Docstoc

Balance-OD

Document Sample
Balance-OD Powered By Docstoc
					                                                                                                     TATA BALANCED FUND
Item Table of Contents                                       Page       Item Table of Contents                                          Page
No.                                                                     No.

I.      HIGHLIGHTS                                              2               xi.    Systematic Transfer Plan (STP)                     29
II.     DEFINITIONS                                             2               xii.   Duration of the Scheme                             29
III.    RISK FACTORS                                            4               xiii. Winding Up                                          29
IV.     DUE DILIGENCE BY THE ASSET                                              xiv. Procedure for Winding Up                             29
        MANAGEMENT COMPANY                                      6       XI.     SALE OF UNITS BEING OFFERED                               30
V.      EXPENSES                                                7               i.     Application details:                               30
VI.     CONDENSED FINANCIAL INFORMATION                         9               ii.    Procedure for application                          30
VII.    CONSTITUTION OF TATA MUTUAL FUND                       14               iii.   General Instructions                               31
        i.     Constitution                                    14       XII.    DIVIDENDS/BONUS & DISTRIBUTIONS                           32
        ii.    The Sponsors                                    14       XIII.   INTER SCHEME TRANSFERS                                    32
        iii.   The Trustee Company                             14       XIV.    ASSOCIATE TRANSACTIONS                                    33
VIII.   INVESTMENT OBJECTIVE AND POLICIES                      17       XV.     BORROWING BY THE MUTUAL FUND                              38
        i.     Investment Objective, investment strategy                XVI.    COMPUTATION OF NAV & VALUATION OF ASSETS                  38
               and risk management:                            17
                                                                                i.     Computation & Determination of Net Asset Value     38
        ii.    Investment Pattern and Risk Profile             18
                                                                                ii.    NAV Information                                    38
        iii.   Overview of Debt Market:                        18
                                                                                iii.   Valuation of Assets                                38
        iv.    Trading in Derivatives                          18
                                                                        XVII. REPURCHASE, RESALE & SWITCH OF UNITS                        41
        v.     Change in Investment Pattern                    20
                                                                                i.     Relevant NAV for Repurchase, Sale & Switch         41
        vi.    Investment in Overseas Financial Assets         20
                                                                                ii.    Repurchase of Units of Tata Balanced Fund          41
        vii.   Investment by the Fund and the
                                                                                iii.   Possible deferral of repurchase requests
               Asset Management Company                        21
                                                                                       and compulsory repurchase                          42
        viii. Restrictions on Investments (as per
                                                                                iv.    Centres where repurchase/resale/switch
              schedule 7 of SEBI Regulations 1996)             21
                                                                                       requests can be given :                            42
        ix.    Securities Lending by the Mutual Fund           22
                                                                                v.     Sale of Units on an ongoing basis                  42
        x.     Underwriting by the Scheme                      22
                                                                                vi.    Spread between Sale and Repurchase Price           43
        xi.    Portfolio Turnover                              22
                                                                                vii.   Switch of Units within the Funds / Schemes
        xii.   Fundamental Attributes                          22                      / Plans of Tata Mutual Fund                        43
IX.     MANAGEMENT OF THE FUND                                 23               viii. Suspension of ongoing Sale, Repurchase or
        i.     The Asset Management Company                    23                     Switch of Units                                     43
        ii.    Key Employees of the AMC and relevant                            ix.    Unclaimed Redemption/Dividend Amount               43
               experience                                      25       XVIII. ACCOUNTING POLICIES                                        43
        iii.   The Custodian                                   27       XIX.    TAX TREATMENT OF INVESTMENTS IN
        iv.    The Registrar                                   27               MUTUAL FUNDS                                              44
        v.     The Auditor                                     27               I.     Tax Benefits To The Fund                           44
        vi.    Bankers                                         27               Ii.    Tax Benefits To Unitholders                        44
        vii.   List of Authorised Investor Service Centres     27               iii.   Capital Gains Tax                                  44
X.      UNITS & OFFER                                          28       XX.     INVESTORS’ RIGHTS & SERVICES                              45
        i.     Offer of Units                                  28               i.     Rights                                             45
        ii.    Minimum Application                             28               ii.    Services                                           46
        iii.   Refund                                          28               iii.   Information regarding the Scheme                   46
        iv.    Despatch of Account Statement and                                iv.    Meeting and consent of Unitholders                 46
               Unit Certificates                               28               v.     Benefits to the Unitholders                        47
        v.     Listing, Transfer & Pledge of Units             28               vi.    Documents available for inspection                 47
        vi.    Nomination Facility                             28       XXI.    INVESTOR GRIEVANCES REDRESSAL MECHANISM 47
        vii.   Applications with Additional Holders            28       XXII. PENALTIES PENDING LITIGATION OR
        viii. Appointment of Beneficiary                       28             PROCEEDINGS, FINDINGS OF INSPECTIONS OR
        ix.    Systematic Investment Plan (SIP)                29             INVESTIGATIONS FOR WHICH ACTION MAY HAVE
                                                                              BEEN TAKEN OR IS IN THE PROCESS OF BEING
        x.     Systematic Withdrawal Plan (SWP)                29             TAKEN BY ANY REGULATORY AUTHORITY                           47




                                                                    1
TATA BALANCED FUND
I.    HIGHLIGHTS                                                              Investments in the Scheme are exempt from Wealth Tax under
                                                                              the prevailing direct tax laws.
       Mutual Fund - sponsored by Tata Sons Limited (TSL) and Tata
      Investment Corporation Limited (TICL).                                  Repurchase/ Resale / Switch will be at Net Asset Value (NAV)
                                                                              related prices with loads as applicable.
      The Scheme is managed by Tata Asset Management Limited
      (TAML).                                                                 Income of the Fund totally exempt from income tax under
                                                                              Section 10 (23D) of the Income Tax Act, 1961.
      Scheme offers Systematic Investment Plan/Systematic
      Withdrawal Plan/Dividend Reinvestment facility to the Investors.        No tax deduction at source on redemption amounts for
                                                                              Resident Investors.
      Two Options for making investments : Dividend Option and
      Growth Option.                                                          NRIs are also eligible to invest.
      Transparency of operations : determination of Net Asset Value
      (NAV) on all business days and full disclosure of portfolio once
      every six months.




II. DEFINITIONS
 1      “Business Day”                        Any day on which the Mumbai Head Office of Tata Asset Management Limited is open for
                                              business purposes and the Banks in Mumbai/RBI clearing is functional but the day(s) on
                                              which the money markets are closed / not accessable, will be treated as non business days.

 2      “Business Hours”                      Business hours are from 9.30 A.M. to 3.00 P.M. on any Business Day.

 3      “CITI Bank N.A “or “Custodian”        CITI Bank N. A., a bank incorporated in the United States of America with limited liability
                                              and includes its successors.
 4      “Calendar Year”                       A Calendar Year shall be 12 full English Calendar months commencing from 1st January and
                                              ending on 31st December.

 5      “Day”                                 Any day as per English Calendar viz. 365 days in a year.

 6      “Financial Year”                      A Financial Year shall be 12 full English Calendar months commencing from 1st April and
                                              ending on 31st March.

 7      “Group”                               As defined in sub-clause (ef) of clause 2 of MRTP Act, 1961.

 8      “IMA”                                 Investment Management Agreement dated 9th May, 1995, as amended from time to time,
                                              between the TTCPL & TAML.

 9      “Investor”                            An investor means any resident or non-resident person whether individual or not (legal entity),
                                              who is eligible to subscribe units under the laws of his/her/their country of incorporation,
                                              establishment, citizenship, residence or domicile and under the Income Tax Act, 1961 including
                                              amendments thereto from time to time and who has made an application for subscribing units
                                              under the Scheme. Unless the context implies otherwise, a unit holder shall be deemed to be
                                              an investor.

 10     “Net Asset Value” or “NAV”            (a) In case of winding up of the Fund:
                                              In respect of an Unit, the amount that would be payable to the holder of that Unit on any date
                                              if the fund were to be wound up and its assets distributed on that date (valuing assets and
                                              liabilities in accordance with the normal accounting policies of the Fund, but excluding net
                                              distributable income of the current financial year and winding up expenses).
                                              (b) On daily basis, under normal circumstances, for ongoing Sale / Redemption / Switch:
                                              In respect of a unit, an amount that would be payable by an intending subscriber / investor for
                                              sale / switch or to an investor on redemption / switch computed on any valuation date by
                                              dividing the Net Assets of the scheme by the number of outstanding units on that valuation
                                              date.

 11     “Net Assets”                          Net Assets of the Scheme / Plan at any time shall be the value of the Fund’s total assets less
                                              its liabilities taking into consideration the accruals and the provisions at that time.

 12     “Non- Resident”                       Any person who is not a resident as defined herein.

 13     “Permissible Investments”             Investments made on account of the Unitholders of the Scheme in securities and assets in
                                              accordance with the SEBI Regulations.

 14     “Portfolio”                           Portfolio at any time shall include all Permissible Investments and Cash.

 15     “Redemption / Resale Load”            Amount collected to cover the cost of providing Redemption / distribution related service to
                                              the Scheme on a continuous basis.


                                                                         2
                                                                                      TATA BALANCED FUND
16   “Regulations”                Regulations imply SEBI Regulations and the relevant rules and provisions of the Securities
                                  and Exchange Board of India (Depositories and participants) Regulations 1996, Public Debt
                                  Act 1944,the relevant notifications of the Government of India Ministry of Finance Department
                                  of Revenue, (Central Board of Direct Taxes), the Income Tax Act, 1961; Wealth Tax Act, 1957,
                                  Gift Tax Act, 1958, Foreign Exchange Management Act, 1999 as amended from time to time
                                  and shall also include any Circulars, Press Releases or Notifications that may be issued by
                                  SEBI or the Government of India or the Reserve Bank of India from time to time.

17   “Resident”                   A resident means any person resident in India under the Foreign Exchange Management
                                  Act,1999 and under the Income Tax Act,1961, including amendments thereto from time to
                                  time.

18   “Scheme”                     The offer made by Tata Mutual Fund through this Offering Circular, viz., Tata Balanced Fund.

19   “SEBI”                       The Securities & Exchange Board of India established under the Securities & Exchange Board
                                  of India Act, 1992.

20   “SEBI Regulations”           The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended
                                  from time to time and shall also include any Mutual Fund Regulations, Circulars, Press
                                  Releases, or Notifications that may be issued by SEBI or the Government of India to regulate
                                  the activities and growth of Mutual funds.

21   “TAML” or “Asset             Tata Asset Management Limited, the Asset Management Company (AMC), a company
                                  Management Company” within the meaning of the Companies Act, 1956 (1 of 1956) and
                                  includes its successors and permitted assigns.

22   “TICL”                       Tata Investment Corporation Limited, a sponsor of the TMF and a shareholder of TAML, a
                                  company within the meaning of the Companies Act, 1956 and includes its successors and
                                  permitted assigns.

23   “TMF” or “Fund”              Tata Mutual Fund, a trust established under a Trust Deed dated 9th May, 1995, under the
                                  provisions of The Indian Trusts Act, 1882, bearing SEBI registration No. MF/023/95/9.

24   “Total Assets”               Total Assets of the Scheme at any time shall be the total value of the Schemes assets taking
                                  into consideration the accruals.

25   “Trust Deed”                 The Trust Deed of the Mutual Fund dated 9th May, 1995, as amended from time to time, made
                                  between TSL and TICL as the settlors, and TTCPL as the Trustee.

26   “TSL”                        Tata Sons Limited, a sponsor of TMF and a shareholder of TAML, a company within the
                                  meaning of the Companies Act, 1956 and includes its successors and permitted assigns.

27   “TTCPL or Trustee Company”   Tata Trustee Company Private Limited, a company within the meaning of the Companies Act,
                                  1956 and includes its successors and permitted assigns.

28   “Unitholder”                 An Unitholder means any resident or non-resident person whether individual or not (legal
                                  entity), who is eligible to subscribe to the Scheme and who has been allotted Units under the
                                  Scheme based on a valid application.

29   “Units”                      The security representing the interests of the Unitholders in the Scheme. Each Unit represents
                                  one undivided share in the assets of the Scheme as evidenced by any letter/ advice or any
                                  other statement / certificate / instrument issued by TMF.

30   “Year”                       A Year shall be 12 full English Calendar months.




                                                          3
TATA BALANCED FUND
III.   RISK FACTORS                                                              No person has been authorised to give any information or to make
A. STANDARD RISK FACTORS                                                         any representations not confirmed in this Offering Circular in
                                                                                 connection with the Initial Offer / Subsequent Offer of Units, and
       Mutual Funds and securities investments are subject to market             any information or representations not contained herein must not
       risks and there can be no assurance and no guarantee that                 be relied upon as having been authorised by the Mutual Fund or
       the Scheme will achieve its objective.                                    the Asset Management Company or the Trustee Company.
       As with any investment in stocks, shares and securities, the              Statements made in this Offering Circular are based on the law
       NAV of the Units under this Scheme can go up or down,                     and practice currently in force in India and are subject to change
       depending on the factors and forces affecting the capital                 therein. Neither the delivery of this Offering Circular nor any sale
       markets.                                                                  made hereunder shall, under any circumstances, create any
                                                                                 impression that the information herein is correct as of any time
       Past performance of the previous Schemes, the Sponsors or
                                                                                 subsequent to the date hereof.
       its Group affiliates is not indicative of and does not guarantee
       the future performance of the Scheme.                                     Investment Risks
       Tata Balanced Fund is only the name of the Scheme and does                The value of, and income from, an investment in the Scheme can
       not in any manner indicate either the quality of the Scheme,              decrease as well as increase, depending on a variety of factors
       its future prospects or the returns. Investors therefore are urged        which may affect the values and income generated by the Scheme’s
       to study the terms of the Offer carefully and consult their               portfolio of securities. The returns of the Scheme’s investments are
       Investment Advisor before they invest in the Scheme.                      based on the current yields of the securities, which may be affected
                                                                                 generally by factors affecting capital markets such as price and
B.  SCHEME SPECIFIC RISK FACTORS AND                                             volume, volatility in the stock markets, interest rates, currency
    SPECIAL CONSIDERATIONS                                                       exchange rates, foreign investment, changes in Government and
Statutory Risks                                                                  Reserve Bank of India policy, taxation, political, economic or other
To the best of the knowledge and belief of the Directors of the Trustee          developments closure of the Stock Exchanges etc. Investors should
Company, information contained in this Offering Circular is in                   understand that the investment pattern indicated, in line with
accordance with the SEBI Regulations and facts and does not omit                 prevailing market conditions, is only a hypothetical example as all
anything likely to have a material impact on the importance of such              investments involve risk and there can be no assurance that the
information.                                                                     Scheme’s investment objective will be attained nor will the Scheme
                                                                                 be in a position to maintain the model percentage of investment
Neither this Offering Circular nor the Units have been registered in             pattern particularly under exceptional circumstances such that the
any jurisdiction. The distribution of this Offering Circular in certain          interest of the Unitholders are protected.
jurisdictions may be restricted or subject to registration requirements
and, accordingly, persons who come into possession of this Offering              Different types of securities in which the scheme would invest in
Circular are required to inform themselves about, and to observe,                the offer document carry different levels and types of risk.
any such restrictions. No persons receiving a copy of this Offering              Accordingly the scheme’s risk may increase or decrease depending
Circular or any accompanying application form in any such                        upon its investment pattern. e.g corporate bonds carry a higher
jurisdiction may treat this Offering Circular or such application form           amount of risk than Government securities. Further even among
as constituting an invitation to them to subscribe for Units, nor should         corporate bonds, bonds which are AAA rated are comparatively
they in any event use any such application form, unless in the                   less risky than bonds which are AA rated.
relevant jurisdiction such an invitation could lawfully be made to               The Scheme will endeavour to invest in highly researched growth
them and such application form could lawfully be used without                    companies. However the growth associated with equities is generally
compliance with any registration or other legal requirements.                    high as also the erosion in the value of the investments/portfolio in
Accordingly, this Offering Circular does not constitute an offer or              the case of the capital markets passing through a bearish phase is
solicitation by anyone in any jurisdiction in which such offer or                a distinct possibility. The NAV of the scheme is largely dependent
solicitation is not lawful or in which the person making such offer or           on the performance of the companies and the sectors wherein the
solicitation is not qualified to do so or to anyone to whom it is unlawful       investment has been made.
to make such offer or solicitation. It is the responsibility of any
persons in possession of this Offering Circular and any persons                  The scheme may also invest in overseas financial assets (please
wishing to apply for Units pursuant to this Offering Circular to inform          refer to Investment Pattern) as and when permitted by the concerned
themselves of, and to observe, all applicable laws and Regulations               regulatory authorities in India. To the extent that the assets of the
of such relevant jurisdiction. Units under the scheme not available              scheme will be invested in securities denominated in foreign
for subscription in North America.                                               currencies, the Indian Rupee equivalent of the net assets,
                                                                                 distributions and income may be adversely affected by changes in
Prospective investors should review / study this Offering Circular               the value of certain foreign currencies relative to the Indian Rupee.
carefully and in its entirety and shall not construe the contents hereof         The repatriation of capital to India may also be hampered by changes
or regard the summaries contained herein as advice relating to                   in regulations concerning exchange controls or political
legal, taxation, or financial / investment matters and are advised to            circumstances as well as the application to it of other restrictions
consult their own professional advisor(s) as to the legal or any other           on investment. In addition, country risks would include events such
requirements or restrictions relating to the subscription, gifting,              as introduction of extraordinary exchange control, economic
acquisition, holding, disposal (sale, transfer, switch or redemption             deterioration and bi-lateral conflict leading to immobilisation of the
or conversion into money) of Units and to the treatment of income                overseas financial assets.
(if any), capitalisation, capital gains, any distribution, and other tax
consequences relevant to their subscription, acquisition, holding,               As and when available and permissible the scheme may use
capitalisation, disposal (sale, transfer, switch or conversion into              techniques and instruments ( as disclosed in the clause “portfolio
money) of Units within their jurisdiction of nationality, residence,             turnover”) for efficient portfolio management and to attempt to hedge
domicile etc. or under the laws of any jurisdiction to which they or             or reduce the risk of such fluctuations. However these techniques
any managed funds to be used to purchase/gift Units are subject,                 and instruments if imperfectly used have the risk of the scheme
and (also) to determine possible legal, tax, financial or other                  incurring losses due to mismatches particularly in a volatile market.
consequences of subscribing / gifting to, purchasing or holding Units            The Fund’s ability to use these techniques may be limited by market
before making an application for Units.                                          conditions, regulatory limits and tax considerations (if any). The

                                                                             4
                                                                                                       TATA BALANCED FUND
use of these techniques is dependent on the ability to predict                      Auto Loans (cars / commercial vehicles /two vehicles)
movements in the prices of securities being hedged and movements
                                                                                    Residential Mortgages or Housing Loans
in interest rates. There exists an imperfect correlation between the
hedging instruments and the securities or market sectors being                      Consumer Durable Loans
hedged. Besides, the fact that skills needed to use these instruments               Personal Loans
are different from those needed to select the Fund’s / Scheme’s              The main risks pertaining to each of the asset classes above are
securities. There is a possible absence of a liquid market for any           described below:
particular instrument at any particular time even though the futures
and options may be bought and sold on an organised exchange.                 Auto Loans (cars / commercial vehicles /two vehicles)
The use of these techniques involves possible impediments to                        The underlying assets (cars etc) are susceptible to
effective portfolio management or the ability to meet repurchase /                  depreciation in value whereas the loans are given at high
redemption requests or other short-term obligations because of the                  loan to value ratios. Thus, after a few months, the value of
percentage of the Scheme’s assets segregated to cover its                           asset becomes lower than the loan outstanding. The
obligations.                                                                        borrowers, therefore, may sometimes tend to default on loans
                                                                                    and allow the vehicle to be repossessed.
Liquidity and Settlement Risks
                                                                                    These loans are also subject to model risk. ie if a particular
The liquidity of the Scheme’s investments may be inherently
                                                                                    automobile model does not become popular, loans given for
restricted by trading volumes, transfer procedures and settlement
                                                                                    financing that model have a much higher likelihood of turning
periods. From time to time, the Scheme will invest in certain
                                                                                    bad. In such cases, loss on sale of repossession vehicles is
securities of certain companies, industries, sectors, etc. based on
                                                                                    higher than usual.
certain investment parameters as adopted internally by TAML. While
at all times the Asset Management Company will endeavour that                       Commercial vehicle loans are susceptible to the cyclicality
excessive holding/investment in certain securities of industries,                   in the economy. In a downturn in economy, freight rates drop
sectors, etc. by the Scheme is avoided, the funds invested by the                   leading to higher defaults in commercial vehicle loans.
Scheme in certain securities of industries, sectors, etc. may acquire               Further, the second hand prices of these vehicles also decline
a substantial portion of the Scheme’s investment portfolio and                      in such economic environment.
collectively may constitute a risk associated with non-diversification
and thus could affect the value of investments. Reduced liquidity in         Housing Loans
the secondary market may have an adverse impact on market price                     Housing loans in India have shown very low default rates
and the Scheme’s ability to dispose of particular securities, when                  historically. However, in recent years, loans have been given
necessary, to meet the Scheme’s liquidity needs or in response to                   at high loan to value ratios and to a much younger borrower
a specific economic event or during restructuring of the Scheme’s                   classes. The loans have not yet gone through the full
investment portfolio. Furthermore, from time to time, the Asset                     economic cycle and have not yet seen a period of declining
Management Company, the Custodian, the Registrar, any Associate,                    property prices. Thus the performance of these housing loans
any Distributor, Dealer, any Company, Corporate Bodies, Trusts,                     is yet to be tested and it need not conform to the historical
any Retirement and Employee Benefit Funds or any Associate or                       experience of low default rates.
otherwise, any scheme / mutual fund managed by the Asset
                                                                             Consumer Durable Loans
Management Company or by any other Asset Management
Company may invest in the Scheme. While at all times the Trustee                    The underlying security for such loans is easily transferable
Company and the Asset Management Company will endeavour that                        without the bank’s knowledge and hence repossession is
excessive holding of Units in the Scheme among a few Unitholders                    difficult.
is avoided, however, the funds invested by these aforesaid persons                  The underlying security for such loans is also susceptible to
may acquire a substantial portion of the Scheme’s outstanding Units                 quick depreciation in value. This gives the borrowers a high
and collectively may constitute a majority unitholder in the Scheme.                incentive to default.
Accordingly, of Units held by such persons may have an adverse
impact on the value of the Units of the Scheme because of the                Personal Loans
timing of any such redemptions and may impact the ability of other                  These are unsecured loans. In case of a default, the bank
Unitholders to redeem their respective Units.                                       has no security to fall back on.

Risk Associated with Securitised Debt                                               The lender has no control over how the borrower has used
                                                                                    the borrowed money.
Scheme may invest in domestic securitized debt such as asset
backed securities (ABS) or mortgage backed securities (MBS).                 Further, all the above categories of loans have the following common
Asset Backed Securities (ABS) are securitized debts where the                risks:
underlying assets are receivables arising from automobile loans,                    All the above loans are retail, relatively small value loans.
personal loans, loans against consumer durables, etc. Mortgage                      There is a possibility that the borrower takes different loans
backed securities (MBS) are securitized debts where the underlying                  using the same income proof and thus the income is not
assets are receivables arising from loans backed by mortgage of                     sufficient to meet the debt service obligations of all these
residential / commercial properties. ABS/MBS instruments reflect                    loans.
the undivided interest in the underlying pool of assets and do not
                                                                                    In India, there is no ready database available regarding past
represent the obligation of the issuer of ABS/MBS or the originator
                                                                                    credit record of borrowers. Thus, loans may be given to
of the underlying receivables. The ABS/MBS holders have a limited
                                                                                    borrowers with poor credit record.
recourse to the extent of credit enhancement provided. If the
delinquencies and credit losses in the underlying pool exceed the                   In retail loans, the risks due to frauds are high.
credit enhancement provided, ABS/MBS holders will suffer credit
                                                                             Securities Lending Risks
losses. ABS/MBS are also normally exposed to a higher level of
reinvestment risk as compared to the normal corporate or sovereign           It may be noted that this activity would have the inherent probability
debt. At present in Indian market, following types of loans are              of collateral value drastically falling in times of strong downward
amortised :                                                                  market trends, resulting in inadequate value of collateral until such
                                                                             time as that diminution in value is replenished by additional security.


                                                                         5
TATA BALANCED FUND
It is also possible that the borrowing party and/or the approved                Risks associated with Derivatives
intermediary may suddenly suffer severe business setback and                    Derivative products are specialised instruments that require
become unable to honour its commitments. This, along with a                     investment techniques and risk analysis different from those
simultaneous fall in value of collateral would render potential loss            associated with stocks and bonds. Derivatives require the
to the Scheme. Besides, there can also be temporary illiquidity of              maintenance of adequate controls to monitor the transactions
the securities that are lent out and the scheme may not be able to              entered into, the ability to access the risk that a derivative add to
sell such lent out securities.                                                  the portfolio and the ability to forecast price of interest rate
Interest Rate Risk                                                              movements correctly. There is a possibility that a loss may be
                                                                                sustained by the portfolio as a result of the failure of another party
As with debt instruments, changes in interest rate may affect the               (usually referred to as the “counterparty”) to comply with the terms
Scheme’s net asset value as the prices of instruments generally                 of the derivatives contract. Other risks in using derivatives include
increase as interest rates decline and generally decrease as interest           the risk of mis-pricing or improper valuation of derivatives and the
rates rise. Prices of long-term securities generally fluctuate more             inability of derivatives to correlate perfectly with underlying assets,
in response to interest rate changes than do short-term securities.             rates and indices.
Indian debt markets can be volatile leading to the possibility of price
movements up or down in fixed income securities and thereby to                  COMPULSORY WINDING UP
possible movements in the NAV.                                                  As per the SEBI circular no. SEBI/IMD/CIR No. 10/22701/03
Credit Risk                                                                     dt. December 12, 2003 Open ended schemes/plan(s) already in
                                                                                existence would required to comply with the following conditions as
Credit risk or Default risk refers to the risk that an issuer of a fixed        soon as possible but not later than December 31, 2004:
income security may default (i.e. the issuer will be unable to make             1) Each scheme and individual plan(s) under the schemes should
timely principle and interest payments on the security). Because of                  have a minimum of 20 investors and no single investor should
this risk, corporate debentures are sold at a higher yield above                     account for more than 25% of the corpus of the scheme/plan(s).
those offered on Government Securities which are sovereign                      2) In each subsequent calendar quarter thereafter, on an average
obligations and free of credit risk. Normally, the value of a fixed                  basis, the schemes/plans should meet with both the conditions
income security will fluctuate depending upon the changes in the                     i.e. a minimum of 20 investors and no single investor should
perceived level of credit risk as well as any actual event of default.               account for more than 25% of the corpus of the scheme/plan(s),
The greater the credit risk, the greater the yield required for someone              failing which the provisions of Regulation 39 (2) (c) of SEBI
to be compensated for the increased risk.                                            (Mutual Funds) Regulations, 1996 would become applicable
Reinvestment Risk                                                                    automatically without any reference from SEBI. Accordingly,
                                                                                     schemes /plans shall be wound up by following the guidelines
This risk refers to the interest rate levels at which cash flows received
                                                                                     laid down by SEBI.
from the securities in the schemes are reinvested. The additional
income from reinvestment is the “interest on interest” component.
The risk is that the rate at which interim cash flows can be reinvested         IV.   DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY
may be lower than that originally assumed.                                            The following Due Diligence Certificate has been submitted to
                                                                                      SEBI:
The Sponsors are not responsible or liable for any loss resulting
from the operations of the Fund beyond the initial contribution made                  It is confirmed that:
by them of an aggregate amount of Rs.1 lac towards setting up of                      (i)    the draft offering Circular is in accordance with the
the Mutual Fund.                                                                             SEBI(Mutual Funds)Regulations, 1996 and the guidelines
                                                                                             and directives issued by SEBI from time to time.
Investors/Unitholders in this Scheme are not being offered a
guaranteed or assured rate of return and the actual returns that                      (ii)   all legal requirements connected with the launching of
would be available to an Investor/Unitholder will be based on the                            the Scheme as also the guidelines, instructions, etc.
actual NAV which may go up or down depending on the market                                   issued by the Government and any other competent
conditions.                                                                                  authority in this behalf, have been duly complied with.
Risk Factors Concerning Floating Rate Debt Instruments And                            (iii) the disclosures made in the Offering Circular are true,
Fixed Rate Debt Instruments Swapped For Floating Rate Return                                fair and adequate to enable the investors to make a well
1. Basis Risk (Interest Rate Movement): During the life of floating                         informed decision regarding investment in the proposed
    rate security or a swap the underlying benchmark index may                              scheme.
    become less active and may not capture the actual movement
    in interest rates or at times the benchmark may cease to exist.                   (iv) the intermediaries named in the Offering Circular are reg-
    These type of events mayresult in loss of value in the portfolio.                      istered with SEBI and till date, such registration is valid.

