Emerging opportunities in Valuation.pptx

EMERGING OPPORTUNITIES IN
VALUATION
INMACS LIMITED PRIVATE & CONFIDENTIAL
CA Vaibhav Jain
B.Com (Hons), FCA, ACS, LLB, DISA (ICAI), MBF (ICAI), FAFD (ICAI),
CCIDT (ICAI), CCCA (ICAI), ID (MCA-IICA), Registered Valuer (SFA) (IBBI)
New Delhi | Gurugram | Chandigarh | Mumbai | Pune
Please feel free to reach out to me at
+91 97113 10004 | vaibhavjain@mehragoelco.com | vaibhavjain@inmacs.com

INMACS PRIVATE & CONFIDENTIAL
EMERGING OPPORTUNITIES IN VALUATION
 Valuation Basic Concepts and Places where Valuation is required
 Valuation Application for Issue and / or Transfer of Shares under: -
o FEMA
o Companies Act
o Income Tax Act & Other Acts
 Who can do Valuation under Different Acts
 New Methods of Valuation notified under Income Tax Act
 How to pitch clients, set up and enhance Valuation Practice
 Prerequisites for Successful Practice as a Valuation Expert

VALUATION BASIC CONCEPTS
AND PLACES WHERE VALUATION IS REQUIRED
What is Valuation and Where it is used?
 Valuation is the process of determining the current worth or fair market value of an asset, investment, business, or
financial instrument.
 The goal of valuation is to estimate the intrinsic value of the subject of interest, whether it be a company, real estate,
stocks, bonds, or other assets.
 Valuation is a crucial concept in finance and investment, and it is used for various purposes, such as
o Investment Decision-Making
o Financial Reporting
o Mergers and Acquisition
o Financial Planning
o Risk Assessment
o Legal and Regulatory Compliance

VALUATION BASIC CONCEPTS AND PLACES WHERE VALUATION
IS REQUIRED
Methods of Valuation

Why Valuation- where it is used?

Security Type
Valuation report from
Registered valuer
Valuation report
from Merchant
Banker
Valuation report from a
Chartered Accountant
Equity Instruments
a a a
Convertible instrument
and other security
a a a
VALUATION UNDER FOREIGN EXCHANGE MANAGEMENT ACT
(FEMA)
Exception: Overseas Direct Investment (ODI) / International Share Swap
 In case the investment being made exceeds USD 5 million – ONLY a SEBI
Banker
 In case investment is by way of swap or shares and foreign company is
Registered (Cat-1) Merchant Banker

VALUATION UNDER COMPANIES ACT 2013
Section Transaction
Valuation report
from Registered
valuer
Valuation report
from Merchant
Banker
Valuation report
from a Chartered
Accountant
Section 62(1)(c)
Preferential Issue
of Further Shares a r r
Section 192(2):- Non
Cash Transactions
Involving directors
Value of assets
involved in such
arrangements
a r r
Section 230(1), 230(3),
232(3)(h):-
Compromise or
Arrangements
Shares , Property
or Assets a r r
Section 232 - Mergers
and Amalgamations
Transferor
company a r r

VALUATION UNDER COMPANIES ACT 2013
Section Transaction
Valuation
report from
Registered
valuer
Valuation
report from
Merchant
Banker
Valuation
report from a
Chartered
Accountant
Section 236
Purchase of minority
shareholding a r r
Section 281:- Submission of
report by Company
Liquidator
Valuation of assets
a r r
Rule 8 of the Companies
(Share Capital and
Debentures) Rules,2014
Issue of Sweat Equity
Shares a r r
Rule 12(5) of the Companies
(Prospectus and Allotment of
Securities) Rules,2014
Allotment of
Shares(Not Being
Bonus Shares)
a r r

Transaction
Valuation report
from Registered
valuer
Valuation report
from Merchant
Banker
Valuation report
from a Chartered
Accountant
Power to compromise or make
arrangements with creditors and
members.
a r r
Corporate Debtor undergoing
Liquidation. a r r
Corporate Debtor undergoing Fast
Track Corporate Insolvency
Resolution Process.
a r r
Corporate Debtor undergoing
Voluntary Liquidation. a r r
Individual Guarantors to Corporate
Debtors and other individuals. a r r
VALUATION UNDER IBC, 2016

