Analysis of 35k companies that will fall under the purview of IND-AS
 
In the interest of reducing disparities between accounting norms accepted in India and global standards,guidelines of IND-AS were introduced in 2016 by The Ministry of Corporate Affairs (MCA) and Government of India, in consultation with the Institute of Chartered Accountants of India (ICAI).

The detailed norms primarily focuses on recording fair values in financial statements and representing information akin to IFRS Standards for ease of comparison.

IND-AS shall be applicable and mandatory henceforth (from Financial year beginning April 2017) for companies with Net-Worth above INR 250 Cr & associate / Subsidiaries / Holding / Joint ventures of such companies. It was adopted with phases; Over 1000 companies have already complied with the norms. The criteria for the first phase mandated all companies with Tangible Net-Worth over INR 500 Cr to follow the Accounting standard (from Financial year beginning April2016).*1

The total number of companies that ought to follow the newly introduced Standard, as per our research is estimated to be 39,188. Analysis of a sample size of 200 companies out of the estimated count of 35k companies, as represented in Table 1.a shows the count of Joint Ventures, Subsidiaries and Associate Companies. The total number of companies that are to follow the IND-AS Standard for the 200 companies are 2002 considering the total number of subsidiaries, associates and JVs. The estimated number of companies that will follow IND-AS is 3,979 if the trend of the sample data is accurate then over 35K companies will follow the new Accounting Standard.

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The benefits of IFRS converged Indian accounting standards makes Financial Statements more accurate to help investors understand the performance of companies better.*2

As per analysis of 2429 companies have Tangible Net-Worth over INR 250 Cr and under INR 500 Cr and will be under the purview of the new accounting standard from Financial Year ending March 2017. The Industry and state-wise classification is as represented in Table 2.a.

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The highest frequency of companies in a particular Industry as per our data, is "Manufacturing Minning and Quarrying". This indicates high requirement for capital in the Industry also high potential of sustenance, consideringthe inherit advantages of companies with high Net-Worth. The states with the highest count of all companies as per the same data is, ‘Maharashtra Delhi and Tamil Nadu’. All the geographies being conducive for establishing businesses with sound infrastructure to support growth.

The count of companies in the represented spectrum also projects the scope of foreign investments across Industries. In order to get a clearer image of the industry classification, the tabular representation (2.b) gives the percentage segregation of the classification.

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"Construction, Real Estate; Renting and Business Activities" as highlighted in Table 1.b, follows Manufacturing and relating activities as second in the count with the difference of a small margin. Delhi being home to the second highest frequency of such companies indicates high number of organized players catering to the demand of the Real Estate market in the geography. Financial Intermediation has a significant share among the companies with Tangible Net-Worth between INR 250 Cr and 500 Cr, this not only represents high wealth accumulation and business potential of stakeholders but also an indicator of growth across Industries considering the diverse nature of its customers.

The details of the companies as per this study is limited to the scope of its Industry and Geography, InstaFinancials is keen and active in conducting research on the data with greater detail. The same shall be published/provided on request. For detailed information of the companies, do connect with us in the following link.
www.InstaFinancials.com

*1 Details of the applicability are as explained in the link below:
www.pwc.in/services/ifrs/ifrs-in-india_roadmap.html

*2 More information on how IND-AS will help draw foreign investments is explained in the link below http://www.business-standard.com/article/companies/ind-as-will-increase-accountability-of-companies-enlighten-investors-siddharth-talwar-keyur-dave-116101100758_1.html

 
 
 

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