TaxTMI 
TaxTMI 
Accounting Norms, investments and expense ceiling
X X X X Extracts X X X X
X X X X Extracts X X X X
....egistrar fees for transfer of units sold or redeemed; iii. Fees and expenses of trustees; iv. Audit fees; v. Subsequent Rating and Appraisal fees; and vi. Listing fees. (b) The annual recurring expenses shall not exceed 2 percent of the funds raised under the collective investment scheme. (c) Incentive fees No incentive fee based on performance of the scheme shall be charged to the scheme in any form or manner. (3) Other Expenses Other direct costs, if any, which are incidental to the operation of the collective investment scheme may be charged to scheme, as may be approved by trustee: Provided that granular (item wise) list of direct costs covering at least eighty percent expenses shall be disclosed in offer document and a quarterly disclosure of actual expenses shall be made. (4) All other expenses shall be borne by the Collective Investment Management Company: Provided that collective investment scheme related expenses including commission paid to distributors, by whatever name it may be called and in whatever manner it may be paid, shall necessarily be paid from the scheme only within the regulatory l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ip of owner with trustees and directors of CIMC * If lease period is shorter than tenure of the ^24[collective investment scheme], the period of lease and conditions for future renewals of lease. 3.3 Land Development Expenses These include expenses on : * New access roads and fencing * Major changes in land contours * Levelling, uprooting and terracing * Regular upkeep and maintenance of land Expenses of a capital nature should be added to the cost of land. In case of leasehold land, these expenses should be written off over the period of the lease or the period of ^25[collective investment scheme], whichever is less. Expenses of a revenue nature should be charged to the Profit and Loss Account in the year in which they are incurred. 3.4 Infrastructure and other facilities shall include : * Roads and Fencing * Security and Research and Development Buildings * Drip Irrigation systems, water systems * Agriculture Equipments and Production facilities These should be accounted as Fixed Assets in accordance with AS-10 on "Accounting for Fixed Assets" issued by ICAI. 3.5 IAS 36 requir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld be disclosed as a separate item appearing between "Fixed Assets" and "Current Assets" in the Balance Sheet. 5.2 The total of Crop development expenses at the end of the year should be compared with Net Realisable Value ('NRV'). NRV would generally mean the amount that would be realised in the normal course, in case the standing crops are disposed of on that day. NRV can be determined on the basis of estimated selling price in the ordinary course of business less estimated cost to be incurred in future for bringing the crop to maturity, and the cost necessarily to be incurred to make the sale. In case the NRV is lower than the total of the crop development expenses at the year end, then a suitable provision for the difference between these two figures should be made and disclosed as follows : Crop Development Expenses (At Cost) X Less : Provision for dimintion in value Y ---------- X-Y 5.3 The crop development expenses and the provision for diminution will be carried forward to the next year at gross values. A similar exercise would be done at the end of each year. In case the NRV at the end of the second or subsequent year is greater than/or equ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y, should be transferred to Profit and Loss account. • Sale of Residuals and Scraps - the sales proceeds shall be accounted as income in the year of sale and credited to Profit and Loss account. • Income from Investments - income arising out of investments of surplus bank balances, etc. shall be accounted on a time proportion basis taking into account the amount outstanding and the rate applicable. • Dividend from Investments - dividends, if any, will be recognized when the right to receive payment is established. • Sale of Standing Crops at terminal point - sale proceeds/transfer value of the standing crops at the terminal point shall be accounted as and when they are disposed off/transferred. The profit arising on such transactions over the book value shall be accounted at the point of sale/disposal; this should be set off against the crop development expenses. 9. Expenses 9.1 Expenses other than Crop Development Expenses can be broadly classified as under: • Initial Marketing and Launch Expenses • Normal Business Expenses 9.2 Initial issue expenses Initial issue expenses may be treated as d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed over the ^35[collective investment scheme] period (refer paragraph 2.3 above). 2. Livestock development expenses 2.1 There are generally expenses incurred on rearing and development of livestock including maintenance and upkeep. This includes expenses on: • Cost of base stock. • Food costs. • Medicines and other maintenance. • Cost of artificial insemination. • Lease rentals paid for land and for any other assets directly attributable to livestock development. • Depreciation and maintenance of fixed assets directly attributable to livestock development. • Any other expenses directly attributable to livestock development. These expenses should be accounted as "Livestock Development Expenses". They should be disclosed as a separate item appearing between "Fixed Assets" and "Current Assets" in the balance sheet. (Reference is invited to Paragraph 5.1). 2.2 Valuation of livestock development expenses and provision for diminution in value would be in the same manner as in respect of crop development expenses which is discussed in Paragraphs 5.2 and 5.3. 3. Livestock Trading 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Development Expenses The following information should be disclosed: • Opening balance • Expenses incurred during the year • Deductions • Closing balance In addition, net realisable value at year end and the Break up of various expenses included in closing balance should be disclosed. The closing balance in provisions for diminution in value in Crop Development Expense Account, if any, will be shown as a deduction from closing balance of Crop Development Expenses. IV. Current assets The following should be separately disclosed : • Balances with banks in current account • Cash on hand • Sundry debtors, distinguishing between good and doubtful • Inventories • Outstanding and accrued income • Advances recoverable in cash or kind • Deposits • Others V. Deferred revenue expenditure The following should be disclosed: • Opening balance • Additions during the year • Amount amortised during the year • Closing balance VI. The debit balance in Profit and Loss Account,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4. Accounting policies Accounting policies in respect of the following should be separately disclosed at one place and form part of the financial statements: (a) Fixed assets 1. Land 2. Others (b) Depreciation 1. Land 2. Others (c) Investments (d) Crop Development Expenses (major items under this head should be disclosed) (e) Inventories (f) Revenue recognition (g) Retirement benefits (h) Foreign currency transactions (i) Deferred revenue expenditure 5. Approval and authorisation The financial statements shall be signed by the schemewise fund managers and the Board of trustees and reported upon by the Auditors. They should be approved at a meeting of the Board of Directors of the Collective Investment Management Company and also at a meeting of the trustees or in case of a trustee company, by the Board of directors of the trustee Company. 6. Auditors report 6.1 All funds operating CIS shall be required to get their accounts audited in terms of a provision to that effect in their trust deeds. The Auditors' Report shall form a part of the Annual Report. It should accompany the Balance Sheet, Profit and Loss Account and Revenue ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 37 ibid. 38 ibid. 39 ibid. 40. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/84 dated 10-05-2022 before it was read as, "PART I -CEILING ON EXPENSES The expenses incurred shall be subject to a ceiling as specified below : (1) Initial Issue Expenses (a) These may include: * cost of offer documents and related costs; * marketing and selling expenses including agents' commission, if any; * fees to Lead Managers, if any, Registrars and collecting banks; * initial rating and appraisal fees. (b) These expenses shall be borne by the ^1[collective investment scheme]. (c) These expenses shall not exceed (i) 7.00 per cent of the funds raised under the ^2[collective investment scheme] for a ^3[collective investment scheme] of duration upto 8 years and (ii) 9.00 per cent of the funds raised under the ^4[collective investment scheme] for a ^5[collective investment scheme] having a duration of more than 8 years. (d) These expenses shall be amortized equally over a period not exceeding seven years or the period of the ^6[collective investment scheme], whichever is less. (2) Management and Advisory Fee....