VALUATION UNDER
INCOME TAX ACT

Valuation of Shares and Securities in case of fresh issuance and transfer
of shares under Income Tax Act, 1961
Valuation of shares and securities u/s 56(2) (viib) (Applicable to company
issuing shares and securities)
• Where a private company receives, any consideration for issue of shares that exceeds the
FV of such shares, the aggregate consideration received for such shares as exceeds the FMV
of the shares shall be chargeable to income tax under income from other sources.
• FMV as on the valuation date for issuance of shares shall be the value as may be
determined in accordance with Rule 11UA(2) of Income Tax Rules, 1962; or as may be
substantiated by the company to the satisfaction of the AO, whichever is higher.
Valuation of shares and securities u/s 56(2)(x)(Applicable to recipient of shares
and securities)
• As per section 56(2)(x)(c) where a person receives any property other than immovable
property without consideration or for a consideration less than fair market value of such
property by an amount exceeding Rs. 50,000, the difference between fair market value of
property and consideration paid, shall be taxable in hands of recipient as income from
other source.

a) Quoted Shares & Securities;
b) Un-Quoted Equity Shares;
c) Un-Quoted Shares & Securities other than
Equity Shares;
i. fair market value shall be the price it
would fetch if sold in the open market on
the valuation date;
ii. In case purchase on the valuation date,
from a registered dealer, the invoice
value;
iii. in case any other mode report of
registered valuer* on the valuation date;
DETERMINATION OF FAIR MARKET VALUE [RULE 11UA]
Rule 11UA (1)
Jewellery
Rule 11UA (1) (a)
Archaeological collections,
Drawings, Paintings,
Sculptures or any work of Art
Rule 11UA (1) (b)
Shares and Securities
Rule 11UA (1) (c)
*Registered Valuer as registered under 34AB
of Wealth Tax Act

VALUATION OF QUOTED SHARES AND SECURITIES
Type of security Quoted Shares : Carried
through Recognized Stock
Exchange
Quoted Shares : Carried out
other than through
Recognized Stock Exchange
Quoted Shares : Carried out
other than through
Recognized Stock Exchange
Transaction NA If valuation date is trading day If valuation date is non-
trading day
Applicable Rule Rule 11UA(1)(c)(a)(i) Rule 11UA(1)(c)(a)(ii)(a) Rule 11UA(1)(c)(a)(ii)(b)
Fair Market Value Transaction Value as
recorded in stock exchange
Lowest price quoted on any
recognised stock exchange on
such valuation date
Lowest price quoted on any
recognised stock exchange on
trading day immediately
preceding from valuation date
Prescribed Valuer Not Prescribed Not Prescribed Not Prescribed
Rule 11UA (1) (c) (a)

VALUATION OF UNQUOTED SHARES AND SECURITIES
Type of security Unquoted Equity Shares Unquoted Equity Shares Unquoted Shares & Securities
other than Equity Shares
Transaction In case of fresh issuance of
shares
Any person receiving the share
or security
Applicable for all cases
Applicable Rule Section 56 (2) (viib) read with
Rule 11UA(2)
Section 56 (2) (x) read with
Rule 11UA(1)(c)(b)
Section 56 (2) (viib) and (x)
read with rule 11UA(1)(c)(c)
Fair Market Value Discounted Cash Flow
method (DCF) or book value
method at the option of
assesse
Book Value method Not prescribed
Prescribed Valuer • Merchant Banker for
Others.
• For Book Value not
prescribed (CA can
undertake)
Not Prescribed
(CA can undertake)
Merchant Banker or
Rule 11UA (1) (c) (b) & Rule 11UA (1) (c) (c)
 To be dealt separately in Upcoming Slides

Applicable
Rule
Section 56 (2)
(viib) read with
Rule
11UA(2)(A)(a)
Section 56 (2) (viib)
read with Rule
11UA(2)(A)(b)
Section 56 (2)
(viib) read with
Rule 11UA(2)(A)(c)
Section 56 (2)
(viib) read with
Rule 11UA(2)(A)(d)
Section 56 (2)
(viib) read with
Rule 11UA(2)(A)(e)
Fair Market
Value
Method
Net Asset Value
Method
Discounted Free
Cash Flow Method
Actual Issue Price 5 New Methods
(Explained Later in
this Presentation)
Actual Issue Price
Prescribed
Valuer
For Book Value
not prescribed
(CA can
undertake)
Merchant Banker Not Required Merchant Banker Not Required
Special
Condition
NA NA Allotment against
Funds received
from Recognised
Venture Capital
Fund
Allotment against
Funds received
from Notified
Entities
Rule 11UA (2) (A) – Unquoted Equity Shares – In Case of Fresh Issuance of Shares

