Definitions for Rule 11/12

Key definitions

• Accountant. An accountant under section 515(3)(b) who is (A) an individual practitioner or valuer with not less than ten years' professional experience and annual professional receipts above fifty lakh rupees in the year preceding the year of valuation, or (B) a member or partner of an entity providing accountancy or valuation services whose annual receipts in that preceding year exceed three crore rupees. It also includes a valuer recognised for similar valuation by the government of the country where the foreign company or entity is registered or incorporated (or its agencies), meeting the same conditions, with the additional requirement for entities that the entity or its affiliates have presence in more than two countries.
• Balance sheet. For an Indian company, the audited balance sheet (with notes) drawn up on the specified date. In any other case, the balance sheet submitted to the relevant authority outside India. Where accounts are pending finalisation, an interim balance sheet approved by the board (or equivalent body); where the specified date is the date referred to in section 9(10)(d)(ii), a balance sheet certified by an accountant.
• Book value of the liabilities. Liabilities as shown in the balance sheet, excluding paid-up capital on equity shares or members' interest, general reserves and surplus, and security premium related to the paid-up capital.
• Observable price. For a listed share, the higher of (i) the average of the weekly high and low of closing prices over the six months before the specified date, and (ii) the same average over the two weeks before the specified date.
• Right of management or control. Includes the right to appoint a majority of directors or to control management or policy decisions, individually or together, directly or indirectly — through shareholding, management rights, shareholder or voting agreements, or any other manner.

Cross-referenced definitions. "Connected person" — section 184(5); "specified date" — section 9(10)(d); "telegraphic transfer buying rate" — rule 207; "merchant banker" and "recognised stock exchange" — rule 56.