TD Managed Assets Program INVESTOR SERIES

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1 2003 Annual Financial Report TD MANAGED PORTFOLIOS TD Managed Assets Program INVESTOR SERIES TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO December 31, 2003 Mutual Funds *

2 434

3 TABLE OF CONTENTS Economic and Market Overview Statement of Investment Portfolio Statements of Net Assets Statements of Investment Operations Statements of Changes in Net Assets Statements of Net Realized Loss on Sale of Investments Statements of Financial Highlights Notes to Financial Statements Auditors Report

4 ECONOMIC AND MARKET OVERVIEW ECONOMICS As 2003 ended, events in the U.S. economy and financial markets continued to dominate investor attention. U.S. real Gross Domestic Product (GDP) growth clocked in at an eye-popping 8.2 per cent (annualized) in the third quarter, putting to rest fears that the economy would fail to respond to a generous array of policy stimulus. However, the growing U.S. budget and current account deficits pose a risk to the outlook. A further widening of those deficits in 2003 contributed to the decline of the U.S. dollar. By the end of the year, the U.S. dollar had sunk to new multiyear lows versus a wide range of currencies, including the Canadian dollar, which finished the year at 77 U.S. cents. The Canadian dollar s rapid rise was only one of a series of shocks to hit the Canadian economy over the course of the year, but its impact is likely to be the longest lasting. The Canadian dollar s appreciation is expected to limit Canadian economic growth in 2004 to the economy s long-term equilibrium growth rate of about 3 per cent. The recovery now underway in the U.S. economy is providing an important offset to the reduced competitiveness implied by a stronger Canadian dollar. The U.S. Federal Reserve is expected to leave rates unchanged until the second half of 2004, providing plenty of time for the U.S. recovery to take hold. In Canada, economic expansion was not as robust as the Bank of Canada had expected in their October 2003 Monetary Policy Report. Consequently, the Bank of Canada is expected to lower interest rates by a total of half a percentage point in the first half of 2004 to guard against a sustained drop in inflation below the 2-per-cent midpoint of the Bank s target inflation range. Prepared by TD Economics EQUITIES MARKET United States After suffering through a three-year bear market, major U.S. indices had their first year of positive returns since The Dow Jones Industrial Average rose 4.9 per cent in Canadian dollars (25.3 per cent in US$). The U.S. dollar s depreciation against the Canadian dollar last year eroded U.S. stock gains. The Standard & Poor s (S&P) 500 Index posted a gain of 5.3 per cent in Canadian dollars (28.7 per cent in US$). The biggest winners have been technology stocks, notably those related to the Internet that were left behind after the tech bubble burst in The Russell 2000 Index added 18.9 per cent in Canadian dollars (45.4 per cent in US$) demonstrating the appeal of small-cap stocks, particularly when coming out of an economic recession. Looking ahead, the combination of a weaker U.S. dollar, the rebound in global demand, the recovery in corporate profits could all give a lift to U.S. economic growth. Canada Although the year began shrouded by uncertainty and negativity, markets in Canada ended 2003 on a high note. Canadian exporters struggled to adjust to the strength of the loonie that had surged over 22 per cent versus the U.S. dollar in The S&P/TSX Composite Index gained 26.7 per cent. The top-performing sector was information technology, which gained 67.1 per cent. Financials issues gained 28 per cent as concerns over credit waned, institutions stopped increasing bad debt reserves and dividends rose. The materials sub-group added 26 per cent, with base metals and mining stocks lifted higher by rising commodity prices. In particular, gold stocks ended higher as the price of bullion topped the US$400 mark. Energy stocks climbed 25 per cent, supported by the price of oil that remained high. Strong U.S. demand and prospects for gains in consumer and business spending are expected to help Canada s industries in However, a high Canadian dollar and a possible slowdown in homebuilding activity could constrain growth. Europe After three years of negative returns, European equity markets rebounded in Among the region s major benchmarks, Britain s FTSE 100 Index advanced 4 per cent (C$), France s CAC 40 Index jumped 15 per cent (C$), while Germany s DAX Index surged 35.8 per cent (C$). Into 2004, the outlook for European equities continues to brighten as economic data suggests that the tide may be turning. However, several risks remain that could derail this outlook. The chief concern among investors is the rapid ascent of the euro and its effects on the ability of companies in the region to compete globally

