Companies Act, 2013 has mandated some instances where valuations need to be carried out by a Registered Valuer (yet to be notified). Further as per draft rules, valuation of stock, shares, debentures, securities and goodwill must be done by financial valuer only, who can either be SEBI registered Merchant Banker or Chartered Account, Company Secretary, Cost Accountant, retired member of Indian Corporate Law service having continuous post qualification experience of minimum 5 years.
Some instances where valuation is mandated under the Companies Act, 2013:
•For Valuing further Issue of Equity Shares & 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 accompanied
• 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 Valuing Equity Shares held by Minority Shareholders
• 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
• For Valuing Assets for submission of report by Company Liquidator
*Till the time provisions of Registered Valuer get enacted, Section 62 of Companies Act, 2013 regarding further issue of share capital read with explanation to rule no 12 of the (Companies Prospectus and allotment of Securities) Rules 2014 state that till then valuation of shares may be done through Merchant Banker or Chartered Accountant having experience of more than 10 years.
The price of shares to be issued on preferential basis shall not be less than the price determined on the basis of the valuation report.
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