Report of the expert group on valuation principles for corporate assets and shares. - Companies Law - No.52/20/CAB-2002

No.52/20/CAB-2002 Ministry of Finance Department of Company Affairs Cost Audit Branch ****** 3rd Floor, Paryavaran Bhavan, CGO Complex, Lodhi Road, New Delhi-110 003. Dated, the 10th April, 2003. Subject: Report of the expert group on valuation principles for corporate assets and shares. Valuation of shares and computation of exchange ratio are the key issues in any scheme of amalgamation or merger of companies. There are various methods of valuation and each method of valuation proceeds on certain assumptions and projections about the company. Any change in these basic assumptions may widely change such valuation of the company and thereby affecting the interest of investors and other stakeholders. Keeping in view the interest of various stakeholders, Department of Company Affairs constituted an expert group in October 2002 under the chairmanship of Shri Shardul S. Shroff with representatives from financial institutions and professional bodies for evolving comprehensive guidelines on "Valuation of Corporate Assets and Shares". The Expert Group after considering the views from practitioners and experts in the field of valuation, investor groups and Chambers of Commerce and Industry as also the Institutes of Chartered Accountants, Costs Accountants and Company Secretaries has now submitted its report to the Department. The said report has been placed on the DCA-website: http://www.dca.nic.in/. All concerned are requested to send their comments and suggestions on the report to the Department of Company Affairs latest by 30th April 2003. (A.K. Kapoor) Adviser (Cost) Telephone : (011)2436 2355; e-mail: [email protected].