5 Japan Japanese markets fizzled in the first half of 2003 and then sizzled in the second half. The Nikkei 225 Index added 12.9 per cent (C$) in 2003 marking its first winning year since Once the situation in Iraq was largely settled, investors focused their attention to the fundamentals of corporate earnings and economic growth. In July, foreign investment in Japan had reached levels not seen since the peak of the Internet bubble. The outlook for Japan in 2004 is cautiously optimistic. The export dependent economy of Japan is likely to see the benefits from a recovering U.S. and continuing demand from China. On the other hand, the pace of restructuring remains slow and recent tax reform plans could add an extra tax burden on Japanese consumers. Asia Asian markets not only had to contend with the geopolitical uncertainty during first half of 2003, but it also had to battle the SARS outbreaks, terror attacks in Indonesia and the Philippines and nuclear rhetoric from North Korea. Regardless of these challenges, some of the world s strongest performing indices were found in Asia. In 2004,Asian markets may again be growth leaders. The economy of China could add a boost to the recovery underway in the U.S. economy and support growth in the export oriented region of Asia. However, the region is still susceptible to shocks such as a renewed outbreak of SARS, instability in North Korea and continuing concerns about terrorist activity. Latin America In 2003, Latin American markets posted their best return since The region was aided by the same conditions that helped other stock markets around the world, namely low interest rates and the acceleration of global economic activity. The Bovespa Index was the best performing Index as it surged 98.9 per cent (C$). In Argentina, the Merval Index rallied 90.8 per cent (C$) as stocks were lifted by an economic recovery following the country s sovereigndebt default in The outlook for Latin American markets continues to be positive and should be supported by accommodative global monetary policy, the anticipated recovery in consumer consumption, attractive relative valuations, low interest rates and improving domestic fundamentals. FIXED-INCOME MARKETS U.S. Federal Reserve Sidelined, But For How Long? The U.S. bond market was a tumultuous place to be invested during 2003, as uncertainty about the direction of the U.S. economy was overtaken by fear that the U.S. could flirt with a period of deflation for the first time since the Great Depression. The U.S. Federal Reserve countered these fears by reducing interest rates by a quarter of a percentage point, bringing the U.S. federal rate to 1 per cent in June This caused investors to begin selling bonds and resulted in the ten-year yield to rise to a high of 4.6 per cent in September. The potential for big price gains is unlikely this year. While the recovery of growth and the improvement in the market s mood extinguished deflation fears, the U.S. inflation rate continues to drift down and that is expected to keep the U.S. Federal Reserve on the sidelines well into Canadian Bonds Expected to Provide Coupon Returns The Canadian bond market also had an interesting year in Faced with a breach of the 3-per-cent ceiling of its target inflation range, the Bank of Canada took interest rates up by a total of half a percentage point in the spring of As core inflation retreated from its high through the summer, the Bank reversed course and reduced interest rates through the summer. The Bank of Canada is expected to start 2004 by lowering interest rates to encourage a more rapid rate of demand growth in the context of a rapid rise in the Canadian dollar, which has reallocated resources away from exports to domestic demand. The Canadian bond market is expected to provide coupon returns this year as economic growth accelerates, but remains relatively low and stable. 3

