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BRILLIANT’S Long Term Financing and Valuation of Goodwill & Shares 185

3. Conversion: Company may raise the 3. H§$de©Z… H§$nZr {S>~|Mg© ¶m {à’$a|g eo¶g© Ho$ ê$n
money in the form of debentures or preference ‘| YZ n«má H$a gH$Vr h¡, {Ogo ~mX ‘| B{³dQ>r eo¶a ‘|
shares which may later be converted into eq-
n[ad{V©V {H$¶m Om gH$Vm h¡& ¶{X H§$de©Z {dH$ën H§$de©Z
uity shares. If the conversion option is based on
Ho$ {XZm§H$ na eo¶g© Ho$ ‘yë¶ na AmYm[aV h¡ Vmo ñdm^m{dH$
the price of share as on the date of conversion,
then obviously, valuation becomes necessary. ê$n go ‘yë¶m§H$Z Amdí¶H$ ~Z OmVm h¡&
4. Buy-Back: The companies Act, 2013 al- 4. ~m¶ ~¡H$… H§$nZr A{Y{Z¶‘ 2013 H§$nZrO H$mo
lows the companies to buy their own shares A{Y{Z¶‘ Ho$ go³eZ 68 ‘| Xr J¶r H§${S>e§g Ho$ AYrZ
subject to the conditions given in section 68 of
the Act. The price at which the shares are to be ñd¶§ Ho$ eo¶g© H$mo IarXZo H$s AZw‘{V XoVm h¡& {Og ‘yë¶
purchased for cancellation depends upon the na eo¶g© H$mo H¢${gboeZ Ho$ {bE IarXm OmZm h¡ H§$nZr Ho$
current value of the shares of the company, eo¶g© Ho$ dV©‘mZ ‘yë¶ na {Z^©a H$aVm h¡ Omo ñQ>m°H$ ‘mH}$Q>
which may be different from the stock market H$moQ>oeZ go {^ÝZ hmo gH$Vm h¡&
quotation.
5. Nationalization/Compulsory acquisi- 5. ZoeZbmBOoeZ/JdZ©‘|Q> Ûmam H$ånbgar
tion by Government: As a part of nationaliza- E{³d{OeZ: H$^r-H$^r ZoeZbmBOoeZ ñH$s‘ Ho$ EH$ ^mJ
tion scheme, sometimes the government re- Ho$ ê$n ‘| JdZ©‘|Q> H$mo {dÚ‘mZ eo¶ahmoëS>g© H$mo j{Vny{V©
quires the compensation to be paid to existing
H$m ^wJVmZ H$aZm Amdí¶H$ hmoVm h¡ Omo eo¶a Ho$ ‘yë¶ na
shareholders which is based on the value of
share. {Z^©a H$aVm h¡&
6. Wealth disclosure: For the purposes of 6. doëW {S>g³bmoOa… Hw$N> H$mZyZm| Ho$ CÔoí¶ Ho$ {bE
some laws, the wealth is required to be dis- doëW {S>g³bmoO H$aZm Amdí¶H$ h¡ VWm ì¶{³V H$s g§n{Îm
closed and the wealth of the person may con-
‘| Hw$N> AZ{bñQ>oS> eo¶g© gpå‘{bV hmo gH$Vo h¢& g§n{Îm
sist of some unlisted shares. The wealth can
rightly be calculated if valuation is available H$s ghr àH$ma go JUZm H$s Om gH$Vr h¡ ¶{X BZ eo¶g©
for these shares. H$m ‘yë¶m§H$Z CnbãY h¡&
7. Takeovers: When any person acquires 7. Q>oH$Amoda… O~ H$moB© ì¶{³V Aݶ H§$nZr ‘| eo¶g©
controlling interest or large block of shares in H$m B§Q>aoñQ> ¶m ~‹S>o ãbm°H$ H$m {Z¶§ÌU àmá H$aVm h¡ Vmo
another company, there are negotiations for {ZJmo{eEe§g hmoVo h¢ {OZHo$ {bE eo¶g© H$m ‘yë¶ {ZYm©[aV
which the value of shares is determined. This
valuation is generally over and above the pre- {H$¶m OmVm h¡& ¶h ‘yë¶m§H$Z gm‘mݶV… ~mOma ‘| àM{bV
vailing market price. ‘yë¶ go A{YH$ hmoVm h¡&
8. Unlisted shares: The valuation of un- 8. AZ{bñQ>oS> eo¶g©… AZ{bñQ>oS> eo¶g© H$m ‘yë¶m§H$Z
listed shares is always done by any of the tech- h‘oem eo¶g© Ho$ ‘yë¶m§H$Z H$s {H$gr VH$ZrH$ VWm {d{Y
niques and methods of valuation of shares, be-
Ûmam {H$¶m OmVm h¡ ³¶m|{H$ CZH$m ‘yë¶ ñQ>m°H$ E³gM|O na
cause their price is not quoted on the stock ex-
change. H$moQ> Zht hmoVm h¡&
9. To avail Secured Loans: Sometimes the 9. {g³¶moS>© bm|g CnbãY H$amZm… H$^r-H$^r B§doñQ>g©
investors want to raise loans against the secu- CZHo$ Ûmam aIo J¶o {d{^ÝZ H§$n{Z¶m| Ho$ eo¶g© H$s {g³¶mo[aQ>r
rity of the shares of various companies held by Ho$ {déÕ F$U àmá H$aZm MmhVo h¢& F$U H$s am{e {Ogo
them. The amount of loan, that can be sanc- ñdrH¥$V H$s OmVr h¡ BZ eo¶g© Ho$ ‘yë¶ na {Z^©a H$aVr h¡&