taken.
2 The followings are in the nature of abnormal, non-recurring or extra-ordinary items
and therefore, have been excluded from the Total Revenues.
Exclusion from Total Revenue
Miscellaneous Income
Sundry Balance Written Back
Interest on Bank FDs
Gain /(Loss)on Disposal of Fixed Assets

0.07
0.29
0.06
0.24
0.66

0.80
0.04

0.00
0.24

0.84

0.24

3 The followings are in the nature of abnormal, non-recurring or extra-ordinary items

and therefore, have been excluded from the Total Costs.
Exclusion from Total Costs
Prior Period Expenses
Foreign Exchange Fluctuations
Bad & Doubtful Debts written off
Sundry Balances written off

4 Growth Rates
Intial Growth rate 6 years
20%
Perpetual Growth rate beyond
5%
Blended Growth rate
11.34%
( Long term average annual componded growth rate)

3.01
4.21
10.21
0.11
17.54

0.01
4.89
5.41
0.08
10.39

0.47
12.88
2.75
0.12
16.22

erage of historical

-6.56

S No.

1
2
3
4
5
6
7
8
9

Company Name

Grauer & weil

Alkhli Metals
Ciba India
Gulshan
Jayant Aqro
Panama
Pidilite
Transpek
United Phosphorus

Levered
Beta

Debt

Equity
(Book)

Equity
(Market)

D/E Ratio

1
666.34
639.56
531.33
0.7
255.47
340.82
170.56
0.5
240.66 2951.85
266.4
0.5
336.69
333.08
712.86
0.9 1161.75
671.73
614.25
1.1
67.43
512.76
342.86
0.6 5025.98 6424.81 27913.32
0.4
369.76
415.48
270.3
0.8 15348.20 17883.90 25538.64
6.50
Total

1.25
1.50
0.90
0.47
1.89
0.20
0.18
1.37
0.60

0.72 Unlevered Beta - Airth.Mean

6.60
0.15

Unlevered
Beta
Tax @ 33.99%
0.55
0.35
0.31
0.38
0.40
0.97
0.54
0.21
0.57
4.29
0.48

1 Unlevered Cost of Equity

( as per Modified CAPM)
Risk Free return
( return on a 10 years 8.24% 2018 Govt.Bonds
Expected return on a well diversified Market Portfolio
( cumulative average BSE 500 return since inception)
Unlevered Beta

7.00%

14.00%

1.00

Risk Premium for Small Size ( assumed)

4.00%

Company Specific risk Premium ( assumed)

4.00%

Cost of Equity
( being return required by an investor)

22.00%

2 Cost of debt
Unsecured Borrowings( in Euro)
Interest rate in Euro
Spot Rate
Forward ( one year)

5.334%
Rs./Euro
Rs./Euro

69.1275
70.5584

Interest rate in INR using Interest Rate Parity Theorem

Forward cover premium cost

7.5144%
2.18%

Pretax Actual Cost of Debt

7.5144%

Current Market Cost of Debt

Tax Rate
Market Cost of Debt ( After Tax)

10%
33.99%
6.60%

K Electro-Chemicals Private Limited

Schedule 3
Computation of Value of An Equity Share as per Discounted Cash Flow Method
Adjusted Present Value Approach ( APV)
Step 1 : Compute Unlevered Value
of firm
NOPLAT
Less : ( Capex- Depreciation)
Less : Increase in Working Capital
Net Cash Flow to Invested Capital ( FCFF)
Terminal Value
Discount Factor
Present Value
Total Present Value ( Value of Firm)

31.3.09 31.3.10

22.00%

Rs./Lacs

31.3.11 31.3.12 31.3.13 31.3.14 Perpetuity

18.45
1.00
1.50
15.95

22.14
2.00
1.80
18.34

26.57
3.00
2.16
21.41

31.88
4.00
2.59
25.29

38.26
5.00
3.11
30.15

45.91
5.00
3.73
37.18

0.82
13.07

0.67
12.32

0.55
11.79

0.45
11.42

0.37
11.16

0.30
11.28

48.21
10.00
3.92
34.29
201.70
0.30
61.17

5.14
1.75
0.91

4.31
1.46
0.83

3.43
1.17
0.75

2.51
0.85
0.68

1.54
0.53
0.62

0.52
0.18
0.56

0.00
0.00
0.00

1.59

1.21

0.88

0.58

0.33

0.10

0.00

132.21

Step 2 : Compute Tax benefits of Debt

Interest cost on Debt
Tax Benefit /Shield
Discount Factor ( being Pretax Market
Cost of Debt)
Present Value
Total Present Value of Tax Shield