2.   Spread Risk: In a floating rate security the coupon is expressed                                         For Tata Asset Management Limited
     in terms of a spread or mark up over the benchmark rate.
     However depending upon the market conditions the spreads                   Place: Mumbai                                    Hormuz A. Bulsara
                                                                                        st
     may move adversely or favourably leading to fluctuation in                 Date : 1 April, 2005                          Chief Operating Officer
     NAV.
3.   In case of downward movement of interest rates, floating rate
     debt instruments will give a lower return than fixed rate debt
     instruments.




                                                                            6
                                                                                                       TATA BALANCED FUND
V.   EXPENSES                                                               The AMC reserves the right to change/modify entry/exit/switchover
A)   Unitholder Transaction Expenses                                        load (including zero load), depending upon the circumstances
                                                                            prevailing at any given time. However any change in the load
 Type of Transaction                                   Levy upto
                                                                            structure shall be applicable on prospective investment only. The
                                                       % of NAV
                                                                            AMC may charge an entry/exit load for switch of units one plan/
 Maximum Sales Load imposed on Resale                  7%                   option to another plan/option within the scheme(s) to and/or switch
 Sales Load on issue of units in lieu of                                    over load depending upon the circumstances prevailing at any given
 dividends (as % of NAV)                               0%                   time. The switchover load may be different for different plans/options
 Contingent Deferred Sales Load                        Nil                  and the switchover load may be different from the entry and /or exit
 Maximum Redemption / Repurchase Load                  7%                   load charged for sale and/or repurchasde units. The load charged
 Maximum Switchover Load                               7%                   could also be different as regards the amount/tenor of investment,
                                                                            etc.
As per SEBI specified limits; the repurchase price shall not be lower       All loads including CDSC shall be maintained in a separate account
than 93 % of the NAV, the sale price will not be higher than 107 %          expenses. Any surplus in this account may be credited to the
of the NAV and further the difference between the sale and                  scheme, whenever felt appropriate by the AMC.
repurchase price shall not exceed 7 % calculated on the sale price.
                                                                            B) Initial Issue expenses
Current Load Structure (as a % of relevant NAV) :                           Present Scheme
On amount invested other than by way of a Systematic                        Tata Balanced Fund is a Scheme of Tata Mutual Fund launched in
Investment Plan :                                                           August 1995.
Entry Load : 2.25% for each investment amount of less than
                                                                            During the Initial Offer Period i.e. from 30th August 1995 to 7th
             Rs.2 crores
                                                                            October 1995, the initial issue expenses were 6% of the resources
             Nil for each investment amount equal to or more
                                                                            raised. Thus for every Rs.10/- invested by the investor, Rs. 9.40
             than Rs.2 crores
                                                                            was available for investment by the Scheme.
Exit Load - Nil                                                             The details are as under:
On amount invested by way of a Systematic Investment                         Description               Estimated as per          Actuals as per
Plan:                                                                                                  Offering Circular        Audited Accounts
Entry Load : NIL                                                                                       Rs. in     % of        Rs. in       % of
Exit Load : If redeemed on or before expiry of 365 days - 2.25%                                        Crore    Targeted      Crore      Resources
                                                                                                                Amount                   Mobilised
            If redeemed after 365 days - NIL.
                                                                             Advertising & Marketing   1.05      1.40           1.07          1.56
No entry Load will be charged on investment made by a Fund of                                                                (Balance      (Balance
Funds Scheme.                                                                                                                  borne         borne
                                                                                                                           by AMC 0.07) by AMC 0.10)
The trustee may at their discretion change the load structure of the         Commission to             2.06      2.75           2.10          3.06
scheme.                                                                      Agents / Brokers
                                                                             Registrar’s Charges       0.45      0.60       (Borne by     (Borne by
                                                                                                                            AMC 0.06)     AMC 0.09)
                                                                             Printing & Dispatch       0.41      0.55          0.64          0.94
                                                                                                                             (Borne by     (Balance
                                                                                                                           by AMC 0.01) by AMC 0.01)
                                                                             Bank Charges                                      0.03          0.04
                                                                             Lead Managers’ Fees       0.38      0.50          0.28          0.40
                                                                             Total                     4.35      5.80         4.12           6.00
                                                                                                                             (Borne         (Borne
                                                                                                                             by AMC        by AMC
                                                                                                                              0.14)          0.20)
Initial Issue Expenses for the past schemes
                                              Total initial issue                    Initial issue expenses             Initial issue expenses
                                             expenses incurred                        borne by the scheme                    borne by AMC
 Scheme                             % of amount             Amount          % of amount              Amount % of amount                   Amount
                                      mobilised      (Rs. In crores)          mobilized       (Rs. In crores) mobilised            (Rs. In crores)
 Tata Short Term Bond Fund                 0.0044             0.0045                   0.00              0.00           0.0044             0.0045
 Tata Income Plus Fund                   0.00498              0.1108             0.00498               0.1108               0.00             0.00
 Tata Index Fund                             0.25                0.02                  0.00              0.00               0.25             0.02
 Tata Fixed Horizon Fund                     0.49             0.0025                   0.00              0.00               0.49           0.0025
 Tata Dynamic bond Fund                      0.03                0.05                  0.03              0.05               0.00             0.00
 Tata Floating Rate Fund                     0.03               0.05                   0.03              0.05               0.00             0.00
 Tata MIP Plus Fund                          1.48                5.57                  1.48              5.57               0.00             0.00
 Tata Equity P/E Fund                        2.72                2.79                  2.72              2.79               0.00             0.00
 Tata Dividend Yield Fund                    1.11               4.49                   1.11              4.49               0.00             0.00
 Tata Infrastructure Fund                    1.75              13.31                   1.75             13.31               0.00             0.00

                                                                        7
TATA BALANCED FUND
C) Annual Scheme Recurring Expenses                                                                                             Estimates (%)
The ongoing fees and expenses of operating the Scheme on an
                                                                             Brokerage & Transaction cost                                  0.10
annual basis (including for the initial offering period) expressed as
                                                                             Audit Fees                                                    0.01
a percentage of the amount of the Scheme’s daily average net assets
                                                                             Bank Charges                                                  0.03
are estimated to be as follows :
                                                                             Cost of providing account statement,
 Description                                       Estimates (%)             redemption cheques / dividend warrants, etc.                  0.05
 Investment Management Fees                                    1.25          Costs of statutory advertisements                             0.06
 Trustee Fees                                                  0.05          Total                                                         0.25
 Custodian Expenses                                            0.18         The above estimates of annual Scheme recurring expenses have
 Registrar Expenses                                            0.20         been made in good faith as per the information available to the
 Marketing & Selling expenses                                               Asset Management Company and are subject to change as per
 (including agents commission)                                 0.57         actuals. The said estimates have been given to assist the Unitholder
                                                                            in understanding the various costs and expenses that an Unitholder
 *Other operating expenses                                     0.25
                                                                            in the Scheme will bear directly or indirectly. However, the annual
 Total                                                         2.50         total of all charges and expenses of Tata Mutual Fund, except for
                                                                            brokerage, commission, stamp duties and other (transaction)
* (For other operating expenses refer to the detailed note in Item 4        expenses directly associated with the purchase, sale and registration
below)                                                                      of transfer of TMF’s investment/securities and except for expenses
1.   Investment Management Fees                                             associated with the initial offer of Units of the Scheme, and except
     Investment Management fees charged by TAML shall be 1.25%              for selling expenses which are directly met / set off against sale &
     of the daily average net assets for net assets upto Rs. 100            redemption load (as stated in the clause on Unitholder Transaction
     crores and 1.00% of the daily average net assets on the                Expenses) shall be subject to the following limits :
     balance amount above Rs. 100 crores. This fee is in conformity
     with SEBI Regulations & shall be payable monthly in arrears.                On the first Rs.100 Crores of the average daily net assets:
     TAML shall not charge any fees on its investment in Units of                2.50%
     the Funds/Schemes/Plans in TMF or any other Mutual Fund.                    On the next Rs.300 Crores of the average daily net assets:
                                                                                 2.25%
2.   Trustee Fees
     The Trustee Company shall be entitled to a fee of 0.05% of the              On the next Rs.300 Crores of the average daily net assets:
     daily average net assets of the corpus or a sum of Rs. 5 lacs               2.00%
     per annum, whichever is higher, payable annually in arrears or              On the balance of the assets: 1.75%
     at such intervals as may be decided from time to time.
                                                                            The above is the maximum limit under Regulation 52 (6) of the
3.   Custodian/Registrar Fees:                                              SEBI (Mutual Funds) Regulations, 1996. The Fund will strive to
     For Custodian’s and the Registrar & Transfer Agent’s Fees,             reduce the level of these expenses so as to keep them well within
     see clause(s) “The Custodian” and “The Registrar” in Item IX           the maximum limits allowed by SEBI and any expenditure in excess
     “Management of the Fund”.                                              of the above limits shall be borne by Tata Asset Management Limited
4.   Other Operating Expenses:                                              and/or Tata Trustee Company Private Limited. Besides only those
     According to Regulation 52 (4)(b) of SEBI (Mutual Funds)               expenses as given above under the clause “Annual Scheme
     Regulations 1996, other operating expenses inter alia includes         Recurring Expenses”. shall be charged to the Scheme.
     (and expressed as a percentage of the amount of daily net
     assets) :




                                                                        8
                                                                                                      TATA BALANCED FUND
VI. CONDENSED FINANCIAL INFORMATION                                          Tata MIP Plus Fund was launched on 27th January 2004. Tata Equity
    Brief Note on Schemes launched:                                          P/E Fund was launched on 17th May, 2004. On 28th September
                                                                             2004 Tata Dividend Yield was Launched, Tata Infrastructure Fund
TMF has so far launched twenty three open-ended schemes and                  was launched on 25th November, 2004, Tata Service Industries Fund
one closed ended scheme. Tata Balanced Fund (TBF) (formerly                  was launched on 9th February,2005, Tata Fixed Horizon Fund
known as Tata Equity Growth Fund), is the maiden scheme of Tata              Series1. TMF has so far launched twenty three open-ended schemes
Mutual Fund launched in August-September 1995. Tata Young                    and one closed ended scheme. Each Scheme offers special
Citizens’ Fund (TYCF) initially close-ended Scheme and converted             innovative benefits to Unitholders by way of Systematic Investment
into an open ended scheme on 30 th October 1998, also launched               Plan, Systematic Withdrawal Plan, etc.
in the same period was the first scheme structured by a private
sector mutual fund exclusively for children with an added automatic          In November 2001, Tata Mutual Fund and Indian Bank Mutual Fund
benefit of Personal Accident Insurance Cover. Tata Tax Saving Fund           entered into an agreement for takeover of the following close ended,
(TTSF) initially a close ended Equity linked Savings Scheme for              running schemes of Indian Bank Mutual Fund viz : Ind Shelter (Plan
residents launched in December 1996 and converted into an open               A&B), Ind Tax Shield (Plan A&B) and Ind Navratna. Subsequent to
ended scheme on 1st April 1999 offers growth besides tax saving              the takeover the names of the schemes were changed to Tata Ind
and a phased investment plan, for cash flow planning. Tata Select            Shelter (Plan A&B), Tata Ind Tax Shield (Plan A&B) and Tata Ind
Equity Fund (TSEF) launched in April-May 1996 was the first close            Navratna . The consideration and all direct expenses in this regard
ended Scheme structured by a private sector Mutual fund for                  were directly borne by the respective parties to the Agreement,
investments exclusively in the equity of core sector companies.              and not debited to the Scheme accounts. An exit option at NAV,
Tata Income Fund (TIF) launched in March - April 1997 offered                without load was provided to unitholders in view of change in the
assured semi-annual income of 15% per annum (for the first financial         Trustee and the Asset Management Company, as well as certain
year) along with possible capital appreciation under Regular Income          modifications in scheme attributes such as issue of Account
Option and accumulated the earnings in the Scheme thus providing             Statement instead of Unit Certificates, changing NAV related
medium to long term capital gains in the case of Appreciation Option.        transactions to prospective from the earlier principle of prior week
Tata Income Fund w.e.f. 27th April 2000 also offers Monthly Income           NAV, etc. Thereafter, with effect from 22nd November 2001, the Tata
and Quarterly Income options. The Monthly Income Option was                  Trustee Company Private Limited is the Trustee and Tata Asset
hived of as seperate scheme namely Tata Monthly Income Fund                  Management Ltd. is the Asset Management Company for these
w.e.f. 23rd December, 2002. Tata Twin Option Fund (TTOF) launched            funds. Tata Ind Shelter Fund Plan A and B were redeemed on
in March 1998 offered the Unitholder, the option to invest in equities       31.3.2002. On 29th March 2003 Tata Ind Tax Shield was made open
of large cap companies and the balanced portfolio option which               ended and named Tata Equity Opportunities Fund. Tata Ind Navratna
invests in both debt and equity. On 14th February 2000 Balanced              was converted in to an open ended fund on 31st March, 2004 and
Portfolio Option of Tata Twin Option Fund got merged with Tata               was named as Tata Growth Fund.
Equity Growth Fund and the Tata Equity Growth Fund was renamed               Date of allotment : TBF (8/10/95), TYCF (14/10/95), TTSF (1/4/96),
as Tata Balanced Fund. while the equity option was renamed as                TSEF (24/5/96), TIFR & TIFA (2/5/97), TIFQ and TIFM (27/4/2000),
Tata Pure Equity Fund. Tata Liquid Fund launched in August 1998              TPEF (7/5/98), TLSTF (18/6/99), TLFR (2/8/99) & TLFA (30/8/98),
offered an ideal debt based (income and growth) investment for               TGSFR & TGSFA (4/8/99) TLSP1 (8/12/2000), TLSP2 (3/1/2001),
short duration investors. Tata Life Sciences & Technology Fund a             TSTBF (12/08/02), TIPF(2/12/02), (TIF) (4/03/03), TDBF (03/09/03),
sectoral fund investing in fast growing Life Science and Technology          TFRF (22/12/03), TMPF (17/03/04), TEQPEF (29/6/04),
Sectors comprising of Engineering, Tele-communications, Space,               TDYF(22/11/04), TISF(31/12/04).
Computers, Software, Pharmaceuticals, Information Technology,
                                                                             TBF - Tata Balanced Fund, TYCF - Tata Young Citizens’ Fund, TTSF
Electronics and Electricals, Agrochemicals, Fertilizers, Fast Moving
                                                                             - Tata Tax Saving Fund, TSEF - Tata Select Equity Fund, TIFR - Tata
Consumer Goods, and various other allied Industries, etc. was
                                                                             Income Fund (Half-Yearly Income Option), TIFQ - Tata Income Fund
launched in June 1999. Tata Gilt Securities Fund, a fund
                                                                             (Quarterly Income Option), TIFM - Tata Income Fund (Monthly
predominantly investing in securities issued by Central/ State
                                                                             Income Option),TIFA - Tata Income Fund (Appreciation Option),
Government was launched in August 1999. This fund also offers
                                                                             TPEF - Tata Pure Equity Fund, TLSTF - Tata Life Sciences &
quarterly income distribution and also growth options. Under Tata
                                                                             Technology Fund, TLFR - Tata Liquid Fund (Regular Income Option),
Liquid Fund two short known-maturity plans were floated. Tata Liquid
                                                                             TLFA - Tata Liquid Fund (Appreciation), TGSFR - Tata Gilt Securities
Fund Serial Plan I was launched on 8.12.2000 and Tata Liquid Fund
                                                                             Fund (Regular Income Option), TGSFA - Tata Gilt Securities Fund
Serial Plan II on 3.1.2001 and quarterly dividends were declared
                                                                             (Appreciation Option), TSTBFR - Tata Short Term Bond Fund
under these plans. On 8th August, 2002 Tata Short Term Bond Fund
                                                                             (Regular Income), TSTBFA - Tata Short Term Bond Fund
was launched. On 11th November, 2002 the Tata Income Plus Fund
                                                                             (Appreciation Option), TIPF(A) - Tata Income Plus Fund Option A,
was launched. Tata Fixed Horizon Fund was launched 10th January,
                                                                             TIPF(B) - Tata Income Plus Fund Option B, TFHF - Tata Fixed Horizon
2003,and Tata Index Fund on 20th February, 2003. On 29th March
                                                                             Fund, TMIF - Tata Monthly Income Fund, TIF - Tata Index Fund,
2003 Tata Ind Tax Shield was converted into on open ended scheme
                                                                             TDBF - Tata Dynamic Bond Fund, TFRF - Tata Floating Rate Fund.
(with no ELSS benefits) and named Tata Equity Opportunities Fund,
                                                                             TMPF - Tata MIP Plus Fund, TGF - Tata Growth Fund, TEQPEF-
Tata Dynamic Bond Fund was launched on 1st September, 2003,
                                                                             Tata Equity P/E Fund, TDYF - Tata Dividend Yield Fund, TISF - Tata
Tata Floating Rate Fund was launched on 12th December, 2003.
                                                                             Infrastructure Fund.




                                                                         9
TATA BALANCED FUND
Condensed Financial Information for the schemes launched during the last three financial years.
 Sr. Historical Per Unit Statistics                                                   TBF
 No.                                                       28/03/05       31/03/04       31/03/03               31/03/02
 1      NAV at the beginning of the year/period                   D 20.8162        13.1925        13.3857        13.3907
                                                                  G 22.2986
 2      Net Income per unit                                            3.09           9.20           0.85         -19.49
 3      Dividends                                                      3.00              –              –              –
 4      Transfer to reserves (if any)                                     –              –              –              –
 5      NAV at the end of the year                                D 24.1547      D 20.8162        13.1925        13.3857
                                                                  G 29.4282      G 22.2986
 6(a)   Annualised Return (%) *                                       15.92          13.99           7.17           8.56

 6(b)   Benchmark returns (%) *                                            NA           NA               NA           NA

                                                                                 Crisil Balanced Fund Index
 7      Net Assets at the end of                                        109.42       97.93          82.36         104.29
        the period (Rs. Crores)
 8      Ratio of Recurring Expenses                                       2.50         2.50          2.50           2.50
        to Avg. Net Assets (%)
 * Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR).

 Sr. Historical Per Unit Statistics                                       TLF                                          TFRSTF
 No.                                              28/02/05           31/03/04     31/03/03    31/03/02           28/02/05  31/03/04
 1      NAV at the beginning               RIPGR-14.7135 TLF-DIV-11.1256           R-11.06 R-11.55         D-10.0053      10.0000
        of the year/period                 RIPFN-11.1415           GR-14.0270      G-13.13 G-12.14         G-10.1185
                                           RIPDD-11.1449       TLHIF-10.0527      HG-10.00
                                           HIPGR-10.5672
                                           HIPDD-11.1199
                                          HIPWLY-11.1556
                                          HIPMLY-10.0407
                                         SHIPGR-11.5948
                                         SHIPDD-11.1200
                                         SHIPMLY-11.1670
                                        SHIPWLY-11.1654
 2      Net Income per unit                           0.56              0.4300        0.96    2.58                0.19        0.11
 3      Dividends                            RIPFN-3.3052        RIPFN-0.4384       R-0.66  R-1.33  RIP WD-0.3814          0.0932
                                            RIPDD-0.3955        RIPDD-0.3841                          IIP DD-0.2412
                                             HPDD-0.4051         HPDD-0.4088
                                           HIPWLY-0.3515       HIPWLY-0.3475
                                            HIPMLY-0.3614      HIPMLY-0.3918
                                           SHIPDD-0.4294      SHIPDD-0.4188
                                          SHIPWLY-0.3700 SHIPWLY-0.3665
                                          SHIPMLY-0.7017 SHIPMLY-0.3501
 4      Transfer to reserves (if any)                    –                    –          –       –                   –           –
 5      NAV at the end of the year      RIPGR-1531.3022       RIPGR-14.7135        R-11.13 R-11.06 RIP DIV-10.0583 D-10.0053
                                         RIPFN-1122.5392      RIPFN-11.1415        G-14.03 G-13.13 RIP GR-10.5708 G-10.1185
                                        RIPDD-1116.7783       RIPDD-11.1449       HG-10.05       – IIP DIV- 10.0104
                                        HIPGR-1100.8634       HIPGR-10.5672                        IIP GR- 10.2556
                                        HIPDD-1114.3033       HIPDD-11.1199
                                       HIPWLY-1123.4159 HIPWLY-11.1556
                                        HIPMLY-1007.6589 HIPMLY-10.0407
                                        SHIPGR-1211.179 SHIPGR-11.5948
                                       SHIPDD-1114.4928 SHIPDD-11.1200
                                      SHIPWLY-1126.3066 SHIPWLY-11.1670
                                      SHIPMLY-1126.8236 SHIPMLY-11.1654
 6(a)   Annualised return (%) *                RIPGR-6.77          RIPGR 7.15 RIPGR 7.66 RIPGR 7.9     RIP GR- 4.78        G-1.19
                                               HIPGR-4.90          HIPGR-5.14                           IIP GR- 2.56
                                             SHIPGR-4.97         SHIPGR-5.01
 6(b)   Benchmark returns (%) *                 RIPGR-NA            RIPGR-NA           NA      NA      RIP GR- 4.11           1.24
                                               HIPGR-4.28          HIPGR-4.40                           IIP GR- 2.11
                                             SHIPGR-4.12         SHIPGR-3.52
                                                          Crisil Liquid Fund Index                       Crisil Liquid Fund Index
 7      Net Assets at the end of                  2449.43              1129.48      125.21   81.38           1125.20       112.03
        the period (Rs. Crores)
 8      Ratio of Recurring Expenses                   0.46                0.64        0.86  G-1.25                0.65        0.75
        to Avg. Net Assets (%)
 *      Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR)

                                                                   10
                                                                                                  TATA BALANCED FUND


Sr.    Historical Per Unit Statistics                      TEQPEF                                             TSTBF
No.                                                        28/02/05                28/02/05                   31/03/04             31/03/03
1      NAV at the beginning of the year/period            D 10.0000              D 10.6401                D 10.5288                   10.00
                                                          G 10.0000              G 11.1663                G 10.5462

2      Net Income per unit                                        1.57                 1.60                    1.6700                  2.21

3      Dividends                                                  0.50               0.4281                    0.4397

4      Transfer to reserves (if any)                                   –                     –                      –                    –

5      NAV at the end of the year                         D 13.6618              D- 10.8015               D-10.6401                 R-10.53
                                                          G 14.2657              G- 11.6771               G-11.1663                 G-10.55

6(a)   Annualised return (%) *                              G 42.66                 G- 6.24                    G-6.93                G 5.46

6(b)   Benchmark returns (%) *                                   38.66                 4.92                       6.09                 6.71

                                                       BSE SENSEX                                Crisil Short Term Bond Fund

7      Net Assets at the end of                                 111.46                15.11                     93.85                 60.56
       the period (Rs. Crores)

8      Ratio of Recurring Expenses                                2.48                 0.83                       0.90                 0.90
       to Avg. Net Assets (%)

* Returns for period less than 1 year are absolute returns and for period more than one year are compounded annualised return (CAGR)




Sr.    Historical Per Unit Statistics                        TMPF                      TDBF                              TFRLTF
No.                                                   28/02/05 31/03/04          28/02/05   31/03/04                28/02/05   31/03/04
1      NAV at the beginning of the year/period   DM   10.0404              –   RD 10.1267                 –        D 10.0038        10.0000
                                                 DQ   10.0403              –   RG 10.4235                 –        G10.1015
                                                 DS   10.0404              –   HD 10.1411                 –
                                                 GR   10.0404              –   HG 10.4402                 –

2      Net Income per unit                               0.41      0.0371            0.10              1.27                0.22        0.06

3      Dividends                                  DM 0.2027        0.0000       RD 0.0119            0.0715              0.2490      0.0804
                                                  DQ 0.1290                     HD 0.0119            0.2306
                                                  DS 0.1003

4      Transfer to reserves (if any)                        –              –             –                –                  –           –

5      NAV at the end of the year                DM   10.2957     10.0404      RD 10.2047           10.1267      DIV 10.1045      D 10.0038
                                                 DQ   10.3703     10.0403      RG 10.6272           10.4235      GR 10.4530       G 10.1015
                                                 DS   10.3987     10.0404      HD 10.2200           10.1411
                                                 GR   10.5027     10.0404      HG 10.6460           10.4402

6(a)   Annualised Return (%) *                        GR 5.03     GR 0.40         RG 4.17           RG 4.24          GR 3.80       GR 1.02
                                                                                  HG 4.29           HG 4.40

6(b)   Benchmark returns (%) *                           3.18          0.58          2.17              3.74                4.11        1.24

                                                 Crisil MIP Blended Index      Crisil Composite Bond Fund         Crisil Liquid Fund Index

7      Net Assets at the end of                        183.07      418.19            7.98             62.06               13.22        8.87
       the period (Rs. Crores)
8      Ratio of Recurring Expenses                       1.97          1.97          1.25              1.25                0.75        0.73
       to Avg. Net Assets (%)


* Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR)




                                                                  11
TATA BALANCED FUND
 Sr.    Historical Per Unit Statistics                                                                      TIPF
 No.                                                                                 28/02/05              31/03/04                 31/03/03
 1      NAV at the beginning of the year/period                                   RID-10.1800           RID-10.2467                       –
                                                                                  RIA-11.2564           RIA-10.2342                       –
                                                                                  HID-10.1862           HID-10.2489                       –
                                                                                  HIA-11.2864           HIA-10.2470                       –
                                                                                   IID-10.5660
                                                                                   IIA-11.3247

 2      Net Income per unit                                                              0.33                     1.25                  0.39

 3      Dividends                                                                              –         HID-0.9428                       –
                                                                                                         RID-0.9428                       –
                                                                                                          IID-0.6609                      –

 4      Transfer to reserves (if any)                                                          –                    –                     –

 5      NAV at the end of the year                                                RID-10.1572           RID-10.1800              RIR-10.2466
                                                                                  RIA-11.2288           RIA-11.2564              RIA-10.2342
                                                                                  HID-10.1628           HID-10.1862              HIR-10.2489
                                                                                  HIA-11.2586           HIA-11.2864              HIA-10.2475
                                                                                                         IID-10.5660                       –
                                                                                                         IIA-11.3247                       –

 6(a)   Annualised return (%) *                                                     RIA- 5.17              RIA-8.91                 RIR-2.47
                                                                                    HIA- 5.29              HIA-9.11                 RIA-2.34
                                                                                                            IIA-7.45                HIR-2.49
                                                                                                                                    HIA-2.47

 6(b)   Benchmark returns (%) *                                                          5.15              RIA-8.79                     3.28
                                                                                                           HIA-8.79
                                                                                                            IIA-6.87

                                                                                                Crisil Composite Bond Fund

 7      Net Assets at the end of the period (Rs. Crores)                                17.67                   165.49                100.11

 8      Ratio of Recurring Expenses                                                      1.49                     1.36                  1.50
        to Avg. Net Assets (%)

 * Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR).


 Sr.    Historical Per Unit Statistics                                TIFN                                                 TIFS
 No.                                                28/02/05         31/03/04       31/03/03         28/02/05       31/03/04        31/03/03
 1      NAV at the beginning of the year/period   NA-10.1030        NA-9.2519          10.00       SA-14.4606      SA-9.2644           10.00
                                                  NB-16.6571        NB-9.2333                      SB-17.0617      SB-9.2605

 2      Net Income per unit                                31.28           8.44       (0.01)            81.65             8.37        (0.03)

 3      Dividends                                             –            6.00            –               –              2.50            –

 4      Transfer to reserves (if any)                         –            0.00            –               –                –             –

 5      NAV at the end of the year                NA-12.1154       NA-10.1030       NA-9.25        SA-17.6586     SA-14.4606        SA-9.27
                                                                   NB-16.6571       NB-9.23                       SB-17.0617        SB-9.26

 6(a)   Annualised Return (%) *                    NA- 40.02         NA57.13       NA (7.48)        SA- 43.38       SA 61.43       SA (7.36)
                                                                     NB 59.29      NB (7.67)                        SB 62.82       SB-(7.40)

 6(b)   Benchmark returns (%) *                            40.89          60.43       (7.33)            42.74            62.53        (7.11)

                                                                                  S&P NIFTY                     BSE SENSEX

 7      Net Assets at the end of                            0.97          29.70         6.55             0.30             2.46         10.62
        the period (Rs. Crores)

 8      Ratio of Recurring Expenses                         0.89           1.42     NA-1.50              0.87             0.84      SA-1.50
        to Avg. Net Assets (%)                                                      NB-0.75                                         SB-0.75
 * Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR).

