The Companies Act 2013 has introduced the concept of ‘Registered Valuer’ through Section 247 Chapter XVII to cover valuation of any property, stock, shares, debentures, securities, goodwill or any other assets of the company as well as its net worth and liabilities. Valuation team of Corporate Professionals here presents the summarized presentation on Registered Valuer.

1. Registered Valuer
Companies Act, 2013
30/10/2013

2. Registered Valuers
Registered Valuers
Stock, Shares,
Debentures,
Securities,
Goodwill
Financial Valuer
Technical Valuer
Property
Persons eligible to apply for being Registered as Valuer
• A
Chartered
Company
Accountant,
Secretary
• Member of the Institute
of Engineers or Member
or
Cost
of
the
Institute
of
Accountant in whole time
practice or retired member
Shall have 5 Years
of
Continuous
Experience,
Post
Qualification
Architects in whole time
Shall have 5
Years
of
Continues
Experience, Pos
t Qualification
practice.
of
Indian
Corporate
law
Service or any other person
• as prescribed.
A
Merchant
Banker
registered with SEBI and
• A person or firm or LLP or
which has in employment
Merchant
under
possessing
it
carrying
CA/CS/CWA for
out
(signing)
Valuation by such qualified
persons.
Banker
both
qualifications may act in
dual capacity.
Registered
Valuer to be
appointed
by
Audit Committee
or in its absence
by the Board of
Directors.

3. Registered Valuers
Registered Valuers
(Financial
Valuation)
Value
Responsibilities
• Valuer to make impartial, true and fair
valuation
• Not undertake valuation if directly or
indirectly interested
• Exercise due diligence
• Valuation to be done as per rules
Upon contravention
• Fine – 25,000 to 100,000
With intention to defraud
• Imprisonment upto 1 year and
• Fine- 1,00,000 to 5,00,000
Additionally upon contravention, to
refund remuneration received and also
liable for damages.
Further Issue
of Shares
Corporate
Debt
Restructuring
Compromise
and
Arrangements
Registered
Valuer
Exit to
Minority
Shareholders
Winding up /
Liquidation
Non Cash
Transactions
with
Directors

4. Section wise Requirement of Registered Valuers
Section 62(1)(c) – For Valuing further Issue of Shares
Section 192(2) – For Valuing Assets involved in Arrangement of Non Cash transactions involving Directors
Section 230(2)(c)(v) – For Valuing Shares, Property and Assets of the company under a Scheme of
Corporate Debt Restructuring
Section 230(3) and 232(2)(d) – For Valuation including Share swap ratio under a Scheme of
Compromise/Arrangement, a copy of Valuation Report by Expert, if any shall be accompanied
Section 232(3)(h) - 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
Section 236(2) – For Valuing Equity Shares held by Minority Shareholders
Section 260(2)(c) – For preparing Valuation report in respect of Shares and Assets to arrive at the Reserve
Price or Lease rent or Share Exchange Ratio for Company Administrator
Section 281(1)(a) – For Valuing Assets for submission of report by Company Liquidator
Section 305(2)(d) – For report on the Assets of the company for preparation of declaration of solvency
under voluntary winding up
Section 319(3)(b) – For Valuing the interest of any dissenting member of the transferor company who did
not vote in favour of the special resolution, as may be required by the Company Liquidator
Section 325(1)(b) – For valuation of annuities and future and contingent liabilities in winding up of
insolvent company

5. Registered Valuers (Draft Rules) – Methods of Valuation
I. Before adopting methods, decide Valuation Approach• Asset Approach
• Income Approach
• Market Approach
II. Valuer to consider following points while undertaking Valuation• Nature of the Business and the History of the Enterprise from its inception
• Economic outlook in general and outlook of the specific industry in particular
• Book Value of the stock and the Financial condition of the business
• Earning Capacity of the company
• Dividend-Paying Capacity of the company.
• Goodwill or other Intangible value
• Sales of the stock and the Size of the block of stock to be valued
• Market prices of stock of corporations engaged in the same or a similar line of business
• Contingent Liabilities or substantial legal issues, within India and Abroad, impacting business
• Nature of Instrument proposed to be issued, and nature of transaction contemplated by parties

6. Registered Valuers (Draft Rules) – Methods of Valuation
III. Registered Valuer shall make valuation of any asset in accordance with any one or more of the
following methodsa.
Net Asset Value Method (NAV)
b.
Market Price Method
c.
Yield Method / PECV Method
d.
Discounted Cash Flow Method (DCF)
e.
Comparable Companies Multiples Method (CCM)
f.
Comparable Transaction Multiples Method (CTM)
g.
Price of Recent Investment Method (PORI)
h.
Sum of the parts Valuation Method (SOTP)
i.
Liquidation Value
j.
Weighted Average Method
k.
Any other method accepted or notified by RBI, SEBI or Income Tax Authorities
l.
Any other method that valuer may deem fit provided adequate justification for use of suh method (and not
any of the above methods) is provided
IV. Registered Valuer shall make valuation of any asset as on the Valuation date and in accordance
with applicable standards, if any stipulated for this purpose.
V. Contents of Valuation report shall contain information as contained in Form 17.3

7. Registered Valuers (Forms) – Contents of Valuation report
1) Description of valuation engagement
(a) Name of the client:
(b) Other intended users:
(c) Purpose for valuation:
(2) Description of business/ asset / liability being valued
(a) Nature of business or asset / liability
(b) Legal background
(c) Financial aspects
(d) Tax matters
(3) Description of the information underlying the valuation
(a) Analysis of past results
(b) Budgets, with underlying assumptions
(c) Availability and quality of underlying data
(d) Review of budgets for plausibility
(e) Statement of responsibility for information received

8. Registered Valuers (Forms) – Contents of Valuation report
(4) Description of specific valuation of assets used in the business:
(a)Basis or bases of value
(b) Valuation Date
(c) Description of the procedures carried out
(d) Principles used in the valuation
(e) The valuation method used and reasoning
(f) Nature, scope and quality of underlying data and
(g) The extent of estimates and assumptions together with considerations underlying them
(5) Confirmation that the valuation has been undertaken in accordance with these Rules
(6) Further it is certified that valuation has been undertaken after taking into account relevant
conditions/regulations/rules/notifications, if any, issued by the Central/State Government(s) from time to time.
(i)
The valuation report must clearly state the significant assumptions upon which the value is based.
When reporting there may be instances, where there are confidential figures, these must be
summarized in a separate exhibit
(ii)
In his valuation report, the registered valuer must set out a clear value or range of values along with
the reasoning
(ii)
In case the valuer has been involved in valuing any part of the subject matter of valuation in the
past, the past valuation report(s) should be attached and referred to herein. In case a different
basis has been adopted for valuation (than adopted in the past), the valuer should justify the
reason for such differences

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