Note of IBBI registered Valuers for shares u/s 247 of Companies Act 2013ANAND GAWADE
This document discusses the role and requirements of IBBI Registered Valuers under the Companies Act 2013 in India. Key points:
- The Companies Act 2013 requires valuations in certain situations to be conducted by individuals registered with IBBI as valuers, such as for issues of further shares, non-cash transactions with directors, schemes of arrangement like mergers/demergers, voluntary winding up of companies.
- It outlines the relevant sections of the Act that specify valuation requirements and the scenarios where a valuation report is mandated.
- Registered valuers must make impartial, true and fair valuations as per prescribed rules and standards and avoid conflicts of interest. Non-compliance can attract penalties and liability.
Valuation in India - Regulations and StandardsRaman Khanna
The document provides information on valuation needs and reasons for valuation under various laws like the Companies Act, Securities laws, Insolvency laws etc. It lists specific sections of the Companies Act that mandate valuation by a registered valuer for matters like further issue of shares, non-cash transactions with directors, mergers and amalgamations, minority shareholder buyouts etc. It also summarizes relevant provisions of the Insolvency and Bankruptcy Code regarding appointment of registered valuers. The document then provides details on the regulatory framework for valuers including the Companies (Registered Valuers and Valuation) Rules that cover eligibility, qualifications, registration process for valuers and recognized valuers organizations.
The Companies Act 2013 has introduced the concept of ‘Registered Valuer’ through Section 247 Chapter XVII to cover valuation of any property, stock, shares, debentures, securities, goodwill or any other assets of the company as well as its net worth and liabilities.
Valuation team of Corporate Professionals here presents the summarized presentation on Registered Valuer.
Project_Secretarial Audit-Tool for Corporate GovernanceCS Vikas Mehta
The document discusses secretarial audits for companies in India. It provides details on:
- What a secretarial audit is and its objectives of ensuring legal compliance and protecting stakeholder interests.
- The regulatory requirements for secretarial audits for listed companies and large public companies.
- The process of conducting secretarial audits, including examining documents, applicable laws, and reporting requirements.
- Qualification and disqualification criteria for secretarial auditors, who must be practicing company secretaries.
- Consequences for non-compliance with secretarial audit requirements, including penalties for companies and auditors.
- The importance of secretarial audits for boosting corporate compliance and governance standards in India
SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 – HIGH...FCS BHAVIK GALA
This article provides highlights and analysis of the recently notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued by SEBI.
Chap 6 - IAS 38 - Intangible Assets.pptxKashif Butt
IAS 38 establishes the accounting requirements for intangible assets. An intangible asset must be identifiable, controlled by the entity through custody or legal rights, and expected to generate future economic benefits. Intangible assets are initially measured at cost and can subsequently be measured either at cost or using the revaluation model. Research costs are expensed as incurred while development costs meeting certain criteria are recognized as intangible assets. Goodwill arising from a business combination is recognized as an asset at cost while internally generated goodwill is not recognized.
Note of IBBI registered Valuers for shares u/s 247 of Companies Act 2013ANAND GAWADE
This document discusses the role and requirements of IBBI Registered Valuers under the Companies Act 2013 in India. Key points:
- The Companies Act 2013 requires valuations in certain situations to be conducted by individuals registered with IBBI as valuers, such as for issues of further shares, non-cash transactions with directors, schemes of arrangement like mergers/demergers, voluntary winding up of companies.
- It outlines the relevant sections of the Act that specify valuation requirements and the scenarios where a valuation report is mandated.
- Registered valuers must make impartial, true and fair valuations as per prescribed rules and standards and avoid conflicts of interest. Non-compliance can attract penalties and liability.
Valuation in India - Regulations and StandardsRaman Khanna
The document provides information on valuation needs and reasons for valuation under various laws like the Companies Act, Securities laws, Insolvency laws etc. It lists specific sections of the Companies Act that mandate valuation by a registered valuer for matters like further issue of shares, non-cash transactions with directors, mergers and amalgamations, minority shareholder buyouts etc. It also summarizes relevant provisions of the Insolvency and Bankruptcy Code regarding appointment of registered valuers. The document then provides details on the regulatory framework for valuers including the Companies (Registered Valuers and Valuation) Rules that cover eligibility, qualifications, registration process for valuers and recognized valuers organizations.
The Companies Act 2013 has introduced the concept of ‘Registered Valuer’ through Section 247 Chapter XVII to cover valuation of any property, stock, shares, debentures, securities, goodwill or any other assets of the company as well as its net worth and liabilities.
Valuation team of Corporate Professionals here presents the summarized presentation on Registered Valuer.
Project_Secretarial Audit-Tool for Corporate GovernanceCS Vikas Mehta
The document discusses secretarial audits for companies in India. It provides details on:
- What a secretarial audit is and its objectives of ensuring legal compliance and protecting stakeholder interests.
