annual report debt and cash schemes

Transcription

1 annual report debt and cash schemes

2 Annual Report Statutory Details: SPONSORS Tata Sons Limited Bombay House, 24, Homi Modi Street, Mumbai Tata Investment Corporation Limited Elphinstone Building, 10, Veer Nariman Road, Mumbai TRUSTEE Tata Trustee Company Limited Mafatlal Centre, 9th Floor, Nariman Point, Mumbai AMC Tata Asset Management Ltd. Mafatlal Centre, 9th Floor, Nariman Point, Mumbai REGISTRAR Computer Age Management Services (Pvt.) Limited No. 178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai

3 REPORT OF THE TRUSTEE TO THE UNITHOLDERS FOR THE YEAR ENDED MARCH 31, 2018 Dear Unitholder, It gives us great pleasure to communicate with you and present to you the scheme-wise audited accounts as on March 31, 2018 as prepared by the Investment Manager. Trustees have reviewed the report of the investment manager on performance of the schemes, future outlook and operations of the schemes and the same is given below. We once again thank you for your patronage and look forward to your having an endearing investment experience as a valued investor of the Tata Mutual Fund family. For Tata Trustee Company Limited Director July 19, 2018 Mumbai. PERFORMANCE OF THE SCHEMES. FUTURE OUTLOOK AND OPERATIONS OF THE SCHEMES The year that was: Equity: Equity markets consolidated its gains in the Financial Year , with BSE Sensex & CNX Nifty recording gains of 11.3% & 10.2% respectively. The start of the year saw strengthening of recovery in developed markets & upward movement of currencies & commodities, which reflected in improved outlook for global growth. Equity markets, across both developed & emerging countries, did well during the year. The Year saw implementation of the much awaited GST & its impact on the economy. The year saw a sharp increase in NPA recognition due to RBI initiatives & the latter part of the year also saw growing concerns of the global Trade war. Rise in global commodity prices especially Crude prices led to concerns over inflation risk leading to Rupee depreciating more than peers. The consumption theme however, was the primary driver of the market with S&P BSE Consumer Durables returning 45.9% in the financial year followed by S& P BSE Realty generating 39.4%. The broader markets did better than the benchmark indices with BSE midcap & BSE small cap indices gaining 13.2% & 17.7% respectively. Within sectors, Consumer Durables, Realty, IT, and Metals outperformed. The introduction of Long term Capital gains tax on equities, rising geo-political concerns & asset quality issues led to markets paring part of the gains in the last quarter of the financial year. Debt: After changing monetary policy stance to Neutral in Q4-FY2017 (February 2017 monetary policy), RBI maintained its neutral stance & reiterated its commitment to achieving 4% CPI target on a durable basis with data dependent policy actions in Neutral stance. CPI inflation fell from 3.89% in March 2017 to 1.46% in June 2017, thereby creating room for 25bps rate cut. After bottoming out in June, Inflation continued to move upwards & headline CPI crossed 5% handle in December 2017 & January High frequency growth indicators suggested that growth has probably bottomed out. On the external sector side, situation turned adverse as high crude prices weighed on imports & trade deficit widened from billion in March 2017 to 13.6 billion in March Credit growth picked up post August 2017, but deposit growth remained muted throughout the year. On the fiscal side, government missed its fiscal deficit target for FY2018 & relaxed the target for FY2019 as well. Government also announced MSP hike to augment rural income. Fiscal slippage coupled with inflationary impact of MSP hike didn t augur well for bond market in Q year G-Sec benchmark yield hardened from a low of 6.42% in July 2017 to a high of 7.78% in March Future Outlook Equity The Investment Manager continues to retain a generally positive outlook on the Indian equity markets over the medium term. Risk of significant FII outflows on account of a major global risk off event remains a concern. However, it is important to note that India is much better placed & thus resilient in such an event given its stable macro-economic parameters. Crude oil prices & monthly GST collections would be key monitors going forward. Strong macro position, reforms & long-term structural drivers like demographic advantage, low household debt, limited penetration across different consumer categories, increased potential for financial savings & urbanization makes India a compelling equity story from medium to long term perspective. Debt While responding to the global inflationary environment (with US dollar strengthening & higher crude prices) RBI is unlikely to compromise on its long-term CPI targets. RBI has reiterated its commitment to achieving 4% inflation target on a durable basis multiple times. Recent Headline & Core CPI prints have surprised on higher side & Crude prices continue to firm up. In this backdrop, Investment Manager believes that the RBI is nearing at the beginning of its hiking cycle.