Step 3 : Compute Value of Firm

33.99%
10.00%

4.68

136.89

Less :Market Value of Debt

63.80

Value of Operating Equity ( Rs. /Lacs)

73.09

Value per Share ( Rs./ Share)

24.36

Market Value of Debt

Principal Outstanding -INR

68.36 31.3.2031.3.10 31.3.11 31.3.12 31.3.13 31.3.14

Payments to Debt Holders

Principal Repayments
Interest Payments ( Gross)
Other Costs ( Forex Variations) payment
Total Cash Flows received by Debt Holders

11.04
3.65
1.49
16.17

11.62
3.06
1.25
15.93

12.24
2.44
1.00
15.68

12.90
1.78
0.73
15.41

13.59
1.10
0.45
15.13

6.97
0.37
0.15
7.49

0.93
15.04

0.87
13.78

0.80
12.62

0.75
11.53

0.70
10.53

0.65
4.85

Discount Factor ( being Pretax Market Cos 10.00% 0.91

Present Value
14.70
Total Present Market Value of Debt
63.80

0.83
13.17

0.75
11.78

0.68
10.53

0.62
9.40

0.56
4.23

Discount Factor ( being Pretax Actual Cost

Present Value
Total Present Value of Debt

7.51%
68.36

21240
5.334%

1
2
3
4
5
6

Blended Growth Rates

Terminal Gr.
Initial Gr.
discount rate
Blended Growth Rates

5%
20%
22.00%
11.34%

0.8196721311 0.806235 0.793 0.78002 0.7672 0.7547 4.6611

9.3819

.20-g
2.064
1.064
11.34%

68.36
57.33
45.70
33.46
20.56
6.97

3.65
3.06
2.44
1.78
1.10
0.37

14.68
14.68
14.68
14.68
14.68
7.34

principal
repaid
57.33
11.04
45.70
11.62
33.46
12.24
20.56
12.90
6.97
13.59
0.00
6.97

12.40

80.75

68.36

Company Name ----Balance Sheet (Rs. In million)

Liabilities
Share Capital
Reserves & Surplus
Net Worth (1)
Secured Loans (2)
Unsecured Loans (3)
Total Liabilities (1+2+3)

(I)
Current liab. & Provs.
Current Laibilities
provisions
(ii)

Profi & loss Account (in million)

Sales
Other Income
Total Income

Mar-08
(12 Months)

Mar-08
(12 Months)

Mar-08
(12 Months)

Fixd Assets
Gross Block
(-) Acc. Depreciation
Net Block (A)
Capital work in prgs.(B)
Investments (C)
Current Asstes, Loan & Advs.
inventories
Sundry Debtors
Cash & Bank
Loans & advances

Company Name -----

Alkhli Metals

127.88
511.68
639.56
637.23
29.11
1,305.90

Assets

Net Curr. Asstes ( I-ii ) (D)

Misc. Expenses (E)
Total Assets (A+B+C+D+E)
Different

Grauer & weil

69.39
271.43
340.82
237.37
18.10
596.29
Mar-08
(12 Months)

Chembond Chem.
Mar-08
(12 Months)
30.00
171.04
201.04
51.21
28.48
280.73
Mar-08
(12 Months)

773.40
222.82
550.58
330.86
16.76

418.46
101.49
316.97
0.00
0.00

137.13
29.85
107.28
17.17
35.72

225.45
357.19
44.38
336.98
964.00

130.93
121.00
0.41
95.56
347.90

117.27
169.33
4.68
63.55
354.83

374.55
181.75
556.30
407.70
0.00
1305.90
-

77.64
0.00
77.64
270.26
9.06
596.29
-

170.97
63.31
234.28
120.54
0.00
280.71
0.02

Grauer & weil

Mar-08
(12 Months)

1958.84
16.99
1975.83

Alkhli Metals
Mar-08
(12 Months)

