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TMI BlogAnnual ReportX X X X Extracts X X X X X X X X Extracts X X X X ..... or fair value in underlying real estate asset, as the case may be; (e) Comments of the Trustees on the performance of the scheme, with full justification. (v) Statement giving relevant perspective historical per unit statistics in accordance with paragraph 6 of this Schedule; 7 [ (vi) Statement on the following lines: On written request, present and prospective unitholders/investors can obtain a physical copy of the trust deed, the annual report and scheme related documents at a nominal price. ] 2. Accounting Policies 8 [(a) For investments in securities - The accounting policies given in Part A of the Ninth Schedule shall be followed. ] (b) For investments in real estate assets- Following accounting policies shall be followed by real estate mutual fund schemes for the preparation of accounts: 9 [ (i) The accounting policies given in Part A of the Ninth Schedule in respect of investment in securities; ] ii. The accounting policies given in Part B of the Ninth Schedule in respect of real estate assets; and iii. In a real estate mutual fund scheme which provides to the unit holders the option for an early redemption or repurchase their own units the par value of the unit shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Asset Management Company; (d) the basis on which management fees have been paid to the Asset Management Company and the computation thereof; (e) if brokerage, custodial fees or any other payment for services are paid to or payable to any entity in which the Asset Management Company or its major shareholders have a substantial interest (being not less than 10% of the equity capital), the amounts debited to the revenue account or amounts treated as cost of investments in respect of such services shall be separately disclosed together with details of the interest of the Asset Management Company or its major shareholders; (f) aggregate value of purchases and sales of investments during the year and expressed as a percentage of 13 [ average net asset ] ; 14 [ (g) In case of securities, excluding debt securities, where the non-traded investments which have been valued in good faith exceed 5% of the net assets at the end of the year, the aggregate value of such investments along with percentage to net assets. In case of debt securities which have been valued at a price other than the price given by the Independent Valuation Agencies at the end of year, the aggregate value of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained from the two approved valuers is adjusted significantly for the purpose of the balance sheet, for example to avoid double-counting of assets or liabilities that are recognised as separate assets or liabilities, the real estate mutual fund scheme should disclose the reconciliation between the so selected lower valuation and the adjusted valuation shown in the balance sheet. (f) In case where a real estate mutual fund scheme measures a real estate asset using the cost model [as mentioned in paragraph (vii) of Explanation in Part B of the Ninth Schedule], the reconciliation required as per item (a) this paragraph shall disclose amounts relating to that real estate asset separately from the amounts relating to other real estate assets. In addition, an real estate mutual fund scheme shall disclose: 1. a description of the real estate asset; 2.an explanation of why fair value cannot be determined reliably; 3.if possible, the range of estimates within which fair value is highly likely to lie; and 4.on disposal of investment of the real estate asset not carried at fair value: the fact that the real estate mutual fund scheme has disposed of the real estate investment asset not car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erating expenses (including repairs and maintenance) arising from real estate asset that did not generate rental income during the period. 5. Auditor s Report (i) All mutual funds shall be required to get their accounts audited in terms of a provision to that effect in their trust deeds. The Auditor s Report shall form a part of the Annual Report. It should accompany the Abridged Balance Sheet and Revenue Account. The auditor shall report to the 24 [ trustee company ] and not to the 25 [ unit holders ] . (ii) The auditor shall state whether: (1) he has obtained all information and explanations which, to the best of his knowledge and belief, were necessary for the purpose of his audit, (2) the Balance Sheet and the Revenue Account are in agreement with the books of account of the fund. (iii) The auditor shall give his opinion as to whether: 1. the Balance Sheet gives a true and fair view of the schemewise state of affairs of the fund as at the balance sheet date, and 2. the Revenue Account gives a true and fair view of the schemewise surplus/deficit of the fund for the year/period ended at the balance sheet date. 21 [ (6) Perspective historical per unit statistics (1) This statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as (iii)(A) The balance-sheet shall disclose under each type of investment(s) in securities the aggregate carrying value and market value of non-performing investments. An investment shall be regarded as non-performing if it has provided no returns in the form of dividend or interest for a period specified in the guidelines issued by the Board. 