4 FUNDS UNDER MANAGEMENT OPERATIONS Annual Report Tata Mutual Fund as on March 31, 2018, has thirty-four open ended schemes of which twenty are equity schemes, two are balanced schemes, eleven are debt schemes, one is Equity Linked Saving Scheme (ELSS) & sixteen close ended schemes of which fifteen are debt schemes & one is Equity Linked Saving Scheme (ELSS). The Average Assets under Management for the year clocked in at Rs. 46,290 Crore as on March 31, 2018 up by Rs. 6,882 Crore compared to the previous year. 1. Investment objective, policy & performance of the schemes of Tata Mutual Fund: Please refer Annexure I for a detailed write up in this regard as provided by the Investment Manager (TAML). 2. Brief Background of Sponsors, Trust, Trustee Company & Asset Management Company (AMC). Tata Mutual Fund (TMF) Tata Mutual Fund was set up as a Trust by the Sponsors & the Settlers, Tata Sons Limited (TSL) & Tata Investment Corporation Limited (TICL) on May 09, 1995 with Tata Trustee Company Limited as a Trustee in accordance with the provisions of the Indian Trusts Act, 1882 & is duly registered under the Indian Registration Act, The Trustee has entered into an Investment Management Agreement dated May 09, 1995 with Tata Asset Management Limited to function as the Investment Manager for all the Schemes of Tata Mutual Fund (TMF). TMF was registered with SEBI on June 30, Tata Trustee Company limited (TTCL) The Trustee Company (Trustee) is the exclusive holder of the Trust Funds & holds the same in trust for the benefit of the unitholders who are the ultimate owners/beneficiaries of the funds. The Trustee has been discharging its duties & carrying out the responsibilities as provided in the Regulations & the Trust Deed. The Trustee seeks to ensure that the Fund & the Schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions & guidelines issued by the SEBI, the Stock Exchanges, the Association of Mutual Funds in India & other regulatory agencies. Tata Asset Management Limited (TAML) The Asset Management is a company incorporated under the Companies Act, 1956 on March 15, TAML has been appointed as the Asset Management Company for Tata Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 09, 1995, executed between TTCL & TAML. 3. Significant Accounting Policies: Accounting policies are in accordance with the requirements of the Securities Exchange Board of India (Mutual Fund) Regulations General Policies & Procedures for exercising the voting rights In view of SEBI guidelines related to Role of Mutual Funds in Corporate Governance of Public Listed Companies, Tata Asset Management Ltd. has formulated its Policy for Proxy Voting in Public Listed Companies. The said policy & summary as well as details of actual exercise of proxy votes during the Financial Year are enclosed as Annexure II & Annexure III to this report & is also available on the website 5. Unclaimed Dividend & Redemption: Details of unclaimed dividend & redemption amount are given in Annexure IV. 6. Redressal of Complaints received by TMF during : Details of complaints received & redressed during financial year are given in Annexure V. 7. Categorization & Rationalization of existing schemes SEBI vide circular numbers SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 06, 2017 & SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017 had advised all Mutual Funds to bring uniformity across all similar open ended schemes & to standardize the scheme categories & characteristics of each category. As per the circular, mutual fund can offer only one scheme in each of the open-ended categories. Uniformity of schemes categories & scheme characteristics across mutual fund industry will help investor to take informed investment decision. Accordingly, the Board approved the merger/change of name/change of classification/change in Fundamental Attribute/Change in Exit Load & other changes of the Schemes as given in Annexure VI 8. Statutory Information: a. The Sponsors are not responsible or liable for any loss resulting from the operation of the Schemes of the Fund beyond their initial contribution (to the extent contributed) of Rs. 1 lakh for setting up the Fund & extant SEBI (Mutual Funds) Regulation, b. The price & redemption value of the units, & income from them, can go up as well as down with fluctuations in the market value of its underlying investments in securities. c. The Full Annual Report is disclosed on the website ( On written request, present & prospective unit holder / investors can obtain copy of the trust deed, the annual report at a price & the text of the relevant scheme.

5 Annexure I Investment Objective, policy and performance of the schemes: Tata Dynamic Bond Fund An open ended dynamic debt scheme investing across duration. The investment objective of the Scheme is to provide reasonable returns & high level of liquidity by investing in debt instruments including bonds, debentures & Government securities; & money market instruments such as treasury bills, commercial papers, certificates of deposit, repos of different maturities & as permitted by regulation so as to spread the risk across different kinds of issuers in the debt markets. The scheme has maintained nimble stance & has done active duration management. This has resulted in long term (5 years & since inception) outperformance over benchmark. However, the scheme has slightly underperformed the benchmark as the scheme was running lower duration risk as of March 31, Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Dynamic Bond Fund Regular Plan - Growth (03/09/03) Tata Dynamic Bond Fund Direct Plan - Growth (01/01/13) Benchmark (I-Sec Composite Index) Regular Plan:6.56 Direct Plan: 8.57 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Fixed Maturity Plan Series 44 (Close ended Income scheme) The investment objective of the scheme is to generate income and/or capital appreciation by investing in wide range of Debt & Money Market instruments having maturity in line with the maturity of the respective schemes. The maturity of all investments shall be equal to or less than the maturity of respective schemes. Direct Plan underperformed due to locking in the rates prevailing at the time of launch, close ended nature & locking in investments till maturity. Regular Plan underperformed due to higher expense ratio as well as locking in the rates prevailing at the time of launch, close ended nature & locking in investments till maturity Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Scheme D (TFM44D) Regular Plan - Growth N/A 8.40(07/10/13) Scheme D (TFM44D) Direct Plan - Growth N/A 8.66(07/10/13) Crisil Composite Bond Fund Index N/A 9.62 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Fixed Maturity Plan Series 46 (Close ended Income scheme) The investment objective of the schemes is to generate income and/or capital appreciation by investing in wide range of Debt & Money Market instruments having maturity in line with the maturity of the respective schemes. The maturity of all investments shall be equal to or less than the maturity of respective schemes. Direct plan underperformed due to locking in the rates prevailing at the time of launch, close ended nature & locking in investments till maturity. Regular Plan underperformed due to higher expense ratio as well as locking in the rates prevailing at the time of launch, close ended nature & locking in investments till maturity. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Fixed Maturity Plan Series 46 Scheme D (TFM46D) Regular Plan - Growth NA 8.24 (26/12/13) Scheme D (TFM46D) Direct Plan - Growth NA 8.48 (26/12/13) Scheme K (TFM46K) Regular Plan - Growth NA 8.25 (05/02/14) Scheme K (TFM46K) Direct Plan - Growth NA 8.80 (05/02/14) Scheme M (TFM46M) Regular Plan - Growth NA 8.43 (20/02/14) Scheme M (TFM46M) Direct Plan - Growth NA 8.69 (20/02/14) Scheme N (TFM46N) Regular Plan - Growth NA 8.34 (07/03/14)

