Valuation Services
By
Valuation Group
p
SPA Merchant Bankers Limited
SEBI Registered Category - I Merchant Bankers
e-mail: valuation@spacapital.com
www.spacapital.com
About SPA
 SPA is a leading composite financial services provider growing on strength of
its research based customer centric approach and consistent servicing.
Thorough understanding of client’s perspective and requirements supported
with exhaustive research forms the backbone of all our services.
 A team of over 1000+ dedicated professionals comprising Bankers, Chartered
Accountants, Company Secretaries, MBAs and Technocrats is striving towards
providing financial solutions and achieving customer satisfaction.
 Key strength of the team- deep understanding of capital market, strong
networking with institutional investors, expertise in industry sectors & ability to
structure transactions and products suitable to needs of the client.
 Offering Innovative, integrated & customized solutions to corporate, funds,
institutions and individuals.
 Ranked amongst top merchant bankers continuously in the league of
arrangers of primary debt placements (source: Prime Database) & amongst
top 2 in short-term debt syndication.
 All India network of offices & strong relationship with Institutional Investors like
commercial banks & mutual funds.
 Large network of Associates and Sub-brokers spread all across the Country.
SPA Capital
Services Ltd.
Ltd.
SPA Securities Ltd.
SPA
SPA Merchant
Bankers Ltd.
SPA Insurance
Broking
Services Ltd.
FOR WHAT IT’S WORTH
FOR WHAT IT’S WORTH…..
Valuation is a controversial and complex subject. It requires an indepth understanding of the market
market, the assets and its competitors
competitors,
financial and non-financial information, as well as factors such the
legal and regulatory environment. Valuation advise needs the right
blend of analysis,
y
experience
p
and p
professional jjudgment.
g
SPA’s Valuation group has extensive experience of valuing shares,
businesses and intangible assets in a variety of commercial and
contentious contexts. Our commercial perspective is supported by
technical rigor, in addition to the insights and experience gained
from performing numerous major assignments every year.
SO TRUST THE EXPERTS TO KNOW THE TRUE WORTH.
Valuation Services
Valuation Services‐‐An Introduction
We provide independent valuation services utilizing accepted valuation
methodology to produce well reasoned, supportable valuation and financial
consulting services. Our valuation passes two tests. First, it reaches an accurate
value conclusion. Second, it clearly and convincingly establishes how the
conclusion was reached.
reached A good business valuation can be successfully
defended and supported under critical scrutiny.
The Team
Quality valuations are performed by experienced,
experienced capable appraisers.
appraisers SPA prides
itself on its professional experience and expertise in the field of corporate
valuations. As a financial consulting firm, our major specialty is valuing businesses
and corporate securities. The team consists of Chartered Accountants, CFAs,
Company Secretaries and ICAI Certified Valuation experts
experts..
Clients Who Count On Us
We have done more than 1000 valuations across industries. Our clientele consist of
domestic and multinational companies including various Fortune 500 companies
companies..
Referrals from existing clients constitute the largest single source of clients for SPA.
Other valued reference sources for new assignments include, accounting firms,
law firms,
firms and investment banking organizations.
organizations
Valuation Concept
Value - Price
Value varies with
situation
Not an Exact Science
Subjective
j
T y p e oftean
x t hArt
e re
More
Date Specific
6
Mélange of Valuation Services
g
The valuation services we provide broadly cover the following:
• Business Valuation
- AcquisitionA
i iti
D
Domestic
ti & Cross
C
B d
Border
-Assessment of Merger Swap Ratio
- Fairness Opinion
- Valuation of business segments/divisions for spin off/restructuring
- Share
Sh
P
Purchase/Investment/Fund
h
/I
t
t/F d Raising
R ii
- Good will & Asset Impairment testing (US GAAP/IFRS/Indian GAAP)
- Investment Impairment testing for accounting purposes
- Fair valuation for statutory/regulatory purposes
• Intangible Asset valuation
-- Brand valuation
-- Intellectual property valuation
-- Asset
A t valuation
l ti
f purchase
for
h
price
i
allocation
ll
ti
f accounting
for
ti
f business
for
b i
combinations (US GAAP/IFRS)
• Employee Stock Options Valuation
-Equity
Equity Shares/Common Stock for Perquisites taxation
- Sweat Equity
-Stock Options through Black Scholes and Binomial or Lattice technique
Corporate Restructuring ‐
Corporate Restructuring ‐ Mergers & Acquisition, Spin Offs etc.
Mergers, Acquisitions and Demergers are the order of the day in today’s world
of rapid and inorganic industrial growth. Complete due diligence and correct
valuation are keys
y for the success of any
y merger,
g
acquisition
q
or demerger.
g
As the cross border barriers are getting reduced M & A activity has spread its
wings around the globe.
