UTTAR PRADESH COOPERATIVE SUGAR FACTORIES FEDERATION LIMITED

TERMS OF REFERENCE for selection of Valuer(s) for 28 Sugar Mills (including 4 with distilleries) and 3 independent distilleries of UPCSFFL

  1. Purpose

The Uttar Pradesh Cooperative Sugar Factories Federation Limited (UPCSFFL)

proposes to engage the services of a panel of Valuer(s) to value the mills as per the Policy of the Government of Uttar Pradesh, Department of Infrastructure Development.

UPCSFFL is engaged in the production and sale of sugar of SugarMills situated at different locations in the State of Uttar Pradesh. For the purpose of valuation exercise, 28 mills and 3 independent distilleries have been grouped into four bundles (or ‘packets’). The bidders may bid for one or more bundles. Two independent valuers will be appointed for independent valuation of each bundle. The bundles of the sugar mills are as below:

Packet / Unit Name / District / Remarks
1 / Morna / Muzaffarnagar / Sugar mill
Gajraula / Jyotibafula Nagar / Sugar mill
Snehroad / Bijnor / Sugar mill
Bagpat / Bagpat / Sugar mill
Sarsawa / Saharanpur / Sugar mill
Nanauta / Saharanpur / Sugar mill
Nanauta / Saharanpur / Independent Distillery
Ramala / Bagpat / Sugar mill
2 / AnoopShahr / Bulandshahr / Sugar mill
Satha / Aligarh / Sugar mill
Anoopshahr / Bulandshar / Independent Distillery
Bilaspur / Rampur / Sugar mill
Kaimganj / Farrukhabad / Sugar mill
Semikhera / Bareilly / Sugar mill
Budaun / Budaun / Sugar mill
3 / Bishalpur / Pilibhit / Sugar mill
Powayan / Shajahanpur / Sugar mill
Majhola / Pilibhit / Independent Distillery
Puranpur / Pilibhit / Sugar mill
Tilhar / Shahjahanpur / Sugar mill
Belrayan / Lakhimpur Kheri / Sugar mill
Sampurnanagar / Lakhimpur Kheri / Sugar mill with distillery
Majhola / Pilibhit / Sugar mill with distillery
Mahmudabad / Sitapur / Sugar mill
4 / Nanpara / Bahraich / Sugar mill with distillery
Sultanpur / Sultanpur / Sugar mill
Sathiaon / Azamgarh / Sugar mill
Dhuriapar / Gorakhpur / Sugar mill
Aurai / Sant Ravidas Nagar / Sugar mill
Ghosi / Mau / Sugar mill with distillery
Rasra / Ballia / Sugar mill

A brief profile of each sugar mill and distillery is enclosed at Annexure-Ifor your ready reference. Further information in respect of the same can be obtained from the designated Nodal Officer of UPCSFFLnamely:

  1. Sri Chandra Prakash Mishra, Managing Director, U.P. Co-operative Sugar factories Federation Limited, 9-A, Rana Pratap Marg,Lucknow-2260010, Tel.:0522-2200183,+91-9999400995,+91-9999400994
  1. Eligibility criteria
  1. The bidder should be a “Government Approved Valuer”
  2. Preference will be given to the bidder who has completed valuation assignments of at least 10 industrial units, of which at least 2 assignments should involve valuation of sugar mill/distillery.
  3. Preference will be given to valuers with prior experience of valuation for disinvestment purposes for Government of India or State/UT by valuing the assets using all four methods of valuation.
  4. The bidder should satisfy itself that it has capacity and manpower and undertake that it can complete valuation of the awarded bundles within the stipulated timeframe (4 weeks from the date of appointment).
  5. The bidder will need to submit a Bid Security of Rs. 50,000 (Rupees Fifty Thousand Only) per bundle which shall be refunded to the unsuccessful bidders within one week of the date of opening of the bids. For successful bidders, thesame shall be converted into Performance Security and will be refunded after completion of the valuation assignment to the satisfaction of UPCSFFL.
  1. Proposed schedule for completing the assignment

The Valuer shall be expected to have the entire valuation process completed and submit its report within 4 weeks from the date of appointment. The site visit to sugar mills and distilleries shall be completed by 31st August 2007. The appointed valuer may contact the Managing Director, UPCSFFLfor any assistance/ escort at the site of sugar mill.If the valuer feels that he will not be able to complete the assignment in the stipulated time frame due to non- availability of data it should give a notice stating the information gaps and the expected time delays on such account so as to reach the office of The Managing Director, UPCSFFL, at least 10 days before the completion date stating the information gaps.