6 Annual Report Last 1 year Last 3 years Last 5 years Since Inception Scheme N (TFM46N) Direct Plan - Growth NA 8.60 (07/03/14) Scheme Q (TFM46Q) Regular Plan - Growth NA 8.31 (12/03/14) Scheme Q (TFM46Q) Direct Plan - Growth NA 8.57 (12/03/14) Scheme R (TFM46R) Regular Plan - Growth NA 8.34 (20/03/14) Scheme R (TFM46R) Direct Plan - Growth NA 8.57 (20/03/14) Scheme T (TFM46T) Regular Plan - Growth NA 8.41 (24/02/14) Scheme T (TFM46T) Direct Plan - Growth NA 8.67 (24/02/14) Crisil Composite Bond Fund Index Scheme D (TFM46D) Regular Plan - Growth NA 9.81 Scheme D (TFM46D) Direct Plan - Growth NA 9.81 Scheme K (TFM46K) Regular Plan - Growth NA 9.72 Scheme K (TFM46K) Direct Plan - Growth NA 9.72 Scheme M (TFM46M) Regular Plan - Growth NA 9.85 Scheme M (TFM46M) Direct Plan - Growth NA 9.85 Scheme N (TFM46N) Regular Plan - Growth NA 9.85 Scheme N (TFM46N) Direct Plan - Growth NA 9.85 Scheme Q (TFM46Q) Regular Plan - Growth NA 9.77 Scheme Q (TFM46Q) Direct Plan - Growth NA 9.77 Scheme R (TFM46R) Regular Plan - Growth NA 9.78 Scheme R (TFM46R) Direct Plan - Growth NA 9.78 Scheme T (TFM46T) Regular Plan - Growth NA 9.90 Scheme T (TFM46T) Direct Plan - Growth NA 9.90 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Fixed Maturity Plan Series 47 (Close ended Income scheme) The investment objective of the schemes is to generate income and / or capital appreciation by investing in wide range of Debt & Money Market instruments having maturity in line with the maturity of the respective schemes. The maturity of all investments shall be equal to or less than the maturity of respective schemes. Direct plan underperformed due to locking in the rates prevailing at the time of launch, close ended nature & locking in investments till maturity Regular Plan underperformed due to higher expense ratio as well as locking in the rates prevailing at the time of launch, close ended nature & locking in investments till maturity. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Fixed Maturity Plan Series 47 TFMP47 (TFM47C) - Regular Plan - Growth NA 8.33 (26/3/14) TFMP47 (TFM47C) - Direct - Growth NA 8.48 (26/3/14) TFMP47 (TFM47D) - Regular Plan - Growth NA 8.33 (28/3/14) TFMP47 (TFM47D) - Direct - Growth NA 8.65 (28/3/14) TFMP47 (TFM47E) - Regular Plan - Growth NA 8.33 (10/4/14) TFMP47 (TFM47E) - Direct - Growth NA 8.50 (10/4/14) TFMP47 (TFM47F) - Regular Plan - Growth NA 8.23 (17/4/14) TFMP47 (TFM47F) - Direct - Growth NA 8.39 (17/4/14) TFMP47 (TFM47H) - Regular Plan - Growth NA 8.31 (30/4/14) TFMP47 (TFM47H) - Direct - Growth NA 8.56 (30/4/14) TFMP47 (TFM47J) - Regular Plan - Growth NA 8.35 (4/4/14) TFMP47 (TFM47J) - Direct - Growth NA 8.51 (4/4/14) Crisil Composite Bond Fund Index TFMP47 (TFM47C) - Regular Plan - Growth NA 9.71

