Proposal for Servicesacquisory.com/Uploads/636977541901101772Acquisory... · 2019. 7. 3. ·...

32
Confidential DELHI/NCR | MUMBAI Proposal for Services

Transcript of Proposal for Servicesacquisory.com/Uploads/636977541901101772Acquisory... · 2019. 7. 3. ·...

Page 1: Proposal for Servicesacquisory.com/Uploads/636977541901101772Acquisory... · 2019. 7. 3. · Confidential DELHI/NCR | MUMBAI OUR CUSTOMISED APPROACH Revenu e TIME MANAGEMENT & STATUS

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DELHI/NCR | MUMBAI

Proposal for Services

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OUR UNDERSTANDING OF YOUR NEEDS

Rockford is looking for assistance in fitment of weaknesses observed in “Aliens Space Station” project of Aliens

Developers Private Limited so as to fulfill the end objective of preserving and enhancing stakeholders returns and

value from the project

Objective

Support to

ManagementAccuracy\ Validity GAP Fitment

Role

• Sales Monitoring & CRM support :

• Track actual sales velocity vis-à-vis milestone mentioned in the loan or debt agreements in order to

release further disbursements.

• Providing support to customer relationship management (CRM) through setting up of process of

documentation of customer files which includes key documents to be collected at the time of sale

and post sales documents requirements.

• Demand / Sale Invoices support: Providing support w.r.t timely generation of demand / sales invoices

linked with payment plans; establishment of total amount collected and receivables with overdue &

delinquent cases and monthly tracker for demand / sales invoices already raised, to be raised to

customers.

• Banking Operations: Providing support in relation to timely reconciliation of bank accounts, escrow

accounts and reasons for unreconciled items and monthly statement of cash inflows & outflows.

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OUR UNDERSTANDING OF THE PROJECT

Aliens Space StationProject Name

LocationGachibowli -Tellapur,

Hyderabad

Project Type

Saleable Area (lac sq.

ft.)38.49

Developer Share (lac

sq. ft.)33.43

Area Sold (lac sq. ft.) 25.48

Total Units Launched 1,906

Total Units Sold 1,486

No. of Towers / Space

Station13

Residential

• Aliens Developers Private Limited is developing “Aliens Space

Station” (hereinafter referred as ‘’Project’) in Gachibowli -

Tellapur, Hyderabad in the format of G+29 floors (14 stations,

83 Towers, 30 floors) in phased manner.

(Note: “Station 13” is named as Station 14)

• The project “Aliens Space Station” was launched in FY 2006-

07 through Joint Development Agreement (JDA) between

Chilakamaari & Mandada Family (hereinafter referred as

“Landlord”) and Aliens Developers Private Limited (hereinafter

referred as “Developer”) and agreed sharing of completed

construction area in the ratio of 24% (Landlord) and 76%

(Developer) which was revised in FY 2012-13 and agreed as

13% and 87% respectively. Total super builtup area 38.49 lacs

sq. ft. have been shared between the landlord and developer

as 5.06 lacs sq. ft. & 33.43 lacs sq. ft. respectively.

• The Project and building plan has been approved by

Hyderabad Urban Development Authority.

• The Project has been classified into different categories (2

BHK, 2+1 BHK, 3 BHK, DUPLEX and PENT HOUSE) based

on the area and price with the name “Aliens Space Station”. It

offers residential apartments with saleable area ranging from

1,122 sq. ft. to 7,674 sq. ft.

Units under Litigation 180

Sales Value (INR

Crores)831.3

Sales Value (INR

Crores)472.7

Sales Value (INR

Crores)358.6

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SCOPE OF WORK

Our understanding of scope of work is :

• Verification of collections reported by developer with

bank statements through tracking of individual

entries in bank statements, escrow accounts and

monitoring of end use of funds in escrow account

based on RERA compliances

• Verification of receipts for all sold cases (Statement

of Receivables, Amount Received, Cash receipts/

default cases/overdue cases)

• Preparation of cash inflow & outflow to report on

cash flows position of the developer

• Verification of KYC Documents (Pan Card/ Address Proof) for all sold

cases

• Setting up and monitoring of processes w.r.t documentation of

customer files and timely generation of demand as per payment

plans.

