ANNUAL REPORT 2016-2017 DEBT-CASH SCHEMES
Annual Report 2016-2017 STATUTORY DETAILS: SPONSORS Tata Sons Limited Bombay House, 24, Homi Modi Street, Mumbai - 400 001. Tata Investment Corporation Limited Elphinstone Building, 10, Veer Nariman Road, Mumbai 400 001. TRUSTEE Tata Trustee Company Limited Mafatlal Centre, 9th Floor, Nariman Point, Mumbai 400 021. AMC Tata Asset Management Ltd. Mafatlal Centre, 9th Floor, Nariman Point, Mumbai 400 021. REGISTRAR Computer Age Management Services (Pvt.) Limited No. 178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai 600 034.
REPORT OF THE TRUSTEE TO THE UNITHOLDERS FOR THE YEAR ENDED 31 ST MARCH, 2017 Dear Unitholder, It gives us great pleasure to communicate with you and present to you the scheme-wise audited accounts as on 31 st March, 2017. 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 annexed. 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 21, 2017 Mumbai. PERFORMANCE OF THE SCHEMES. FUTURE OUTLOOK AND OPERATIONS OF THE SCHEMES The year that was: Equity: Equity markets performed strongly in Financial Year 2016-17, with BSE Sensex and CNX Nifty recording gains of 16.9% and 18.5% respectively. The start of the year saw stability returning in Emerging Market currencies and commodities, which refl ected in improved outlook for global growth. Most equity markets, across both developed and emerging countries, did well during the year. Apart from a conducive global environment, Indian economy and markets benefi ted from low infl ation and interest rates, good monsoons, continued strength in consumption and government capex and improved corporate performance from some of the stressed sectors such as metals. Markets also welcomed the reformist steps such as introduction of GST, a pragmatic budget focusing on fi scal discipline and higher political stability as witnessed in key state election results. The broader markets did better than the benchmark indices with BSE midcap and NSE small cap indices gaining over 30%. Debt: The year saw softening of government yields due to lower CPI infl ation, falling crude prices, effi cient supply management by government, high base effect and high liquidity due to demonetisation. Reserve Bank of India (RBI) continued its accommodative stance (till February 2017), with cumulative rate cuts totalling 50 bps (25 bps each in April and October). Macroeconomic scenario was a mixed bag with CAD, reserves and infl ation performing well while investments, economic activity and credit growth remained sluggish. The month of November saw demonetization wherein the deposit base of banking system witnessed abrupt jump. Post demonetization banking liquidity remained in surplus mode with RBI and government issuing MSS bonds to manage liquidity in the system. Broader macro sustainability, bold fi scal policy measures and coherent monetary policies led to large FPI infl ows and rupee appreciation from a low point of Rs. 68.78 to Rs. 64.85 by the end of March 2017. Rupee was among the top 5 best performing currencies in the fi nancial year 2016-2017 and India was one of the best countries to invest among the emerging markets. Future Outlook Equity The Investment Manager continues to retain a generally positive outlook on the Indian equity markets over the medium term. India s macroeconomic parameters continue to be healthy with the twin defi cits and infl ation remaining under control. GDP and earnings growth is expected to improve gradually. However, current valuations are close to one standard deviation higher than longer term averages. Thus, near term returns are more likely to track earnings growth. Debt Acknowledging a continuous fall in infl ation, sluggishness in economic activity and improving domestic economic indicators, the Investment Manager expects a repo rate cut in Financial Year 2017-2018. Given the government s debt strategy for more issuance in 10-14-year segment, the issuances at the longer-end of the curve are likely to remain muted, which in turn may lead to fl attening of the yield curve.