  1. Last date for submission of bid

The interested bidders may submit their bids within a sealed cover subscribing on the top of envelope “Bid for appointment of Valuer” positively by 13.00 hrs. onAugust 10,2007 or before, on any working day between 09.30 hrs. and 18.00 hours (IST) to Managing Director, U.P. Co-operative Sugar factories Federation Limited, 9-A, Rana Pratap Marg,Lucknow-2260010, Tel.:0522-2200183

  1. Bidding Format

The sealed cover (as mentioned in para 4 above) should contain:

  • Application Covering letter as per Annexure II
  • 2 separate sealed envelops marked as:

- Envelop-A:Technical Bids (as per Annexure III)

- Envelop-B: Financial Bids (as per Annexure IV)

Envelop – A i.e. Technical Bid, should contain the supporting documents (as per details below and Annexure III) and Bid Performance Securityamount whereas,Envelop -- B should contain unconditional Financial Bid.

Documents to be submitted with Technical Bids

  1. Valid and duly authenticated registration certification issued by the state or central government certifying the valuer as a “Government certified valuer”
  2. Proof for each completed valuation assignment for which credit is claimed
  3. Full particulars of the constitution, ownership and main business activities of the prospective Valuer(s) (bidder).
  4. Undertaking stating that the bidder has not been barred from undertaking similar assignments from any of the State Governments or the Union Government of India.
  5. Details of the pending litigation and contingent liabilities, if any, that could affect the performance of the bidder under the mandate, as also details of any past conviction and pending litigation against sponsors/partners and any areas of possible conflicts of interest.

Documents to be submitted with FinancialBids

The Valuer(s) are required to submit the sealed Financial Bids incorporating the Lump-sum Fee chargeable (including valuation fee, expected out of pocket expenses and gross of all applicable taxes). The Bid should be unconditional. The valuer may bid for one or more bundles for valuation. The bid should indicate the fee chargeable on a per item basis for the following:

  1. Fee for Valuation of Bundle 1
  2. Fee for Valuation of Bundle 2
  3. Fee for Valuation of Bundle 3
  4. Fee for Valuation of Bundle 4
  5. Fee for Valuation of Bundle 5

6. Sub-contracting

The appointed valuers may sub-contract work to other agencies. However, the appointed valuer will be responsible for the final deliverable and certify the correctness of the valuations on its own letterhead.

7.Opening of Bids & Bid Evaluation Criteria

The opening of bids shall take place at U.P. Co-operative Sugar factories Federation Limited, 9-A, Rana Pratap Marg,Lucknow-2260010 at 1400 hours IST in the presence of bidders on August 10th 2007.

The bids shall be scrutinized on the basis of details provided in Envelop A (Technical Bid) following the under mentioned qualifying criteria:

WEIGHTAGES: Technical aspects shall carry 50 % weightage whereas the financial aspects shall carry 50% weightage.

Technical

  • Past experience of the bidder
  • Past experience of Valuation in disinvestment/sale for GOI
  • Past experience of valuation in disinvestment for Central/ State Government PSUs
  • Past experience valuation of industrial units
  • Past experience valuation of sugar Mills
  • No. of years experience of key personnel associated with the engagement
  • Number of certified valuers with the firm

Financial

  • Lump sum Fee quoted for valuation

For each packet, the two independent valuers with the highest and second highest total score will be appointed as valuers. The fee payable to each of the two appointed valuers will be the lowest amongst the fee quoted by the valuers with the highest and second highest total score.

8.Letter of Appointment

The selected Valuer(s) shall be issued a Letter of Appointment immediately after completion of the bid evaluation and selection process on the same day i.e. 10th august 2007.

9.Payment of fee to the appointed Valuers

The total fees (Adjusted for penalties if any) will be paid in the form of a lump sum payment on completion of the assignment which is on submission and satisfactory completion of the stated deliverables (As stated in Para 11)to UPCSFFL.

