In this emerging trend of business acquisitions, change in shareholdings and for various financial reporting purposes; valuations of the business / instruments play a key role.
Valuation under Companies act
- Section 247 of the Companies Act provides requirement of valuation to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other asset or net worth of a company or its liabilities.
- It shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed and appointed by the audit committee or in its absence by the Board of Directors of that company
- Our role is to present impartial, true and fair valuation of any assets which may be required to be valued and exercise due diligence while performing the functions as valuer and make the valuation in accordance with such rules as may be prescribed
Valuation under Ind AS / IFRS
- In order to provide appropriate valuation under IFRS / Ind AS it is important to understand the concepts and methods laid down in Ind AS ‘113 – Fair value measurements’.
- On adoption of Ind AS, it is regular requirement of the Companies to get the financial assets measured at FVTPL valued in accordance with Ind AS 113.
- Our firm has an expertise in providing valuations in accordance with IFRS / Ind AS.
Valuation under Income tax act
- Under the Income tax act, 1961 the valuation rules are specified Under Rule 11U, Rule 11UA, Rule 11UAA and Rule 11UB for various provisions which cover valuation options in case of various assets including equity shares and other securities.
- Understanding the requirements of each section and corresponding rules so as to comply with provisions of the act and avoid litigations thereafter requires expertise knowledge.
- We have team which specialises in providing valuations in accordance with the Income tax act.
Valuation under FEMA
- Valuation is mandated under Foreign Exchange Management Act (FEMA) for direct investments by residents in joint venture and wholly owned subsidiaries outside India.
- This valuation has to be carried by commonly accepted valuation methods.
- Our firm can assist by providing the required valuation to comply with the requirements of FEMA.
- After implementing the ESOPs Scheme, every year, as per law, you would need to do a valuation of each grant of options using an options pricing model (most commonly used being the Black Scholes Options Pricing Model) and also provide detailed statutory disclosures in a particular format in the Annual Report. This is for listed as well as for unlisted companies. We would be glad to help you with this annually.
- We also engage with companies on a long-term basis where we meet them periodically to discuss / review all the ESOPs strategy issues to ensure everything is on track.