6 TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO STATEMENT OF INVESTMENT PORTFOLIO AS AT DECEMBER 31, 2003 NO. % OF TOTAL OF UNITS DESCRIPTION COST MARKET VALUE NET ASSETS CANADIAN EQUITY 162,143 TD Canadian Blue Chip Equity Fund, Institutional Series $ 1,723,054 $ 1,999, ,885 TD Canadian Equity Fund, Institutional Series 1,551,297 1,621,666 60,412 TD Canadian Small-Cap Equity Fund, Institutional Series 639, , ,496 TD Canadian Value Fund, Institutional Series 1,400,974 1,596,683 5,314,716 6,021, U.S. EQUITY 157,303 TD U.S. Blue Chip Equity Fund, Institutional Series 2,934,786 2,362, ,833 TD U.S. Large-Cap Value Fund, Institutional Series 1,501,641 1,574,648 68,936 TD U.S. Mid-Cap Growth Fund, Institutional Series 798, ,664 76,351 TD U.S. Small-Cap Equity Fund, Institutional Series 739, ,778 5,974,719 5,495, INTERNATIONAL EQUITY 233,681 TD International Equity Fund, Institutional Series 3,152,771 3,005, ,076 TD International Growth Fund, Institutional Series 1,905,429 1,393,101 5,058,200 4,398, GLOBAL EQUITY 210,476 TD Global Select Fund, Institutional Series 3,370,415 2,795, GLOBAL SECTOR EQUITY 32,908 TD Health Sciences Fund, Institutional Series 530, ,097 36,538 TD Science & Technology Fund, Institutional Series 874, ,707 1,405,106 1,170, TOTAL INVESTMENT PORTFOLIO 21,123,156 19,881, Other Net Assets 41,035 41, TOTAL NET ASSETS $ 21,164,191 $ 19,922, The accompanying notes to financial statements are an integral part of these statements

7 TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO STATEMENTS OF NET ASSETS AS AT DECEMBER 31, 2003 AND ASSETS Investments at Market Value* $ 19,881,605 $ 15,752,175 Cash 46,067 31,171 Interest Receivable 0 40 Subscriptions Receivable 69,623 0 Receivable for Investment Sales 0 5,217 19,997,295 15,788,603 LIABILITIES Accrued Liabilities 30,450 4,950 Redemption Payable 2,260 0 Payable for Investment Purchases 41,945 20,023 74,655 24,973 NET ASSETS REPRESENTING UNITHOLDERS EQUITY $ 19,922,640 $ 15,763,630 NUMBER OF UNITS OUTSTANDING - Investor Series (Note 3) 2,436,375 2,187,266 NUMBER OF UNITS OUTSTANDING - Advisor Series (Note 3) 47,513 18,060 NET ASSET VALUE PER UNIT - Investor Series $ 8.00 $ 7.14 NET ASSET VALUE PER UNIT - Advisor Series $ 9.02 $ 8.05 * Investments at cost $ 21,123,156 $ 20,437,294 On Behalf of the Board of Directors of TD Asset Management Inc. S. J. Geist, Director Michael Thorfinnson, Director The accompanying notes to financial statements are an integral part of these statements. 5

8 TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO STATEMENTS OF INVESTMENT OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND INVESTMENT INCOME Income Distributions Received from Underlying Funds $ 47,654 $ 34,798 Foreign Withholding Taxes (2,210) (3,175) Net Income Distributions (Note 6) 45,444 31,623 Interest (Net) (116) (1,156) 45,328 30,467 EXPENSES (NOTE 4) Management Fee 193,080 7,931 Recordkeeping and Communications 34,614 37,396 Legal and Filing 11,834 10,948 Audit 4,629 4, ,157 60,796 GST 16,263 3, ,420 64,285 Net Investment Loss (215,092) (33,818) Net Realized Loss on Sale of Investments (1,148,099) (1,167,532) Net Change in Unrealized Appreciation (Depreciation) of Investments 3,443,568 (3,108,702) Capital Gains Distributions Received From Underlying Funds (Note 6) 66,349 0 Net Gain (Loss) on Investments 2,361,818 (4,276,234) INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS $ 2,146,726 $ (4,310,052) The accompanying notes to financial statements are an integral part of these statements

9 TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2003 AND INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS $ 2,146,726 $ (4,310,052) CAPITAL UNIT TRANSACTIONS (NOTE 3) Proceeds from Sale of Units 5,501,526 5,151,845 Amounts Paid on Redemptions (3,490,720) (3,280,295) Early Redemption Fee 1,478 1,753 Net Capital Unit Transactions 2,012,284 1,873,303 INCREASE (DECREASE) IN NET ASSETS FOR THE YEAR 4,159,010 (2,436,749) NET ASSETS, BEGINNING OF THE YEAR 15,763,630 18,200,379 NET ASSETS, END OF THE YEAR $ 19,922,640 $ 15,763,630 The accompanying notes to financial statements are an integral part of these statements. 7