Annual Report 2016-2017 FUNDS UNDER MANAGEMENT OPERATIONS Tata Mutual Fund as on 31 st March 2017, has thirty open ended schemes of which sixteen are equity schemes, two are balanced schemes, eleven are debt schemes, one is Equity Linked Saving Scheme (ELSS) and twenty-six close ended schemes of which twenty -fi ve are debt schemes and one is Equity Linked Saving Scheme (ELSS). The Average Assets under Management for the fi nancial year 2016-2017 was Rs.38978.18 crore. (Up by Rs.8897 crore compared to the fi nancial year 2015-16) 1. Investment objective, policy and 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 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 Limited as a Trustee in accordance with the provisions of the Indian Trusts Act, 1882 and is duly registered under the Indian Registration Act, 1908. The Trustee has entered into an Investment Management Agreement dated 9 th May, 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 30 th June, 1995. The Trustee is the exclusive holder of the Trust Funds and holds the same in trust for the benefi t of the unitholders who are the ultimate owners/benefi ciaries of the funds. 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 fl oated 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. Tata Asset Management Limited (TAML) is a company incorporated under the Companies Act, 1956 on 15 th March, 1994. TAML has been appointed as the Investment Manager for Tata Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated 9 th May, 1995, executed between TTCL and TAML. 3. Significant Accounting Policies: Accounting policies are in accordance with the requirements of the Securities Exchange Board of India (Mutual Fund) Regulations 1996. 4. General Policies and 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 and summary as well as details of actual exercise of proxy votes during the Financial Year 2016 2017 are enclosed as Annexure II & Annexure III to this report and is also available on the website www.tatamutualfund.com. 5. Unclaimed Dividend & Redemption: Details of unclaimed dividend and redemption amount are given in Annexure IV. 6. Redressal of Complaints received against TMF during 2016-2017: Details of complaints received and redressed during fi nancial year 2016-17 are given in Annexure V. 7. 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 and extant SEBI (Mutual Funds) Regulation, 1996. b. The price and redemption value of the units, and income from them, can go up as well as down with fl uctuations in the market value of its underlying investments. c. Full Annual Report is disclosed on the website (www.tatamutualfund.com) and is available for inspection at the Head Offi ce of the mutual fund. Present and prospective unit holders can obtain a copy of the trust deed, the full Annual Report of the Fund / AMC at a charge.
Annexure I Investment Objective, policy and performance of the schemes: Tata Money Market Fund: An open ended money market scheme (Liquid Fund Category). The investment objective is to create a highly liquid portfolio of money market instruments so as to provide reasonable returns and high liquidity to the unitholders. The scheme is investing 100% of the net assets in money market securities. The scheme has investment in / purchase money market securities with maturity up to 91 days only. The fund has outperformed due to exposure to high yield papers and active mark to market management. Performance at a glance (% as on 31st March, 2017) Last 1 year Last 3 years Last 5 years Since Inception Regular Plan- Growth 7.28 8.15 8.67 7.73(01/09/04) Direct Growth 7.35 8.22 NA 8.59 (1/1/13) Crisil Liquid Fund Index Regular Plan- Growth 7.11 8.04 8.36 7.16 Direct Growth 7.11 8.04 NA 8.38 NA - Not Available. 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 Liquid Fund: An open ended high liquidity income scheme. The Investment objective is 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. The Scheme can invest 100 % of its net assets in debt & money market instruments having maturity up to 91 days. It also has fl exibility to invest 100% in non-money market fi xed income instruments. The Fund have the fl exibility to invest in wide range of listed/unlisted debt & money market instruments. 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 31st March, 2017) Last 1 year Last 3 years Last 5 years Since Inception Regular Plan Growth 7.19 8.09 8.58 7.40 (22/05/03) Direct Plan Growth 7.26 8.17 NA 8.50 (1/1/2013) HIP - Growth 6.71 7.67 8.16 7.06 (26/02/03) RIP - Growth 6.40 7.35 7.84 7.06 (30/08/98) Crisil Liquid Fund Index Regular Plan- Growth 7.11 8.04 8.36 6.87 Direct Growth 7.11 8.04 NA 8.38 NA - Not Available. Past Performance may or may not sustain in future. Returns given are for Regular Plan (Growth option) & Direct Plan (Growth option).
Annual Report 2016-2017 VOTING POLICY Annexure-II 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 the principles are essential to ensure the long-term performance of assets managed by the AMC. The AMC will endeavour to manage voting rights with the same level of care and 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 infl uence 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 and when required. The AMC will follow a common voting policy for all its holdings including group companies and 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 confl icts 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 Vote Cast by Tata Mutual Fund for the Financial Year 2016-2017: Summary of Votes cast by Tata Mutual Fund during the Financial Year 2016-2017 Annexure-III Financial Year Quarter Total no. of resolutions Break-up of Vote decision For Against Abstained April - June 228 228 0 0 2016-2017 July - September 1497 1489 3 5 October - December 83 82 1 0 January - March 71 70 0 1 Total 1879 1869 4 6 The details of actual exercise of proxy votes during the Financial Year 2016-2017 is enclosed with the Annual Report 2016-2017 of Tata Mutual Fund along with the Scrutiniser s Certifi cation. The same is also available on the website www.tatamutualfund.com.
