Valuation Report of Cubot Business Intelligence Pvt Ltd

Valuation Summary
1 Identity of the client Cubot Business Intelligence Private Limited
2 Purpose and intended use The Purpose of valuation is to determine the Enterprise
of the valuation value & the Equity value per share of Cubot Business
Intelligence Private Limited to meet the long-term capital
requirements of the company by raising equity.
5 Date of the Valuation 31st March,2020

6 Report date 11th September, 2020

7 Standard of Value Fair Value

8 Premise of value Going concern

9 Method Adopted by the Income approach – Discounted cash flow

Valuer

10 Valuation conclusion Equity Value of shares of the Company as on March 31 2020

is Rs 53.10 per share.
Enterprise Value of the Company as on March 31 2020 is
Rs 4 Crore.

TABLE OF CONTENTS
Sl. No. Particulars Page No.

1
 Valuation Report of Cubot Business Intelligence Pvt Ltd
1. Engagement Background 3-5
1.1. Company Background 3
1.2. Scope of Valuation Engagement 4-5
1.2.1. Purpose of Valuation and Appointing Authority 4
1.2.2. Subject Matter of Valuation 4
1.2.3. Identity of Valuer and any other Experts 4
1.2.4. Disclosure of the Valuer’s interest or conflict, if any
5

2. Industry Overview 6
3. Company’s Business and Financial Review 7-10
3.1. Company’s Operations 7-8
3.1.1. Business Segments 7-8
3.1.2. Corporate Strategy, Mission and Vision 8
3.2. Financial Review: 9-10
3.2.1. Financial performance: Growth and Profitability 10
4. Concept & Valuation Methodology 10-16
4.1. Adoption and Application of Indian Valuation Standards 13 -14
4.2. Selection of Approach& Method 14
4.3. Valuation Calculations 14-16
4.3.1 Assumptions for determining Enterprise Value 14-15
4.3.2 Calculation of the Projected Cash Flows with Terminal
15
Value Calculations
4.3.3 Computation of Enterprise Value 16
5. Information Sources 17
5.1. Sources of Information 17
5.2. Management Representations 17
5.3. Inspections and/or investigations 17
6. Valuation Analysis & Conclusions 18
7. Assumptions, Limiting Conditions, Caveats and Disclaimers 19-21

1. ENGAGEMENT BACKGROUND

1.1. Company Background

Cubot Business Intelligence Private Limited (CUBOT) is a comprehensive business

intelligence platform which empowers business teams and users with reliable data
insights.

The Company was incorporated on 24th April 2000 with an objective to make the
process of getting insights easy for business customers, partners, analysts &
executives. The company has changed its name from Robust Designs (India) Pvt. Ltd.

2
Valuation Report of Cubot Business Intelligence Pvt Ltd
To Cubot Business Intelligence Private Limited in FY 20. The company has a 100%
subsidiary in Singapore.

Its registered office is situated at 135, 4th floor, Opposite to Hindu Press, Infantry Road
Bangalore - 560001 

Cubot has been founded by Srinivas Agnihotri, Naresh Sadasivan, Rohan Waman Joshi
& Yadavendra Balehosur

PROMOTERS PROFILE

 Yadavendra Balehosur: (CEO) – He has over 30 year of experience in the

technology industry. He has worked as software product engineering, project lead
& delivery consultant for many clients & has empowered the team to deliver best
results. He has worked with partners to integrate different softwares. He has
worked with companies like Accenture, Infosys, VP Healthcare, etc. He is an
(M.Tech)Computer science engineer from IIT Madras.

 Srinivas Agnihotri: (Founder & VP Sales ) - He has over 25 year of experience in

the field of business development & sales industry .He is Skilled in Setting up
and running the business successfully with complete P&L responsibility. He has
worked in companies like Cyber Media India Limited , etc .

1.2. Scope of Valuation Engagement

1.2.1. Purpose of Valuation and Appointing Authority

Based on discussion with the Management, I understand that the Company’s

promoters are evaluating the possibility of infusion of capital in the Company to
augment the long-term resources and to meet the long-term capital requirements of
the company. In this context, the Management requires my assistance in determining
the Enterprise Value and Equity value per share of the Company & I have been
appointed by the Board of Directors of CUBOT as an independent valuer to derive
the enterprise value to issue equity shares and warrants.

3
Valuation Report of Cubot Business Intelligence Pvt Ltd

I have in this regard, been provided with various information in respect of the
Company. I have also relied on the discussion with the executives of the company.

