ANNUAL REPORT

Transcription

1 ANNUAL REPORT

2 INDEX 1. Report of the Trustees to Unitholders of Tata Mutual Fund Brief Background of Sponsors, Trust, Trustee Co. and Asset Management Company (AMC) Investment Objectives of the Schemes Significant Accounting Policies: Unclaimed Dividend & Redemptions Statutory Information Auditors Report Balance Sheet as at 31 st March Revenue Account for the year ended 31 st March Schedules forming part of the Balance Sheet as at 31st March, Note to Accounts Key Statistics STATUTORY DETAILS: SPONSORS Tata Sons Limited Bombay House, 24, Homi Modi Street, Mumbai Tata Investment Corporation Limited Ewart House, 22, Homi Modi Street, Mumbai TRUSTEE Tata Trustee Company Private Limited Fort House, 221, D. N. Road, Fort, Mumbai AMC Tata Asset Management Ltd. Fort House, 221, D. N. Road, Fort, Mumbai REGISTRAR Computer Age Management Services (Pvt.) Limited Ground Floor, 178/10 Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai

3 Dear Unitholder, REPORT OF THE TRUSTEE TO THE UNITHOLDERS FOR THE YEAR ENDED 31 ST MARCH 2008 It gives us great pleasure to enclose schemewise audited financials as on 31st March, This Report is in continuation of the Performance and Portfolio of the Schemes Report as on 31st March, 2008 published by us earlier. 1. Scheme Performance, Future Outlook and Operations of the Schemes : Investment approach remained that of investing in short term papers and maintaining high liquidity in the fund. This helped the fund to outperform the benchmark. Performance at a glance (as on 31 st March, 2008) Last 1 year Last 3 years Last 5 years Since Inception RIP Growth (30/08/98) HIP Growth (26/02/03) SHIP Growth (22/05/03) Crisil Liquid Fund Index RIP Growth N.A. HIP Growth SHIP Growth Performance at a glance (as on 31 st August, 2008) - Last 1 year Last 3 years Last 5 years Since Inception RIP Growth (30/08/98) HIP Growth (26/02/03) SHIP Growth (22/05/03) Crisil Liquid Fund Index RIP Growth NA HIP Growth SHIP Growth Return for the period 1 year and below is absolute and for more than one year is compounded annualised. Past performance may or may not be sustained in future. No data for benchmark index is available prior to 30 th March Investment approach remained that of investing in short term papers and maintaining high liquidity in the fund. This helped the fund outperform the benchmark. Performance at a glance glance (as on 31 st March, 2008) Last 1 year Since Inception (03/03/06) Crisil Liquid Fund Index Performance at a glance (as on 31 st August, 2008) Last 1 year Since Inception (03/03/06) Crisil Liquid Fund Index Return for period upto 1 year is absolute and for more than one year is compounded annualised. Past performance may or may not be sustained in future. 3

4 Tata Floating Rate Fund: (Short Term) TFRSTF - Investment approach remained that of investing in short term papers and maintaining high liquidity in the fund. This helped the fuind outperform the benchmark. Performance at a glance (as on 31 st March, 2008) Tata Floating Rate Fund Last 1 year Last 3 years Since Inception Short Term - App (22/12/03) IIP - App (01/09/04) Crisil Liquid Fund Index Short Term 5.94 IIP Performance at a glance (as on 31 st August, 2008) Tata Floating Rate Fund Last 1 year Last 3 years Since Inception Short Term- App (22/12/03) IIP - App (01/09/04) Crisil Liquid Fund Index Short Term 6.11 IIP Return for period upto 1 year is absolute and for more than one year is compounded annualised. Past performance may or may not be sustained in future. No data for benchmark index is available prior to 30 th March : Investment approach remained that of investing in short term papers and maintaining high liquidity in the fund. This helped the fund outperform the benchmark. Performance at a glance (as on 31 st March, 2008) Since Inception RIP Growth 6.13 (13/07/07) HIP Growth 6.03 (13/07/07) SHIP Growth 6.14 (13/07/07) Crisil Short Term Bond Fund Index RIP Growth 5.11 HIP Growth 5.11 SHIP Growth 5.11 Performance at a glance (as on 31 st August, 2008) Last 1 year Since Inception RIP Growth (13/07/07) HIP Growth (13/07/07) SHIP Growth (13/07/07) Crisil Short Term Bond Fund Index RIP Growth HIP Growth SHIP Growth Return for the period 1 year and below is absolute and for more than one year is compounded annualised. Past performance may or may not be sustained in future. 4

