This document provides an overview of the appointment of registered valuers under the Companies Act 2013 in India, including: - When valuation is required under the Act for various corporate actions like mergers, preferential shares issuance, etc. - The eligibility requirements to become a registered valuer, including qualifications, experience, and passing a valuation examination. - The process for applying for and obtaining a certificate of registration from the authority (currently IBBI), and the ongoing conditions of registration. - Requirements for how valuations must be conducted, including following valuation standards and what must be included in valuation reports. - Provisions for temporary surrender of registration and transitional arrangements for existing valuers to obtain registration

1. Appointment of Registered Valuer
under Companies Act, 2013
CS Meenakshi Jayaraman

2. Credits and Acknowledgments
Sundar Rajan S

3. Legends used in the Presentation
Act Companies Act, 2013
CG Central Government
CIT(A) Commissioner of Income-tax (Appeals)
IBBI Insolvency and Bankruptcy Board of India
ITAT Income-tax Appellate Tribunal
MHRD Ministry of Human Resources and Development
PG Post Graduate
Rule(s) Companies (Registered Valuers and Valuation) Rules, 2017

4. Presentation Schema
Meaning of relevant
terms
Circumstances
when valuation is
required under the
Act
Valuation by
Registered Valuers
Eligibility for
Registered Valuer
Qualifications and
experience
Valuation
examination
Application for
certificate of
registration
Conditions of
Registration
Conduct of
Valuation
Temporary
surrender
Transitional
Arrangement
Contravention

5. Meaning of relevant terms
• Authority specified by CG under section 458 of the Act to perform the functions under the
Rules
• Currently, the powers are delegated by CG to IBBI vide notification dated 23rd October, 2017
Authority
• A distinct group of assets, such as land and building, machinery and equipment, displaying
similar characteristics, that can be classified and requires separate set of valuers for valuation
• Annexure IV of the Rules provides 3 asset classes:
• a. Plant and machinery; b. Land and building; c. Securities or Financial Assets
Asset class
• A member of a registered valuers organisation who possesses the requisite educational
qualifications and experience for being registered as a valuer
Valuer member
• It means a partnership firm registered under the Indian Partnership Act, 1932 or a limited
liability partnership registered under the Limited Liability Partnership Act, 2008
Partnership entity

6. Contd.
• A person residing in India for more than 182 days during the course of the preceding financial year but
does not include,
• a person who has gone out of India or who stays outside India, in either case –
• 1. for or on taking up employment outside India, or
• 2. for carrying on outside India a business or vocation outside India, or
• 3. for any other purpose, in such circumstances as would indicate his intention to stay outside India
for an uncertain period
• a person who has come to or stays in India, in either case, otherwise than –
• 1. for or on taking up employment in India, or
• 2. for carrying on in India a business or vocation in India, or
• 3. for any other purpose, in such circumstances as would indicate his intention to stay in India for an
uncertain period
Person resident in
India

7. Circumstances when valuation is required under
the Act
Under the following circumstances, valuation has to be done mandatorily as per the Act, by the Registered Valuer
Issue of shares or other securities on preferential basis under section 62(1)(c) of the Act
Issue of Sweat Equity Shares under section 54 of the Act
Issue of shares or other securities for consideration other than cash
In case of compromise, arrangement and amalgamation made under section 230 of the Act
In case of provision of money for purchase or subscription of its own shares, if such shares are to be held for the
benefits of the employees under Section 67 of the Act
In case of submission of report by Company liquidator based on winding up order passed by Tribunal – Section 281
of the Act

8. Valuation by Registered Valuers – Section 247 (1) of
the Act
Where a valuation is required to be made in respect of any property, stocks, shares, debentures,
securities or goodwill or any other assets (herein referred to as the assets) or net worth of a
company or its liabilities under the provision of this Act,
it shall be valued by a person having such qualifications and experience and registered as a
valuer in such manner, on such terms and conditions as prescribed in Rule 4 and
appointed by the Audit Committee or in its absence by the Board of Directors of that
Company

