A road map will be unveiled by November on the convergence of Indian accounting standards with the International Financial Reporting Standards (IFRS) by November, Salman Khursheed, Union Minister of State (independent charge) for Corporate Affairs and Minority Affairs, said on Thursday.
Pointing out that three expert groups were now working on different aspects of IFRS, Mr Khursheed told reporters in Sriperumbudur near here that the groups’ reports would deal with issues including the introduction of IFRS in phases or at one go.
The Minister, who earlier inaugurated a seminar on secularism organised by the Rajiv Gandhi National Institute of Youth Development (RGNIYD), added that “we have made it clear that from 2011, IFRS convergence will be in place.”
Asked whether there was any timeframe for the adoption of the Companies Bill, which was introduced in Lok Sabha early this month and which sought to replace the Companies Act of 1956, Mr Khursheed expressed the hope that the Bill would be passed in the near future. Pointing out that the Bill had been referred to the Standing Committee, he said “we are urging the Minister for Parliamentary Affairs to take up with the Speaker that there should be a time limit on the Standing Committee looking at the draft of the Bill.”
Speaking on the Bill, he said “I think many changes that are long overdue will come. The spirit in which we want to see corporate affairs to develop which is, to use the words of Prime Minister, ‘trust and verify.’ We have to trust the industry. We have to be partners with them. But, [we have] also to ensure that a few people who default do not bring a bad name to the entire industry.”
Describing the proposed law as a “much more transparent and objective structure,” the Minister said: “We have taken away a lot of what we think unnecessary part of the [existing] law, unnecessary burden on companies.We have subscribed to the view that we must trust people, shareholders. But, disclosure and full information are very important. So, we emphasise on disclosure and full information. Reduce discretion to the bare minimum. Ensure that people, particularly directors, know what their responsibilities are and they are not caught by any surprise. But, if knowing what their responsibilities are and there is default, there must be a very clear case of sanctions that will be imposed.”