The most critical part remains the correct valuation.
We, at SPA, provide process oriented defendable Valuation Report.
As a Category I Merchant Bankers we also provide Fairness Opinion report.
Intangible Asset Valuation
Intangible Asset Valuation‐‐ Brand, IPR etc.
Intellectual property (IP) and intangible asset (IA) issues abound throughout the
business world,
world touching nearly all aspects of a company,
company from product
development to human capital, and staff functions such as legal, accounting,
finance to line operations such as R&D, marketing and general management.
This wide diversity of IP applications and stakeholders is a leading contributor to
the complexity of managing IP,
IP as each field has its own legal,
legal regulatory and
practitioner history.
One aspect all these disciplines have in common is the need for valuation
valuation.
Valuation, as noted by Lord Kelvin, provides the potential to enhance our
knowledge of intellectual property and to bridge the gap between these
disciplines by providing a common set of methods to capture and describe the
business, legal and financial aspects of the intangible asset in question. While
the applications and even the vocabulary of these field can differ, the
underlying valuation methods bear striking similarities,
similarities which in turn reduces
complexity and helps shed light on key management issues.
We, at SPA, provide Valuation Report which uses internationally accepted
complex methods but is still easily understandable.
V
Valuation‐
Valuation
l ti ‐ under under IFRS/ IAS
d IFRS/ IAS
IFRS/ IAS
With IFRS all set to come to India, emphasis will be more on fair value
accounting than cost based accounting. Some of the standards where there
will be need of fair valuation opinions are:
 Share-based Payment (IFRS 2)
 Business Combination (IFRS 3)
 Financial Instruments Presentation (IAS 32 & IFRS 7)
 Impairment of Assets (IAS 36)
 Financial Instruments Measurement (IAS 39)
 Investment
I
t
t Properties
P
ti (IAS 40)
SPA provides valuation report
report, which serves the purpose of financial reporting
reporting,
including, but not limited to, the effective date of valuation, the methods and
significant
i ifi
t assumptions
ti
applied
li d in
i estimating
ti
ti
f i value
fair
l
and
d if applicable,
li bl the
th
extent to which the values were determined by reference to observable prices
in an active market or recent market transactions at arm’s length terms or were
estimated using other valuation techniques, which enables the client to make
d ii
decisions
on the
th mostt appropriate
i t accounting
ti
t
treatment
t
t and
d to
t accountt for
f the
th
different assets (or liabilities) employed in the enterprise in a compatible fashion.
Valuation
Valuation‐‐ For RBI under FEMA
As per Notification
A
N tifi ti
N FEMA 120
No.
120// RB
RB--2004 & Notification
N tifi ti
N FEMA 20 /2000No.
2000-RB
dated 3rd May 2000 , we provide valuation report:
For remittances under approval
pp
route
For remittances under automatic route
For Investment in a foreign security by swap or exchange of shares of an Indian
company
F Transfer
For
T
f by
b way off gift
ift or sale
l by
b a person resident
id t in
i India
I di to
t a person
resident outside India
SPA has
 Extensive knowledge of valuation theory and practical experience in valuing
Foreign and domestic companies;
 Expertise in relevant laws
Valuation
Valuation‐‐ For Perquisites taxation
In the Finance Bill 2009,
2009, FBT has been abolished, but ESOPs will continue to
t
taxed
d as perquisites,
i it
b i off which
basis
hi h shall
h ll remain
i FFair
i Market
M k t Value
V l
Value.
CBDT has
h
issued a notification in this regard which says that in a case where, on the
date of exercise of the option, the share in the company is not listed on a
recognized stock exchange, the fair market value shall be such value of the
share
h
i the
in
th company as determined
d t
i d by
b a merchant
h t banker
b k
on the
th
specified date.
SPA issues FMV certificate which is in compliance
p
with p
provisions of Income
tax law and circulars issued by Indian Government.
Valuation of ESOP for accounting & other purposes
As per SEBI (ESOP Scheme) 1999,
1999 the accounting value of options shall be
equal to the aggregate, over all employee stock options granted during
the accounting period, of the intrinsic value of the option or, if the
company so chooses, the fair value of the option.
option.
Th fair
The
f i value
l
shall
h ll be
b estimated
ti
t d using
i
an option-pricing
ti
i i
model
d l (for
(fffor
example, the BlackBlack-Scholes or a binomial model) that takes into account
as of the grant date the exercise price and expected life of the option,
the current price in the market of the underlying stock and its expected
volatility,
olatilit expected
e pected dividends
di idends on the stock,
stock and the risk-free
risk free interest rate
for the expected term of the option.