- The regulatory requirements for secretarial audits for listed companies and large public companies.
- The process of conducting secretarial audits, including examining documents, applicable laws, and reporting requirements.
- Qualification and disqualification criteria for secretarial auditors, who must be practicing company secretaries.
- Consequences for non-compliance with secretarial audit requirements, including penalties for companies and auditors.
- The importance of secretarial audits for boosting corporate compliance and governance standards in India
SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 – HIGH...FCS BHAVIK GALA
This article provides highlights and analysis of the recently notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued by SEBI.
Chap 6 - IAS 38 - Intangible Assets.pptxKashif Butt
IAS 38 establishes the accounting requirements for intangible assets. An intangible asset must be identifiable, controlled by the entity through custody or legal rights, and expected to generate future economic benefits. Intangible assets are initially measured at cost and can subsequently be measured either at cost or using the revaluation model. Research costs are expensed as incurred while development costs meeting certain criteria are recognized as intangible assets. Goodwill arising from a business combination is recognized as an asset at cost while internally generated goodwill is not recognized.
The document outlines the agenda and content for a presentation on demystifying regulatory rules for business valuation in India. The presentation covers an overview of valuation approaches across different stages of a business' growth cycle and the skills required for valuations. It then discusses regulatory valuation requirements in India for various purposes like issuing shares, transfers of shares, mergers, and capital gains under laws like the Companies Act, Income Tax Act, SEBI regulations, and others. Specific valuation methodologies, purposes, and qualified professionals for different situations are explained.
‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc.
The document discusses the verification of investments by auditors, including obtaining opening balances, confirming purchase and sale transactions, verifying the closing balance, and ensuring investments are within the entity's authority. It also covers examining internal controls over investments, verifying transactions through documents, conducting physical inspections where possible, examining valuation methods and disclosure compliance, and performing analytical review procedures.
The document discusses key changes introduced by the Companies Act 2013 relating to listed companies and corporate governance norms for listed companies proposed by SEBI. Some key points include:
1) The Act introduces stricter compliance requirements for listed companies regarding disclosures, reporting and transparency. It aligns listing agreement with the Act and lays out roadmaps for listed entities.
2) SEBI approved amendments to the listing agreement to strengthen corporate governance norms for listed companies in line with the Act. The amendments will be applicable from October 1, 2014.
3) The Act introduces new audit requirements for listed companies regarding secretarial audit and internal audit. It also changes terms of appointment for statutory auditors.
4) The
The document is a presentation on the Companies (Auditor's Report) Order, 2020 (CARO 2020) by Rajvanshi & Associates. It provides an overview of CARO 2020, including its background, applicability, and the various matters that must be addressed in auditor's reports under CARO 2020. Specifically, it outlines the 21 paragraphs of CARO 2020 that auditors must comment on, such as fixed assets, loans & advances, statutory dues, fraud, related party transactions, and internal audit. It also lists companies that are exempt from CARO 2020, such as banking, insurance and small companies.
Appointment of Registered Valuer under the Companies Act, 2013DVSResearchFoundatio
This document provides an overview of the appointment of registered valuers under the Companies Act 2013 in India, including:
- When valuation is required under the Act for various corporate actions like mergers, preferential shares issuance, etc.
- The eligibility requirements to become a registered valuer, including qualifications, experience, and passing a valuation examination.
- The process for applying for and obtaining a certificate of registration from the authority (currently IBBI), and the ongoing conditions of registration.
- Requirements for how valuations must be conducted, including following valuation standards and what must be included in valuation reports.
- Provisions for temporary surrender of registration and transitional arrangements for existing valuers to obtain registration
The document discusses various topics related to auditing of banks, insurance companies, cooperative societies, stock exchanges, NBFCs, mutual funds, and depositories. It provides an overview of the relevant legislation, accounting practices, internal controls, audit procedures, and reporting requirements for auditing these different entities. The key points covered include the Reserve Bank of India Act, Banking Regulation Act, procedures for bank audits such as verification of assets and liabilities, non-performing assets, long-form audit reports. For insurance companies, it discusses the Insurance Act, general insurance business nationalization act, features of accounting, and content of audit reports.
The document summarizes key provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR).
It provides background on the notification of LODR which consolidated various listing agreements. It outlines the applicability and key definitions in LODR. It also summarizes some important approval, intimation and disclosure requirements for listed entities. Finally, it highlights some common obligations for listed entities and specific corporate governance norms for entities that have listed specified securities.
The document discusses techniques for verifying assets and liabilities during an audit. It outlines six key techniques: 1) verifying physical existence, 2) assessing correct valuation, 3) confirming ownership, 4) ensuring proper disclosure, 5) identifying any charges on assets, and 6) checking for proper authorization of transactions. Specific procedures are described for different asset types, including obtaining certificates from management and third parties. The auditor must also consider events after the balance sheet date and obtain a management representation letter.
