DRAFT COMPANIES (REGISTERED VALUERS AN

Contents

Valuation by registered valuers

Section 247 of the Companies Act, 2013(Act for short) provides for the valuation by registered valuers. Section 2

property;

stocks;

shares;

debentures;

securities; or

goodwill or

any other assets; or

net worth of a company; or

the liabilities under the provisions of this act,

it shall be valued by a person having such qualifications and experience and registered as a valuer in such manne

Valuation report from a registered valuer under the Act

The Act requires the valuation reports from the registered valuer in the following cases-

Section 62(1)(c) - Where at any time, a company having a share capital proposes to increase its subscr
authorized by a special resolution, whether or not those persons include the persons, referred to in clause
such shares is determined by the valuation report of a registered valuer subject to such conditions as may

Section 192(2) - Valuation of Assets Involved in Arrangement of Non cash transactions involving Directors
general meeting under sub-section (1) shall include the particulars of the arrangement along with the valu

Section 230 (2)(c)(v) Sanction of scheme a a valuation report in respect of the shares and the prope
a registered valuer;

Section 230(3) - Where a meeting is proposed to be called in pursuance of an order of the Tribunal under
creditors and to all the members or class of members and the debenture-holders of the company, individu
statement disclosing the details of the compromise or arrangement, a copy of the valuation report, if any, a
promoter members, and the debenture-holders and the effect of the compromise or arrangement on any m
 other matters as may be prescribed;

Section 232(2)(d) - Where an order has been made by the Tribunal under sub-section (1), merging comp
to circulate the following for the meeting so ordered by the Tribunal, namely the report of the expert with re

Section 232(3(h) - The Valuation report to be made by the tribunal for exit opportunity to the shareholders
Transferor company is Listed Company and the Transferee-company is an unlisted Company;

Section 236(2) Purchase of minority shareholding - The acquirer, person or group of persons under sub
shares held by such shareholders at a price determined on the basis of valuation by a registered valuer in

Section 260(2)(c) - Powers and duties of company administrator The Company administrator may be c
at the reserve price for the sale of any industrial undertaking of the company or for the fixation of the lease

Section 281 (1) - Valuing assets for submission of report by liquidator;

Rules

For the purposes of carrying out the provisions of section 247 of the Act, the Government floated draft rules, viz.,
the comments of the stakeholders. The Rules is having 5 chapters, 20 rules and 3 schedules. The rules prescrib

eligibility, qualifications and registration of valuers;

recognition of valuation professional organizations;

valuation standards;

disciplinary proceedings.

A person shall practice as registered valuer only after obtaining a certificate of registration.

Effective date

The Rules shall come into force with effect from 15.07.2017.

Registered Valuer

Rule 2(1)(f) defines the expression registered valuer as a valuer registered with the Registration Authority under

Registration Authority

Rule 2(1(g defines the expression registration authority as the Insolvency and Bankruptcy Board of India establis

Appointment of registered valuer

Section 247(1) provides that the registered valuer shall be appointed by the Audit Committee or in its absence by

Eligibility

Any individual shall be eligible to be a registered valuer if he has passed the valuation examination in the three ye
years of age and has been substantially involved in at least 10 valuation assignments of the assets (for valuation
during the 5 years preceding the commencement of these rules, he shall not be required to pass the valuation exa

Disqualifications

The following are the disqualifications prescribed for not becoming a registered valuer-

if the applicant is a minor;

he has been declared to be of unsound mind;

he is an undischarged bankrupt, or has applied to be adjudicated as an bankrupt;

he is a person of nonresident in India;

he has been convicted by any competent court for an offence punishable with imprisonment for a term exc
has not elapsed from the date of expiry of the sentence.

he has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of se

he is not a valuer member, holding certificate of practice, of a valuation professional organization; or

he isnot a fit and proper person.

The following are the disqualifications prescribed for the partnership entity-

it has incurred any of the following disqualifications-

is a person non resident in India;

has been convicted by any competent court for an offence punishable with imprisonment for a term excee
not elapsed from the date of expiry of the sentence.

has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven

is not a valuer member, holding certificate of practice, of a valuation professional organization; or

is not a fit and proper person;

it is undergoing an insolvency resolution or bankruptcy process or is an undischarged insolvent;

any of its partners have incurred the following disqualifications-

if the applicant is a minor;

he has been declared to be of unsound mind;

he is an undischarged bankrupt, or has applied to be adjudicated as an bankrupt;

he is a person of nonresident in India;

 he has been convicted by any competent court for an offence punishable with imprisonment for a term exc
has not elapsed from the date of expiry of the sentence.

he has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of se

he is not a valuer member, holding certificate of practice, of a valuation professional organization; or

he isnot a fit and proper person.

if majority of its partners practicing in India are not registered valuers; or

if none of its partners is a registered valuer for the class of assets, for the valuation of which it seeks to be

Fit and proper person

The explanation to Rule 5(1) provides that for determining whether an individual is a fit and proper person under t
including but not limited to the following criteria-

integrity, reputation and character;

absence of convictions and restraint orders; and

competence, including financial solvency and net worth.

Qualifications and experience

An individual shall have the following qualifications to be eligible for registration under this Rules-

post graduate degree, in the specified discipline, from a University established, recognized, incorporated b

a Bachelors degree kin the specified discipline, from a University established recognized or incorporated

membership of a professional institute set up under an Act of Parliament and at least 5 years experience

Specific discipline

Specific discipline means the specific discipline which is relevant for the valuation of the class of asset for which r
rules.

Valuation examination

The Registration Authority shall, either on its own or through a designated agency, conduct a Valuation Examinati

The Registration Authority shall, on the recommendations of a Committee of Experts constituted by it, determine t

The format and frequency of the Valuation Examination, including qualifying marks, shall be published on the web

A person who passes the Valuation Examination shall receive acknowledgement of passing the examination.

A person may appear for the Valuation Examination any number of times.
By: Mr. M. GOVINDARAJAN - June 2, 2017

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Does valuer has membership of any one of the professional valuer bodies viz.
Institution of Valuers, institution of Surveyors (Valuation Branch), institution of
Govt. Approved Valuers, Practicing Valuers Association of India, The Indian
Institution of Valuers, Centre for ( Yes / No ) Details :
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________ pg. 2 Signature of the
applicant __________________ Valuation Studies, Research and Training, Royal
institute of Chartered Surveyors, India Chapter, American Society of Appraisers,
USA, Appraisal institute USA etc. (Related documents to be submitted)