SVM114050 - Information Standards:
Supplementary Information
The following is not an exhaustive list but provides some
indication of the type of supplementary information that
might reasonably be required by a prospective
purchaser. It is based on evidence given by expert witnesses in the
Lynall case.
But the extent to which any of them are appropriate in a
case must depend on an objective consideration of all the
circumstances of the particular valuation:
- in a trading company the current trading position including
interim figures for turnover and profits which were available to
the directors at the valuation date. Also the views of the
directors on the prospects for the remainder of the trading year
then current (based perhaps on the size of the order book as
compared with the corresponding figure for the previous year).
- in an investment or property investment company, details of the
portfolio of securities or properties. But again, just to reinforce
the message, common sense has to be applied to what might be
reasonable in the circumstances. For example, if a property company
owns only two or three properties, then
all purchasers would receive such information. But
it might be different if we are valuing a tiny holding and the
company owns hundreds of properties.
- in a farming company, the location and acreage of the land and
details of tenancies.
- the dividend prospects and policy.
- the prospects of any imminent or contemplated flotation,
quotation, merger, take-over, liquidation or other transaction
which might enhance the value of the shares or the return from them
in the shareholders' hands. If any of these matters were in
prospect or contemplation, then further particulars of the precise
stage achieved and advice received at the valuation date might
reasonably be required, depending on the facts.
Other occasions when supplementary information is required
In the case of recently incorporated companies where there are
no published accounts or other indications of value then sufficient
information to enable a value to be placed on the shares, e.g.
latest available trading figures and details of assets and
liabilities.
Where the latest published accounts are old (or stale), then
the valuer should consider obtaining details of prepared but as yet
unpublished accounts. It may also be reasonable for management
accounts to be considered in appropriate cases.