617.68
0.42
618.10

Chembond Chem.
Mar-08
(12 Months)

955.20
26.70
981.90

Raw Material Cost

Excise
Other Expenses

1040.36
225.54
423.85
1689.75

326.41
69.36
96.62
492.39

798.10
173.76
-67.14
904.72

Operating Profit

286.08

125.71

77.18

Interest Name
Gross profit

68.79
217.29

17.72
107.99

7.48
69.7

Depreciation
Profit Bef. Tax

37.30
179.99

18.17
89.82

5.65
64.05

Tax
Net Profit

46.25
133.74

10.50
79.32

13.62
50.43

Other Non-Recurring Income

Reported Profit
Equity Dividend

-6.80
126.94
31.97

0.00
79.32
27.75

0.00
50.43
10.50

(I)

dep+int+tax
int+tax
Company Name ----Ratios

152.34
115.04
Grauer & weil
Mar-08
(12 Months)

Alkhli Metals
Mar-08
(12 Months)

Chembond Chem.
Mar-08
(12 Months)

Profitability Ratios %
Operating Profit Margin
Gross Profit Margin
Net Profit Margin

13.73
11.83
6.42

20.28
17.34
12.83

5.28
4.69
5.13

10.30
5.48
2.53

5.25
5.10
1.48

9.63
5.64
6.97

1.73
1.04
3.91

4.48
0.75
7.07

1.51
0.40
6.75

20.60
19.84
29.76

21.01
23.90
40.93

17.98
25.08
24.35

Turnover Ratios %
Inventory Turnover Ratio
Debtor Turnover Ratio
Fixed Asset Turnover Ratio
Solvency Ratios %
Current Ratio
Debt Equity Ratio
Interest Covering Ratio
Performance Ratios %
Return on Investment
Return on Networth
Dividend Yield

Economic times
Market Price
P/E Ratio
EPS
Mkt Cap

41.55
3.7
11.23
531.33
.

Market Price
P/E Ratio
EPS
Mkt Cap

167.75
0
0
170.56

143
6.86
20.85

Ciba India

Dailchi

Dr. Biotech

Gulshan

Mar-08
(12 Months)

Mar-08
(12 Months)

Mar-08
(12 Months)

Mar-08
(12 Months)

132.81
2819.04
2951.85
0.00
240.66
3192.51
Mar-08
(12 Months)

76.06
451.79
527.85
35.96
18.77
582.58
Mar-08
(12 Months)

24.20
6.90
31.10
0.00
2.60
33.70
Mar-08
(12 Months)

145.74
187.34
333.08
334.58
2.11
669.77
Mar-08
(12 Months)

HK Finechem Haryana Leather

Mar-08
(12 Months)
95.00
60.25
155.25
91.42
32.70
279.37
Mar-08
(12 Months)

Mar-08
(12 Months)
49.08
83.11
132.19
5.59
0.00
137.78
Mar-08
(12 Months)

1188.81
928.09
260.72
131.70
1508.56

464.78
315.00
149.78
0.43
35.99

0.50
0.30
0.20
0.00
0.10

743.43
288.88
454.55
64.93
2.28

335.21
126.89
208.32
3.56
0.00

147.89
76.35
71.54
1.99
0.00

817.01
758.22
13.17
795.60
2384.00

61.94
116.85
20.70
328.02
527.51

0.00
6.20
0.20
29.50
35.90

92.38
146.27
8.11
43.37
290.13

65.33
32.35
2.05
23.07
122.80

31.98
70.56
2.71
15.11
120.36

1010.38
82.07
1092.45
1291.55
0.00
3192.53
(0.02)

114.94
16.18
131.12
396.39
0.00
582.59
(0.01)

1.90
0.60
2.50
33.4
0.00
33.70
-

133.55
18.72
152.27
137.86
10.15
669.77
-

44.23
11.09
55.32
67.48
0.00
279.36
0.01

51.61
4.49
56.10
64.25
0.00
137.78
-

Ciba India
Mar-08
(12 Months)

4697.95
83.36
4781.31

Dai lchi
Mar-08
(12 Months)

451.73
44.73
496.46

Dr. Biotech
Mar-08
(12 Months)

10.90
0.00
10.90

Gulshan
Mar-08
(12 Months)