This document provides information on Hong Kong Accounting Standard 38 (HKAS 38) Intangible Assets, including the copyright notice and contents. HKAS 38 establishes the accounting requirements for intangible assets that are not covered by other standards. It defines key terms, addresses the recognition and measurement of intangible assets, and sets out disclosure requirements regarding intangible assets.
30 important changes in balance sheet & P/L account of private limited companyAnkitasahu60
A balance sheet is a financial statement report that depicts the financial situation on a specific date. An organization's balance sheet has a wealth of information that can be used to assess financial stability and commercial performance. The balance sheet is a report version of the accounting equation, which states that the total assets must always equal the total liabilities plus shareholder's capital.
P&L depicts an organization's total revenue, expenses, and profits/losses for a given time period. A profit and loss statement also contains information on the company's operations.
Various major changes have been made in Division I of Schedule III:
1) Ageing schedule of Trade receivables
2) Rounding off of figures
3) Shareholding of promoters disclosure
4) Major ratio and comparison with previous year ratio
5) Disclosures relating to cryptocurrency
This document discusses the raising of funds and annual compliances under the Companies Act, 2013. It begins with an overview of key definitions related to securities and how private and unlisted companies can issue securities through methods like private placement, rights issue, bonus issue, and preferential issue. It then covers the procedural requirements for these methods of issuance like board resolutions, shareholder approvals, filing of forms. The document also discusses other annual compliance requirements like related party transactions, meetings of board and shareholders, adoption of financial statements, and disclosures required by directors and auditors.
Section 204 of the Companies Act 2013 mandates secretarial audits for listed companies, public companies with a paid up capital of over Rs. 50 crore or turnover over Rs. 250 crore. A secretarial audit verifies compliance with company law and other applicable laws, conducted by an independent company secretary. Non-compliance can result in fines from Rs. 1-5 lakh. Secretarial audits ensure management compliance and prevent penal liability. Fraud reporting and penalties for false statements are also outlined. Benefits include due diligence, risk avoidance, and regulatory assurance of compliance.
The document provides an overview of secretarial audits for companies. It discusses that secretarial audits verify compliance with corporate laws and regulations. The objectives are to check and report on compliance, identify non-compliances, and protect stakeholders. The scope includes checking compliance with various acts like the Companies Act, SEBI regulations, and listing agreements. Secretarial audits are beneficial as they strengthen governance, reduce penalties for non-compliance, and provide assurance to directors, investors and regulators. A secretarial audit is conducted by a practicing company secretary and follows steps like planning, documentation, discussions, and issuance of a report.
This document provides an overview of Ind AS 38 on Intangible Assets. It discusses the objective and scope, key definitions, recognition and measurement criteria, disclosure requirements, and differences between Ind AS 38 and the previous Accounting Standard AS 26. Some of the key points covered include defining an intangible asset, the criteria for recognition of intangible assets, measurement at cost or revaluation model, amortization periods, impairment testing, and additional disclosures required under Ind AS 38.
The document summarizes the history and amendments made to IAS 38 Intangible Assets. Key points include:
- IAS 38 was originally issued in 1998 and has been amended multiple times, most recently in 2016.
- Amendments have clarified definitions, recognition criteria, measurement of useful life, treatment of subsequent expenditures, and disclosure requirements.
- The amendments were made primarily as part of the IASB's Business Combinations project and Annual Improvements process.
The document provides information on secretarial audits required for certain companies under Section 204 of the Companies Act, 2013. It explains that secretarial audits verify a company's compliance with legal and procedural requirements under various laws such as the Companies Act, Securities Contracts Regulation Act, and Foreign Exchange Management Act. Companies meeting certain criteria must provide a secretarial audit report certified by a Company Secretary in Practice. The document outlines the process, documents required, applicable laws, benefits, and penalties for non-compliance.
The document outlines the agenda and content for a presentation on demystifying regulatory rules for business valuation in India. The presentation covers an overview of valuation approaches across different stages of a business' growth cycle and the skills required for valuations. It then discusses regulatory valuation requirements in India for various purposes like issuing shares, transfers of shares, mergers, and capital gains under laws like the Companies Act, Income Tax Act, SEBI regulations, and others. Specific valuation methodologies, purposes, and qualified professionals for different situations are explained.
‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc.
The document discusses the verification of investments by auditors, including obtaining opening balances, confirming purchase and sale transactions, verifying the closing balance, and ensuring investments are within the entity's authority. It also covers examining internal controls over investments, verifying transactions through documents, conducting physical inspections where possible, examining valuation methods and disclosure compliance, and performing analytical review procedures.
The document discusses key changes introduced by the Companies Act 2013 relating to listed companies and corporate governance norms for listed companies proposed by SEBI. Some key points include:
1) The Act introduces stricter compliance requirements for listed companies regarding disclosures, reporting and transparency. It aligns listing agreement with the Act and lays out roadmaps for listed entities.
