Companies (Registered Valuers and Valuation) Rules,
2017[1] [18th October,
2017] In exercise of
the powers conferred by Section 247 read with Sections 458, 459 and 469 of the
Companies Act, 2013 (18 of 2013), the Central Government hereby makes the
following rules, namely Chapter I PRELIMINARY (1) These rules may
be called the Companies
(Registered Valuers and Valuation) Rules, 2017. (2) They shall come
into force on the date of their publication in the Official Gazette. [3][(3) These
rules shall apply for valuation in respect of any property, stocks, shares,
debentures, securities or goodwill or any other assets or net worth of a
company or its liabilities under the provision of the Act or these rules. Explanation. It is hereby clarified that conduct of valuation under any other
law other than the Act or these rules by any person shall not be affected by
virtue of coming into effect of these rules.] (1) In these rules,
unless the context otherwise requires (a) “Act” means the
Companies Act, 2013 (18 of 2013); (b) “authority”
means an authority specified by the Central Government under Section 458 of the
Companies Act, 2013, to perform the functions under these rules; (c) “asset class”
means 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; (d) “certificate of
recognition” means the certificate of recognition granted to a registered
valuers organisation under sub-rule (5) of Rule 13 and the term “recognition”
shall be construed accordingly; (e) “certificate of
registration” means the certificate of registration granted to a valuer under
sub-rule (6) of Rule 6 and the term “registration” shall be construed
accordingly; (f) “partnership
entity” means a partnership firm registered under the Indian Partnership Act,
1932 (9 of 1932) or a limited liability partnership registered under the
Limited Liability Partnership Act, 2008 (6 of 2009); (g) “Annexure”
means an annexure to these rules; (h) “registered
valuers organisation” means a registered valuers organisation recognised under
sub-rule (5) of Rule 13; (i) “valuation
standards” means the standards on valuation referred to in Rule 18; and (j) “valuer” means
a person registered with the authority in accordance with these rules and the
term “registered valuer” shall be construed accordingly. (2) Words and
expressions used but not defined in these rules, and defined in the Act or in
the Companies (Specification of Definitions Details) Rules, 2014, shall have
the same meanings respectively assigned to them in the Act or in the said
rules. Chapter II ELIGIBILITY, QUALIFICATIONS AND REGISTRATION
OF VALUERS (1) A person shall
be eligible to be a registered valuer if he (a) is a valuer
member of a registered valuers organisation; Explanation. For the purposes of this clause, “a valuer member” is a member
of a registered valuers organisation who possesses the requisite educational
qualifications and experience for being registered as a valuer; (b) is recommended
by the registered valuers organisation of which he is a valuer member for
registration as a valuer; (c) has passed the
valuation examination under Rule 5 within three years preceding the date of
making an application for registration under Rule 6; (d) possesses the
qualifications and experience as specified in Rule 4; (e) is not a minor; (f) has not been
declared to be of unsound mind; (g) is not an
undischarged bankrupt, or has not applied to be adjudicated as a bankrupt; (h) is a person
resident in India; Explanation. For the purposes of these rules ‘person resident in India’ shall
have the same meaning as defined in clause (v) of Section 2 of the Foreign Exchange Management Act, 1999 (42
of 1999) as far as it is applicable to an individual; (i) has not been
convicted by any competent court for an offence punishable with imprisonment
for a term exceeding six months or for an offence involving moral turpitude,
and a period of five years has not elapsed from the date of expiry of the
sentence: Provided that
if a person has been convicted of any offence and sentenced in respect thereof
to imprisonment for a period of seven years or more, he shall not be eligible
to be registered; (j) has not been
levied a penalty under Section 271-J of Income Tax Act, 1961 (43 of 1961) and
time limit for filing appeal before Commissioner of Income Tax (Appeals) or
Income Tax Appellate Tribunal, as the case may be has expired, or such penalty
has been confirmed by Income Tax Appellate Tribunal, and five years have not
elapsed after levy of such penalty; and (k) is a fit and
proper person: Explanation. For determining whether an individual is a fit and proper person
under these rules, the authority may take account of any relevant
consideration, including but not limited to the following criteria (i) integrity,
reputation and character, (ii) absence of convictions
and restraint orders, and (iii) competence and
financial solvency. (2) No partnership
entity or company shall be eligible to be a registered valuer if (a) it has been set
up for objects other than for rendering professional or financial services,
including valuation services and that in the case of a company, it is [4][*
* *] a subsidiary, joint venture or associate of another company or body
corporate; (b) it is
undergoing an insolvency resolution or is an undischarged bankrupt; (c) all the
partners or directors, as the case may be, are not ineligible under clauses (c), (d), (e), [5][(f),] (g), (h), (i), (j) and (k) of
sub-rule (1); (d) three or all
the partners or directors, whichever is lower, of the partnership entity or
company, as the case may be, are not registered valuers; or (e) none of its
