Valuations & Business Modelling (CSP Paper-9.7) CS Professional Mod-3

ElectivePaper 9.7:  Valuations & Business Modelling (Max Marks 100)

Objectives
Part I : To develop a reservoir of knowledge on valuation which can assist the Company Secretaries in undertaking valuation assignments as a Registered Valuer under Companies Act, 2013 including for Mergers and Acquisitions, Issue of Shares, Winding up of Business and during Distressed Sale.
Part II : To assist the student in comprehending the concept of Business Modelling, its vital components, steps involved in preparation of a Business Model and Business Models for varied magnitude of business organizations.

Part I: Valuations (70 Marks)
Detailed Contents
1. Overview of Business Valuation : Genesis of Valuation; Need for Valuation; Hindrances/ Bottlenecks in Valuation;
    Business Valuation Approaches; Principles of Valuation (Cost, Price and Value).
2. Purpose of Valuation : M&A, Sale of Business, Fund Raising, Voluntary Assessment; Taxation; Finance; Accounting;
    Industry perspective; Statutory Dimension; Society Angle.
3. International Valuation Standards Overview.
4. Valuation guidance resources in India.
5. Business Valuation Methods: Discounted Cash Flow Analysis (DCF); Comparable transactions method;
    Comparable Market Multiples method; Market Valuation; Economic Value Added Approach; Free Cash Flow to
    Equity; Dividend Discount Model; Net Asset Valuation; Relative Valuation; Overview of Option Pricing Valuations.
6. Steps to establish the Business Worth: Planning and Data Collection; Data Analysis and Valuation including
    review and analysis of Financial Statements; Industry Analysis; Selecting the Business Valuation Methods; Applying
    the selected Valuation Methods; Reaching the Business Value Conclusion.
7. Valuation of Tangibles: Overview of Valuation of Immovable Properties; Plant & Machinery; Equipments; Vehicles;
    Capital Workin- Progress; Industrial Plots; Land and Buildings; Vessels, Ships, Barges etc.
8. Valuation of Intangibles: Definition of Intangible Assets; Categorization of Intangibles- Marketing Related
    (Trademarks, Trade names, Certification marks, Internet domains etc.), Customer or Supplier Related (Advertising
    Agreements, Licensing, Royalty Agreements, Servicing Contracts, Franchise Agreements), Technology Related
    (Contractual or non-contractual rights to use: Patented or Unpatented Technologies, Data Bases, Formulae,
    Designs, Softwares, Process), Artistic Related (Royalties from artistic works: Plays, Books, Films, Music).
9. Accounting for share based payment (Ind AS102).
10. Valuation during Mergers & Acquisitions.
11. Valuation of various magnitudes of Business Organizations: Large Companies, Small Companies, Start-Ups,
     Micro Small and Medium Enterprises.
12. Valuation of Business during Distressed Sale.

Part- II: Business Modelling (30 Marks)
13. Introduction to Business Modelling : Genesis, Meaning; Features; Significance; Usage; Spreadsheet Techniques
     (Effective use of spreadsheets for modelling, Review of key Excel Functions like building Macros,
      Decisions involving Time Value of Money); Report and analyze historical data, Prepare future projections and
      present integrated financial statements, Key financial ratios and Outputs in a logical, summarized and effective
      manner.
14. Business Model Analysis: Facets of Analysis : Revenues: Cash flows and their timing and Revenue drivers, 
      Expenses: Cash flows and their timing, Investment required through cash flow breakeven: Working Capital, 
      Maximum financing required and cash flow breakeven timing, Sensitivity Analysis: Key success factors, 
      Structuring and designing models.