10 TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO STATEMENTS OF NET REALIZED LOSS ON SALE OF INVESTMENTS FOR THE YEARS ENDED DECEMBER 31, 2003 AND Proceeds From Sale of Investments $ 5,520,723 $ 3,601,026 Cost of Investments, Beginning of the Year 20,437,294 19,774,535 Cost of Investments Purchased During the Year 7,354,684 5,431,317 27,791,978 25,205,852 LESS: Cost of Investments, End of the Year 21,123,156 20,437,294 Cost of Investments Sold During the Year 6,668,822 4,768,558 NET REALIZED LOSS ON SALE OF INVESTMENTS $ (1,148,099) $ (1,167,532) The accompanying notes to financial statements are an integral part of these statements

11 TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO STATEMENTS OF FINANCIAL HIGHLIGHTS (NOTE 5) FOR THE YEARS ENDED DECEMBER 31 Investor Series PER UNIT DATA: NET ASSET VALUE PER UNIT - BEGINNING OF THE YEAR $ 7.14 $ 9.13 $ $ $ INCREASE (DECREASE) IN NET ASSETS FROM INVESTMENT OPERATIONS Net Investment Income (Loss) (0.09) (0.02) (0.05) (0.07) (0.01) Net Realized and Unrealized Gains (Losses) on Investments 0.95 (1.97) (1.52) (0.57) 1.21 Increase (Decrease) in Net Assets from Investment Operations 0.86 (1.99) (1.57) (0.64) 1.20 DISTRIBUTIONS TO UNITHOLDERS From Net Investment Income (0.02) From Net Realized Gains on Investments (0.24) (0.38) Total Distributions (0.24) (0.40) NET ASSET VALUE PER UNIT - END OF THE YEAR $ 8.00 $ 7.14 $ 9.13 $ $ ADDITIONAL DATA: Total Net Assets - End of the Year ($000 s) 19,494 15,618 18,200 18,702 5,435 Average Net Assets ($000 s) 16,378 17,247 18,197 14,419 2,106 Management Expense Ratio 2.69% 2.68% 3.02% 3.12% 3.10% Management Expense Ratio Without Expense Waivers/Absorptions 2.70% 2.70% 3.15% 3.20% N/A Portfolio Turnover Rate 33.14% 20.75% 45.08% 41.19% 11.60% Annual Rate of Return 12.0% (21.8%) (14.8%) (5.5%) 11.1% The accompanying notes to financial statements are an integral part of these statements. 9