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. An individual
shall have the following qualifications and experience to be eligible for
registration under Rule 3, namely (a) postgraduate
degree or postgraduate diploma, in the specified discipline, from a University
or Institute established, recognised or incorporated by law in India and at
least three years of experience in the specified discipline thereafter; or (b) 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
five years of experience in the specified discipline thereafter; or (c) membership of a
professional institute established by an Act of Parliament enacted for the
purpose of regulation of a profession with at least three years' experience
after such membership [6][*
* *]. Explanation I. For the purposes of this clause the ‘specified 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 these rules. Explanation II. Qualifying education and experience [7][*
* *] for various asset classes, is given in an indicative manner in Annexure IV
of these rules. [8][Explanation III. For the purposes of this rule and Annexure IV,
‘equivalent’ shall mean professional and technical qualifications which are
recognised by the Ministry of Human Resources and Development as equivalent to
professional and technical degree.] (1) 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, and 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: Provided that
the autho rity may recognise an educational course conducted by a registered
valuers organisation before its recognition as adequate for the purpose of
appearing for valuation examination: Provided also
that the authority may recognise an examination conducted as part of a master's
or postgraduate degree course conducted by a University which is equivalent to
the valuation examination. (2) 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. (3) 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. (4) An individual
who passes the valuation examination, shall receive acknowledgement of passing
the examination. (5) An individual
may appear for the valuation examination any number of times. (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 five thousand rupees 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 ten thousand rupees in favour of the
authority. (3) The authority
shall examine the application, and may grant twenty one 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 twenty one days. (5) The authority
may require the applicant to appear, within twenty one days, before the
authority in person, or through its authorised representative for explanation
or clarifications required for processing the application. (6) If the
authority is satisfied, after such scrutiny, inspection or inquiry as it deems
necessary, that the applicant is eligible under these 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 sixty 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 forty five 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. (8) The applicant
shall submit an explanation as to why his/its 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 thirty days of receipt
of explanation. The
registration granted under Rule 6 shall be subject to the conditions that the
valuer shall (a) at all times
possess the eligibility and qualification and experience criteria as specified
under Rule 3 and Rule 4; (b) at all times
comply with the provisions of the Act, these rules and the bye-laws or internal
regulations, as the case may be, of the respective registered valuers
organisation; (c) 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; (d) take prior
permission of the authority for shifting his/its membership from one registered
valuers organisation to another; (e) take adequate
steps for redressal of grievances; (f) maintain
records of each assignment undertaken by him for at least three years from the
completion of such assignment; (g) comply with the
Code of Conduct (as per Annexure I of these rules) of the registered valuers
organisation of which he is a member; (h) 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; (i) 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; (j) 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; (k) 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; (l) 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; and (m) comply with
such other conditions as may be imposed by the authority. (1) The registered
valuer shall, while conducting a valuation, comply with the valuation standards
as notified or modified under Rule 18: Provided that
until the valuation standards are notified or modified by the Central
Government, a valuer shall make valuations as per (a) internationally
accepted valuation standards; (b) valuation
standards adopted by any registered valuers organisation. (2) 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 which case he
shall fully disclose the details of the inputs and the particulars etc. of the
other registered valuer in his 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. (3) The valuer
shall, in his report, state the following (a) background
information of the asset being valued; (b) purpose of
valuation and appointing authority; (c) identity of the
valuer and any other experts involved in the valuation; (d) disclosure of
valuer interest or conflict, if any; (e) date of
appointment, valuation date and date of report; (f) inspections
and/or investigations undertaken; (g) nature and
sources of the information used or relied upon; (h) procedures adopted
in carrying out the valuation and valuation standards followed; (i) restrictions on
