There are boundless opportunities in the field of valuation. Know more about it in my recent article.

1. Profession of Registered Valuers
About the Author
Article aims to explains briefly about the emerging oppor-
tunities in Valuation emerging out of Section 247 of
Companies Act 2013.
CA Sunil Patodia is a Chartered Accountant from Mumbai
he has been the Past Chairman of Western India Regional
Council (WIRC), The Institute of Chartered Accountants of
India (ICAI).
A market economy relies on its robust institutions for efficient
and sustainable provision of goods and services. A country
develops if she has political and economic institutions that
unleash, empower and protect the full potential of each citizen
to innovate, invest and develop. Professions like Chartered
Accountancy, Company secretaryship have emerged as impor-
tant institutions of Indian economy.
One of the emerging profession is that of Valuation. Valuation
as a profession exists since the existence of trade and com-
merce. Everything has a value and valuation is arriving at the
right price to the value. Value is something which is different for
different people. It is prespective. Value like beauty lies in the
eyes of beholder. Valuation is ever evolving subject. The ways,
means and techniques are changing with time.
It is eloquently stated by Gerald Loeb, the author of The Battle
for Investment survival, who wrote, "There is no such thing as
a final answer to security values. "A dozen experts will arrive at
12 different conclusions. It often happens that a few moments
later each would alter his verdict if given a chance to reconsid-
er because of a changed condition. Market values are fixed
only in part by balance sheets and income statements; much
more by hopes and fears of humanity; by greed, ambition, acts
of God, invention, financial stress and strain, weather, discov-
ery, fashion and numberless other causes impossible to be list-
ed without omission".
From Banking laws to Income tax laws. From valuation required
by Securities and exchange Board of India ("SEBI") to valuation
under Foreign Exchange Management Act, 1999("FEMA") the
requirement of valuation was all prevalent and is all prevalent.
It is just that how the valuation as a stream of profession is
managed and regulated in India and also globally is getting
changed.
Till date for valuation as profession the focus has been on
demand side - what needs to be valued, who can render valu-
ation services and the manner of such valuation. There has
been no focus on supply side of valuation services. In the
sense that if Banking regulations need valuation they specify
some specific professional. If valuation is required under any
other act it is done by some other professional so on and so
forth. There had been no specific authority controlling the stan-
dard and ethics in the valuer profession.
Valuation profession has been largely in the self-regulation
mode till today.
Globally, there are different models across jurisdictions.
Traditionally, most of them had self regulation, where a few
competing VPOs regulated their members. However, most
have shifted to some kind of statutory regulations. Incorporated
by the Royal Charter in 1881, Royal Institution of Chartered
Surveyors (RICS) is probably the oldest, largest and most
respected professional body for valuation. Two sets of stan-
dards, namely, International Valuation Standards (IVS) issued
by the International Valuation Standards Council (IVSC), and
the Royal Institution of Chartered Surveyors (RICS) Red Book,
command great respect among the stakeholders.
There is apparent need of institutionalising the profession of
valuation to bring in more homogeneity, standard of valuation
and accountability. Government has already started taking
concrete steps in the direction of institutionalisation of valua-
tion. Government has also put in public domain the Draft val-
uers Bill, 2020 for comment and feedback from various stake-
holders.
News Letter P:08

2. The first step in this direction is the concept of Registered
Valuers. It was been brought by section 247 of The Companies
Act, 2013 to regulate the practice of Valuation in India and to
standardize the valuation in line with International standards.
The Ministry of Corporate Affairs (MCA) has notified the provi-
sions governing valuation by registered valuers [section 247 of
the Companies Act, 2013 (the Act)] and the Companies
(Registered Valuers and Valuation) Rules, 2017 (the Rules),
both to come into effect from 18 October, 2017.
As per Section 247 of Chapter VXII of the Indian Companies
Act, 2013
"where a valuation is required to be made in respect of any
property, stocks, shares, debentures, securities or goodwill or
any other asset or net worth of a company or its liabilities under
the provisions of this Act, it shall be valued by a person having
such qualifications and experience and registered as a valuer
in such manner and on such terms and conditions as maybe
prescribed and appointed by the audit committee or in its
absence by the Board of Directors of that company".
The Companies (Registered Valuers and Valuation) Rules, 2017
ule 11 specified as under :
"Transitional Arrangement ? Any person who may be rendering
valuation services under the Act, on the date of commence-
ment of these rules, may continue to render valuation services
without a certificate of registration under these rules upto 31st
March, 2018"
This date had been subsequently shifted to 31st Jan 2019 in
staggered manner as follows:
Therefore, any valuation which is done under Companies Act,
2013 as per Section 247 shall be required to be done by the
Registered Valuer.
Also, "With effect from February 1, 2019, no insolvency profes-
sional shall appoint a person other than a registered valuer to
conduct any valuation under the Code or any of the regulations
made there under," the Insolvency and Bankruptcy Board of
India ("IBBI") said.
Registered valuers are the new stream of valuation profession-
al who are eligible to be registered with Insolvency and
Bankruptcy Board of India after undertaking prescribed training
of 50 hours and passing the notified exams.
Presently Central government has designated the IBBI as the
authority under the Companies (Registered Valuers and
Valuation) Rules, 2017 to provide a comprehensive framework
for development and regulation of the profession of valuers.
The IBBI, as the authority, recognises RVOs and registers val-
uers, and it also monitors their conduct and performance in
accordance with the Companies (Registered Valuers and
Valuation) Rules, 2017. It publishes syllabus, format and fre-
quency of the valuation examination for all three Asset Classes,
namely,
" Land and Building,
" Plant and Machinery, and
" Securities or Financial Assets,
in consultation with the stakeholders.
It conducts computer-based online valuation examinations
every day from several locations across the country for all three
Asset Classes. With effect from 1 February, 2019, every valua-
tion required under the Companies Act, 2013 and the
Insolvency and Bankruptcy Code, 2016 needs to be conducted
by valuers registered with the authority.
A profession who is Member of ICAI, member of ICSI, member
of Institute of cost accountants of India, MBA or post graduate
diploma in Business management (specialisation in finance) or
Post graduate in finance and has three years of post qualifica-
tion experience is eligible to appear for Securities or Financial
Assets ("SFA") class of valuation to become the RV.
As per most recent statistics provided by IBBI as on 30th Sept
2020 there are 1252 Registered valuer registered in the SFA
asset class. As the entry to RVs is restricted by exam and also
there is minimum three years of post qualification experience
required as a prerequisite to be eligible for being RV. Therefore,
there is huge gap in demand and supply for RVs. RVs are able
to attract premium for the same.
It is expected that the Valuation professionals, in the long run,
should be full-time valuation practitioners just like doctors,
Lawyers, CAs, etc.
There are n number of places where valuation is required to be
done like Valuation of the transactions like business purchase,
business sale etc, Valuation for court cases like contractual dis-
putes, valuation for compliances, for planning, under various
statutes etc.
It has already been made compulsory to avail the valuation
from RV in Companies Act, 2013 and IBC,2016 and in due
course it is expected that it shall be made compulsory under
other Acts as well like Income tax Act, 1961, Foreign Exchange
Management Act, 1999 etc.
There are ample opportunities for young professionals in the
field of valuation and also for seasoned professionals it can be
developed as a new segment of work. The skill set for valuation
can be developed over a period of time and initial knowledge
of one's domain along with 50 hours compulsory training pro-
vides good base for practicing as the valuation profession.
News Letter P:09
1st Oct 2016
Construtution
of IBBI
18th Oct 2017
Rules were
formulated
31st March
2018
31st Jan
2019
30th Sept
2018