                                                                     12
                                                                                                         TATA BALANCED FUND
Sr.       Historical Per Unit Statistics                                         TGSF                                             TGSMF
No.                                             28/02/05           31/03/04             31/03/03       31/03/02            28/02/05            31/03/04
1         NAV at the beginning                    ANNX         GR-123782                GR-11.89       GR-10.60        DIV- 10.4290                 NA
          of the year/period                                   GA-19.4883               GA-16.75       GA-12.66        GR- 10.7467                  NA
                                                                                        HG-10.00           6.43                0.14
2         Net Income per unit                      -0.38              9700                  2.37                                                   0.32
3         Dividends                          RIP-0.3058         RIP-1.3411                  1.26            1.56               0.1500           0.2674
                                             HIP-0.3058         HIP-0.6247
4         Transfer to reserves (if any)                –                 –                     –              –                   –                 –
5         NAV at the end of the year              ANNX               ANNX               GR-12.38       GR-11.89        DIV- 10.0164       DIV-10.4290
                                                                                        GA-19.49       GA-16.75         GR-10.9937        GR-10.7467
6(a)      Annualised Return (%) *                 ANNX           RIP-19.23               G20.57         G-22.25           GR- 5.09               7.47
                                                                  HIP-8.11
6(b)      Benchmark returns (%) *                 ANNX             RIP-NA                   N.A.            N.A.           GR- 5.42              11.12
          I Sec Composite Index                                   HIP-6.57

7         Net Assets at the end of                492.75               450.00             143.33          94.72                 18.31              7.21
          the period (Rs. Crores)
8         Ratio of Recurring Expenses               1.60                 1.54               1.18            1.30                 0.98              0.78
          to Avg. Net Assets (%)
* Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR).


                                                                       ANNX
                              TATA GILT SECURITIES FUND (Including Retirement Planning Series)
                                                RIP - Gr    HIP - Gr     2005 GRW         2006 DIV   2006 GRW      2007 DIV     2007 GRW        2008 DIV
    Inception Date                             3-Aug-99     3-Aug-99      30-Oct-03       6-Oct-03    4-Dec-03      9-Oct-03    15-Jan-04      31-Oct-03
    NAV on Allotment                            10.0000      10.0000       10.0000         10.0000     10.0000      10.0000       10.0000        10.0000

    NAV as on 31/3/04                           22.3430      13.6907       10.1946         10.1862     10.2978      10.1299       10.1319        10.2013
    Annualised Return (%) *                        19.23        8.11             1.95         1.86        2.98          1.30            1.32        2.01
    Benchmark Return (%) *                           NA         6.57             2.31         2.57        2.51          2.11            1.33        2.29
    NAV as on 28/02/05                          21.4556      13.1459          9.7899        9.7813      9.8889       9.7277        9.7296         9.7963
    Annualised Return (%) *                        14.93        2.33          -100.00        -1.57       -0.60         -1.96        -2.41          -1.53
    Benchmark Return (%) *                          N.A         3.69             1.37         1.49        1.64          1.17            0.77        1.36

                                              2008 GRW      2009 DIV     2009 GRW         2010 DIV   2010 GRW      2011 DIV     2011 GRW        2013 DIV
    Inception Date                             21-Oct-03    3-Feb-04     27-Nov-03       23-Mar-04   27-Oct-03     28-Oct-03    27-Nov-03      10-Dec-03
    NAV on Allotment                            10.0000      10.0000       10.0000         10.0000     10.0000      10.0000       10.0000        10.0000

    NAV as on 31/3/04                           10.0708      10.1501       10.2119         10.0718     10.2053      10.2897       10.2119        10.3050
    Annualised Return (%) *                         0.71        1.50             2.12         0.72        2.05          2.90            2.12        3.05
    Benchmark Return (%) *                          1.76        1.49             2.27         0.31        2.39          2.66            2.27        2.49
    NAV as on 28/02/05                            9.6711      9.7471          9.8043        9.7128      9.7964       9.8811        9.8064         9.8958
    Annualised Return (%) *                        -2.43       -2.36            -1.56        -2.87       -1.52         -0.89        -1.54          -0.85
    Benchmark Return (%) *                          0.94        0.95             1.43        -0.15        1.43          1.63            1.43        1.64

                                                           2013 GRW      2014 GRW        2015 GRW    2016 GRW      2018 DIV      2025 DIV      2025 GRW
    Inception Date                                         24-Nov-03      30-Jan-04      29-Dec-03    2-Jan-04   10-Dec-03       9-Oct-03      26-Dec-03
    NAV on Allotment                                         10.0000       10.0000         10.0000     10.0000      10.0000       10.0000        10.0000

    NAV as on 31/3/04                                        10.2163       10.1717         10.1367     10.1169      10.3022       10.1025        10.1254
    Annualised Return (%) *                                     2.16             1.72         1.37        1.17          3.02            1.02        1.25
    Benchmark Return (%) *                                      2.35             1.48         1.42        1.48          2.49            2.11        1.57
    NAV as on 28/02/05                                        9.8107          9.7678        9.7342      9.7152       9.8931        9.7008         9.7257
    Annualised Return (%) *                                    -1.50            -2.15        -2.28       -2.46         -0.88        -2.16          -2.33
    Benchmark Return (%) *                                      1.48             0.93         0.81        0.87          1.64            1.17        0.93

*     Returns for period less than 1 year are absolute returns and for period more than 1 year are compounded annualised return (CAGR)
      Data for Crisil Bond Fund Index, Crisil Liquid Fund index, Crisil Balanced Fund Index and Crisil MIP blended index were not available prior
      to 30th March, 2002.

No scheme of Tata Mutual Fund has resorted to borrowings during the last financial year i.e financial year 2003-2004.


                                                                         13
TATA BALANCED FUND
VII. CONSTITUTION OF TATA MUTUAL FUND                                             March, 2004. Its realizable value of investment as on 31st
i.   Constitution:                                                                March, 2004. was Rs. 1184.76 crores, spread over 238
                                                                                  companies.
     Tata Mutual Fund (TMF) has been constituted as a Trust in
     accordance with the provisions of The Indian Trusts Act, 1882                Financial performance of TICL :
     (2 of 1882) and is registered as a Trust under The Indian                    Last three financial years.
     Registration Act, 1908. TMF was registered with Securities &                                                                   (Rs. in crores)
     Exchange Board of India (SEBI) and commenced operation
     by launching its first scheme on 30th August 1995. Tata Sons                                               2001-02     2002-03     2003-04
     Limited(TSL) and Tata Investment Corporation Ltd (TICL) are
                                                                                    Total Income                   50.33       52.80       90.37
     the Sponsors and the Settlors and Tata Trustee Company
     Private Limited is the Trustee Company. The Trustee Company                    Profit after tax               43.97       45.82       80.56
     has appointed Tata Asset Management Limited (TAML) as the                      Equity Share Capital           19.69       22.97       22.97
     Asset Management Company. TSL and TICL have made an
                                                                                    Free reserves                286.20       325.16      379.46
     aggregate initial contribution of Rs.1 lac towards setting up of
     TMF.                                                                           Net worth/Book               155.34       151.53      175.17
                                                                                    Value per Share
      Share holding pattern of Tata Asset Management Ltd (TAML)
                                                                                    Earnings per share             24.49       21.71       35.06
      and Tata Trustee Company Pvt Ltd (TTCPL)
                                                                                    Dividend paid (%)              60.00       60.00      101.00
                                                 TAML       TTCPL
                                                                             iii. The Trustee Company
       Tata Sons Ltd                            67.91%         50%           Constitution
       Tata Investment Corporation Ltd          32.09%         50%           Tata Trustee Company Private Limited, through its Board of
                                                                             Directors, discharges the obligations as Trustee of TMF. The Trustee
ii.   The Sponsors:                                                          Company may, amend the terms of the offer of the Units, the
                                                                             terms of the Scheme and the terms of the Fund from time to time
1.    Tata Sons Limited (TSL)
                                                                             as per the provisions contained in SEBI Regulations. The Trustee
      Tata Sons Limited is the principal investment holding company          Company is entitled to fees as stated in the clause on “Trustee
      of TATA. It also has the following operating consultancy               Fee”. The Trustee Company has appointed TAML as the Asset
      divisions:                                                             Management Company, Citi Bank N.A as the Custodian and CAMS
1.    Tata Consultancy Services(TCS) provides a wide range of                as the Registrar and Transfer Agent, the details of which are given
      services in the areas of information technology and                    in the Clause “Management of the Fund”.
      management consultancy and has proven experience in
                                                                             Board of Tata Trustee Company Private Limited:
      offering integrated solutions for various projects.
                                                                             Mr. S. M. Datta (Director), Address: Peerless General Finance &
2.    Tata Economic Consultancy Services (TECS) is one of the                Investment Company Limited, 11-A, Mittal Tower, ‘A’ wing, First Floor,
      largest economic consultancy organisations in India having             Nariman Point, Mumbai 400 021. Status: Independent Occupation:
      undertaken over 2000 assignments including macro and micro             Industrialist, Other Directorships : Chairman Castrol India Limited,
      economic studies in all sectors.                                       IL&FS Investment Managers Limited, Philips India Limited, E. I. D.
3.    Tata Financial Services(TFS) provides a wide range of financial        Parry (India) Limited, Director Zodiac Clothing Company Limited,
      services to Tata Companies.                                            TIL Limited, Peerless General Finance & Investment Company
4.    Tata Quality Management Service (TQMS) renders services                Limited, BOC India Limited, Goodlass Nerolac Paints Limited, M.
      to Tata Companies in the implementation of the Tata Business           Visvesvaraya Industrial Research & Development Centre, Transport
      Excellence Module (TBEM)                                               Corporation of India Limited, Atul Limited, Bhoruka Power
      Financial performance of TSL                                           Corporation Limited, Other Memberships : Chairman - Indian
                                                      (Rs. in crores)        Institute of Management, Bangalore, Chairman - Goa Institute of
                                                                             Management, Advisor - Army Group Insurance Fund, Trustee - India
                                     2001-02    2002-03 2003-04              Brand Equity Fund Trust, Member - Council of EU Chambers of
                                                                             Commerce, Member – ACME, Chairman - SIES Institute of
      Total Income                   4329.53     5158.87 6476.68
                                                                             Management Studies, Director – Supervisory Board of the Eicher
      Profit after tax                 863.29     816.84 1291.96             Group of Companies, Governor – Woodlands Hospital & Medical
      Preference Share Capital          54.44      31.25     16.10           Research Centre Limited, Chairman of Governing Board: Indian
      Equity Share Capital              40.41      40.41     40.41           Institute of Health Management Research.

      Free reserves                  3301.53     3965.98 4981.50             Mr. I. Hussain (Director), Address: Tata Sons Limited, Bombay
                                                                             House, 24, Homi Mody Street, Mumbai 400 001. Status: Associate,
      Net worth                      3341.94     4006.39 5021.91
                                                                             Occupation: Industrialist, Other Directorships : Chairman Voltas
      Dividend on Preference Shares      5.44       4.09       2.00          Limited, Tata Finance Limited, Director Tata Sons Limited, Tata
      Dividend on Ordinary Shares      121.24     131.35    242.49           Iron & Steel Company Limited, Titan Industries Limited, Tata Inc.,
                                                                             Tata Teleservices Limited, Tata Industries Limited, The India Growth
      Earnings per share (face value
                                                                             Fund Inc., Tata AIG Life Insurance Co. Limited, Tata AIG General
      Rs.1000 per share) (Rs.)       21226        20107      31912
                                                                             Insurance Co. Limited, Idea Cellular Limited, CMC Limited, Videsh
2.    Tata Investment Corporation Limited (TICL)                             Sanchar Nigam Limited, Tata Teleservices (Maharashtra) Limited,
      Tata Investment Corporation Ltd. was promoted by Tata Sons             Speech & Software Technologies (India) Pvt. Limited, Space TV
      Ltd. in 1937, with the main objective of being an investment           Limited.
      company, and was initially called The Investment Corporation           Mr. J. N. Godrej (Director), Address: Godrej & Boyce Manufacturing
      of India Ltd. It remained closely held till 1959, when it was          Company Limited, Pirojshanagar, Vikhroli, Mumbai - 400 079.
      listed on the Bombay Stock Exchange. Over the years, TICL              Status: Independent, Occupation: Industrialist, Other
      has built up a portfolio of investments of quoted and unquoted         Directorships : Chairman Geometric Software Solutions Company
      securities of a book value of Rs. 455.01 crores as on 31st             Limited, Chairman & Managing Director Godrej & Boyce

                                                                        14
                                                                                                            TATA BALANCED FUND
Manufacturing Company Limited, Director Godrej Properties &                      (5)   No Trustee shall participate in the meetings of the Board of
Investments Limited, Godrej Agrovet Limited, Godrej Sara Lee                           Trustee when any decisions for investments in which he/she
Limited, Godrej Foods Limited, Godrej Tea Limited, Godrej Industries                   may be interested are taken.
Limited, 3D PLMSoftware Solutions, Godrej Consumer Products
                                                                                 (6)   All the Trustee shall furnish to the Board of Trustee, particulars
Limited, Bajaj Auto Limited, Antrix Corporation Limited, Godrej
                                                                                       of interest which he/she, may have in any other company, or
Upstream Limited, Godrej Investments Private Limited, Lawkim
                                                                                       institution or financial intermediary or any corporate by virue
Limited, Illinois Institute of Technology (India) Private Limited, Godrej
                                                                                       of his/her position as director, partner or with which he/she
(Singapore) Pte. Limited, Godrej (Malaysia) Sdn. Bhd., Godrej
                                                                                       may be associated in any other capacity.
(Vietnam) Company Limited, Godrej & Khimji (Middle East) LLC,
Muscat, Haldia Petrochemicals Limited, Breach Candy Hospital                     (7)   The trustees shall ensure before the launch of any scheme
Trust. Other Memberships : Past President & Member of the                              that the asset management company has:-
National Council - Confederation of Indian Industry, Past Chairman
                                                                                       (a) systems in place for its back office, dealing room and
of the Western Regional Council- Confederation of Indian Industry,
                                                                                            accounting:
Past President & Member of the Executive Committee - Indian
Machine Tool Manufacturers’ Association, Member of the Governing                       (b) appointed all key personnel including fund manager(s) for
Council - Central Manufacturing Technology Institute, Bangalore,                            the scheme(s) and submitted their bio-data which shall
Founder Member & Member of the Executive Council - Tool Gauge                               contain the educational qualifications, past experience
Manufacturers’ Association.                                                                 in the securities market with the trustees, within 15 days
                                                                                            of their appointment:
Dr. N. A. Kalyani (Director) Address: Shangrilla Gardens, B&C
Wings, 1st Floor, Bund Garden Road, Pune 411 001. Status: Inde-                        (c) appointed auditors to audit its accounts:
pendent, Occupation: Industrialist Other Directorships :                               (d) appointed a compliance officer to comply with regulatory
Executive Chairman Kalyani Forge Limited, Chairman Kalyani                                  requirement and to redress investor grievances:
Securities Private Limited, Shakuntal Engineering & Equipments
Private Limited, Kautilya Engineering & Manufacturing Private                          (e) appointed registrars and laid down parameters for
Limited, Gajanan Investment Private Limited, Aboli Investment                               supervision:
Private Limited, Zendu Investment Private Limited, Uttara Agro                         (f) prepared a compliance manual and designed internal
Private Limited, Purva Agro Private Limited, Anuradha Agrotech                              control mechanisms including internal audit systems:
Private Limited, Punarvasu Agro Private Limited, Vishakha Agro
Private Limited, Kalyani Floritech Private Limited, Ashlesha Agro                      (g) specified norms for empanelment of brokers and marketing
Private Limited, Uttarashadha Agro Private Limited, Dhanishtha                              agents.
Agro Private Limited, Purvashadha Agro Private Limited, Saraswati                (8)   The trustees shall ensure that an asset management company
Agrotech Private Limited, Rohini Agrotech Private Limited, Kalyani                     has been diligent in empanelling the brokers, in monitoring
Agro and Exports Private Limited, Bhadrapada Agro Private Limited,                     securities transactions with brokers and avoiding undue
Jeshtha Agro Private Limited, Shattarka Agro Private Limited,                          concentration of business with any broker.
Kalyani Horticulture Private Limited, Pushya Agro Private Limited,
Bramhaputra Agrotech Private Limited, Jamuna Agrotech Private                    (9)   The trustees shall ensure that the asset management company
Limited, Chinab Agrotech Private Limited, Director Kinetic Engi-                       has not given any undue or unfair advantage to any associates
neering Company Limited, Kirloskar Oil Engines Limited, Finolex                        or dealt with any of the associates of the asset management
Industries Limited, Finolex Cables Limited, Sudarshan Chemical                         company in any manner detrimental to interest of the
Industries Limited, Hindustan Construction Company Limited,                            unitholders.
Dronacharya Investment and Trading Private Limited,                              (10) The trustees shall ensure that the transactions entered into
Dandakarayanya Investment and Trading Private Limited, Hastinapur                     by the asset management company are in accordance with
Investment and Trading Private Limited, Campanula Investment and                      these regulations and the scheme.
Finance Private Limited, Cornflower Investment and Finance Private
Limited, Other Memberships : Chairman – Kalyani Institute of Sci-                (11) The trustees shall ensure that the asset management company
entific Research, Pune, Chairman – Kalyani Medical Foundation,                        has been managing the mutual fund schemes independently
Pune, Chairman – Kalyani Institute of Poultry Research, Pune,                         of other activities and have taken adequate steps to ensure
Member - Executive Committee, Mahratta Chamber of Commerce                            that the interest of investors of one scheme are not being
and Industries, Pune, Member - Executive Committee, Federation                        compromised with those of any other scheme or of other
of Indian Chamber of Commerce and Industry.                                           activities of the asset management company.

Duties and Responsibilities of the Trustee Company                               (12) The trustees shall ensure that all the activities of the asset
                                                                                      management company are in accordance with the provisions
(1)   The trustees and the asset management company shall with                        of these regulations.
      the prior approval of the Board enter into an investment
      management agreement.                                                      (13) Where the trustees have reason to believe that the conduct of
                                                                                      business of the mutual fund is not in accordance with these
(2)   The investment management agreement shall contain such                          regulations and the scheme they shall forthwith take such
      clauses as are mentioned in the Fourth Schedule and such                        remedial steps as are necessary by them and shall immediately
      other clauses as are necessary for the purpose of making                        inform the Board of the violation and the action taken by them.
      investments.
                                                                                 (14) Each trustee shall file the details of his transactions of dealing
(3)   The trustees shall have a right to obtain from the asset                        in securities with the Trust on a quarterly basis.
      management company such information as is considered
      necessary by the trustees.                                                 (15) The trustees shall be accountable for, and be the custodian
                                                                                      of, the funds and property of the respective schemes and shall
(4)   In carrying out his/her responsibilities as a member of the Board               hold the same in trust for the benefit of the unit holders in
      of Trustee, each Trustee shall maintain an arms’ length                         accordance with these regulations and the provisions of trust
      relationship with other companies, or institutions or financial                 deed.
      intermediaries or any body corporate with which he may
      associated in any transaction also involving the mutual fund.

                                                                            15
TATA BALANCED FUND
(16) The trustees shall take steps to ensure that the transactions             (22) The trustees shall periodically review all service contracts such
     of the mutual fund are in accordance with the provisions of                    as custody arrangements, transfer agency of the securities
     the trust deed.                                                                and satisfy itself that such contracts are executed in the interest
                                                                                    of the unitholders.
(17) The trustees shall be responsible for the calculation of any
     income due to be paid to the mutual fund and also of any                  (23) The trustees shall ensure that there is no conflict of interest
     income received in the mutual fund for the holders of the units                between the manner of deployment of its networth by the asset
     of any scheme in accordance with these regulations and the                     management company and the interest of the unitholders.
     trust deed.
                                                                               (24) The trustees shall periodically review the investor complaints
(18A) The trustees shall obtain the consent of the unitholders -                    received and the redressal of the same by the asset
    (a) whenever required to do so by the Board in the interest                     management company.
         of the unitholders: or                                                (25) The trustees shall abide by the Code of Conduct as specified
                                                                                    in the Fifth Schedule.
     (b)   whenever required to do so on the requisition made by
           threefourths of the unit holders of any scheme: or                  (26) The trustees shall furnish to the Board on a half yearly basis:-
     (c)   when the majority of the trustees decide to wind up or                   (a)    a report on the activities of the mutual fund covering the
           prematurely redeem the units: or                                                detail as prescribed by SEBI.
(18B) The trustees shall ensure that no change in the fundamental                   (b)    a certificate stating that the trustees have satisfied them-
      attributes of any scheme or the trust or fees and expenses                           selves that there have been no instances of self dealing
      payable or any other change which would modify the scheme                            or front running by any of the trustees, directors and key
      and affects the interest of unitholders, shall be carried out                        personnel of the asset management company:
      unless:-
                                                                                    (c)    a certificate to the effect that the asset management com-
      (i) a written communication about the proposed change is                             pany has been managing the schemes independently of
          sent to each unitholder and an advertisement is given in                         any other activities and incase any activities of the na-
          one English daily newspaper having nationwide circula-                           ture referred to in sub-regulation (2) of regulation 24 have
          tion as well as in a newspaper published in the language                         been undertaken by the asset management company and
          of the region where the Head Office of the mutual fund is                        has taken adequate steps to ensure that the interest of
          situated; and                                                                    the unitholders are protected.
      (ii) the unitholders are given an option to exit at the prevail-         (27) The independent trustees referred to in sub-regulation (5) of
           ing Net Asset Value without any exit load.”                              regulation 16 shall give their comments on the report received
      The fundamental attributes for the above clause are:                          from the asset management company regarding the
                                                                                    investments by the mutual fund in the securities of group
      1) Type of scheme: An Open-ended balanced fund investing                      companies of the sponsor.
         in equity and equity related instruments as well as in debt
         and money market instruments.                                         (28) Trustees shall exercise due diligence as under:
      2) Investment Objective : The investment objective of the                A.   General Due Diligence
         Scheme will be to provide income distribution and/ or                      (i) the Trustees shall be discerning in the appointment of
         medium to long term capital gains while at all times                           the directors on the Board of the asset management com-
         emphasising the importance of capital appreciation.                            pany.

      3) Terms of the issue :                                                       (ii)   Trustees shall review the desirability of continuance of
                                                                                           the asset management company if substantial irregulari-
        Maximum recuring expenses On the first Rs 100 Crores                               ties are observed in any of the schemes and shall not
        2.25% of average daily net assets (also refer to para on                           allow the asset management company to float new
        annual recurring expenses on page 8 of the Offering                                schemes.
        Circular)
 Maximum Initial issue expenses upto 6% of the amount mobilised                     (iii) The trustees shall ensure that the trust property is prop-
                                                                                          erly protected, held and administered by proper persons
(19) The trustees on a quarterly basis shall call for the details of
                                                                                          and by a proper number of such persons.
     transactions in securities by the key personnel of the asset
     management company in his own name or on behalf of the                         (iv) The trustee shall ensure that all service providers are
     asset management company and shall report to the Board, as                          holding appropriate registrations from the Board or con-
     and when required.                                                                  cerned regulatory authority.
Explanation:                                                                        (v)    The trustees shall arrange for test checks of service con-
To comply with the requirement of sub-regulation (1) of regulation                         tracts.
18 of the SEBI (Mutual Funds) Regulations, 1996, the trustees shall                 (vi) Trustees shall immediately report to the Board of any spe-
call for the details of transactions in securities by the key personnel                  cial developments in the mutual fund.
of the asset management company in their own name or on behalf
of the AMC on a six monthly basis.                                             B.   Specific Due Diligence:
 (20) The trustees shall quarterly review all transactions carried out         The Trustees shall:
      between the mutual funds, asset management company and                        (i)    Obtain internal audit reports at regular intervals from in-
      its associates.                                                                      dependent auditors appointed by the Trustees.
(21) The trustees shall quarterly review the networth of the asset                  (ii)   Obtain compliance certificates at regular intervals from
     management company and in case of any shortfall, ensure                               the asset management company
     that the asset management company make up for the shortfall
                                                                                    (iii) Hold meeting of trustees more frequently.
     as per clause (f) of sub-regulation (1) of regulation 21.

                                                                          16
                                                                                                         TATA BALANCED FUND
     (iv) Consider the reports of the independent auditor and com-            Trustee Company and discussed. Reports of the independent
          pliance reports of asset management company at the                  Internal auditors(currently M/s C.C.Chokshi & Co., Chartered
          meetings of trustees for appropriate action.                        Accountants, Mafatlal Centre, Backbay Reclamation, Mumbai 400
     (v)    Maintain records of the decisions of the Trustees at their        020)are sent directly to the Chairman of the Trustee Company and
            meetings and of the minutes of the meetings.                      also placed before the Audit Committee of Directors, who seek
                                                                              explanation and clarifications from TAML on the points brought out
     (vi) Prescribe and adhere to a code of ethics by the Trustees,
                                                                              in the report and thereafter report the same to the main Board.
          asset management company and its personnel.
                                                                              Periodic declarations are taken from the staff and Directors of TAML
     (vii) Communicate in writing to the asset management com-                and placed before the Board of Directors of the Trustee Company
           pany of the deficiencies and checking on the rectification         to peruse and to ascertain that there have been no instances of
           of deficiencies.                                                   self dealing or front running. Meetings of the Board of Directors of
(29) Notwithstanding anything contained in sub-regulations (1) to             the Trustee Company are held (atleast) once every two months and
     (25), the trustees shall not be held liable for acts done in good        atleast six such meetings shall be held in every year wherein atleast
     faith if they have exercised adequate due diligence honestly.            one independent Director is required along with other Directors to
                                                                              form effective quorum.
(30) The independent directors of the trustees or asset
     management company shall pay specific attention to the                   During the year ended February 2005 there were six Board Meetings
     following, as may be applicable, namely:                                 of the Trustee Company.
     (i)    the Investment Management Agreement and the com-                  Power to make rules:
            pensation paid under the agreement.                               The Trustee company may, from time to time, as per provisions of
                                                                              SEBI Regulations (with the prior permission from the Unitholders
     (ii)   Service contract with affiliates – whether the asset man-
                                                                              in case of change of fundamental attributes in accordance with
            agement company has charged higher fees than outside
                                                                              Clause 15 of Regulation18 of the SEBI (Mutual Funds) Regulations,
            contractors for the same services.
                                                                              1996 and otherwise to be in conformity with the SEBI Regulations
     (iii) Selection of the asset management company’s indepen-               or to reflect the change in rules and regulations generally applicable
           dent directors.                                                    to mutual funds or trusts), prescribe such forms and make such
     (iv) Securities transactions involving affiliates to the extent          rules for the purpose of giving effect to the provisions of the Scheme,
          such transactions are permitted.                                    with the power to the Trustee Company/Asset Management
                                                                              Company to add to, alter or amend all or any of the forms and rules
     (v)    Selecting and nominating individuals to fill independent          that may be framed from time to time.
            directors vacancies.
                                                                              The trustees shall ensure that no change in the fundamental at-
     (vi) Code of ethics must be designed to prevent fraudulent,              tributes of any scheme or the trust or fees and expenses payable or
          deceptive or manipulative practices by insiders in                  any other change which would modify the scheme and affect the
          connection with personal securities transactions.                   interests of unitholders, shall be carried out unless :-
     (vii) The reasonableness of fees paid to sponsors, asset
                                                                              (i)    a written communication about the proposed change is sent
           management company and any others for services
                                                                                     to each unitholder and an advertisement is given in one En-
           provided.
                                                                                     glish daily newspaper having nationwide circulation as well as
     (viii) Principal underwriting contracts and their renewals.                     in a newspaper published in the language of the region where
     (ix) Any service contract with the associates of the asset                      the Head Office of the mutual fund is situated; and
          management company.                                                 (ii)   the unitholders are given an option to exit at the prevailing Net
(31) No amendments to the trust deed shall be carried out                            Asset Value without any exit load.
     without the prior approval of the SEBI and unitholders’                  Power to remove difficulties:
     approval would be obtained where it affects the interests of             If any difficulty arises in giving effect to the provisions of the Scheme,
     the unitholders.                                                         the Trustee Company may take such steps which are not inconsistent
Supervision over TAML:                                                        with these provisions, which appear to them to be necessary or
                                                                              expedient, for the purpose of removing the difficulties.
The Trustee Company monitors the activities of TAML on an ongoing
basis by having in place, a number of checks and balances and                 VIII. INVESTMENT OBJECTIVE AND POLICIES
asking for various reports besides periodic review of the various             i.     Investment Objective, investment strategy and risk
activities of TAML. Specific amongst such systems is the periodic                    management:
MIS reporting to be submitted by TAML at each Meeting of the
Board of Directors of the Trustee Company (held at least once every           The investment objective of the Scheme will be to provide
two months), which includes:                                                  income distribution and / or medium to long term capital gains
                                                                              while at all times emphasising the importance of capital
1. NAV calculations, movement of Net Assets and Valuation                     appreciation. The scheme will be investing in equity and equity
      matrix/methodology.                                                     related instruments as well as in debt and money market
2. Balance sheet and Revenue & Expenditure Accounts                           instruments under normal circumstances. Equity and equity
3. Schemewise breakup of Industry Exposure in Equities/                       related instruments would be between 51-70% while debt and
      Securities.                                                             money market instruments 30-49%.
4. Investments in Associate/Group Companies (alongwith                        However the above weightages may be changed in exceptional
      justification)                                                          circumstances, depending on market conditions, by taking approval
5. Investment in Corporates who have invested in the Scheme.                  of the Trustee Company. The main aim of such steps will be to
6. Companywise List of Investments                                            protect the interests of the unitholders.
7. Broker-wise transactions.                                                  The above investment policies are in conformity with the provisions
Besides, the quarterly compliance reports which are submitted by              of various constitutional documents viz. MOA/ AOA of the TAML/
TAML to SEBI are also placed before the Board of Directors of the             Trustee Company, IMA and the Trust Deed.

