3.5 Illustrative Limitations in a Valuation Report specific to Tangible Assets
i. Title deeds of properties
We have not verified the title deeds of the properties with the records of registrar’s office as this is beyond the agreed scope of our services stated in our engagement letter.
ii. Legal and other issues Our valuation is primarily from a business perspective and has not considered various legal and other corporate structures beyond the limited information made available. The scope of work has been limited both in terms of the areas of the business and operations which have been reviewed. There may be matters, other than those noted in this report, which might be relevant in the context of the transaction and which a wider scope might uncover.
iii. Sketch plans and photographs
The RV has endeavoured to visually identify the land boundaries and dimensions; however, he is not a surveyor. So, where there is a doubt about the precise position of the structures, it is recommended that a Licensed Surveyor be contacted.
iv. Latent defects affecting the Value
Physical condition in most instances has been determined by observation or indication by others. Any unknown conditions existing at the time of inspection could alter the value. No responsibility is assumed for latent defects of any nature whatsoever, which may affect value, or for any expertise required to disclose such conditions.
v. RVs observations are not a warranty
We have examined the assets described herein exclusively for the purposes of identification and description of the property. The RV’s observations and reporting of the subject improvements are for the valuation process and purposes only and should not be considered as a warranty of any component of the property. This valuation assumes unless otherwise specifically stated, that the subject is structurally sound and all components are in working condition.
Understanding the Guidelines on Use of Limitations, Caveats and Disclaimers by the Registered Valuers in Valuation Reports
Insolvency and Bankruptcy Board of India having office at 7th Floor, Mayur Bhawan, New Delhi – 110001 issued Guidelines on Use of Limitations, Caveats and Disclaimers by the Registered Valuers in Valuation Reports on 1st September, 2020, Some key features are mentioned below for knowledge gain purposes of the whole fertanity & the ecosystem attached to it.
vi. Hazardous conditions/material
In the absence of a statement to the contrary, we have assumed that no hazardous conditions or materials exist which could affect the subject business or the assets. We are not qualified to establish the absence of such conditions or materials, nor do we assume the responsibility for discovering the same. Our valuation takes no such liabilities into account, except as they have been reported to the RV by the client or by an environmental consultant of the client, and then only to the extent that the liability was reported to us in an actual or estimated amount. To the extent such information has been reported to us, the RV has relied on it without verification and offers no warranty or representation as to its accuracy or completeness.
vii. Accuracy of architectural plans
Where a sketched plan is attached to this report, it does not purport to represent accurate architectural plans. Sketch plans and photographs are provided as general illustrations only.
viii. Validity of permits and licenses:
Unless otherwise stated as part of the terms of engagement, the RV has not made a specific compliance survey or analysis of the various permits and licenses under central, state and local laws / regulations applicable to the operation and use of the subject property, and this valuation does not consider the effect, if any, of non-compliance.
ix. Continuation of subject business
We have assumed that the business continues normally without any disruptions due to statutory or other external/internal occurrences.
x. Independent Third Party We have acted as an independent third party and, as such, shall not be considered an advocate for any concerned party for any dispute. The valuation has been carried out independently to assess the valuation services. We have no present or planned future interest in [company] or any of its group companies and the fee for this report is not contingent upon outcome of the transaction. Our valuation should not be construed as investment advice; specifically, we do not express any opinion on the suitability or otherwise of entering into any transaction with [company].
xi. Valuation assumptions made by us:
We have made certain assumptions in relation to facts, conditions or situations affecting the subject of, or approach to, this exercise that has not been verified as part of the engagement rather, treated as “a supposition taken to be true”. If any of these assumptions prove to be incorrect then our estimate on value will need to be reviewed.
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