5 The year that was: Debt: During the first half of year , Call rates were hovering below the Reverse Repo rate for significant period of time on account of easy liquidity. RBI responded by tightening the liquidity through MSS. However, it kept the Repo Rate and Reverse Repo rate unchanged at 7.75% and 6% respectively. Inflation increased steeply to 8% towards the end of the FY compared to 6% at the beginning of year. To control the excess liquidity, RBI hiked the CRR 3 times during the year to 7.5% from 6.25% at the end of previous year. 10 year G-sec yield at the end of year closed flat at 8% before trading in the range of 7.30% to 8.25% during the year. 10 year corporate bond yields traded in the range of 9% to 10.25% before closing at 9.65% compared to 9.90% at the beginning of year. FUTURE OUTLOOK: DEBT OUTLOOK Inflation has spiked to a 13 year high of 12.44% currently. This higher inflation is the outcome of record high commodities and food article prices as also the sharp spike in crude oil prices in the global markets in recent times. Sustained higher inflation assumed the central theme in the monetary policy as a consequence. Reserve Bank of India has already hiked CRR and Repot rate on several occasions in Crude oil prices have since retraced from the escalated levels to around USD112/bl. Similarly, other commodities and food articles prices have also corrected downwards. This has resulted in expectations that together with monetary and fiscal steps introduced by RBI and Govt, inflation outlook may improve over the coming months. However, current inflation appears rather sticky and analysts forecast further rise in headline inflation number before the moderation steps in. Accordingly, inflationary expectations still remain high and are likely to continue to dominate the markets for some time. With money supply growth still above 20%, liquidity moderation will likely be the primary monetary policy target. Short term rates are expected to move further higher till the year end. Long term yields are likely to be range bound in the current band of %. Any spike beyond this band will likely induce value buying by insurance companies and banks. FUNDS UNDER MANAGEMENT - OPERATIONS Tata Mutual Fund today manages thirty open ended schemes of which fifteen are equity schemes, two are balanced schemes, thirteen are debt schemes and twelve are close ended schemes of which eight are debt schemes, three are equity scheme and one is Equity Linked Saving Scheme (ELSS). The average net assets under management were around Rs crores as on 31/03/08 which have increased from crores as on 31/03/07 showing an increase of Rs crores. The AMC's continued focus on marketing and sales efforts has been showing good results and the total average net assets under management as on 31/08/08 were Rs crores. 2. Brief Background of Sponsors, Trust, Trustee Co. and Asset Management Company (AMC). a) Tata Mutual Fund Tata Mutual Fund (TMF) was set up as a Trust by the Sponsors and the Settlers, Tata Sons Limited (TSL) and Tata Investment Corporation Limited (TICL) on 9 th May, 1995 with Tata Trustee Company Private Limited as a Trustee in accordance with the provisions of the Indian Trust Act, 1882 and is duly registered under the Indian Registration Act, The Trustee has entered into an Investment Management Agreement dated 9th May, 1995 with Tata Asset Management Limited to function as the Investment Manager for all the Schemes of TMF. TMF was registered with SEBI on 30 th June, b) Tata Trustee Company Private Limited The Trustee is the exclusive owner of the Trust Fund and holds the same in trust for the benefit of the unitholders. The Trustee has been discharging its duties and carrying out the responsibilities as provided in the Regulations and the Trust Deed. The Trustee seeks to ensure that the Fund and the Schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the Stock Exchanges, the Association of Mutual Funds in India and other regulatory agencies. c) Tata Asset Management Limited (TAML) is a company incorporated under the Companies Act, 1956 on 15th March, 1994, having its Registered Office at Fort House, 221 Dr. D. N. Road, Fort, Mumbai TAML has been appointed as the Asset Management Company for Tata Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated 9th May, 1995, and executed between TTCPL and TAML. The Trustee Company has appointed TAML as the Asset Management Company for TMF. The shareholders of TAML are TSL and TICL. TAML has entered into an Investment Management Agreement dated 9th May, 1995 with TTCPL, pursuant to which TAML will run the operations of TMF and manage the assets of TMF's Schemes. TAML, having its registered office at, Fort House, 221 Dr. D. N. Road, Mumbai is a Company incorporated under the Companies Act, 1956 on 15th March 1994 and was approved to act as an Asset Management Company for TMF by SEBI on 30th June, The networth of TAML as on August 31, 2008 is approximately about crores. TAML is currently managing thirty open-ended schemes and twelve close ended schemes. 5

6 3. Investment Objectives of the Schemes TLF : An open ended liquid scheme. To create a highly liquid portfolio of good quality debt as well as money market instruments so as to provide a reasonable returns and high liquidity to the Unitholders. TLMF : An open ended liquid scheme, investing predominantly in money market instruments / floating rate instruments and other debt instruments. The objective of the scheme is to generate reasonable returns along with high liquidity and safety by investing in a portfolio of money market and other short term debt instruments. TFRF : An open ended debt scheme. The primary objective of the Scheme is to generate stable returns with a low risk strategy by creating a portfolio that is substantially invested in good quality floating rate debt or money market instruments, fixed rate debt or money market instruments swapped for floating returns and fixed rate debt and money market instruments. TTMF : An open ended debt scheme. The investment objective of the scheme is to generate reasonable returns along with liquidity by investing predominantly in a portfolio of money market and other short term debt instruments. 4. Significant Accounting Policies: "Accounting policies are in accordance with Securities Exchange Board of India (Mutual Fund) Regulations 1996." 5. Unclaimed Dividend & Redemptions: Scheme Unclaimed Dividend Unclaimed Redemptions Total Amount No. of Invst. Amount No. of Invst. Amount No. of Invst. TLF , , TLMF TFRSTF , , TTMF 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 1 lakh for setting up the Fund, and such other accretions / additions to the same. b. The price and redemption value of the units, and income from them, can go up as well as down with fluctuations in the market value of its underlying investments. c. Full Annual Report shall be disclosed on the website ( and shall be available for inspection at the Head Office of the mutual fund. Present and prospective unit holder can obtain copy of the trust deed, the full Annual Report of the Fund / AMC at a price. For Tata Trustee Company Private Limited, S. M. Datta Chairman Place: Mumbai Date: 24 September, 2008 Encl. Schemewise Abridged Audited Accounts and Auditor s Report 6

