SCHEDULE 9
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Investments:
(1) Transactions in securities are recognised as of the trade date. Where securities transactions take place outside the stock market, the transaction is recorded, in the event of purchase, as of the date on which an enforceable obligation to pay the purchase consideration is obtained or, in the event of sale, when an enforceable obligation to collect the sale proceeds or deliver the securities sold, as the case may be, is obtained.
(2) The cost of investments, inter alia includes brokerage, stamp duty, cost of stamps, custodian charges directly identifiable with an investment and service tax levied (if any) at the time of purchase but excludes interest accrued upto the date of purchase. Any front-end discount / incentive received / receivable in respect of placement of debt instruments is reduced from the cost of investments.
(3) (a) Traded equity securities are valued at the closing (last trade) price on the valuation day and, if the same is not available, at the closing (last trade) price of the earliest previous day within not more than 30 days prior to the valuation day, for which a quotation is available on the National Stock Exchange, in the first instance or the Bombay Stock Exchange.
(b) Traded debt securities are valued at the closing (last trade) price on the valuation day and, if the same is not available, at the closing (last trade) price of the earliest previous day within not more than 15 days prior to the valuation day, for which a quotation is available on the National Stock Exchange.
(c) Non-traded and thinly traded securities are valued in “good faith” in accordance with the guidelines for valuation of securities issued by SEBI from time to time and approved by the Board of Trustees. Valuation of equity shares is based on the net asset value and earnings capitalisation; valuation of debt securities is mainly based on the Yield to Maturity applied with reference to credit rating, benchmark yields, mandatory additional discounting factors and other criteria. Investments in securities having maturity not exceeding 182 days are valued at cost plus amortisation for premium/ discount.
(d) Government securities issued by Government of India are valued at prices indicated by CRISIL.
(e) Based on the Guidance Note on Accounting for Investment in the Financial Statements of Mutual Funds issued by the Institute of Chartered Accountants of India, net unrealised gain or loss in the value of investment is determined separately for each category of investments. The change in net unrealised loss between two balance sheet dates is recognised in the Revenue Account and the change in net unrealised gain is adjusted in the Unrealised Appreciation Reserve.
1.2 Revenue and Expense Recognition:
(1) Interest and other income are accounted on accrual basis
(2) Gains and losses on sale of securities are determined by considering the weighted average cost.
(3) Expenses are accounted on accrual basis.
1.3 Non-performing Assets and provisioning there against
An asset is regarded as non-performing if interest and / or principal amount have not been received or remained outstanding for one quarter from the day such income / installment has fallen due. Income on non-performing assets is recognised on cash basis and accrued outstanding income is reversed. Provision is also created against the principal amount, in accordance with related SEBI guidelines.
1.4 Investment Management & Advisory Fees:
In accordance with the Investment Management Agreement, investment management and advisory fees payable to Escorts Asset Management Limited is chargeable at a rate of 0.30% of the weekly average net assets of the Scheme.
1.5 Equalisation Account:
Upon sale and/or repurchase of units, an amount equal to the distributable income per unit is taken to Equalisation Account; at the year end, the balance in such Equalisation Account is transferred to Revenue Account. The treatment does not, however, impact the net income of the Fund.
1.6 Marketing Expenses:
Ongoing marketing expenses such as advertisement expenses, related printing charges and brokerage paid/payable to members of recognized Stock Exchanges/agents of the Mutual Fund towards sale of units are not considered as distribution charges.
1.7 Dividend:
Provision for dividend is based on the number of units issued (net of redemption) under the Dividend Option of the Scheme as on the relevant record date during the year.