9. Functions of Registered Valuer
The valuer appointed under Section 247 (1) shall,
1. make an impartial, true and fair valuation of any assets which may be required to be valued;
2. exercise due diligence while performing the functions as valuer;
3. make the valuation in accordance with Rule 8;
4. not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during
a period of 3 years prior to his appointment as valuer or 3 years after the valuation of assets was conducted by him

10. Eligibility for Registered Valuer – Rule 3
A person shall be eligible to be a registered valuer only if he/ she satisfies the following conditions:
1. Such person is a valuer member of a registered valuers organisation
2. Such person is recommended by the registered valuers organisation of which he/she is a valuer member for registration
as a valuer
3. Such person has passed the valuation examination under Rule 5 within three years preceding the date of making an
application for registration under Rule 6
4. Possesses the qualifications and experience as specified in Rule 4
5. Such person is not a minor and has not been declared to be of unsound mind
6. Such person is not an undischarged bankrupt, or has not applied to be adjudicated as a bankrupt
7. Such person is a person resident in India
Part – A

11. Contd.
8. Such person has not been convicted by any competent court for an offence punishable with imprisonment for a term
exceeding 6 months or for an offence involving moral turpitude, and a period of 5 years has not elapsed from the date of
expiry of the sentence
However, if a person has been convicted of any offence and sentenced in respect thereof to
imprisonment for a period of 7 years or more, he shall not be eligible to be registered
9. Such person has not been levied a penalty under section 271J of Income-tax Act, 1961* and time limit for filing appeal
before CIT(A) or ITAT, as the case may be has expired, or such penalty has been confirmed by ITAT, and 5 years have not
elapsed after levy of such penalty
10. Such person is a fit and proper person
For determining whether an individual is a fit and proper person under the Rules, the authority may take account of any
relevant consideration, including but not limited to the following criteria:
1. Integrity, reputation and character
2. Absence of convictions and restraint orders, and
3. Competence and financial solvency
* Section 271J – Penalty for furnishing incorrect information in reports or certificates – Rs. 10,000 for each such report/ certificate

12. Contd.
Part – B A partnership entity or Company shall be eligible to be a registered valuer if the following conditions are satisfied
It has been set up for objects for rendering professional or financial services, including valuation services and that in the case of a
Company, it is not a subsidiary, joint venture or associate of another Company or body corporate
It is not undergoing an insolvency resolution or is not an undischarged bankrupt
All the partners or directors, as the case may be, are eligible under points (3) to (10) in Part - A
Three or all the partners or directors, whichever is lower, of the partnership entity or Company, as the case may be, are registered
valuers
Atleast one of the partners or directors, as the case may be, is a registered valuer for the asset class, for the valuation of which it seeks
to be a registered valuer

13. Qualifications and experience – Rule 4
An individual shall have the following qualifications and experience to be eligible for registration under Rule 3:
PG degree or PG diploma, in the specified discipline, from a University or Institute established, recognised or
incorporated by law in India and at least 3 years of experience in the specified discipline thereafter, or
a Bachelor's degree or equivalent, in the specified discipline, from a University or Institute established, recognised or
incorporated by law in India and at least 5 years of experience in the specified discipline thereafter, or
membership of a professional institute established by an Act of Parliament enacted for the purpose of regulation of a
profession with at least 3 years experience after such membership
•Specific discipline shall mean the specific discipline which is relevant for valuation of an asset class for which the registration as a
valuer or recognition as a registered valuers organisation is sought under the Rules
•Equivalent shall mean professional and technical qualifications which are recognised by the MHRD as equivalent to professional
and technical degree

14. Eligibility Qualification and Experience for
Registration as Valuer – Annexure IV
Asset Class Eligibility / Qualifications Experience in specified discipline
Plant and Machinery a. Graduate in Mechanical, Electrical, Electronic and
Communication, Electronic and Instrumentation, Production,
Chemical, Textiles, Leather, Metallurgy, or Aeronautical
Engineering, or Graduate in Valuation of Plant and
Machinery or equivalent
b. PG on above courses
a. 5 years
b. 3 years
Land and Building a. Graduate in Civil Engineering, Architecture,
Town Planning or equivalent
b. PG on above courses and also in
valuation of land and building or Real Estate
Valuation (a two-year full time post-graduation
course)
a. 5 years
b. 3 years
Securities or Financial
Assets
a. Member of ICAI, ICSI or ICMAI; MBA or PG Diploma in
Business Management (specialisation in finance)
b. PG in Finance
a. 3 years
b. 3 years