2) SEBI approved amendments to the listing agreement to strengthen corporate governance norms for listed companies in line with the Act. The amendments will be applicable from October 1, 2014.
3) The Act introduces new audit requirements for listed companies regarding secretarial audit and internal audit. It also changes terms of appointment for statutory auditors.
4) The
The document is a presentation on the Companies (Auditor's Report) Order, 2020 (CARO 2020) by Rajvanshi & Associates. It provides an overview of CARO 2020, including its background, applicability, and the various matters that must be addressed in auditor's reports under CARO 2020. Specifically, it outlines the 21 paragraphs of CARO 2020 that auditors must comment on, such as fixed assets, loans & advances, statutory dues, fraud, related party transactions, and internal audit. It also lists companies that are exempt from CARO 2020, such as banking, insurance and small companies.
Appointment of Registered Valuer under the Companies Act, 2013DVSResearchFoundatio
This document provides an overview of the appointment of registered valuers under the Companies Act 2013 in India, including:
- When valuation is required under the Act for various corporate actions like mergers, preferential shares issuance, etc.
- The eligibility requirements to become a registered valuer, including qualifications, experience, and passing a valuation examination.
- The process for applying for and obtaining a certificate of registration from the authority (currently IBBI), and the ongoing conditions of registration.
- Requirements for how valuations must be conducted, including following valuation standards and what must be included in valuation reports.
- Provisions for temporary surrender of registration and transitional arrangements for existing valuers to obtain registration
The document discusses various topics related to auditing of banks, insurance companies, cooperative societies, stock exchanges, NBFCs, mutual funds, and depositories. It provides an overview of the relevant legislation, accounting practices, internal controls, audit procedures, and reporting requirements for auditing these different entities. The key points covered include the Reserve Bank of India Act, Banking Regulation Act, procedures for bank audits such as verification of assets and liabilities, non-performing assets, long-form audit reports. For insurance companies, it discusses the Insurance Act, general insurance business nationalization act, features of accounting, and content of audit reports.
The document summarizes key provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR).
It provides background on the notification of LODR which consolidated various listing agreements. It outlines the applicability and key definitions in LODR. It also summarizes some important approval, intimation and disclosure requirements for listed entities. Finally, it highlights some common obligations for listed entities and specific corporate governance norms for entities that have listed specified securities.
The document discusses techniques for verifying assets and liabilities during an audit. It outlines six key techniques: 1) verifying physical existence, 2) assessing correct valuation, 3) confirming ownership, 4) ensuring proper disclosure, 5) identifying any charges on assets, and 6) checking for proper authorization of transactions. Specific procedures are described for different asset types, including obtaining certificates from management and third parties. The auditor must also consider events after the balance sheet date and obtain a management representation letter.
This document provides information on Hong Kong Accounting Standard 38 (HKAS 38) Intangible Assets, including the copyright notice and contents. HKAS 38 establishes the accounting requirements for intangible assets that are not covered by other standards. It defines key terms, addresses the recognition and measurement of intangible assets, and sets out disclosure requirements regarding intangible assets.
30 important changes in balance sheet & P/L account of private limited companyAnkitasahu60
A balance sheet is a financial statement report that depicts the financial situation on a specific date. An organization's balance sheet has a wealth of information that can be used to assess financial stability and commercial performance. The balance sheet is a report version of the accounting equation, which states that the total assets must always equal the total liabilities plus shareholder's capital.
P&L depicts an organization's total revenue, expenses, and profits/losses for a given time period. A profit and loss statement also contains information on the company's operations.
Various major changes have been made in Division I of Schedule III:
1) Ageing schedule of Trade receivables
2) Rounding off of figures
3) Shareholding of promoters disclosure
4) Major ratio and comparison with previous year ratio
5) Disclosures relating to cryptocurrency
This document discusses the raising of funds and annual compliances under the Companies Act, 2013. It begins with an overview of key definitions related to securities and how private and unlisted companies can issue securities through methods like private placement, rights issue, bonus issue, and preferential issue. It then covers the procedural requirements for these methods of issuance like board resolutions, shareholder approvals, filing of forms. The document also discusses other annual compliance requirements like related party transactions, meetings of board and shareholders, adoption of financial statements, and disclosures required by directors and auditors.
Section 204 of the Companies Act 2013 mandates secretarial audits for listed companies, public companies with a paid up capital of over Rs. 50 crore or turnover over Rs. 250 crore. A secretarial audit verifies compliance with company law and other applicable laws, conducted by an independent company secretary. Non-compliance can result in fines from Rs. 1-5 lakh. Secretarial audits ensure management compliance and prevent penal liability. Fraud reporting and penalties for false statements are also outlined. Benefits include due diligence, risk avoidance, and regulatory assurance of compliance.
