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.