10.Scope of work

The responsibilities of the Valuer(s) would, inter-alia,be to undertake a valuation of mills as per Govt. of UP guidelines. The methodology used for valuation should include but is not limited to:

  1. Discounted cash flow (DCF)
  2. Balance Sheet Method
  3. Market multiples method/Comparable companies method
  4. Market valuation of assets/Asset Valuation Method

The above methods have been explained in detail in Annexure V

If the valuer in his professional opinion believes that any one or more methods of valuation may be inappropriate, he may exclude these methods. However, the valuer will have to provide a justification for not using the method.

The above valuations have to be supported with well laid out assumptions, which will need to be fully justified and explained in the report and in the presentation as specified under the “Deliverables” section of these Terms of Reference.

In case of market multiples method, the use of a comparable should be explained in the valuation report.

If the valuer in his professional opinion believes that other methods of valuation may be appropriate, he may also include these methods in addition to those required. However, the valuer will have to provide a justification for using the method.

In case of Market valuation of assets/Asset Valuation Method, valuation may be done for:

  1. Plant and Machinery
  2. Land and Building
  3. Intangibles, if required
  4. Other assets

Presentation to UPCSFFL:As a part of terms of ToR, the valuers will be required to make a presentation to UPCSFFL, if called for, and justify the valuationand the underlying assumptions.

11. Deliverables

The deliverables for valuers includes:

  • The last date for submission of valuation report is four weeks from the issue of letter of appointment.
  • A sealed valuation report containing valuation Report of each of the sugar mills /distillery in the bundle awarded to the Valuer in LoA.
  • A presentation to justify the recommended valuation, if called for.

Penalty for Late submission

For each day of delay in submission of the valuation report a penalty of 1% of the valuation fee shall be deducted from fees payable to the valuer for each bundle.

12.Other terms and conditions

  • All the information/details to be supported by authentic documents duly certified by the authorized signatory.
  • UPCSFFLreserves the right to negotiate the Lump-sum Fee and with the selected bidder.
  • UPCSFFLreserves the right to reject any or all Bids without assigning any reason thereof as well as the right to add/delete/modify any one or more of the terms and conditions.
  • UPCSFFLreserves the right to discontinue the services of the appointed Valuer(s) at any point of time on account of force-majeure or non-satisfactory performance by the Valuer(s).
  • The Valuer is required to comply with the guidelines issued by the Deportment of Infrastructure Development, Government of Uttar Pradesh.

Managing Director

UP Co-operative Sugar Factories Fed. Ltd.