The document provides an overview of secretarial audits for companies. It discusses that secretarial audits verify compliance with corporate laws and regulations. The objectives are to check and report on compliance, identify non-compliances, and protect stakeholders. The scope includes checking compliance with various acts like the Companies Act, SEBI regulations, and listing agreements. Secretarial audits are beneficial as they strengthen governance, reduce penalties for non-compliance, and provide assurance to directors, investors and regulators. A secretarial audit is conducted by a practicing company secretary and follows steps like planning, documentation, discussions, and issuance of a report.
This document provides an overview of Ind AS 38 on Intangible Assets. It discusses the objective and scope, key definitions, recognition and measurement criteria, disclosure requirements, and differences between Ind AS 38 and the previous Accounting Standard AS 26. Some of the key points covered include defining an intangible asset, the criteria for recognition of intangible assets, measurement at cost or revaluation model, amortization periods, impairment testing, and additional disclosures required under Ind AS 38.
The document summarizes the history and amendments made to IAS 38 Intangible Assets. Key points include:
- IAS 38 was originally issued in 1998 and has been amended multiple times, most recently in 2016.
- Amendments have clarified definitions, recognition criteria, measurement of useful life, treatment of subsequent expenditures, and disclosure requirements.
- The amendments were made primarily as part of the IASB's Business Combinations project and Annual Improvements process.
The document provides information on secretarial audits required for certain companies under Section 204 of the Companies Act, 2013. It explains that secretarial audits verify a company's compliance with legal and procedural requirements under various laws such as the Companies Act, Securities Contracts Regulation Act, and Foreign Exchange Management Act. Companies meeting certain criteria must provide a secretarial audit report certified by a Company Secretary in Practice. The document outlines the process, documents required, applicable laws, benefits, and penalties for non-compliance.
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2. Subject matter of Valuation
Any Property (means both Tangible and Intangible)
Stocks
Shares
Debentures
Securities
Goodwill
Any other assets (means any other Tangible and
Intangible assets which are not covered above)
Net worth of a company
Liabilities
2
3. Broad forms of Security Interests
Forms of
security
interests
Specific
property
General
property
Tangible
property
Future
property
Intangible
property
Movable
property
Immovabl
e
property
Possessory
Interest
Non-
possessory
interest
Mortgage Charge or lien
Posses
sion
Nature of
interest
Quasi-
security
interests
3
7. Need for valuation
Investors
To analyse
best
investment
option
INVESTORS SHARE HOLDERS
To assign true worth of the company
MANAGEMENT
To measure performance of the company
INDUSTRYAS A WHOLE
For the growth of the economy
REGULATORS
To maintain transparency,
Perfect compliance&
Better employment
To analyse best investment option
Financiers
to assess the borrowing
capacity of a company when
arranging funding facilities
7
9. LEGAL PROVISIONS RELATING TO
INTANGIBLE ASSETS –INTERNATIONAL
Legal
provisions –
International
• WIPO – World Intellectual Property Rights
Organization
• The Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS)
• THE PATENT COOPERATION TREATY
• International Financial Reporting
Standards(IFRS)
• IAS38 – Intangible Assets
• IAS13 – Fair value Measurement
• IAS 36 – Impairment of Assets
• IFRS 3 – Business Combinations
9
10. Legal Provisions relating to Intangible
Assets- National
Patents (Amendment) Act 2005 & Patents (Amendment) Rules, 2006
Trade Marks Act, 1999 & Trade Marks Rules 2002
Copyright Amendment Act 2012
Indian Accounting Standards
• AS26 – Intangible Assets- Recognition, Measurement, Amortisation & Disclosures
• AS14 –Valuation of Intangible Assets acquired by way of Amalgamation
• AS12 – Valuation of Intangible Assets acquired by way of Government Grant
• AS22 – Deferred Tax Assets
• AS19 – Accounting for Leases
• AS21 – Goodwill arising on consolidation
Indian Companies Act
Insolvency and Bankruptcy Code 2016
10
14. Disclosure of Intangible Assets under Companies
Act,2013
• (i) Classification shall be given as:
• (a) Goodwill;
• (b) Brands /trademarks;
• (c) Computer software;
• (d) Mastheads and publishing titles;
• (e) Mining rights;
• (f) Copyrights, and patents and other intellectual
property rights, services
• and operating rights;
• (g) Recipes, formulae, models, designs and
prototypes;
• (h) Licences and franchise;
• (i) Others (specify nature).
Intangible
assets
(Schedule
III)
14
15. Disclosures
under
IFRS – IAS38
• Different classes of intangible assets
• Distinguish between internally
generated and other intangible assets
• Useful life
• Amortisation method
• Gross and net carrying amounts
• Additions and deletions
• Increases or decreases due to
impairment recognised in the other
comprehensive income
• Impairment losses
15
16. 16
Revised Schedule VI
• Ministry of Corporate Affairs (MCA) has issued revised
Schedule VI
• Provide new format for preparation and presentation of
financial statements
• As per Revised Schedule VI, the disclosure for fixed
assets is to be segregated into:
(a) Tangible assets;
(b) Intangible assets;
(c) Capital work-in-progress; and
(d) Intangible assets under development
19. 19
Notes to Accounts
Intangible assets
Classification shall be given as:
(a) Goodwill;
(b) Brands /trademarks;
(c) Computer software;
(d) Mastheads and publishing titles;
(e) Mining rights;
(f) Copyrights, and patents and other intellectual property rights,
services
and operating rights;
(g) Recipes, formulae, models, designs and prototypes;
(h) Licences and franchise;
(i) Others (specify nature).