994.19
0.04
994.23

HK Finechem Haryana Leather

Mar-08
Mar-08
(12 Months)
(12 Months)

311.71
1.72
313.43

210.59
4.95
215.54

3748.13
111.62
510.94
4370.69

311.63
66.44
78.88
456.95

9.40
0.00
0.40
9.80

561.61
120.49
131.28
813.38

183.46
40.73
56.01
280.20

142.30
21.54
29.82
193.66

410.62

39.51

1.10

180.85

33.23

21.88

14.30
396.32

5.82
33.69

0.00
1.10

51.70
129.15

14.49
18.74

1.55
20.33

68.36
327.96

8.52
25.17

0.30
0.80

34.46
94.69

16.16
2.58

6.53
13.80

123.19
204.77

9.28
15.89

0.30
0.50

19.64
75.05

-1.34
3.92

2.22
11.58

-11.39
193.38
46.48

0.00
15.89
9.13

0.00
0.50
0.00

20.71
95.76
4.66

4.31
8.23
0.00

-3.32
8.26
2.45

Ciba India
Mar-08
(12 Months)

Dai lchi
Mar-08
(12 Months)

Dr. Biotech
Mar-08
(12 Months)

Gulshan
Mar-08
(12 Months)

HK Finechem Haryana Leather

Mar-08
Mar-08
(12 Months)
(12 Months)

6.69
5.51
4.04

-1.15
-3.04
3.20

10.09
7.33
4.58

18.18
14.72
9.70

10.10
4.92
2.62

8.04
4.94
3.83

5.99
6.20
3.95

8.37
3.87
0.97

0.00
1.76
21.80

12.82
6.80
1.34

5.39
9.63
0.93

7.26
2.98
1.42

2.18
0.08
22.88

4.02
0.10
-0.90

14.36
0.08
0.00

1.91
1.01
3.50

2.22
0.80
2.17

2.15
0.04
10.90

10.25
6.55
28.12

-0.89
3.01
67.19

3.26
1.60
0.00

26.99
46.33
5.64

11.27
5.29
0.00

12.29
6.24
34.77

200.6
7.84
25.6
266.4

24
17.91
1.34
18.26

0
0
0

114.75
6.62
17.33
712.86

14.05
13.64
1.03

9.79
4.26
2.34

Jayant Aqro

Laffancs

Panama

Passari

Mar-08
Mar-08
Mar-08
Mar-08
(12 Months) (12 Months) (12 Months) (12 Months)
124.52
547.21
671.73
770.71
391.04
1833.48

80.00
283.94
363.94
228.02
61.68
653.64

54.00
458.76
512.76
66.84
0.59
580.19

31.82
-12.11
19.71
12.93
0.00
32.64

Mar-08
Mar-08
Mar-08
Mar-08
(12 Months) (12 Months) (12 Months) (12 Months)

Pidilite

Refnol Resins

SNZS

Mar-08
(12 Months)

Mar-08
(12 Months)

Mar-08
(12 Months)

281.82
6142.99
6424.81
1904.27
3121.71
11,450.79
Mar-08
(12 Months)

30.90
-26.75
4.15
27.23
0.00
31.38
Mar-08
(12 Months)

50.00
-68.90
-18.90
0.00
5.20
-13.70
Mar-08
(12 Months)

427.13
126.43
300.70
2.77
123.90

350.39
109.96
240.43
0.00
1.19

91.12
30.96
60.16
0.00
0.24

26.30
7.94
18.36
0.00
6.41

6773.21
2973.48
3799.73
1670.94
1623.69

47.72
36.53
11.19
0.00
8.91

0.00
0.00
0.00
0.00
0.00

1010.12
287.52
33.18
464.09
1794.91

208.77
367.26
5.11
70.11
651.25

968.98
468.76
94.03
122.35
1654.12

0.38
5.02
-0.01
3.11
8.50

2655.44
2057.48
1485.50
924.84
7123.26

19.23
70.01
8.77
14.84
112.85

0.00
0.00
0.00
1.00
1.00

297.90
90.91
388.81
1406.11
0.00
1833.48
-

237.87
1.35
239.22
412.02
0.00
653.64
-

1064.01
70.32
1134.33
519.79
0.00
580.19
-

0.63
0.01
0.64
7.87
0.00
32.64
-

2169.02
597.81
2766.83
4356.43
0.00
11450.79
-

98.55
3.03
101.58
11.28
0.00
31.38
-

14.40
0.30
14.70
-13.70
0.00
-13.70
-

Jayant Aqro
Laffancs
Panama
Passari
Mar-08
Mar-08
Mar-08
Mar-08
(12 Months) (12 Months) (12 Months) (12 Months)