NOTIFIED ENTITIES UNDER RULE 11UA(2)(A)(E)
[NOTIFICATION NO. 29/2023/F. NO. 370142/9/2023-TPL (PART-I)]
In exercise of the powers conferred by sub-clause (ii) of the first proviso to clause (viib)
of sub-section (2) of Section 56, the Central Government hereby notifies the following class
or classes of persons, forthe purposes of the said clause, namely:-
(i) Government and Government related investors such as central banks, sovereign wealth
funds, international or multilateral organizations or agencies including entities controlled by
the Government or where direct or indirect ownership of the Government is seventy-five
percent or more;
(ii) Banks or Entities involved in Insurance Business where such entity is subject to applicable
regulations in the country where it is established or incorporated or is a resident;
(iii) Any of the following entities, which is a resident of any country or specified territory
listed in Annexure, and such entity is subject to applicable regulations in the country where
it is established or incorporated or is a resident :––
(a) entities registered with Securities and Exchange Board of India as Category-I Foreign
PortfolioInvestors;
(b) endowment funds associated with a university, hospitals or charities;
(c) pension funds created or established under the law of the foreign country or specified
territory;
(d) Broad Based Pooled Investment Vehicle or fund where the number of investors in such
vehicle or fund is more than fifty and such fund is not a hedge fund or a fund which
employs diverse or complex trading strategies.
Name of Country / Specified Territory
1. Australia
2. Austria
3. Belgium
4. Canada
5. Czech Republic
6. Denmark
7. Finland
8. France
9. Germany
10. Iceland
11. Israel
12. Italy
13. Japan
14. Korea
15. New Zealand
16. Norway
17. Russia
18. Spain
19. Sweden
20. United Kingdom
21. United States

NEW METHODS OF VALUATION NOTIFIED UNDER
INCOME TAX ACT 1961
From 26th September 2023, As per rule 11UA (2)(A) the fair market value of unquoted equity shares for
the purposes of sub-clause (d) be determined by Merchant Banker, Where the consideration received
by the assessee is from a Non-Resident in accordance with any of following method
Comparable
company multiple
method:
• This approach
involves assessing a
company’s value by
comparing it to
similar companies
in the same
industry.
Probability weighted
expected return
method:
• A forward-looking
method that
considers various
scenarios and their
probabilities to
calculate the
expected return.
Option pricing
method:
• This method
applies financial
options theory to
determine the
value of an
investment,
considering its
inherent flexibility
and potential
upside.
Milestone analysis
method:
• Focusing on critical
company
milestones, this
method links
valuation to key
achievements such
as product
launches or market
expansions.
Replacement cost
method:
• This method
assesses an asset’s
value by calculating
the cost required to
replace it with a
similar asset,
accounting for
associated
expenses.

ILLUSTRATIVE PRESENTATION OF
NET ASSET VALUE METHOD
Rule 11UA(2)(a) states the fair market value of unquoted equity shares for the purposes of sub-clause (i) of clause (a) of Explanation to clause (viib) of sub-section (2) of
section 56 shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner under clause (a) or clause (b), at the option of the
assessee, namely:— the fair market value of unquoted equity shares = (A+B+C+D-L) x (PV)/(PE)
Amount (₹) Remarks
A book value of the assets in the balance-sheet as reduced by any amount of tax paid as deduction or collection at source or as
advance tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act and any amount shown in the
balance-sheet as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset;
B the price which the jewelry and artistic work would fetch if sold in the open market on the basis of the valuation certificate obtained
from a registered valuer
C fair market value of shares and securities as determined in the manner provided in this rule
D the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in
respect of the immovable property
L book value of liabilities shown in the balance-sheet, but not including the following amounts, namely:—
(i) the paid-up capital in respect of equity shares;
(ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been
declared before the date of transfer at a general body meeting of the company;
(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards
depreciation;
(iv) any amount representing provision for taxation, other than amount of tax paid as deduction or collection at source or as advance
tax payment as reduced by the amount of tax claimed as refund under the Income-tax Act, to the extent of the excess over the
tax payable with reference to the book profits in accordance with the law applicable thereto;
(v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities;
(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference
shares;
(PV) the paid-up value of such equity shares ₹10 per share
(PE) total amount of paid-up equity share capital as shown in the balance-sheet (on fully diluted basis)
(A+B+C+D-L) x (PV)/(PE) = ₹ _______ per equity share.