20. Sec of
Companies
Act, 2013
Purpose Details
Sec 62(1)(c) Issue of new shares Price of such shares should be
determined by the valuation report
of a Registered Valuer
Section 192
(2)
Non-cash transactions
with Directors
The value of the assets has to be
calculated by a Registered Valuer
Sec 230 (2) &
(3) , Sec 232
Compromise,
Arrangements,
Amalgamations
Valuation report in respect of
shares, property or assets, tangible
and intangible, movable and
immovable or a swap ratio report
by a Registered Valuer.
Sec 236 Purchase of minority
shareholding
The minority shareholding at a
valuation determined by the
Registered Valuer.
Section 281
(1) (a) and
Section 305
(2) (d)
Winding up of a
company
A valuation of assets of the
company
5/8/2024 20
21. Intangible Assets under Companies Act, 2013
Section under
Companies Act, 2013
Details
Schedule III Separate line item in Balance Sheet under “Non-Current
Assets”
Schedule II Decpreciation/Amortisation of intangible assets –
applicability of Accounting standards,
5/8/2024 21
23. Who can be a valuer?
A person having such qualifications and experience
and registered as a valuer in such manner, on
such terms and conditions as may be prescribed.
Amendment:
It shall come into force from the 23'd day of October,
2017. In the Companies Act,2013, in section 247,
in sub-section (1), for the words ,,a person having
such qualifications and experience and registered
as a valuer in such rnanner, on such terms and
conditions as may be prescribed", the words "a
person having such qualifications and experience,
registered as a valuer and being a member of an
organisation recognised in such manner, on such
terms and conditions as may be prescribed" shall
be substituted. 23
24. An individual shall have the following qualifications
and experience to be eligible for registration under
rule 3, namely:-
(a) post-graduate degree or post-graduate
diploma, in the specified discipline, from a
University or Institute established, recognized or
incorporated by law in India and at least three
years of experience in the specified discipline
thereafter; or
(b) a Bachelor's degree or equivalent, in the
specified discipline, from a University or Institute
established, recognized or incorporated by law in
India and at least five years of experience in the
specified discipline thereafter; or
(c) membership of a professional institute
established by an Act of Parliament enacted for
24
Who can be a valuer?
25. Securities or Financial Assets Graduate in any
stream:
(1) Member of the Institute of Chartered
Accountants or The Institute of Cost
Accountants of India or the Institute of
Company Secretaries of India;
(2) MBA/PGDBM specialisation in finance or;
(3) Post Graduate Degree in Finance Three
years of experience in the discipline after
completing graduation. Courses as per
syllabus specified under rule 5
Any other asset class along with corresponding
qualifications and experience in accordance
with rule 4 as may be specified by the authority
for a registered valuers organization in its
25
Who can be a valuer?
26. Expert
As per Sec.2(38)
“EXPERT” includes:
An Engineer,
A Valuer,
A Chartered Accountant,
A Company Secretary,
A Cost Accountant And
Any Other Person Who Has The Power Or Authority To
Issue A Certificate In Pursuance Of Any Law For The Time
Being In Force
26
29. COMPANIES (REGISTERED VALUERS AND VALUATION) RULES, 2017
Eligibility for registered valuers
Qualifications and experience
Valuation Examination
Application for certificate of registration
Conditions of Registration
Conduct of Valuation
Temporary surrender
Functions of a Valuer
Transitional Arrangement
Eligibility for registered valuers organizations
Application for recognition
Conditions of Recognition
Cancellation or suspension of certificate of registration or recognition
Complaint against a registered valuer or registered valuers organization
Procedure to be followed for cancellation or suspension of registration or recognition certificate
Valuation Standards
Committee to advise on valuation matters
Punishment for contravention
Punishment for false statement
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30. What is the subject matter of valuation?
Who can be a valuer?
Who is having the power to appoint a valuer?
30
31. COMPANIES ACT 2013 PROVISIONS
• 247.Valuation by Registered Valuers.
• (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.
31
33. Issue of new shares
value (worth) of the business.
sale of a business
Expansion
Amalgamate
preference shares or debentures
the acquisition
jointly by the partners in a partnership firm and it is dissolved, it becomes necessary to value for proper
distribution of assets.
loan advanced on the security of shares
Purchase and sale of shares of private limited/ limited companies and any un quoted shares under stock
exchanges.
net asset value by an investment company.