5994.43
67.73
6062.16

1761.13
8.52
1769.65

2339.12
8.45
2347.57

0.00
0.00
0

Pidilite
Mar-08
(12 Months)

15371.88
168.64
15540.52

Refnol Resins
SNZS
Mar-08
Mar-08
(12 Months) (12 Months)

234.82
1.79
236.61

0.00
0.40
0.4

5297.08
0.00
551.68
5848.76

1478.25
260.32
-63.15
1675.42

1972.49
304.66
-142.31
2134.84

0.00
0.00
0.39
0.39

9145.69
1687.78
1912.63
12746.10

158.42
45.85
4.89
209.16

0.00
0.00
2.50
2.5

213.40

94.23

212.73

-0.39

2794.42

27.45

-2.1

105.07
108.33

34.85
59.38

45.55
167.18

0.00
-0.39

205.81
2588.61

6.70
20.75

0.00
-2.1

21.51
86.82

14.37
45.01

3.70
163.48

0.00
-0.39

385.05
2203.56

1.81
18.94

0.00
-2.10

35.48
51.34

16.00
29.01

20.42
143.06

0.45
-0.84

363.22
1840.34

0.45
18.49

0.00
-2.1

10.04
61.38
18.75

-0.14
28.87
0.00

4.92
147.98
22.29

0.00
-0.84
0.00

43.19
1883.53
442.87

12.04
30.53
0.00

0.00
-2.10
0.00

Jayant Aqro
Laffancs
Panama
Passari
Mar-08
Mar-08
Mar-08
Mar-08
(12 Months) (12 Months) (12 Months) (12 Months)

Pidilite
Mar-08
(12 Months)

Refnol Resins
SNZS
Mar-08
Mar-08
(12 Months) (12 Months)

2.43
2.07
1.01

4.86
4.05
1.63

8.73
8.57
6.30

0.00
0.00
0.00

17.08
14.57
12.09

10.93
10.16
12.91

0.00
0.00
-525.00

5.98
20.85
14.03

9.68
4.80
5.03

2.73
4.99
25.67

0.00
0.00
0.00

7.07
7.47
2.60

14.59
3.35
4.92

0.00
0.00
0.00

4.62
1.73
1.39

2.72
0.80
2.46

1.46
0.13
4.48

13.41
0.66
0.00

2.57
0.78
12.76

1.11
6.56
3.83

0.07
-0.28
0.00

7.94
9.61
37.60

13.11
7.97
0.00

35.20
29.22
15.06

-1.18
-4.24
0.00

22.93
29.38
27.56

81.80
735.61
0.00

18.24
0.00
0.00

40.7
7.86
5.21
614.25

11.6
1.65
7.02

72
1.55
46.55
342.86

16

110
14.27
7.73
27913.32

7.08
1.26
5.63

3.75
46.88
0.08

Sunshield

Transpek

United Phosphorus

Mar-08
(12 Months)

Mar-08
(12 Months)

Mar-08
(12 Months)

73.53
40.98
114.51
137.29
123.85
375.65
Mar-08
(12 Months)

56.73
358.75
415.48
230.29
139.47
785.24
Mar-08
(12 Months)

1292.10
16591.80
17883.90
2045.50
13302.70
33232.10
Mar-08
(12 Months)

350.36
92.71
257.65
0.99
0.03

949.19
364.64
584.55
20.09
47.35

11805.50
4895.30
6910.20
1273.00
8312.0

52.97
89.35
3.47
26.94
172.73

158.65
203.29
27.92
140.06
529.92

3022.70
4985.20
3038.30
14556.60
25602.80

55.75
0.00
55.75
116.99
0.00
375.66
(0.01)

356.21
40.47
396.68
133.25
0.00
785.24
-

8351.90
514.00
8865.90
16736.90
0.00
33232.10
-

Sunshield
Mar-08
(12 Months)

