Annual Report Open Ended Debt-1 - IDFC Mutual Fund

OPEN ENDED SCHEMES
Schedules to the financial statements for the period ended March 31, 2006
(Currency: Indian Rupee)
1. Background
Standard Chartered Mutual Fund (‘the Fund’) is sponsored by Standard
Chartered Bank, U.K. (‘SCB’) and is constituted as a Trust under the Indian
Trust Act, 1882 with Standard Chartered Trustee Company Private Limited
(‘the Trustee’) as trustee. In accordance with the Securities and Exchange
Board of India (SEBI) (Mutual Funds) Regulations, 1996 (‘the Regulations’)
and amendments thereto the Trustees have entrusted the investment management
function to Standard Chartered Asset Management Company
Private Limited (‘the AMC’).
Grindlays Super Saver Income Fund
Grindlays Super Saver Income Fund (‘GSSIF’) is an open ended scheme.
The Scheme has three plans, Investment Plan (‘GSSIF-IP’), Short Term
Plan (‘GSSIF-ST’) and Medium Term Plan (‘GSSIF-MT).
GSSIF – ST offers four further sub-plans viz. Plan A – available for
investment by all categories of investors and Plan B (Institutional Plan)
available for investment by non-individuals only, Plan C (super institutional
plan) available for investments for corporates and Plan D available for
investment by all categories of investors.
All the sub-plans of GSSIF-IP offer a choice of four Investment Options viz.,
Dividend (Quarterly), Dividend (Half yearly), Dividend (Annual) and Growth
Option. All the sub-plans of GSSIF-ST offer a choice of two Investment
Options viz., Dividend (Monthly) and Growth. All the sub-plans of GSSIF-MT
offer a choice of two Investment Options viz., Growth and Dividend (Bi-
Monthly). Under all Dividend Options reinvestment facility is available.
Grindlays Dynamic Bond Fund
Grindlays Dynamic Bond Fund (‘GDBF’) is an open-ended income Scheme.
As stated in the Offer document, the Scheme is designed to generate
optimal returns with high liquidity by active management of the portfolio and
investing in high quality money market and debt instruments.
The Scheme offer a choice of three Investment Options viz., Dividend
(Annual), Dividend (Quarterly) and Growth Option. Under all Dividend Options
reinvestment facility is available.
Grindlays Government Securities Fund
Grindlays Government Securities Fund (‘GGSF’) has three plans Investment
Plan (GGSF-IP), Short Term (GGSF-ST) and Provident Fund (PF)
Plan (GGSF-PF).
As stated in the Offer document, GGSF – IP is designed for investors
seeking a long-term investment option and generally has a medium term
maturity profile. It provides stable returns over a relatively longer tenor
period of investments. GGSF - ST is designed for investors seeking stable
returns over shorter periods and generally has a much shorter average
maturity of assets thereby providing consistent returns even over a shorter
period of investments. GGSF – PF is designed for PF trusts and investors
seeking optimal returns by investing in government securities.
GGSF-PF offers two further sub-plans viz. Plan A (Regular Plan) – available
for investment by all categories of investors and Plan B (Institutional
Plan) available for investment by non-individuals only.
GGSF – IP offers a choice of four Investment Options viz., Dividend
(Quarterly), Dividend (Half yearly), Dividend (Annual) and Growth Option.
GGSF-ST offers a choice of three Investment Options viz., Dividend
(Monthly), Dividend (Quarterly) and Growth. Both sub-plans A and B of
GGSF – PF offers investment options of Growth, Dividend (Quarterly)
and Dividend (Annual). Under all Dividend Options reinvestment facility is
available.
2. Significant accounting policies
2.1 Basis of preparation of financial statements
The financial statements are prepared and presented under the historical
cost convention, as modified for investments which are ‘marked-to-market’,
on the accrual basis of accounting and in accordance with the accounting
policies and standards specified in the Ninth Schedule of the
Regulations and amendments thereto, and the accounting standards issued
by the Institute of Chartered Accountants of India.
2.2 Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles (‘GAAP’) requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities as at the date of financial
statements. The estimates and the assumptions used in accompanying
financial statements are based upon managements evaluation of relevant
facts and circumstances as at the date of financial statements.
Actual results could differ from those estimates and assumptions used in
preparing financial statements. Any revision to accounting estimates is
recognized prospectively in the current and future periods.
2.3 Investments
Basis of accounting
• Transactions for purchase and sale of investments are recorded on
trade date. Cost of investments includes brokerage. Any front enddiscount
on privately placed investments is reduced from the cost of
such investments.
• Broken period interest paid/received is debited/credited to Interest
Receivable account and is not included in the cost of purchase/sale
value.
• Inter scheme purchase/sale of securities are recorded at prevailing
market rates.
Valuation
• Investments for the purpose of valuation are classified as traded and
non traded in accordance with the provisions of the Regulations.
• Investments are stated at market/fair value as follows:
Traded debt securities
Government securities
• Government securities are valued at prices obtained from Credit
Rating Information Services of India Limited (‘CRISIL’) in accordance
with the guidance note for valuation of securities for Mutual
funds issued by SEBI.
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