• Verify monthly sales MIS provided by the developer with respective

sales agreements / application forms for all sold cases.

• Monitor average realization rate, schemes, payment plans,

• Track actual sales velocity vis-à-vis milestone mentioned in the loan

or debt agreements in order to release further disbursements;

• Monitor monthly collections, as per customer files, CRM package of

the developer, accounting package, escrow statements, bank

statement, sales MIS. Identify and reconcile the differences.

• Quality of sales MIS - Investor sales or end user sales, bank loan

cases, receivables position

• Check for any subvention plan/ assured plan/contingent .

• Verification of cancellation / refund cases and respective liability on

the part of developer

• Verification of transfer cases and respective amount transfer from

one customer account to other with necessary documentation.

• Verification of units under litigation and calculation of liability arises

on account of refund order

Escrow / Outflow MonitoringSales Monitoring & CRM Support

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Monthly cash flow

position based on

collections, receivables

and costs

CRM Support - setting up of process

w.r.t. demand generation, key customer

documents and timeline

Expenses verification –

Whether in line with progress or

not. Obtaining cost recoveries

Reporting whether project

activities and banking

operations are adequately

performed and

monitored

Project governance and

risk management –

Check on project

approvals, RERA and

other compliances

Reporting on contingent

liabilities for the projects

OUR

SOLUTION

OUR SOLUTION

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OUR CUSTOMISED APPROACH Revenu

e

TIME MANAGEMENT & STATUS REPORTING

Project Execution

Project Reporting

• Involvement of subject matter

experts

• Expert knowledge of real estate

• Senior management and

experienced resources

• Weekly status update

Acquisory team

Project Planning

Project Asset Management • Dedicated team of experienced resources (1-2) in real

estate – capable of handling CRM and financial sort

of capability at location of project to adhere timelines

and status update to Rockford

• Single point of contact - Manager

• Weekly issue tracker circulated to the team for

updating the status of the project

• Adhere to stated timelines

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OUR UNDERSTANDING OF REAL ESTATE

Strategic Planning Conceptualization and Design

Acquisitions/Dispositions Property/ Lease Marketing

Strategic Business Alliances

• Project budgeting, forecasting, planning and execution

• Contractor selection• Bidding and tendering• Site development and improvement• Construction monitoring• Project accounting and timelines• Project records and project management• Compliances of local laws and regulations

• Budgeted vs. actual sales price realizations

• Budgeted saleable area and actual area sold

• Leasable Area and Rentals• Exit Rates• Marketing process• Customers relations• Enquiry capturing and records

Sales and MarketingConstruction

Human Resources Information Technology Fixed Assets Management

Financial Accounting Budgeting & MIS Legal & Regulatory

Strategic Management

Core Business Resource Management

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KEY BUSINESS RISK IN REAL ESTATE

Impact Key Business Risks

Significant

Moderate

Minor

• Delay in financial closure• High cost of debt and debt to equity ratio• Lack of execution capability• Pricing uncertainty• Project delays• Compliances to key covenants of the agreement

entered for land owners or government• Significant pre construction cost• Issues in clear land title

• Related party transactions• Non compliances of rules and regulations• Increased cost of construction• Continued uncertainty and impact of

credit crunch• Global economic and market fluctuations• Non achievability of projections• Cash Transactions• Irregular cash flows

• Delay in collection from customers• Inadequate infrastruture• Inappropriate Revenue recognition policy• Agreeing on contract terms which is detrimental

to the Company

• Unsupported Transactions• Volatile input costs of steel and cement• Significant litigation against the promoters

and key employees• Market reputation of the project• Political connections

• Non documented business processes and policies across all business cycles

• Segregation of duties• Non existence of integrated ERP package• Civil cases

• Inadequate Insurance• Inadequate supervision of work vis-à-vis

quality / quantity and usage of materials– will have an impact on cost of project

• Excessive administrative overheads

Medium HighLIKELIHOOD

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Acquisory was incorporated in 2010, by highly credentialed and experienced professionals, from

PricewaterhouseCoopers, Arthur Andersen and Protiviti. The management team among themselves

represent extensive experience in specialized services across M&A Advisory, Asset Management,

Operations & Risk Consulting and Assurance and Regulatory.