7 Abbreviations of the Scheme Names: TLF - RIP - Retail Investment Plan HIP - High Investment Plan SHIP-Super High Investment Plan GR - Growth FN - Fortnightly Dividend DD - Daily Dividend WLY - Weekly Dividend MLY - Monthly Dividend TLFR - Regular TLFA - Appreciation* TLHIF - Tata Liquid High Investment Fund TFRSTF - RID - Retail Investment - Dividend RIG - Retail Investment - Growth IID - Institutional Investment - Dividend IIG - Institutional Investment - Growth TLMF - DD - Daily Dividend DWLY - Weekly Dividend G - Growth TTMF - RIP - Retail Investment Plan HIP - High Investment Plan SHIP - Super High Investment Plan RIP G Retail Investment Plan Growth RIP MD Retail Investment Plan Monthly Dividend HIP G High Investment Plan Growth HIP DD High Investment Plan Daily Dividend HIP WD High Investment Plan Weekly Dividend HIP MD High Investment Plan Monthly Dividend SHIP G Super High Investment Plan Growth SHIP DD Super High Investment Plan Daily SHIP - Dividend Monthly. SHIP - Weekly Dividend. Dividend. * This scheme / plan has two options namely Dividend Option and Growth Option. Dividend option is denoted by D, Div and Growth Option is denoted by G, GR 7

8 TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY PRIVATE LIMITED AUDITORS REPORT We have audited the attached Balance Sheet of TATA MUTUAL FUND TATA LIQUID FUND ( the Fund ) as at 31 st March, 2008 and the Revenue Account of the Fund for the year ended on that date, annexed thereto, and Report thereon as follows: a) The Balance Sheet and the Revenue Account dealt with by this Report have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, These financial statements are the responsibility of the Managements of the Trustee and the Asset Management companies. b) Our audit was conducted in accordance with the generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. c) 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. d) The Balance Sheet and the Revenue Account dealt with by this Report are in agreement with the books of account of the Fund. e) Non-traded securities have been valued in accordance with the guidelines notified by the Securities and Exchange Board of India. In our opinion, these valuations are fair and reasonable. f) Without qualifying our opinion, we draw attention to Note No. 13 of Schedule VIII wherein the Management of the Tata Asset Management Limited has explained its rationale regarding certain Accounting Standards issued by the Institute of Chartered Accountants of India as not being applicable to mutual funds. g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and give a true and fair view in conformity with the accounting principles generally accepted in India: (i). in the case of the Balance Sheet, of the state of affairs of the Fund as at 31 st March, 2008; and (ii) in the case of the Revenue Account, of the surplus of the Fund for the year ended on that date. For S. B. BILLIMORIA & CO. Chartered Accountant Nalin M. Shah Partner (Membership No ) MUMBAI, 25 August,

9 TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY PRIVATE LIMITED AUDITORS REPORT We have audited the attached Balance Sheet of TATA MUTUAL FUND TATA LIQUIDITY MANAGEMENT FUND ( the Fund ) as at 31 st March, 2008 and the Revenue Account of the Fund for the year ended on that date, annexed thereto, and Report thereon as follows: a) The Balance Sheet and the Revenue Account dealt with by this Report have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, These financial statements are the responsibility of the Managements of the Trustee and the Asset Management companies. b) Our audit was conducted in accordance with the generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. c) 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. d) The Balance Sheet and the Revenue Account dealt with by this Report are in agreement with the books of account of the Fund. e) Non-traded securities have been valued in accordance with the guidelines notified by the Securities and Exchange Board of India. In our opinion, these valuations are fair and reasonable. f) Without qualifying our opinion, we draw attention to Note No. 14 of Schedule VII wherein the Management of the Tata Asset Management Limited has explained its rationale regarding certain Accounting Standards issued by the Institute of Chartered Accountants of India as not being applicable to mutual funds. g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Fund as at 31 st March, 2008; and (ii) in the case of the Revenue Account, of the surplus of the Fund for the year ended on that date. For S. B. BILLIMORIA & CO. Chartered Accountant Nalin M. Shah Partner (Membership No ) MUMBAI, 25 August,