418.51
7.20
425.71

Transpek
United Phosphorus
Mar-08
Mar-08
(12 Months)
(12 Months)

1067.36
32.83
1100.19

15411.20
1394.60
16805.8

305.46
55.38
25.32
386.16

604.85
74.44
306.99
986.28

9368.70
1119.30
3743.70
14231.70

39.55

113.91

2574.1

27.76
11.79

44.05
69.86

1123.60
1450.5

13.94
-2.15

49.94
19.92

669.10
781.40

0.68
-2.83

9.26
10.66

18.90
762.5

-2.52
-5.35
0.00

1.31
11.97
0.00

156.60
919.10
439.30

Sunshield
Mar-08
(12 Months)

Transpek
United Phosphorus
Mar-08
Mar-08
(12 Months)
(12 Months)

7.72
4.39
-0.66

7.59
2.91
1.02

7.65
3.31
5.50

8.95
4.68
1.19

7.20
5.25
1.15

6.03
3.09
1.48

3.10
2.28
1.16

1.34
0.89
1.84

2.89
0.86
1.05

8.60
-2.48
0.00

10.32
2.72
83.14

3.54
5.43
55.55

Mean
13.76
11.76
1.17

50.7
4.81
10.51
270.3

116
13.77
8.44
25538.64

Median

Standard Deviation

Coff. Of Variation

1821

Company Name

Gross
Cash
Mkt Cap Book Equity
Pretax Earning
Net Income Flow

Grauer & weil

531.33
Alkhli Metals
170.56
Ciba India
266.4
Gulshan
712.86
Jayant Aqro
614.25
Panama
342.86
Pidilite
27913.32
Transpek
270.3
United Phosphorus 25538.64
MEDIAN
531.33

639.56
340.82
2951.85
333.08
671.73
512.76
6424.81
415.48
17883.90
639.56

179.99
89.82
327.96
94.69
86.82
163.48
2203.56
19.92
781.40

Company Name

MV Eq/
Pretax
Earnings

MV Eq./
Net
Income

EBITDA

133.74 171.04 1958.84 286.08

79.32
97.49
617.68 125.71
204.77 273.13 4697.95 410.62
75.05 109.51
994.19 180.85
51.34
72.85 5994.43 213.40
143.06 146.76 2339.12 212.73
1840.34 2225.39 15371.88 2794.42
10.66
60.60 1067.36 113.91
762.5 1431.60 15411.20 2574.10
133.74

Market Value of Equity ( MVE) Multiples

MV
Eq/Book
Eq.

Sales

Market Value of Invested Capital ( MVIC) M

MV
Eq/Gross
MV
MVIC/EBI MVIC/E
Cash Flow Eq/Sales
TDA
BIT

Grauer & weil

Alkhli Metals
Ciba India
Gulshan
Jayant Aqro
Panama
Pidilite
Transpek
United Phosphorus

0.83
0.50
0.09
2.14
0.91
0.67
4.34
0.65
1.43

2.95
1.90
0.81
7.53
7.07
2.10
12.67
13.57
32.68

3.97
2.15
1.30
9.50
11.96
2.40
15.17
25.36
33.49

3.11
1.75
0.98
6.51
8.43
2.34
12.54
4.46
17.84

0.27
0.28
0.06
0.72
0.10
0.15
1.82
0.25
1.66

4.19
3.39
1.23
5.80
8.32
1.93
11.79
5.62
15.88

4.81
3.96
1.48
7.17
9.26
1.96
13.67
10.01
21.46

Mean
Median
Standard Deviation
Coff of Variation

1.29
0.83
1.29
100.25

9.03
7.07
10.02
110.92

11.70
9.50
11.31
96.70

6.44
4.46
5.64
87.66

0.59
0.27
0.68
115.40

6.46
5.62
4.80
74.27

8.20
7.17
6.37
77.71

Notes
As per S Pratt multiple with lower coff of variation is to be given more weights Pg 299
For coff of variation we need to calculate mean
Median is considered as better measure than Mean for skewed data, so median is considered for calculaion of target
the median is not influenced by outliers at the extremes of the data set. For this reason, the median often is used whe

In the investing world, the coefficient of variation allows you to determine how much volatility (risk) you are assuming i
122
474