7 Last 1 year Last 3 years Last 5 years Since Inception TFMP47 (TFM47C) - Direct - Growth NA 9.71 TFMP47 (TFM47D) - Regular Plan - Growth NA 9.70 TFMP47 (TFM47D) - Direct - Growth NA 9.70 TFMP47 (TFM47E) - Regular Plan - Growth NA 9.93 TFMP47 (TFM47E) - Direct - Growth NA 9.93 TFMP47 (TFM47F) - Regular Plan - Growth NA 9.78 TFMP47 (TFM47F) - Direct - Growth NA 9.78 TFMP47 (TFM47H) - Regular Plan - Growth NA 9.64 TFMP47 (TFM47H) - Direct - Growth NA 9.64 TFMP47 (TFM47J) - Regular Plan - Growth NA 9.95 TFMP47 (TFM47J) - Direct - Growth NA 9.95 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Fixed Maturity Plan Series 53 (Close ended Income scheme) The investment objective of the schemes is to generate income and / or capital appreciation by investing in wide range of Debt & Money Market instruments having maturity in line with the maturity of the respective schemes. The maturity of all investments shall be equal to or less than the maturity of respective schemes. The schemes were launched in the last fortnight of March 2018 & are being invested as per investment mandate of matching maturity papers. Performance at a glance (% as on March 31, 2018) Since Inception Tata Fixed Maturity Plan Series 53 TFMP 53(TFM 53 A) Regular Plan - Growth (22/3/18) TFMP 53(TFM 53 A) Direct Plan - Growth (22/3/18) Crisil Composite Bond Fund Index TFMP 53(TFM 53 B) Regular Plan - Growth (26/3/18) TFMP 53(TFM 53 B) Direct Plan - Growth (26/3/18) Crisil Composite Bond Fund Index Note: Above returns are absolute return since inception. Past Performance may or may not sustain in future. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Total return variant of the benchmark Index (TRI) has been used for performance comparison. Tata Income Fund: An open ended medium term debt scheme. The investment objective of the Scheme is to provide income distribution/capital appreciation over medium to long term. The Fund has the flexibility to invest in wide range of short term debt/securitized debt & money market Instruments. Under normal circumstance portfolio of the scheme will have Macaulay Duration between 4 years & 7 years. The scheme has done active duration management. This has resulted in long term (1 year, 5 years & since inception) outperformance over benchmark. However, in 3 years tenure, the scheme has slightly underperformed the benchmark as the scheme was running lower duration risk as of March 31, Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Income Fund Regular Plan - Growth (28/04/97) Tata Income Fund Direct Plan - Growth (01/01/13) Crisil Composite Bond Fund Index Regular Plan - NA Direct Plan 8.57 *The scheme was earlier known as Tata Long Term Debt Fund. N.A. - Not Applicable. Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option).

8 Annual Report Tata Treasury Advantage Fund: An open ended low duration debt scheme. The investment objective of the scheme is to generate regular income & capital appreciation by investing in a portfolio of debt & money market instruments with relatively lower interest rate risk. The Fund has the flexibility to invest in wide range of short term debt & money market Instruments. Under normal circumstance, portfolio of the scheme will have Macaulay Duration between 6 months to 12 months. The scheme has outperformed its benchmark from in long term (1 year, 3 years, 5 years & since inception) time periods. Active duration management has helped in outperformance. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Treasury Advantage Fund - Regular Plan - Growth (06/09/05) Tata Treasury Advantage Fund - Direct Plan - Growth (01/01/2013) Crisil Liquid Fund Index Regular Plan-7.35 Direct Plan-8.09 *The scheme was earlier known as Tata Ultra Short Term Fund Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Young Citizens Fund: An open-ended Children s Fund. The investment objective of the Scheme is to generate long term capital growth. Investment for children having a lock in period of 5 years or till date the child attains the age of majority whichever is earlier. Since its inception in October 1995, the Fund has delivered 12% CAGR. The Fund s return is uncomparable to the benchmark because it was a 50:50 Debt & Equity Fund till FY18 versus 65:35 for the benchmark. The Fund s attribute has been changed from May Its equity exposure will be now minimum 65% at all times. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Young Citizens Fund-Regular Plan-Growth (14/10/95) Crisil Balanced Fund Index N.A. Tata Young Citizens Fund-Direct-Growth (01/01/13) Crisil Balanced Fund Index N.A. - Not Applicable Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Corporate Bond Fund: An open-ended debt scheme predominantly investing in AA+ & above rated corporate bonds. The investment objective of the scheme is to generate returns over short to medium term by investing predominantly in corporate debt instruments. Direct Plan: The Fund has outperformed the benchmark because the Fund had lower average maturity relative to benchmark. Interest rates are likely to remain at elevated levels given the current macro-economic environment as well as pressure on commodities & crude prices. The duration will be managed actively considering view above to gain out of opportunities available in market. Regular Plan: The Fund has outperformed the benchmark in one-year time bucket but has underperformed marginally since inception due to higher expense ratio being charged as well as lower average maturity relative to benchmark, as mentioned above. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Corporate Bond Fund Regular Plan - Growth (13/07/07) Tata Corporate Bond Fund Direct Plan -Growth (01/01/13) Crisil Short Term Bond Index Regular Plan-8.03 Direct Plan Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option).