We have an appreciation for dynamics of business, operations, transactions and necessary skills to

blend practical business & commercial insights with tax & regulatory knowledge to identify effective

solutions to all business problems. We partner with our clients through the entire business continuum

from identification of the problem, to solution, to implementation.

Our Values

Effective, Practical and Timely solutions for client problems

Demonstrate deep industry knowledge

Be proactive and responsive

Highest professional ethics and standards

Motivate and retain high quality professionals

Focus on innovation and continuous improvement

People Experience

Knowledge Solution

Value Creation

ABOUT THE FIRM

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Our Focus

Acquisory assists clients ranging from global enterprises to small and middle market companies

that are both publicly held or privately owned, as well as large, mid and small-cap private equity

firms, corporate management and boards of directors.

We provides specialist advice for a range of sectors. With a personal, partner-led approach, more

than 35 years of experience have taught us that an understanding of the structure and practices of

your industry is critical to providing the services you need to reach your goals

ABOUT THE FIRM

Real Estate & Construction Private Equity Group

Infrastructure Retail Industry

Manufacturing Telecommunication

Media and Entertainment Insurance

Healthcare and Hospitals Education

Hotel, Hospitality and Leisure Service industry

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Name Qualifications Years

Sumchit Anand CA 20+

Divya Viz CA 18+

Krishan Goyal CA, CS, IRP 16+

Rajarshi Datta MA, MRICS 16+

Varun Kohli CA 11+

Puneet Batra CA - Forensic

Accounting and Fraud

Prevention Expert

10+

Jasmine Agarwal CA 8+

Devashish Goel CA 5+

20+

Services

02

Locations

02

Associate

Locations

10+

Partners &

Directors

100 +

Professionals

250 +

Clients

CORE TEAM and FIRM OVERVIEW

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Corporate Restructuring

Corporate Finance

Operational Due Diligence

Financial Due Diligence

Valuation

Deal

Structuring/Negotiation

M&A Integration

Buy Side / Sell Side

advisory

M&A – Lead

Advisory

Internal Audit

Process Reengineering

Forensics/ Investigation

support

Cost reduction

Working capital

Optimization

Media DAS Audit

IFC Review

Sox Compliance

SOP Development

Operations &

Risk Consulting

Compliances

Accounting & Reporting

Regulatory Compliance

Audits

Financial Audits

FEMA / RBI Regulatory

Compliances

RERA Compliance

Secretarial

Assurance &

Regulatory

Resolution Plan

Data Support

Insolvency Support

Valuation

Audit

Information Memorandum

Insolvency

Management

Incorporation

Strategy Preparation

Fund Raising

Accounting / Secretarial

Payroll & HR Support

Office Support

ERP-Setup

Startup Services

Fixed Assets

Management

Inventory Management

Warehouse Management

Book Keeping

Pre-Audit Assistance

Accounting System Set up

Customized Assignments

as per user requirement

Data Analytics

Mystery Shopping

Ancillary

Services Portfolio Management

Strategic Advice

Finance Management

Dispute Resolution and

litigation Management

Exit advice &

Maximization

of Investors return

Asset

management

SELECT SERVICES

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SERVICE PORTFOLIO – FOR FUNDS/INVESTORS

We bring a structured approach to each and every assignment, with a unique set of objectives,

requiring specific priorities, designed to deliver the best results. With a widespread and detailed

understanding of operations, we are able to rapidly formulate and execute practical solutions in

complex business problems / environments by:

Pre-Investment

Financial Modeling

Lead Advisory

Tax Structuring

Market Assessment

Pre Investment memorandum

Feasibility Statement

During Investment

Due Diligence

Valuation

Background Checks

Pre-disbursement Review

Sales Review

Technical Review

Post-Investment

Investment Monitoring Budgeted Vs Actual,

Compliance etc,

Exits

Forensics

NAV Valuations

Internal audits/Accounting

Investor Reporting

Obtaining in-depth business / industry understanding

Collating all facts and getting them right

Planning and partnering

Analyzing and diagnosing the problem

Identifying practical solutions

Supporting and leading

Establishing a self-sustaining organization

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PRE-INVESTMENT - FINANCIAL MODELING

Develop Models from Scratch

Compilation of historic data

Ratio & Trend Analysis

Management discussion

Analyze parameters

Develop Financial Model

- Assumptions,

- Cost & sales schedule,

- Debt repayment schedule,

- Taxation calculation sheet

- cash flow

Sscenario/Sensitivity Analysis

Model Update

Timely Update of existing model for following:

- Incorporate actual numbers as on date

- Changes in Management assumptions

- Changes in external parameters like Govt. policies or market conditions

Output Sheet

Snapshot of important parameters and key KPI’s

We have expertise in Financial Modelling and equipped for end-to-end solution to corporates for building &

updating the model in timely manner in order to enable the Clients to achieve the desired objective.

Our

Solution

1

2

3

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DURING INVESTMENT – DUE DILIGENCE

We keep ourselves focused on synergies in business and the overall environment in which the business operates to arrive at a viable

merger option and a realistic valuation. At Acquisory we provide the following categories of due diligence consolidated in one report:

Business and Financial

Tax

Operational

Legal (through tie up with specialists)

We work with specialists who possess in-depth industry knowledge and market know-how and identify comprehensive key transaction

risks and concern areas (value destroyers) along with potential upsides (value enhancers).

Transaction specialists with experience on

deal size range of USD 5 mn to USD 10 bn

Dedicated group of specialists

providing end-to-end solutions

Bring industry and geography

perspective and knowledge

Blend transaction, tax, structuring,

valuation and legal competencies

Understand Future

Analyze History

Planning

Deal

issuesEvaluation

issues

Assurance

issues

Looking

ForwardValidate strategic

rationale

Informed valuation

decision

Identify & mitigate key

risks

Identify key going concern/

integration issues

- Understand the business

- Understand the deal drivers

- Agree on expectation

- Desktop research

- Develop information requirement checklists

- Understand assumptions

- Analysis of business drivers

- Consider market research

- Compare with historical data

- Ensure projections are integrated

- Discuss with management

- Financial analysis – get the numbers right

- Quality of earnings and net assets base

- Accounting policies and practices

- Reliability of systems

- Link to audited numbers

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DURING INVESTMENT – VALUATIONS

In our approach to valuation, we focus on determining the intrinsic worth of the asset / business to be valued.

Valuation is not a precise science and requires selection of an appropriate methodology under a suitable approach.

Following are generally accepted approaches:

- Market Approach

- Income Approach

- Cost Approach

Once we have selected an approach based on our analysis and understanding of the business, we adopt a suitable

methodology from amongst those discussed below:

VALUATION METHODOLOGIES

Discounted Cash Flow

Market Multiples

Net Assets

Value

Forecast of the cash flows available to investors is

discounted to present value using an appropriate rate of

return

Uses industry multiple of

comparable companies

operating in similar industry to

determine the value of

investments

Uses book / market value of

the assets to determine the

value available to investors

Final weights are allocated to computed values

from each method as per relevance to arrive at

the computed value

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DURING INVESTMENT – BACKGROUND CHECKS

Background check

Conducting Collecting intelligence Obtaining information Field visit

- Review of records of

Registrar of Companies

(ROC)

- Subscribed database and

internet search

- Media search

- Customers / suppliers

- Business associates

- Competitors

- Ex-employees

- Journalists

- Social and political contacts

- Indian Regulatory bodies

(data as available in the

public domain and other

market sources)

- To gather information about

the company and its

promoters and to determine

the modus operandi in

doing business

To identify

- Promoters and other

interested parties

- Changes in the

shareholding pattern

- Financial standing

- Group performance

- Industry news and reviews

- Review of business

activities (previous and

current)

- Market reputation and

credentials

- Holding and interests in

other entities

- Political connections and

reach

- Opinion and experience

- Any links with the

underworld

- Involvement in civil and

criminal proceedings in

specified jurisdictions

- Reputation with

Government and

investigative authorities

- Character, integrity and

reputation of the company

and the promoter

- Business practices followed

- Any evidence of fraudulent

business dealings

- Family history

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DURING INVESTMENT – PRE-DISBURSEMENT REVIEW

Compliance Check

Identify pre-

disbursement

requirement

Prepare Compliance

checker

Track all Compliances/

Approvals/ CPs as per

the agreement

Red flag issues / area

of non-compliance

Sales and technical

review

Technical risks –

product,

processes,

systems

Cost to Mitigate

Layout Plans

Schedule

Approvals

We bring structural

approach for pre-

disbursement review

via carrying out a

comprehensive list

of sales, technical

and CPs as per

requirement of

agreement.

