Corporate Updates – 18-07-2016


MCA has notified the Companies (Cost Records and Audit) Amendment Rules, 2016. The Amendment Rules have modified the definition of ‘cost audit report’. Further, it has also amended Rule 3 comprising of the Table containing the Sectors/Industry/Product/Service on which the maintenance of the Cost Records shall apply. It further notifies that these Rules shall not apply to a Company which is covered under Rule 3 and is engaged in generation of electricity for captive consumption through Captive Generating PIant. Now, a Cost Auditor before such appointment shall provide the written consent along with the Certificate certifying his eligibility. Further, now such cost statements shall be approved by the Board of Directors before they are signed on behalf of the Board by any of the director authorised by the Board, for submission to the Cost Auditor to report thereon, that is, now the cost audit report shall be duly signed by the Board of Directors. Also, the Companies shall file the Form CRA-4, that is, the cost audit report, in XBRL Format in the manner as specified in the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015.


SEBI vide Circular barred banks from using their own Fixed Deposit Receipts (FDRs) as collateral in their function as trading or clearing members of stock exchanges, directly or through associate entities. Further, SEBI asked them not to accept such FDRs while trading or clearing members having already deposited their own FDRs or that of associate banks would need to replace them with other eligible collaterals within six months. SEBI stated that it has observed that some banks who are also trading members or clearing members on the stock exchange/ clearing corporation have placed Fixed Deposit Receipts issued by themselves as collateral, with the clearing corporation. However, SEBI’s Risk Management Review Committee, after taking into account the global benchmarks set for collaterals by the international securities regulator body IOSCO, suggested that there is a need to align the risk management practices in Indian markets with the global principles.

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