10 TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY PRIVATE LIMITED AUDITORS REPORT We have audited the attached Balance Sheet of TATA MUTUAL FUND TATA FLOATING RATE SHORT TERM FUND ( the Fund ) as at 31 st March, 2008 and the Revenue Account of the Fund for the year ended on that date, annexed thereto, and Report thereon as follows: a) The Balance Sheet and the Revenue Account dealt with by this Report have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, These financial statements are the responsibility of the Managements of the Trustee and the Asset Management companies. b) Our audit was conducted in accordance with the generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. c) 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. d) The Balance Sheet and the Revenue Account dealt with by this Report are in agreement with the books of account of the Fund. e) Non-traded securities have been valued in accordance with the guidelines notified by the Securities and Exchange Board of India. In our opinion, these valuations are fair and reasonable. f) Without qualifying our opinion, we draw attention to Note No. 14 of Schedule VIII wherein the Management of the Tata Asset Management Limited has explained its rationale regarding certain Accounting Standards issued by the Institute of Chartered Accountants of India as not being applicable to mutual funds. g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Fund as at 31 st March, 2008, and (ii) in the case of the Revenue Account, of the surplus of the Fund for the year ended on that date. For S. B. BILLIMORIA & CO. Chartered Accountant Nalin M. Shah Partner (Membership No ) MUMBAI, 25 August,

11 TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY PRIVATE LIMITED AUDITORS REPORT We have audited the attached Balance Sheet of TATA MUTUAL FUND TATA TREASURY MANAGER FUND ( the Fund ) as at 31 st March, 2008 and the Revenue Account of the Fund for the period from 10 th July, 2007 (date of commencement) to 31 st March, 2008, annexed thereto, and Report thereon as follows: a) The Balance Sheet and the Revenue Account dealt with by this Report have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, These financial statements are the responsibility of the Managements of the Trustee and the Asset Management companies. b) Our audit was conducted in accordance with the generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. c) 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. d) The Balance Sheet and the Revenue Account dealt with by this Report are in agreement with the books of account of the Fund. e) Non-traded securities have been valued in accordance with the guidelines notified by the Securities and Exchange Board of India. In our opinion, these valuations are fair and reasonable. f) Without qualifying our opinion, we draw attention to Note No.13 of Schedule VII wherein the Management of the Tata Asset Management Limited has explained its rationale regarding certain Accounting Standards issued by the Institute of Chartered Accountants of India as not being applicable to mutual funds. g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Fund as at 31 st March, 2008; and, (ii) in the case of the Revenue Account, of the surplus of the Fund for the period from 10 th July, 2007 (date of commencement) to 31 st March, For S. B. BILLIMORIA & CO. Chartered Accountant Nalin M. Shah Partner (Membership No ) MUMBAI, 25 August,

12 LIABILITIES Balance Sheet as at 31st March, 2008 TFRSTF TLF TLMF TTMF Schedule As At As At As At As At As At As At As At 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Unit Capital I 3,810,393,535 1,046,290,190 15,446,713,951 20,035,622, ,969,573 9,370,664,082 6,569,957,320 Reserves & Surplus II 724,294, ,325,205 4,742,000,210 3,974,570,949 3,942,165 87,171,769 41,066,489 Current Liabilities & Provisions III 2,659,314 1,555,178 6,751,846 9,043, ,680 3,723,793 1,218,193,289 TOTAL 4,537,347,336 1,179,170,573 20,195,466,007 24,019,236, ,130,418 9,461,559,644 7,829,217,098 ASSETS Investments IV 4,510,076,736 1,157,613,565 20,074,630,372 21,893,276, ,756,241 9,444,460,364 7,775,906,386 Deposits V - 10,000,000 50,100,000 2,000,100,000 Other Current Assets VI 27,270,600 11,557,008 70,735, ,860,106 9,374,177 17,099,280 53,310,712 Deferred Revenue Expenditure VII TOTAL 4,537,347,336 1,179,170,573 20,195,466,007 24,019,236, ,130,418 9,461,559,644 7,829,217,098 Significant Accounting Policies and Notes to the Accounts IX As per our report of even date attached For S. B. BILLIMORIA & CO. Chartered Accountants Nalin M. Shah Partner (Membership No ) Place: Mumbai, Dated: 25 th August, 2008 On behalf of the Board of Directors of Tata Trustee Co. Pvt. Ltd. S. M. Datta Ishaat Hussain Chairman Director On Behalf of the Investment Manager Tata Asset Management Ltd. Farrokh K. Kavarana Ved Prakash Chaturvedi Hormuz A. Bulsara Chairman Managing Director Chief Operating Officer Raju Sharma Fund Manager 12