                                                                         17
TATA BALANCED FUND
The moneys collected under this Scheme shall be invested only in              in corporate securities market is higher compared to those of
transferable securities in the money market or in the capital market.         government securities. Liquidity in the corporate debt market has
As per SEBI (Mutual Funds) Regulations 1996, the Fund shall not               been improving due to the entry of more players and due to various
make any investments in any un-listed securities of associate/group           measures taken by the regulators in this direction over a period of
companies of the Sponsors. The Fund will also not make investment             time. SEBI’s directive of a compulsory rating by a rating agency for
in privately placed securities issued by associate/group companies            any public issuance over 18 months is a case in point. In times to
of the Sponsors. The Fund may invest not more than 25% of the net             come, dematerialization, entry of private insurance companies and
assets (of all the Schemes of the Fund) in listed securities (equity          growth of fixed income mutual funds are expected to enhance
& debt instruments) of Group companies.                                       liquidity in corporate debt market.
                                                                              The market participants in the Corporate debt and gilt markets are
ii. Investment Pattern and Risk Profile
                                                                              banks, financial institutions, mutual funds, corporates, insurance
Under normal circumstances, the total assets of the Scheme, shall             companies, FIIs, primary dealers and provident funds. The main
(after providing for all ongoing operational expenses) generally be           debt instruments in the market are those issued by Corporates and
invested / the indicative asset allocation shall be as follows :              State/Central Governments. Corporate papers carry credit risk while
                            Proportion**                                      government securities are believed to carry no credit risk. The main
                         % of funds available                                 risks with investments in debt securities are interest rate risk, credit
                                                                              risk and liquidity risk. Interest rate risk associated with debt
 Instrument            Minimum      Likely Maximum              Risk          instruments depend on the macroeconomic environment. It includes
                           Upto    Around      upto           Profile         both market price changes due to change in yields as well as coupon
                                                                              reinvestment rate risk. Corporate papers carry higher liquidity risk
 Equity and Equity           51          60           70        High          as compared to gilts due to the depth of the gilt market. Lately, we
 related instruments                                                          have observed higher volumes in corporate paper too due to the
 Debt & debt related           5         30           45      Low to          entry of more players in the market. Liquidity will improve further
 instruments                                                 Medium           due to dematerialisation and entry of private insurance companies.
 (Listed/Unlisted/Securitised)                                                The following table attempts to give a broad overview of the available
 Money Markets                 0         10           25       Low/           instruments in the financial markets and their risk return profile.
 instruments                                               Sovereign          The data given in the table is based on market conditions around
 TOTAL                                  100                                   the date of the Offer document and can at best be considered
                                                                              indicative:
*   Investment by the scheme in securitized debt will not normally            Expected Yields on Debt Securities
    exceed 50% of the net assets of the scheme.
** At the time of investment                                                  Instruments                   Current Yields*          Liquidity
                                                                                                               (% p.a.)
If permitted by SEBI under extant regulations / guidelines, not more
than 50% of the net assets of the scheme shall be deployed in                 Central/State      Short Term 5.30% - 6.40%            Very High
securities lending. The Scheme would limit its exposure, with regards         Government         Long Term 6.60% - 7.00%
to securities lending., for a single intermediary, to the extent of 5%        Securities
of the total net assets of the scheme at the time of lending.                 PSU Bonds/        Short Term      5.00% - 6.00%        Medium - High
                                                                              Corporate         Long Term       6.00% - 7.50%
The scheme net assets will have a maximum derivative net position             Debentures
of 50% of the net assets of the scheme. Investment in derivative
instruments may be done for hedging and Portfolio balancing.                  Securitised       Short Term      5.25% - 6.00%        Low - Medium
                                                                              debt              Long Term       6.20% - 7.00%
Investment in derivatives/futures/options may be done for hedging             Commercial Papers/
and portfolio balancing.                                                      Certificates of Deposit           5%    - 6.50%        High
The Trustee Company may from time to time for a short term period             Call/Notice Money                 4.50% - 5.00%        Very High
on defensive consideration invest upto 100% of the funds available            Repo                              4.50% - 5.00%        Very High
in money market instruments, the primary motive being to protect
the Net Asset Value of the Scheme and protect unitholders interests           iv. Trading in Derivatives
as also to earn reasonable returns on liquid funds maintained for             Subject to SEBI (Mutual Fund) Regulations, 1996, the Scheme may
redemption/repurchase of units.                                               use techniques and instruments such as trading in derivative
The Trustee Company may from time to time for a short term period             instruments to hedge the risk of fluctuations in the value of the
under exceptional circumstances on defensive consideration modify             investment portfolio. The Scheme shall enter into derivative
/ alter the investment pattern / asset allocation the intent being to         transactions for the purpose of hedging and portfolio balancing. In
protect the Net Asset Value of the Scheme & Unitholders interests             accordance with the guidelines issued by the SEBI. Exposure to
without seeking consent of the unitholders.                                   derivative instruments will be restricted to 50% of the assets of the
                                                                              scheme.
iii. Overview of Debt Market:                                                 A derivative is an instrument whose value is derived from the value
The major players in the Indian Debt Markets are banks, financial             of one or more of the underlying assets which can be commodities,
institutions, insurance companies and mutual funds. The                       precious metals, bonds, currency, etc. Common examples of
instruments in the market can be broadly categorized as those                 Derivative instruments are Interest Rate Swaps, Forward Rate
issued by corporate, banks, financial institutions and those issued           Agreements, Futures, Options, etc.
by state/central governments. The risk associated with any                    The Scheme may use techniques and instruments such as trading
investments are – credit risk, interest rate risks and liquidity risk.        in derivative instruments to hedge the risk of fluctuations in the
While corporate papers carry credit risk due to changing business             value of the investment portfolio. A derivative is an instrument whose
conditions, government securities are perceived to have zero                  value is derived from the value of one or more of the underlying
credit risk. Interest rate risk is present in all debt securities and         assets which can be commodities, precious metals, bonds, currency,
depends on a variety of macroeconomic factors. The liquidity risk             etc. Common examples of Derivative instruments are Interest Rate

                                                                         18
                                                                                                             TATA BALANCED FUND
Swaps, Forward Rate Agreements, Futures, Options, etc. The                       Interest Rate Swaps: An Interest Rate Swap is an agreement
Scheme may write (sell) and purchase call and put options in                     whereby two parties agree to exchange periodic interest payments.
securities in which it invests and on securities indices based on                The amount of interest payments exchanged is based on some
securities in which the scheme invests. Through the purchase and                 predetermined principal, called notional principal amount. The
sale of futures contracts and related options on those contracts the             amount each counterparty pays to the other upon periodic interest
Fund would seek to hedge against a decline in securities owned by                rate multiplied by the notional principal amount. The only amount
the Fund or an increase in the prices of securities which the Fund               that is exchanged between the parties is the interest payment, not
plans to purchase. The Fund would sell futures contracts on                      the notional principal amount.
securities indices in anticipation of a fall in stock prices, to offset a
decline in the value of its equity portfolio. When this type of hedging          Example : IRS (Intrest Rate Swaps)
is successful, the futures contract increase in value while the Fund’s           Assuming the Scheme is having 10% of the portfolio in cash. The
investment portfolio declines in value and thereby keep the Fund’s               fund manager has a view that the interest rate scenario is soft and
net asset value from declining as much as it otherwise would.                    call rates are unlikely to spurt over the next three months. The fund
Similarly, when the Fund is not fully invested, and an increase in               manager would therefore prefer to receive a higher rate of return
the price of equities is expected, the Fund would purchase futures               on his cash, which he is lending in the overnight call market. In
contracts to gain rapid market exposure that may partially or entirely           other words, he would like to move to a 91 days fixed interest rate
offset increase in the cost of the equity securities it intends to               from overnight floating rate.
purchase.
                                                                                 Say Notional Amount : Rs. 2 crores
Example 1. Hedging against an anticipated rise in equity prices                  Benchmark : NSE MIBOR
The scheme has a corpus of Rs.100 crores and has invested Rs.85                  Tenor : 91 Days
crores in equity and still has a cash of Rs.15 crores available to               Fixed Rate : 10.25%
invest. The Fund may buy index futures of a value of Rs.15 crores.               At the end of 91 days;
The scheme may reduce the exposure to the future contract by                     The Scheme pays : compounded call rates for 91 days is 9.90%
taking an offsetting position as investments are made in the equities            TMF receives : Fixed rate at 10.25% for 91 days.
the scheme wants to invest in. Here, if the market rises, the scheme
gains by having invested in the index futures.                                   In practice, however the difference of the two amounts is settled.
                                                                                 Here the Scheme receives Rs. 2,00,00,000 x 0.35% x91 / 365
Event               Gain/(Loss)       Gain/(Loss)       Overall Gain/            =Rs.17,452.
                    from               from             (Loss) to                The players in IRS are scheduled commercial banks, primary deal-
                    derivative        cash market       Scheme                   ers, corporate, mutual funds and All India Financial Institutions.
                    position          position
                                                                                 Forward Rate Agreements (FRA): This is an agreement between
5% rise in          15 * 5% =         85 * 5% =         Rs. 5 crores
                                                                                 two counterparties to pay or to receive the difference between an
equity price        Rs. 0.75 crs      Rs. 4.25 Crs
                                                                                 agreed fixed rate (the FRA rate) and the interest rate prevailing on
5% fall in          15 * 5% =         85 * 5% =         (Rs. 5 crores)           a stipulated future date based on the notional amount, for an agreed
equity price        (Rs. 0.75 crs)    (Rs. 4.25 Crs)                             period.
                                                                                 The interest rate benchmarks that are commonly used for floating
                                                                                 rate in interest rate swaps are those on various Money Market
Example 2:- Hedging against anticipated fall in equity prices:-
                                                                                 Instruments. In Indian markets, the benchmark most commonly used
If the Fund has a negative view on the market and would not like to              is MIBOR.
sell stocks as the market might be weak, the scheme of the Fund
can go short on index futures. Later, the scheme can sell the stocks             Options and Futures
and unwind the future positions. A short position in the future would            The Scheme(s) may write (sell) and purchase call and put options
offset the long position in the underlying stocks and this can curtail           in securities in which it invests and on securities indices based on
potential loss in the portfolio.                                                 securities in which the scheme invests. Through the purchase and
                                                                                 sale of futures contracts and related options on those contracts the
For eg. the scheme has a corpus of Rs.100 crores and is fully
                                                                                 Fund would seek to hedge against a decline in securities owned by
invested in equities. If fund manager wishes to reduce the equity
                                                                                 the Fund or an increase in the prices of securities which the Fund
exposure to Rs. 80 crores in a short time, he would sell index future
                                                                                 plans to purchase. The Fund would sell futures contracts on
contracts of Rs. 20 crores.
                                                                                 securities indices in anticipation of a fall in stock prices, to offset a
Event                 Gain/(Loss) Gain/(Loss)           Overall Gain/            decline in the value of its equity portfolio. When this type of hedging
                      from        from                  (Loss) to                is successful, the futures contract increase in value while the Fund’s
                      derivative  cash market           Scheme                   investment portfolio declines in value and thereby keep the Fund’s
                      position    position                                       net asset value from declining as much as it otherwise would.
                                                                                 Similarly, when the Fund is not fully invested, and an increase in
5% fall in            20 * 5% =       80 * 5% =         (Rs. 3 crores)           the price of equities is expected, the Fund would purchase futures
equity price          Rs. 1 crs       (Rs. 4.00 Crs)                             contracts to gain rapid market exposure that may partially or entirely
5% rise in            20 * 5% =       80 * 5% =         Rs. 3 crores             offset increase in the cost of the equity securities it intends to
equity price          (Rs. 1 crs)     Rs. 4 Crs                                  purchase. An interest rate swap agreement (as per guidelines issued
                                                                                 by RBI on July 7, 1999 and November 1, 1999) from fixed rate to
The scheme may use derivative instruments like Interest Rate
                                                                                 floating rate will be an effective hedge for portfolio in a rising interest
Swaps, Forward Rate Agreements or such other derivative
                                                                                 rate environment.
instruments as may be introduced from time to time and as may be
permitted under the SEBI (Mutual Fund) Regulations.




                                                                            19
TATA BALANCED FUND
Exposure to Derivatives :
The Scheme will have a maximum derivative net position of 50% of the portfolio (i.e net assets) of the scheme. The limits on equity
derivatives exposure per scrip / instruments and derivative positions are given below :
  Sr.   Derivative              Action Description                                           Limit
  1     Index futures           Buy      Buy futures against cash to protect                 To the extent of cash / equivalents in the portfolio.
                                         against rising market                               Max limit (50%) of portfolio
  2     Index futures           Sell     Hedging of portfolio against expected               Up to (100%) of equity portion of the scheme or (50%)
                                         market downturn                                     of the net assets of the scheme whichever is lower
  3     Index futures - Call    Buy      Buy index calls against cash (existing /            To the extent of cash/equivalents in the portfolio.
                                         expected to protect against rising market           Max. limit (50%) of portfolio
  4     Index Options - Call    Sell     Covered Call Sale-against existing                  Up to (100%) of equity portion of the scheme or (50%)
                                         portfolio                                           of the net assets of the scheme whichever is lower
  5     Index Options - Put     Buy      Buy index puts to hedge existing                    Up to (100%) of equity portion of the scheme or (50%)
                                         portfolio                                           of the net assets of the scheme whichever is lower
  6     Index Options - Put     Sell     Covered Put Sale-Possible top sell index            To the extent of cash/equivalents in the portfolio.
                                         puts against existing / expected cash               Max. limit (50%) of portfolio
  7     Stock futures           Buy      Buy against cash to protect against                 To the extent of cash/equivalents in the portfolio.
                                         rising share prices                                 Max. limit (50%) of portfolio; per scrip limit (10%) of
                                                                                             the net assets of the scheme
  8     Stock futures           Sell     Sell against existing stock - Hedging               To the extent of the particular scrip holding in the
                                         against downside on existing stock in               portfolio; Max. limit (50%) of portfolio; per scrip limit
                                         the face of expected volatility in the stock        (100%) of the holding
                                         price
  9     Stock options - Call    Buy      Buy against cash to protect against                 To the extent of cash/equivalents in the portfolio.
                                         rising share prices                                 Max. limit (50%) of portfolio; per scrip limit (10%) of
                                                                                             the net assets of the scheme
  10    Stock options - Call    Sell     Sell against existing stock                         To the extent of the particular scrip holding in the
                                                                                             portfolio; Max. limit 50% of portfolio; per scrip limit
                                                                                             (100%) of the holding
  11    Stock option - Put      Buy      Purchase against existing stock.                    To the extent of the particular scrip holding in the
                                         Hedging against downside on existing                portfolio; Max. limit (50%) of portfolio; per scrip limit
                                         stock in the face of expected volatility            (100%) of the holding
                                         in the stock price
  12    Stock options - Put     Sell     Covered Put Sale against cash                       To the extent of cash/equivalents in the portfolio.
                                                                                             Max. limit (50%) of portfolio; per scrip limit (10%) of
                                                                                             the net assets of the scheme
Note : The per scrip limit disclosed above is as a % of the holding in the scrip and not as a % of the portfolio of the Scheme.

Risks associated with Derivatives                                              The asset allocation pattern may be modified in the interest of
Derivative products are specialised instruments that require                   investors; and to protect the NAV of the Schemes, however, the
investment techniques and risk analysis different from those                   same will be reviewed by the trustee on a quarterly basis and will
associated with stocks and bonds. Derivatives require the                      be rebalanced to its normal position in a time frame as permitted
maintenance of adequate controls to monitor the transactions                   by the trustee. However, the AMC will endeavour to achieve a normal
entered into, the ability to access the risk that a derivative add to          asset allocation pattern in a maximum period of 6 months.
the portfolio and the ability to forecast price of interest rate               vi. Investment in Overseas Financial Assets
movements correctly. There is a possibility that a loss may be                 In accordance with the RBI policy announced in October 1997 and
sustained by the portfolio as a result of the failure of another party         the guidelines of the SEBI on overseas Investments, it is the Asset
(usually referred to as the “counterparty”) to comply with the terms           Management Company’s belief that overseas markets offer new
of the derivatives contract. Other risks in using derivatives include          investment and portfolio diversification opportunities into multi-
the risk of mis-pricing or improper valuation of derivatives and the           market and multi-currency products. The scheme shall invest in
inability of derivatives to correlate perfectly with underlying assets,        overseas financial assets including GDRs/ ADRs of Indian
rates and indices.                                                             Companies, Securities issued by Governments of the G7 nations,
v. Change in Investment Pattern                                                etc. which in the judgement of the Asset Management Company is
The Investment Pattern as outlined above is indicative. The Trustee            eligible for investment as part of the scheme’s portfolio and is
Company may from time to time modify the investment strategy                   consistent with the investment strategy. The investment in such
and pattern provided such modification is in accordance with the               overseas Financial Assets shall not exceed the limit as may be
Scheme objective and Regulations and as amended from time to                   imposed by SEBI/ RBI from time to time and shall be within the
time including by way of Circulars, Press Releases, or Notifications           investment pattern as disclosed in the clause “Investment pattern
issued by SEBI or the Government of India to regulate the activities           and Risk Profile. The investment shall also take into consideration
and growth of Mutual Funds, the intent being to protect the Net                the country rating assigned by credit rating agencies of international
Asset Value of the Scheme and Unitholders’ interests.                          repute such as Standard and Poor or Moody etc. as investment
                                                                               grade. For potential risks, please refer to the clause on “Investment

                                                                          20
                                                                                                       TATA BALANCED FUND
Risks” under Risk Factors. However, to manage risks associated                    charging any fees, provided that aggregate interscheme
with foreign currency and interest rate exposure, the Fund may use                investment made by all schemes under the same management
derivatives for efficient portfolio management including hedging and              or in schemes under the management of any other asset
in accordance with conditions as may be stipulated by the                         management company shall not exceed 5% of the net asset
Regulations / Reserve Bank of India.                                              value of the mutual fund.
                                                                                  A scheme can not invest in a Fund of Funds scheme.
vii. Investment by the Fund and the Asset Management
Company                                                                      5.   The initial issue expenses in respect of any scheme may not
The Scheme may invest in another Scheme under the management                      exceed six per cent of the funds raised under that scheme.
of TAML or of any other Asset Management Company. The aggregate              6.   Every mutual fund shall buy and sell securities on the basis of
Interscheme investment by TMF under all its Schemes, other than                   deliveries and shall in all cases of purchases, take delivery of
fund of fund schemes, taken together, in another Scheme managed                   relative securities and in all cases of sale, deliver the securities
by TAML or in any other Scheme of any other Mutual Fund, shall                    and shall in no case put itself in a position whereby it has to
not be more than 5% of the net asset value of the Fund. TAML may,                 make short sale or carry forward transaction or engage in
on an ongoing basis invest, in Units of the Funds / Schemes / Plans               badla finance.
in TMF (the existing Funds / Schemes / Plans including the present                Provided that mutual funds shall enter into derivatives
Scheme and others from time to time). TAML shall not charge any                   transactions in a recognised stock exchange for the purpose
fees on the investment by the Scheme in another Scheme under                      of hedging and portfolio balancing, in acceptance with the
the management of TAML or of any other Asset Management                           guidelines issued by the Board
Company and also on its (TAML’s) own investment in Units of the              7.   Every mutual fund shall, get the securities purchased or
Funds / Schemes / Plans in TMF.                                                   transferred in the name of the mutual fund on account of the
The objective of the Scheme in investing in Schemes of TMF or                     concerned scheme, wherever investments are intended to be
any other Mutual Fund will be primarily to gain better yields in the              of long term nature.
short term as compared to other short term instruments in the money          8.   Pending deployment of funds of a scheme in securities in terms
market.                                                                           of investment objectives of the scheme a mutual fund can invest
                                                                                  the funds of the scheme in short term deposits of scheduled
viii. Restrictions on Investments (as per schedule 7 of SEBI                      commercial banks.
Regulations 1996)
                                                                             9.   No mutual fund scheme shall make any investment in;
1.   A mutual fund scheme shall not invest more than 15% of its
     NAV in debt instruments issued by a single issuer which are                  a)   any unlisted security of an associate or group company
     rated not below investment grade by a credit rating agency                        of the sponsor; or
     authorised to carry out such activity under the Act. Such                    b)   any security issued by way of private placement by an
     investment limit may be extended to 20% of the NAV of the                         associate or group company of the sponsor; or
     scheme with the prior approval of the Board of Trustees and                  c)the listed securities of group companies of the sponsor
     the Board of asset management company.                                          which is in excess of 25% of the net assets of the
     Provided that such limit shall not be applicable for investments                schemes.
     in government securities and money market instruments.                  10. No Mutual Fund Schemes shall invest more than 10% of its
                                                                                 NAV in the equity shares or equity related instruments of any
     Provided further that investment within such limit can be made
                                                                                 Company including units/securities of Venture Capital Funds.
     in mortgaged backed securitised debt which are rated not below
     investment grade by a credit rating agency registered with the          11. A Mutual Fund shall not invest more than 5% of its NAV in
     Board.”                                                                     unlisted equity shares or equity related instruments including
                                                                                 units/securities of Venture Capital Funds in case of open ended
1A. A mutual fund scheme shall not invest more than 10% of its                   schemes.
    NAV in unrated debt instruments issued by a single issuer
    and the total investment in such instruments shall not exceed            These investment limitations / parameters (as expressed / linked
    25% of the NAV of the scheme. All such investments shall be              to the net asset / net asset value / capital) shall in the ordinary
    made with the prior approval of the Board of Trustees and the            course apply as at the date of the most recent transaction or
    board of asset management company.                                       commitment to invest, and changes do not have to be effected
                                                                             merely because, owing to appreciations or depreciations in value,
     Debentures irrespective of any residual maturity period (above          or by reason of the receipt of any rights, bonuses or benefits in the
     or below 1 year) shall attract the investment restrictions as           nature of capital or of any scheme of arrangement or for
     applicable for debt instruments as specified under clause 1             amalgamation, reconstruction or exchange, or at any repayment or
     and 1A above.                                                           redemption or other reason outside the control of the Fund, any
2.   No Mutual Fund under all its Schemes should own more than               such limits would thereby be breached. If these limits are exceeded
     10% of the Companies paid-up capital carrying voting rights.            for reasons beyond its control, TAML shall adopt as a priority
                                                                             objective the remedying of that situation, taking due account of the
3.   Transfers of investments from one scheme to another scheme              interests of the Unitholders.
     in the same mutual fund shall be allowed only if:-
                                                                             In addition, certain investment parameters (like limits on exposure
     (a)   such transfers are done at the prevailing market price for        to Sectors, Industries, Companies, etc.) may be adopted internally
           quoted instruments on spot basis.                                 by TAML, and amended from time to time, to ensure appropriate
           Explanation- “ spot basis” shall have same meaning as             diversification / security for the Fund. The Trustee Company / TAML
           specified by stock exchange for spot transactions.                may alter these above stated limitations from time to time, and also
                                                                             to the extent the SEBI (Mutual Funds) Regulations, 1996 change,
     (b)   the securities so transferred shall be in conformity with         so as to permit the Scheme to make its investments in the full
           the investment objective of the scheme to which such              spectrum of permitted investments for mutual funds to achieve its
           transfer has been made.                                           investment objective. As such all investments of the Scheme will
4.   A scheme may invest in another scheme under the same asset              be made in accordance with SEBI (Mutual Funds) Regulations,
     management company or any other mutual fund without                     1996, including Schedule VII thereof.

                                                                        21
TATA BALANCED FUND
ix. Securities Lending by the Mutual Fund                                        of that situation, taking due account of the interests of the
Subject to the SEBI Regulations, the Mutual Fund may, if the Trustee             Unitholders.
permits, engage in Securities Lending. Securities Lending means                  As such all underwriting and sub-underwriting activities of the Fund
the lending of Securities to another person or entity for a fixed period         will be undertaken in accordance with SEBI (Underwriters) Rules
of time, at a negotiated compensation in order to enhance returns                and Regulations, 1993, and the norms as laid down by SEBI Circular
of the portfolio. The securities lent will be returned by the borrower           dated June 30, 1994, and as amended from time to time.
on the expiry of the stipulated period. The AMC will adhere to strict
limits should it engage in securities lending.                                   xi. Portfolio Turnover
                                                                                 “Portfolio Turnover” is the term used by any Mutual Fund for
Not more than 50 % of the net assets of the scheme shall generally               measuring the amount of trading that occurs in a Scheme’s portfolio
be deployed in securities lending. The Scheme would limit its                    during the year.
exposure, with regard to securities lending, for a single intermediary,
to the extent of 5% of the total net assets of the scheme at the time            The Scheme is an open-ended scheme. It is expected that there
of lending, Collateral would be obtained by the approved                         may be a number of subscriptions and repurchase on a daily basis.
intermediary for the lending transactions and this collateral must               Consequently, it is difficult to estimate with any reasonable measure
exceed in value, the value of the securities lent. The collateral can            of accuracy, the likely turnover in the portfolio. However, a high
be in the form of cash, bank guarantee, government securities or                 turnover would significantly affect the brokerage and transaction
certificate of deposits or other securities as may be agreed upon                costs. This will exclude the turnover caused on account of :
with the approved intermediary.                                                  –   investing the initial subscription,
As with other modes of extensions of credit, there are risks inherent            –   subscriptions and redemption undertaken by the unit holders.
to securities lending, including the risk of failure of the counterparty,
in this case the approved intermediary, to comply with the terms of              The AMC will endeavor to balance the increased cost on account
the agreement entered into between the lender of securities i.e.                 of higher portfolio turnover with the benefits derived there from. A
the scheme and the approved intermediary. Such failure can result                high portfolio turnover rate is not necessarily a drag on portfolio
in the possible loss of rights to the collateral put up by the borrower          performance and may be representative of arbitrate opportunities
of the securities, the inability of the approved intermediary to return          that exist for scrips/securities held in the portfolio rather than an
the securities deposited by the lender and the possible loss of any              indication of a change in AMC’s view on a scrip, etc.
corporate benefits accruing to the lender from the securities                    xii. Fundamental Attributes
deposited with the approved intermediary.                                        The information set out below should be read in conjunction with
The Mutual Fund may not be able to sell such lent out securities                 the full text of this Offering Circular.
and this can lead to temporary illiquidity.                                      1   Structure:
x. Underwriting by the Scheme                                                    An open-ended Balanced scheme.
The Scheme may also undertake underwriting and sub-underwriting                  2     Type of Scheme:
activities (only for equity and equity related instruments) in order to          An Open-ended balanced fund investing in equity and equity related
augment its income, after complying with the approval and                        instruments as well as in debt and money market instruments.
compliance process specified in the SEBI (underwriters) Rules &                  3    Scheme:
Regulations, 1993 and further subject to the following norms:                    Tata Balanced Fund is a separate and distinct Scheme within Tata
     The capital adequacy of the Mutual Fund for the purposes of                 Mutual Fund representing interests in a defined portfolio of assets
     SEBI (Underwriters) Rules and Regulations, 1993 shall be the                and liabilities.
     net assets of the Scheme.                                                   4     Investment Objective:
                                                                                 The investment objective of the Scheme will be to provide income
     The total underwriting obligation of the Scheme shall not
                                                                                 distribution and/ or medium to long term capital gains while at all
     exceed 25% of the total net asset value of the Scheme.
                                                                                 times emphasising the importance of capital appreciation.
     No Underwriting commitment may be undertaken in respect
     of the Scheme during the period of 6 months prior to the date               5     Investment Pattern And Risk Profile:
     of redemption of the Scheme.                                                Under normal circumstances, the total assets of the Scheme, shall
                                                                                 (after providing for all ongoing expenses) generally be invested /
     The decision to take up any underwriting commitment shall                   the indicative asset allocation shall be as follows :
     be made as if the Scheme is actually investing in that particular
     security.                                                                                                Proportion**
                                                                                                           % of funds available
     As such, all investment restrictions and prudential guidelines
     relating to investments, individually and in aggregate as                   Instrument            Minimum        Likely Maximum            Risk
     mentioned in SEBI Regulations shall, in so far as may be                                              Upto      Around      upto         Profile
     applicable, apply to underwriting commitments which may be
                                                                                 Equity and Equity             51           60        70        High
     undertaken under the Scheme.
                                                                                 related instruments
These underwriting norms / parameters (as expressed / linked to
                                                                                 Debt & debt related           5           30         45      Low to
the net asset/ net asset value/ capital) shall in the ordinary course
                                                                                 instruments                                                 Medium
apply as at the date of the most recent transaction of commitment
                                                                                 (Listed/Unlisted/Securitised)
to underwrite, and changes do not have to be effected merely
because, owing to appreciations or depreciations in value or by                  Money Markets                   0         10         25       Low/
reason of the receipt of any rights, bonuses or benefits in the nature           instruments                                               Sovereign
of capital or of any scheme of arrangement or for amalgamation,                  TOTAL                                     100
reconstruction or exchange, or at any repayment or redemption or
                                                                                 *   Investment by the scheme in securitized debt will not normally
other reason outside the control of the Fund, any such limits would
                                                                                     exceed 50% of the net assets of the scheme.
thereby be breached. If these limits are exceeded for reasons beyond
its control, TAML shall adopt as a priority objective the remedying              ** At the time of investment


