CA Practice- Be a Registered Valuer

CA Amresh Vashisht

A chartered accountant practice is multi dimensional practice. A practicing chartered accountant must always look for the additions of services in his basket to offer. Recently Companies Act 2013 has granted an opportunity to take us the task as registered valuer. Now A chartered accountant, who is in whole-time practice eligible to apply for being registered as a valuer with the Ministry Of Corporate affairs, the mandatory requirement is to have five years of continuous post membership experience. This registration may generate professional opportunity and shall make CA at par with the Merchant Banker and engineers who were so far enjoying the monopoly in the field.

A NEW PROFESSIONAL OPPORTUNITY ON THE CARD

 A person who is registered as a Registered Valuer in pursuance of Section 247 of the Act with the Central Government and whose name appears in the register of Registered Valuers maintained by the Central Government or any authority, institution or agency, as may be notified by the Central Government only can act as a registered valuer. The Companies Act 2013 Chapter XVII prescribes the modalities of registered valuers. So far relevant section have not been notified, but as and when notify the authorization to valuation work shall be duly recognized, registered under the act and then only they can practice as registered valuers. So far it was an open field and there were mechanisms of its recognition under the Income Tax Act. However the following section has opened up a field for practicing chartered accountants.

WHOLE TIME PRACTICE WITH 5 YEAR EXPERIENCE

For the purposes of this rule, a person shall be deemed “to be in whole-time practice”, when individually or in partnership or in limited liability partnership or in merchant banker with other persons in practice who are members of other professional bodies, he, in consideration of remuneration received or to be received:

(i) engages himself in the practice of valuation; or

(ii) offers to perform or performs services involving valuation of any assets with the object of arriving at financial value of the asset being valued; or

(iii) renders professional services or assistance in or about matters of principle or detail relating to valuation.

SCOPE OF WORK

The Chartered Accountants shall be eligible to conduct valuation of stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities . In the Act, specific mention about valuation by registered valuer has been made in the following Sections:

Section 62(1)(c) – Further issue of share capital, other than Rights Issue and Issue under a Scheme of Employee Stock Option.

Section 192(2) – Non cash transaction involving directors

Section 230(2) – Valuation report in case of a scheme of Corporate Debt Restructuring.

Section 230(2) – Valuation report in case of a scheme of compromise or arrangement with creditors or members

Section 236(2) – Purchase of minority shareholding

Section 281(1)(a) proviso – Submission of report by company liquidator

Section 305(2)(d) – Declaration of solvency in case of proposal to wind up voluntarily

Section 319(3) (b) – Power of Company Liquidator to accept shares, etc., as consideration for sale of property of company.

ICAI LAUNCHED A CERTIFICATE COURSE ON VALUATION.

In the light of the emerging diversities & complexities in valuation jobs, ICAI has designed a course to empower the members to be the leaders in the global service market. The Institute claimed that apart from the comprehensive theoretical aspects, this course, first of its kind in India, will sharpen the expertise and excellence of our members through multiple case studies across the industry and service sector like pharmaceuticals, retail, manufacturing, banking, insurance, valuation, mining, infrastructure, private equity valuation, and cross-border transactions.

The course fee is Rs. 20000/- and having a seven day classes. A case study has to be submitted and thereafter Corporate Laws and Corporate Governance Committee conduct the examination across the country at a fixed one day. The overall goal of this course is to build skills and improve quality & confidence of the member in carrying out the valuation assignment.

APPOINTMENT OF REGISTERED VALUER [SECTION 247(1)]:

Where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provision of this Act, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed and appointed by the audit committee or in its absence by the Board of Directors of that company.

DUTIES OF REGISTERED VALUER [SECTION 247(2)]:

The valuer appointed under sub-section (1) shall,—

(a) make an impartial, true and fair valuation of any assets which may be required to be valued;

(b) exercise due diligence while performing the functions as valuer;

(c) make the valuation in accordance with such rules as may be prescribed; and

(d) not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during or after the valuation of assets.

PENAL PROVISIONS [SECTION 247(3) & (4)]:

If a valuer contravenes the provisions of this section or the rules made there under, the valuer shall be punishable with fine which shall not be less than Rs. 25,000/- but which may extend to Rs. 1,00,000/-.

