Equities - DVFA

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activities of the commissions
Expert Group Corporate Transaction & Valuation
Since January 2009, the Expert Group Corporate Transaction & Valuation has looked at
corporate valuations in so-called ‘dominated’ situations, i.e. companies under CPL agreements
or involved in squeeze outs. The adequacy of the consideration offered to minority
shareholders in such scenarios is examined by the courts in review proceedings, the duration
of which usually spans several years. In this context, the courts currently orient their
decisions on the IDW S1 auditing principles for corporate valuations.
Initially, the Expert Group addressed the legislative framework in Germany and elsewhere,
as well as valuation concepts, valuation standards and the corporate perspective. Its objectives
include simplification of the review process and development of principles for valuation
by the majority shareholder. This will contribute to improved efficiency and prevent
unreasonably long court proceedings, provided the principles are also accepted by the
German justice system. Furthermore, the recommendations aim to establish international
comparability between principles for valuation in dominated situations through promotion
of methodological diversity (NPV, DCF, multiples) and transparency.
Expert Group Small Caps
Equities_
The DVFA Small & Mid Cap Reporting Standard represens a collection of the most important
reporting and information elements as a sort of best practice for financial reporting, and
fundamental aid for small and medium-sized companies entering the capital market. The
DVFA SMCRS are meant to improve the efficiency of capital market communication by
small caps in the German market. The Expert Group presented the DVFA SMCRS at the
second DVFA Small Cap Forum (SCF_ on 19 April 2010). Based on this presentation, the
concept was published in both Börsen Zeitung and GoingPublic magazine.
A white paper by the Expert Group was sent to 30 selected companies with the request for
a statement of position on the SMCRS. Alongside work on the SMCRS, the Small Cap
Expert Group supported a dissertation on ‘Analysis of the investment behaviour of small
cap investors’ by Marta Kemter, University of Hamburg. The next task for the Expert Group
will be the practical implementation of the DVFA SMCRS.