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Our Asset Management services are the solution to support our private equity clients in meeting their objectives of

maximizing returns. Our services have been designed to address the challenges being faced by investors in

managing the operational, strategic and financial aspects of their investee companies, as they are not able to get

the right management information in time and worried about fraud, misappropriation or misconduct in their investee

companies.

Smart investors know that it is prudent if investments are followed up with a continuous monitoring of key business

risks. Acquisory becomes your eyes and ears on the ground and help you manage such risk factors through our

suite of asset management services.

Our Process

POST INVESTMENT - ASSET MANAGEMENT SERVICE

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ASSET MANAGEMENT SCOPERevenue

Sales

MonitoringCost / Time to

Complete

Escrow/Outflow

Monitoring

Compliance

Including RERABudget, LTV

and Cover

• Verify monthly sales MIS provided by the developer with

respective sales agreements.

• Monitor average realization rate, schemes, payment

plans,

• Track actual sales velocity vis-à-vis milestone mentioned in

the loan or debt agreements in order to release further

disbursements;

• Monitor monthly collections, as per customer files, CRM

package of the developer, accounting package, escrow

statements, bank statement, sales MIS. Identify and

reconcile the differences.

• Quality of sales MIS – Investor sales or end user sales,

bank loan cases, receivables position

Key Steps

Deli

vera

ble

sDetailed sales MIS along

with analysis will be

provided as part of monthly

asset management package

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Sales

Monitoring

Revenue

Cost / Time to

Complete

Escrow/Outflow

Monitoring

Compliance

Including RERABudget, LTV

and Cover

• Coordinate with technical team of the developer for the

detailed and itemized break up of costs to be incurred;

• Per inputs of technical team (Lender, Acquisory or others),

map actual expenditure based on construction progress

against budget and estimate the cost to be incurred on

completion.

• Monitor admin, marketing and brokerage, office support,

PMC and other costs with respect to budget provided by

the developer.

• Map construction progress (detailed PERT chart, floor

wise, tower wise) vis-a- vis actual progress and

construction completion timelines

Key Steps

Deli

vera

ble

s

Plan Start Actual Start Plan Finish Actual Finish

Excavation XX XX XX XX

Basement XX XX XX XX

- First XX XX XX XX

- Second XX XX XX XX

First Floor XX XX XX XX

Second Floor XX XX XX XX

Plumbing XX XX XX XX

Electrical XX XX XX XX

Fire Fighting XX XX XX XX

AC XX XX XX XX

Lifts XX XX XX XX

- Procurement XX XX XX XX

- Receipt XX XX XX XX

- Installation XX XX XX XX

Time to Finish

Tower 1

We have a panel of technical experts

which we use on AM engagements and

will leverage for technical inputs like

design inputs, QS and other details.

ASSET MANAGEMENT SCOPE

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Sales

Monitoring

Revenue

Cost / Time to

Complete

Escrow/Outflow

Monitoring

Compliance

Including RERABudget, LTV

and Cover

• Track monthly sales and monthly collections as per

sales MIS reconcile with the collections as per escrow

account statements

• Monitor end use of escrow considering Rera

compliances on weekly basis;

• Coordinate with developer and assist lender to release

escrow based on weekly construction plan, comparison

of budgets, compliance with debt agreements and

milestones;

• Release of escrow as per waterfall given in debt

agreements.