This report has been prepared solely for CUBOT for the purposes stated hereinabove.
In no event, regardless of whether consent has been provided, shall I assume any
responsibility to any third party to which the work is disclosed or otherwise made
available.

1.2.2. Subject Matter of Valuation

The subject matter of valuation is the Enterprise Value and Equity value per share of
the company.

1.2.3. Identity of Valuer and any other experts

Shivadutt Bannanje (the Valuer) is an IBBI Registered Valuer in the asset class
“Securities or Financial Assets”. He has the necessary experience of providing
services across all verticals of Debt and Equity.

1.2.4. Disclosure of Valuer’s interest and conflict, if any

I acknowledge that I have no present or contemplated financial interest in the

company. My fees for this valuation is based upon normal billing rates, and not
contingent upon the results or the value of the business or in any other manner. I
have no responsibility to modify this report for events and circumstances occurring
subsequent to the date of this report.

4
Valuation Report of Cubot Business Intelligence Pvt Ltd

2. INDUSTRY OVERVIEW
The global Big Data Analytics market was valued at $ 37.34 Bn in 2018 and expected
to reach $ 105.08 Bn by 2027 growing at a CAGR of 12.3% from 2019 to 2027.
According to a survey, the number of firms investing in big data and AI is more than
$50 Mn which rose from 27% in 2018 to 33.9% in 2019. The global spending on big
data analytics is more than $ 180 Bn in 2019.

The Analytics, Big Data, and Data Science market in India generated $2.71 Bn yearly
revenue as in 2020.
This industry is growing at a CAGR of 33.50%. Advanced Analytics, Predictive
Modelling & Data Science reign in almost 11% of the annual inflow in the analytics
industry. Big Data independently contributes 22% of the annual inflow. By 2025, the
Analytics industry is estimated to be worth $20 Bn in India alone.

5
Valuation Report of Cubot Business Intelligence Pvt Ltd
Almost 65% of revenues in the analytics industry in India come directly from
analytics exports to the USA.
The Finance & Banking sector continues to be the largest consumer of analytics
services in India. Almost 38% comes from the finance and banking sector. Marketing
& Advertising contributes 24% of analytics revenues. Commerce sector contributes
15% of analytics revenues in India. The travel & Hospitality industry has made the
most significant jump of 61% i.e. from $34 million to $54 million in analytics revenue.
Pharma & Healthcare rose by almost 50% from 2019.

Most of the companies requires data analytics. Large-sized companies in IT sector

with an employee base of more than 10k, employ almost 40% of analytics
professionals in India. Mid-sized organizations in IT sector with a range of 200 to 10k
employees, employ around 32% of total analytics professionals in India. IT start-ups
with less than 200 employee base, employ 28% of analytics professionals in India. The
field is expected to grow further in the coming years. Thus, there is huge opportunity
for this industry to grow.

Sources:
 https://medium.com/@jennifersmithbriskinsights/big-data-analytics-market-size-share-growth-trends-analysis-and-forecast-2019-to-2027-155cd37d0732

 https://databrio.com/blog/analytics-and-data-science-industry-in-2020

3. COMPANY’S BUSINESS AND FINANCIAL REVIEW

3.1. Company’s Operations

3.1.1. Business

CUBOT is a robust business intelligence platform that integrates data from various
data sources within an organization and gives managers the ability to analyse
information and track performance in a quick and easy manner.

It uses analytics to help managers to accelerate decision making thus driving business
growth, reducing costs & drive operational efficiency. They help in getting insights
by various ways like discovering patterns within transaction data, identifying

6
Valuation Report of Cubot Business Intelligence Pvt Ltd
unusual patterns & anomalies, determining root causes of operational problems & by
mining customer sentiments.
CUBOT comes with an inbuilt ETL tool, reporting tool and analytics tool. It allows
information sources across systems, channels and repositories to be semantically
modelled into business dimensions and measures.

CUBOT is 100% browser based which makes it accessible over an office network, a
private network or TM over the Internet. The platform ensures that managers have
critical information at their fingertips, on-demand, anywhere, anytime.

The features provided by CUBOT are:

 Cloud based: Complex calculations and large volumes of data are
processed on servers
 User focus: No code is required for measure and dimension specification
which helps business users to govern data
 Filter data: Filter data easily with the same conditions used across reports
and dashboard
 User Roles and Distribution: Secure user access and role rights, down to
each number
 Export easily: Export reports or relevant slice of raw data out of CUBOT
easily into excel.