13 INCOME Revenue Account for the period / year ended 31st March, 2008 TFRSTF TLF TLMF TTMF Schedule Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Dividend Interest VIII 342,651, ,875,481 3,801,107,277 3,195,467, ,996, ,995, ,708,482 Profit on sale / redemption of investments 2,617, ,421 42,197,275 8,834, , , ,853 Profit on inter- scheme transfer / sale of investments 12,122,270 3,204, ,013,172 8,006, ,849 1,016,887 Other income ,958 22, ,883 TOTAL (A) 357,391, ,188,711 3,950,384,682 3,212,331, ,786, ,712, ,398,105 EXPENSES AND LOSSES Provision / (reversal) for depreciation in value of investments (for NPAs) Provision for outstanding accrued income considered doubtful Provision for doubtful deposits and current assets Loss on sale / redemption of investments 2,067,987 2,429,182 18,052,740 11,069, , ,247 Loss on inter- scheme transfer / sale of investments 10,133,290 69,576 23,814,858 2,473, ,968 2,434,314 Management fees 4,401,608 6,337,517 57,907,366 91,632,518 2,239,063 7,267,675 1,603,486 Trusteeship fees 41, , , ,201 12,680 Staff cost including salaries allowances, contributions to Provident Fund, Gratuity, etc Office and administrative expenses Registration and local charges Commission to Agents 2,399,651 3,056, , ,638 - Publicity expenses 485, , ,743 23, Audit fees 84,270 33, , ,124 84,271 Other operating expenses 1,921,377 1,402, ,812 1,020, ,196 Deferred revenue expenses written off Depreciation of fixed assets Custodian fees & expenses 173, , ,174 67, ,055 Registrar's fees & expenses 1,613,629 3,000, ,012,018 2,275, ,016 Less : Amount recovered on sale of units on account of management expenses Provision / (reversal) for diminution in value of investments 4,418,713 (156,424) 4,942,010 75, ,985 TOTAL (B) 27,740,949 16,825, ,716, ,251,899 4,692,390 11,750,990 6,743,923 Surplus / (Deficit) ( A - B ) - 329,650, ,362,857 3,845,667,708 3,107,079, ,094, ,961, ,654,182 Increase / (decrease) in unrealised appreciation in value of investments 2,760,167 (550,986) (20,083,870) 36,570, ,874,756 Surplus after considering unrealised appreciation / (diminution) in value of investments 332,410, ,811,871 3,825,583,838 3,143,650, ,094, ,961, ,528,938 Add / (Less): Income Equalisation Account 411,604,737 (125,479,808) (862,551,396) 159,974,966 (118,885,286) 10,941,138 6,340, ,015, ,332,063 2,963,032,442 3,303,625,313 (1,790,817) 293,902, ,869,139 Add : Surplus brought forward 134,909, ,969,585 3,663,320,204 2,762,378, ,451,676 5,937,805 - Transfer from Reserves Prior Period Income

14 Revenue Account for the period / year ended 31st March, 2008 TFRSTF TLF TLMF TTMF Schedule Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Surplus / (Deficit) after adjustments 878,924, ,301,648 6,626,352,646 6,066,003, ,660, ,840, ,869,139 Appropriations Income Distribution / Units Capitalisation 97,759, ,293,627 1,536,708,332 1,964,453,223 70,799, ,369,068 60,914,058 Tax on dividend distributed 27,676,180 31,098, ,999, ,229,980 19,929,982 35,019,890 13,345,010 Less : Transfer from Unit Premium Reserve Add : Amount of load transferred Amount ( Payable) / Receivable to AMC Surplus/Deficit carried forward 753,488, ,909,148 4,654,644,568 3,663,320,204 11,931, ,451,676 39,610,071 Income (Gross) as a percentage to Average Net Assets Recurring Expenses as a percentage to Average Net Assets Significant Accounting Policies and Notes to the Accounts IX As per our report of even date attached For S. B. BILLIMORIA & CO. Chartered Accountants Nalin M. Shah Partner (Membership No ) Place: Mumbai, Dated: 25 th August, 2008 On behalf of the Board of Directors of Tata Trustee Co. Pvt. Ltd. S. M. Datta Ishaat Hussain Chairman Director On Behalf of the Investment Manager Tata Asset Management Ltd. Farrokh K. Kavarana Ved Prakash Chaturvedi Hormuz A. Bulsara Chairman Managing Director Chief Operating Officer Raju Sharma Fund Manager 14