12 NOTES TO FINANCIAL STATEMENTS 1. The Portfolio The TD Managed Maximum Equity Growth Portfolio, (the Portfolio ) is an open-ended mutual fund trust established under the laws of Ontario and is governed by an Amended, Consolidated and Restated Declaration of Trust dated October 7, The Portfolio invests exclusively in fixed percentages of specified mutual fund trusts ( Underlying Funds ). TD Asset Management Inc. ( TDAM ) is the manager, portfolio adviser and Trustee of the Portfolio. TD Investment Services Inc. ( TDIS ) is the principal distributor of the Investor Series units of the Portfolio. Both TDAM and TDIS are wholly-owned subsidiaries of The Toronto-Dominion Bank (the Bank ). The Portfolio is authorized to issue an unlimited number of units of two distinct series, which rank equally and are available for sale under separate prospectuses. The Investor Series of units ( Investor Series ) is available for sale on a no-load basis from TDIS. The Advisor Series of units ( Advisor Series ) is distributed through registered brokers and dealers. Each series of units are sold under differing purchase options and may have higher or lower management fees, reflecting the extent of the investment advice provided. These financial statements and accompanying notes to the financial statements presented herein are for the Investor Series. Separate financial statements have also been issued for the Advisor Series of the Portfolio. The financial statements for this series are available upon request by writing to TDAM at the address contained in Note 8. The Bank provides recordkeeping and communications services to the Portfolio for a fee. 2. Summary of Significant Accounting Policies These financial statements, prepared in accordance with Canadian generally accepted accounting principles, include estimates and assumptions by management that affect the reported amounts of assets, liabilities, income and expenses during the reporting period. Actual results may differ from estimates. The following is a summary of significant accounting policies followed by the Portfolio. (I) Valuation of Investments The investments in the Underlying Funds are valued at the closing net asset value of each Underlying Fund on the day of valuation. (II) Investment Transactions, Income and Expenses Investment transactions are accounted for as of the trade date. Realized gains and losses from investment transactions are calculated on an average cost basis. Interest income and expenses are accrued daily. Expenses specifically related to each series are charged directly to the series. Other expenses are allocated proportionately to each series based upon the average net asset value of each series. (III) Distributions from Underlying Funds Distributions received from Underlying Funds out of interest, foreign income and related withholding taxes, Canadian dividends and net capital gains are recognized when declared. (IV) Other Assets and Liabilities Other financial assets and financial liabilities recorded at cost are short-term in nature and therefore their carrying value approximates fair value. (V) Translation of Foreign Currencies The market value of investments and other assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the rate of exchange prevailing on each valuation date. The Underlying Funds investment portfolios may consist of securities that are traded in foreign markets. The proceeds on the sale of such securities will be realized in foreign currencies. Unhedged foreign currency positions are subject to gains and losses due to fluctuations in the respective exchange rates. Foreign currency purchases and sales of investments and foreign currency dividend and interest income are translated into Canadian dollars at the rate of exchange prevailing on the respective date of the transaction. (VI) Valuation of the Portfolio TDAM usually calculates the Net Asset Value ( NAV ) per series unit for the Portfolio as at 4 p.m. Eastern Time (ET) on each day that the Toronto Stock Exchange is open for trading, but in some circumstances, it may be calculated at another time. TDAM calculates a separate NAV for each series of units of the Portfolio by taking the series proportionate share of the Portfolio s common assets less common liabilities and deducting from this amount all liabilities that relate solely to a specific series. The NAV per series unit is derived by dividing the NAV of the series by the total number of series units outstanding. 3. Unitholders Equity Units of the Portfolio, which are redeemable at the option of the holder in accordance with the provisions of the Declaration of Trust, do not have any nominal or par value and the number of units which may be issued is unlimited. Units are issued or redeemed on a daily basis at the net asset value per unit next determined after the purchase order or redemption request, respectively, is received by TDAM

13 SUMMARY OF SALES AND REDEMPTIONS OF UNITS Balance, Balance, End Year Series Beginning of Year Purchases Reinvestments Redemptions of Year Investor Series 2,187, , ,837 2,436,375 Advisor Series 18,060 38, ,357 47,513 Investor Series 1,993, , ,678 2,187,266 Advisor Series 10 21, ,137 18, Management Fee and Other Expenses Management Fee Other Expenses Series Investor Series $ 190,578 $ 7,883 $ 66,492 $ 56,038 Advisor Series 2, The Portfolio pays TDAM a management fee for the investment management and portfolio administration provided on behalf of the Portfolio. The management fee is a variable fee dependent upon the amount of all other fees and expenses that are paid by the Portfolio. The Management Expense Ratio ( MER ) of each series of the Portfolio reflects the total of that series share of all fees and expenses paid by the Portfolio, plus the Portfolio s share of the fees and expenses paid by the Underlying Funds. These expenses include recordkeeping and communications costs, legal and filing fees, audit, and all taxes, and are charged separately to each series of the Portfolio. Effective October 9, 2001, a cap was placed on the MER for the Investor Series such that it cannot exceed 2.70%. The maximum management fee is the amount that would be necessary to reach the cap, when combined with all expenses of the Portfolio, and its share of the Underlying Funds expenses. During the years ended December 31, 2003 and 2002, the management fees were charged at the following average annual rates: In March 2003, the Portfolio converted its investments from the Investor Series to the Institutional Series of the underlying TD Mutual Funds. Management fees charged to the Portfolio were increased to offset the lower fees paid by the Underlying Funds. There is no duplication of management fees and there is not a net increase to the MER. TDAM will waive or absorb a portion of the operating expenses payable by the Portfolio to the extent necessary to ensure that the MER does not exceed the stated cap. TDAM may, at its discretion, waive or absorb additional fees and expenses otherwise payable by the Portfolio. These additional waivers may be terminated at any time by TDAM, and at TDAM s discretion, may be continued indefinitely. Without such waivers or absorptions, the MER would have been as reported under MER without Expense Waivers/Absorptions on the Statements of Financial Highlights. Management Fees For Years Ended December Portfolio Underlying Total Portfolio Underlying Total 1.16% 0.94% 2.10% 0.05% 1.89% 1.94% 11