Rule 11UA (2) (B) – Unquoted Compulsorily Convertible
Preference Shares – In Case of Fresh Issuance of Shares
(B) the fair market value of compulsorily convertible preference shares for the
purposes of sub-clause (i) of clause (a) of the Explanation to clause (viib) of sub-
section (2) of section 56 shall be the value, on the valuation date, as
determined-
(i) in accordance with the provisions of sub-clause (b), sub-clause (c), or
sub-clause (e) of clause (A), at the option of the assessee, or based on
the fair market value of unquoted equity shares determined in
accordance with sub-clause (a), sub-clause (b), sub-clause (c), or sub-
clause (e) of clause (A), at the option of the assessee, where such
consideration is received from a resident; and
(ii) in accordance with the provisions of sub-clauses (b) to (e) of clause
(A), at the option of the assessee, or based on the fair market value of
unquoted equity shares determined in accordance with sub-clauses
(a) to (e) of clause (A), at the option of the assessee, where such
consideration is received from a non-resident.
Section 56 (2) (viib)
read with
Applicable Rule
Fair Market Value
Method
Rule 11UA(2)(A)(a)
Net Asset Value
Method
Rule 11UA(2)(A)(b)
Discounted Free
Cash Flow Method
Rule 11UA(2)(A)(c)
Actual Issue Price -
Investment by
Venture Capital Fund
Rule 11UA(2)(A)(d)
5 New Methods
(Explained Earlier in
this Presentation)
Rule 11UA(2)(A)(e)
Actual Issue Price -
Investment from
Notified Countries

Rule 11UA (3) – Certain Conditions regarding Validity of
Report
(3) Where the date of valuation report by the merchant banker for the purposes
of sub-rule (2) is not more than ninety days prior to the date of issue of shares
which are the subject matter of valuation, such date may, at the option of the
assessee, be deemed to be the valuation date:
Provided that where such option is exercised under this sub-rule, the provisions
of clause (j) of rule 11U shall not apply.
Rule 11U(j) of the IT Rules
defines valuation date means the
date on which the property or
consideration, as the case may be,
is received by the taxpayer
Rule 11U (j) – Definition of
Valuation Date
Rule 11UA (4) – Certain Conditions regarding Validity of Report
(4) For the purposes of clause (A) or clause (B) of sub-rule (2), where the issue price of the shares exceeds the value of shares
as determined in accordance with -
(i) sub-clause (a) or sub-clause (b) of clause (A), for consideration received from a resident, by an amount not exceeding ten
per cent. of the valuation price, the issue price shall be deemed to be the fair market value of such shares;
(ii) sub-clause (a) or sub-clause (b) or sub-clause (d) of clause (A), for consideration received from a non- resident, by an
amount not exceeding ten per cent. of the valuation price, the issue price shall be deemed to be the fair market value of
such shares.
Explanation.—For the purposes of this sub-rule, 'issue price' means the consideration received by the company for one share.]

HOW TO PITCH YOUR CLIENTS
Pitching clients effectively is a crucial skill for anyone in business, sales, or entrepreneurship. Here are
some key steps and tips to help you create a compelling pitch:
Understand Your
Client Needs:
• Research your
clients thoroughly
to understand
their needs,
preferences, and
pain points.
Highlight Benefits,
Not Features
• Focus on the
benefits your
client will receive
rather than just
listing features.
Help them
visualize how your
solution will
positively impact
their business or
life.
Build Trust:
• Establish trust by
being authentic,
transparent, and
knowledgeable.
Share relevant
experiences,
credentials, or
success stories to
demonstrate your
credibility..
Timely Deliverables:
• consistent and
punctual delivery
of services, or
work within
specified
deadlines.
Meeting deadlines
is crucial for
maintaining trust,
fostering positive
relationships.
Follow Up:
• Express your
enthusiasm and
interest in moving
forward,and be
responsive to any
further inquiries..
Well, this is Theory… Lets get to know how to Actually do it…!!