ANNEXURE I

UP COOPERATIVE SUGAR FACTORIES FEDERATION LIMITED

U.P.CO-OPERATIVE SUGAR FACTORIES FEDERATION,LUCKNOW
RUN DATE / 04/07/2007
SL. / NAME OF THE / LOCATION / YEAR / LAND / CRUSHING / CANE / PBIT
NO. / MILL SOCIETY / AREA / CAPACITY / CRUSHED
IN / (TCD) / (TONNE)
ACRES / (SEASON) / (RS. IN LACS)
1 / ANOOPSHAHR / JAHANGIRABAD
2004-05 / 2500 / 3.12 / 873.93
2005-06 / 2500 / 2.72 / -319.99
2006-07 / 97.60 / 2500 / 4.50 / -1550.43
2 / BAGPAT / BAGPAT
2004-05 / 2500 / 3.98 / 1046.98
2005-06 / 2500 / 3.37 / 467.19
2006-07 / 30.835 / 2500 / 4.68 / -1416.38
3 / MORNA / MORNA
2004-05 / 2500 / 3.91 / 1697.95
2005-06 / 2500 / 2.37 / 120.62
2006-07 / 39.99 / 2500 / 4.83 / -411.09
4 / NANAUTA / NANAUTA
2004-05 / 5000 / 5.90 / 1925.86
2005-06 / 5000 / 6.67 / 711.98
2006-07 / 126.00 / 5000 / 8.61 / -802.43
5 / RAMALA / RAMALA
2004-05 / 2750 / 4.96 / 1595.42
2005-06 / 2750 / 2.97 / 928.81
2006-07 / 81.648 / 2750 / 5.26 / -52.74
6 / SARSAWA / SARSAWA
2004-05 / 2750 / 3.84 / 1358.29
2005-06 / 2750 / 4.18 / 782.32
2006-07 / 19.203 / 2750 / 4.95 / 16.31
7 / BELRAYAN / BELRAYAN
2004-05 / 5000 / 5.92 / 930.99
2005-06 / 5000 / 6.71 / 163.12
2006-07 / 86.07 / 5000 / 8.67 / -1610.43
8 / BILASPUR / RUDRA-BILASPUR
2004-05 / 2000 / 1.64 / 245.61
2005-06 / 2000 / 1.94 / -191.55
2006-07 / 105.00 / 2000 / 2.88 / -853.36
9 / BISALPUR / BISALPUR
2004-05 / 2750 / 2.61 / 876.75
2005-06 / 2750 / 2.94 / -128.53
2006-07 / 92.02 / 2750 / 3.98 / -1167.11
10 / BUDAUN / BUDAUN
2004-05 / 1250 / 1.16 / 58.50
2005-06 / 1250 / 1.55 / -627.64
2006-07 / 99.51 / 1250 / 2.27 / -839.55
11 / GAJRAULA / GAJRAULA
2004-05 / 2500 / 3.08 / 940.05
2005-06 / 2500 / 2.76 / 259.00
2006-07 / 136.80 / 2500 / 4.30 / -835.07
12 / KAIMGANJ / KAIMGANJ
2004-05 / 1250 / 1.26 / 435.32
2005-06 / 1250 / 1.73 / -222.83
2006-07 / 95.00 / 1250 / 2.48 / -826.27
13 / MAJHOLA / MAJHOLA
2004-05 / 2000 / 2.33 / 329.96
2005-06 / 2000 / 2.37 / -392.88
2006-07 / 118.87 / 2000 / 3.21 / -1071.79
14 / POWAYAN / POWAYAN
2004-05 / 2125 / 0.92 / -36.40
2005-06 / 2125 / 1.23 / -395.65
2006-07 / 105.00 / 2125 / 2.17 / -1284.55
15 / PURANPUR / PURANPUR
2004-05 / 2500 / 2.61 / 1171.14
2005-06 / 2500 / 2.86 / -25.94
2006-07 / 91.65 / 2500 / 3.55 / -1084.61
16 / SAMPURNANAGAR / SAMPURNANAGAR
2004-05 / 5000 / 4.97 / 1474.80
2005-06 / 5000 / 5.74 / -373.53
2006-07 / 95.14 / 5000 / 8.19 / -2255.86
17 / SATHA / SATHA
2004-05 / 1250 / 1.15 / 151.85
2005-06 / 1250 / 0.94 / -554.59
2006-07 / 96.00 / 1250 / 1.79 / -572.49
18 / SEMIKHERA / SEMIKHERA
2004-05 / 2750 / 2.69 / 838.93
2005-06 / 2750 / 2.98 / 32.57
2006-07 / 119.00 / 2750 / 4.52 / -839.34
19 / SNEHROAD / NAZIBABAD
2004-05 / 3000 / 4.56 / 2197.23
2005-06 / 3000 / 3.45 / 1759.56
2006-07 / 175.00 / 3000 / 5.05 / 546.92
20 / TILHAR / TILHAR
2004-05 / 2500 / 2.28 / 798.22
2005-06 / 2500 / 2.80 / -68.19
2006-07 / 105.01 / 2500 / 4.74 / -881.18
21 / AURAI / AURAI
2004-05 / 1250 / 0.10 / -296.85
2005-06 / 1250 / 0.04 / -359.87
2006-07 / 89.638 / 1250 / 0.06 / -343.98
22 / GHOSI / GHOSI
2004-05 / 2500 / 2.02 / 489.66
2005-06 / 2500 / 2.55 / -569.48
2006-07 / 100.177 / 2500 / 2.82 / -1506.78
23 / MAHMUDABAD / MAHMUDABAD
2004-05 / 2750 / 2.11 / 532.48
2005-06 / 2750 / 3.04 / -276.63
2006-07 / 82.11 / 2750 / 3.99 / -1169.30
24 / NANPARA / NANPARA
2004-05 / 2500 / 2.95 / 744.33
2005-06 / 2500 / 3.34 / -259.17
2006-07 / 95.92 / 2500 / 4.63 / -1261.94
25 / RASRA / RASRA
2004-05 / 1250 / 0.66 / -88.29
2005-06 / 1250 / 0.97 / -262.06
2006-07 / 81.30 / 1250 / 1.10 / -890.45
26 / SATHIAON / SATHIAON
2004-05 / 1250 / 0.29 / -348.38
2005-06 / 1250 / 0.53 / -501.48
2006-07 / 86.382 / 1250 / 0.48 / -876.51
27 / SULTANPUR / SULTANPUR
2004-05 / 1250 / 0.82 / 41.87
2005-06 / 1250 / 1.38 / -276.75
2006-07 / 96.00 / 1250 / 2.12 / -646.28
28 / DHURIAPAR / DHURIAPAR
2004-05 / 2500 / 0.08 / -651.19
2005-06 / 2500 / 0.04 / -385.84
2006-07 / 39.04 / 2500 / 0.06 / -403.36
(HECT.)
TOTAL
2004-05 / 69125 / 71.92 / 19335.01
2005-06 / 69125 / 74.17 / -967.43
2006-07 / 2585.913 / 69125 / 105.89 / -24890.05
NOTE->FIGURES FOR THE YEAR ENDING 31-03-2007 IS TENTATIVE.