The platform helps to give domain specific analytics in the areas of Telecom, Asset
Management, Insurance, Banking, and Healthcare.

Experience and Performance

CUBOT team brings together technical skills, data science and business domain
knowledge to maximize value in the projects they deliver.

CUBOT's features, interface and pricing plans make it usable as a platform for
different user profiles. They are helpful for the following:
 Analysts: It helps them to save time & helps analysts find patterns in a
business.

7
Valuation Report of Cubot Business Intelligence Pvt Ltd
 Executives: It helps to provide meaningful summaries for executives.
Executives can use filters across chart types to visualize trends, understand
underlying causes through annotations and can be sent alerts to act upon
based on pre-defined KPI thresholds.
 Companies: They help companies to understand the industry and business
and helps in smarter decision making. CUBOT's security matrix is ideal
for the same data to be shared across a large set of business users

Infrastructure
CUBOT has an efficient team of people who have vast experience in the Field of
Technology, Sales & Marketing, Data Science which would help the Company grow.

3.1.2. Corporate Strategy, Mission and Vision

CUBOT vision is to bring technology for business users to make their work faster and
simpler

3.2. Financial Review

We have considered the consolidated financials of the Company for our review
which is stated as follows:
As at
31.3.2020(Provisional As at
EQUITY AND LIABILITIES ) 31.3.2019(Audited)
Shareholders' Funds
(a) Share Capital 75,32,870 75,32,870
(b) Reserves and Surplus (53,43,521) (34,43,048)
 
Non-Current Liabilities
 
Current Liabilities
(a) Short-Term Borrowings 57,59,746 63,85,708
(b) Trade Payables 8,29,752 5,20,503
(c) Other Current Liabilities 68,71,997 89,26,350
 
TOTAL 1,56,50,844 1,99,22,383
ASSETS

8
Valuation Report of Cubot Business Intelligence Pvt Ltd
Non-Current Assets
(a) PPE
Tangible Assets 1,20,831 1,30,898
Intangible Assets 74,38,632 94,50,861
Intangible Asset Under development 24,46,525 24,46,525
(b) Long-Term Loans and Advances 3,00,000 5,52,408
 
Current Assets
(a) Short term loans & advances 32,94,237 27,84,891
(b) Trade receivables 14,56,804 28,28,580
(c) Cash and Cash Equivalents 5,93,815 17,28,220
(d) Other Current Assets - -
 
TOTAL 1,56,50,844 1,99,22,383
Amt in Rs

3.2.1. Financial Performance: Growth and Profitability

Amt in Rs

 Particulars Year ended Year ended

31.3.2020 31.3.2019
(Provisional) (Audited)
Total Revenue 2,5
5,94,046 1,88,10,686

PBT
(18,84,371) (17,44,698)

PAT (
18,84,371) (17,44,698)

4. CONCEPT & VALUATION METHODOLOGY

Valuation of business is not an exact science and ultimately depends upon what it is
worth to a serious investor or buyer who may be prepared to pay substantial
goodwill. This exercise may be carried out using various methodologies, the relative
emphasis of each often varying with –
• Industry to which the company belongs
• Past track record of the business and the ease with which the growth rate in
cash flows to perpetuity can be estimated.

9
Valuation Report of Cubot Business Intelligence Pvt Ltd
• Extent to which industry and comparable company information is available.

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

A. Asset Approach:

Net Asset Value Method (“NAV”) –

The value arrived as under this approach is based on the audited financial statements
of the business and may be defined as shareholders’ funds or Net Assets Owned by
the business. The balance Sheet Values are adjusted for any contingent liabilities that
are likely to materialise.

The Net Asset Value is generally used as the minimum breakup value for the
transaction since this methodology ignores the future return the assets can produce
and is calculated using historical accounting data that does not reflect how much the
business is worth to someone who may buy it as a going concern.

I understand that the business of the company is not capital intensive. Accordingly,
the current NAV would not be reflective of its growth potential going forward and
thus would not reveal the true business value of the company. Hence keeping the
context and purpose of the Report in mind, I have not used this method in the
Analysis.