Max

17.84

Min

0.98

Tangible
EBIT Asset Value

MVIC profit margin

equity/MVIC

dep

248.78
107.54
342.26
146.39
191.89
209.03
###
63.97
###

1197.67
426.03
507.06
1049.55
1776
410.29
32939.3
640.06
40886.84

37.30
18.17
68.36
34.46
21.51
3.70
385.05
49.94
669.10
37.30

639.56
331.76
2951.85
322.93
671.73
512.76
6424.81
415.48
17883.90

6.83%
12.84%
4.36%
7.55%
0.86%
6.12%
11.97%
1.00%
4.95%
6.12%

44.36%
40.03%
52.54%
67.92%
34.59%
83.57%
84.74%
42.23%
62.46%
52.54%

dep+int+tax int+tax
152.34
46.39
205.85
105.80
162.06
69.67
954.08
103.25
1811.60
152.34

115.04
28.22
137.49
71.34
140.55
65.97
569.03
53.31
1142.50
115.04

tax
46.25
10.50
123.19
19.64
35.48
20.42
363.22
9.26
18.90
20.42

e of Invested Capital ( MVIC) Multiples

MVIC/
Sales

MVIC/Tangib
le Asset
Value

0.61
0.69
0.11
1.06
0.30
0.18
2.14
0.60
2.65

1.87
1.28
0.17
3.25
2.64
0.80
5.13
1.54
2.29

0.93
0.61
0.89
96.39

2.11
1.87
1.47
69.65

sidered for calculaion of target company multiples

, the median often is used when there are a few extreme values that could greatly influence the mean and distort what might be considered

atility (risk) you are assuming in comparison to the amount of return you can expect from your investment. In simple language, the lower the

5.13

0.17

t what might be considered typical

mple language, the lower the ratio of standard deviati

Guideline Public Company Method - Value Summary - Relative to Grauer & Weil
Equity Multiples

MVE/ net income

MVE/gross cash flow
MVE/earnings before taxes
MVE/net sales
MVE/book equity

Multiple Adjusted
KECPL
Indicated
of Grauer Multiple X Funda= Value & weil
-mental
3.97
3.01
15.18
45.77
3.11
2.49
22.18
55.19
2.95
3.86
23.00
88.67
0.27
0.21
190.00
0.00
0.83
0.63
50.17
31.63

Invested Capital Multiples

MVIC/ EBITDA
MVIC/EBIT
MVIC/net sales
MVIC/net tangible asset value

4.19
4.81
0.61
1.87

3.64
4.11
0.46
1.42

34.35
27.35
190.00
50.17

125.20
112.45
88.15
71.29

Debt
=
0
0
0
0
0

68.36
68.36
68.36
68.36

The equity capitalization rate for the subject company has been kept larger by 8% ( 4% for size d

4% for Company specific risks) than the comparable rates for guidelines company. Accordin
multiples have been adjusted.

Indicated
Weight
Weighted
Equity X
=
Value
Value
45.77
0.05
2.29
55.19
0.10
5.52
88.67
0.05
4.43
0.00
0.05
0.00
31.63
0.05
1.58

56.84
44.09
19.79
2.93

0.20
0.20
0.10
0.20
1

11.37
8.82
1.98
0.59
36.57

larger by 8% ( 4% for size difference and

idelines company. Accordingly, selected

Guideline Public Company Method Value Summary

Equity Multiples

MVE/ net income

MVE/gross cash flow
MVE/earnings before taxes
MVE/net sales
MVE/book equity
Invested Capital Multiples
MVIC/ EBITDA
MVIC/EBIT
MVIC/net sales
MVIC/net tangible asset value

Selected
KECPL
Indicated
Multiple X Funda= Value -mental
9.50
15.18
144.21
4.46
22.18
98.94
7.07
23.00
162.72
0.27
190.00
51.54
0.83
50.17
41.68

