Independence and Disclosure of Interest-Saturday Brain Storming Thought (84) 24/10/2020 -BY VR AVINASH KULKARNI

Saturday Brain Storming Thought (84) 24/10/2020 -BY VR AVINASH KULKARNI

Independence and Disclosure of Interest

Valuators will employ independent and objective judgement in reaching conclusions and will decide all matters on their merits, free from bias, advocacy and conflicts of interests
Valuation Independence Rule

Section 1026.42(C)(1) prohibits both direct and indirect attempts to cause the value assigned to the consumers principal dwelling to be based on a factor other than the independent judgement of the person that prepares the valuation, through coercion and certain other acts and practices

Independent Valuation Report

A property valuation report is a legal and professional assessment of the price of a property, usually prepared for various reasons

An independent valuation report is one conducted by a neutral party who has no interest in the property being assessed

Section 184 of the Companies Act, 2013

It deals with the disclosure of interests by a director

Objectives of section 184

If a director makes a contract with the company and does not disclose his interests, he will be committing breach of trust

Consequences of Non Disclosure for directors

A director shall be liable to

1) an imprisonment which may extend to one year OR

2) a minimum fine of Rs Fifty Thousand which may extend up-to Rs 1 Lakh OR

3) both imprisonment and penalty

Disclosure

It is the process of making facts or information known to public

Proper disclosure by corporations is the act of making its customers, investors and many people involved in doing business with the company aware of pertinent information

Benefits of self disclosure

1) helping the client to not feel alone

2) decreasing client anxiety

3) improving the clients awareness to different view points

4) increasing counsellor genuineness

Types of disclosures

1) deliberate

2) unavoidable

3) accidental

4) client initiated

Disclosure Statement

1) do not exclude any information, Be honest

2) write clearly, use simple words in writing your income statement for disclosure

3) attach necessary documents to your disclosure statement

4) review and revise

Valuation Value

Value means the worth of a thing, and valuation means an estimate of its worth

A valuation is a judgement that someone makes about how much money something is worth

Importance of Independent

If one thing or person is independent of another, they are separate and not connected, so the first one is not affected or influenced by the second
Independent Valuer

It means a person with no material current or prior business or personal relationship with the advisor orchard 4th e directors and who is engaged to a substantial extent in the business of rendering opinions regarding the value of investments of the type held by the company

Independent Valuation provider

1) breadth of coverage to meet both the current and future valuation needs

2) valuation professionals that have a deep understanding of the assets

3) Market data and the ability to source, gather, manage and apply appropriately

4) Analytical requirements and technical expertise, including the ability to automate and document the process

Full Disclosure

Disclose all evidence of proven factual information gathered and presented to an individual or group

Full disclosure, the acknowledgement of possible conflicts of interest in one’s work

Primary Disclosure

It includes any material which casts doubts on the accuracy of any persecution evidence, may point to another person having involvement in the commission of the offence or may go the creditability of a prosecution witness

Enhanced Disclosure

Details of all criminal history, cautions, warnings, reprimands, spent and unspent convictions held on the police

Online disclosure

Facts of disclosing personal information online usually with a feeling of safety related to apparent anonymity

Valuer should give declaration in every valuation report about independence and disclosure of interests

1) I shall act with objectivity in my professional dealings by ensuring that my decisions are made without the presence of any bias, conflict of interest, coercion, or undue influence of any party, whether directly connected to the valuation assignments or not

2) I shall not take up an assignment, if I or any of my relatives or associates is not independent in terms of association to the company

3) I shall maintain complete independence in my professional relationships and shall conduct the valuation independent of external influence

4) I shall whenever necessary disclose to the clients, possible sources of conflicts of duties and interests, while providing unbiased services

5) I shall not deal in securities of any subject company after any time when I first become aware of the possibility of my association with the valuation, and in accordance with the securities and exchange board of India (prohibition of insider trading) regulations, 2015 or till the time the valuation report becomes public, whichever is earlier

6) I shall not indulge in mandate snatching or offering convenience valuations in order to cater to a company or clients need

7) as an independent valuer, I shall not charge success fee (success fees may be defined as a compensation/incentive paid to any third party for successful closure of transactions or approval of credit proposals)

8) in any fairness opinion or independent expert opinion submitted by me, if there has been a prior engagement in an unconnected transaction, I shall declare the association with the company during the last five years

Compiled by:-

Vr Avinash Kulkarni

Chartered Engineer
Govt Regd Valuer
IBBI Regd Valuer

Independence and Disclosure of Interest

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