Dispute resolution cases
intellectual property rights
per share value of an Employee Stock Option Plan (ESOP)/ Sweat Equity shares.
bank financing or alternative investment.
intrinsic value of a business and assess whether it is different from the fair market value of the business.
33
35. 35
Chapter-IV-Share Capital and Debentures
Section 54 read with Rule 8 For valuation of sweat equity shares
Section 62 (1)(c) For valuation of further issuance of shares
Chapter-XII-Meetings of Board and its Powers
Section 177(4)(vi) For valuation of undertakings or assets of the company.
Section 192(2) For valuing of Assets involved in arrangement of Non-cash transactions
involving directors
Chapter-VX- Compromises, Arrangements and Amalgamations
Section 230(2)(c)(v) For valuation of shares, property and all assets, tangible and intangible,
movable and immovable of the Company under a scheme of Corporate Debt
restructuring.
Section 230(3) Under a scheme of compromise /arrangement, along with the notice of
creditors/shareholders meeting, a copy of valuation report, if any shall be
accompanied.
Section 232(2)(d) Copy of the Valuation Report by the expert with regard to valuation, if any
would be circulated for meeting of creditors/members.
Section 232(3)(h) Where under Merger and Amalgamation of companies, the transferor
company is a listed company and the transferee company is an unlisted
company, for exit opportunity to the shareholder of transferor company,
valuation may be required to be made by the tribunal.
Section 236(2) Valuation for Purchase of Minority
Shareholding
Chapter-XIX- Revival and Rehabilitation of Sick Companies
Section 260(2)(C) Valuation in respect of Shares and Assets to arrive at the Reserve Price for the
sale of for Company Administrator.
((a).Omitted by Insolvency and Bankruptcy Code, 2016 Dated 15th Nov, 2016)
(b) The MCA Notification No. F.O. 3453(E) Dated 15th November, 2016,
enforcing the related sections of Insolvency and Bankruptcy Code, 2016)
Chapter-XX- Winding Up-Part-I- Winding Up by Tribunal
Section 281(1)(a) For submission of report by Company Liquidator shall accompany valuation
report on the assets held by the company.
Chapter-XX- Winding Up-Part-II-Voluntary Winding Up
Section 305(2)(d) Report on Assets for declaration of solvency in case of proposal to wind up
voluntarily.
Section 319(3)(b) Valuing interest of any dissenting member under Power of Company
Liquidator to accept shares etc., as consideration for sale of property of the
company.
((a).Omitted by Insolvency and Bankruptcy Code, 2016 Dated 15th Nov, 2016)
(b) The MCA Notification No. F.O. 3453(E) Dated 15th November, 2016,
enforcing the related sections of Insolvency and Bankruptcy Code, 2016)
37. 37
Act Particulars Refrerence
Insolvency and Bankruptcy Code, 2016 Regulation 35 (i) The Code defines liquidation
value as
“Liquidation value is the
estimated realizable value of the
assets of the corporate debtor if
the corporate debtor were to be
liquidated on the insolvency
commencement date.”
Regulation 38 (i) It mandates that the resolution plan
shall identify the liquidation value due
to operating creditors and liquidation
value due to dissenting financial
creditors.
Under SEBI(Real Estate Investment Trust)
Regulations, 2014
Regulation 2(1) (zz) “Valuer” means any person who is a
"registered valuer" under section 247 of
the Companies Act, 2013 and who
has/have been appointed by the
manager to undertake both financial
and technical valuation of the REIT
assets.
Under SEBI (Infrastructure Investment
Trusts) Regulations, 2014
Regulation 2(1) (zzf) “valuer” means any person38[(s)] who
is a "registered valuer" under section
247 of the Companies Act, 2013 and
who has/have been appointed by the
investment manager to undertake both
financial and technical valuation of the
InvIT assets.
38. 38
Act Particulars Refrerence
SEBI (Issue Of Capital and Disclosure
Requirements) Regulations, 2009
Chapter-VIA- Conditions and manner of
providing Exit Opportunity to
Dissenting Shareholders under Section
27 of the Companies Act, 2013.
Regulation -69E-Exit Offer Price-
Pricing of equity shares – Infrequently
traded shares.
Chapter-VII- Preferential Issue Regulation -73(3) - securities are issued
on a preferential basis to promoters,
their relatives, associates and related
entities for consideration other than
cash.
Chapter-VII- Preferential Issue Regulation-76A- Pricing of equity
shares – Infrequently traded shares.
SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations,
2011
Chapter-II-Substantial Acquisition of
Shares, Voting Rights or Control.
Regulation 8(16)-Offer Price-In case
infrequently traded shares, the SEBI
may ask valuation of shares.
Chapter-II-Substantial Acquisition of
Shares, Voting Rights or Control.