M. P. Chitale & Co. Chartered Accountants 1/11, Prabhadevi Ind. Estate, 1st Flr., Opp. Siddhivinayak Temple, Veer Savarkar Marg, Prabhadevi, Mumbai - 25 Tel.: 43474301-03 Fax : 43474304 The Board of Directors, Tata Asset Management Ltd/ Tata Trustee Company Ltd. 9 th Floor, Mafatlal Centre, Nariman Point, Mumbai-400 021 We have been appointed as scrutinizer by Tata Asset Management Ltd. to certify the disclosure of votes cast on their website for the year 2016-17 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, 2016. We have verified the voting disclosures made by Tata Asset Management Ltd. on the website for the year April 2016 to March 2017 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. 101851W Vidya Barje Partner M. No. 104994 Mumbai, April 17, 2017
Annual Report 2016-2017 Statement of Unclaimed Dividend & Redemptions as on 31st March 2017 Annexure IV Unclaimed Amounts (Rs.) No. of Investors Scheme Name Redemption Dividend Total Redemption Dividend Total TATA Fixed Maturity Plan -Series 27 Scheme A 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 TATA Fixed Maturity Plan -Series 43 Scheme B 1,435.86 0.00 1,435.86 1 0 1 0.35 0.00 0.35 2 0 2 0.27 0.00 0.27 2 0 2 0.03 0.00 0.03 3 0 3 0.24 0.00 0.24 2 0 2 573.28 0.00 573.28 1 0 1 0.00 0.00 0.00 1 0 1 TATA Balanced Fund 210,366.19 868,682.04 1,079,048.23 163 3,168 3,331 Tata Capital Builder Fund 133,617.05 0.00 133,617.05 67 0 67 Tata Contra Fund 3,671.52 0.00 3,671.52 3 0 3 TATA Capital Protection Oriented Fund - Series 1 TATA Capital Protection Oriented Fund - Series 2 738,329.80 0.00 738,329.80 11 0 11 32,384.52 0.00 32,384.52 10 0 10 TATA Dynamic Bond Fund 8,299.38 401.13 8,700.51 2 6 8 TATA Dual Advantage Fund - Scheme A 35,985.26 0.00 35,985.26 20 0 20 TATA Dividend Yield Fund 359,907.45 252,470.55 612,378.00 275 1,362 1,637 Tata Equity Management Fund 360,615.49 0.00 360,615.49 201 1 202 TATA Equity Opportunities Fund 3,537,932.13 2,007,059.16 5,544,991.29 2,263 11,318 13,581 Tata Equity PE Fund 757,865.32 247,198.57 1,005,063.89 532 1,583 2,115 TATA Fixed Income Portfolio Fund A1 Series TATA Fixed Income Portfolio Fund A2 Series TATA Fixed Income Portfolio Fund A3 Series TATA Fixed Income Portfolio Fund B2 Series TATA Fixed Income Portfolio Fund B3 Series TATA Fixed Income Portfolio Fund C3 Series 0.03 0.00 0.03 1 0 1 1,622.90 0.00 1,622.90 2 0 2 68,542.77 0.00 68,542.77 2 0 2 0.00 0.00 0.00 1 0 1 2,282.89 0.00 2,282.89 2 0 2 576.86 0.00 576.86 1 0 1 Tata Ultra Short Term Fund 28,185.82 0.00 28,185.82 86 0 86
Unclaimed Amounts (Rs.) No. of Investors Scheme Name Redemption Dividend Total Redemption Dividend Total TATA Floating Rate Fund - Long Term 27,935.14 2.75 27,937.89 31 1 32 TATA Money Market Fund 27,607.34 0.00 27,607.34 27 0 27 TATA Fixed Tenure Fund - Series 1 68,689.80 0.00 68,689.80 8 0 8 TATA Fixed Tenure Fund - Series 2 3,750.04 0.00 3,750.04 8 0 8 TATA Gilt Securities Fund 32,349.77 19,483.33 51,833.10 9 108 117 TATA Mid Cap Growth Fund 731,185.02 1,179,543.08 1,910,728.10 380 7,279 7,659 TATA Index Fund - Nifty Plan 7,267.87 0.00 7,267.87 7 0 7 Tata Long Term Debt Fund 46,753.81 204,986.73 251,740.55 38 856 894 TATA Infrastructure Fund 3,126,271.45 647,035.78 3,773,307.23 1,863 3,297 5,160 TATA Index Fund - Sensex Plan 6,679.40 156.85 6,836.25 4 1 5 TATA Liquid Fund 89,934.80 10,449.65 100,384.44 