9 Tata Liquid Fund: An open ended liquid scheme. The investment objective is to generate reasonable returns with high liquidity to the unitholders. The scheme can make investments in/purchase debt & money market securities with maturity upto 91 days. Direct Plan: The Fund has performed in line with benchmark over one-year period. The Fund has outperformed the benchmark since inception due to exposure to high yield papers & active MTM management. Regular Plan: The Fund underperformed the benchmark due to higher expense ratio. The Fund has outperformed the benchmark since inception due to exposure to high yield papers & active MTM management. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Regular Plan- Growth (01/09/04) Direct Growth (01/01/13) Crisil Liquid Fund Index Regular Plan:7.14 Direct Plan: 8.09 The scheme was earlier known as Tata Money Market Fund Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Money Market Fund: An open ended debt scheme investing in money market scheme. The investment objective is to generate returns with reasonable liquidity to the unitholders by investing in money market instruments. The scheme is investing 100% of the net assets in money market securities. The scheme will have to invest / purchase money market securities having maturity upto 1 year. Direct Plan: The fund has outperformed due to exposure to high yield papers. Regular Plan: The fund outperformed due to exposure to high yield papers. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Money Market Fund - Regular Plan Growth (22/05/03) Tata Money Market Fund - Direct Plan Growth (01/01/13) Crisil Liquid Fund Index Regular Plan:6.87 Direct Plan: 8.09 The scheme was earlier known as Tata Liquid Fund Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Gilt Mid Term Fund: An open ended debt fund investing predominantly in Government Securities. The investment objective of the scheme is to provide reasonable returns & high liquidity to the unitholders by investing predominantly in government securities having residual maturity up to 15 years. The scheme can invest in Government of India dated securities & Money Market instruments like CP, CD & like instruments. In case of Tata Gilt Mid Term Fund (TGSMF), under normal circumstances the average portfolio maturity shall not exceed 6 years. The scheme has outperformed its benchmark in 1 year, 3 years & since inception. Strategic allocation & controlling risk have resulted in outperformance. The regular plan underperformed benchmark across time buckets on account of higher expense ratio as compared to direct plans. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Regular Plan-Growth (24/06/10) Regular Plan-Dividend (01/01/13) Direct Plan Growth (01/01/13) Direct Plan Dividend N/A 9.72 (10/07/14) Benchmark (I-Sec Composite Index) Regular Plan Direct Plan Growth-8.73 Direct Plan Dividend-9.40 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option).

10 Annual Report Tata Gilt Securities Fund (TGSF) including Retirement Planning Series: An open ended debt fund investing predominantly in government securities across maturity. The investment objective of the Scheme is to generate medium to long term capital appreciation & income distribution by investing predominantly in Government Securities. The direct plan has outperformed its benchmark in 1 year & 3-year time periods. Active duration management helped in outperformance The regular plan outperformed in 1 year & 5-year time buckets. It underperformed the benchmark in 3-year time bucket. Higher expenses have resulted in lower returns. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Gilt Securities Fund Regular Plan Growth (6/09/99) Regular Plan Dividend (6/09/99) Direct Plan Growth (11/01/13) Direct Plan Dividend (11/01/13) Tata Gilt Retirement Plan ( ) - Growth (29/12/03) Tata Gilt Retirement Plan ( ) - Dividend (10/10/03) CRISIL Gilt Index Regular Plan: 9.13 Direct Plan: 7.87 Retirement Plan Growth: 6.58 Retirement Plan Dividend 6.52 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Medium Term Fund: An open ended medium term debt scheme. The investment objective of the scheme is to generate income & capital appreciation over a medium term. The Fund has the flexibility to invest in wide range of debt & money market instruments. Under normal circumstances portfolio of the scheme will have Macaulay Duration between 3 years & 4 years. Tata Medium Term Fund direct plan has outperformed the benchmark in FY18 & since inception. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Medium Term Fund Regular Plan - Growth (11/11/02) Tata Medium Term Fund Direct Plan - Growth (27/02/13) Crisil Composite Bond Fund Index Regular Plan 6.82 Direct Plan Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Retirement Savings Fund: The Tata Retirement Savings Fund has three open ended schemes within its solution suite Progressive, Moderate & Conservative. The objective of the fund is to provide a financial planning tool for long term financial security for unitholders based on their retirement planning goals. In all the three funds the fund management style & stock picks are similar with the only difference being percentage allocation to equity (equity, balanced & MIP oriented respectively). The Equity portion with relevant weightages are common across these solutions based funds. There may be minor weightage differences that may creep up over time, which then are corrected, as far as possible. The scheme is having a lock in for at least 5 years or till retirement age whichever is earlier. Since its inception in November 2011, all the three funds have performed well versus their respective benchmark. In FY18, the Progressive Fund outperformed the benchmark by 6.4%, the Moderate Fund by 5.8% & the Conservative Fund by 2.5%. The Fund s overweight positioning in Consumer Discretionary, Private Financiers, Materials positively contributed to the outperformance. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 Years Since Inception Tata Retirement Savings Fund Conservative-Regular Plan-Growth (01/11/2011) Tata Retirement Savings Fund Conservative-Direct-Growth (09/01/2013) CRISIL Short Term Debt Hybrid Fund Index Direct Plan 9.96 Regular Plan 10.11

11 Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option). Tata Short Term Bond Fund An open ended short term debt scheme. The investment objective is to generate regular income/ appreciation over a short term period. Under normal circumstance, portfolio of the scheme will have Macaulay Duration between 1 year to 3 years. The scheme outperformed the benchmark on 1, 3, & 5-year basis. Active duration management led to this outperformance. Regular Plan is underperformed due to differential expense ratio, as compared to direct plan. Performance at a glance (% as on March 31, 2018) Last 1 year Last 3 years Last 5 years Since Inception Tata Short Term Bond Fund Regular Plan - Growth (08/08/02) Tata Short Term Bond Fund Direct Plan - Growth (01/01/13) Crisil Short Term Bond Fund Index Regular Plan-7.16 Direct Plan Past Performance may or may not sustain in future. Return for period more than one year is compounded annualised. Returns given are for Regular Plan (growth option) & Direct Plan (Growth option).