HOW TO PITCH YOUR CLIENTS
Limitation: Independence and Disclosure of Interest
Model Code of Conduct - THE COMPANIES (REGISTERED VALUERS AND VALUATION ) RULES, 2017
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.
Effect:
• We cannot do Valuations of our Own Clients, and even for those
• Irregular Connects who engaged us for an occasional engagement in Last 5 years.
Solution Lies in Quid Pro Quo
Steps:
• Get requisite qualifications and registrations (as explained in Upcoming Section)
• Network with other CA Colleagues who are in practice, who can refer their Clients for Valuation Specific Jobs.
• Scale up with Word of Mouth and Quality Differentiation with Stiff Timelines and Quality Deliverables.

HOW TO SET UP VALUATION PRACTICE
Setting up a valuation practice in India involves several steps, and it's important to adhere to legal and
professional standards. Here is a general guide to help you get started:
Education and
Certification:
•Valuation
professionals for
Securities or Financial
Assets (SFA) typically
have backgrounds in
finance, accounting,
certifications such as
(CA), CS etc with 3
years or more Post
Qualification
Experience
Licencing
•Undergo 50 Hours
Training from RVO
and Pass relevant
exam conducted by
IBBI.
•Register as an
Individual Valuer with
RVO and IBBI
Build Association /
Network:
•Identify reliable IBBI
Valuers of other
Classes
•Land & Building
•Plant & Machinery
•Identify Income Tax
Registered Valuer
(34AB of Wealth Tax)
•Land & Building
•Cat 1 Merchant
Banker
Practice
•Obtain Engagements
/ Assignments
•Implement them with
Support of others in
Network
Scale Up Your Practice
•Registered Valuer
Entity need to be
Setup as a Company /
LLP
•Minimum 2 RV and
Preferably atleast one
of Each Class, as
Bigger Assignments
are normally received
by RVE

Please feel free to reach out to me at
+91 97113 10004 | vaibhavjain@mehragoelco.com | vaibhavjain@inmacs.com
CA Vaibhav Jain
B.Com (Hons), FCA, ACS, LLB, DISA (ICAI), MBF (ICAI), FAFD (ICAI),
CCIDT (ICAI), CCCA (ICAI), ID (MCA-IICA), Registered Valuer (SFA) (IBBI)
New Delhi | Gurugram | Chandigarh | Mumbai | Pune
WE ARE OPEN FOR QUESTIONS

VALUATION UNDER VARIOUS LAWS
Valuation Requirements under the laws and statutes covered in this
presentation are as under:-
i. The Companies Act 2013;
ii. The Insolvency and Bankruptcy Code, 2016 (IBC);
iii. Indian Accounting Standards (Ind AS);
iv. The Income Tax Act 1961;
v. Foreign Exchange Management Act (FEMA); and
vi. Securities and Exchange Board of India (SEBI) Regulations

VALUATION REQUIREMENTS UNDER COMPANIES ACT
The Companies Act 2013 require Valuation under the following Sections / Events: -
Serial
No.
Reference Activity Valuation Point
Valuation
report
1
Section 8 read with Rule 21 and
22 of the Companies
(Incorporation) Rules, 2014
Conversion of section –8 company to
public/ private ltd -Valuation of
assets of a Section 8 Company when
it is to be converted into any other
type of company
Before filing for such
conversion
Registered
Valuer
2
Section 39 read with Rule 12(5)
of the Companies (Prospectus
and Allotment of Securities)
Rules, 2014
Issue of shares for consideration
other than cash
- requirement for valuation of the
consideration
When filing
the return
of allotment for issue of
shares for consideration
other than cash
Registered
Valuer
3
of the Companies (Share
Capital) Rules, 2014
Fair price justification for issue of
sweat equity shares
Before the
approval of issue of sweat
equity shares
Registered
Valuer

