Under Ibbi Code
As per rule 27 of the insolvency regulations “INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY RESOLUTION PROCESS FORCORPORATE PERSONS) REGULATIONS, 2016”
Regulation:27. Appointment of registered valuers.
The interim resolution professional shall within seven days of his appointment, appoint two registered valuers to determine the liquidation value of the corporate debtor in accordance with Regulation 35:
Provided that the following persons shall not be appointed as registered valuers:
- a relative of the interim resolution professional;
- a related party of the corporate debtor;
- an auditor of the corporate debtor in the five years preceding the insolvency commencement date; or
- a partner or director of the insolvency professional entity.
Regulation 35. Liquidation value.
- Liquidation value is the estimated realizable value of the assets of the corporate debtor if the corporate debtor were to be liquidated on the insolvency commencement date.
- Liquidation value shall be determined in the following manner:
- the two registered valuers appointed under Regulation 27 shall submit to the interim resolution professional or the resolution professional, as the case may be, an estimate of the liquidation value computed in accordance with internationally accepted valuation standards, after physical verification of the inventory and fixed assets of the corporate debtor;
- if in the opinion of the interim resolution professional or the resolution professional, as the case may be, the two estimates are significantly different, he may appoint another registered valuer who shall submit an estimate computed in the same manner; and
- the average of the two closest estimates shall be considered the liquidation value.
Under Companies Act
Section 39 (4) of Companies Act 2013 and Rule 12 (5) of Companies (Prospectus and allotment of Securities) Rules, 2014. A report of a registered valuer in respect of valuation of the consideration shall also be attached along with the contract as mentioned in sub-rule (3) and sub-rule (4).
Section 54 (1) of Companies Act 2013 and Rule 8- Issue of Sweat Equity of Companies (Share Capital and Debentures) Rules, 2014
Rule 8 (6) The sweat equity shares to be issued shall be valued at a price determinedby a registered valuer as the fair price giving justification for such valuation.
Rule 8 (7) The valuation of intellectual propertyrights or of know how or value additions for which sweat equity shares are to be issued, shall be carried out by a registered valuer, who shall providea proper report addressed to the Board of directors with justification for suchvaluation.
Section 62(1) (c) of Companies Act 2013 and Rule 13 (1)Provides thatthe price of shares to be issued on a preferential basis by a listed company shall be required tobe determined by the valuationreport of a registered valuer
Section 67(3) (b) of Companies Act 2013 and Rule 16 (1) (c)Provision of money by companyfor purchase of its own shares byemployees or by trustees for thebenefit of employees.-where shares of a company arenot listed on a recognized stockexchange, the valuation at whichshares are to be purchased shallbe made by a registered valuer;
Section 73 of Companies Act 2013 and Rule 2 (ix)Provided that if such bonds ordebentures are secured by thecharge of any assets referredto in Schedule III of the Act,excluding intangible assets,the amount of such bonds ordebentures shall not exceed themarket value of such assets asassessed by a registered valuer
Section 73(2) of Companies Act 2013 and Rule 6 – Creation of Security Provided that in the case ofdeposits which are secured bythe charge on the assets referredto in Schedule III of the Actexcluding intangible assets, theamount of such deposits and theinterest payable thereon shallnot exceed the market valueof such assets as assessed by aregistered valuer.
Section 192 (2)of Companies Act 2013 the notice for approval of theresolution by the company orholding company in generalmeeting under sub-section (1)shall include the particulars of thearrangement along with the valueof the assets involved in sucharrangement duly calculated by aregistered valuer
Section 230 (2) (c) (v)any scheme of corporate debtrestructuring consented to by notless than seventy-five per cent ofthe secured creditors in value,including a valuation report inrespect of the shares and theproperty and all assets, tangibleand intangible, movable andimmovable, of the company by aregistered valuer.
Section 232 (2) (d)Where an order has been made bythe Tribunal under sub-section(1), merging companies or thecompanies in respect of which adivision is proposed, shall also berequired to circulate the followingfor the meeting so ordered by theTribunal, namely:—
(d) the report of the expert withregard to valuation, if any;
Section 232 (3) (h) (B)where the transferor company is alisted company and the transfereecompany is an unlisted company,—
- the transferee company shallremain an unlisted companyuntil it becomes a listedcompany;
- if shareholders of the transferor company decide to opt out of the transferee company, provision shallbe made for payment of the value of shares held by them and other benefits in accordance with a predetermined price formula orafter a valuation is made, andthe arrangements under thisprovision may be made bythe Tribunal:
Provided that the amount ofpayment or valuation under thisclause for any share shall not be less than what has been specified by the Securities and Exchange Board under any regulations framed by it
Section 236 (2)The acquirer, person or group ofpersons under sub-section (1) shalloffer to the minority shareholders of the company for buying the equity shares held by such shareholders at a price determined on the basis of valuation by a registered valuer in accordance with such rules as may be prescribed.
Financial Reporting Purposes
- Purchase price allocation per requirement of Ind AS 103/ IFRS 3
- Impairment analyses for goodwill, other intangibles and long-lived assets per Ind AS 36/ IFRS 36
- Valuation of employee stock options and restricted stock awards per Ind AS 102/ IFRS 2
- Valuation of financial instruments encompassing derivatives, structured products, foreign currency convertible bonds and preferred stock
- Valuation of guarantees and indemnifications
- Valuation and structuring of contingent consideration
Regulatory Reporting Purposes
- Valuation for transactions between resident shareholder and non-resident shareholder and vice versa where the report is filed with RBI under FEMA regulations
- Valuation for submission to tax authorities in connection with withholding tax/capital gain tax
- Valuation for Transfer Pricing
Valuations of intangible assets (customer relationships, trademarks, technology, patents, databases, domain names, websites, brands, software , customer contracts, intellectual property, non-compete agreement and assembled workforceetc.) to assist in fund-raising, financial reporting purposes or internal strategic decision making.
Valuation of companies for shareholder, matrimonial and professional negligence disputes
Acting as an "Expert Witness" Hidden income, hidden assets or indications of fraud during valuation
We first develop a better understanding of your needs. For every job, we enter into brief discussions and review papers on a no-cost basis and only then agree on a fee or other mutually acceptable basis for charging.
An engagement letter is drafted for your approval that states what we will do when we will do it, and what we will charge. No one gets surprises.
We next appoint a Manager who we believe would be best suited and able to serve your needs, supported by a team. If at any time you are not happy we want to know.
We are well known as a significant and influential independent business dedicated to the valuation of private companies, intellectual property, intangible assets and indeed any asset which does not have a ready market value, uncluttered by the need or desire to offer tax advice or audit.