Annual Report for Monthly Income Schemes - Tata Mutual Fund

Tata MIP Plus FundTata Monthly Income FundFuture Outlook:EquityThe macro economic challenges faced by Indian economy are substantial. India’s large CAD and the resultant high dependence oncapital inflows expose Indian equity markets to substantial volatility due the swings in global capital market’s risk-on/risk off phases.However, in FY13, we have seen moderate improvements in at least some of the challenges. The reduction in fiscal deficits and regularincreases in auto fuel prices are welcome signs. We have seen moderation in WPI inflation from the second half of FY13. The CabinetCommittee on Investments is taking steps to improve the implementation of stalled projects. The monsoon has started on time and isexpected to be good this year. This is likely to aid agricultural growth in FY14 after low growth in the previous year. Thus, we see somesilver linings to the dark clouds hovering over the Indian economy.Also, it would be worth reiterating that many of India’s problems are more cyclical than structural in nature. Indian markets continue to beattractive from a long term view due to its demographics, low indebtedness of the household sector, significantly underpenetrated marketsin several goods and services and an equity market that offers good diversity across sectors. The market valuations are reasonable andnot excessive. Thus, while there may be near terms risks in terms of volatility due to global capital flows and uncertainties in policy makingin an election year, a disciplined approach to equity investments is likely to be rewarding in the medium to long term.DebtThe growth in the economy is likely to witness a slow-paced recovery during FY14, on improved governance and concerted action toresolve structural bottlenecks.RBI has projected a growth of 5.7% during FY14 and inflation to be at 5.5% in March 2014.Given the weak growth scenario and steady outlook on inflation, RBI is likely to take further steps towards monetary easing during thefiscal 2014, albeit gradually, which would result in yields falling further.Funds under Management – OperationsTata Mutual Fund as on 31 st March’2013, has thirty eight open ended schemes of which thirteen are equity schemes, two are balancedschemes, twenty two are debt schemes, one is Equity Linked Saving Scheme (ELSS) and thirty close ended schemes of which twentyseven are debt schemes, one is balanced scheme and two are Equity Linked Saving Scheme (ELSS). The Average Assets underManagement for the year was Rs.20160.02 crores.Investment objective, policy and performance of the schemes of Tata Mutual Fund are given in Annexure I.2. Brief Background of Sponsors, Trust, Trustee Co. and Asset Management Company (AMC).a) Tata Mutual FundTata Mutual Fund (TMF) was set up as a Trust by the Sponsors and the Settlers, Tata Sons Limited (TSL) and Tata InvestmentCorporation Limited (TICL) on 9 th May, 1995 with Tata Trustee Company Limited as a Trustee in accordance with the provisions of theIndian Trusts Act, 1882 and is duly registered under the Indian Registration Act, 1908. The Trustee has entered into an InvestmentManagement Agreement dated 9 th May, 1995 with Tata Asset Management Limited to function as the Investment Manager for all theSchemes 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 benefit of the unitholders who are theultimate owners/beneficiaries of the funds . The Trustee has been discharging its duties and carrying out the responsibilities asprovided in the Regulations and the Trust Deed. The Trustee seeks to ensure that the Fund and the Schemes floated there under aremanaged by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the StockExchanges, 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 hasbeen appointed as the Asset Management Company for Tata Mutual Fund by the Trustee vide Investment Management Agreement(IMA) dated 9 th May, 1995, executed between TTCL and TAML.The Trustee Company has appointed TAML as the Asset Management Company for TMF.3. Significant Accounting Policies:Accounting policies are in accordance with the requirements of the Securities Exchange Board of India (Mutual Fund) Regulations 1996.4. Scheme Launches during the yearDuring the year eleven close-ended Fixed Maturity Schemes & two close-ended Capital Protection Funds were launched.Annual Report 2012-2013 4