use of the report, if any; (j) major factors
that were taken into account during the valuation; (k) conclusion; and (l) 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. (1) 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. (2) 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. (3) 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. A valuer shall
conduct valuation required under the Act as per these rules [9][*
* *]. Any person who
may be rendering valuation services under the Act, on the date of commencement
of these rules, may continue to render valuation services without a certificate
of registration under these rules up to [10][31st
January, 2019]: Provided that
if a company has appointed any valuer before such date and the valuation or any
part of it has not been completed before [11][31st
January, 2019], the valuer shall complete such valuation or such part within
three months thereafter. [12][* * *] Chapter III RECOGNITION OF REGISTERED VALUERS
ORGANISATIONS (1) An organisation
that meets requirements under sub-rule (2) may be recognised as a registered
valuers organisation for valuation of a specific asset class or asset classes
if (i) it has been
registered under Section 25 of the Companies Act, 1956 (1 of 1956) or Section 8
of the Companies Act, 2013 (18 of 2013) with the sole object of dealing with
matters relating to regulation of valuers of an asset class or asset classes
and has in its bye-laws the requirements specified in Annexure III; (ii) [13][it is a
professional institute] established by an Act of Parliament enacted for the
purpose of regulation of a profession; Provided that,
subject to sub-rule (3), the following organisations may also be recognised as
a registered valuers organisation for valuation of a specific asset class or
asset classes, namely (a) an organisation
registered as a society under the Societies Registration Act, 1860 (21 of 1860)
or any relevant state law, or; (b) an organisation
set up as a trust governed by the Indian Trust Act, 1882 (2 of 1882). (2) The
organisation referred to in sub-rule (1) shall be recognised if it (a) conducts
educational courses in valuation, in accordance with the syllabus determined by
the authority, under Rule 5, for individuals who may be its valuers members,
and delivered in class room or through distance education modules and which
includes practical training; (b) grants
membership or certificate of practice to individuals, who possess the
qualifications and experience as specified in Rule 4, in respect of valuation
of asset class for which it is recognised as a registered valuers organisation; (c) conducts
training for the individual members before a certificate of practice is issued
to them; (d) lays down and
enforces a code of conduct for valuers who are its members, which includes all
the provisions specified in Annexure I; (e) provides for
continuing education of individuals who are its members; (f) monitors and
reviews the functioning, including quality of service, of valuers who are its
members; and (g) has a mechanism
to address grievances and conduct disciplinary proceedings against valuers who
are its members. (3) A registered
valuers organisation, being an entity under proviso to sub-rule (1), shall
convert into or register itself as a company under Section 8 of the Companies
Act, 2013 (18 of 2013), and include in its bye-laws the requirements specified
in Annexure III, within one year from the date of commencement of these rules. (1) An eligible
organisation which meets the conditions specified in Rule 12 may make an
application for recognition as a registered valuers organisation for asset
class or classes to the authority in Form D of the Annexure II along with a
non-refundable application fee of Rupees One lakh in favour of the authority. (2) The authority
shall examine the application, and may grant twenty one days to the applicant
to remove the deficiencies, if any, in the application. (3) The authority
may require the applicant to submit additional documents or clarification within
twenty one days. (4) The authority
may require the applicant to appear, within twenty one days, before the
authority through its authorised representative for explanation or
clarifications required for processing the application. (5) If the
authority is satisfied, after such scrutiny, inspection or inquiry as it deems
necessary that the applicant is eligible under these rules, it may grant a
certificate of recognition as a registered valuers organisation in Form E of
Annexure II. (6) If, after
considering an application made under sub-rule (1), the authority is of the
prima facie opinion that recognition ought not to be granted, it shall
communicate the reasons for forming such an opinion within forty five days of
receipt of the application, excluding the time given by it for removing the
deficiencies, presenting additional documents or clarifications, or appearing
through authorised representative, as the case may be. (7) The applicant
shall submit an explanation as to why its application should be accepted within
fifteen days of the receipt of the communication under sub-rule (6), to enable
the authority to form a final opinion. (8) After
considering the explanation, if any, given by the applicant under sub-rule (7),
the authority shall either (a) accept the
application and grant the certificate of recognition; or (b) reject the
application by an order, giving reasons thereof. (9) The authority
shall communicate its decision to the applicant within thirty days of receipt
of explanation. The recognition