                                                                            22
                                                                                                           TATA BALANCED FUND
The Trustee Co. may from time to time for a short term period under              Tata AIG General Insurance Co. Limited, Exegenix Canada Inc.,
exceptional circumstances on defensive consideration modify / alter              Sitel India Limited, Tata Tea Inc., Tatatech Inc., Tata America
the investment pattern / asset allocation, the intent being to protect           International Corporation, Inter Consumer Goods AG, Executive
the Net Asset Value of the Scheme.                                               Chairman Tata Infotech Limited, Vice Chairman Tata International
                                                                                 AG, Tata AG, Tata Enterprises (Overseas) AG, Tata Enterprises
6 Offer Price:
                                                                                 Overseas Limited, Tata Limited, Director Tata Sons Limited, Tata
The Offer Price will be based on the Net Asset Value (NAV) with                  Industries Limited, Tata Tea Limited, Titan Industries Limited, Trent
applicable loads as per SEBI (Mutual Funds) Regulations, 1996.                   Limited, Akzo Nobel Coatings India Private Limited, Sika Properties
7 Repurchase/ Resale / Switch /Listing:                                          Private Limited, Tata Overseas Development Company Limited, Tata
                                                                                 Overseas Development Company (UK) Limited, Tata Consultancy
Repurchase/ Resale is at Net Asset Value (NAV) related prices
                                                                                 Services France S.A., Tata Consultancy Services Deutschland
with repurchase/ resale loads as applicable (within limits) as
                                                                                 Gmbh, Tata Consultancy Services Netherlands B.V.,Teknosoft S.A.,
specified under SEBI Regulations 1996: the repurchase price shall
                                                                                 QUARTZ Software Technology AG, TKS – Banking Solutions SA,
not be lower than 93% of the NAV, the sale price will not be higher
                                                                                 Tata Precision Industries (Pte) Limited, Tata Technologies Pte
than 107% of the NAV and furtherthat the difference between the
                                                                                 Limited, Tata Technology Investments (Pte) Limited, Tata Projects
sale and repurchase price shall not exceed 7% calculated on the sale
                                                                                 (Malaysia) Sdn. Bhd., Titan International Marketing Limited, Titan
price.
                                                                                 International Holdings B. V., Titan International Investments B.V.,
Listing is not envisaged as the Scheme is an open-ended Scheme,                  ELXSI Corporation, St. James Court Hotel Limited, GIP Consulting
with the Fund providing for sales and repurchase on a continuous                 SA, Tetley Group, Consilience Technologies,
basis.                                                                           Mr. S. S. Marathe (Director), Address: “Vinay”, 9, Sahajeevan Co-
The trustees shall ensure that no change in the fundamental                      op Hsg. Society, Off. Ganeshkhind Road, Pune – 411 007, Status:
attributes of any scheme or the trust or fees and expenses payable               Independent, Occupation: Economist, Other Directorships :
or any other change which would modify the scheme and affects                    Chairman Life & General Associates (Pvt) Limited, Synise
the interest of unitholders, shall be carried out unless:-                       Technologies Pvt. Limited, GDA Trustee and Consultancy Private
                                                                                 Limited, Vice Chairman Sandvik Asia Limited, Director Automotive
     (i)    a written communication about the proposed change is                 Axles Limited, Bajaj Tempo Limited, Bharat Forge Limited, Deepak
            sent to each unitholder and an advertisement is given in             Fertilisers & Petrochemicals Corporation Limited, Finolex Industries
            one English daily newspaper having nationwide circulation            Limited, Larsen and Toubro Limited, Futura Polyesters Limited,
            as well as in a newspaper published in the language of               Kirloskar Brothers Limited, Mandovi Pellets Limited, Pan Gulf Group
            the region where the Head Office of the mutual fund is               Limited, Channel Islands, Kinetic Motors Limited. Other
            situated; and                                                        Memberships : Former Economic Adviser to the Government of
     (ii)   the unitholders are given an option to exit at the prevailing        India, India’s former Alternate Executive Director on the International
            Net Asset Value without any exit load.”                              Monetary Fund, Washington, Former Minister for Economic and
                                                                                 Commercial Affairs, Embassy of India, Washington, Former
8 Minimum Application:
                                                                                 Chairman, Bureau of Industrial Cost & Prices, Former Secretary to
Subscription by the Unitholder should be for a minimum of
                                                                                 the Government of India, Ministry of Industry.
Rs.5,000/- and in multiples of Re.1/- thereof. For additional
purchases, the minimum shall be for Rs.1,000/- and in multiples                  Mr. M. L. Apte (Director), Address: Apte Amalgamations Ltd., 14A
of Re.1/- thereof. There is no maximum limit.                                    – The Club, Near Mangal Anand Hospital, Swastik Park, Chembur,
                                                                                 Mumbai 400 071, Status: Independent, Occupation: Industrialist,
IX. MANAGEMENT OF THE FUND                                                       Other Directorships : Chairman & Managing Director Apte Amal-
i. The Asset Management Company                                                  gamations Limited, Director Bajaj Hindustan Limited, Kulkarni
Constitution                                                                     Power Tools Limited, Lintas India Private Limited, The Bombay
The Trustee Company has appointed TAML as the Asset                              Burmah Trading Corporation Limited, New Phaltan Sugar Works
Management Company for TMF. The shareholders of TAML are TSL                     Limited, Standard Industries Limited, The Raja Bahadur Poona Mills
and TICL. TAML has entered into an Investment Management                         Limited, Grasim Industries Limited, Zodiac Clothing Company
Agreement dated 9th May, 1995 with TTCPL, pursuant to which                      Limited, Dr. Writer’s Food Products Private Limited.
TAML will run the operations of TMF and manage the assets of                     Mr. A. Hasib (Director), Address : A/42, Ocean Gold, Twin Towers
TMF’s Schemes. TAML, having its registered office at, Fort House,                Road, Bombay Bank Compound, Prabhadevi, Mumbai - 400 025.
221 Dr. D. N. Road, Mumbai 400 001 is a Company incorporated                     Status: Independent, Occupation: Company Director Other
under the Companies Act, 1956 on 15th March 1994 and was                         Directorships : Director Al - Baraka Finance & Investment Company
approved to act as an Asset Management Company for TMF by                        Limited, Other Memberships : Former Executive Director - RBI,
SEBI on 30th June, 1995. The networth of TAML as on February                     Consultant - National Bank for Agriculture and Rural Development,
28, 2005 is about Rs.51.56 crores. TAML is currently managing                    Consultant - World Bank, Consultant - UNDP, Former I.M.F. Adviser
twenty three open-ended Schemes the details of which are stated                  - Central Bank of Iraq, Former I.M.F. Adviser - Reserve Bank of Fiji,
in the clause on “Previous Schemes of Tata Mutual Fund &                         Author of a few books and a number of articles on Economic Policy.
Condensed Financial Information”. The Asset Management
Company shall be entitled to fees as stated in the clause on                     Mr. A. R. Gandhi (Director), Address: Tata Sons Limited, Bombay
“Investment Management Fee”. The appointment of TAML as the                      House, 24, Homi Modi Street, Mumbai 400 001, Status: Associate,
Asset Management Company can be terminated with the approval                     Occupation: Company Director, Executive Director: Tata Sons
of SEBI and upon resolution by the Trustee Company, or by 75% of                 Ltd. Other Directorships: Tata Infotech Limited, Benares Hotels,
the Unitholders of the Scheme.                                                   Limited, Bayer Diagnositcs India Limited, Raychem RPG Limited,
                                                                                 Paper Products Limited, Ultra Teh Cemco Ltd, Tata Tea (GB) Ltd,
The members of the Board of Directors of Tata Asset                              Tata Tea Inc. Ltd, Trustee: Lintas Employees Professional
Management Limited are :                                                         Development Trust, Lintas Employees Family Plannig Asistance
Mr. F. K. Kavarana (Chairman), Address: Tata Sons Limited,                       Trsut, Lintas Employees Education Trust, E2E SerWiz Solutions
Bombay House, 24, Homi Modi Street, Mumbai 400 001, Status:                      Ltd. Other Memberships: Panel Member of the Arbitrators of the
Associate, Occupation: Company Director, Other Directorships:                    Indian Merchants’ Chamber, Member of Advisory Council of
Chairman Tata Projects Limited, Tata AIG Life Insurance Co. Limited,             Premcband Roychand Group of Companies, Former Member of

                                                                            23
TATA BALANCED FUND
the Local Advisory Board of the Toronto-Dominion Bank, India, Was                        relatives, for the purpose of any securities transaction and
associated with the Local Advisory board (LAB) of Abu Dhabi                              distribution and sale of securities:
Commercial Bank for 8 years (4 years as the Chairman of LAB),
Former Member of Research Committee & Accounting Standards                               Provided that an asset management company may utilise such
Board of the Institute of Chartered Accountants of India, Former                         services if disclosure to that effect is made to the unit holders
Member of SEBI’s Takeover Panel for exemption under the Takeover                         and the brokerage or commission paid is also disclosed in the
Code.                                                                                    half yearly annual accounts of the mutual fund.

Mr. Ved Prakash Chaturvedi (Managing Director), Address: Tata                            Provided further that the mutual funds shall disclose at the
Asset Management Limited, Fort House, 221 Dr D. N. Road, Mumbai                          time of declaring half-yearly and yearly results:
400001. Status : Associate, Occupation : Company Executive,                              (i)    any underwriting obligations undertaken by the schemes
Director : Association of Financial Planners.                                                   of the mutual funds with respect to issue of securities of
Duties and Obligations of TAML                                                                  associate companies.
(1) The asset management company shall take all reasonable                               (ii)   Devolvement, if any;
    steps and exercise due diligence to ensure that the investment
    of funds pertaining to any scheme is not contrary to the                             (iii) Subscription by the schemes in the issues lead managed
    provisions of these regulations and the trust deed.                                        by associate companies.
(2)   The asset management company shall exercise due diligence                          (iv) Subscription to any issue of equity or debt on private
      and care in all its investments decisions as would be exercised                         placement basis where the sponsor or its associate com-
      by other persons engaged in the same business.                                          panies have acted as arranger or manager.
(3)   The asset management company shall be responsible for the                    (9)   The asset management company shall file with the trustees
      acts of commissions or omissions by its employees or their                         the details of transactions in securities by the key personnel
      persons whose services have been procured by the asset                             of the asset management company in their own name or on
      management company.                                                                behalf of the asset management company and shall also report
(4)   The asset management company shall submit to the trustees                          to the Board, as and when required by the Board.
      quarterly reports of each year on its activities and the                     (10) In case the asset management company enters into any
      compliance with these regulations.                                                securities transactions with any of its associates a report to
(5)   The trustees at the request of the asset management company                       that effect shall be sent to the trustees at its next meeting.
      may terminate the assignment of the asset management                         (11) In case any company has invested more than 5 per cent of
      company at any time:                                                              the net asset value of a scheme, the investment made by that
      Provided that such termination shall become effective only                        scheme or by any other scheme of the same mutual fund in
      after the trustees have accepted the termination of assignment                    that company or its subsidiaries shall be brought to the notice
      and communicated their decision in writing to the asset                           of the trustees by the asset management company and be
      management company.                                                               disclosed in the half yearly and annual accounts of the
                                                                                        respective schemes with justification for such investment
(6)   Notwithstanding anything contained in any contract or                             provided the latter investment has been made within one year
      agreement or termination, the asset management company                            of the date of the former investment calculated on either side.
      or its directors or other officers shall not be absolved of liability
      to the mutual fund for their acts of commission or omissions,                (12) The asset management company shall file with the trustees
      while holding such position or office.                                            and the Board :-(a) detailed bio-data of all its directors alongwith
                                                                                        their interest in other companies within fifteen days of their
(7)   (a)   An asset management company shall not through any
                                                                                        appointment ;and (b) any change in the interests of directors
            broker associated with the sponsor, purchase or sell se-
                                                                                        every six months.(c) a quarterly report to the trustees giving
            curities, which is average of 5% or more of the aggregate
                                                                                        details and adequate justification about the purchase and sale
            purchases and sale or securities made by the mutual fund
                                                                                        of the securities of the group companies of the sponsor or the
            in all its schemes.
                                                                                        asset management company as the case may be, by the mutual
            Provided that for the purpose of this sub-regulation, ag-                   fund during the said quarter."
            gregate purchase and sale of securities shall exclude sale
                                                                                   (13) A statement of holdings in securities of the directors of the
            and distribution of units issued by the mutual fund.
                                                                                        asset management company shall be filed with the trustees
            Provided further that the aforesaid limit of 5% shall apply                 with the dates of acquisition of such securities at the end of
            for a block of any three months                                             each financial year.
      (b)   An asset management company shall not purchase or                      (14) The asset management company shall not appoint any person
            sell securities through any broker [ other than a broker                    as key personnel who has been found guilty of any economic
            referred to in clause (a) of sub-regulation (7)] which is                   offense or involved in violation of securities laws.
            average of 5% or more of the aggregate purchases and
            sale of securities made by the mutual fund in all its                  (15) The asset management company shall appoint registrars and
            schemes, unless the asset management company has                            share transfer agents who are registered with the Board.
            recorded in writing the justification for exceeding the limit               Provided if the work relating to the transfer of units is processed
            of 5% and reports of all such investments are sent to the                   in-house, the charges at competitive market rates may be
            trustees on a quarterly basis.                                              debited to the scheme and for rates higher than the competitive
                                                                                        market rates, prior approval of the trustees shall be obtained
            Provided that the aforesaid limit shall apply for a block of                and reasons for charging higher rates shall be disclosed in the
            three months.                                                               annual accounts.
(8)   An asset management company shall not utilise the services                   (16) The asset management company shall abide by the Code of
      of the sponsor or any of its associates, employees or their                       Conduct as specified in the Fifth Schedule.

                                                                              24
                                                                                             TATA BALANCED FUND
ii. Key Employees of the AMC and relevant experience                                   (All key employees are based in Mumbai)


 Employee              Age Designation Qualifications Total      Type & Nature of Experience
                                                      Exp.(yrs.) Assignments held during the last 10 yrs
 Ved Prakash Chaturvedi 39   Managing      BE (Engg),        13 yrs.     Upto June 1992 – Rating Analyst at CRISIL, Reporting to
                             Director      PGDM (IIM –                   Chief Rating Officer. June 1992 to December 1994 - Manager
                                           Bangalore)                    at BNP, Looking after Management of debt exposure to large
                                                                         corporates - Reporting to General Manager December 1994
                                                                         to August 1998 - Head of Research and Fund Manager at
                                                                         Sun F&C AMC Ltd. reporting to CIO. August 1998 to November
                                                                         1999 – Chief Investment Officer at SBI Funds Management
                                                                         Ltd. - Reporting to MD December 1999 to January 2002
                                                                         Chief Executive of Cholamandalam AMC Ltd. (formerly
                                                                         Cholamandalam Cazenove AMC Ltd.) Reporting to Board of
                                                                         Directors.
                                                                         January 2002 onwards – at TAML as Chief Executive
                                                                         Officer of the company. Appointed as Managing Director with
                                                                         effect from October 2004. He the overall incharge of the
                                                                         Company.
 Hormuz A Bulsara      42    Sr. Vice      F. C. A., F. C. S., 16 yrs.   Upto May 1994 – Senior Manager at Cadbury India Ltd.,
                             President     F. I. C. W. A.,               in various capacities such as Commercial Manager,
                             (Finance) &   B. Com (Hons),                Head Internal Audit and Business Quality Facilitator. -
                             Company       LL. B                         Reporting to : Executive Director (Fin.) & Company Secretary.
                             Secretary
                                                                         June 1994 Upto date – At TAML - As the Chief Operating
                                                                         Officer he looks after the , Compliance Finance, Systems,
                                                                         Marketing,Investor Services and Administrative functions of
                                                                         the Fund. He has been involved in the setting up of the Tata
                                                                         Mutual Fund since its inception and has contributed in the
                                                                         setting up of the various systems, compliance procedures
                                                                         and controls. - Reporting : Managing Director.
 Isaac C Jacob         52    Vice          MA (Econ),        25 years    From June 1992 to Dec. 1994 : Account Planning Director
                             President &   Masters in                    at HTA - Reporting to Senior VP & GM from January. 1995 to
                             Head          Marketing                     April 2001 : Senior VP with SSC & B Lintas - reporting to
                             Marketing     Mgmt, Dip in                  President. From May 2001 to June 2002 : President Fortune
                                           Advertising.                  Communication (JWT subsidiary) - reporting to Board of
                                                                         Directors. July 2002 to December. 2002: President (Business
                                                                         Development) with Interlink Consultancy reporting to Board
                                                                         of Directors.
                                                                         January 2003 to date – TAML as Vice President & head
                                                                         of Marketing and reporting to the Managing Director.
 Latha Rajaraman       48    First Vice    B. Sc, CAIIB      23 yrs.     Upto June 1995 – Officer with Canbank Investment -
                             President                                   Management Services Ltd., in various departments such
                             Investor                                    as Custody and Investor Services Departments. Reporting
                             Services                                    Head Investor Services.
                                                                         July 1995 to date – Has been directly interfacing with various
                                                                         investors at the corporate and retail level and looks
                                                                         after Registrar and Investor related compliance matters -
                                                                         Reporting to Managing Director.
 Murthy Nagarajan      35    First Vice   M.COM,             9 years     1991 to 1994- worked in UTI in the Accounts Department -
                             President & PGPMS                           Reporting to Manager 1996- 1999 worked in PNB Gilts Ltd
                             Head                                        as Asst. Vice President in the investment department
                             Fixed Income                                Reporting to Senior Vice President.
                                                                         1999- to date : Working with TAML in the Investment
                                                                         Department as the Fund Manager for Tata Income Fund,
                                                                         Tata Monthly Income Fund, Tata Fixed Horizon Fund, Tata
                                                                         Income Plus Fund, Tata Gilt Securities Fund, Tata Short
                                                                         Term Bond Fund, Tata Liquid Fund Tata Floating Rate Fund ,
                                                                         Tata MIP Plus Fund, Tata Fixed Horizon Fund Series 1
                                                                         Reporting, to Managing Director / CIO.




                                                                25
TATA BALANCED FUND

 Employee              Age Designation Qualifications Total      Type & Nature of Experience
                                                      Exp.(yrs.) Assignments held during the last 10 yrs
 Venugopal M.          33   General     MBA (Finance) 9 yrs.        Dec’93-June’95 – Worked with a Member of Mumbai Stock
 (Fund Manager for          Manager -   BSC                         Exchange as Equity Research Analyst to identify investment
 the current scheme)        Investments (Mathematics)               opportunities in the capital market covering several sectors.
                                                                    July 1995 till date – Tata Asset Management. Currently the
                                                                    Fund Manager for Tata Balanced Fund, Tata Young Citizens
                                                                    Fund, Tata Index Fund (Sensex and Nifty options), Tata MIP
                                                                    Plus Fund, Tata Monthly Income Fund, Tata Select Equity
                                                                    Fund, Tata Pure Equity Fund, Tata Tax Saving Fund, Tata Life
                                                                    Science and Technology Fund, Tata Equity Opportunities
                                                                    Fund, Tata Growth Fund, Tata Equity P/E Fund, Tata Dividend
                                                                    Yield Fund, Tata Infrastructure Fund, Tata Service Industries
                                                                    Fund. Also holds the position of Head, Research, directing
                                                                    and co-ordinating all research activities of the team. Has good
                                                                    exposure to large number of industries and companies having
                                                                    done fundamental research over the years. Gained good under
                                                                    standing of the stock market having worked as dealer in Tata
                                                                    Mutual Fund for about two years. Has cleared the certification
                                                                    exam of the BSE Training Institute, for participating in the
                                                                    derivatives market.
 Upesh K. Shah         35   General         CA, ICWA,     9 years   From May 1994 to May 1995 with C. C.Chokshi & Co.
                            Manager         B.Com.                  Chartered Accountants as Jr. Audit Manager - Reporting to
                            Compliance                              Partner. June 1994 to July 1996 with M R P L as Accounts
                                                                    Officer- Reporting to Dy. General Manager - Finance, August
                                                                    1996 to March 2003 with IDBI- Principal Asset Management
                                                                    Company Limited as Compliance Officer- Reporting to CEO.
                                                                    April 2003 till date with TAML as General Manager
                                                                    Compliance – reporting to the Managing Director.
 Raghav Iyengar        36   Vice            BCom., ACA,   9 years   Jan 94 to Sept. 95 Manager- Project Finance at Kanoria
                            President &     Grad. CWA               Plaschem, involved project funding, reporting to Director
                            Head                                    Oct 95 to June 97 Associate Manager,VCK Capital Markets
                            Institutional                           Ltd., marketing Financial products, reporting to General
                            Sales                                   Manager July 97 to March 98 Sr. Manager, DSP Merrill Lynch
                                                                    Ltd Marketing Financial products, reporting to Executive
                                                                    Director April 98 to August 2000 Associate Vice President,
                                                                    Prudential ICICI Asset Management, mutual fund sales
                                                                    reporting to SVP & Head – Sales September 2000 to June
                                                                    2002 Head - Marketing, JF Asset Management -Mutual Fund
                                                                    sales, reporting to Director.
                                                                    July 2002 to date Vice President & Head - Institutional Sales
                                                                    at TAML is responsible for sales strategy and managing sales
                                                                    channels & sales to large investors. Reporting to the Man-
                                                                    aging Director.
 Abhay Nagar           31   Vice         MBA (Finance), 7 years     From September 1995 to August 2002: RR Financial Consu-
                            President & B.Com(Hons.)                ltants Ltd in various capacities such as Head of Mutual Fund
                            Head                                    Desk, Regional Head (west), Astt Vice President- Retail
                            Retail Sales                            Distribution and Vice President & All India Head(Sales and
                                                                    Distribution) - reporting to Managing Director.
                                                                    September 2002 upto date - joined TAML as Regional Head
                                                                    (North) and presently serving as Vice President & Head of
                                                                    Retail Sales- reporting to Managing Director.




                                                            26
                                                                                                           TATA BALANCED FUND
Fund Management :                                                                     CITI Bank N. A.
The People :                                                                          77 Ramnord House,
                                                                                      Dr. Annie Besant Road,
The investment operations of the schemes (including this scheme)
                                                                                      Worli, Mumbai 400 018.
of Tata Mutual Fund are managed by TAML’s investment team,
comprising six people (excluding dealing personnel). The                        The custodian does not have the power or authority to sell or dispose
professionally qualified Fund Management Team members (described                of or deal in the securities / investments held by it on behalf of the
in greater detail above) are Mr. M. Venugopal and Mr. Murthy                    Fund except as instructed by the Trustee Company / Asset
Nagarajan and are backed by a team of research / investment                     Management Company The salient features of the custodial
personnel, possessing collectively within them a vast and varied                agreement and the responsibilities of the custodian include :
knowledge base culled out of research, market analysis, physical                        Keeping in safe custody all the securities and such other
on-site visits, training in portfolio management, derivatives, AMFI                     instruments belonging to the Scheme segregated from the
course on Mutual Funds, and so on. The members of the equity                            other assets of the custodian and from the assets of other
research team and their past experience is Mr. M. Venugopal, who                        clients of the custodian and shall be held in the name of the
apart from being a Fund Manager is also the Head of the Research,                       Trustee Company A/c Fund or in such other manner as may
has been with TAML for the past 9 years and prior to that he was                        be mutually agreed
associated with a member of the Stock Exchange as an Equity
Analyst, Mr. Arun Khurana has an experience of ten years in the                         Ensuring the smooth inflow / outflow of securities and such
Capital Market of which around 6years has been in Equity Research                       other instruments as and when necessary, in the best interests
with various reputed members of the Stock Exchange, Mr. Pradeep                         of the Unitholders.
S. Gokhale who has an experience of 10 years in Debt Research                           Ensuring that the benefits due to the holdings are recovered.
and 4years in Corporate Finance and Mr. Marzban Irani who has
                                                                                        Responsibility for loss of or damage to the securities due to
started his career with TAML and has spent 4 years with the Company.
                                                                                        fraud, bad faith, negligence or willful neglect or default or
The Investment Process :                                                                willful default on its part or on the part of its approved agents.
According to the terms of the respective Offer Document of each                 TMF shall pay Citi Bank, custodian fees for its services @ 0.06% of
scheme under consideration, decisions regarding the debt : equity               the value of each buy and @0.06% approximately, of the value of
allocation, industry selection, stock selection, etc are taken.                 each sell transaction. Citi Bank will also be reimbursed all reasonable
The investment committee of the AMC (comprising MD/ CIO, Fund                   out of pocket expenses incurred by it, in the performance of its duties.
Managers and Analysts) is in overall charge of formulating broad                The custodian agreement may be terminated by serving a 60 days
investment policies, strategies and is responsible for its                      prior written notice, subject to the non-objection of such termination
implementation. Based on the in house research / external research,             by SEBI, or earlier upon certain circumstance such as persistent
Fund Manager prepares the strategy and proposal to buy/sell the                 breach of / default in or negligence in performance of its duty.
securities keeping in view the specific mandate and objectives of the           iv.   The Registrar
schemes. Investment committee discusses the same and approves
                                                                                Computer Age Management Services (Private) Limited, A&B Lakshmi
/ disapproves the recommendation of fund manager. For equities,
                                                                                Bhavan, 609, Anna Salai, Chennai – 600 006 (Cams) has been
the concerned fund manger has an authority to buy/sale securities
                                                                                appointed as Registrar for the Scheme. The Registrar is registered
which are part of approved universe.
                                                                                with SEBI under registration number INR000002813. As Registrar to
The existing portfolio is reviewed regularly by the Investment                  the Scheme, Cams will handle communications with investors and
Committee and the respective Fund Manager(s) and based on the                   despatch account statements during the Initial Offer Period. TAML
discussions (which would involve fundamental reasons such as past               and TTCPL have satisfied themselves that the Registrar can provide
performance, future outlook etc.), decisions are taken to add/ reduce/          the services required and have adequate facilities and system
exit from securities.                                                           capabilities. As Registrar to the Scheme, they will accept and process
                                                                                Unitholders applications and inform TAML as to the amounts received
For equity, investments will only be in the universe of securities              for subscriptions (duly reconciled) during the Initial Offer Period and
approved by the Executive Committee of the AMC. However the                     also during the ongoing subscription period.
Investment Committee has an authorisation limit within which it can
approve the investments in stocks out side the approved universe.               v.    The Auditor
                                                                                TTCPL shall have the financial statements for the Scheme audited
Justification for all investment decisions are recorded in writing. SEBI        by such Chartered Accountant(s) as may be appointed for that
norms regarding maximum exposure per scrip, investment with                     purpose by the Trustee Company. S.B.Billimoria & Co. Chartered
respect to the equity capital of a company, investment in group                 Accountants, Mafatlal Centre, Backbay Reclamation,
companies, etc are strictly adhered to. Interscheme transfers are               Mumbai 400020, have been appointed in such capacity.
made as per the market price or the valuations being followed, so
that neither of the schemes is benefited or adversely affected.                 vi.   Bankers
Performance of the scheme and complete portfolio statement                      ICICI Bank Ltd.
elaborating various classifications, limits and valuations is placed for        (SEBI Registration Number: 100000004)
scrutiny before the Board of Directors of the AMC and the Trustee               vii. List of Authorised Investor Service Centres
Company at their Board Meetings.                                                The Registrar, Computer Age Management Services (Private)
Benchmark Index :                                                               Limited, have set up a special Investor service cell for quick redressal
Crisil Balanced Fund Index is the benchmark index for Tata Balanced             of Unitholder grievances (if any). All correspondence, including change
Fund.                                                                           in the name, address, designated bank account number and bank
                                                                                branch, loss of Unit Certificate, Account Statement, etc. should be
iii. The Custodian                                                              addressed to :Computer Age Management Services (Private)
The Trustee Company has entered into a Custodial Agreement with                 Limited, A&B Lakshmi Bhavan, 609, Anna Salai, Chennai – 600
CITI Bank N. A, pursuant to which Citi Bank shall be the custodian              006.
for the Scheme. The custodian is registered with SEBI and the SEBI
                                                                                For providing clarifications/help to the Unitholders at Computer Age
Regn. No. IN/CUS/004 and its address is:
                                                                                Management Services (Private) Limited the Registrar CAMS has