14 5. Statement of Financial Highlights The information disclosed in this statement is calculated as follows: (I) Net asset value per Investor Series unit is computed by dividing the net asset value attributed to the Investor Series of the Portfolio by the total number of units of the Investor Series outstanding, as at the beginning or end of the year. (II) Net investment income per Investor Series unit is based on the net investment income allocated to the Investor Series and the average number of Investor Series units outstanding during the year. Distributions to unitholders from net investment income and net realized gains are based on the number of Investor Series units outstanding on the record date for each distribution. (III) Average net assets is calculated as the average of the daily net asset values attributed to the Investor Series during the year. (IV) The MER is based on total expenses of the Investor Series of the Portfolio and the Underlying Funds (other than brokerage commissions on securities transactions) expressed as a percentage of the average net asset value of the Investor Series during the year. The portion of MER attributed to the Underlying Funds has been calculated by prorating the MER of each Underlying Fund by its target market value weighting in the Portfolio. (V) Portfolio turnover rate is a measure of portfolio activity calculated by dividing the lesser of purchases or sales of securities, excluding securities having maturity dates at acquisition of one year or less, by average market value of the investment portfolio for the year. (VI) Annual rate of return is calculated on the basis of change in the net asset value per unit of the Investor Series of the Portfolio and takes into account reinvested distributions. 7. Tax Status The Portfolio qualifies as a mutual fund trust under the Income Tax Act (Canada). All or substantially all of the net income for tax purposes and net taxable capital gains realized in any year are distributed to unitholders such that no income tax is payable by the Portfolio. The Portfolio has accumulated the following net realized capital losses/non-capital losses which are available for utilization against net realized gains or net investment income as applicable for tax purposes in future years as follows. Capital losses have no expiry, non-capital losses can be carried forward for up to seven years. Non-Capital Capital (by year of expiry) $3,671,245 $0 $0 $86,826 $33,818 $215, Other Reports Unaudited statements of portfolio transactions of the Portfolio for the year ended December 31, 2003 will be provided, without charge, by writing to: TD Managed Assets Program c /o TD Asset Management Inc. Canada Trust Tower, 35 th Floor 161 Bay Street Toronto, ON M5J 2T2 Audited financial statements for the year ended December 31, 2003 for the Underlying Funds are available by writing to TDAM at the above address. 6. Distributions Received from Underlying Funds Distributions from Total Income (net of foreign Distributions from Underlying Funds Distributions withholding taxes) Capital Gains TD Canadian Equity Fund $ 23,050 $ 0 $ 23,050 TD Canadian Small-Cap Equity Fund 18, ,242 TD Canadian Value Fund 62,013 37,879 24,134 TD International Equity Fund 5,827 5, TD U.S. Large-Cap Value Fund 2,661 1, Total $ 111,793 $ 45,444 $ 66,

15 AUDITORS REPORT To the Unitholders and Trustee of the Investor Series of: TD MANAGED MAXIMUM EQUITY GROWTH PORTFOLIO (THE PORTFOLIO ) We have audited the accompanying statement of investment portfolio of the Portfolio as at December 31, 2003, the statements of net assets as at December 31, 2003 and 2002, the statements of investment operations, statements of changes in net assets, and statements of net realized loss on sale of investments for the years then ended and the statements of financial highlights of the Investor Series of units for each period in the five-year period ended December 31, These financial statements are the responsibility of the Portfolio s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Portfolio s management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Portfolio as at December 31, 2003 and 2002, the results of its operations and the changes in its net assets for the years then ended and the financial highlights for the Investor Series for each period in the five-year period ended December 31, 2003 in accordance with Canadian generally accepted accounting principles. We have also reported without reservation on the Portfolio s financial statements as they pertain to the unitholders of the Advisor Series. PricewaterhouseCoopers LLP Chartered Accountants Toronto, Ontario January 30,