5. Omitted vide Notification No. SEBI/LAD-NRO/GN/2019/37 dated 23-09-2019 w.e.f. 15-10-2019 before it was read as (iv) The Balance Sheet shall indicate the extent of provision made in the Revenue Account for the depreciation/loss in the value of non-performing investments in securities. However, if the investments in securities are valued at marked to market, provisions for depreciation shall not be necessary. 6. Omitted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as xi. In a close-ended scheme 2 [launched prior to the commencement of the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2009] which provides to the unitholders the option for an early redemption or repurchase their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified by the Board in this regard. iii. For quoted shares, the dividend income earned by the scheme shall be recognised, not on the date the dividend is declared, but on the date the share is quoted on an ex-dividend basis. For investments in shares which are not quoted on the stock exchanges, the dividend income must be recognised on the date of declaration. iv. In respect of all interest-bearing investments, income shall be accrued on a day to day basis as it is earned. Therefore when such investments are purchased, interest paid for the period from the last interest due date upto the date of purchase, shall not be treated as a cost of purchase, but shall be treated to Interest Recoverable Account. Similarly, interest received at the time of sale for the period from the last interest due date upto the date of sale must not be treated as an addition to sale value but shall be credited to Interest Recoverable Account. v. In determining the holding cost of investments and the gains or loss on sale of investments, the average cost method shall be followed. vi. Transactions for purchase or sale of investments shall be recognised as of the trade date and not as of the settlement dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualisation Account as provided in (x)(a). 6 [ **** ] xii. The cost of investments acquired or purchased shall, inter alia, include brokerage, stamp charges and any charge customarily included in the broker s bought note. In respect of privately placed debt instruments any front-end discount offered shall be reduced from the cost of the investment. xiii. Underwriting commission shall be recognised as revenue only when there is no devolvement on the scheme. Where there is devolvement on the scheme, the full underwriting commission received and not merely the portion applicable to the devolvement shall be reduced from the cost of the investment. 9. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/70 dated 25-01-2022 before it was read as i. The accounting policies given in paragraph 2(a) in respect of investment in securities; 10. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/70 dated 25-01-2022 11. Omitted vide Notification No. SEBI/LAD-NRO/GN/2022/70 dated 25-01-2022 before it was read as These particulars shall contain information enumerated in Annexures 1A and 1B hereto 12. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/70 dated 25-01-2022 before it was read a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit on sale of investment to third party, per unit; (iv) transfer to revenue account from past year s reserve, per unit. (c) aggregate of expenses, write off, amortisation and charges, per unit; (d) net income, per unit; (e) unrealised appreciation/depreciation in value of investments, per unit; (f) if the units are traded or repurchased/resold, the highest and the lowest prices per unit during the year and the price-earning ratio ; (g) per unit, ratio of expenses to average net assets by percentage; (h) per unit, ratio of gross income to average net assets by percentage (excluding transfer to revenue account from past year s reserve but including unrealised appreciation on investments) ; (i) per unit NAV. 22. Omitted vide Notification No. SEBI/LAD-NRO/GN/2022/70 dated 25-01-2022 before it was read as ANNEXURE 1A [Refer para 3] Contents of schemewise Balance Sheet ASSETS SIDE OF THE BALANCE SHEET: I. The assets of the balance sheet shall be grouped into the following categories: - Investments - Deposits - Other Current Assets - Fixed Assets II. INVESTMENTS: (a) The following types of investment in securities shall be separately disclosed: (i) Equity shares; (ii) Preference shares; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... current liabilities and provisions Current liabilities: - Sundry creditors; - Interest payable on loans; - Contract for purchase of investments in securities; - Bank account overdrawn as per books; - Unclaimed distributed income; - Others. Provisions: - Provisions for loss/depreciation in value of investments in securities (separately with reference to each type of investment in securities) (optional, if marked to market); - Provision for doubtful deposits; - Provision for outstanding any accrued income considered doubtful; - Provision for gratuity; - Provision for staff welfare fund; - Proposed income distributed on initial capital and unit-capital; - Other provisions. VI. Contingent liabilities - Disclosure should be made of all contingent liabilities, showing separately :- (i) Underwriting commitments; (ii) Uncalled liability on partly paid shares; (iii) Other commitments; and (iv) Others (specifying details). ANNEXURE 2 [Refer para 4] Contents of revenue account - Dividend; - Interest; - Rental (lease) income - Profit on sale/redemption of investments in securities (other than inter-scheme transfer/sale); - Profit on sale of real estate assets (other than inter-scheme transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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