If the valuer has contravened such provisions with the intention to defraud the company or its members, he shall be punishable with imprisonment for a term which may extend to 1 year and with fine which shall not be less than Rs. 1,00,000/- but which may extend to Rs. 5,00,000/-.

Where a valuer has been convicted as above, he shall be liable to—

(i) Refund the remuneration received by him to the company; and

(ii) Pay for damages to the company or to any other person for loss arising out of incorrect or misleading statements of particulars made in his report.

REMOVAL & RESTORATION

The name of a registered valuer can be removed from the register by the Central Government if the government is satisfied –

a. that his name has been entered in the register by error or on account of misrepresentation or suppression of a material fact

b. that he has been convicted of any offence and sentenced to a term of imprisonment or has been guilty of misconduct in his professional capacity which, in the opinion of the Central Government or any authority, institution or agency, renders his name unfit to be kept in the register.

c. that his performance is such that his name should not remain on the register of valuers, satisfied, after giving that person a reasonable opportunity of being heard and after such further inquiry, if any, as it thinks fit to make.

d. The Central Government or any authority, institution or agency may appoint one or more competent persons as enquiry officer(s) for conducting an enquiry as referred above. The officer(s) conducting an enquiry shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 while make an enquiry and he may also call upon such experts from the field of law, economics, business, finance, accountancy, international trade, management, technology or such other discipline as he deems necessary to assist him in conducting the enquiry.

e. A registered valuer aggrieved by an order passed for removal of name may prefer an appeal in accordance with the procedure laid down in the respective Acts, regulations or bye-laws governing the respective professional. An appeal against the order of the Central Government shall be preferred to the Tribunal. The name can be restored on sufficient cause being shown to the satisfaction of the Central Government.

CEASEATION UNLESS STAYED OR ACQITAL

Further where any person who is registered as a valuer under section 247 or who has made an application for registration as a valuer under that section is, at any time thereafter,—

(a) sentenced to a term of imprisonment for any offence; or

(b) found guilty of misconduct in his professional capacity by any association or institute or other body of which he is a member or with which he is registered;

he shall immediately after such conviction or finding, intimate the particulars thereof to the Central Government, institution or agency with which he is registered as a valuer and cease to act as valuer unless

• permitted by the Central Government, institute or agency with which he is registered as a valuer, or
• the order imposing penalty/sentence has been stayed by competent authority.

In case valuer is found guilty of professional misconduct or otherwise by the Institute of which he is a member or by NFRA or where the SEBI removed the registration of the merchant banker, such valuer shall cease to be the valuer automatically and their name shall be removed from the register of valuer unless such order has been stayed by the Competent Authority.

Any ongoing assignment of such valuer, who has ceased to be a valuer, shall be assigned to other valuer from the panel maintained by Central Government or any authority or institution to complete the assignment, if no stay is granted on such appeal, if any.

RELEVANT FORMS

FOR INDIVIDUAL & PARTNERSHIP FIRM

17.1 Application to Central Government or institution or agency Notified by the Central Government for registration as a valuer

FOR COMPANY OR LLP

17.2 Application to Central Government or institution or agency notified by the Central Government for registration as a valuer .

APPLICANT MAY MOVE 17.1 / 17.2 TO THE FOLLOWING

a) The Central Government or

b) institution or

c) agency as notified by the Central Government

Form No. 17.1

Application to Central Government or institution or agency notified by the Central Government for registration as a valuer [Pursuant to section 247(1) and rule 17.2(3)]

1.Name of the applicant (Individual/Partnership Firm):

2.Category (see Rule 17.2(2))

In case applicant is an individual (for all partners/associates)

3.Father’s name/mother’s name/spouse’s name :

4. Gender :

5.Nationality: Indian other (specify)

6.Date of birth:

7. Place of birth:

8.Permanent address for correspondence:

(a) Address Line I

Line II

(b) City:

(c) State:

(d) Country:

(e)Pin code:

(f) Phone:

(g) Fax:

(h) E-mail ID:

9. Present address:

(a) Office:

(b) Residence:

10.Income-tax permanent account number (PAN):

11.Passport number:

12.Details of educational, including professional or technical qualifications:

Name of Examination passed

Examining Authority

Year of Passing

% / Grade obtained

13.Details of experience:

Name of organisation / Firm

Designation

Period

Nature of experience

From        To

14.Details of licences or certificates, if any:

15.Areas of expertise:

16.If already engaged in the profession of a valuer:

(a) Date of commencement of practice as a valuer: (DD/MM/YY)

(b) Details of major projects valued/handled:

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17. Certificate of Practice Number/Registration Number: ——–

18.Service Tax Registration no., if any:

DECLARATION

I hereby declare that I (Name)/ Partner (Name of Firm) is not disqualified from applying for registration as a valuer under section 247 of the Companies Act, 2013.

