Managerial remuneration (calculation of effective capital)

Refer Explanation-I in Section IV.  All investments (except in case of investment by an investment company whose principal business is acquisition of shares, stock, debentures or other securities) have to be reduced.

Effective capital is that part of total capital which is solely invested in your business. To put in other way it is net of investments made outside the business of the entity. hence investments outside the business must be deducted.