38 14 52 TATA Liquidity Management Fund 59.96 0.00 59.96 2 0 2 TATA Life Sciences & Technology Fund 60,383.26 49,775.40 110,158.66 30 97 127 TATA Regular Savings Equity Fund 137,167.51 15,665.09 152,832.60 37 333 370 TATA Large Cap Fund 1,284,206.09 688,200.24 1,972,406.33 830 3,841 4,671 TATA Retirement Saving Fund -Conservative TATA Retirement Saving Fund - Moderate TATA Retirement Saving Fund - Progressive 193,812.45 11,695.73 205,508.17 121 654 775 1,070.32 0.00 1,070.32 4 0 4 9,525.53 0.00 9,525.53 35 0 35 TATA Services Industries Fund 11,120.85 475.06 11,595.90 6 3 9 TATA SIP Fund 1 1,252,376.23 48.71 1,252,424.94 573 1 574 Tata Smart Investment Plan - 1 Scheme A Tata Smart Investment Plan - 1 Scheme B 58,878.85 0.00 58,878.85 86 0 86 7,208.25 0.00 7,208.25 21 0 21 TATA Ethical Fund 149,330.24 295,321.07 444,651.31 88 603 691 TATA Short Term Bond Fund 6,289.41 251.51 6,540.91 12 18 30 TATA Tax Advantage Fund 5,081,629.54 0.00 5,081,629.54 3,798 3 3,801 Tata Corporate Bond Fund 52,735.54 0.00 52,735.54 32 1 33 Tata India Tax Savings Fund 392,114.69 2,777,963.50 3,170,078.19 385 8,989 9,374 TATA Equity Opportunities Fund* 169,022.51 169,022.51 0 709 709 TATA Young Citizens Fund 172,875.83 0.00 172,875.83 166 0 166 Note: Tata Capital Builder Fund merged with Tata Midcap Growth Fund,Tata Contra Fund merged with Tata Equity Opportunities Fund,Tata Equity Management Fund merged with Tata Large Cap Fund,Tata Liquidity Management Fund merged with Tata Liquid fund,tata Life Sciences & Technology Fund merged with Tata Equity Opportunities Fund & Ind Bank Tax Sheild* migrated to Tata Equity Opportunities Fund
Annual Report 2016-2017 Redressal of Complaints received against Mutual Funds (MFs) during 2016-2017 Name of Mutual Fund: Tata Mutual Fund Total Number of Folios (as on 31-Mar-17): 1153594 Complaint Type of complaint# code (a) No. of complaints pending at the beginning of the year (b) No of complaints received during the year Within 30 days Resolved 30-60 days Non Actionable* 60-180 days Action on (a) and (b) Beyond 180 days 0-3 months 3-6 months Pending 6-9 months Annexure-V 9-12 months I A I B I C I D Non receipt of Dividend on Units Interest on delayed payment of Dividend Non receipt of Redemption Proceeds Interest on delayed payment of Redemption 0 3 3 0 0 0 0 0 0 0 0 0 4 4 0 0 0 0 0 0 0 0 0 4 4 0 0 0 0 0 0 0 0 0 4 4 0 0 0 0 0 0 0 0 II A Non receipt of Statement of Account /Unit Certificate 0 6 5 0 1 0 0 0 0 0 0 II B II C II D III A III B III C III D III E Discrepancy in Statement of Account Data corrections in Investor details Non receipt of Annual Report/Abridged Summary Wrong switch between Schemes Unauthorized switch between Schemes Deviation from Scheme attributes Wrong or excess charges/ load Non updation of changes viz. address, PAN, bank details, nomination, etc 1 60 55 4 0 0 0 2 0 0 0 16 402 418 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 29 32 0 0 0 0 0 0 0 0 IV Others 2 99 96 3 0 0 0 2 0 0 0 Total 22 611 621 7 1 0 0 4 0 0 0 Complaints Summary for Financial Year 2016-2017: Particulars Count Total Complaints Received 611 Total Number of Folios 1153594 Percentage Complaints Against Folios 0.05% # - including against its authorized persons / distributors / employees etc. *Non actionable - means the complaint that are incomplete / outside the scope of the Mutual Fund.