15 Schedules forming part of the Balance Sheet as at 31st March, 2008 TFRSTF TLF TLMF TTMF As At As At As At As At As At As At Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) SCHEDULE I UNIT CAPITAL Initial Capital 4,844,498,320 4,844,498,320 10,050,000 10,050,000 37,420,641 37,420, ,343,313 Unit Capital Units Opening Balance 1,046,290,190 1,909,748,531 20,035,622,476 17,821,670,256 9,370,664,082 2,241,033, ,343,313 Add : Unit Capital reissued during the year 68,247,986,030 39,216,869, ,208,807, ,647,480,602 27,924,004,305 66,359,888,374 23,731,033,280 69,294,276,220 41,126,618, ,244,430, ,469,150,858 37,294,668,387 68,600,921,725 24,074,376,593 Less : Unit Capital repurchased during the Year 65,483,882,685 40,080,328, ,797,716, ,433,528,382 37,179,698,814 59,230,257,643 17,504,419,273 Unit Capital Closing Balance 3,810,393,535 1,046,290,190 15,446,713,951 20,035,622, ,969,573 9,370,664,082 6,569,957,320 SCHEDULE II RESERVES & SURPLUS : Unit premium reserve Opening Balance (3,583,943) (6,357,404) 311,250,745 53,008,181 (17,279,907) 5 - Add : Addition / (deduction) during the year (25,610,563) 2,773,461 (223,895,103) 258,242,564 9,290,518 (17,279,912) 1,456,418 (29,194,506) (3,583,943) 87,355, ,250,745 (7,989,389) (17,279,907) 1,456,418 Less : Transfer to / (from) revenue account for the year Closing Balance (29,194,506) (3,583,943) 87,355, ,250,745 (7,989,389) (17,279,907) 1,456,418 Accumulated Load Opening Balance Add : Collection during the year Less : Utilised towards agents commission Less :Transferred to AMC Less : Transfer to revenue account Closing Balance Revenue Account 753,488, ,909,148 4,654,644,568 3,663,320,204 11,931, ,451,676 39,610, ,294, ,325,205 4,742,000,210 3,974,570,949 3,942,165 87,171,769 41,066,489 15

16 SCHEDULE III CURRENT LIABILITIES & PROVISIONS Current Liabilities Schedules forming part of the Balance Sheet as at 31st March, 2008 TFRSTF TLF TLMF TTMF As At As At As At As At As At As At Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Management Fees Payable 179, ,152 1,494,777 3,193,118 8, , ,450 Trusteeship Fees Payable 36, , , ,724 11,594 Selling Commission / Brokerage 266, , , , ,709 Advertisement & Publicity 496, , ,526 23,315 - Audit Fees 84,270 33, , ,124 84,271 Custodian Fees & Expenses 18,983 14, ,618 5,612 62,121 Registrar Fees & Expenses 153, ,308 11, , ,021 Other Expenses 940, , , ,548 78,311 48,895 59,449 Interest payable on loans Contract for purchase of investments Bank account overdrawn as per books Unclaimed distributed income Repurchase amount payable 69, , ,215,300,125 Inter-scheme dues 25,010 2,270 5,894 2, , Dividend Distribution Tax 387,521 23,836 4,092,733 3,716,159 15,940 1,584,449 1,155,476 Amount payable to AMC Variation Margin Payable - F&O Others ,265 1,536, ,743 TOTAL 2,659,314 1,555,178 6,751,846 9,043, ,680 3,723,793 1,218,193,289 Provisions Provision for loss / depreciation in value of investments Provision for doubtful deposits Provision for outstanding and accrued income considered doubtful Provision for gratuity Provision for staff welfare fund Proposed income distributed on initial capital and unit-capital Other provisions TOTAL 2,659,314 1,555,178 6,751,846 9,043, ,680 3,723,793 1,218,193,289 16

17 SCHEDULE IV INVESTMENTS (Market / Yield to maturity / Fair value) Schedules forming part of the Balance Sheet as at 31st March, 2008 TFRSTF TLF TLMF TTMF As At As At As At As At As At As At Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Equity Shares Preference Shares Warrants Privately Placed Debentures / Bonds 330,265, ,000,000 2,024,884,917 80,000, ,000, ,000,000 Mutual Fund Units-Offshore Debentures listed / awaiting listing on recognised stock exchange 209,959,586-3,448,002,935 5,612,683, ,404,423 Zero Coupon Bonds / Deep discount Bonds - - Fixed Coupon Floating Rate Note - Reset - - Calls paid in advance Term loans Securitised Debt - 20,830,030 Mumbai Inter Bank Offer Rate Central and State Government Securities Asset Backed Securities - 43,622, ,815,078 Treasury Bills Commercial Paper 919,381, ,731,169 1,497,754, ,317,823 2,751,696,184 96,604,146 Certificate Of Deposit 2,252,742, ,312,136 13,089,428,947 15,063,912,926 6,075,064,648 3,541,814,276 CBLO Investments ,069,043,232 Reverse Repos 797,728,122 24,740,230 14,559, ,739, ,756,241 17,699, ,225,231 4,510,076,736 1,157,613,565 20,074,630,372 21,893,276, ,756,241 9,444,460,364 7,775,906,386 SCHEDULE V DEPOSITS Deposits with scheduled banks - 10,000,000-2,000,000, Deposits with Companies / Institutions 50,100, , Others ,000,000 50,100,000 2,000,100,