2. Market Approach:

Comparable Company Market Multiple Method

Under this methodology, market multiples of comparable listed/unlisted (which are

valued by other buyers) companies are computed and applied to the business being
valued in order to arrive at a multiple based valuation. The difficulty here is in
selection of a comparable company since it is rare to find two or more companies

10
Valuation Report of Cubot Business Intelligence Pvt Ltd
with the same product portfolio, size, capital structure, business strategy, profitability
and accounting practises.

Whereas no publicly traded company provides an identical match to the operations

of a given company, important information can be drawn from the way comparable
enterprises are valued by the public markets.

I have not used this methodology in the analysis as I understand that there are no
comparable listed companies in terms of size in the sector which have just started the
operations to which the company belongs.

Comparable Transactions multiple method

This approach is somewhat similar to the market multiples approach except that the
sales and the EBITDA multiples reported transactions in the same industry in the
recent past is applied to the sales and the EBITDA of the business being valued. I
have not used this approach since there are no market comparable which is in the
same stage

3. Income Approach

Maintainable Profit Method (Discounted Cash Flows – “DCF”) –

DCF uses the future free cash flows of the company discounted by the firm’s
weighted average cost of capital (The average cost of capital used in the business,
including debt and equity), plus risk factor measured by beta, to arrive at the present
value.

Beta is an adjustment that uses historic stock market data to measure the sensitivity
of the company’s cash flow to market indices, for example through business cycles.

The DCF method is a strong valuation tool, as it concentrates on cash generation

potential of a business. This valuation method is based on the capability of a
company to generate cash flows in the future. The free cash flows are projected for
certain number of years and then discounted at a discount rate that reflects the

11
 Valuation Report of Cubot Business Intelligence Pvt Ltd
company’s cost of capital and the risk associated with the cash flows it generates.
DCF analysis is based mainly on the following elements:
a. Projection of financial statements
b. The Weighted Average cost of capital to discount the projected Cash flows.

However, expected cash flows discounted at our usual discount rates that account for
systematic risk don't apply when it comes to early stage companies. Investment in a
company will come with a probability that it will achieve profitability, or it may not.
A relevant aspect would be the probability of success which would come with
experience. It comes from the experience of an investor who has built a portfolio with
companies at different stages of maturity in distinct industries.
Adjusting cash flows with the probability of success makes them “expected cash
flows” rather than just “optimistic cash flows”.
As an investor, the probability of success of that specific startup has to be accounted
for. The more mature the firm is, higher is the probability of success & younger the
firm, the dream cash flows have to be discounted further.

Free Cash Flows

I have been provided with the free cash flows of the company(Consolidated) for 5
years starting April 1st, 2020 onwards by the management, which I have considered
for my
analysis. These include projected income statement and projected Balance Sheet.
Accordingly, the projected Free Cash Flows to Firm (FCFF) based on these financial
statements are set out below in Annexure.

Terminal Value

The terminal Value refers to the present value of business going concern beyond the
period of projections up to infinity. This value is estimated by taking into account
expected growth rates of the business in the future, sustainable capital investments
required for the business as well as estimated growth rate of the industry and
economy.

4.1. Adoption and Application of Indian Valuation Standards

12
 Valuation Report of Cubot Business Intelligence Pvt Ltd

The general process for the valuation starts with the analysis of historical and current
financials, then analysis of future projections, if applicable, is done and discussions
with the Company is performed to understand the future assumptions. After
analysing the data, appropriate valuation method is determined. The valuation is
done accordingly and the valuation report is prepared & finally shared with the
Company.

The report has been prepared in compliance with Valuation Standards adopted by
Valuer’s Registered Valuation Organisation (RVO)

The Standard of Value used in the Analysis is “FAIR VALUE”, which is often defined
as the price in terms of cash or cash equivalent, that a buyer could reasonably be
expected to pay and a seller could reasonably be expected to accept, if the business
were exposed for sale on the open market for a reasonable period of time, with both
buyer and seller being in the possession of the pertinent facts and neither being under
any compulsion to act

4.2. Selection of Approach & Method

I have considered various approaches and methods available for determining the
Enterprise Value and Equity value per share of the Company, the relative emphasis
of each was considered based on:
• Nature and stage of business of the company.
• Nature of industry to which the company belongs.
• Quality and extent of availability of prospective financial information of the
Company such as cash flow forecasts; growth in cash flows to perpetuity etc.

The purpose of valuation; Keeping in mind the purpose of the report and availability
of information, I have adopted Income Approach - Discounted Cash Flow
methodology since in my view it derives best estimate value of the Company.
Management of the Company has compiled the projected financials based on the
business model of the Company, expected future market conditions and the likely
course of action to be taken by the Company as on the Valuation Date.