Serial
No.
Valuation
report
4
of the Companies (Share
Capital) Rules, 2014
Valuation of IP / know how acquired
by issue of sweat equity shares to be
valued
Before the
approval of issue of sweat
equity shares
Registered
Valuer
5
Section 62(1)
(c) read with Rule 13(1) of the
Companies (Share Capital and
Debentures) Rules, 2014
Share issue (other than rights and
ESOP)
Before pricing the issue
Registered
Valuer
6
Section 67(3) read with Rule
16(1)(c) of the Companies
(Share Capital and Debentures)
Rules, 2014
Determination of price of issue by an
unlisted entity when shares are
issued to employees
/ trust to which the company is
providing loan for such purchase
Before the approval of the
transaction
Registered
Valuer

Serial
No.
Valuation
report
7
Section 73 read with Rule 2(ix)
of the Companies (Acceptance
of Deposits) Rules, 2014
To determine that bonds /
debentures issued are secured (and
hence not a deposit), valuation of
the assets provided as security
Before the issue of such
bonds / debentures
Registered
Valuer
8 Section 192(2)
Non-cash transaction involving
directors - requirement to value the
assets
Before effecting approval for
the transaction to be
executed.
Registered
Valuer
9
Section 230(2) and
Section 230(3)
Filing of a compromise or
arrangement amongst creditors /
shareholders
Before filing of the
application.
Registered
Valuer

Serial
No.
Valuation
report
10 Section 232
Mergers and amalgamations
When Board
places their report to the
members
Registered
Valuer
11 Section 236
Acquisition of minority stake by
those holding 90% or more
Before making an offer for buyout
of the shares from the minority
holders
Registered
Valuer
12 Section 281(1)(a)
Valuation of assets at the time of
winding up of a company
Once the
liquidator is appointed
Registered
Valuer

VALUATION REQUIREMENTS UNDER IBC
Insolvency and Bankruptcy Code, 2016 require Valuation under the following Sections / Events: -
Serial
No.
Valuation
report
1
Regulation 27 read with
Regulation 35 of the IBBI
(Insolvency Resolution Process
for Corporate Persons)
Regulations, 2016
Valuation by two registered valuers to be
appointed by the RP
Once the
company is placed into
CIRP
Registered
Valuer
2
Regulation 35 of the IBBI
(Insolvency Resolution Process
for Corporate Persons)
Regulations, 2016
A third valuer's valuation when the RP is
not satisfied with the two valuation
reports and where the variance between
these values is significant
If the RP determines this
is required after the first
two valuer's reports are
received by him.
Registered
Valuer
3
Regulation 35 of IBBI
(Liquidation Process)
Regulations, 2016
Valuation of assets when a company is
placed under liquidation, if the liquidator
decides that the valuation at the time of
CIRP may no longer be relevant
When the Liquidator
makes such an
assessment once the
liquidator is appointed
Registered
Valuer

VALUATION REQUIREMENTS UNDER IBC
Insolvency and Bankruptcy Code, 2016 require Valuation under the following Sections / Events: -
Serial
No.
Valuation
report
4
Section 59(3)(b)
(ii) of IBC, 2016 and Regulation
3 of IBBI (Voluntary Liquidation
Process) Regulations, 2017
Valuation of assets of a company going in
for voluntary liquidation
Once the company has
resolved to place the
company into voluntary
liquidation
Registered
Valuer
5 Section 46 (2)
Valuation of the Undervalued
Transactions
When the RP has
identified undervalued
transactions and there is
a need for valuation
thereof
Registered
Valuer
6
Regulation 34 of the IBBI (Fast
Track Insolvency Resolution
Process for Corporate Persons)
Regulations, 2017
Ascertainment of Fair value and
liquidation value of the Assets of the
Corporate Debtor.
Once the fast- track
insolvency process
commences
Registered
Valuer

VALUATION REQUIREMENTS UNDER INDIAN ACCOUNTING
STANDARDS (IND AS)
Indian Accounting Standards (Ind AS) require Valuation under the following Sections / Events: -
Serial
No.
Valuation
report
1
Ind AS 16 - Property, Plant and
Equipment
Revaluation of PPE
Period end when
impairment indicators
are available
Not
Specified
2
Ind AS 109 - Financial
Instruments
Fair valuation of unlisted
investments held as FVTPL or FVTOCI
Period end when
are available
Not
Specified
3
Ind AS 40 -
Investment Property
Fair valuation of investment properties for
disclosure in financials
Year end
Not
Specified
4
Ind AS 36 -
Impairment of Assets Fair valuation for impairment testing
Period end when
are available
Not
Specified