18 SCHEDULE VI Schedules forming part of the Balance Sheet as at 31st March, 2008 TFRSTF TLF TLMF TTMF As At As At As At As At As At As At Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) OTHER CURRENT ASSETS Balances with banks in current account 9,375,670 10,073,230 8,262,953 6,571,920 9,206,809 9,266, ,511 Cheques on hand ,450,000 Sundry Debtors Contract for sale of investments - - Outstanding and accrued income 17,830,061 1,270,677 62,373, ,262,748 25,860 6,212,473 15,395,243 Advance, Deposits, etc. - - Bridge Finance - - Shares / Debentures application money, pending allotment - - Receivable on redemption of investment Receivable from the AMC Variation Margin - Receivable F&O Inter-scheme dues ,527,408 Others * 64, ,409 98,910 25, ,508 1,619,897 1,067,550 27,270,600 11,557,008 70,735, ,860,106 9,374,177 17,099,280 53,310,712 SCHEDULE VII DEFERRED REVENUE EXPENDITURE Opening Balance Add: Addition during the year - Less : Amount written off during the year Less : Amount recovered on redeemed units - Amount deferred to subsequent years Schedule forming part of the Revenue Account for the period ended 31st March, 2008 SCHEDULE VIII INTEREST INCOME Call Money TFRSTF TLF TLMF TTMF As At As At As At As At As At As At Period Ended 31-Mar Mar Mar Mar Mar Mar Mar-08 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Other Deposits 497,843 - Term Deposits 46,800 36,606, ,789, ,250,005 1,438,356 35,230,588 Debentures / Bonds / Asset Backed Securities 39,540,365 64,844, ,853, ,338,036 24,156,902 23,714,775 16,821,548 Discounted Securities 275,051, ,490,403 2,534,620,567 1,916,672,128 78,038, ,524,574 81,915,096 Government Securities 4,904,357-58,934, Reverse Repos 23,108,541 13,933, ,411,362 83,207,636 17,362,725 20,525,593 10,971,838 Others ,651, ,875,481 3,801,107,277 3,195,467, ,996, ,995, ,708,482 18

19 Schedule IX - Statement of significant accounting policies of (TLF) and Notes forming part of the Accounts for the year ended 31st March, A. SIGNIFICANT ACCOUNTING POLICIES 1. INCOME RECOGNITION: a) Profit or loss on sale of investments is recognised on trade dates. The cost of investments sold is determined on "weighted average cost basis". b) Interest on investments is accounted on an accrual basis. Interest on an investment that is past due for three months is accrued and a full provision is made against all outstanding interest on that investment. c) Discounts / premiums to the redemption value on fixed income securities are amortised on a straight-line basis over the period upto redemption. d) Other income of a miscellaneous nature is accounted when it is received on grounds of prudence. 2. EXPENSES: Being a no load scheme, all expenses, excluding management fees, have been borne by Tata Asset Management Limited and Tata Trustee Company Private Limited. 3. INVESTMENTS: Purchase and sale of investments are recorded on the date of the transaction, at cost and sale price respectively, after considering brokerage, commission, stamp charges and any charge customarily included in the broker note. 4. PORTFOLIO VALUATION FOR NAV CALCULATION i. Traded Securities (Other than Floating Rate Debt Securities): Traded Securities are valued at year-end closing market rates on the principal stock exchange on which the security is traded (excluding accrued interest, if any, which is accounted separately). In the absence of a quoted price on the valuation date for debt securities (other than Government Securities), the last available quoted price within a period of fifteen days prior to the valuation date is used for valuation purposes. ii. iii. Thinly Traded Securities (Other than Floating Rate Debt Securities): The thinly traded debt securities are those securities (other than Government securities) if on the valuation date, there are no individual trades in those securities in marketable lots (presently 5 crores) on the principal stock exchange or any other stock exchange. These have been valued on the basis of valuation principles laid down by The Securities and Exchange Board of India (SEBI) for the same. Non-Traded Securities (Other than Floating Rate Debt Securities): a. Non-Traded/Thinly Traded Debt Securities/Asset Backed Securities of over 182 days to maturity are valued in good faith on a yield to maturity basis by Tata Asset Management Limited (TAML). The non - traded debt securities have been classified by TAML as "investment grade" and "below investment grade" as at 31st March, The values applied by TAML for "investment grade" debt securities are on the basis of valuation yields determined by CRISIL (Credit Rating Information Services of India Limited). In the opinion of TAML, these yields determine fair and reasonable values and such basis of valuation is approved by the Tata Trustee Company Private Limited. These securities have been valued on the basis of valuation principles laid down by SEBI for the same. Non - traded debt securities with residual maturity of upto 182 days are valued on the basis of amortisation (cost plus accrued interest till the beginning of the day plus the difference between the redemption value (inclusive of interest) and the cost spread uniformly over the remaining maturity period of the instrument). This basis of valuation is in accordance with SEBI guidelines. b. Valuation of non traded/thinly traded debt securities with floating rate of interest upto 182 Days to the Interest Reset Date/Maturity Date : The non-traded / thinly traded floating rate debt securities with a residual maturity / next reset date upto 182 days are valued on the basis of amortisation (cost plus accrued interest till the beginning of the day plus the difference between the redemption value and the cost spread uniformly over the remaining maturity / interest reset period of the instruments) in the absence of any other standard benchmarks in the market. c. Floating Rate Debt Securities with Put/Call options : The floating rate debt securities with put/call options shall be valued in terms of the Valuation Guidelines specified above taking into consideration the next interest rate reset date instead of the final maturity date in the absence of any other guidelines from SEBI. The aggregate fair value of these non-traded "investment grade" debt securities as at 31st March, 2008 is 5,472,887,852/- (previous year 5,227,560,698/-). The scheme does not invest in "below investment grade" debt securities. These balances exclude redemption proceeds due but not received Nil (previous year Nil). 19

