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Share Valuation Certificate for FC GPR

Anand (Practicing CA) (190 Points)

27 March 2011

I want to know if a Unlisted company can issue shares at Face value to its Foreign Parent Company even if the share valuation as per the CA certificate is greater than of lesser than the Face Value.

Thanx in Adavnce

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19 Replies

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7014 Points)
Replied 27 March 2011

I hope you are talking about the valuations arrived after DCF method.

The issue price can't be less than the value arrived at by DCF method.

2 Like

Anand (Practicing CA) (190 Points)
Replied 28 March 2011

Originally posted by : CA. Anuj Gupta
	I hope you are talking about the valuations arrived after DCF method. The issue price can't be less than the value arrived at by DCF method.

Is there any specif format for teh Share Valuation Certificate, if you can you please share it.

Rgds

Anand

SATYANARAYANA (CHARTERED ACCOUNTANT) (21 Points)
Replied 24 May 2011

Hi,

Can anyone please provide format of DCF Method of share valuation.

Mehul Jain (ROC and R&D Executive) (59 Points)
Replied 04 August 2011

PFA AS REQUIRED

Attached File : 568861 791483 report.zip downloaded: 12564 times

1 Like

ATUL (b) (54 Points)
Replied 31 August 2011

Good File Mehul

Ankit Tulsyan (Chartered Accountant) (33 Points)
Replied 12 September 2011

A Foreign investor was initial subscriber of 9000 shares (Company was incorporated on 15 Dec.'10) but the share money (90000 i.e. 9000 shares @ 10) was received on 23rd March'11.

Queries

Can CA certify that as it's a new company and the foreign investor is a promoter the shares are valued at face value?
Will the DFCF Method be applicable in this case (as it's a new company)? If yes, how will we get the base figures?

SUNIL KUMAR JAIN (PRACTISING COMPANY SECRETARY) (187 Points)
Replied 12 September 2011

Dear Mr. Ankit Tulsyan,

Under the FDI Policy, even in case of new companies, foreign promoters who are subscribers to the Memorandum are required to subscribe based on the Share Valuation as per DCF method. Such valuation is done based on the future profitibility projections.

Regards,

Sunil K. Jain

Practising Company Secretary

9810104162; rediffmail.com

Shishir Kumar (CS) (43 Points)
Replied 24 September 2012

dear sir

i also have a same query

that a newly incorporated company whose subscribers have subscribed 99 %the capital @ Rs.10 each.

we had sent the FCGPR and a certificate from ca stating that the value of shares is rs.10 as company has to be formed nad value of share is rs.10 as per clause V of moa. but RBI has asked for valuation report under DCF method.

Now my sir is asking me to show any section or guideline for newly incorporated company that valuation report is given under DCF method is required if foreigner subscribes the share capital

please help me

my mail id is sunnysuman @ gmail.com

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 24 September 2012

Under form FCGPR a CA Certificate is to be submitted regarding price difference on which the share were issued to the Indian Resident Shareholders and to the NRI/ Foreign Shareholders. In case there is no difference, the certificate is to be placed just mentioning that the share were issued on face value and at the same rate to the Indian shareholders and NRI shareholders, there was no pricing difference.

1 Like

Durga Thota (Company Secretary) (29 Points)
Replied 09 November 2012

Dear All,

My querty is-

A private limited company, having only foreign shareholderfs, issued further shares at face value i.e. Rs10/-. For filing FC GPR valuation certificate under DCF Method has been obtained. As per the same, the price is Rs. 3.20. Consistent growth has been shown in projetions. Will it be acceptable by RBI.

Thanks

Durga

Rakesh Sharma (CS) (38 Points)
Replied 02 January 2015

sir i have same query that in current time what is method for share valuation in case of transfer and issue of shares to NRI

meetul shah (Employee) (26 Points)
Replied 26 February 2015

Can you Suggest me what to do on these Query

Dear Sir,
Please refer to the FCGPR submitted by you for issue of shares on 13/12/14
In this connection it is observed that the first issue of shares to non resident is on RIGHTS basis.You are requested to clarify the same.

You are also requested to submit CS compliance certificate to Reg.6 of FEMA 20 for issue of shares on rights basis.