STANDARDS (IND AS)
Serial
No.
Valuation
report
5
Ind AS 102 - Share Based
Payments
ESOP / SAR
accounting
At the time of option
grant
Not
Specified
6
Ind AS 102 - Share Based
Payments
ESOP with performance criteria affecting
the option price / SAR accounting
Period end when
are available
Not
Specified
7
Ind AS 103 - Business
Combinations Accounting for Business Combination At the time of acquisition
Not
Specified
8
Ind AS 105 - Non- current
Assets held for Sale and
Discontinued Operations
Non-Current Assets held for disposal
At the time of
classification
Not
Specified

STANDARDS (IND AS)
Serial
No.
Valuation
report
9 Ind AS 102 - Share Based Payments
ESOP / SAR
accounting At the time of option grant Not Specified
10 Ind AS 102 - Share Based Payments
ESOP with performance criteria
affecting the option price / SAR
accounting
Period end when impairment
indicators are available Not Specified
11
Ind AS 103 - Business Combinations Accounting for Business
Combination
At the time of acquisition Not Specified
12
Ind AS 105 - Non- current Assets
held for Sale and Discontinued
Operations
Non-Current Assets held for
disposal
At the time of classification Not Specified

STANDARDS (IND AS)
Serial
No.
Valuation
report
13
Ind AS 20 -
Accounting for Government Grants
and Disclosure
of Government Assistance
Government Grants
When non- monetary grants
are received
Not Specified
14
Ind AS 41 –
Agriculture Biological assets Period end Not Specified
Valuation Requirement under Ind AS do not require any specific valuer.
In terms of Judgement, a relevant Domain Expert can be chosen who may or may not be a valuer, though there is one
school of thought which says since Registered Valuer u/s 247 are available in Companies Act and IndAS Financials are
also governed by Companies Act, preference should be given to Registered Valuers.

VALUATION REQUIREMENTS UNDER INCOME TAX ACT, 1961
Income tax Act, 1961 require Valuation under the following Sections / Events: -
Serial
No.
Valuation
report
1
When there is a purchase
of shares in an unlisted
company
When there is a purchase of shares in an
unlisted company
At the time of the
transfer
CA
2
Section 50 CA read with
Rule 11UA
When there is a sale of shares in an unlisted
company
At the time of the
transfer
CA
3
Section 56(2) (viib) read
with Rule 11UA
When a company in which public are not
substantially interested issues shares at a
premium.
At the time of issue
NAV – CA
Others – MB
4
Section 17 read
with rule 3(8)
When ESOP shares in unlisted company is
exercised - for determination of perquisite
value by issuing company.
At the time
of exercise of options
(reports are valid for a
period of 180 days)
NAV – CA
Others – MB

VALUATION REQUIREMENTS UNDER INCOME TAX ACT, 1961
Income tax Act, 1961 require Valuation under the following Sections / Events: -
Serial
No.
Valuation
report
5
Section 92 and
93
For determining arm’s length pricing, if
and when required
At the time of
contracting the
transaction
NAV – CA
Others – MB
6
Section 50B and Rule
11UAE
When a slump sale is effected, to determine
the fair value of the slump sales
At the time of effecting
the slump sale
NAV – CA
Others – MB
7
Section 115WC and Rule
40C
Valuation of specified security or sweat equity
share being a share in the company
At the date on which
the option
vests with the
employee
MB
8
Section 115WC and Rule
40D
Valuation of specified security not being an
equity share in the company
At the date on which
the option
vests with the
employee
MB

VALUATION REQUIREMENTS UNDER SECURITIES AND
EXCHANGE BOARD OF INDIA (SEBI) REGULATIONS
Securities and Exchange Board of India (SEBI) Regulations require Valuation under the following Sections / Events: -
Serial
No.
Law Reference Activity Valuation Point
Valuation
report
1 SEBI (Listing Obligations
and Disclosure
Requirement)
Regulations 2015
Regulation 87C -
Valuation, Rating and
NAV disclosure
Quarterly For NAV in case of an
issuer whose security
receipts are listed
on a stock exchange
Registered
Valuer
2 SEBI (Substantial
Acquisition of Shares
and Takeovers)
Regulations, 2011
Regulation 8
(16) - Offer Price
Direct acquisition
effected under SEBI
Takeover Code - in
determining the offer
price, one of the
criteria when the
shares are not
frequently traded
At the time of open
offer where the direct
acquisition is of an
entity where shares
are not frequently
traded
Registered
Valuer

