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A Company Secretary is now recognised as a 'registered valuer' under the new valuation rules issued by the Corporate Affairs Ministry.
The notification of these rules -- Companies (Registered Valuers and Valuation) Rules 2017 -- is expected to bring clarity regarding various aspects of valuation and registered valuers and have major impact on industry, professionals, stakeholders and the Government as well.
Introduction of valuation standards will ensure that the valuation reports disclose a true, fair and complete view and result in greater objectivity in valuation procedures.
The increased transparency and fairness in the valuation system would also boost stakeholders confidence alongside improving government revenues by way of plugging of loopholes in valuation.
Commenting on the development, Shyam Agrawal, President, Institute of Company Secretaries of India, said that the notification of these rules will lead to the setting up of Indian valuation standards that will improve transparency and governance.
The requirement of registered values will definitely enhance professional opportunities for both the Company Secretaries and other professionals as well, Agrawal said.
In India, the concept of valuation has always been debated as to whether it is a science or an art, he noted. Due to the involvement of element of subjectivity, substantial number of litigations in mergers and acquisition are about valuation, according to Agrawal.
Furthermore,there is an absence of standards for valuation of business in India, specifically for unlisted and private companies, he said.
Though there is some consensus among professional values about generally accepted approaches, methods and procedures; however, there was a need for education, training, regulation and standardisation of prevalent practices in valuation, he said.
S.N.Ananthasubramanian, Practising Company Secretary and former President of ICSI, told BusinessLine that a Company Secretary being recognised as a valuer presents enormous opportunity to practising members of ICSI to exhibit their expertise and knowledge acquired over time.
This opening should also be utilised in making ground level assessments through appropriate skill applications, he said.
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