Information relating to Distilleries

At present 7 distilleries are working in cooperative sector out of which 4 distilleries are the units of cooperative sugar mills viz. Nanpara, Sampurananagar, Kaimganj and Ghosi. The rest 3 cooperative distilleries namely Anupshahr, Nanauta and Majhola are the units of U.P. Cooperative Sugar Factories Federation Ltd., Lucknow, the details of which are as under:-

Last Three Years
Distillery / Location / Year / Land / Install Capacity / Molasses / Profit\Loss (-) / Man power
Area / Per anuam / Distilled / (Rs. In Lacs) / Permananet
(Acres) / (Lac B.L.) / (Lac Qtls) / (No.)
Majhola / Majhola / 2004-2005 / 24.31 / 90 / 2.96 / 236.62 / 76
2005-2006 / 90 / 1.42 / -67.57 / 76
2006-2007 / 90 / 2.90 / 8.44 / 73
Anopshahar / Jahagirabad / 2004-2005 / 8.77 / 90 / 1.12 / -38.39 / 60
2005-2006 / 90 / 1.09 / -198.05 / 59
2006-2007 / 90 / 1.61 / -111.30 / 59
Nanauta / Nanauta / 2004-2005 / 27.00 / 90 / 2.13 / 56.40 / 55
2005-2006 / 90 / 1.83 / 162.89 / 50
2006-2007 / 90 / 2.56 / 61.99 / 50
Nanpara / Nanpara / 2004-2005 / Included / 90 / 2.11 / 22.69 / 43
2005-2006 / in Mill / 90 / 1.11 / -233.76 / 43
2006-2007 / Area / 90 / 2.21 / 103.41 / 43
Kaimganj / Kaimganj / 2004-2005 / Included / 90 / 1.01 / 102.65 / 35
2005-2006 / in Mill / 90 / 1.31 / -135.42 / 35
2006-2007 / Area / 90 / 1.55 / -2.04 / 35
Sampurna Nagar / Sampurna Nagar / 2004-2005 / Included / 90 / 2.25 / 117.33 / 34
2005-2006 / in Mill / 90 / 1.62 / 36.14 / 34
2006-2007 / Area / 90 / 2.57 / 117.75 / 34
Ghosi / Ghosi / 2004-2005 / Included / 90 / 1.73 / 83.36 / 36
2005-2006 / in Mill / 90 / 1.06 / -155.39 / 35
2006-2007 / Area / 90 / 2.02 / 101.74 / 36

ANNEXURE II

APPLICATION LETTER

(On the letter head of the Bidder)

Date:

To,

Managing Director

U.P. Co-operative Sugar factories Federation Limited

9-A, Rana Pratap Marg

Lucknow-2260010

Ref: Your advertisement in ET dated______

Sub: Valuation services for Sugar Mills in Uttar Pradesh

Sir,

Being duly authorised to represent and act on behalf of ...... (hereinafter referred to as "the Bidder"), and having reviewed and fully understood all of the requirements of the Expression of Interest (BID) and information provided, the undersigned hereby apply for the project referred above.