13
 Valuation Report of Cubot Business Intelligence Pvt Ltd
4.3. Valuation Calculations
4.3.1. Assumptions for determining Enterprise Value and Equity value per share.

Head Particulars
Discount Rate Cost of Equity has been arrived at using CAPM. As the
company is not expected to have debt leverage, such Cost of
Equity is considered as the rate of discount.
Projected Financial I have performed my analysis based on management certified
Statements projected financial statements of the Company(Consolidated )
for a period of 3 years from the valuation date including
assumptions underlying;
Terminal Value The terminal value has been estimated using stable growth
rate of 4%, which according to the management reflects long
term expected average growth of the industry. However, a
reduced rate of WACC is considered keeping in mind that the
risk perception is at a stable growth rate.
Equity risk premium Equity Risk Premium is arrived at using CAPM, which is
based on statistics of the market. Various factors have been
compiled to arrive at an average equity risk premium in the
current market and the industry in which the company
operates.
Equity Infusion The Company has informed us that they have plans to infuse
additional capital to meet the working capital requirements.

4.3.2. Calculation of the Projected Cash Flows with Terminal Value Calculations

Rs in crores

Particulars 2020-21 2021-22 2022-23

PBT 0.05 0.38 2.79
Less: Taxes paid 0.00 0.11 0.64
Profit after Taxes 0.05 0.27 2.15
Add: Depreciation 0.12 0.07 0.04
Less: Loan Repayment 0.58 0.00 0.00
Free Cash Flow to Firm
(FCFF) -0.41 0.33 2.18

14
Valuation Report of Cubot Business Intelligence Pvt Ltd

4.3.3. Computation of Enterprise Value and Equity value per share.

Computation of Present Value of Free Cash

Rs in Crores
Flows  
Discount
Financial Year Free Cash Flow Factor@
Present Value/
WACC
2020-21 -0.41 0.73 -0.30
2021-22 0.33 0.53 0.18
2022-23 2.18 0.39 0.84
Present Value of Free Cash Flows during
Explicit Period
Add: Terminal sale value
Terminal Sale value in 2023 8.41 0.39 3.25
Discounted Terminal Sale Value
Arrived Enterprise Value 4.00

No. of shares 0.075

Value per share (Amt in Rs) 53.10

15
Valuation Report of Cubot Business Intelligence Pvt Ltd

5. INFORMATION SOURCES

5.1. Sources of Information

The analysis is based on the review of the business plan of the company provided by
the Management and information relating to the data analytics industry as available
in the public domain. Specifically, the sources of the information include –
• Discussions with the management
• Company brochure and website
• Financial Projections(Consolidated) of the company for 5 years ending March
31, 2025 as provided by the management. However, going by the nature &
stage of the business, I have only considered 3 years projections.
In addition to the above, I have also obtained such other information and
explanations which were considered relevant for the purpose of the Analysis.

5.2. Management Representations

The Valuation exercise was carried out keeping in mind the standard methodologies
are influenced by the following factors:
a. Ease with which the growth rate in cash flows can be achieved.
b. My estimate of the valuation of the Company was on the basic assumption of a
going concern entity and is based on the Income Approach

5.3. Inspections and/or investigations

The company provided me with the projections, and other necessary information as
required for the purpose of valuation. I have inspected the data as provided by the
management.

I understand as per the books of accounts of the company that the directors are
looking for augmenting the long term resources and to meet the long-term capital
requirements of the company by raising equity.

16
 Valuation Report of Cubot Business Intelligence Pvt Ltd
6. VALUATION ANALYSIS & CONCLUSION

The report has been prepared in compliance with Valuation Standards adopted by
Registered Valuers Organisation.
Keeping in mind the context and purpose of the report, I have taken the DCF method
as it captures the growth potential of the business going forward. I have used these
methods to calculate the Enterprise Value & Equity value per share of the Company
based on the Financial Projections prepared by the Management of the Company and
comparison with the competition.

Based on my analysis, and subject to the assumptions presented herein, I hereby

certify that the Enterprise Value of the Company as on 31 March, 2020 under
Discounted Free Cash Flow Basis is Rs. 4.00 Crores & the equity value per share is Rs
53.10. I have no obligation to update this report or my conclusion of value for
information that comes to my attention after the date of report.  