12 Annual Report Annexure-II VOTING POLICY Tata Asset Management Limited (The AMC) is the Asset Management Company for Tata Mutual Fund (Fund). The AMC has set out this Voting policy. The Policy contains the principles that form the basis of all votes. The AMC believes that these principles are essential to ensure the long-term performance of assets managed by the AMC. The AMC will endeavor to manage voting rights with the same level of care & skill as it manages the funds. As a broad principle, the AMC does not have intention to participate directly or indirectly in the management of the companies, but it will use its influence as the representative of the shareholder amongst others by exercising its voting rights in accordance with the best interests of its funds unit holders as & when required. The AMC will follow a common voting policy for all its holdings including group companies & companies which have subscribed to the units of the schemes of the AMC without any bias towards any company. The interests of its unitholders being of prime importance. The Schemes are entitled to exercise the voting rights attached to the shares. The shareholders do not necessarily need to be physically present at the site of the company s annual meeting / extra-ordinary general meeting in order to exercise their right to vote. It is common for shareholders to voice their vote by proxy. The AMC will exercise adequate safeguards to address any conflicts of interest with regard to any individual investments. This may imply that the AMC through its representatives may decide to refrain from exercising its voting rights if considered appropriate. AMC will only be voting in the exclusive interest of the unitholders, without taking into consideration the interest of any particular lobby/business group / promoter etc. of such company. The Summary & Details of Votes Cast by Tata Mutual Fund for the Financial Year : Financial Year Quarter Total no. of resolutions Break-up of Vote decision Annexure-III For Against Abstained April - June July - September October - December January - March Total The details of actual exercise of proxy votes during the Financial Year is enclosed with the Annual Report of Tata Mutual Fund along with the Scrutiniser s Certification. The same is also available on the website

13 M. P. Chitale & Co. Chartered Accountants 1/11, Prabhadevi Ind. Estate, 1st Flr., Opp. Siddhivinayak Temple, Veer Savarkar Marg, Prabhadevi, Mumbai - 25 Tel.: Fax : The Board of Directors, Tata Asset Management Ltd/ Tata Trustee Company Ltd. 9 th Floor, Mafatlal Centre, Nariman Point, Mumbai We have been appointed as scrutinizer by Tata Asset Management Ltd. to certify the disclosure of votes cast on their website for the year in terms of SEBI circular No. CIR/IMD/DF/05/2014 dated March 24, 2014 and modified by SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2016/68 dated August 10, We have verified the voting disclosures made by Tata Asset Management Ltd. on the website for the year April 2017 to March 2018 on the basis of data obtained from custodian w.r.t. resolutions on which AMC is required to cast votes and details received from the Investment Team w.r.t. the voting decision (either to vote for/against/abstain from voting) duly supported by the rationale for each agenda item.we certify that AMC has disclosed details of all the votes cast in the format specified in the circular. This certification has been issued for submission to Board of Directors of Tata Trustee Company Ltd. and to disclose the same in the Tata Asset Management Ltd. s annual report and on website in terms of SEBI circular No. CIR/IMD/DF/05/2014 dated March 24, modified by SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2016/68 dated August 10, 2016 and should not be used for any other purpose. Yours faithfully, For M.P. Chitale & Co. Chartered Accountants Firm Reg. No W Vidya Barje Partner M. No Mumbai, May 09, 2018

14 Annual Report Annexure IV Statement of Unclaimed Dividend & Redemptions as on March 31, 2018 Unclaimed Amounts No. of Investors Scheme Name Redemption Dividend Total Redemption Dividend Total Tata Fixed Maturity Plan -Series 27 Scheme A 15, , Tata Fixed Maturity Plan -Series 27 Scheme B Tata Fixed Maturity Plan -Series 28 Scheme A Tata Fixed Maturity Plan -Series 29 Scheme C Tata Fixed Maturity Plan -Series 34 Scheme B Tata Fixed Maturity Plan -Series 42 Scheme F 13, , Tata Fixed Maturity Plan -Series 46 Scheme E 113, , Tata Balanced Fund 4,189, ,935, ,124, Tata Banking and Financial Services Fund 14, , Tata Capital Builder Fund 1,265, ,265, Tata Contra Fund 40, , Tata Capital Protection Oriented Fund - Series 1 1,821, ,821, Tata Capital Protection Oriented Fund - Series 2 714, , Tata Dynamic Bond Fund 93, , , Tata Digital India Fund 9, , Tata Dual Advantage Fund - Scheme A 2,125, ,125, Tata Dual Advantage Fund - Scheme B 862, , Tata Dual Advantage Fund - Scheme C 718, , Tata Dividend Yield Fund 4,740, ,108, ,848, Tata Equity Management Fund 3,639, ,639, Tata Equity Opportunities Fund 50,558, ,061, ,619, Tata Equity PE Fund 10,623, ,476, ,100, Tata Fixed Income Portfolio Scheme A Tata Fixed Income Portfolio Fund Scheme A2 18, , Tata Fixed Income Portfolio Scheme A3 1,604, ,604, Tata Fixed Income Portfolio Scheme B3 53, , Tata Ultra Short Term Fund 404, , Tata Floating Rate Fund - Long Term 651, , Tata Money Market Fund 305, , Tata Fixed Tenure Fund - Series 1 462, , Tata Fixed Tenure Fund - Series 2 87, , Tata Gilt Securities Fund 501, , , Tata Mid Cap Growth Fund 12,750, ,214, ,965,