15. Valuation Examination – Rule 5
The authority shall, either on its own or through a designated agency, conduct valuation examination for one or more asset
classes, for individuals, who possess the qualifications and experience as specified in Rule 4
Such individuals have completed their educational courses as member of a registered valuers organisation, to test their
professional knowledge, skills, values and ethics in respect of valuation
The authority may recognise an educational course conducted by a registered valuers organisation before its recognition as
adequate for the purpose of appearing for valuation examination
The authority may recognise an examination conducted as part of a master's or post graduate degree course conducted by
a University which is equivalent to the valuation examination

16. Contd.
The authority shall determine the syllabus for various valuation specific subjects or assets classes for the valuation
examination on the recommendation of one or more Committee of experts constituted by the authority in this regard
The syllabus, format and frequency of the valuation examination, including qualifying marks, shall be published on the
website of the authority at least three months before the examination
An individual who passes the valuation examination, shall receive acknowledgement of passing the examination
An individual may appear for the valuation examination any number of times

17. Application for certificate of registration – Rule 6
1. An individual eligible for registration as a registered valuer under Rule 3 may make an application to the authority in Form-
A of Annexure -II along with a non-refundable application fee of Rs. 5,000 in favour of the authority
2. A partnership entity or company eligible for registration as a registered valuer under Rule 3 may make an application to the authority
in Form-B of Annexure-II along with a non-refundable application fee of Rs. 10,000 in favour of the authority
3. The authority shall examine the application and may grant 21 days to the applicant to remove the deficiencies, if any, in the application
4. The authority may require the applicant to submit additional documents or clarification within 21 days
5. The authority may require the applicant to appear, within 21 days, before the authority in person, or through its authorised
representative for explanation or clarifications required for processing the application

18. Contd.
6. If the authority is satisfied, after such scrutiny, inspection or inquiry as it deems necessary, that the
applicant is eligible under the Rules,
it may grant a certificate of registration to the applicant to carry on the activities of a registered
valuer for the relevant asset class or classes in Form-C of the Annexure-II
within 60 days of receipt of the application, excluding the time given by the authority for presenting
additional documents, information or clarification, or appearing in person, as the case may be
7. If, after considering an
application made under this
rule, the authority is of
the prima facie opinion that
the registration ought not be
granted,
it shall communicate the
reasons for forming such an
opinion within 45 days of
receipt of the application,
excluding the time given by
it for removing the
deficiencies, presenting
additional documents or
clarifications, or appearing in
person, as the case may be

19. Contd.
8. The applicant shall submit an explanation as to why his application should be accepted within fifteen days of the receipt of
the communication under sub- rule (7), to enable the authority to form a final opinion
9. After considering the explanation, if any, given by the applicant under sub-rule (8), the authority shall either
a. accept the application and grant the certificate of registration; or
b. reject the application by an order, giving reasons thereof
10. The authority shall communicate its decision to the applicant within 30 days of receipt of explanation

20. Conditions of Registration – Rule 7
The registration granted under Rule 6 shall be subject to the conditions that the valuer shall,
at all times possess the eligibility and qualification and experience criteria as specified under Rule 3 and Rule 4
at all times comply with the provisions of the Act , the Rules and the Bye-laws or internal regulations, as the case may be,
of the respective registered valuers organisation
in his capacity as a registered valuer, not conduct valuation of the assets or class(es) of assets other than for which he/it
has been registered by the authority
take prior permission of the authority for shifting his/ its membership from one registered valuers organisation to another
take adequate steps for redressal of grievances
maintain records of each assignment undertaken by him for at least three years from the completion of such assignment