Regulation 9(5(c)) - Mode of Payment-
Where listed securities are offered as
consideration, the value of such
securities and the ratio of exchange of
shares.
39. 39
Regional Stock Exchange listed
Companies/ Listed companies moved
to Dissemination Board of NSE/ BSE
SEBI Circular dated 10th October 2016,No.
SEBI/HO/MRD/DSA/CIR /P/ 2016/110
Exit opportunity to the shareholders of Exclusively
Listed Companies.
Mergers, Amalgamations, Demerger,
Reduction of Capital etc.,
SEBI Notification No. CIR/CFD/CMD/16/2015, dated 30th
November, 2015
Fairness Opinion is required from the Category-1
Registered Merchant Banker based on the valuation
done by an Independent Chartered Accountant.
RBI/FEMA Regulations Under FEMA Regulations (Foreign Direct Investments), for
Issue /Transfer of Equity shares / Compulsory convertible
instruments between Resident and Non Resident Also for
Investment/Acquisition of Companies outside India (ODI),
valuation is required- Inbound/ outbound Investments
For Investment more than 5 mn USD, then Valuation of
Category-1 Merchant Banker registered with SEBI.
For Investment 5 mn USD or less, then Valuation from
practicing Chartered Accountant in practice with ten
years of experience.
Income Tax Act, 1961 Section -17 (2)(vi) read with Rule 3(8)(i) of Income Tax
Rules, 1962
Perquisite is taxed in the hands of Employees which is
computed as the difference between the Fair Market
Value of the shares on the date of exercise and the
exercise price. The employer is required to withhold
tax at source in respect of such perquisite:
In case of Unlisted Companies, Valuation to be
done by a SEBI Registered (Category-I)
Merchant Banker.
For Listed companies, Average of Opening and
Closing Market Price on Exercise date is
prescribed.
Section-56- Income Tax on deemed gifts Section 56 (2)(vii) & Section 56 (2)(vii)(a) –Valuation
done by Valuation from practicing Chartered
Accountant in practice
Section 56 (2)(vii)- Valuation to be done by a SEBI
Registered (Category-I) Merchant Banker.
Section 92C-Transfer Pricing To Meet the regulatory guidelines.
41. Conditions Precedents and
Subsequents
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 a
period of three years prior to his appointment as valuer or three
years after the valuation of assets was conducted by him.]
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42. Do’s and Do not’s
DO
• Make an impartial, true
and fair valuation
• Exercise due diligence
DO NOT
• Undertake valuation of
any assets in which he
has any interest
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44. Valuation Report
As per,
Companies_(Registered_Valuers_and_Valuation)_Rules_2017.
(3) The valuer shall, in his report, state the following:-
(a) background information of the asset being valued;
(b)purpose of valuation and appointing authority;
(c) identity of the valuer and any other experts involved in the valuation;
(d) disclosure of valuer interest or conflict, if any;
(e)date of appointment, valuation date and date of report;
(f)inspections and/or investigations undertaken;
(g)nature and sources of the information used or relied upon;
(h)procedures adopted in carrying out the valuation and valuation standards followed;
(i) restrictions on use of the report, if any;
(j) major factors that were taken into account during the valuation;
(k) conclusion; and
(l) caveats, limitations and disclaimers to the extent they explain or elucidate the limitations
faced by valuer, which shall not be for the purpose of limiting his responsibility for the
valuation report.
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45. Valuer shall consider the following points for valuation Report
(a) Nature and History of the business
(b) Economic outlook
(c) Book value of the
(d) Earning capacity of the company;
(e) Dividend –paying capacity;
(f) Goodwill or other intangible value;
(g) Sales of the stock and the size of the block of stock to be valued;
(h) Market prices of stock
(i) Contingent liabilities
Points to be considered in valuation report
45
47. Variation in valuation from one intangible asset with other intangible assets
Basis of valuation depends on time, cost and circumstances.
Impact of amendments in the regulations for disclosures affecting the financial
position of the company.
Various kinds of intangible assets are not taken into account in disclosure of
financial statements.
Gaps in the Indian and International accounting standards and reporting systems.
Failure to understand the enterprise's core value and the special characteristics of
its intangible assets;
47
Valuation - Pitfalls
48. PITFALLS – CASE STUDY
Failure to understand the enterprise's core value and the special
characteristics of its intangible assets;
48
Pitfalls Cases
49. 49
Case Study
With the loans to Kingfisher Airlines (KFA) turning into a non-performing asset
(NPA), the Reserve Bank of India (RBI) has asked banks not to treat “Kingfisher
brand”, an intangible asset, as collateral
RBI’s instruction to banks is the principle of lending to and on the back of
all intangible and knowledge assets. By permitting banks to finance
investments in an intangible asset such as spectrum and seeking bank’s
recourse to it in the event of a default, RBI had moved forward on
intangible asset financing.
50. Active part in drafting rules
Registered Valuer
Organization
Clarifications
Training Courses
Exams
50