granted under Rule 13 shall be subject to the conditions that the registered
valuers organisation shall (a) at all times
continue to satisfy the eligibility requirements specified under Rule 12; (b) maintain a
register of members who are registered valuers, which shall be publicly
available; (c) admits only
individuals who possess the educational qualifications and experience
requirements, in accordance with Rule 4 and as specified in its recognition
certificate, as members; (d) make such
reports to the authority as may be required by it; (e) comply with any
directions, including with regard to course to be conducted by valuation
organisation under clause (a)
of sub-rule (2) of Rule 12, issued by the authority; (f) be converted or
registered as company under Section 8 of the Act, with governance structure and
bye-laws specified in Annexure III, within a period of [14][two
years] from the date of commencement of these rules if it is an organisation
referred to in proviso to sub-rule (1) of Rule 12; (g) shall have the
governance structure and incorporate in its bye-laws the requirements specified
in Annexure III within one year of commencement of these rules if it is an
organisation referred to in clause (i)
of sub-rule (1) of Rule 12 and existing on the date of commencement of these
rules; (h) display on its
website, the status and specified details of every registered valuer being its
valuer members including action under Rule 17 being taken against him; and (i) comply with
such other conditions as may be specified by authority. Chapter IV CANCELLATION OR SUSPENSION OF CERTIFICATE
OF REGISTRATION OR RECOGNITION The authority
may cancel or suspend the registration of a valuer or recognition of a
registered valuers organisation for violation of the provisions of the Act, any
other law allowing him to perform valuation, these rules or any condition of
registration or recognition, as the case may be in the manner specified in Rule
17. A complaint may
be filed against a registered valuer or registered valuers organisation before
the authority in person or by post or courier along with a non-refundable fees
of rupees one thousand in favour of the authority and the authority shall
examine the complaint and take such necessary action as it deems fit: Provided that
in case of a complaint against a registered valuer, who is a partner of a
partnership entity or director of a company, the authority may refer the
complaint to the relevant registered valuers organisation and such organisation
shall handle the complaint in accordance with its bye-laws. (1) Based on the
findings of an inspection or investigation, or a complaint received or on
material otherwise available on record, if the authorised officer is of the
prima facie opinion that sufficient cause exists to cancel or suspend the
registration of a valuer or cancel or suspend the recognition of a registered
valuers organisation, it shall issue a show-cause notice to the valuer or
registered valuers organisation: Provided that
in case of an organisation referred to in clause (ii) of sub-rule (1) of Rule 12 which has been granted
recognition, the authorised officer shall, instead of carrying out inspection
or investigation, seek the information required from the registered valuers
organisation within the time specified therein and in the case of a default,
give one more opportunity to provide the information within specified time
failing which or in the absence of sufficient or satisfactory information
provided, either initiate the process under this rule or refer the matter to
the Central Government for appropriate directions. (2) The show-cause
notice shall be in writing and shall state (a) the provisions
of the Act and rules under which it has been issued; (b) the details of
the alleged facts; (c) the details of
the evidence in support of the alleged facts; (d) the provisions
of the Act or rules or certificate of registration or recognition allegedly
violated, or the manner in which the public interest has allegedly been
affected; (e) the actions or
directions that the authority proposes to take or issue if the allegations are
established; (f) the manner in
which the person is required to respond to the show-cause notice; (g) consequences of
failure to respond to the show-cause notice within the given time; and (h) procedure to be
followed for disposal of the show-cause notice. (3) The show-cause
notice shall be served in the following manner by (a) sending it to
the valuer or registered valuers organisation at its registered address by
registered post with acknowledgment due; or (b) an appropriate
electronic means to the e-mail address provided by the valuer or registered
valuers organisation to the authority. (4) The authorised
officer shall dispose of the show-cause notice by reasoned order in adherence
to the principles of natural justice. (5) The order in
disposal of a show-cause notice may provide for (a) no action; (b) warning; or (c) suspension or
cancellation of the registration or recognition; or (d) change in any
one or more partner or director or the governing board of the registered
valuers organisation. (6) An order passed
under sub-rule (5) cancelling the recognition of a registered valuers
organisation, shall specify the time within which its members may take
membership of another registered valuers organisation recognised for valuation
of relevant asset class without prejudice to their registration. (7) The order
passed under sub-rule (5) shall be issued to the concerned person immediately,
and published on the website of the authority. (8) The order
passed under sub-rule (5) shall not become effective until thirty days have