We are enclosing the following documents in one original plus two copies, with the details as per the requirements of the Bid invitation, for your evaluation.

i)A valid and duly authenticated registration document issued by the state or central government certifying the us as a “Government approved valuer”

ii)Credentials forassignments undertaken in the last two years along with proof thereof (Letter of Appointment etc).

iii)Undertaking that, we will be able to submit the valuation reports for______bundles, as specified in para 1, if awarded to us,within 4 weeks of appointment.

iv)Technical Bid (Envelope A) as per Annexure III of BID

v)Financial Bid (Envelope B) as per Annexure IV of BID.

vi)Bid Security in the form of a demand draft worth Rs. 50,000 (Rupees Fifty thousand only) addressed to “Managing Director, UPCSFFL” for eachbundles that we have bid for within the specified period of four weeks.

Yours sincerely.

Signature

Name (Authorised Signatory)

ANNEXURE III

FORMAT FOR TECHNICAL BID

NAME OF THE BIDDER :

REGISTERED OFFICE :

DETAILS OF CONTACT PERSONS (along with their telephone numbers, fax numbers, e-mail Ids) :

A] SHORTLISTING PARAMETERS

Sr. No / Criteria
1 / Past experience of the company
  • Number of years of experience:
  • Past experience in valuation of industrial units
  • Past experience in valuation of sugar mills
  • Past experience in valuation of assets being disinvested by state/central/UT government

2 / Key personnel
  • Years of experience
  • No. of certified valuers

Note: Please provide details of each reference project for which your firm was contracted by the client in the details below:

Name of the client:

Start date of assignment:

End date of assignment:

Detailed narrative description of project:

Detailed description of actual services provided by your firm:

ANNEXURE IV

FORMAT FOR FINANCIAL BID

FINANCIAL BID

(On the letter head of the Bidder)

To ,

Managing Director

U.P. Co-operative Sugar factories Federation Limited

9-A, Rana Pratap Marg

Lucknow-2260010

Sub: Appointment of Valuer for Sugar Mills in Uttar Pradesh

Sir,

I/We have perused the proposal document for subject assignment contracting Scope of Work at Para10 and other details and am/are willing to undertake and complete the assignments as per terms and conditions stipulated in the proposal document.

Our offer is inclusive of all taxes including service tax, incidentals, overheads, travelling expenses, printing and binding of reports, all sundries, all other expenditure for execution of this service/assignment covering all 'Scope of Work’ as mentioned in the bid document of UPCSFFL is as follows:

  1. For Valuation of bundle1: Rs...... (i.e., in words Rupees...... ).
  2. For Valuation of bundle 2: Rs...... (i.e., in words Rupees...... ).
  3. For Valuation of bundle 3: Rs...... (i.e., in words Rupees...... ).
  4. For Valuation of bundle 4: Rs...... (i.e., in words Rupees...... ).

This offer is valid for a period of 3 months from the date of opening of the bid (bid due date).

Witnesses Signature Signature of Authorised Person

Name :Name :

Address :Address :

ANNEXURE V

Valuation Methodologies being followed

Making a valuation requires an examination of several aspects of a company's activities, such as analysing its historical performance, analysing its competitive positioning in the industry, analysing inherent strengths/weaknesses of the business and the opportunities/threats presented by the environment, forecasting operating performance, estimating the cost of capital, estimating the continuing value, calculating and interpreting results, analysing the impact of prevailing regulatory frame work, the global industry outlook, impact of technology and several other environmental factors.

Keeping with the best market practices the following four methodologies are being used for valuations: -

a) Discounted Cash Flow (DCF) Method.

b) Balance Sheet Method.

c) Transaction Multiple Method.

d) Asset Valuation Method.

While the first three are business valuation methodologies generally used for valuation of a going concern, the last methodology would be relevant only for valuation of assets in case of liquidation of a company. In addition, in case of listed companies, the market value of shares during the last six months is also used as an indicator. However, many sugar company’s stocks suffer from low liquidity and the price determination may not be always efficient. Moreover, there could be increased trading activity after announcement of the valuation, which could be on account of high market expectation of the bid price and even based on malafide intent. This could lead to the price being traded up to unsustainable levels, which is not desirable.

Discounted Cash Flow (DCF) method

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.

This method is used to determine the present value of a business on a going concern assumption. It recognises that money has a time value by discounting future cash flows at an appropriate discount factor. The DCF methodology depends on the projection of the future cash flows and the selection of an appropriate discount factor.