                                                                           27
TATA BALANCED FUND
appointed N. K. Prasad, Head - Process Management, as the                          The AMC has provided this nomination facility as an additional feature.
Compliance Officer (Investor Services) and he is available at the                  By provision of this facility the AMC is not in any way attempting to
above-mentioned address.                                                           grant any rights other than those granted by law to the nominee. A
X. UNITS & OFFER                                                                   nomination in respect of the Units does not create an interest in the
                                                                                   property after the death of the Unitholder. The nominee shall receive
i. Offer of Units                                                                  the units only as an agent and trustee for the legal heirs or legatees
Tata Balanced Fund (formerly Tata Equity Growth Fund) was launched                 as the case may be. It is hereby clarified that the nominees under the
as an open ended growth Scheme on 30th August 1995. The units                      nomination facility provided herein shall not necessarily acquire any
are now offered at Net Asset Value (NAV) based price along with                    title or beneficial interest in the property by virtue of this nomination
loads as applicable.                                                               & the transmission of units would normally be governed as per
                                                                                   succession certificate/probate of the will.
ii. Minimum Application
Subscription by the Unitholder should be for a minimum of Rs.5,000/                vii. Applications with Additional Holders
- and in multiples of Re.1/- thereafter. For additional purchases, the             An application may be made in sole or more names (not more than
minimum shall be for Rs.1,000/- and in multiples of Re.1/- thereafter.             three) on first holder basis. The Units can be held under single /
There is no maximum limit.                                                         additional holding / any one or survivor. The first named unitholder
                                                                                   has the option to add/delete name of one person subsequent to the
iii. Refund
                                                                                   investment. In case the unitholder (i.e. the first holder) wants to change
Refund of subscription money to investors whose applications are                   the names/ order of the additional holders, he can write to Authorised
invalid for any reason whatsoever, is without incurring any liability              Investor Service Centres requesting for the prescribed form to alter
for interest or other sum.                                                         the order of additional holdings. However, the Units will be continued
iv. Despatch of Account Statement and Unit Certificates                            to be held by the Unitholder on first holder basis. In the case of refunds,
                                                                                   income distributions, repurchase proceeds, and other distributions,
An Account Statement will be despatched to each Unitholder stating                 etc. will be made out in favour of, and all communications will be
the number of Units held, etc. within a maximum of thirty days from                addressed to the Unitholder whose name appears first and at his /
the date of allotment.                                                             her address as has been communicated to the Fund. However, it
On request from the unitholders, the Asset Management Company                      should be noted that if the Unitholder has an Unit Certificate, such
shall within 6 weeks issue the Unit Certificate. The request can be                introduction/ alteration of additional holders shall attract stamp duty
made to any of the Authorised Investor Service Centres. The cost for               and the cost of stamp duty will be borne by the Scheme itself and will
issuing the Unit Certificate in lieu of Account Statement will be borne            form part of its annual ongoing expenses.
by the Scheme and will form part of its annual ongoing expenses.
                                                                                   In all such cases and in all matters concerning the Fund, it shall be
v.    Listing, Transfer & Pledge of Units                                          deemed that the first of such persons, that is the original Unitholder,
Being an open ended scheme, the units of the scheme are not                        is the holder of the Units and all correspondence, if any, shall be
proposed to be listed on any Stock Exchange. However the Trustees                  competent only by and to the first of such person.
may, at their sole discretion, cause the units under the scheme to be
                                                                                   All payments and settlements made to the first holder and a receipt
listed on one or more Stock Exchange. Notification of the same will
                                                                                   thereof shall be a valid discharge to the Fund;The Fund shall for all
be made through Investor Service Centers or the AMC and as may
                                                                                   purposes correspond only with the first holder and all communications
be required by the respective Stock Exchanges.
                                                                                   with the first holder including information on the working of the Fund
As the Fund will be repurchasing and issuing the Units on an ongoing               shall be deemed to be a valid discharge to the Fund of its obligations;
basis, no transfer facility is required.
                                                                                   In the event of death of the first holder, the person next in the order
Units under this scheme can be pledged (converted into money)                      as stated in the application form, (unless changed) shall be the
with scheduled banks, financial institutions, NBFCs, or any other                  only person(s) recognised by the Fund as having any title or
body by the unitholders as security for raising loans. TMF will take               interest in the Units on first holder basis.
note of such pledge / charge in its records. A standard form /                     For the convenience of the investors, we wish to allow units of any
appropriate documentation has been drafted for this purpose and is                 Scheme of Tata Mutual Fund to be held under any one or survivor
available on request. However, disbursement of such loans will be at               and to add/delete name of one person subsequent to investment.
the entire discretion of scheduled banks, financial institutions, NBFCs,
or any other body concerned and TMF assumes no responsibility                      viii. Appointment of Beneficiary
therefor.                                                                          Every individual unitholder shall appoint only one person (viz. spouse,
                                                                                   child or dependent) as Beneficiary under the Scheme to receive the
vi.   Nomination Facility                                                          benefits hereunder the Scheme in the event of the death of the
If an application is made in the name of a single individual holder,               Unitholder. The Unitholder can nominate a beneficiary to receive the
the Unitholders under this scheme, can write to Cams Authorised                    benefits under the Scheme upon his / her death, to the extent provided
Investor Service Centres requesting for a Nomination Form to                       in the foregoing clause(s) on Nomination. If joint names have been
nominate a successor to receive the Units upon his / her death, as                 inserted on first holder basis and in the event of death of the first
provided in the Regulations. All payments and settlements made to                  holder i.e. the Unitholder, the person next in the order as stated in
such nominee and a receipt thereof shall be a valid discharge by the               the application form, (unless changed) shall be the only person(s)
Fund. Unitholders being either parent or lawful guardian on behalf of              recognised by the Fund as having any title or interest in the benefits
a minor and power of attorney holder of an eligible institution, societies,        under the Scheme (on first holder basis), to the extent provided in
Funds, bodies corporate, partnership firms and HUF shall have no                   the foregoing clause(s) on Joint Applications/ Holders.
right to make any nomination. Nomination in favour of Non-Residents
will be governed by the rules formulated by Reserve Bank of India                  A beneficiary who becomes entitled to hold the Units in consequence
from time to time.                                                                 of the death of a sole holder or the person next in the order as
                                                                                   stated in the prescribed form (in case of joint holders), insolvency,
The provisions for nomination with regard to Mutual Funds would be                 or winding up or by operation of law, pledge etc., upon producing
as per Section 56 and Section 69 (regarding the right of the beneficiary           evidence to the satisfaction of the Fund, and / or after complying
to transfer possession )of the Indian Trusts Act, 1882 since the Mutual            with all the formalities in connection with the claim, shall have the
Fund is formed as a Trust under the said Act.                                      option either to be paid repurchase value of Units, or to continue in

                                                                              28
                                                                                                           TATA BALANCED FUND
the Scheme if he / she so desires and is otherwise eligible, by issuance         unitholder. Unitholders may change the amount, not below the
of account statement in his / her name. All payments and settlements             specified minimum, by giving two weeks prior written notice to the
made to such beneficiary and a receipt thereof shall be a valid                  registrars. STP may be terminated automatically if the balance falls
discharge by the Fund.                                                           below the minimum account balance or upon the receipt of notification
                                                                                 of death or incapacity of the unitholders by the fund. Rules relating to
Every appointment of a beneficiary to be made under the Scheme
                                                                                 the plan may be changed from time to time by the Investment
shall be in writing signed by the Unitholder and shall remain in full
                                                                                 Manager.
force and effect until the death of the beneficiary / Unitholder or until
the same is revoked in writing by the Unitholder (by whom the same               xii. Duration of the Scheme
was made) and a fresh appointment is made in the manner aforesaid.               The Scheme has been structured like an open-ended Scheme.
An Unitholder may from time to time revoke or change the beneficiary             Investors can invest on an ongoing basis on Business Days at
by filling an appropriate form made available at CAMS Authorised                 prevailing NAV related price. The Units under the Scheme stand
Investor Service Centres. The new appointment of the beneficiary                 redeemed on happening of various events as stated elsewhere in
shall take effect on the date the appropriate form for appointment of            the Offering Circular. As such except on the happening of any event
the beneficiary is submitted to CAMS Authorised Investor Service                 as stated in the clause relating to winding up, the Scheme has
Centres whether or not the Unitholder is alive on the date of                    perpetual existence and therefore there is no fixed duration of the
acknowledgement of the change in beneficiary without prejudice to                Scheme.
the Fund or Asset Management Company or Trustee Company on
account of any payment or transmission of Units having been made                 xiii. Winding Up
before the acknowledgement of the change or on account of any                    1)   In accordance with the SEBI Regulations, the Scheme may be
delay in payment or transmission of Units having been made due to                     wound up:
non production of evidence to the satisfaction of the Fund, and / or
                                                                                      on the happening of any event which, in the opinion of the Trustee
non compliance with all the formalities in connection with the claim.
                                                                                      Company, requires the Scheme to be wound up; or
The Trustee Company / TAML may alter these above stated provisions
                                                                                      if seventy five percent of the Unitholders of a Scheme pass a
/ norms for appointment of a beneficiary from time to time to the
                                                                                      resolution that the Scheme be wound up; or
extent deemed necessary, and also in conformity with the Guidelines
and Notifications issued by SEBI / Government of India / any other                    if the SEBI so directs in the interests of the Unitholders.
regulatory body from time to time and / or any statutory modification            2)   Where a Scheme is to be wound up pursuant to the above
or re-enactment thereof, so as to permit the Scheme to provide                        Regulation, the Trustee Company shall give notice of the
maximum benefits to the Unitholder and the beneficiary.                               circumstances leading to the winding up of the Scheme.
The provisions for appointment of beneficiary with regard to Mutual                   To SEBI; and
Funds would be as per Section 56 and Section 69 (regarding the                        in two daily newspapers having circulation all over India and
right of the beneficiary to transfer possession) of the Indian Trusts                 also in a vernacular newspaper circulating at the place where
Act, 1882 since the Mutual Fund is formed as a Trust under the said                   the Fund is established.
Act.
                                                                                 xiv. Procedure for Winding Up
ix.   Systematic Investment Plan (SIP)
                                                                                 The Trustee Company shall call a meeting of the Unitholders to
The investors can benefit by investing specified Rupees amounts at
                                                                                 consider and pass necessary resolutions by simple majority of the
regular intervals after scheme reopens for ongoing sales. The SIP
                                                                                 Unitholders present and voting at the meeting for authorising the
allows the unitholders to invest a fixed amount of Rupees at regular
                                                                                 Trustee Company or any other person to take steps for winding up
intervals for purchasing additional units of the scheme at NAV based
                                                                                 the Scheme. The Trustee Company or the person authorised as above,
prices. Investment can be done with the minimum / maximum amount
                                                                                 shall dispose off the assets of the Scheme concerned in the best
and number of cheques specified by AMC from time to time. The
                                                                                 interests of the Unitholders of the Scheme.
cheques will be presented on the dates mentioned on the cheque
and subject to realization. Units will be allotted at the applicable NAV         The proceeds of sale made in pursuance of the above shall in the
along with applicable load.                                                      first instance be utilised towards the discharge of such liabilities as
x. Systematic Withdrawal Plan (SWP)                                              are properly due and payable under the Scheme and after making
                                                                                 appropriate provision for liability and for meeting the expenses
This facility available to the unitholders of the scheme enables them            connected with such winding up, the balance shall be paid to the
to withdraw fixed sums from their unit accounts at periodic intervals.           Unitholders in proportion to their respective interest in the assets of
The amount withdrawn under SWP by redemption shall be converted                  the Scheme as on the date when the decision for winding up was
into the Scheme units at the Repurchase price and such units will be             taken.
subtracted from the unit balance of that unitholder. In case the date
falls during a book closure period the immediate next Business day               On the completion of the winding up, the Trustee Company shall
will be considered for this purpose.                                             forward to SEBI and the Unitholders a report on the winding up
The Authorised Investor Service Center may terminate SWP on                      containing particulars such as circumstances leading to the winding
receipt of a notice from the unitholder. It will terminate automatically         up, the steps taken for disposal of assets of the Scheme before
if all units are liquidated or withdrawn from the account or upon the            winding up, expenses of the Scheme for winding up, net assets
receipt of notification of death or incapacity of the unitholder.                available for distribution to the Unitholders and a certificate from the
                                                                                 Auditors of the Fund.
xi. Systematic Transfer Plan (STP)
                                                                                 Notwithstanding anything contained herein, the provisions of the SEBI
A unitholder may establish a Systematic Transfer Plan (STP) and                  Regulations in respect of disclosures of half- yearly reports and annual
choose to transfer on a monthly or a quarterly basis from one TMF                report shall continue to apply.
Scheme to another TMF Scheme on a date prescribed by the
Investment Manager. The amount thus withdrawn by redemption shall                After the receipt of the report referred to above under “Procedure for
be converted into units at the applicable NAV on the scheduled day               Winding Up”, if SEBI is satisfied that all measures for winding up of
and such units will be subtracted from the unit balance of that                  the Scheme have been completed, the Scheme shall cease to exist.



                                                                            29
TATA BALANCED FUND
XI. SALE OF UNITS BEING OFFERED:                                               to record the change in Address and the Residential Status.
i.   Application details:                                                      Notwithstanding the aforesaid, the Trustee Company reserves the
                                                                               right to close the Unitholder account and to pay the repurchase value
(a) Minimum investment:                                                        of Units, subsequent to his becoming a person resident outside India,
Subscription by the Unitholder should be for a minimum of                      should the reasons of expediency, cost, interest of Unitholders and
Rs.5,000/- and in multiples of Re.1/- thereafter. For additional               other circumstances make it necessary for the Fund to do so. In
purchases, the minimum shall be for Rs.1,000/- and in multiples of             such an event, no resident Unitholders who have subsequently
Re.1/- thereafter. There is no maximum limit.                                  become resident outside India shall have a right to claim the growth
                                                                               in capital and/ or income distribution.
(b) Eligibility for application
The following persons (subject, wherever relevant to, Sale of Units            Tata Balanced Fund has not been registered in any country outside
being permitted under their respective constitutions and relevant State        India. To ensure compliance with any Laws, Acts, Enactments, etc.
Regulations) are eligible to apply for the purchase of the Units:              including by way of Circulars, Press Releases, or Notifications of
                                                                               Government of India, the Fund may require/give verification of identity/
     Adult individuals, either singly or jointly (not exceeding three)         any special/additional subscription-related information from /of the
     on first holder basis.                                                    Unitholders(which may result in delay in dealing with the applications,
     Parents, or other lawful Guardians on behalf of Minors.                   Units, benefits, distribution, etc./giving subscription details, etc). Each
     Companies, corporate bodies, public sector undertakings, trusts,          Unitholder must represent and warrant to the Trustee Company/TAML
     wakf boards or endowments, funds, institutions, associations              that, among other things, he is able to acquire Units without violating
     of persons or bodies of individuals and societies (including co-          applicable laws. The Trustee Company will not knowingly offer or sell
     operative societies) registered under the Societies Registration          Units to any person to whom such offer or sale would be unlawful, or
     Act, 1860 (so long as the Sale of Units is permitted under their          might result in the Fund incurring any liability or suffering any other
     respective constitutions).                                                pecuniary disadvantages which the Fund might not otherwise incur
                                                                               or suffer. Units may not be held by any person in breach of the law or
     Mutual Funds (including any Scheme managed by TAML or any                 requirements of any governmental, statutory authority including,
     Scheme of any other Mutual Fund); (in accordance with                     without limitation, Exchange Control Regulations. The Trustee
     Regulation 44(1) read with Clause 4 of Schedule VII, of the               company may, compulsorily redeem any Units held directly or
     Securities & Exchange Board of India (Mutual Funds)                       beneficially in contravention of these prohibitions. In view of the
     Regulations, 1996). Including a Fund of Funds schemes.                    individual nature of investment portfolio and its consequences, each
     Asset Management Company (TAML); (in accordance with                      Unitholder is advised to consult his/her own professional advisor
     Regulation 24(3) of the Securities & Exchange Board of India              concerning possible consequences of purchasing, holding, selling,
     (Mutual Funds) Regulations, 1996).                                        converting or otherwise disposing of the Units under the laws of his/
     Partnership firms, in the name of the partners.                           her State/country of incorporation, establishment, citizenship,
                                                                               residence or domicile.
     Hindu Undivided families (HUF) in the sole name of the Karta.
     Financial and Investment Institutions/ Banks.                             ii.   Procedure for application
     Army/ Navy / Air Force, para military Units and other eligible            How to apply
     institutions.                                                             Application forms complete in all respects, accompanied by
     Religious and Charitable Trusts, registered under the Societies           cheque / draft are to be submitted to any of the Authorised
     Registration Act/ Indian Trusts Act (so long as the Sale of Units         Investor Service Centres, as stated in the Offer Circular or as may
     is permitted under their respective constitutions).                       be declared. All cheques and bank drafts accompanying the
                                                                               application form should contain the application form number and
     Scientific and Industrial Research organisations (so long as the          the name of the applicant on its reverse. For additional
     Sale of Units is permitted under their respective constitutions)          instructions, investors are requested to follow the application form
     Provident / Pension/Gratuity/ Superannuation and such other               carefully. All cheques/ drafts by the applicants should be made out
     retirement and employee benefit and other similar funds (so               in favour of “Tata Balanced Fund” and crossed “A/c Payee and Not
     long as the Sale of Units is permitted under their respective             Negotiable”.
     constitutions.)
                                                                               The Authorised Investor Service Centres/Marketing Associates who
     Non-resident Indians/persons of Indian origin residing abroad             receive the application form shall stamp and return the
     (NRIs) on a full repatriation basis.                                      “Acknowledgement Slip” of the application form, thereby
     Foreign Institutional Investors registered with SEBI (FIIs).              acknowledging receipt of the application form. The investors are
                                                                               requested to preserve the acknowledgement slip duly stamped by
     Overseas Financial Organisations which have entered into an
                                                                               the Authorised Investor Service Centres / Marketing Associates. This
     arrangement for investment in India, inter-alia, with a Mutual
                                                                               shall be subject to final verification and scrutiny by the Trustee
     Fund registered with SEBI and which arrangement is approved
                                                                               Company / Asset Management Company that the cheque / demand
     by the Central Government.
                                                                               draft and application form are in order / valid.
     International Multilateral Agencies approved by the Government
     of India.                                                                 In case of a total investment of Rs.50,000/- and above, the investors
                                                                               should furnish Income Tax P.A.N. / G.I.R. number and I.T. Circle
The Trustee Company may, accept an application from an                         address (if allotted).
unincorporated body of persons/ trusts. The Trustee Company may
from time to time add and review the persons eligible for making               For ongoing subscription, applications completed in all respects,
applications for Sale of Units under the scheme.                               must be submitted only at the Investors Service Centers.

If a person resident of India at the time of subscription becoming a           Application form (duly completed), along with a cheque (drawn on
person resident outside India subsequently, shall have the option to           Chennai) / DD (payable at Chennai) may also be sent by Mail directly
either be paid repurchase value of Units, or continue into the Scheme          to the Registrar viz. Computer Age Management Services
if he/ she so desires and is otherwise eligible. However, the person           (Private) Limited, Unit : Tata Mutual Fund, A&B Lakshmi Bhavan,
who desires to continue in the Scheme shall not be entitled to any             609, Anna Salai, Chennai – 600 006, superscribing the envelope as
interest or any compensation during the period it takes for the Fund           “ Tata Mutual Fund - Application form - TBF”.

                                                                          30
                                                                                                            TATA BALANCED FUND
If there is no Authorised Investor Service Centres where the investor            FIIs
resides, he/she may purchase a Demand Draft from any other Bank                  FIIs may pay their subscription amounts either by way of inward
in favour of “Tata Balanced Fund”, payable at Mumbai, after deducting            remittance through normal banking channels or out of funds held in
bank charges / commission (as per IBA guidelines for the Demand                  Foreign Currency Account or Non-resident Rupee Account maintained
Draft) from the amount of investment. If such bank charges /                     by the FII with a designated branch of an authorized dealer with the
commission are not deducted by the applicant, then the same may                  approval of the RBI subject to the terms and conditions set out in the
not be reimbursed by the Trustee Company. Such bank charges /                    aforesaid notification.
commission will be treated as an ongoing expense. However in case
of application along with local Cheque or Bank Draft payable at                  All cheques/drafts should be made out in favour of “Tata Balanced
Mumbai, at / from locations where TMF has its designated Authorised              Fund” and crossed “Account Payee Only”. In case Indian Rupee
Investor Service Centres, Bank Draft charges/ commission may have                drafts are purchased abroad or from FCNR/NRE A/c. an account
to be borne by the applicant. In such cases the Trustee Company is               debit certificate from the Bank issuing the draft confirming the debit
entitled, in its sole and absolute discretion, to reject or accept any           shall also be enclosed.
application.                                                                     Mode of payment on Non-Repatriation basis
Example:                                                                         In case of NRIs/Persons of Indian origin seeking to apply for Units
                                                                                 on a non-repatriation basis, payments may be made by cheques/
If an amount of Rs. 5,000/- is being invested in Tata Balanced Fund
                                                                                 demand drafts drawn out of Non-Resident Ordinary (NRO) accounts/
by an investor resident in India having no specified collection centre
                                                                                 Non-Resident Special Rupee (NRSR) accounts and Non Resident
near his / her residence, the Demand Draft charges that he /she can
                                                                                 Non-Repatriable (NRNR) accounts payable at the city where the
deduct has been illustrated below:
                                                                                 Application Form is accepted.
INVESTMENT DEMAND DRAFT                  THE CORRECT AMOUNT
                                                                                 Refunds, interest and other distribution (if any) and maturity proceeds/
MADE (RS.) CHARGES (RS.)                 OF PAYMENT AFTER
                                                                                 repurchase price and /or income earned (if any) will be payable in
(say)                                    RECOVERY OF DEMAND
                                                                                 Indian Rupees only. The maturity proceeds/repurchase value of units
                                         DRAFT CHARGES (RS.)
                                                                                 issued on repatriation basis, income earned thereon, net of taxes
  5,000.00             50.00                       4950.00                       may be credited to NRE/FCNR account (details of which should be
Please note that Stockinvests and Postdated Cheques, Money Orders                furnished in the space provided for this purpose in the Application
and Postal Orders would not be accepted.                                         Form) of the non-resident investor or remitted to the non-resident
                                                                                 investor. Such payments in Indian Rupees will be converted into US
Subscription by NRIs                                                             dollars or into any other currency, as may be permitted by the RBI, at
                                                                                 the rate of exchange prevailing at the time of remittance and will be
In terms of Schedule 5 of Notification no. FEMA 20/2000 dated May
                                                                                 dispatched through Registered Post at the unitholders risk. The Fund
3, 2000, RBI has granted general permission to NRIs to purchase,
                                                                                 will not be liable for any loss on account of exchange fluctuations,
on a repatriation basis units of domestic mutual funds. Further, the
                                                                                 while converting the rupee amount in US dollar or any other currency.
general permission is also granted to NRIs to sell the units to the
                                                                                 Credit of such proceeds to NRE/FCNR account or remittance thereof
mutual funds for repurchase or for the payment of maturity proceeds,
                                                                                 may be permitted by authorized dealer only on production of a
provided that the units have been purchased in accordance with the
                                                                                 certificate from the Fund that the investment was made out of inward
conditions set out in the aforesaid notification. For the purpose of
                                                                                 remittance or from the Funds held in NRE/FCNR account of the
this section, the term “mutual funds” is as referred to in Clause (23D)
                                                                                 investor maintained with an authorized dealer in India. However, there
of Section 10 of Income-Tax Act 1961. However, NRI investors, if so
                                                                                 is no objection to credit of such proceeds to NRO/NRSR account of
desired, also have the option to make their investment on a non-
                                                                                 the investor if he so desires.
repatriable basis.
                                                                                 Subscription by Multilateral Funding Agencies, on full repatriation
Subscription by FIIs
                                                                                 basis, is subject to approval by the Foreign Investment Promotion
In terms of Schedule 5 of Notification no. FEMA 20/2000 dated May                Board.
3, 2000. RBI has granted general permission to a registered FII to
purchase on a repatriation basis units of domestic mutual funds                  Rejection of applications
subject to the conditions set out in the aforesaid notification. Further,        Applications not complete in any respect are liable to be rejected.
the general permission is also granted to FIIs to sell the units to the          The Trustee Company may reject any application not in accordance
mutual funds for repurchase or for the payment of maturity proceeds,             with the terms of the Scheme.
provided that the units have been purchased in accordance with the               iii. General Instructions
conditions set out in the aforesaid notification. For the purpose of
this section, the term “mutual funds” is as referred to in Clause (23D)          Documents to be submitted
of Section 10 of Income-Tax Act 1961.                                            In the case of applications under Power of Attorney
Mode of Payment on Repatriation basis                                            If any application or any request for transmission is signed by a person
                                                                                 holding a valid Power of Attorney, the original Power of Attorney or a
NRIs                                                                             certified copy duly notarised should be submitted with the application
In case of NRIs and persons of Indian origin residing abroad, payment            or the transmission request, as the case may be, unless the Power
may be made by way of Indian Rupee drafts purchased abroad and                   of Attorney has already been registered with the Fund / Registrar.
payable at Mumbai or by way of cheques drawn on Non-Resident
(External) (NRE) Accounts payable at par at Mumbai. Payments                     In the case of applications by limited Company or a corporate body
can also be made by means of rupee drafts payable at Mumbai and                  or an eligible institution or a registered society or a Trust or a Fund or
purchased out of funds held in NRE / FCNR Accounts.                              a FII etc.

