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CS Professional · Compliance Management, Audit and Due Diligence · Due Diligence

Arvind Pharma Ltd's audit committee appoints CS Neha to supervise due diligence on a target. As part of the process, a valuation of the target's shares is required under the Companies Act, 2013. Who must appoint the valuer for this purpose, and in whose absence does the power pass on?

The valuer is appointed by the audit committee, or in its absence by the Board of Directors. Section 247(1) vests the appointment power in these bodies, and the valuer must be a registered valuer with the prescribed qualifications and experience.

  1. AThe audit committee, or in its absence the Board of DirectorsCorrect
  2. BThe Board of Directors, or in its absence the shareholders
  3. CThe statutory auditor, or in its absence the audit committee
  4. DThe Company Secretary, or in its absence the Board

Explanation

Section 247(1) says valuation must be made by a registered valuer appointed by the audit committee or, in its absence, by the Board of Directors of the company. Option B reverses the order and brings in shareholders, which the section does not do.

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