5.62
7.17
0.61
1.87

34.35
27.35
190.00
50.17

193.01
196.09
116.17
93.95

Debt

Indicated
= Equity X
Value
0
144.21
0
98.94
0
162.72
0
51.54
0
41.68

68.36
68.36
68.36
68.36

124.65
127.72
47.81
25.59

Weight

Weighted
= Value

0.05
0.10
0.05
0.05
0.05

7.21
9.89
8.14
2.58
2.08

0.20
0.20
0.10
0.20
1

24.93
25.54
4.78
5.12
90.27

K Electro-Chemicals Private Limited

Value Indications

S.No. Method of Valuation

1 Adjusted Net Assets Method

Value
Less
Less
Total
100 % Non
derived DLOC DLOM
Marketable
methods
Discount Minority V.
(Rs./Lacs)
(Rs./Lacs)
81.03
15%
25%
36%
51.65

2 DCF Method - APV Approach

73.09

5%

25%

29%

52.08

3 Guideline Public Company M

-Relative to Selected Comps.
-Relative to Grauer & weil

90.27
36.57

5%
5%

25%
25%

29%
29%

64.32
26.06

4 CCI

66.50

0%

15%

15%

56.52

115.89

0%

40%

40%

69.54

5 FEMA Guidelines

Value
Per share
Rs.
17.22
17.36

21.44
8.69
18.84
23.18

Please use the following rates for Revaluation of Balances in the

Mirror Accounts and Outstanding Spot/Overdue and Forward Contracts as at
28th NOVEMBER 2008
-----------------------------------------------------------------------------------------------------------------------------------------------------CODE
SPOT DEC.2008 JAN.2009 FEB.2009 MAR.2009 APR.2009 MAY.2009 JUN.2009 JUL.2009
-----------------------------------------------------------------------------------------------------------------------------------------------------USD
50.0750 50.3000 50.4800 50.6100 50.6800 50.7400 50.7850 50.8300 50.8750
GBP
77.0575 77.4150 77.7175 77.9225 78.0425 78.1450 78.2275 78.3100 78.3925
EUR
64.3725 64.6375 64.8600 65.0200 65.1125 65.1925 65.2525 65.3300 65.4075
*JPY
52.5775 52.9025 53.1575 53.3600 53.5050 53.6400 53.7600 53.8750 53.9900
CHF
41.5300 41.8075 42.0200 42.2000 42.3200 42.4325 42.5325
AUD
32.9175 33.0050 33.0600 33.0950 33.1075 33.1150 33.1125
CAD
40.4925 40.6700 40.8450 40.9700 41.0525 41.1275 41.1900
SGD
33.1675 33.3275 33.4775 33.5975 33.6800 33.7575 33.8250
SEK
6.2350
6.2625
6.2825
6.3000
6.3100
6.3175
6.3250
DKK
8.6400
8.6650
8.6875
8.7050
8.7150
8.7225
8.7275
NOK
7.2225
7.2400
7.2525
7.2600
7.2625
7.2650
7.2650
HKD
6.4600
6.4925
6.5175
6.5325
6.5425
6.5500
6.5550
MYR
13.8200 13.8700 13.9325 13.9750 14.0100 14.0425 14.0700
NZD
27.6575
THB
1.4100
BHD
132.8250
AED
13.6350
*KES
63.7075
*IDR
0.4325
For F.E.D.A.I.
QAR
13.7575
OMR
130.0650
EGP
9.0750
SAR
13.2825
Dy.Chief Executive
KWD
187.0225
All Currencies are for 1 unit of Foreign Currency = So many Indian Rupees except
Those marked * which are 100 units of Foreign Currency = So many Indian Rupees

Iteration method of cost of capital

1580000
0.114
13859649
0.288608 4000000
0.711392 9859649

4.8 0.288608 1.385316

21 0.711392 14.93924
16.32456

sales cagr
38054800
0.164

cagr
aagr

1.153882
0.153882
0.038471
0.036431
0.036747

ces in the
Contracts as at

-----------------------------AUG.2009 NOV.2009
-----------------------------50.9200
51.0450
78.4750
78.7075
65.4850
65.7050
54.1075
54.4450

0.9700
1.6500
1.3325

1.94%
2.14%
2.07%

69.1275
1.430928
70.55843

1000 69127.5
53.34
1053.34 74322.01
5194.514

1.430928
0.0207
7.51%

For F.E.D.A.I.

Dy.Chief Executive

28th NOVEMBER 2008

7.51%

32979800

5075000
0.1538820733
18.03
4.5075

38054800
35497100
35201800
34627900
32979800

0.072054
0.008389
0.016573
0.049973
0.146989
0.036747