21. Contd.
comply with the Code of Conduct of the registered valuers organisation of which he is a member
in case a partnership entity or Company is the registered valuer, allow only the partner or director who is a registered
valuer for the asset class(es) that is being valued to sign and act on behalf of it
in case a partnership entity or company is the registered valuer, it shall disclose to the company concerned, the extent of
capital employed or contributed in the partnership entity or the company by the partner or director, as the case may be,
who would sign and act in respect of relevant valuation assignment for the company
in case a partnership entity is the registered valuer, be liable jointly and severally along with the partner who signs and acts
in respect of a valuation assignment on behalf of the partnership entity
in case a company is the registered valuer, be liable along with director who signs and acts in respect of a valuation
assignment on behalf of the company
in case a partnership entity or company is the registered valuer, immediately inform the authority on the removal of a
partner or director, as the case may be, who is a registered valuer along with detailed reasons for such removal
comply with such other conditions as may be imposed by the authority

22. Conduct of Valuation – Rule 8
The registered valuer shall, while conducting a valuation, comply with the valuation standards as notified or modified under
Rule 18
However, until the valuation standards are notified or modified by the Central Government, a valuer shall make
valuations as per -
• internationally accepted valuation standards
• valuation standards adopted by any registered valuers organisation
The registered valuer may obtain inputs for his valuation report or get a separate valuation for an asset class conducted
from another registered valuer*
* In such a case, the valuer shall fully disclose the details of the inputs and the particulars etc. of the other registered valuer in the
report and the liabilities against the resultant valuation, irrespective of the nature of inputs or valuation by the other registered
valuer, shall remain of the first mentioned registered valuer

23. Contd.
Contents of Valuation Report
background information of
the asset being valued
purpose of valuation and
appointing authority
identity of the valuer and any
other experts involved in the
valuation
disclosure of valuer interest
or conflict, if any
date of appointment,
valuation date and date of
report
inspections and/or
investigations undertaken
nature and sources of the
information used or relied
upon
procedures adopted in
carrying out the valuation and
valuation standards followed
restrictions on use of the
report, if any
major factors that were taken
into account during the
valuation
Conclusion; caveats, limitations and disclaimers to the extent they
explain or elucidate the limitations faced by valuer, which shall not
be for the purpose of limiting his responsibility for the valuation
report

24. Temporary surrender – Rule 9
A registered valuer may
temporarily surrender his
registration certificate in
accordance with the bye-
laws or regulations, as the
case may be, of the
registered valuers
organisation and on such
surrender, the valuer shall
inform the authority for
taking such information on
record
A registered valuers
organisation shall inform the
authority if any valuer
member has temporarily
surrendered his/its
membership or revived his/
its membership after
temporary surrender, not
later than seven days from
approval of the application
for temporary surrender or
revival, as the case may be
Every registered valuers
organisation shall place, on
its website, in a searchable
format, the names and other
details of its valuers
members who have
surrendered or revived their
memberships

25. Transitional Arrangement – Rule 11
Any person who may be rendering valuation services under the Act
on the date of commencement of the Rules, may continue to render valuation services
without a certificate of registration under the Rules upto 31st January, 2019
If a company has
appointed any valuer
before such date and
the valuation or any part
of it has not been
completed before 31st
January, 2019,
the valuer shall complete
such valuation or such part
within three months
thereafter

26. Contravention
If a valuer contravenes the provisions
of section 247 or the Rules,
the valuer shall be punishable with fine of Rs. 25,000 – Rs. 1,00,000
If the valuer has contravened such
provisions with the intention to
defraud the Company or its members
the valuer shall be punishable with,
imprisonment upto 1 year and
fine amounting to Rs. 1 lakh – 5 lakhs
Where a valuer has been convicted
under Section 247(3) of the Act
Section 247(3) of the Act
Section 247(4) of the Act
the valuer shall be liable to,
refund the remuneration received by him/ her to the Company, and
pay for damages to the Company or to any other person for loss
arising out of incorrect or misleading statements of particulars made in
his/ her report

27. Thank You
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