Key Steps

Deli

vera

ble

s

Cost / Time to

Complete

Detailed break up of all payments

including name of the contractors and

party linking with budgets and construction

milestones will be provided as part of

monthly asset management package

ASSET MANAGEMENT SCOPE

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Compliance

Including RERA

Sales

Monitoring

Revenue

Cost / Time to

Complete

Escrow/Outflow

MonitoringBudget, LTV

and Cover

• Check and analyze compliances with:

• Debt agreements – monthly dashboard on status of key

covenants compliance with the lenders

• Approvals : status of compliance on approvals – quarterly

basis

• Security package : compliance with security package

mentioned in debt agreements in order to make sure security

is intact.

• Statutory requirements

• Income Tax and GST compliances

• RERA compliances

• Labour laws, safety and other compliances

• Corporate Law compliances

• Escrow agreement compliances

Key Steps

Deliv

era

ble

s

Cost / Time to

Complete

Compliance Dashboard April May June July YTD

- Corporate

- AR, BOD, EGM

- Income Tax

- TDS returns

- TDS Deposit

- GST

Exceptions

- Delay in filings

Rera

- 70% collections in bank

- audit

- filings

- agreements RERA

Actual

ASSET MANAGEMENT SCOPE

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Budget, LTV

and Cover

Compliance

Including RERA

Sales

Monitoring

Revenue

Cost / Time to

Complete

Escrow/Outflow

Monitoring

• Track numbers as per underwritten business plan vs

actual position month on month and identify the reasons

for differences with the management;

• Collate data from management on cash flow position and

debt profile on a group level basis;

• Calculate actual cash flow cover monthly and LTV

quarterly basis. Report to lender.

• Check compliances with debt agreements; highlight to

lender in case of significant variances; report sources

and uses of funds.

• Track market and other news relating to Investee

companies (IC) / Indian promoters

Key Steps

Deliv

era

ble

s

Cost / Time to

Complete

ASSET MANAGEMENT SCOPE

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RECOGNITIONS

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SELECT CLIENTELE

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ASSET MANAGEMENT CLIENTELE

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SELECT REAL ESTATE CREDENTIALS

Nature of ServiceClient Served

Investment Advisory

Due Diligence SOP Development Asset Management Internal

audit Project Review

Edelweiss X X

Hines X X

Piramal NBFC X X

Phoenix Mills X

Brookfield X X X

Ansal API X X X

KKR X X X

L&T Phoenix X

Clearwater X X X

Oxford properties X X

Rustomjee X X

Emaar MGF X X

Manjeera X X X X X

IL & FS X

Logix X

Trinity Capital X X X X

Sachsen Fonds X X X X

Religare X X X X

Sun Apollo X

BCC Builders X X

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SELECT REAL ESTATE CREDENTIALS

Nature of ServiceClient Served

Investment Advisory

Due Diligence SOP Development Asset Management Internal

audit Project Review

DB Realty X X

HDFC Fund X X X

Brookfield X X

Kalpataru X

IREP X X

Tata Realty X

Kotak Realty X X X X

BCC Builders X X

Kautilya Finance X X X

Reliance Capital X X X

Indiabulls X

Supertech X X

SS Group X X

Saya Homes X

Shri Group X

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WHY ACQUISORY?

Our Strengths

• Ability to serve our clients

anywhere in India and globally

• “One Stop” for all our client needs

• Responsive and put our clients

first

• Ability to staff your projects at a

short notice

• We deliver on our promises and

provide practical solutions

• We want to be your partner in

success and you can pick up the

phone and talk to a partner

anytime

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PROPOSED FEES

We aim to strengthen a long-term and mutually beneficial professional relationship. We believe in

providing exceptional value for our services and we would ensure that there is no compromise on the

work executed by our team. Our senior management is committed to provide all the necessary expertise

and on-site support, where required and would always be available for any discussions and feedback with

you : We re-iterate our commitment and offer our fee estimate for the project which will be (excluding

OPE’s and taxes) :

Fees and expenses for any additional or unplanned work will be pre-agreed and billed separately. We

will, of course, discuss any changes to the scope with you prior to performing additional work.

While our normal rates would lead to a much higher quote, based on our existing relationship with

Rockford, have discounted our standard rates as an investment in this relationship. We are confident that

at the end of the engagement, we would be able to demonstrate value for the money you spend, by

leveraging our functional skills and our knowledge of best practices in the real estate industry.

Professional Fess (INR) Rs ____________