Serial
No.
Valuation
report
3 SEBI (Issue of Capital
and Disclosure
Requirements)
Regulations, 2018
Regulation 158(6)-
Preferential Issue
Preferential issue –
conversion of debt
into equity under
strategic debt
restructuring scheme
At the time of
determination of
conversion price in
case of conversion of
debt into equity under
strategic debt
restructuring scheme
Registered
Valuer
and Disclosure
Requirements)
Regulations, 2018
Regulation 163(3)-
Disclosures to
Shareholders
In case of issuance of
specified securities
on a preferential
basis for
consideration other
than cash
At the time of issuance
of specified securities
on a preferential basis
for consideration
other than cash.
Registered
Valuer

Serial
No.
Valuation
report
and Disclosure
Requirements)
Regulations, 2018
Regulation 165-
Pricing of
Infrequently
Traded Share
Pricing of the
infrequently traded
shares
At the time of pricing
of shares of an issuer which
are not frequently traded in line
with the requirements of
Regulation 165 of the SEBI (ICDR)
Regulations, 2018
Registered
Valuer
6 SEBI (Infrastructure
Investment Trusts)
Regulations, 2014
Regulation 21 (4)
-Valuation of
Assets
Annually For NAV publication within 2
months of year end
Registered
Valuer

Serial
No.
Valuation
report
Investment Trusts)
Regulations, 2014
Regulation 21 (5) -
Valuation of Assets
Half yearly For NAV publication within one
month of half year end
Registered
Valuer
Investment Trusts)
Regulations, 2014
Regulation 21 (8) -
Valuation of Assets
For purchase of
any project
At the time of transaction Registered
Valuer
Investment Trusts)
Regulations, 2014
Regulation 21 (8) -
Valuation of Assets
For sale of any
project
Valuer

Serial
No.
Valuation
report
Investment Trusts)
Regulations, 2014
Regulation 21 (7) -
Valuation of Assets
When public issue is
proposed (except
bonus issue)
When the issue is proposed
to be made
Registered
Valuer
11 SEBI (Real Estate
Investment Trusts)
Regulations, 2014
Regulation 21 (4) -
Valuation of Assets
Annually For NAV publication within 3
months of year end
Registered
Valuer
Investment Trusts)
Regulations, 2014
Regulation 21 (5) -
Valuation of Assets
Half yearly For NAV publication within
forty- five days from the
date of end of such half year.
Registered
Valuer

Serial
No.
Valuation
report
13 SEBI (Real
Estate Investment
Trusts) Regulations,
2014
Regulation 21 (8) -
Valuation of Assets
For purchase of any
project
Valuer
14 SEBI (Real
Estate Investment
Trusts) Regulations,
2014
Regulation 21 (8) -
Valuation of Assets
For sale of any
project
Valuer
Investment Trusts)
Regulations, 2014
Regulation 21 (7) -
Valuation of Assets
When public issue is
proposed (except
bonus issue)
When the issue is proposed
to be made
Registered
Valuer

Serial
No.
Valuation
report
16 SEBI (Alternative
Investment Funds)
Regulations, 2012
Regulation 23 -
Valuation
Half yearly In case of investments of
Category I and Category II
Alternative Investment Funds
Registered
Valuer
17 SEBI (Delisting of
Equity Shares)
Regulations, 2021
Regulation 33 –
Delisting of equity
shares of a company
by a recognised stock
exchange
Determination of fair value of the
delisted equity shares, in case
where equity shares
are delisted by a recognized stock
exchange
At the time of delisting of
equity shares of a company by a
stock exchange
Registered
Valuer
18 SEBI (Share Based
Employee Benefits
and Sweat Equity)
Regulations, 2021
Regulation 34 -
Valuation
Valuation of the know-how or
intellectual property
rights or value addition
Before the approval of issue of
sweat equity shares, valuation
of the know- how or intellectual
property rights or value
addition has to be done
Registered
Valuer

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