I / We hereby further declare that while acting as a registered valuer under the provisions of the Act and rules made there under, I /we shall:

(a) make an impartial, true and fair valuation of any asset which I /we may be required to value;

(b) exercise due diligence and skill while performing the functions as valuer;

(c) Make the valuation in accordance with the provisions of the Act and the rules made there under;

(d) Not undertake valuation of any assets in which I /we have direct or indirect interest or become so interested at any time during the valuation of the assets.

VERIFICATION

I/we,…………………………………………………………. , do hereby, declare that–

(i)the information provided in this application is true and correct to the best of my/our knowledge and belief, and

(ii)the document(s) enclosed herewith is/are true and accurate.

Signature:

Membership No:

Date:

Place:

(in case of partnership firm, the required information shall be given for each partner)

Attachments:

(1)Professional degree certificates

(2)Copy of licences or certificates

(3)Copy of income-tax PAN

(4)Copy of service tax registration certificate

(5)Copy of passport

(6)Summary of major projects valued

(7)List of major clients

(8)Constitution/Partnership deed

Form No. 17. 2

   ( BY COMPANY OR LLP)

Application to Central Government or institution or agency notified by the Central Government for registration as a valuer [Pursuant to section 247(1) and rule 17.2(3)]

1.Name of the applicant (company/LLP):

2.Category (see Rule 17.2(2))

3.Registration Details :

4.Registering Authority /Country:

5.Date of Incorporation:

6.Place of Incorporation:

7.Address of Registered office:

Address:

City:

State:

Country:

Pin code:

Phone:

Fax:

E-mail ID:

8.Address in India if registered outside /Correspondence address if different from registered office:

9.Details of promoter shareholders and directors: (all shareholders having more than 10% shares should be listed) in following format:

a.Name

b.Father’s name/mother’s name/spouse’s name :

c.Gender :

d.Nationality:

e.Date of birth:

f.Place of birth:

g.Permanent address:

h.Address for correspondence

i.Present address:

(a) Office:

(b) Residence:

j.Income-tax permanent account number (PAN):

k.Passport number:

10.Income-tax permanent account number (PAN) of the entity:

11.Details of educational, including professional or technical qualifications: (of whole time directors and of senior management personnel only) (Bachelor degree and above only/ and/or professional qualifications). What if examining authority outside India? Do you want any equal qualification certification?

Name of Examination passed

Examining Authority

Year of Passing

% / Grade obtained

 12.Details of experience:

Designation

Period

Nature of experience

Name of organisation / Firm

From             To

13.Details of licences or certificates, if any:

14.Areas of expertise:

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15.If already engaged in the profession of a valuer:

(a) Date of commencement of practice as a valuer: (DD/MM/YY)

(b) Details of major projects valued/handled:

————————————————————————

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16.Service tax Registration no., if any:

DECLARATION

We hereby declare that we are not disqualified from applying for registration as a valuer under section 247 of the Companies Act, 2013.

I / We hereby further declare that while acting as a registered valuer under the provisions of the Act and rules made thereunder, I /we shall:

a) Make an impartial, true and fair valuation of any asset which I /we may be required to value;

b) Exercise due diligence and skill while performing the functions as valuer;

c) Make the valuation in accordance with the provisions of the Act and the rules made there under;

d) Not undertake valuation of any assets in which I /we have direct or indirect interest or become so interested at any time during the valuation of the assets.

VERIFICATION

I,………………………………… ,do hereby, declare that –

i) the information provided in this application is true and correct to the best of my knowledge and belief, and

ii) the document(s) enclosed herewith is/are true and accurate.

Signature:

Membership No:

Date:

Place:

(in case of LLP, the required information shall be given for each partner)

Attachments:

1) Professional degree certificates

2) Copy of licences or certificates

3) Copy of income-tax PAN

4) Copy of service tax registration certificate

5) Copy of passport

6) Summary of major projects valued

7) List of major clients