FEMA: Valuation of Shares of New Pvt Ltd Co receiving FDI

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This query is : Resolved

Pradeep Kumar (Querist)

24 April 2009 HI
A PVT Ltd Co was formed June 2008. The company has received FDI in August 2008, Rs 16 Lacs for which no Legal compliances have been made. The Company is in activity of Consulting Engineering and other Engineering related activites. My Question is that if Rs 16 Lacs received I show as FDI in Equity Capital, wherein Rs 10 shares are issued at a Premium of Rs 48, will it raise any problem. I have gone through the CCI Guidelines for Valuation of Shares:
Net Asset Value: Not applicable as this company has no latest audited Balance Sheet, and this is First Year.

Profit Earning Capacity Value: Not applicable as the method applies to Trading and Manufacturing Compnay, and this is a Consulting Engineering company

Market Value: N/a since Pvt Ltd Co

Fair Value: This method starts taking avg of First 2 methods, which are N/a

Kindly let me knw, if I go by the random issue price of Rs 58( FV 10 & Premium 48) will there be any non compliance

Thank You

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)

24 April 2009 please make your query presice and specific

Pradeep Kumar

Pradeep Kumar (Querist)

25 April 2009 All i am asking is that, in case of Pvt Ltd Company, if money is received from abroad, and we propose to show it as FDI in equity cap of the company, will a random selection of Issue Price per share pose any problem? Since the CCI guidelines for valuation of shares are not applicable, I propose to go ahead with a random Issue Price

Pradeep Kumar

Pradeep Kumar (Querist)

25 April 2009 Will it make any create problem?