INDEPENDENT AUDITORS REPORT TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY LIMITED TATA MUTUAL FUND TATA MONEY MARKET FUND Report on the Financial Statements We have audited the accompanying fi nancial statements of TATA MUTUAL FUND TATA MONEY MARKET FUND (the Scheme ) which comprise the Balance Sheet as at March 31, 2017,the Revenue Account and the Cash Flow Statement for the year then ended and a summary of the signifi cant 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 fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Scheme in accordance with accounting policies and standards as specifi ed in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended (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 fi nancial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fi nancial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial statements that give a true and fair view of the fi nancial 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 fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the fi nancial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid fi nancial 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, 2017; 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 specifi ed 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, 2017 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. 117366W / W-100018) Mumbai, July 21, 2017 G. K. Subramaniam Partner (Membership No. 109839)
Annual Report 2016-2017 INDEPENDENT AUDITORS REPORT TO THE BOARD OF DIRECTORS OF TATA TRUSTEE COMPANY LIMITED TATA MUTUAL FUND TATA LIQUID FUND Report on the Financial Statements We have audited the accompanying fi nancial statements of TATA MUTUAL FUND TATA LIQUID FUND (the Scheme ) which comprise the Balance Sheet as at March 31, 2017,the Revenue Account and the Cash Flow Statement for the year then ended and a summary of the signifi cant 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 fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Scheme in accordance with accounting policies and standards as specifi ed in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended (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 fi nancial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fi nancial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial statements that give a true and fair view of the fi nancial 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 fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the fi nancial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid fi nancial 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, 2017; 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 specifi ed 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, 2017 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. 117366W / W-100018) Mumbai, July 21, 2017 G. K. Subramaniam Partner (Membership No. 109839)
Balance Sheet as at 31st March, 2017 Balance Sheet as at 31st March, 2017 LIABILITIES Schedule Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Unit Capital I 39,691,419,999 30,245,508,619 16,138,774,517 11,442,704,793 Reserves & Surplus II 52,261,462,688 30,592,761,065 24,156,122,950 12,899,308,988 Loans (Refer Note C 22 of Schedule IX) III 3,298,554,058 8,748,259,051 7,348,658,810 2,250,000,000 Current Liabilities & Provisions IV 6,596,666 2,693,285,469 1,142,124,713 339,108,055 ASSETS TOTAL 95,258,033,411 72,279,814,204 48,785,680,990 26,931,121,836 Investments V 83,882,353,348 63,676,908,934 39,993,097,251 23,176,061,082 Deposits VI 10,020,200,000 8,120,200,000 5,580,000,000 3,250,000,000 Other Current Assets VII 1,355,480,063 482,705,270 3,212,583,739 505,060,754 TOTAL 95,258,033,411 72,279,814,204 48,785,680,990 26,931,121,836 Significant Accounting Policies and Notes to the Accounts IX In terms of our reports attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants On behalf of the Board of Directors of Tata Trustee Company Limited G. K. Subramaniam Director Partner Tata Asset Management Limited Mumbai, July 21, 2017 Authorised Signatory Fund Manager
Revenue Account for the year ended 31st March, 2017 INCOME Schedule Revenue Account for the year ended 31st March, 2017 Tata Money Market Fund Tata Liquid Fund Year Ended Year Ended Year Ended Year Ended 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Interest VIII 6,181,634,763 4,651,638,408 2,917,862,826 2,352,590,863 Profit on sale / redemption of investments (other than interscheme transfer/sale) 51,966,146 33,236,503 25,375,351 22,866,466 Profit on inter- scheme transfer / sale of investments 2,432,351 7,841,056 718,347 3,206,391 Other income (Including excess provision written back) 89,584-20,895 1,565 Increase / (Decrease) in unrealised appreciation in value of investments (36,422,748) 28,076,977 (14,857,355) 8,607,091 TOTAL (A) 6,199,700,096 4,720,792,944 2,929,120,064 2,387,272,376 EXPENSES AND LOSSES Loss on sale / redemption of investments (other than interscheme transfer/sale) 14,855,415 11,030,988 6,097,990 6,386,672 Loss on inter- scheme transfer / sale of investments 473,227 1,310,649 272,814 438,508 Management fees 21,998,787 16,553,984 16,515,891 7,762,232 Trusteeship fees - - - - Service Tax Expenses on Management Fees 3,258,360 2,361,494 2,454,015 1,099,946 Commission to Agents 13,661,822 8,130,183 9,448,634 4,804,893 Investor Education Fund Expenses 17,016,024 6,737,720 8,108,747 3,570,819 Interest expense on borrowings 125,849,847 95,081,416 74,517,576 55,482,011 Provision/(Reversal) for / of diminution in value of investments 4,223,622 (1,629,948) 2,768,797 (2,353,966) TOTAL (B) 201,337,104 139,576,486 120,184,464 77,191,115 Surplus (A-B) 5,998,362,992 4,581,216,458 2,808,935,600 2,310,081,261 Add / (Less) : Income Equalisation Account (Refer Note B 1.5 of Schedule IX) 16,557,681,681 4,801,132,079 8,736,436,483 (4,029,527,729) 22,556,044,673 9,382,348,537 11,545,372,083 (1,719,446,468) Add: Surplus brought forward 28,958,483,985 20,192,370,491 17,348,415,797 19,610,845,811 51,514,528,658 29,574,719,028 28,893,787,880 17,891,399,343 Add: Unrealised Appreciation Reserve at the beginning of the year 49,740,882 21,663,905 20,237,744 11,630,653 Less: Unrealised Appreciation Reserve at the end of the year 13,318,134 49,740,882 5,380,389 20,237,744 Surplus after adjustments 51,550,951,406 29,546,642,051 28,908,645,235 17,882,792,252 Appropriations Less : Income Distribution 604,993,380 395,646,159 297,165,237 361,984,250 Less : Tax on dividend distributed 289,947,244 192,511,907 138,359,963 172,392,205 Surplus carried forward to Revenue Reserve 50,656,010,782 28,958,483,985 28,473,120,035 17,348,415,797 Income as a percentage to Average Net Assets 7.26 8.16 7.20 8.18 Recurring Expenses as a percentage to Average Net Assets 0.21 0.22 0.27 0.25 Significant Accounting Policies and Notes to the Accounts IX In terms of our reports attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants On behalf of the Board of Directors of Tata Trustee Company Limited G. K. Subramaniam Director Partner Tata Asset Management Limited Mumbai, July 21, 2017 Authorised Signatory Fund Manager
Cash Flow Statement for the year ended 31st March, 2017 Cash Flow Statement for the year ended 31st March, 2017 Tata Money Market Fund Tata Liquid Fund Year Ended Year Ended Year Ended Year Ended 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. A. Cash flow from Operating Activities Surplus for the year (Refer Note 2 below) 5,998,362,992 4,581,216,458 2,808,935,600 2,310,081,261 Adjustments for:- Interest income (6,181,634,763) (4,651,576,734) (2,917,862,826) (2,352,590,863) Interest expense on borrowings 125,849,847 95,081,416 74,517,576 55,482,011 Net (Increase) / Decrease in Unrealised gain/loss in the value of Investments 40,646,370 (29,706,925) 17,626,152 (10,961,057) Change in assets and liabilities: (Increase) / Decrease in Investments at Cost (24,123,269,846) (16,679,443,330) (18,821,850,551) 1,032,552,240 (Increase) / Decrease in Deposits with scheduled banks/companies / institutions (1,900,000,000) (550,000,000) (2,330,000,000) 2,250,000,000 (Increase) / Decrease in Other Current Assets 124,810 (111,552) 14,920 (162,774) (Decrease) in Current Liabilities and Provisions (2,793,599) (7,567,172) (318,773) (13,216,974) Cash Generated from/(used in) Operations (26,042,714,189) (17,242,107,839) (21,168,937,902) 3,271,183,844 Interest received 6,178,731,557 4,654,535,004 2,884,605,327 2,373,263,625 Dividend received - - - - Net Cash Generated from/(used in) Operating Activities ( A ) (19,863,982,632) (12,587,572,835) (18,284,332,575) 5,644,447,469 B. Cash flow from Investing Activities ( B ) - - - - C. Cash flow from Financing Activities Net proceeds from reissue / (payments for re-purchase) of units 9,396,420,725 8,772,046,492 4,515,904,638 (1,635,657,504) Net unit premium received / (paid) 16,565,279,255 4,840,921,678 8,883,403,562 (4,068,824,482) Net proceeds from Borrowings (5,449,704,993) (96,740,949) 5,098,658,810 (450,000,000) Interest paid during the year (127,582,725) (95,267,519) (73,725,697) (55,606,778) Dividend paid (including tax on dividend distributed, where applicable) during the year (896,716,795) (586,558,490) (436,633,837) (533,767,890) Net Cash Generated from/(used in) Financing Activities 19,487,695,467 12,834,401,212 17,987,607,476 (6,743,856,654) ( C ) Net increase / (decrease) in Cash and Cash Equivalents (A+B+C) (376,287,165) 246,828,377 (296,725,099) (1,099,409,185) Cash and cash equivalents as at the beginning of the year 428,807,361 181,978,984 488,073,346 1,587,482,531 Cash and cash equivalents as at the end of the year (Refer Note 1 below) 52,520,196 428,807,361 191,348,247 488,073,346 Notes: 1. Components of cash and cash equivalents as at the end of the year (Refer Note B 1.6 of Schedule IX) Balances with banks in current account (Refer Schedule VII) 13,415,706 217,259,828 156,111,234 186,283,785 Reverse Repos (Refer Schedule VII) 39,395,371 211,962,293 36,936,467 303,424,388 Less: Earmarked Balances - Unclaimed Dividend and Unclaimed Redemption invested in Reverse Repos/CBLO (290,881) (414,760) (1,699,454) (1,634,827) (Refer Schedule IV) Cash and cash equivalents as at the end of the year 52,520,196 428,807,361 191,348,247 488,073,346 2. Surplus / (Deficit) for the year considered in the cash flow statement is after adjusting net movement in Marked to Market value of Investments. Significant Accounting Policies and Notes to the Accounts IX In terms of our reports attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants On behalf of the Board of Directors of Tata Trustee Company Limited G. K. Subramaniam Director Partner Tata Asset Management Limited Mumbai, July 21, 2017 Authorised Signatory Fund Manager
