. On June 30^th 2020, the companies A and B decided to merge as the business combination form of A+B = A(enlarged) through an all share deal, the appointed date being 1 April 2013 (with retrospective effect). The agreed date for consideration of relevant historical accounting and market data for the purpose of valuation was 31^st March 2020. The merger process was completed and the deal was closed on 31^stOctober 2013.(effective date) upon the receipt of the order of the high court of respective jurisdiction.

The summarised balance sheets of the two companies as on 31^st March 2013 are given as under: Rs/Mn

	Company A	Company B
Share Capital Company A: Equity Shares of Rs 5 each Company B: equity shares of Rs 10 each Reserves and surplus Debentures and other Long Term Loans	75 75 100	80 150 100
Sources of Fund	250	330
Fixed Assets(Net Block after Depreciation) Current Assets Less Current Liabilities	200 100 50	250 150 70
Application of Funds	250	330

Rs/Mn

	Company A	Company B
Revenue Cost of Sales Selling general and administration Expenses EBID and Amortisation Depreciation and Amortisation Interest Expenses EBT EAT	1500 800 300 400 20 10 370 250	2500 1300 500 700 25 10 665 440

Two companies decided to determine the fair valuation based on weighted average of the valuation determined net asset or book value, P/E ratio and discounted FCF methods. For this purpose P/e ratios agreed upon by the two companies were 40 for company A and 30 for company B. The business valuation made for two companies based on DFCF method were Rs 750 cr and Rs 500 cr respectively for A and B. The present market value of non-operating assets of both companies were considered as Rs 50 cr for A and Rs 100 cr for B. For the purpose of valuation the weights were considered as 1 for DFCF, 2 for net asset or book value and 3 for P/E ratio.

Analyse the financial situation of a merged entity and work out fair share swap ratio.