15 Unclaimed Amounts No. of Investors Scheme Name Redemption Dividend Total Redemption Dividend Total Tata India Consumer Fund 5, , Tata Index Fund - Nifty Plan 92, , Tata Long Term Debt Fund 481, ,224, ,706, Tata IND NAVRATNA Fund 29,776, , ,777, Tata Infrastructure Fund 42,933, ,739, ,672, Tata India Pharma & Healthcare Fund 8, , Tata Index Fund - Sensex Plan 91, , , Tata Liquid Fund 1,837, , ,953, Tata Liquidity Management Fund 1, , Tata Life Sciences & Technology Fund 711, , ,250, Tata Regular Savings Equity Fund 1,645, , ,358, Tata MIP Plus Fund Tata Large Cap Fund 20,753, ,621, ,375, Tata Retirement Saving Fund - Conservative 3,416, , ,669, Tata Retirement Saving Fund - Moderate 1,087, ,087, Tata Retirement Saving Fund - Progressive 124, , Tata Services Industries Fund 123, , , Tata SIP Fund 1 13,455, , ,456, Tata Smart Investment Plan - 1 Scheme A 660, , Tata Smart Investment Plan - 1 Scheme B 67, , Tata Ethical Fund 2,587, ,038, ,626, Tata Short Term Bond Fund 141, , , Tata Tax Advantage Fund 98,597, ,597, Tata Corporate Bond Fund 880, , Tata India Tax Savings Fund 6,285, ,712, ,997, IBMF TAX Shield (Tata Equity Opportunities Fund) ,874, ,874, Tata Young Citizens Fund 2,160, ,160,

16 Annual Report Annexure V Complaint code Redressal of Complaints received against Mutual Funds (MFs) during Name of Mutual Fund: Tata Mutual Fund Total Number of Folios (as on 31-Mar-18): Type of complaint# (a) No. of complaints pending at the beginning of the year (b) No of complaints received during the year Within 30 days days Resolved days Action on (a) and (b) Beyond 180 days Non- Actionable* 0-3 months 3-6 months Pending 6-9 months I A Non-receipt of Dividend on Units I B Interest on delayed payment of Dividend I C Non-receipt of Redemption Proceeds I D Interest on delayed payment of Redemption II A Non-receipt of Statement of Account/ Unit Certificate II B Discrepancy in Statement of Account II C Data corrections in Investor details II D Non-receipt of Annual Report/Abridged Summary III A Wrong switch between Schemes III B Unauthorized switch between Schemes III C Deviation from Scheme attributes III D Wrong or excess charges/load III E Non updation of changes viz. address, PAN, bank details, nomination, etc IV Others ** V Others-Non-Allotment of Units Complaints Summary for Financial Year : Particulars Count Total Complaints Received 438 Total Number of Folios Percentage Complaints Against Folios 0.03% # - including against its authorized persons / distributors / employees etc. *Non actionable - means the complaint that are incomplete / outside the scope of the Mutual Fund months

