Valuation by registered valuers

Regulation 10 of Takeover Code

(1)

Where a valuation is required to be made in respect of any property, stocks, shares , debenture, 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 may be prescribed a person having such qualifications and experience, registered as a valuer and being a member of an organisation recognised, in such manner, on such terms and conditions as may be prescribedand appointed by the audit committee or in its absence by the Board of Directors of that company.

(2)

The valuer appointed under sub-section ( 1 ) shall,—

(a)

make an impartial, true and fair valuation of any assets which may be required to be valued;

(b)

exercise due diligence while performing the functions as valuer;

(c)

make the valuation in accordance with such rules as may be prescribed; and

(d)

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 three years prior to his appointment as valuer or three years after the valuation of assets was conducted by him during or after the valuation of assets.

(3)

If a valuer contravenes the provisions of this section or the rules made thereunder, the valuer shall be liable to a penalty of fifty thousand rupees punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees :

Proviso

Provided that if the valuer has contravened such provisions with the intention to defraud the company or its members , he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

(4)

Where a valuer has been convicted under sub-section ( 3 ), he shall be liable to—

(i)

refund the remuneration received by him to the company; and

(ii)

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 report.

Notes, amendments & references (7)

IBBI have listed the provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 that requires Valuation from a Registered Valuer vide its Circular dated 16.09.2019. To view the Circular, Click Here .

a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed Substituted vide the Companies (Removal of Difficulties) Second Order, 2017. dated 23.10.2017. To view the Order , Click Here

Refer rule 3 to 17 of The Companies (Registered Valuers and Valuation) Rules, 2017. To view the rule, Click Here

and appointed by the audit committee or in its absence by the Board of Directors Board of Directors , in relation to a company, means the collective body of the directors of the company

Refer rule 18 and 19 of The Companies (Registered Valuers and Valuation) Rules, 2017. To view the rule, Click Here

Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018 effective from 09.02.2018. To view the notification, Click Here

Substituted vide Companies (Amendment) Act, 2020 dated 28.09.2020. To view the notification, Click Here and Notified vide Commencement Notification dated 24.03.2021. To view the notification, Click Here