elapsed from the date of issue of the order unless stated otherwise. (9) Any person
aggrieved by an order of the authorised officer under sub-rule (5) may prefer
an appeal before the authority. Explanation. For the purposes of this rule, the authorised officer shall be
an officer as may be specified by the authority. Chapter V VALUATION STANDARDS The Central
Government shall notify and may modify (from time to time) the valuation
standards on the recommendations of the Committee set up under Rule 19. (1) The Central
Government may constitute a Committee to be known as “Committee to advise on
valuation matters” to make recommendations on formulation and laying down of
valuation standards and policies for compliance by companies and registered
valuers. (2) The Committee
shall comprise of (a) a Chairperson
who shall be a person of eminence and well versed in valuation, accountancy,
finance, business administration, business law, corporate law, economics; (b) one member
nominated by the Ministry of Corporate Affairs; (c) one member
nominated by the Insolvency and Bankruptcy Board of India; (d) one member
nominated by the Legislative Department; (e) up to four
members nominated by Central Government representing authorities which are
allowing valuations by registered valuers; (f) up to four
members who are representatives of registered valuers organisations, nominated
by Central Government; (g) up to two
members to represent industry and other stakeholder nominated by the Central
Government in consultation with the authority; [15][(h) Presidents of, the Institute of
Chartered Accountants of India, the Institute of Company Secretaries of India,
the Institute of Cost Accountants of India as ex-officio members.] (3) The Chairperson
and Members of the Committee shall have a tenure of three years and they shall
not have more than two tenures. Chapter VI MISCELLANEOUS Without
prejudice to any other liabilities where a person contravenes any of the
provision of these rules he shall be punishable in accordance with sub-section
(3) of Section 469 of the Act. If in any
report, certificate or other document required by, or for, the purposes of any
of the provisions of the Act or the rules made thereunder or these rules, any
person makes a statement, (a) which is false
in any material particulars, knowing it to be false; or (b) which omits any
material fact, knowing it to be material; he shall be
liable under Section 448 of the Act. ANNEXURE I MODEL CODE OF
CONDUCT FOR REGISTERED VALUERS [See clause (g) of Rule 7 and clause (d) of sub-rule (2) of Rule 12] Integrity and Fairness (1) A valuer shall,
in the conduct of his/its business, follow high standards of integrity and
fairness in all his/its dealings with his/its clients and other valuers. (2) A valuer shall
maintain integrity by being honest, straightforward, and forthright in all
professional relationships. (3) A valuer shall
endeavour to ensure that he/it provides true and adequate information and shall
not misrepresent any facts or situations. (4) A valuer shall
refrain from being involved in any action that would bring disrepute to the
profession. (5) A valuer shall
keep public interest foremost while delivering his services. Professional Competence and Due Care (6) A valuer shall
render at all times high standards of service, exercise due diligence, ensure
proper care and exercise independent professional judgment. (7) A valuer shall
carry out professional services in accordance with the relevant technical and
professional standards that may be specified from time to time. (8) A valuer shall
continuously maintain professional knowledge and skill to provide competent
professional service based on up-to-date developments in practice, prevailing
regulations/guidelines and techniques. (9) In the
preparation of a valuation report, the valuer shall not disclaim liability for
his/its expertise or deny his/its duty of care, except to the extent that the
assumptions are based on statements of fact provided by the company or its
auditors or consultants or information available in public domain and not
generated by the valuer. (10) A valuer shall
not carry out any instruction of the client insofar as they are incompatible
with the requirements of integrity, objectivity and independence. (11) A valuer shall
clearly state to his client the services that he would be competent to provide
and the services for which he would be relying on other valuers or
professionals or for which the client can have a separate arrangement with
other valuers. Independence and Disclosure of Interest (12) A valuer shall
act with objectivity in his/its professional dealings by ensuring that his/its
decisions are made without the presence of any bias, conflict of interest,
coercion, or undue influence of any party, whether directly connected to the
valuation assignment or not. (13) A valuer shall
not take up an assignment if he/it or any of his/its relatives or associates is
not independent in terms of association to the company. (14) A valuer shall
maintain complete independence in his/its professional relationships and shall
conduct the valuation independent of external influences. (15) A valuer shall
wherever necessary disclose to the clients, possible sources of conflicts of
duties and interests, while providing unbiased services. (16) A valuer shall
not deal in securities of any subject company after any time when he/it first
becomes aware of the possibility of his/its association with the valuation, and
in accordance with the Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015 or till the time the valuation report