In case Indian rupee drafts are purchased abroad or from Foreign                 In the case of applications by limited Company or a corporate body
Currency Accounts or Non-resident Rupee Accounts an account debit                or an eligible institution or a registered society or a trust or a fund
certificate from the Bank issuing the draft confirming the debit shall           or a FII, a certified true copy of the Board resolution of the Managing
also be enclosed.                                                                Body authorising transactions in Units including authority granted
                                                                                 in favour of the officials signing the application for Units and their
                                                                                 specimen signature etc. alongwith a certified copy of the

                                                                            31
TATA BALANCED FUND
Memorandum and Articles of Association and / or bye-laws and / or                   units of a mutual fund or a collective investment scheme unless
trust deed and / or partnership deed and Certificate of Registration                such specified investor, its promoters and directors have been
should be submitted. The officials should sign the application under                allotted UIN by December 31, 2004. Further, vide Press Release
the official designation. In the case of a Trust/ Fund, it shall produce            PR No.344/2004 dt. 31st December, 2004 SEBI has specified
a resolution from the Trustee(s) authorising such purchases.                        31st December, 2005 as the notified date for the purpose of
                                                                                    obtaining Unique Identification Number for specified investors
The above mentioned documents or duly certified copy thereof must
                                                                                    being bodies corporate whose promoters or directors are persons
be lodged separately at the office of the Registrar to the Offer, quoting
                                                                                    resident outside India. For this purpose, the words person resident
the serial number of the application / folio number.In case of non
                                                                                    outside India shall have the same meaning as is assigned u/s
submission of the above mentioned documents, the Trustee Company
                                                                                    2(w) of Foreign Exchange Management Act, 1999.
is entitled, in its sole and absolute discretion, to reject or accept any
                                                                                    In case of other investors:
application.
                                                                                    As per the Gazette Notification S.O. No. 1077 (E). dt. 28th
Availability of Application Forms and Offering Circular                             September, 2004, published by SEBI all resident investors other
Application forms and copies of Offering Circular may be obtained                   than a body corporate shall quote UIN number in all application
from the office of Tata Asset Management Limited., Offices of the                   for any transaction in units of mutual funds of value of one lakh
Authorised Investor Service Centres on Back Cover Page of this                      rupees or more effective from January 1, 2006.
Offering Circular or any agents of TMF.
                                                                                 In case of a joint holding UIN of all the joint holders should be
Bank Account Details                                                             mentioned in the application form.
It shall be mandatory for the Unitholders to mention their bank account          All applications received from a Body Corporate after 31st
numbers in their applications/requests for redemptions. Unitholders              December, 2004 without valid UIN would be liable to be rejected.
are requested to give the full particulars of their Bank Account i.e.            In case of investors other than a Body Corporate for an amount
nature and number of account, name, Account Number, Nine digit                   greater than Rs.1,00,000/- after 1st January, 2006 without a valid
Bank Code Number (For Electronic Credit Facility), branch address                UIN would be liable to be rejected by the Mutual Fund.
of the bank at the appropriate space in the application form.
                                                                                 XII. DIVIDENDS/BONUS & DISTRIBUTIONS
For faster dissemination of information, Unitholders are
requested to provide their e-mail ID.                                            The income / profits received / earned would be accumulated by the
                                                                                 Fund as capital accretion, aimed at achieving medium to long term
Any application for subscription /request for redemption without                 and also short term capital growth as reflected in the NAV. In the
Bank account details will be rejected by the mutual fund.                        alternative and as may be decided by the Trustees the profits received
PAN Number Details of the Investors                                              / earned and so retained and reinvested may be distributed as Income
                                                                                 at appropriate rates (after providing for all relevant ongoing expenses,
As per SEBI Circular SEBI/MD/CIR. No6/ 4213/04 dated March 1,
                                                                                 etc.) The Income distribution warrants/certificate shall be despatched
2004 Whenever an application is for total value of Rs 50,000/- or
                                                                                 within 30 days of the declaration of the Income. Guided by the
more, the applicant or in case of application is in joint names, each
                                                                                 philosophy of value-oriented returns, the Trustee Company may
of the applicants, should mention his/her permanent account number
                                                                                 periodically capitalise net earnings of the Scheme (including interest
(PAN) allotted under the Income Tax Act, 1961. As per Rule 114B of
                                                                                 income and realised gains on the Securities) by way of allotment/
The Income Tata Rules 1962, every person shall quote his permanent
                                                                                 credit of bonus Units to the Unitholders Accounts, the intent being to
account number (PAN) in all documents pertaining to payment of an
                                                                                 protect the Net Asset Value of the Scheme and Unitholders’ interests.
amount of Rupees Fifty Thousand or more to a Mutual Fund for
purchase of its units. In case the person making the payment is a                The Fund does not assure any targeted annual return / income nor
minor who does not have any income chargeable to income tax, he                  any capitalisation ratio. Accumulation of earnings and / or capitalisation
shall quote the permanent account number of his father or mother or              of bonus units and the consequent determination of NAV, may be
guardian, as the case may be. Any person who does not have a                     suspended temporarily or indefinitely under any of the circumstances
permanent account number and who enters into any transaction                     as stated in the clause “Suspension of Ongoing Sale, Repurchase or
specified in this rule shall make a declaration in Form No. 60/61                Switch of Units.”
giving therein the particulars of such transaction.
                                                                                 Dividend Reinvestment Option :
In case of a joint holding, PAN / Form No. 60/61 is required for all the         Unitholders under this Option also have the facility of reinvestment of
joint holders.                                                                   the income so declared, if so desired. Income Distribution Warrants
Any application for subscription of units of the total value of Rs               will not be despatched to such Unitholders. The income declared
50,000/- or more without a valid PAN / Form No. 60 / 61 will be                  would be reinvested in the Scheme on the immediately following ex-
liable to be rejected by the Mutual Fund.                                        dividend date.
For validation purposes investors are required to submit xerox                   Certificates for Tax Deduction at Source (TDS) :
of PAN Card or any other communication received from the                         Certificate for tax deduction at source will be issued one month after
Income Tax department specifying name and PAN No of the                          the end of the current financial year.
investor.
                                                                                 XIII. INTER SCHEME TRANSFERS
Note: Investors are urged to refer The Income Tax Rules, 1962 or
consult their Tax Advisors for further details.                                  Transfers of investments from one Scheme to another Scheme
                                                                                 (including the present Scheme) under Tata Mutual Fund, shall be
Unique Identification Number (UIN) Requirement                                   allowed only if:
   In case of a body corporate:                                                        such transfers are made at the prevailing market price for quoted
   As per the SEBI Notification No. MRD/DOP/MAPIN/Cir –26 /2004                        securities or, Fair value in case of non-quoted/non-traded
   dt. August 16, 2004 no specified investor being a body corporate                    securities on spot basis;
   shall buy, sell or deal in any securities which are listed on any                   the securities so transferred shall be in conformity with the
   recognized stock exchange or in units of a mutual fund or a                         investment objective of the Scheme to which such transfer has
   collective investment scheme or subscribe to securities which                       been made.
   are proposed to be listed in any recognized stock exchange or


                                                                            32
                                                                                              TATA BALANCED FUND
XIV. ASSOCIATE TRANSACTIONS
i)  As per SEBI Regulations, the Fund shall not make any investments in any unlisted securities of associate/group companies of the
    sponsors. The Fund will also not make investment in privately placed securities issued by Associate/Group companies of the Sponsors.
    The Fund may invest not more than 25% of the net assets (of all the Schemes of the Fund) in listed securities of Group companies.
ii)   Market value of investments made in companies which have invested more than 5% of the Net Assets of a scheme and investments
      made by that or any other scheme of Tata Mutual Fund in such company or its subsidiaries within one year of the latter investment
      calculated on either side in terms of Regulation 25(11) as on 28th February, 2005 as given.
                                                                                                                               Rs. lacs.
       Company which has Invested                      Schemes in              Schemes        Aggregate Cost             Outstanding
                                                       which Companies          which          of Acquisition                   as at
                                                       have invested           have                 during the      28th February, 05
                                                       more than 5%            invested        period ended                  at Fair /
                                                       of the Net Assets                     28th February, 05          Market Value
       TATA IRON & STEEL CO. LTD.                      TFHF                    TSEF                     667.00                 152.91
                                                       TFRSTF                  TDYF                    3345.99                1339.01
                                                       TLF                     TBF                      631.73                 182.05
                                                                               TEOF                    6555.08                1116.40
                                                                               TEQPEF                  1735.07                 702.45
                                                                               TIFN                     382.47                   2.21
                                                                               TIFS                      49.09                   1.12
                                                                               TGF                      329.99                 113.20
                                                                               TISF                    3022.16                1208.06
                                                                               TMIF                     612.31                   0.00
                                                                               TMPF                    1188.79                   0.00
                                                                               TPEF                    3863.51                 594.74
                                                                               TTSF                     845.01                 168.96
                                                                               TYCF                     362.94                 133.90
       TATA MOTORS LIMITED                             TFHF                    TSEF                     172.91                  47.52
                                                                               TDYF                     148.03                  71.27
                                                                               TBF                      520.76                 190.06
                                                                               TEOF                    4181.95                   0.00
                                                                               TIF                      954.68                   0.00
                                                                               TIFN                     388.77                   1.63
                                                                               TIFS                      45.71                   0.65
                                                                               TGF                      117.45                   0.00
                                                                               TLF                     1750.89                   0.00
                                                                               TMIF                     177.43                   0.00
                                                                               TMPF                     541.55                 166.30
                                                                               TPEF                    1049.11                   0.00
                                                                               TTSF                     183.87                   0.00
                                                                               TYCF                      95.49                   0.00
       VIDESH SANCHAR NIGAM LTD                        TFHF                    TSEF                     381.05                 199.61
                                                                               TDYF                     506.57                 459.70
                                                                               TBF                      311.45                 152.81
                                                                               TIFN                     117.22                   0.59
                                                                               TISF                     616.29                 336.58
                                                                               TMPF                     363.89                 199.61
                                                                               TTSF                     224.51                 219.35
       TATA CHEMICALS LIMITED                           TSTBF                   TSEF                      66.63                  0.00
                                                        TFHF                    TDYF                     386.33                391.63
                                                                                TBF                      186.08                  0.00
                                                                                TIFN                      68.29                  0.32
                                                                                TGF                       73.40                  0.00
                                                                                TYCF                     100.53                  0.00
       BAJAJ AUTO LTD                                   TGSF                    TSEF                     196.18                  0.00
                                                                                TBF                      340.33                  0.00
                                                                                TEOF                    1337.26                413.32
                                                                                TEQPEF                   522.19                309.99
                                                                                TIFN                     272.97                  0.99
                                                                                TIFS                      41.75                  0.45
                                                                                TGF                      259.87                  0.00
                                                                                TMIF                       6.81                  0.00
                                                                                TMPF                     198.07                  0.00
                                                                                TPEF                    1227.50                315.16
                                                                                TTSF                     434.66                156.48
                                                                                TYCF                     271.37                 98.16

                                                                   33
TATA BALANCED FUND
   Company which has Invested    Schemes in          Schemes     Aggregate Cost          Outstanding
                                 which Companies      which       of Acquisition                as at
                                 have invested       have              during the   28th February, 05
                                 more than 5%        invested     period ended               at Fair /
                                 of the Net Assets              28th February, 05       Market Value
   HERO HONDA MOTORS LTD         TGSF                TSEF                 271.05                0.00
                                                     TDYF                1386.57              691.20
                                                     TBF                  307.49                0.00
                                                     TEOF                1276.84                0.00
                                                     TIFN                 224.42                1.03
                                                     TIFS                  33.49                1.35
                                                     TGF                   13.08                0.00
                                                     TMIF                 318.32                0.00
                                                     TMPF                 262.44                0.00
                                                     TPEF                 535.64                0.00
                                                     TYCF                 197.45                0.00
   UNION BANK OF INDIA           TGF                 TBF                   81.17                0.00
                                                     TEOF                2036.44                0.00
                                                     TGF                  157.77                0.00
                                                     TISF                 525.72              522.77
                                                     TMPF                 236.52                0.00
                                                     TPEF                 130.53                0.00
                                                     TTSF                 122.41                0.00
                                                     TYCF                 106.45                0.00
   ICICI BANK LTD                TLF                 TDBF               2450.22                 0.00
                                                     TBF                1287.49               524.43
                                                     TEOF                951.45                 0.00
                                                     TFHF              15600.47              9177.04
                                                     TFRSTF            18370.04             13568.64
                                                     TIF                2449.21                51.40
                                                     TIFN                447.68                 2.65
                                                     TIFS                 90.53                 1.80
                                                     TIPF               1980.03                 0.00
                                                     TISF               2583.96              2573.71
                                                     TLF              106619.64             15196.72
                                                     TMIF               8681.87               503.19
                                                     TMPF                 49.00                 0.00
                                                     TSTBF             20407.94                 0.00
                                                     TPEF                365.17                 0.00
                                                     TYCF               1617.58               575.84
   HINDUSTAN ZINC LIMITED       TFHF                 TSEF               263.92                154.70
                                                     TBF                193.29                123.12
                                                     TEOF               629.85                301.44
                                                     TISF               637.56                351.60
                                                     TMPF               152.45                  0.00
                                                     TPEF               575.85                531.39
   HCL TECHNOLOGIES LTD         TFHF                 TBF                174.35                   0.00
                                                     TEOF              2271.76                   0.00
                                                     TEQPEF             220.25                   0.00
                                                     TIFN               223.48                   1.02
                                                     TLSTF              229.49                   0.00
                                                     TMIF                40.38                   0.00
                                                     TMPF               137.15                   0.00
                                                     TPEF               435.46                   0.00
                                                     TYCF                54.31                   0.00




                                          34
                                                                                       TATA BALANCED FUND
Company which has Invested                       Schemes in              Schemes         Aggregate Cost        Outstanding
                                                 which Companies          which           of Acquisition               as at
                                                 have invested           have                  during the   28 February, 05
                                                                                                              th

                                                 more than 5%            invested         period ended             at Fair /
                                                 of the Net Assets                      28th February, 05      Market Value
ITC LTD                                        TFRSTF                   TSEF                    147.10                 0.00
                                               TLF                      TDYF                   1869.24               362.47
                                                                        TBF                     396.25                 0.00
                                                                        TEOF                   2007.23                73.60
                                                                        TEQPEF                  322.10               116.51
                                                                        TIFN                    653.02                 3.04
                                                                        TIFS                    126.49                 1.45
                                                                        TGF                     343.60                 0.00
                                                                        TLSTF                   148.81                 0.00
                                                                        TMIF                    480.73                 0.00
                                                                        TPEF                   1421.83                46.03
                                                                        TTSF                    455.40                 0.00
                                                                        TYCF                    287.91                 0.00
WIPRO LTD                                      TLF                      TBF                     240.80                 0.00
                                                                        TEOF                    500.33                 0.00
                                                                        TIFN                   1044.64                 4.66
                                                                        TIFS                     16.45                 0.63
                                                                        TGF                      64.52                 0.00
                                                                        TLSTF                   290.25                34.96
                                                                        TMIF                    357.82                 0.00
                                                                        TMPF                    700.14                 0.00
                                                                        TPEF                    722.18                 0.00
                                                                        TTSF                    194.76                 0.00
                                                                        TYCF                    140.21                 0.00
BHATATI TELE VENTURES LTD                      TFRSTF                   TBF                     252.44                 0.00
                                                                        TEOF                   1444.41                 0.00
                                                                        TIFN                    619.54                 3.95
                                                                        TIFS                     10.27                 0.54
                                                                        TISF                    955.58               754.09
                                                                        TLS                     141.65                 0.00
                                                                        TMIF                    447.82               133.93
                                                                        TMPF                    228.51                 0.00
                                                                        TPEF                   1067.07               450.20
                                                                        TTSF                    213.04               225.10
                                                                        TYCF                     74.55                 0.00


All the above companies are growth oriented blue chip companies with a proven track record.




                                                           35
TATA BALANCED FUND
iii)   Total investment in securities of Associate/Group companies under all schemes is disclosed below. No investment was made in unlisted
       securities of Group companies after the amendment of the SEBI Regulations in January 1998. Most of such equity shares, debentures,
       etc. were purchased from the open secondary market at relevant market prices over a period of time based on the approved investment
       strategy. All these securities pertain to highly traded Blue chip companies. In keeping with the investmentobjective of the Schemes,
       these companies offer good investment potential.
                                                                                                                                  Rs. in lacs

       Scheme                            As on 31.03.02            As on 31.03.03            As on 31.03.04                As on 28.02.05
                                       Amount       %ge           Amount          %ge       Amount       %ge           Amount         %ge
       TBF                               909.19     8.72         1146.86      13.93         1184.63     12.10         1517.82        13.88
       TYCF                              457.92     6.94          648.65      10.22          836.96      8.76         1332.28        11.85
       TTSF                              354.24    12.72          318.97      13.59          375.12      8.59         1196.68        21.75
       TSEF                              348.73    13.52          563.32      26.58          874.27     16.29         1041.87        15.24
       TIF (R)                           212.52     1.84               –          –               –         –               –            –
       TIF(A)                            106.26     0.51          302.89       1.42               –         –               –            –
       TITSA                              91.66    24.91           77.89      15.92               –         –               –            –
       TITSB                              36.41    17.50               –          –               –         –               –            –
       TPEF                              409.43    12.50          464.19      17.75         1644.46     13.04         3131.88        15.32
       TLSTF                              77.51     3.51           55.07       3.31          202.19      6.50          491.23        13.11
       TGF                               370.58    13.38          535.25      21.37          540.30     14.11          603.91        14.53
       TIFS                                   –        –            4.01       7.79           36.66     14.91            3.99        13.30
       TIFN                                   –        –            3.42       7.81          340.02     11.19           15.59        16.13
       TMIF                                   –        –           33.07       3.11          525.78      1.15          891.36         5.35
       TIPF                                   –        –               –          –               –         –               –            –
       TEOF                                   –        –               –          –               –         –         4206.76        14.05
       TMPF                                   –        –               –          –          953.53      2.28         1134.03         6.20
       TEQPEF                                                                                                         1659.23        14.88
       TDYF                                                                                                           5367.72        14.96
       TLF                                                                                                            1013.70         0.41
       TISF                                                                                                           4931.41         6.50


iv)    The following amounts were paid/provided for as selling commission by the respective schemes to Associate Companies for their
       marketing efforts in mobilising subscriptions for the units of such schemes.
AS on 31/3/2002                                                                                                                  Rs. in lacs
   Scheme                         Tata       Tata Share         Tata Sons &         Tata Chemicals              Aftaab          Tata Sons
                        Securities Ltd         Registry        Consult Serv                Limited         Investments            Limited
                                                Limited      Empl. Welf Trust

   TBF                            3.62             0.25                       –                   –                    –              0.56
   TSEF                           3.47             0.20                       –                   –                    –              0.13
   TIFA                          20.94             0.14                       –                   –                 1.23              0.19
   TGSFA                          2.90             0.06                    0.33                   –                    –              2.40
   TGSFR                          2.23             0.10                       –                   –                    –              1.19
   TLFA                           5.54             0.00                       –                   –                 0.07              0.17
   TLFR                           1.79             0.01                       –                0.65                    –              0.55
   TLSP1                             –                –                       –                   –                    –              0.39
   TLSP2                             –                –                       –                0.17                    –                 –
   TLSTF                          3.53             0.16                       –                   –                    –              0.06
   TIFR                          13.81             0.43                       –                   –                 4.33             10.32
   TPEF                           4.59             0.28                       –                   –                    –              0.02
   TTSF                           0.98             0.10                       –                   –                    –                 –
   TYCF                           2.88             0.11                       –                   –                    –                 –




                                                                     36
                                                                                                TATA BALANCED FUND
As on 31/03/2003                                                                                                                    Rs. in lacs
 Schemes            Tata Tata Share          Tata    Tata      Tata Sons           Tata Panatone Eureka            Trent     Tata Inv.    Taj Inv.
               Securities  Registry     Chemicals   Sons    & Serv. Empl.   Investment Finance Forbes            Brands        & Fin.      & Fin.
                     Ltd.      Ltd.          Ltd.    Ltd.   Welfare Trust   Corpn. Ltd.                             Ltd.     Co. Ltd.        Ltd.

 TBF                3.37       0.10             –    0.16               –            –             –      1.37         –            –           –
 TYCF               1.69       0.08             –       –               –            –             –         –         –            –           –
 TTSF               1.69       0.06             –       –               –            –             –         –         –            –           –
 TSEF               2.27       0.11             –    0.03               –            –          0.03         –         –            –           –
 TIFA              33.91       1.17          0.36    2.23               –         0.16             –         –         –         1.22           –
 TPEF               3.59       0.20             –    0.01               –            –             –         –         –            –           –
 TLF               15.06       0.01             –    0.23               –            –             –      0.18      0.32            –        0.63
 TLSTF              2.11       0.08             –    0.01               –            –             –      0.08         –            –           –
 TGSF               6.15       0.21             –    0.66            0.07            –             –         –         –            –           –
 TSTBF              7.88       0.01             –       –               –            –             –      0.01      0.18            –           –
 TIPF              12.24       0.01             –       –               –            –             –         –         –            –        0.08
 TMIF               1.51       0.06             –       –               –            –             –         –         –            –           –
 TLHIF              0.60          –             –       –               –            –             –         –         –            –           –
 TIFNA              0.07          –             –       –               –            –             –         –         –            –           –
 TIFSA              0.12          –             –       –               –            –             –         –         –            –           –
 TEOF               0.14          –             –       –               –            –             –         –         –            –           –
 TINR               1.10          –             –       –               –            –             –         –         –            –           –

AS on 31/03/2004                                                                                                                   Rs. in lacs
 Scheme                                                      Taj Inv. &               Tata               Tata Share                   Tata
                                                       Finance Co. Ltd.       Finance Ltd.             Registry Ltd.       Securities Ltd.
 TIFR                                                               0.91                                         1.15                    23.22
 TLF                                                                0.03                 0.00                    0.00                    30.42
 TBF                                                                0.00                 0.12                    0.10                     3.00
 TIPF                                                               0.00                 0.01                    0.05                    43.83
 TGSF                                                               0.00                 0.00                    0.24                    24.79
 TMIF                                                               0.00                 0.00                    0.10                     8.96
 TPEF                                                               0.00                 0.00                    0.27                     4.37
 TSEF                                                               0.00                 0.00                    0.12                     1.66
 TTSF                                                               0.00                 0.00                    0.09                     0.67
 TYCF                                                               0.00                 0.00                    0.08                     1.91
 TDBF                                                               0.00                 0.00                    0.00                    14.74
 TEOF                                                               0.00                 0.00                    0.00                     4.98
 TIXF                                                               0.00                 0.00                    0.00                     0.53
 TLSTF                                                              0.00                 0.00                    0.10                     2.07
 TSTBF                                                              0.00                 0.00                    0.00                    13.76
 TFRF                                                               0.00                 0.00                    0.00                     0.90
 TMPF                                                               0.05                 0.00                    0.00                     2.02
As on 28/02/2005                                                                                                                  Rs. in lacs
 Scheme                                                       Taj Inv. &              Tata               Tata Share                   Tata
                                                        Finance Co. Ltd.      Finance Ltd.             Registry Ltd.       Securities Ltd.
 TATA Balanced Fund                                                  0.00                0.08                    0.06                     2.05
 TATA Dividend Yield Fund                                            0.00                0.00                    0.00                     7.19
 TATA Dynamic Bond Fund                                              0.00                0.00                    0.00                     4.47
 TATA Equity Opportunities Fund                                      0.00                0.00                    0.02                     2.58
 Tata Equity P/E Fund                                                0.00                0.00                    0.00                     2.52
 Tata Fixed Horizon Fund                                             0.00                0.00                    0.00                     0.56
 TATA Floating Rate Fund                                             0.00                0.00                    0.03                     7.42
 TATA Gilt Securities Fund                                           0.00                0.00                    0.09                    19.75
 Tata Growth Fund                                                    0.00                0.00                    0.00                     0.05
 TATA Income Fund                                                    0.13                0.00                    0.50                     6.79
 TATA Income Plus Fund                                               0.00                0.00                    0.02                     4.71
 TATA Index Fund                                                     0.00                0.00                    0.00                     0.02
 Tata Infrastructure Fund                                            0.00                0.00                    0.00                     4.32
 TATA Life Sciences & Technology Fund                                0.00                0.00                    0.08                     1.84
 TATA Liquid Fund                                                    0.02                0.00                    0.00                    54.45
 TATA MIP Plus                                                       0.42                0.00                    0.00                     9.90
 TATA Monthly Income Fund                                            0.00                0.00                    0.06                    19.44
 TATA Pure Equity Fund                                               0.00                0.00                    0.19                     2.67
 TATA Select Equity Fund                                             0.00                0.00                    0.13                     1.37
 TATA Short Term Bond Fund                                           0.00                0.00                    0.00                     0.36
 TATA Tax Saving Fund                                                0.00                0.00                    0.07                     0.48
 TATA Young Citizens’ Fund                                           0.00                0.00                    0.06                     1.35


                                                               37
TATA BALANCED FUND
v.      The following amounts were paid/provided for to Tata Share             XV. BORROWING BY THE MUTUAL FUND
        Registry Ltd., for utilization of their services as R&T Agent.         In accordance with Regulation 44(2) of the SEBI (Mutual Funds)
                                                            Rs.in lacs         Regulations, 1996, to meet the temporary liquidity needs of the
         Scheme                  As on       As on           As on             Scheme for the purposes of repurchases / redemptions or income
                               31.03.02    31.03.03        31.03.04            distribution to the Unitholders, the Fund / Scheme may borrow from
                                                                               any Body Corporate including TAML and Commercial Banks, not
         TBF                        1.51        4.37              –            more than 20% of the net assets of the Scheme on satisfactory
                                                                               terms as to interest, security and collateral without encumbering
         TYCF                     16.51         6.82              –            its assets. The duration of such a borrowing shall not exceed a
         TTSF                       5.93        2.37              –            period of six months
         TSEF                       3.05        1.33              –            XVI. COMPUTATION OF NAV & VALUATION OF ASSETS
         TIF                      16.31         6.88              –            i. Computation & Determination of Net Asset Value
         TPEF                       2.95        1.53              –            Net Asset Value (“NAV”) of the Units shall be determined daily as
         TLSTF                      2.33        0.94              –            of the close of each Business Day on which the Bombay Stock
                                                                               Exchange is open for trading.
vi.     Total percentage of broking business given and the brokerage
        paid(and included in the cost of investments) to Associate             NAV shall be calculated in accordance with the following formula :
        brokers is disclosed below. The brokerage paid to the Associate
                                                                                     Market Value of Scheme’s Investments + Accrued Income
        brokers compare with that prevailing in the Capital market for
                                                                                     + Receivables + Other Assets + Unamortised portion of
        buying/selling of securities.
                                                                                     initial issue expenses - Accrued Expenses - Payables -
                                                            Rs. in Lacs
                                                                                     Other Liabilities
      Name                    As on          As on           As on             NAV= ——————————————————————-
                             31.03.02       31.03.03        31.03.04                             Number of Units Outstanding
                            %ge Rs.        %ge     Rs.    %ge     Rs.          The computation of Net Asset Value, valuation of Assets,
      Tata                                                                     computation of applicable Net Asset Value (related price) for ongoing
      Securities Ltd.      3.71 6.23        3.95 6.39     1.43   4.81          Sale, Repurchase,
      (Formerly Tata TD                                                        and their frequency of disclosure shall be based upon a formula in
      Waterhouse Securities Ltd.)                                              accordance with the Regulations and as amended from time to
vii.The Fund has not undertaken any Underwriting obligations                   time including by way of Circulars, Press Releases, or Notifications
    with respect to any Public Issue of Associate Companies.                   issued by SEBI or the Government of India to regulate the activities
    During last 3 fiscal years the Fund has not subscribed to any              and growth of Mutual Funds.
    issue lead managed by an Associate Company                                 ii. NAV Information
TBF      : Tata Balanced Fund                                                  The Scheme’s NAV will be available on all Business Days at the
TYCF         : Tata Young Citizens’ Fund                                       Authorised Investor Service Centres. The Fund will endeavour to
TTSF         : Tata Tax Saving Fund                                            publish the Scheme’s NAV on all Business Days in atleast 2 Daily
TSEF         : Tata Select Equity Fund                                         Newspapers (along with sale and repurchase price). In the event
                                                                               NAV cannot be calculated and / or published, such as because of
TIFR         : Tata Income Fund (Regular Income Option)                        the suspension of trading on the Bombay Stock Exchange, during
TIFA         : Tata Income Fund (Appreciation Option)                          the existence of a state of emergency and / or a breakdown in
TPEF         : Tata Pure Equity Fund                                           communications, the Board may suspend determination and / or
                                                                               publication of the NAV of the Units.
TLF          : Tata Liquid Fund
TLSTF        : Tata Life Sciences & Technology Fund                            NAV will also be updated on a daily basis on Association of Mutual
TGSFA        : Tata Gilt Securities Fund (Appreciation Option)                 Fund India (AMFI) website.
TGSFR        : Tata Gilt Securities Fund (Regular Income Option)               Sale Price = Applicable NAV *(1 + Sales Load, if any)
TSTBF        : Tata Short Term Bond Fund                                       Repurchase Price = Applicable NAV *( 1 - Exit Load, if any)
TGF          : Tata Growth Fund                                                Example : if the applicable NAV is Rs. 10.00; sales/entry load is 2
TIPF         : Tata Income Plus Fund                                           per cent and the exit/repurchase load is 2 per cent then the sales
TMIF         : Tata Monthly Income Fund                                        price will be Rs. 10.20 and the repurchase price will be Rs. 9.80.
TIFNA        : Tata Index Fund Nifty                                           iii. Valuation of Assets
TIFSA        : Tata Index Fund Sensex                                          NAV of the Scheme as stated in the foregoing clause for
                                                                               “Computation & Determination of NAV” will be determined by dividing
TEOF         : Tata Equity Opportunities Fund
                                                                               the net assets of the Scheme by the number of outstanding Units
TDBF         : Tata Dynamic Bond Fund                                          on the valuation date.
TGSF         : Tata Gilt Securities Fund
                                                                               Pursuant to Regulation 77 of the SEBI (Mutual Funds) Regulations,
TIXF   : Tata Index Fund                                                       1996, the following investment valuation norms are applicable to
TEQPEF : Tata Equity P/E Fund                                                  the Scheme:
TMPF         : Tata MIP Plus Fnd
                                                                               1.   Traded Securities :
TFRF         : Tata Floating Rate Fund
                                                                                    1.   The securities shall be valued at the last quoted closing
TDYF         : Tata Dividend Yield Fund                                                  price on the stock exchange.
TISF         : Tata Infrastructure Fund