20 iv. Money Market Securities : Money Market instruments which are not traded are valued on the basis of amortisation (cost plus accrued interest till the beginning of the day plus the difference uniformly amortised over the remaining maturity period of the instrument). For Money Market Instruments which are traded, the difference between the traded price and the cost plus accrued interest is booked as unrealised gain or loss on that day and from the next day the unrealised gain or loss is amortised over the remaining period to maturity in such a manner that on the maturity date, the value of security matches the face value. v. Asset Backed Securities : Asset backed securities in the form of Pass-Through Certificates (non coupon bearing) are valued at discounted value of future cash inflows, whereas coupon bearing Pass-Through Certificates are valued at cost. vi. CBLO Investment: CBLO investments are valued at cost. vii. Reverse Repo Investment : Investment bought on Repo basis are valued at cost. viii. Unrealised Gain / Loss in value of Investments : Following the issue of the Guidance Note on Accounting for Investments in the Financial Statements of Mutual Funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the SEBI Regulations), the appreciation / diminution in investments is worked out on individual basis. The value of diminution as at the year end is reflected in the Revenue Account. Unrealised appreciation as at the year end is also routed through the Revenue Account but is reduced from the distributable income at the time of income distribution. 5. INCOME EQUALISATION RESERVE : Income Equalisation Reserve is being maintained by crediting / (debiting) the equalisation account in respect of sale / (repurchase) of units by an appropriate amount which represents the distributable income at the time of sale / (repurchase). It is reflected in the Revenue Account after the net excess / deficit of the scheme is determined. 6. UNIT PREMIUM RESERVE : On repurchase / redemption / resale of units, the difference between the unit face value and the NAV (after adjusting income equalisation reserve) is disclosed as "Unit Premium Reserve". B. Notes attached to and forming part of the accounts for the year ended 31st March, The aggregate value of purchases and sales of investments for the year ended 31st March, 2008, expressed as a percentage of average weekly net assets is as under : Particulars Aggregate value of Purchases Aggregate value of Sales As at As at Value* Value* % % 983,841,653, ,873,451, ,812,462, ,814,542, * The amounts do not include reverse repo transactions. 2. Investments made in group / associate companies. (Refer Annexure 1). 3. Investments made by the schemes of Tata Mutual Fund in companies or their subsidiaries (to the extent of information available) that have invested more than 5% of the net assets as at 31st March, 2008 of any scheme of the fund, in terms of Regulation 25 (11). (Refer Annexure 2). 4. Statement of Portfolio with industry wise classification as at 31st March, (Refer Annexure 3) 20

21 5. In accordance with the Rules and Regulations of the scheme, Management Fees were paid on the daily net assets of the plans of the scheme as follows : Current Year Previous Year Dates Retail Investment Plan Dates Retail Investment Plan From To % of Daily Net Asset From To % of Daily Net Asset % % % % % % % Current Year Previous Year Dates High Investment Plan Dates High Investment Plan From To % of Daily Net Asset From To % of Daily Net Asset % % % % % % % Current Year Previous Year Dates Super High Investment Plan Dates Super High Investment Plan From To % of Daily Net Asset From To % of Daily Net Asset % % % % % % % % % % % % % % % % TLF being a no load scheme Trusteeship Fees are paid by Tata Asset Management Limited. 6. Contingent liabilities as at 31st March, 2008 are Nil (previous year Nil). 21

22 7. Disclosure under Regulation 25(8) of the SEBI Regulation have been made in the table below in respect of amounts paid to parties associated with sponsors in which the Asset Management Company or its major sharehloders have a substantial interest. Name of the Company Tata Securities Pvt. Limited. Tata Asset Management Limited Nature of Payment Selling Commission Management Fees % equity capital held by the sponsors and its subsidiary / associates as at 31 st March, ,799,775 8,466,772 # 57,907,366 91,632, %* # Extent of holding by principal shareholders of the sponsors and its subsidiary / associates not available. * Tata Sons Limited % and Tata Investment Corporation Limited % ** Tata Sons Limited % and Tata Investment Corporation Limited % TLF being a no load scheme, the brokerage payments shown above are borne by Tata Asset Management Limited and Tata Trustee Company Private Limited. 8. Net Asset Value Per Unit () : Particulars As at As at Face Value 1, , Net Asset Value RIP RIP Daily Div Fortnightly Growth 1, , , Daily Div Fortnightly Growth 1, , , HIP Daily Div Weekly Div Monthly Div Growth HIP Daily Div Weekly Div Monthly Div Growth 1, , , , SHIP Daily Div Weekly Div Monthly Div Growth SHIP Daily Div Weekly Div Monthly Div Growth 1, , , , Unprovided diminution and unrealised appreciation in the value of investments. Particulars Unrealised appreciation 27,609,129 47,693,001 Unprovided diminution