17 Annexure VI Summary of the changes carried out in various open ended schemes pursuant to SEBI circular SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 6th 2017 & SEBI circular SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 4th 2017 regarding rationalization & categorization of schemes to bring uniformity across all Mutual Funds & to standardize the scheme categories & characteristics of each category. Sr. No. Scheme old name Revised Scheme Name / Category 1 Tata Equity Opportunities Fund Tata Large & Mid Cap Fund categorized under Large & Mid Cap Fund 2 Tata Large Cap Fund Tata Large Cap Fund categorized under Large Cap Fund 3 Tata Mid Cap Growth Fund 4 Tata Infrastructure Fund Tata Mid Cap Growth Fund categorized under Mid Cap Fund Tata Infrastructure Fund categorized under Sectoral Fund 5 Tata Ethical Fund Tata Ethical Fund categorized under Thematic Fund 6 Tata Money Market Fund Tata Liquid Fund categorized under Liquid Fund 7 Tata Liquid Fund Tata Money Market Fund categorized under Money Market Fund 8 Tata Ultra Short Term Fund 9 Tata Short Term Bond Fund 10 Tata Medium Term Fund 11 Tata Long Term Debt Fund 12 Tata Gilt Securities Fund 13 Tata Corporate Bond Fund Tata Treasury Advantage Fund categorized under Low Duration Fund Tata Short Term Bond Fund categorized under Short Duration fund Tata Medium Term Fund categorized under Medium Duration Fund Tata Income Fund categorized under Medium to Long Duration Fund Tata Gilt Securities Fund categorized under Gilt Fund Tata Corporate Bond Fund categorized under Corporate Bond Fund 14 Tata Balanced Fund Tata Hybrid Equity Fund categorized under Aggressive Hybrid Fund Investment Focus Investment in equity & equity related instruments of large cap companies- 35%-65% of total assets Investment in equity & equity related instruments of mid cap stocks- 35%- 35% of total assets. Other equity & equity related Instruments 0-30% of total assets. Other Securities 0-30% of total assets. Investment in equity & equity related instruments of large cap companies- 80% - 100% of total assets. Other equity & equity related Instruments 0-20% of total assets. Debt & Money Market Instruments 0-20% of total assets. Investment in equity & equity related instruments of mid cap companies 65%-100% of total assets. Other equity & Equity related instruments 0-35% of total assets. Debt & Money Market Instruments (incl cash & cash equivalent )0-35% of total assets. Investment in equity & equity related instruments of companies in the infrastructure sector- 80% -100% of total assets. Equity & equity related instruments of other companies 0-20% of total assets. Debt & Money market instruments 0-20% of total assets. Investment in equity & equity related instruments of Shariah complaint companies 80%-100% of total assets. Other Shariah complaint instruments including cash 0-20% of total assets. Investment in Money Market instruments having residual maturity upto 1 year 0-100% of total assets. Investment in Debt & money market securities with maturity of upto 91 days 0-100% of total assets Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 6 months to 12 months 0-100% of total assets Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years 0-100% of total assets. Investment in Debt & Money Market Instruments such that the Macaulay duration of the portfolio is between 3 years to 4 years 0-100% of total assets. Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 4 to 7 years of total assets. Minimum investment in Gsecs 80% -100% of total assets (across maturity). Money Market instruments 0-20% of total assets. Investment in AA+ & above rated corporate bonds & securities across maturities 80%-100% of total assets. Other debt & money market instruments 0-20% of total assets. Investments in Equity & Equity related instruments 65% - 80% of total assets. Debt, Money Market & Cash between 20% -35% of total assets

18 Annual Report Sr. No. Scheme old name Revised Scheme Name / Category 15 Tata Regular Savings Equity Fund 16 Tata Young Citizens' Fund Tata Equity Savings Fund categorized under Equity Savings Fund Tata Young Citizens' Fund categorized under Children's Fund Investment Focus Investment in equity & equity related instruments 65%-90% of total assets. Of which -Net Long Equity Exposure is between 15%-35% -Equity & Equity Derivatives (Arbitrage/Hedged Exposure) between 30%- 70% Investments in debt cash & money market securities - 10% - 35% of total assets. Valuation overlay policy has been discontinued Investments in Equity & Equity related instruments 65% - 85% of total assets; Debt, Money Market instruments 15% -35% of total assets. The scheme will have a lock-in period of at least 5 years or till the child attains age of majority (whichever is earlier) In addition to the above: Tata Retirement Savings Fund i.e. (i. Tata Retirement Savings Fund- Progressive ii. Tata Retirement Savings Fund-Moderate iii. Tata Retirement Savings Fund- Conservative) is categorized under Retirement Fund & the Scheme will have a lock-in for at least 5 years or till retirement age whichever is earlier. Tata Dividend Yield Fund was merged with Tata Large & Mid Cap Fund & Tata Gilt Mid Term Fund was merged with Tata Gilt Securities Fund.

19 INDEPENDENT AUDITORS REPORT TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY LIMITED TATA MUTUAL FUND TATA DYNAMIC BOND FUND Report on the Financial Statements We have audited the accompanying financial statements of TATA MUTUAL FUND TATA DYNAMIC BOND FUND (the Scheme ) which comprise the Balance Sheet as at March 31, 2018, the Revenue Account and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements The Managements of Tata Trustee Company Limited (the Trustee Company ) and Tata Asset Management Limited (the Investment Manager ) are responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Scheme in accordance with accounting policies and standards as specified in the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and subsequent amendments (the SEBI Regulations ) and in accordance with the accounting principles generally accepted in India. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the SEBI Regulations for safeguarding the assets of the Scheme and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the SEBI Regulations, the accounting and auditing standards and matters which are required to be included in the auditors report under the provisions of the SEBI Regulations. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Scheme s preparation of the financial statements that give a true and fair view of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Scheme s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the SEBI Regulations in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a) in the case of Balance Sheet, of the state of affairs of the Scheme as at March 31, 2018; b) in the case of the Revenue Account, of the surplus of the Scheme for the year ended on that date; and c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Regulatory Requirements 1. As required by Regulation 55, and Clause 5 of the Eleventh Schedule to the SEBI Regulations, we report that: (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) the Balance Sheet and the Revenue Account dealt with by this report are in agreement with the books of account of the Scheme; and (c) the Balance Sheet and the Revenue Account dealt with by this report have been prepared in accordance with accounting policies and standards as specified in the Ninth Schedule of the Regulations. 2. As required by Clause 2 (ii) of Eighth Schedule of the SEBI Regulations, we report that, non-traded securities as at March 31, 2018 have been valued following the Principles of Fair Valuation approved by the Board of Directors of the Trustee Company and Investment Manager. In our opinion, these valuations are fair and reasonable. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm s Registration No W / W ) Mumbai, July 19, 2018 Jayesh Parmar Partner (Membership No )