Black-Scholes methodology has historically been used for valuing equity
options. However in many cases, a more sophisticated option pricing
models, such as a Binomial Model or, for more complex cases, a MonteCarlo simulation is required. Deciding on the appropriate valuation model
is a key decision for accounting for share awards.
SPA assists in designing appropriate equity incentive plans and
developing robust models that determine the accounting cost of stock
plans.
Why SPA ?
Experience & Clientele
Clientele:: SPA prides itself on its professional experience
and
d expertise
ti in
i the
th field
fi ld off corporate
t valuations.
l ti
W have
We
h
d
done
more
than 500 valuations across industries. Our clientele consist of domestic
and multinational companies including various Fortune 500 companies.
Team
Team:: Quality valuations are performed by experienced, capable
appraisers. The team consists of Chartered Accountants, CFAs, Company
Secretaries and ICAI Certified Valuation experts.
Quality output
output:: As a result of clear understanding of applicable laws
and p
passion to excel and deliver, our valuation p
passes two tests. First, it
reaches an accurate value conclusion. Second, it clearly and
convincingly establishes how the conclusion was reached. Our valuation
can be successfully defended and supported under critical scrutiny.
Touch of advisory
advisory:: We understand that, clients require more than just
the report. We are more than willing to provide advisory and support
before and after the rendering of services.
Promoters of SPA Group
Promoters of SPA Group
Kamal Kishore Somani, Director
A Chartered Accountant with 26 years excellent track record
in the financial services. He has vast experience in corporate
finance, debt market, money market, project financing,
financial re
re-structuring
structuring and investment advisory. He also has a
rich experience in distribution of mutual fund schemes, public
issues, mergers and amalgamations.
Sandeep Parwal, Director
A Chartered Accountant with excellent academic record
and engaged in financial services for the last 19 years. He has
p
in distribution of mutual fund schemes
vast experience
amongst cash rich corporate and HNI. He also has
experience of marketing of public issues, corporate finance,
debt market, investment advisory and taxation.
Key Execution TeamTeam- Valuations
Nitin Somani, Company Secretary
ACS - 6 years of experience in handling corporate compliances, Merchant
Banking
issues .
g and distribution of public
p
Sourabh Garg, Sr. Manager
ACA, B. com having more than 3 years experience in the field of Merchant
Banking, Project Financing, Loan Syndication & Corporate Valuations. Certified
Valuer from Institute of Chartered Accountants of India
CLIENT QUOTES
“V
“Very
Very
V
professional
f
i
l and
d promptt iin services”
i
” - CFO,
CFO off an IT Major
M j
“Kept
Kept to deadlines,
deadlines and excellent self explanatory report” Director Finance, of Media Company
“Timely and clear communication, during process and final
product was worth the money”
money - CFO, Telecommunication
Company
“What they delivered was beyond the assignment, it had a touch
of advisory, which was priceless”priceless CEO, Healthcare Company
Other Services Offered By SPA Group
Investment Banking
k
Management of Public
& Rights Offer
Private Placement of
equity & debt
Managers to
T k
Takeovers/Mergers/
/M
/
Acquisitions
Delisting & Buyback
offers
Equity Research
Overseas listing (FCCB)
ESOPs Advisory
D bt Restructuring
Debt
R t
t i
Financial structuring
Loan syndication
Short Term Debt
Distribution of b
f
Financial Products
Mutual Funds
Public Issues
Bonds
Fixed Deposits
Debt Issues
Other financial
products
Securities Broking
Cash Market
Wholesale
Debt Market
Futures &
Options
Insurance Broking
Life Insurance
Broking
Non-Life
Insurance
Broking
Network Offices
Head Office
25, C-Block Community Centre, Janakpuri, New Delhi - 110 058
Phone: 011-25558601 / 45675587, Fax: 011-25572763
E
E-mail:
il valuation@spacapital.com
l ti @
it l
Corporate Office
Phone: 022-22801240-49,
F
Fax:
022-22846318
022 22846318
E-mail: mumbai@spacapital.com
Bangalore Office
Phone: 080-25092206-07,
F
Fax:
080-25092208
080 25092208
E-mail: blr@spacapital.com
Kolkata Office
Phone: 033-40114800/ 2100819,
Fax: 033-22521540
E-mail: cal@spacapital.com
Chennai Office
Phone: 044-45544670-75 Fax:
044-42071380
E-mail:
Hyderabad Office
Phone: 040-42200042,
Fax: 040-42200042
Pune Office
Phone:020-41200017
Fax:020-41200016