16 Redeeming Your Investments You can redeem units of your Portfolio in the following ways (orders involving e-series units may be made through the Internet or by other means authorized by TD Asset Management Inc. ( TDAM )): TD Investment Services Inc. ( TDIS ) customers: In person At any TD Canada Trust branch By telephone (toll free) (English) (French) (Chinese) By mail Send a written request with your name, account number, the Portfolio name, the series of units, the dollar amount or number of units to be redeemed, and specifics on where you would like the proceeds to be sent. We can send proceeds to either a mailing address or a TD Canada Trust account. The request must be signed by you. To confirm that your signature is genuine, TDIS will request that your signature be guaranteed by an officer of a Canadian chartered bank or trust company or by any member of a recognized stock exchange who knows you. Send your request to: TD Managed Assets Program c/o TD Investment Services Inc. P.O. Box 100 Toronto-Dominion Bank Tower Toronto-Dominion Centre Toronto, ON M5K 1G8 Internet if you have an active TD Mutual Funds Account if you have an active TD efunds Account Dealer clients If you have purchased units through a registered dealer, you may request a redemption of Portfolio units through that dealer. You may be charged a commission or a fee. Processing Orders If a Portfolio receives your order before 4 p.m. Eastern Time ( ET ) (3 p.m. ET for e-series units or orders placed over the Internet) on any valuation day, you will receive that day s applicable closing net asset value per Series unit. Your dealer may set earlier times for receipt of orders than the times set by the Portfolio. If a Portfolio receives your order after 4 p.m. ET (3 p.m. ET for e-series units or orders placed over the Internet) on any valuation day, or on any day that is not a valuation day, you will receive the applicable net asset value per Series unit at the close of the next valuation day. The valuation day for your Portfolio is each day on which a net asset value per Series unit is determined. Net asset values are generally determined at 4 p.m. ET on each day that the Toronto Stock Exchange ( TSX ) is open for trading, but in some circumstances, we may calculate it at another time. Other Redemption Information Distributions are reinvested in units of the portfolio, unless you specify in advance that you wish to receive cash. If you wish to receive your distributions in cash, please contact a TD Canada Trust branch or your investment dealer, or send your written instructions to TD Mutual Funds, c/o TD Investment Services Inc., P.O. Box 100, Toronto-Dominion Bank Tower, Toronto-Dominion Centre, Toronto, Ontario M5K 1G8. An early redemption fee of up to 2% of the purchase cost may be payable to the Portfolio if you redeem units within 90 days of purchase. Otherwise, there are no charges for redeeming units of the Portfolios directly through TDIS or branches of TD Canada Trust. Redemption proceeds will be mailed to you or deposited to a designated account within three business days of the valuation date on which the redemption order is processed. If you wish to have the redemption proceeds wired to a designated account, there is an administrative handling fee of up to $25 in addition to the wire costs. Any previously issued certificates for units that you intend to redeem must be included with the redemption request in order to complete the transaction. TDIS may require further documentation from corporations, fiduciaries and other institutional investors. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please obtain a copy of the prospectus which contains detailed investment information from your dealer and read it before investing. Mutual funds are not guaranteed or insured, their values change frequently and past performance may not be repeated. Available through TDIS (principal distributor), TD Waterhouse Canada Inc. (Member CIPF), and independent dealers. This communication was first published in March 2004 by TDAM. 8 Trade-mark of The Toronto-Dominion Bank. TDAM is a licensed user. TD Mutual Funds and the TD Managed Assets Program are managed by TDAM, a wholly owned subsidiary of The Toronto-Dominion Bank (03/04)