Schedule I - Unit Capital Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Initial Capital 4,844,498,320 4,844,498,320 10,050,000 10,050,000 Unit Capital (Refer Annexure 6) Units Opening Balance 30,245,508,619 21,460,631,024 11,442,704,793 13,380,010,301 Add : Units reissued during the year 951,644,039,067 619,831,082,888 481,858,729,922 359,248,783,370 981,889,547,686 641,291,713,912 493,301,434,715 372,628,793,671 Less : Units repurchased during the year 942,198,127,687 611,046,205,293 477,162,660,198 361,186,088,878 Units Closing Balance 39,691,419,999 30,245,508,619 16,138,774,517 11,442,704,793
Schedule II - Reserves & Surplus Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Unit Premium Reserve Opening Balance 1,584,536,198 1,544,746,599 (4,469,344,553) (4,430,047,800) Net Addition / (Deduction) during the year 7,597,574 39,789,599 146,967,079 (39,296,753) Closing Balance 1,592,133,772 1,584,536,198 (4,322,377,474) (4,469,344,553) Unrealised Appreciation Reserve Opening Balance 49,740,882 21,663,905 20,237,744 11,630,653 Increase/(Decrease) in unrealised gain in the value of investments (36,422,748) 28,076,977 (14,857,355) 8,607,091 Closing Balance 13,318,134 49,740,882 5,380,389 20,237,744 Revenue Account 50,656,010,782 28,958,483,985 28,473,120,035 17,348,415,797 52,261,462,688 30,592,761,065 24,156,122,950 12,899,308,988
Schedule III - Loans Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Loan from Commercial Banks (Refer Note C 22 of Schedule IX) Loan from The Clearing Corporation of India Ltd. (Refer Note C 22 of Schedule IX) - 6,750,000,000 4,300,000,000 2,250,000,000 3,298,554,058 1,998,259,051 3,048,658,810-3,298,554,058 8,748,259,051 7,348,658,810 2,250,000,000
Schedule IV - Current Liabilities & Provisions Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Current Liabilities Management Fees payable 440,060 3,657,683 73,346 1,742,039 Selling Commission / Brokerage Expenses payable 1,610,217 1,219,496 3,195,867 2,079,032 Other payables 507,684 532,987 106,333 221,407 Interest payable on loans (not due) 480,715 2,213,593 1,389,824 597,945 Units pending allotment 848,800 50,215,576 149,160,653 330,624,458 Contract for purchase of investments - 2,630,895,500 985,038,000 - Repurchase amount payable - - - 704 Unclaimed Redemption payable (Refer Note C 14 of Schedule IX) 290,881 414,760 1,589,527 1,510,829 Unclaimed Dividend payable (Refer Note C 14 of Schedule IX) - - 109,927 123,998 Dividend Distribution Tax payable 523,915 2,300,086 394,368 1,486,347 Income Distribution payable - - 268 2,855 Investor Education Fund Expenses Payable 1,828,390 1,305,424 1,055,598 465,845 Service Tax payable on Management Fees 66,004 530,364 11,002 252,596 6,596,666 2,693,285,469 1,142,124,713 339,108,055
Schedule V - Investments Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Debentures and Bonds listed / awaiting listing on recognised stock exchange - - 200,732,400 - Treasury Bills 8,395,158,052 4,768,858,154 3,075,717,214 1,136,831,784 Commercial Paper 57,606,355,968 30,105,015,435 23,560,032,799 9,438,704,484 Certificate of Deposit 17,880,839,328 28,803,035,345 13,156,614,838 12,600,524,814 83,882,353,348 63,676,908,934 39,993,097,251 23,176,061,082
Schedule VI - Deposits Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Deposits with scheduled banks 10,000,000,000 8,100,000,000 5,580,000,000 3,250,000,000 Deposits with Companies / Institutions 20,200,000 20,200,000 - - 10,020,200,000 8,120,200,000 5,580,000,000 3,250,000,000
Schedule VII - Other Current Assets Tata Money Market Fund Tata Liquid Fund As At As At As At As At 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Balances with banks in current accounts 13,415,706 217,259,828 156,111,234 186,283,785 Reverse Repos 39,395,371 211,962,293 36,936,467 303,424,388 Contract for sale of investments 1,268,118,760 21,835,198 2,972,226,230 - Accrued income 34,550,226 31,647,020 47,309,808 14,052,309 Inter-scheme dues - - - 1,220,725 Others Receivables (Refer Note C 19 of Schedule IX) - 931-79,547 1,355,480,063 482,705,270 3,212,583,739 505,060,754
Schedule VIII - Interest Income Tata Money Market Fund Tata Liquid Fund Year Ended Year Ended Year Ended Year Ended 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 Rs. Rs. Rs. Rs. Term Deposits 498,510,556 409,308,110 237,409,964 242,563,629 Debentures / Bonds / Asset Backed Securities - - 493,151 3,781,918 Discounted Securities 5,644,177,438 4,208,970,106 2,651,693,628 2,088,970,955 Reverse Repos 38,864,509 33,298,518 28,095,118 16,964,677 Other Deposits 82,260 61,674 170,965 309,684 6,181,634,763 4,651,638,408 2,917,862,826 2,352,590,863
Schedule IX - Statement of Significant Accounting Policies and Notes to the Accounts as at and for the year ended 31st March, 2017. A. Background Tata Mutual Fund (the "Fund") is registered with the Securities and Exchange Board of India ( SEBI ). The Schemes are managed by Tata Asset Management Limited ( TAML / the Investment Manager ), an investment management company registered with SEBI. The Schemes are sponsored by Tata Sons Limited ( TSL ) and Tata Investment Corporation Limited ( TICL ). Tata Trustee Company Limited ( TTCL / the Trustee Company ) is the trustee company of the Schemes. SCHEME Tata Money Market Fund (TMMF) Tata Liquid Fund (TLF) NATURE AND SCHEME OBJECTIVE TATA MONEY MARKET FUND is an open ended scheme of the Fund. The investment objective is to create a highly liquid portfolio of money market instruments so as to provide reasonable returns and high liquidity to the unitholders. TATA LIQUID FUND is an open ended scheme of the Fund. The investment objective is to create a highly liquid portfolio of good quality debt as well as money market instruments so as to provide reasonable returns and high liquidity to the unitholders.
