Annual Report for Fixed Maturity Schemes - Tata Mutual Fund

Non – traded/ thinly traded debt securities with residual maturity of upto 182 days were valued on the basis of amortisation (cost / last
valuation price (as applicable) plus the difference between the redemption value and the cost / last valuation price (as applicable) spread
uniformly over the remaining maturity period of the instrument).
With effect from 29th July, 2010, non-traded / thinly traded debt securities (including floating rate securities) and Money Market
Instruments of over 91 days to maturity are valued based on yields arrived at by using a matrix of spread over the risk free benchmark
yield. The risk free benchmark yield and matrix of spread is obtained from CRISIL and ICRA (both agencies being entrusted for the
purpose by AMFI), which are aggregated to arrive at the average yield for valuation.
Non-Traded / thinly traded debt securities and Money Market instruments with residual maturity of upto 91 days are valued on an
amortisation basis (i.e. at cost / last valuation price (as applicable) plus the difference between the redemption value and cost / last
valuation price (as applicable) spread uniformly over the remaining maturity period of the instrument).
In the case of floating rate securities with floor and caps on coupon rate and residual maturity of upto 91 days, the valuation on an
amortisation basis is determined taking the floor as the coupon rate.
Government Securities and Treasury Bills:
Upto 31st August, 2010, Government Securities (not being Treasury Bills) were being valued at the prices released by CRISIL, which
was the agency approved by AMFI for the purpose.
Consequent to the guidance provided by AMFI, on and from 1st September, 2010, such securities are valued at the average of the prices
released by CRISIL and ICRA, which are now the agencies approved by AMFI for the purpose.
Upto 4th August, 2010, Treasury Bills were being valued at the last quoted closing price on the principal stock exchange (National
Stock Exchange of India Limited) on which it was traded or at amortised cost (i.e. at cost / last valuation price (as applicable) plus the
difference between the redemption value and cost / last valuation price (as applicable) spread uniformly over the remaining maturity
period of the instrument), if not traded.
Consequent to guidance provided by AMFI, on and from 5th August, 2010, Treasury Bills are valued at the weighted average price at
which they are traded on the particular valuation day on the principal stock exchange (National Stock Exchange of India Limited) on
which it is traded. In the absence of such trade, Treasury Bills having a residual maturity greater than 91 days are valued at the average
of the prices released by CRISIL and ICRA, the approved agencies for the purpose and Treasury Bills having a residual maturity not
exceeding 91 days, are valued on an amortisation basis (i.e. at cost / last valuation price (as applicable) plus the difference between the
redemption value and cost / last valuation price (as applicable) spread uniformly over the remaining maturity period of the instrument.
1.4 A) Income Recognition:
a) Income is recognised when the right of receipt is established and there is a reasonable certainty of collection.
b) Profit or loss on sale of investments is recognised on trade dates. The cost of investments sold is determined on “weighted average cost
basis”.
c) Interest on investments is recognised on an accrual basis.
d) Discounts / premium on debt securities are amortised on a straight-line basis over the period upto redemption.
1.4 B) Expenses:
Expenses directly attributable and identifiable to particular scheme, are charged to the respective scheme. Investor related expenses viz:
Registrar expenses, investor communications, investor meets etc.are allocated to the schemes in proportion to the number of live folios
in the schemes.Other expenses,which are not identifiable to specific schemes, are allocated to the schemes in proportion to their net
assets.