SHIVADUTT BANNANJE
Registered Valuer
Registration No. IBBI/RV/04/2019/11751

Place: Bangalore
Date: 11th Sep , 2020

7. ASSUMPTIONS, LIMITING CONDITIONS, CAVEATS AND DISCLAIMERS

17
Valuation Report of Cubot Business Intelligence Pvt Ltd

1. The conclusion of value arrived at herein is valid only for the stated purpose as of the
date of the valuation and may not be used out of the context presented herein.

2. Public information, estimates, industry and statistical information contained in this

report have been obtained from sources considered to be reliable. However, I
independently did not verify such information and make no representation as to the
accuracy or completeness of such information obtained from or provided by such
sources.

3. The company and its representatives warranted to me that the information supplied to
me was complete and accurate to the best of their knowledge and that the financial
information properly reflects the business conditions and operating results for the
respective periods in accordance with generally accepted accounting principles.
Information supplied to me has been accepted as correct without any further
verification. I have not audited, reviewed, or compiled the financial information
provided to me and, accordingly, I express no audit opinion or any other form of
assurance on this information.

4. Financial information of the subject company is included solely to assist in the

development of a value conclusion presented in this report and should not be used to
obtain credit or for other purpose. Because of the limited purpose of the information
presented, it may be incomplete and contain departures from generally accepted
accounting principles. I have not audited, reviewed or compiled this information and
express no assurance on it.

5. I do not provide assurance on the achievability of the results forecasted by the client
because events and circumstances frequently do not occur as expected; differences
between actual and expected results may be material; and achievement of the
forecasted results is dependent on actions, plans, and assumptions of management.

6. The conclusion of value arrived at herein is based on the assumption that the current
level of management expertise and effectiveness would continue to be maintained, and
that the character and integrity of the enterprise through any sale, reorganization,

18
Valuation Report of Cubot Business Intelligence Pvt Ltd
exchange, or diminution of the owners’ participation would not be materially or
significantly changed.

7. Possession of this report, or a copy thereof, does not carry with it the right of
publication of all or part of it nor may it be used for any purpose by anyone other than
those enumerated in this report without the written consent of Shivadutt Bannanje.
This report and the conclusion of value arrived at herein are for the exclusive use of
my client for the sole and specific purposes as noted herein.

8. The report and conclusion of value are not intended by the author and should not be
construed by the reader as investment advice in any manner whatsoever. The
conclusion of value represents the considered opinion of Shivadutt Bannanje, based on
information furnished to them by the client and other sources.

9. Neither all nor any part of the contents of this report (especially the conclusion of
value, the identity of any valuation specialist(s), or the firm with which such valuation
specialists are connected or any reference to any of their professional designations)
should be disseminated to the public through advertising media, public relations,
news media, sales media, mail, direct transmittal, or any other means of
communication without the prior written consent and approval of Shivadutt Bannanje.

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

11. The analyst, by reason of this valuation, is not required to give further consultation,
testimony, or be in attendance in court with reference to the property in question
unless arrangements have been previously made.

12. Our engagement for this valuation consulting work does not include any procedures
designed to discover any defalcations or other irregularities, should any exist.

13. Shivadutt Bannanje has not determined independently whether the client is subject to
any present or future liability relating to environmental matters nor the scope of any

19
Valuation Report of Cubot Business Intelligence Pvt Ltd
such liabilities. Shivadutt Bannanje’s valuation takes no such liabilities into account,
except as they have been reported to Shivadutt Bannanje by the client or by an
environmental consultant working for the client.

14. No change of any item in this valuation/conclusion report shall be made by anyone
other than Shivadutt Bannanje and we shall have no responsibility for any such
unauthorized change.

15. It is assumed that there is full compliance with all applicable central, state, and local
environmental regulations and laws unless noncompliance is stated, defined, and
considered in the report.

16. If prospective financial information approved by management has been used in my

work, I have not examined or compiled the prospective financial information and
therefore, do not express an audit opinion or any other form of assurance on the
prospective financial information or the related assumptions.

17. I have conducted interviews with the current management of the client concerning the
past, present, and prospective operating results of the company. Except as noted, I
have relied on the representations of the owners, management, and other third parties
concerning the value and useful condition of all equipment, real estate, investments
used in the business, and any other assets or liabilities, except as specifically stated to
the contrary in this report.

18. I have not attempted to confirm whether or not all assets of the business are free and
clear of liens and encumbrances or that the entity has good title to all assets.

20