B SIGNIFICANT ACCOUNTING POLICIES 1.1 Basis of Accounting The principle accounting policies applied in the presentation of these financial statements are set out below. These policies have been consistently applied to both the periods presented, unless otherwise stated. 1.2 Preparation of Financial Statements of the Schemes The financial statements of the Schemes have been prepared in accordance with the requirements of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and subsequent amendments (the SEBI Regulations ), the Ninth and Eleventh Schedules of which lay down the accounting policies and standards to be adopted and the disclosures to be made and the accounting principles generally accepted in India. The preparation of financial statements in conformity with the SEBI Regulations requires the use of certain critical accounting estimates. It also requires the Board of Directors of the Investment Manager to exercise its judgement in the process of applying the Fund s accounting policies. The areas involving high degree of judgement or complexity or critical estimates are fair values of unlisted equity securities. 1.3 Portfolio Valuation a. Recognition and measurement Regular purchases and sales of investments are recognised on the trade date - i.e. the date on which the Scheme's order of purchase or sale of investment is executed. Investments include contracts for purchase of securities and exclude contracts for sale of securities, for which deliveries are not received/collected. Investments purchased are initially recognised at cost of acquisition. Cost of acquisition includes transaction costs such as brokerage, stamp charges and other charges customarily included in the brokers note, but excludes pre-acquisition accrued interest which is classified as part of "Other Current Assets". Subsequent to initial recognition, all investments are measured at fair values reflective of the realisable value of the securities / assets. Gains or losses on sale of investments are determined using the "weighted average cost method" and are recognised in the Revenue Account in the period in which they arise either within "Income" if it is a gain or within "Expenses and Losses" if it is a loss. Changes in the unrealised diminution in the value of investments, if any, between two balance sheet dates is recognised in the Revenue Account as "Provision/(Reversal) for diminution in value of investments". Changes in the unrealised appreciation in the value of investments, if any, between two balance sheet dates is disclosed in the Revenue Account as "Increase / (Decrease) in unrealised appreciation in the value of investments". Net unrealised gain in the value of investment is reduced from distributable income at the time of income distribution. b. Fair value estimation Debt securities (including asset backed securities and money market instruments but excluding Government Securities and Treasury Bills) ("Debt Securities"): Debt Securities (including floating rate securities and money market instruments) with balance maturity of over 60 days are being valued at average of the prices received from CRISIL Ltd. ("CRISIL") and ICRA Ltd. ("ICRA") (both agencies being entrusted for the purpose by the Association of Mutual Funds in India ("AMFI")). Debt Securities with residual maturity of upto 60 days are valued on an amortisation basis. The amortisation based value is determined by adding to the cost or, as the case may be, last valuation price, the difference between the redemption value and the cost / last valuation price (as applicable) spread uniformly over the remaining maturity period of the instrument. Should the difference between the price derived from average yield and amortised value/trade value (as explained below) exceed 10 basis points of the amortised value, the amortised value/trade value is adjusted to bring it within the band of +/- 10 basis points from the price as derived from average yield. When there are trades in a day aggregating value of Rs. 25 crores or more by the Fund, highest yield in those trades would be considered for determining the trade value to be considered for valuation. In the case of floating rate securities with floor and caps on coupon rate and residual maturity of upto 60 days, the valuation on an amortisation basis is determined taking the interest rate as the coupon rate.