The International Financial Reporting Standards (IFRS), which several large companies in India will need to follow from April 1, will be flexible enough to suit Indian companies, the Union Minister for Corporate Affairs, Mr Salman Khurshid, has said.
“From Day 1, we have said we will converge, not adopt. There will be different standards on specific issues on which we need to have different standards,” Mr Khurshid told Business Line.
“Convergence,” he said, “gives you the flexibility to stop where you want to stop, adjust where you want to adjust and make an exception where you want to make an exception.”
Asked for instances, he said that “fair value” accounting was one of the areas the government had not taken a view yet. “We are working out. There will be areas where ‘fair value’ will apply, there will be areas where it need not apply,” he said.
Stressing that India should not be seen as a country that drags its feet, Mr Khurshid said that it was necessary to ensure that “we do not fall into the trap of some spurious sovereignty idea.”
He said that there was no confusion about alignment of IFRS with tax laws.
“There will be two parallel systems — the accounting system and the tax system,” he said.
On the expertise available in the country to help companies migrate to the IFRS system, the Minister observed that expertise will come only after the system is brought in, since people would come forward to get trained only after there is a market for their knowledge.
“There is no hypothetical training,” he said.
Subiksha — SFIO
On the case of the retail chain Subiksha being referred to the Serious Frauds Investigations Office (SFIO), Mr Khurshid said that it was a “routine matter” and action would be taken if necessary.
He noted that SFIO was “the next level of procedure in substantive inquiry” and the Registrar of Companies would refer a case to SFIO if it felt that the case needed “more extensive and investigative procedure.”
The Minister stressed that referring a matter to the office “does not mean we are condemning it (the company investigated) .”
Asked about irregularities in the Indian Premier League, Mr Khurshid said that the issue largely lay outside the mandate of the Ministry of Corporate Affairs.
However, he noted that there were some Company Law violations by some IPL companies and “we will take steps in those matters.”
Portals for investors
Today, at an investor awareness programme organised by his ministry in collaboration with the Southern India Chamber of Commerce and Industry (SICCI), Mr Khurshid launched an ‘investor awareness’ web portal in Tamil language.
Such portals are to be launched in fourteen Indian languages.
This is part of the effort to involve the common man in the Indian capital market system.
The capital market is not just for some English speaking, rich people, the Minister said.