2. NOTES TO THE ACCOUNTS
2.1 Movement in Unit Capital
|
Unit Capital |
Units (No.) |
|
Rs. |
|
|
Balance as at 01.04.2008 |
|
|
|
|
|
Growth Option |
47,335.16 |
|
473,352 |
|
|
|
(1,12,684.98) |
|
(1,126,850) |
|
|
Dividend Option |
11,845.41 |
59,180.58 |
118,454 |
591,806 |
|
|
(9113.51) |
(121,798.49) |
(91,135) |
(1,217,985) |
|
Units issued during the year |
|
|
|
|
|
Growth Option |
37,430.65 |
|
374,307 |
|
|
|
(470,563.57) |
|
(4,705,636) |
|
|
Dividend Option |
26,418.25 |
63,848.90 |
264,183 |
638,489 |
|
|
(2,731.90) |
(473,295.47) |
(27,319) |
(4,732,955) |
|
Units Repurchased during the year |
|
|
|
|
|
Growth Option |
5,814.03 |
|
58,140 |
|
|
|
(535,913.38) |
|
(5,359,134) |
|
|
Dividend Option |
19,962.10 |
25,776.13 |
199,621 |
257,761 |
|
|
(NIL) |
(5359133.80) |
(NIL) |
(5,359,134) |
|
Balance as at 31.03.2009 |
|
|
|
|
|
Growth Option |
78,951.79 |
|
789,518 |
|
|
|
(47,335.16) |
|
(473,352) |
|
|
Dividend Option |
18,301.57 |
97,253.36 |
183,016 |
972,534 |
|
|
(11,845.41) |
(59,180.58) |
(118,454) |
(591,806) |
2.2 The aggregate value of purchases (excluding call money transactions) during the year amounted to Rs.NIL (Rs. NIL), i.e.NIL (NIL) of average daily net assets and the aggregate value of sales (excluding call money transactions) during the year amounted to Rs. NIL (Rs. 592,699/-) i.e., NIL (37.05%) of average daily net assets.
2.3 The Asset Management Company is satisfied that the Custodian of the Scheme, HDFC Bank Limited is maintaining the stock of assets of the Scheme in good order. Necessary confirmations have been received from HDFC Bank Limited at the year-end, in this regard.
2.4 No Provision for Taxation has been made as the Mutual Fund is registered with Securities and Exchange Board of India and therefore, its income is exempt from Income Tax under Section 10(23D)(i) of the Income-tax Act, 1961.
2.5 Details of Large Holdings as on March 31, 2009:
|
Name of the Investor |
Percentage to total Unit |
|
Escorts Securities Ltd. |
25.72% |
2.6 Computation of Management Fees:
|
Particulars |
For the period year ending March 31, 2009 |
For the period year ending March 31, 2008 |
|
Average Daily Net Assets |
1,026,115 |
1,743,693 |
|
Less :- Net Average Daily Net Asset Value of units held by Asset Management Company |
124,809 |
143,825 |
|
Net Asset Value for Management Fees |
901,306 |
1,599,869 |
|
Management Fee 0.30% of Daily Average Weekly Net Assets |
2,696 |
4,785 |
|
Add; Service Tax |
322 |
593 |
|
Management Fees debited to Revenue Account |
3,018 |
5,378 |
2.7 Other Receivables and Payables includes Rs. NIL (Rs. NIL) and Rs. NIL (Rs. NIL) respectively towards inter-scheme dues.
2.8 The total income (including change in unrealised appreciation in the value of investments) and expenditure are 10.35 % (9.67 %) and 0.93 % (0.34 %) respectively of daily average net assets.
2.9 Associate Companies of Asset Management Company:
A sum of Rs. 248/- (Rs. 2,552/-) has been paid to Escorts Securities Ltd. a brokerage towards the sale of units of the schemes during the period.
for Escorts Mutual Fund for Escorts Asset Management Limited
(Trustee: Escorts Investments Trust Limited)
(RAJAN NANDA)
CHAIRMAN DIRECTOR
DIRECTOR DIRECTOR
As per our report of even date
For S.N. DHAWAN & Co.
Chartered Accountants
( SURESH SETH )
PARTNER
PLACE: NEW DELHI
DATE: