The ICAI has issued a Clarification regarding Applicability of MCA Notification dt. 30 March 2017 on ‘SBN Transactions’ in respect of financial statements for FY 2017-18 (i.e. disclosure requirements notified by MCA for transactions by Companies of ‘Specified Bank Notes’ during 8 Nov 2016 to 30 Dec 2016), as under:
This is regarding the disclosure for the Financial Year 2017-2018 and onwards as per the requirements in the Notification dated 30th March 2017 issued by the Ministry of Corporate Affairs with reference to amendment in Schedule III of Companies Act, 2013 for disclosure of Specified Banking Notes (SBN). As per the notification, disclosure is required to be given for transactions in SBN by Companies during period from 8th Nov 2016 to 30th Dec 2016.
Further as per the “Companies (Audit and Auditors) Amendment Rules, 2017, Auditors are required to give suitable note on the same in the Audit report.
In both the notifications, since it was not mentioned that these requirements are applicable only for Financial Year 2016-17 hence a clarification is found necessary.
The Corporate Laws & Corporate Governance Committee at its 41st meeting held on 6th June, 2018 decided that since this disclosure requirement was event specific, and hence was relevant for Financial Year 2016-17 only and required disclosure is also for period falling under that financial year. Therefore, in Notes to Account as well as Audit Report, the disclosure requirement relating to SBNs are not applicable for the Financial Year 2017-18 & subsequent years. Consequent disclosures may be made in the Financial Statements/ Audit Reports.