becomes public, whichever is earlier. (17) A valuer shall
not indulge in “mandate snatching” or offering “convenience valuations” in
order to cater to a company or client's needs. (18) As an
independent valuer, the valuer shall not charge success fee. (19) In any fairness
opinion or independent expert opinion submitted by a valuer, if there has been
a prior engagement in an unconnected transaction, the valuer shall declare the
association with the company during the last five years. Confidentiality (20) A valuer shall
not use or divulge to other clients or any other party any confidential
information about the subject company, which has come to his/its knowledge
without proper and specific authority or unless there is a legal or
professional right or duty to disclose. Information Management (21) A valuer shall
ensure that he/it maintains written contemporaneous records for any decision
taken, the reasons for taking the decision, and the information and evidence in
support of such decision. This shall be maintained so as to sufficiently enable
a reasonable person to take a view on the appropriateness of his/its decisions
and actions. (22) A valuer shall
appear, cooperate and be available for inspections and investigations carried
out by the authority, any person authorised by the authority, the registered
valuers organisation with which he/it is registered or any other statutory
regulatory body. (23) A valuer shall
provide all information and records as may be required by the authority, the
Tribunal, Appellate Tribunal, the registered valuers organisation with which
he/it is registered, or any other statutory regulatory body. (24) A valuer while
respecting the confidentiality of information acquired during the course of
performing professional services, shall maintain proper working papers for a
period of three years or such longer period as required in its contract for a
specific valuation, for production before a regulatory authority or for a peer
review. In the event of a pending case before the Tribunal or Appellate
Tribunal, the record shall be maintained till the disposal of the case. Gifts and hospitality (25) A valuer or
his/its relative shall not accept gifts or hospitality which undermines or
affects his independence as a valuer. Explanation. For the purposes of this code the term ‘relative’ shall have the
same meaning as defined in clause (77) of Section 2 of the Companies Act, 2013
(18 of 2013). (26) A valuer shall
not offer gifts or hospitality or a financial or any other advantage to a
public servant or any other person with a view to obtain or retain work for himself/itself,
or to obtain or retain an advantage in the conduct of profession for
himself/itself. Remuneration and Costs (27) A valuer shall
provide services for remuneration which is charged in a transparent manner, is
a reasonable reflection of the work necessarily and properly undertaken, and is
not inconsistent with the applicable rules. (28) A valuer shall
not accept any fees or charges other than those which are disclosed in a
written contract with the person to whom he would be rendering service. Occupation, employability and restrictions (29) A valuer shall
refrain from accepting too many assignments, if he/it is unlikely to be able to
devote adequate time to each of his/its assignments. (30) A valuer shall
not conduct business which in the opinion of the authority or the registered
valuer organisation discredits the profession. Forms [For Forms see Web-data] [1] Ministry of Corporate Affairs, Noti. No. G.S.R.
1316(E), dated October 18, 2017, published in the Gazette of India, Extra.,
Part II, Section 3(i), dated 18th October, 2017, pp. 38-70, No. 866 [2] Subs. for “Short title and commencement” by G.S.R.
1108(E), dt. 13-11-2018 (w.e.f. 13-11-2018). [3] Ins. by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f.
13-11-2018). [4] The word “not” omitted by G.S.R. 1108(E), dt.
13-11-2018 (w.e.f. 13-11-2018). [5] Ins. by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f.
13-11-2018). [6] Subs. for “and having qualification mentioned at
clause (a) or (b)” by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f. 13-11-2018). [7] The word “and examination or
training” omitted by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f.
13-11-2018). [8] Ins. by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f.
13-11-2018). [9] The word “and he may conduct valuation as per these rules
if required under any other law or by any other regulatory
authority” omitted by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f.
13-11-2018). [10] Subs. for “30th September, 2018” by G.S.R. 925(E),
dated 25-9-2018 (w.e.f. 26-9-2018) [11] Subs. for “30th September, 2018” by G.S.R. 925(E),
dated 25-9-2018 (w.e.f. 26-9-2018) [12] Omitted by G.S.R. 1108(E), dt. 13-11-2018 (w.e.f.
13-11-2018). Prior to omission it read as: “Explanation.It is hereby clarified
that conduct of valuation by any person under any law other than the Act, or
these rules shall not be effected by virtue of coming into effect of these
rules unless the relevant other laws or other regulatory bodies require
valuation by such person in accordance with these rules in which case these
rules shall apply for such valuation also from the date specified under the
laws or by the regulatory bodies.” [13] Subs. for “a professional institute” by G.S.R.
1108(E), dt. 13-11-2018 (w.e.f. 13-11-2018). [14] Subs. for “one year” by G.S.R. 925(E), dated
25-9-2018 (w.e.f. 26-9-2018). [15] Ins. by G.S.R. 559(E), dated 13-6-2018 (w.e.f.
14-6-2018).Companies (Registered Valuers and Valuation)
Rules, 2017