REGISTERED VALUER UNDER COMPANIES ACT, 2013
The Companies Act, 2013 had brought the concept of Registered Valuers to regulate the practice of Valuation in India and to standardize the valuation in line with International Standards. However, the Valuer's qualification, experience, manner and process has been left to be decided by the Rules.
The Ministry of Corporate Affairs (MCA) has now issued the Companies (Registered Valuers and Valuation) Rules, 2017 on 18th October, 2017. Simultaneously, Section 247 of the Companies Act, 2013 has now come into force w.e.f. 18th October, 2017.
The Registered Valuer under the Companies Act, 2013 shall specifically do valuation of asset classes (Land and Building, Plant and Machinery and Securities and Financial Assets) as required under the Act. However, it is also clarified under the Rules that the Registered Valuer provisions shall not automatically become applicable to valuation required under any other Law (like RBI, Income Tax, SEBI Etc).
Accordingly, as of now, the Registered Valuer provisions shall cover the following Act/ Regulations - The Companies Act, 2013, Insolvency & Bankruptcy Code, 2016 and SEBI (REIT and InvIT) Regulations, 2016. However, in times to come, it is expected that other Regulators would also align their Act/ Rules with these Registered Valuer provisions. The Registered Valuer shall be appointed by the audit committee or in its absence by the Board of Directors of the Company.
Companies (Registered Valuers and Valuation) Rules, 2017 contain various aspects pertaining to registered valuers including :-
- Who can become Valuer (qualification, experience and clearance of valuation examinations) for each Asset Class and the process involved;
- The Valuation Standards required to be adhered to while performing and reporting;
- Contents of the Valuation Report including permissible caveats and limitations;
- Professional competence and a due care and independence of valuer;
- Maintenance of records of each assignment for minimum of 3 years; and
- Regulation of the profession including model code of conduct for Registered Valuers.
Some instances where valuation is mandated under the Companies Act, 2013
- For valuing further issue of Equity Shares and Convertible Instruments;
- For Valuing Assets involved in arrangement of non cash transactions involving Directors;
- For valuing shares, property and assets of the Company under a scheme of corporate debt restructuring ;
- For valuation including share swap ratio under a scheme of compromise / arrangement, a copy of valuation report by expert, if any shall be accompanies;
- Where under a scheme of Compromise/ Arrangement the transferor company is a listed company and the transferee company is an unlisted company, for exit opportunity to the shareholders of transferor company, valuation may be required to be made by the Tribunal;
- For valuation Equity Shares held by minority shareholders;
- For preparing valuation report for determination of liquidation value of assets
We assist our clients in ascertaining the value of the Company as per international valuation standards issued by International valuation Standards Council (IVSC). We provide well reasoned and defensive valuation reports to serve their commercial and statutory requirements. PCS has experience and commitment necessary to provide practical and timely regulatory valuations consultants services. We come in a league of one of the best Registered Valuer Consultants.