                                                                          38
                                                                                                           TATA BALANCED FUND
     2.    When the securities are traded on more that one                            Unlisted Equity Shares will be valued in accordance with the
           recognised stock exchange, the securities shall be valued                  criteria laid down in SEBI circular no. MFD/CIR03/526/2002
           at the last quoted closing price on the stock exchange                     dated May 9, 2002.
           where the security is actively traded. It would be left to
           the AMC to select the appropriate stock exchange, but                VALUATION OF NON-TRADED / THINLY TRADED SECURITIES
           the reasons for the selection should be recorded in writing.         Non traded/ thinly traded securities shall be valued “in good faith”
           There should however be no objection for all scrips being            by the asset management company on the basis of the valuation
           valued at the prices quoted on the stock exchange where              principles laid down below :
           a majority in value of the investments are principally traded
                                                                                (i)   Non-traded / thinly traded equity securities:
           such as the National Stock Exchange (NSE) or The Stock
           Exchange, Mumbai (BSE).                                                    (a)   Based on the latest available Balance Sheet, net worth
                                                                                            shall be calculated as follows :
     3.    Once a stock exchange has been selected for valuation
                                                                                      (b)   Net Worth per share = [share capital + reserves (exclud-
           of a particular security, reasons for change of the
                                                                                            ing revaluation reserves) – Misc. expenditure and Debit
           exchange shall be recorded in writing by the AMC.
                                                                                            Balance in P&L A/c] Divided by No. of Paid up Shares.
     4.    When on a particular valuation day, a security has not
           been traded on the selected stock exchange; the value                      (c)   Average capitalisation rate (P/E ratio) for the industry
           at which it is traded on another stock exchange may be                           based upon either BSE or NSE data (which should be
           used.                                                                            followed consistently and changes, if any noted with
                                                                                            proper justification thereof) shall be taken and discounted
     5.    When a security (other than Government Securities) is                            by 75% i.e. only 25% of the Industry average P/E shall
           not traded on any stock exchange on a particular valuation                       be taken as capitalisation rate (P/E ratio). Earnings per
           day, the value at which it was traded on the selected stock                      share of the latest audited annual accounts will be con-
           exchange or any other stock exchange, as the case may                            sidered for this purpose.
           be, on the earliest previous day may be used provided                      (d)   The value as per the net worth value per share and the
           such date is not more than thirty days prior to valuation                        capital earning value calculated as above shall be aver-
           date in case of equity and equity related instruments and                        aged and further discounted by 10% for ill-liquidity so as
           15 days in case of debt securities.                                              to arrive at the fair value per share.
2.   Thinly Traded Securities :                                                       (e)   In case the EPS is negative, EPS value for that year shall
     (i)   Thinly Traded Equity/Equity Related Securities :                                 be taken as zero for arriving at capitalised earning.
           When trading in an equity/equity related security (such                    (f)   In case where the latest balance sheet of the company is
           as convertible debentures, equity warrants, etc.) in a                           not available within nine months from the close of the
           month is less than Rs. 5 lacs and the total volume is less                       year, unless the accounting year is changed, the shares
           than 50,000 shares, it shall be considered as a thinly                           of such companies shall be valued at zero.
           traded security and valued accordingly.
                                                                                      (g)   In case an individual security accounts for more than 5%
           Where a stock exchange identifies the “thinly traded” se-                        of the total assets of the scheme, an independent valuer
           curities by applying the above parameters for the pre-                           shall be appointed for the valuation of the said security.
           ceding calendar month and publishes/provides the re-
           quired information along with the daily quotations, the              (ii) (a) Non Traded /Thinly Traded Debt Securities of Upto 182
           same can be used by the mutual funds.                                Days to Maturity :
                                                                                As the money market securities are valued on the basis of
           If the share is not listed on the stock exchanges which
                                                                                amortization (cost plus accrued interest till the beginning of the
           provide such information, then it will be obligatory on the
                                                                                day plus the difference between the redemption value and the cost
           part of the mutual fund to make its own analysis in line
                                                                                spread uniformly over the remaining maturity period of the
           with the above criteria to check whether such securities
                                                                                instruments) the same process should be adopted for non-traded
           are thinly traded which would then be valued accordingly.
                                                                                debt securities with residual maturity of upto 182 days, in the
           In case trading in an equity security is suspended upto              absence of any other standard benchmarks in the market. All other
           30 days, then the last traded price would be considered              non traded Non Government debt instruments should be valued
           for valuation of that security. If an equity security is sus-        using the method suggested in (ii)(b) hereof.
           pended for more than 30 days, then the Asset Manage-
                                                                                (ii) (b) Non Traded/ Thinly Traded Debt Securities of Over 182
           ment Company/Trustees will decide the valuation norms
                                                                                Days to Maturity.
           to be followed and such norms would be documented
                                                                                For the purpose of valuation, all Non Traded Debt Securities would
           and recorded.
                                                                                be classified into “Investment grade” and “Non Investment grade”
     (ii) Thinly Traded Debt Securities:                                        securities based on their credit ratings. The non-investment grade
           A debt security (other than Government Securities) shall             securities would further be classified as “Performing” and “Non
           be considered as a thinly traded & security, if on the valu-         Performing” assets
           ation date there are no individual trades in that security                 All Non Government investment grade debt securities,
           in marketable lots (current Rs. 5 crore) on any stock ex-                  classified as not traded, shall be valued on yield to maturity
           change.                                                                    basis as described below.
           A thinly traded debt security as defined above would be                    All Non Government non investment grade performing debt
           valued as per the norms set for non-traded debt security.                  securities would be valued at a discount of 25% to the face
                                                                                      value
3.   Non Traded Securities :
                                                                                      All Non Government non investment grade non performing debt
     When a security (other than Government Securities) is not                        securities would be valued based on the provisioning norms.
     traded on any stock exchange for a period of 30 days (15 days
     in case of debt security) prior to the valuation date the scrip
     must be treated as a ‘non traded’ security.

                                                                           39
TATA BALANCED FUND
The approach in valuation of non traded debt securities is based                    for corporate securities of investment grade. The matrices are
on the concept of using spreads over the benchmark rate to arrive                   dynamic and the spreads will be computed every week. The
at the yields for pricing the non traded security.                                  matrix will be built for all duration buckets for which the
                                                                                    benchmark GOI matrix is built to effectively link the corporate
The Yields for pricing the non traded debt security would be arrived                matrix with the GOI securities matrix. Accordingly:
at using the process as defined below.
                                                                                         All traded paper (with minimum traded value of Rs. 1 crore)
Step A                                                                                   will be classified by their ratings and grouped into 7 dura-
A Risk Free Benchmark Yield is built using the government securities                     tion buckets; for rated securities, the most conservative
(GOI Sec) as the base. GOI Secs are used as the benchmarks as                            publicly available rating will be used;
they are traded regularly; free of credit risk; and traded across                        For each rating category, average volume weighted yield
different maturity spectrums every week.                                                 will be obtained both from trades on the appropriate stock
Step B                                                                                   exchange and from the primary market issuances
A Matrix of spreads(based on the credit risk) are built for marking                      Where there are no secondary trades on the appropriate
up the benchmark yields. The matrix is built based on traded                             stock exchange in a particular rating category and no
corporate paper on the wholesale debt segment of an appropriate                          primary market issuances during the fortnight under con-
stock exchange and the primary market issuances. The matrix is                           sideration, then trades on appropriate stock exchange
restricted only to investment grade corporate paper.                                     during the 30 day period prior to the benchmark date will
                                                                                         be considered for computing the average YTM for such
Step C                                                                                   rating category;
The yields as calculated above are Marked-up/Marked-down for ill-
liquidity risk                                                                           If the matrix cannot be populated using any or all of the
                                                                                         above steps, then credit spreads from trades on appro-
Step D                                                                                   priate stock exchange of the relevant rating category over
The Yields so arrived are used to price the portfolio                                    the AAA trades will be used to populate the matrix;

METHODOLOGY                                                                              In each rating category, all outliers will be removed for
                                                                                         smoothening the YTM matrix;
A.   Construction of Risk Free Benchmark
                                                                                         Spreads will be obtained by deducting the YTM in each
     Using Government of India dated securities, the Benchmark
                                                                                         duration category from the respective YTM of the GOI
     shall be constructed as below :
                                                                                         securities;
          Government of India dated securities will be grouped into
                                                                                         In the event of lack of trades in the secondary market
          the following duration buckets viz., 0.5-1 years, 1-2 years,
                                                                                         and the primary market the gaps in the matrix would be
          2-3 years, 3-4 years, 4-5 years, 5-6 years and 6 years
                                                                                         filled by extrapolation. If the spreads cannot be extrapo-
          and the volume weighted yield would be computed for
                                                                                         lated for the reason of practicality, the gaps in the matrix
          each bucket. Accordingly, there will be a benchmark YTM
                                                                                         will be filled by carrying the spreads from the last matrix.
          for each duration bucket.
          The benchmark as calculated above will be set weekly,                C.   Mark-up/Mark-down Yield
          and in the event of any change in the Reserve Bank of                     The Yields calculated would be marked-up/marked –down to
          India (RBI) policies affecting interest rates during the                  account for the ill-liquidity risk, promoter background, finance
          week, the benchmark will be reset to reflect any change                   company risk and the issuer class risk. As the level of ill-liquidity
          in the market conditions.                                                 risk would be higher for non rated securities the marking
                                                                                    process for rated and non rated securities would be
          Note : The concept of duration over tenor has been cho-                   differentiated as follows
          sen in order to capture the reinvestment risk. It is intended
          to gradually move towards a methodology that incorpo-                     C(I) Adjustments for Securities rated by external rating agen-
          rates the continuous curve approach for valuation of such                      cies
          securities. However, in view of the current lack of liquidity                  The Yields so derived out of the above methodology could
          in the corporate bond markets, a continuous curve ap-                          be adjusted to account for risk mentioned above.
          proach to valuation would be necessarily based on lim-
          ited data points, and this would result in out of line valu-                   A Discretionary discount/premium of upto +100/-50 Ba-
          ations. As an interim methodology therefore it is proposed                     sis Points for securities having a duration of upto 2 years
          that the Duration Bucket approach be adopted and con-                          and upto +75/- 25 Basis Points for securities having du-
          tinuously tracked in order to fine tune the duration buck-                     ration higher than 2 years will be permitted to be pro-
          ets on a periodic basis. Over the next few years it is ex-                     vided for the above mentioned types of risks. The ratio-
          pected that with the deepening of the secondary market                         nale for the above discount structure is to take cogni-
          trading, it would be possible to make a gradual move from                      zance of the differential interest rate risk of the securi-
          the Duration Bucket approach towards a continuous curve                        ties. This structure will be reviewed periodically.
          approach.
                                                                                    C (II) Adjustments for Internally Rated Securities
B.   Building a Matrix of Spreads for Marking-up the Benchmark                           To value an un-rated security, the fund manager has to
     Yield                                                                               assign an internal credit rating, which will be used for
     Mark up for credit risk over the risk free benchmark YTM as                         valuation. Since un-rated instruments tend to be more
     calculated in step A, will be determined using the trades of                        illiquid than rated securities, the yields would be marked
     corporate debentures/bonds of different ratings. All trades on                      up by adding +50 basis point for securities having a du-
     appropriate stock exchange during the fortnight prior to the                        ration of upto two years and +25 basis point for securi-
     benchmark date will be used in building the corporate YTM                           ties having duration of higher than two years to account
     and spread matrices. Initially these matrices will be built only                    for the illiquidity risk.


                                                                          40
                                                                                                             TATA BALANCED FUND
Valuation of securities with Put/Call Options                                    the yield at which they are currently traded. For this purpose, non-
The option embedded securities would be valued as follows:                       traded instruments that is instruments not traded for a period of
Securities with call option :                                                    seven days will be valued at cost plus interest accrued till the
The securities with call option shall be valued at the lower of the              beginning of the day plus the difference between the redemption
value as obtained by valuing the security to final maturity and valuing          value and the cost spread uniformly over the remaining maturity
the security to call option.                                                     period of the instruments;

In case there are multiple call options, the lowest value obtained by            Valuation of Derivative Product:
valuing to the various call dates and valuing to the maturity date is            1.    The traded derivative shall be valued at market price in
to be taken as the value of the instrument.                                            conformity with the stipulations of sub clauses (I) to (V) of
                                                                                       clause 1 of the eighth Schedule to the Securities and Exchange
Securities with Put option
                                                                                       Board of India (Mutual Funds) Regulations, 1996, as amended
The securities with put option shall be valued at the higher of the
                                                                                       by SEBI circular no. MFD/CIR/8/92/2000 dated September,
value as obtained by valuing the security to final maturity and valuing
                                                                                       18, 2000.
the security to put option
                                                                                 2.    The valuation of untraded derivatives shall be done in
In case there are multiple put options, the highest value obtained
                                                                                       accordance with the valuation method for untraded investments
by valuing to the various put dates and valuing to the maturity date
                                                                                       prescribed in sub clauses (I) and (II) of clause 2 of the Eighth
is to be taken as the value of the instruments.
                                                                                       Schedule to the Securities and Exchange Board of India
Securities with both Put and Call option on the same day :                             (Mutual Funds) Regulations, 1996, as amended by SEBI
The securities with both Put and Call option on the same day would                     circular no. MFD/CIR/8/92/2000 dated September, 18, 2000.
be deemed to mature on the Put/Call day and would be valued
                                                                                 XVII. REPURCHASE, RESALE & SWITCH OF UNITS
accordingly.
                                                                                 i.    Relevant NAV for Repurchase, Sale & Switch
(ii) (c) Government securities Government securities will be valued
                                                                                       The relevant NAV for Repurchase, Sale, Switch will be the
at prices released by an agency suggested by AMFI.
                                                                                       closing NAV of the business day of receipt of the Repurchase/
(iii) Liquid Securities :                                                              Switch/Sale request provided. The date of receipt of a request
(a)   Aggregate value of “illiquid securities” of scheme, which are                    for fresh Sale, Repurchase, Switch will be the actual business
      defined as non-traded, thinly traded and unlisted equity shares,                 day of the Mail receipt at any of the Authorised Investor Service
      shall not exceed 15% of the total assets of the scheme and                       Centers stated in this offering circular and / of in-person request
      any illiquid securities held above 15% of the total assets shall                 if received upto 3.00pm on any business day.
      be assigned zero value.                                                          Valid application for “switch out” shall be treated as
      Provided that in case any scheme has illiquid securities in                      redemption and for “switch in” shall be treated as
      excess of 15% of total assets as on September 30, 2000 then                      purchases and the relevant NAV for “switch in” and “switch
      such a scheme shall within a period of two years bring down                      out” shall be applicable accordingly.
      the ratio of illiquid securities within the prescribed limit of 15%              Outstation cheques/demand drafts will not be accepted at
      in the following time frame:                                                     centers other than at Mumbai.
      (i)    all the illiquid securities above 20% of total assets of the
                                                                                       Relevant NAV for subscription application received along with
             scheme shall be assigned zero value on September 30,
                                                                                       and outstation cheque/demand draft will be NAV of the closing
             2001.
                                                                                       of the day on which cheque/demand draft is credited to account.
      (ii)   All the illiquid securities above 15% of total assets of the
             scheme shall be assigned zero value on September 30,                ii.   Repurchase of Units of Tata Balanced Fund
             2002.                                                                     Requests for repurchase can be submitted on any Business
(b)   All funds shall disclose as on March 31 and September 30 the                     Days of the Month, at our Authorised Investor Service Centres
      scheme-wise total illiquid securities in value and percentage                    (mentioned in this Offer Document). The repurchase request
      of the net assets while making disclosures of half yearly                        can be made for Rs. 500/- / 50 units or in multiples of Rs.500/
      portfolios to the unitholders. In the list of investments, an                    - / 50 Units or for all the Units. The Units will be repurchased
      asterisk mark shall also be given against all such investments                   (sold back to the Fund) / redeemed at a repurchase price. The
      which are recognised as illiquid securities.                                     repurchase price will be in accordance with Regulation 49(3)
                                                                                       of the Securities Exchange Board of India (Mutual Funds)
(c)   Mutual Funds shall not be allowed to transfer illiquid securities                Regulations, 1996, which shall not be lower than 93% of the
      among their schemes w.e.f. October 1, 2000.                                      NAV and further that the difference between the sale and
                                                                                       repurchase price shall not exceed 7% calculated on the sale
(d)   In respect of closed ended funds, for the purposes of valuation
                                                                                       price. The Trustee Company may however, from time to time
      of illiquid securities, the limits of 15% and 20% applicable to
                                                                                       review and modify the repurchase load for each choice of
      open-ended funds should be increased to 20% and 25%
                                                                                       investment as stated in the foregoing clause on “Unitholder
      respectively.
                                                                                       Transaction Expenses”. The Units if partially repurchased would
(e)   Where a scheme has illiquid securities as at September 30,                       be subtracted from the Unit balance of that Unitholder on “First
      2000 not exceeding 15% in the case of an open-ended fund                         In First Out” basis i.e. the Units that were offered / allotted first
      and 20% in the case of closed fund, the concessions of giving                    would be the first to be repurchased unless otherwise indicated
      time period for reducing the illiquid security to the prescribed                 by unitholders. In case amount is withdrawn, the same will be
      limits would not be applicable and at all time the excess over                   converted into Units at the applicable Repurchase price / NAV
      15% or 20% shall be assigned nil value.                                          related price and the number of Units so arrived at will be
                                                                                       subtracted from the Unit balance of that Unitholder on “First In
Valuation of Money Market Instruments:                                                 First Out” basis unless otherwise indicated by unitholders. The
Investments in call money, bills purchased under rediscounting                         repurchase would be permitted to the extent of credit balance
scheme and short term deposits with banks shall be valued at cost                      in the Unitholder’s account.
plus accrual; other money market instruments shall be valued at

                                                                            41
TATA BALANCED FUND
Securities Transaction Tax (STT) on redemption:                                      The Fund may mandatorily redeem all the Units of any
                                                                                     Unitholder:
As per the income Tax Act 1961, in case of an open ended equity
scheme, securities transaction tax (STT) of 0.15% (pus education                          if the value of the account falls below the minimum Account
cess @2%) is payable for sale of units to the mutual fund. This is                        balance of Rs.5000/- (based on prevailing NAV) and / or
illustrated below:                                                                        500 Units, due to normal repurchase / switch and the
                                                                                          Unitholder fails to invest sufficient funds or to purchase
 Repurchase Price Rs.                                          11.00                      sufficient Units to bring the value of the account upto
 Repurchase Units                                               1000                      Rs.5000/- (based on prevailing NAV) and / or 500 Units
                                                                                          or more, within 30 days after a written intimation in this
 Repurchase Price Rs.                                         11000
                                                                                          regard is sent by the Fund to that Unitholder; or
 Securities Transaction Tax (STT) Rs.                          16.50
                                                                                          where the Units are held by a Unitholder in breach of any
 (On redemption @ 0.15% of redemption value)
                                                                                          regulations.
 Education Cess (EC) @ Rs.                                      0.33
                                                                               iv.   Centres where repurchase/resale/switch requests can be
 Total Tax (STT = EC) Rs.                                      16.83
                                                                                     given :
 Net Amount Payable to Investors Rs.                       10983.17
                                                                                     Authorised Investor Service Centres :
 (Rs. 11000 - Rs. 16.83)                                                             For the list of Authorised Investor Service Centres, please refer
 The repurchase cheque will be issued in the name of the first                       to the Back Cover Page of this Offering Circular.
 unitholder. Under normal circumstances, the Fund will ensure that                   All locations from where an empanelled distributor of the
 the repurchase cheques are despatched within three Business                         AMC is empowered and able to use the transaction screens
 Days from the date of receipt of the repurchase request. For                        provided by the Registrar, in association with the banking
 repurchase request above Rs.10 lacs per Unitholder at a time, the                   facilities offered by the AMC, in accordance with
 above service time of five Business Days would not apply. However,                  procedures laid out by and agreed with our Registrar, to
 in such cases and under normal circumstances, the Fund would                        submit electronic transactions within the cutoff time.
 despatch the cheque within ten Business Days from the date of
 receipt of the repurchase request. In the event of partial repurchase,        v.    Sale of Units on an ongoing basis
 the Fund shall despatch the revised Account Statement for the                       Requests for fresh Units can be submitted on any Business
 balance number of Units still being held by the Unitholder along                    Day of the Month at our Authorised Investor Service Centres,
 with the repurchase cheque. Credit balances in the account of a                     by filling in the prescribed form. Unitholders can also subscribe
 Non- Resident Unitholder on maturity or otherwise, (where RBI                       additional Units under their existing Folio. Fresh subscription
 final approval and any other approval (if any required) has been                    of Units will be at the relevant NAV (as stated in the foregoing
 obtained) may be repurchased by the Fund by such Unitholder in                      clause(s) for “Relevant NAV for Repurchase / Resale & Switch
 accordance with the procedure described above and also subject                      of Units”) plus a Sales Load, which shall be the applicable
 to any procedures laid down by RBI and any other agency. Such                       sale price. The Offer price / NAV related price will be in
 repurchase proceeds will be paid by means of a Rupee cheque                         accordance with Regulation 49(3) of the Securities & Exchange
 payable to the NRE/ NRO account of the Unitholder or subject to                     Board of India (Mutual Funds) Regulations, 1996, which shall
 RBI procedures and approvals, such payment in Indian Rupees                         not be higher than 107% of the NAV and further that the
 will be converted into US Dollars or into any other currency, as                    difference between the sale and repurchase price shall not
 may be permitted by RBI, at the rate of exchange prevailing at the                  exceed 7% calculated on the sale price. The Trustee Company
 time of remittance and will be despatched at the applicants’ risk,                  may however, from time to time review and modify the sale
 or at the request of the applicants’ will be credited to their NRE/                 load for each choice of investment as stated in the foregoing
 NRO Accounts, details of which are to be furnished in the space                     clause on “Unitholder Transaction Expenses”.
 provided for this purpose in the Repurchase Form. The Fund will
 not be liable for any delays or for any loss on account of exchange                 Sale on an ongoing basis by any investor shall individually be
 fluctuations, while converting the rupee amount in US Dollar or                     for a minimum of Rs.5000/- and in multiples of Re.1/- thereafter
 any other currency. The Fund (if required) may also make                            while for an existing unitholder it shall be for Rs. 1000/- and
 arrangements to obtain RBI approvals on a case-by-case basis                        in multiples of Re.1/- or as may be decided by the Asset
 on behalf o the Unitholder, subject to the Unitholder providing the                 Management Company / Trustee Company from time to time.
                                                                                     The Trustee Company may however stipulate a different
 Fund with the necessary documents required.                                         minimum amount per application for group investment (e.g.
iii.   Possible deferral of repurchase requests and compulsory                       investment by employees of any company, members of co-
       repurchase                                                                    operative society, etc.). Requests for Sale of Units on an
                                                                                     ongoing basis can be made only by specifying the amount to
       Whilst every effort will be made to ensure that the Scheme will               be invested and not the number of Units in the prescribed form.
       have sufficient liquidity to enable the repurchase cheques to                 The total number of Units will be determined with reference to
       be collected/despatched within the deadline stated in the                     the applicable sale price, and fractional Units may be created.
       foregoing Clause, Unitholders should note that where the                      Fractional Units will be computed and accounted for upto three
       Scheme is obliged to arrange for the disposal of the underlying               decimal places. Units will be allotted on the date of receipt/
       securities / borrow, in order to satisfy redemption / repurchase              realisation of cheque (deemed date of allotment). A (fresh)
       requests, Unitholders may experience some delays in receiving                 Account Statement will be despatched to the address as
       repurchase cheques, reflecting the time involved in settling                  indicated in the prescribed form by the investor, reflecting the
       the underlying sales of securities / borrowing. However, in any               updated holding of the Unitholder after every transaction of
       case, the Fund will ensure that the collection/despatch of                    ongoing / fresh sale. Under normal circumstances, the Account
       repurchase cheques is not delayed beyond ten working days                     Statement will be despatched after five Business Days or after
       (when TMF is open for business) from the date of receipt of                   clearance of cheque (whichever is later). However, the despatch
       the repurchase request in accordance with Regulation 53(b)                    of Account Statement shall not be delayed beyond six weeks
       of the Securities Exchange Board of India (Mutual Funds)                      from the date of receipt of request from the unitholder as per
       Regulations, 1996.                                                            Regulation 36 of SEBI Regulations.

                                                                          42
                                                                                                           TATA BALANCED FUND
vi.   Spread between Sale and Repurchase Price                                        the Scheme temporarily or indefinitely, if the Asset Management
      The spread between the sale and repurchase price will be in                     Company / Trustee Company views that increasing the
      accordance with Regulation 49(3) of the Securities & Exchange                   Scheme’s size further may prove detrimental to the existing
      Board of India (Mutual Funds) Regulations, 1996. Accordingly,                   Unitholders of the Scheme. An offer for fresh subscription of
      the repurchase price shall not be lower than 93% of the NAV                     Units is not binding on and may be rejected by the Asset
      while the sale price shall not be higher than 107% of the NAV                   Management Company / Trustee Company, unless it has been
      and further that the difference between the sale and repurchase                 confirmed in writing by the Asset Management Company /
      price shall not exceed 7% calculated on the Sale price. Please                  Trustee Company and payment has been received.
      also refer to the Clause on “Unitholder Transaction Expenses”.                  Suspension of repurchase facility under the scheme shall be
vii. Switch of Units within the Funds / Schemes / Plans of Tata                       made applicable only after the approval from the Board of
     Mutual Fund                                                                      Directors of the AMC and Trustee Company. The approval from
                                                                                      the AMC & Trustee Company Boards giving details of
      The Unitholders under Tata Balanced Fund may exchange their                     circumstances and justification for the proposed actions shall
      Units for Units of the other Funds / Schemes / Plans in Tata                    be informed to SEBI in advance.
      Mutual Fund (the existing Funds / Schemes / Plans and others
      as may be announced / launched from time to time) on the                  ix.   Unclaimed Redemption/Dividend Amount
      basis of the terms / rules / Regulations / provisions prevalent                 The unclaimed Redemption amount and Dividend amount may
      for the relevant Funds / Schemes / Plans, of the respective                     be deployed by the Mutual Fund in Call Money Market or Money
      Units (of the relevant Funds / Schemes / Plans) to be                           Market Instruments only and the investor who claims these
      exchanged.                                                                      amounts during a period of three years from the due date shall
      Requests for switch may be submitted on any Business Day                        be paid at the prevailing Net Asset Value. After a period of
      of the Month, at our Authorised Investor Service Centres. The                   three years, this amount will be transferred to a pool account
      Units will be switched at the relevant NAV (as stated in the                    and the investor can claim the amount at NAV prevailing at
      foregoing clause(s) for “Relevant NAV for repurchase / resale                   the end of third year. The income on such funds will be used
      & switch of units”), plus any administrative cost and other                     for the purpose of investor education. The AMC will make
      charges and which shall be the applicable resale / NAV related                  continuous efforts to remind the investors through letters to
      price. The Units thus switched would be subtracted from the                     take their unclaimed amount. Further, the investment
      Unit balance of that Unitholder on “First In First Out” basis i.e.              management fee charged by the AMC for managing unclaimed
      the Units that were offered / allotted first would be the first to              amounts shall not exceed 50 basis points.
      be switched unless otherwise indicated by unitholders. In case            XVIII. ACCOUNTING POLICIES
      amount is switched the same will be converted into Units at
      the applicable resale / NAV related price and the number of               Accounts and Audit
      Units so arrived at will be subtracted from the Unit balance of           TAML will keep and maintain the books of accounts, records and
      that Unitholder on “First In First Out” basis unless otherwise            documents for the Scheme so as to explain its transactions and to
      instructed by the Unitholder. The minimum amount / number                 disclose the financial position of the Scheme. The Trustee shall
      of Units that may be exchanged for amount / Units of the other            arrange for the financial statements of the Scheme to be audited
      Funds / Schemes / Plans in Tata Mutual Fund will be the                   as of every 31st March and shall prepare an annual report and
      minimum amount / number of Units as applicable to the relevant            annual statement of account. The first such audit was conducted
      Funds / Schemes / Plans to be exchanged of this Scheme.                   and such annual report prepared for the year / period ending March
                                                                                31st, 1996. The Board shall have the financial statements for the
      Unitholder should note that each exchange represents the sale             Scheme audited by such Chartered Accountant(s) as may be
      of Units from one Scheme (which may produce a capital gains               appointed for that purpose by the Trustee Company. S.B.Billimoria
      or loss) and the purchase of Units in another Scheme and for              & Co. Chartered Accountants, have been appointed in such capacity.
      NRI/ FII/ OCB unitholder is also subject to any final approval
      and procedures laid down by RBI and any other agency (if                  Pursuant to Regulation 50 of the SEBI (Mutual Funds) Regulations,
      any).                                                                     1996, the following accounting policies are applicable to the Scheme:

viii. Suspension of ongoing Sale, Repurchase or Switch of                       a)    For the purposes of the financial statements, the Fund shall
      Units                                                                           mark all investments to market and carry investments in the
                                                                                      balance sheet at market value. However, since the unrealised
      The ongoing sale, repurchase or switch of Units may be                          gains arising out of appreciation on investments cannot be
      suspended temporarily or indefinitely under any of the following                distributed, provision shall be made for exclusion of this item
      circumstances:                                                                  when arriving at distributable income.
           Stock markets stop functioning or trading is restricted.
                                                                                b)    In respect of all interest-bearing investments, income shall be
           Periods of extreme volatility in the capital / stock markets,              accrued on a day to day basis as it is earned. Therefore when
           which in the opinion of the Asset Management Company                       such investments are purchased, interest paid for the period
           is prejudicial to the interests of the Unitholders.                        from the last interest due date upto the date of purchase shall
           A complete breakdown or dislocation of business in the                     not be treated as a cost of purchase but shall be debited to
           major financial markets.                                                   Interest Recoverable Account. Similarly, interest received at
                                                                                      the time of sale for the period from the last interest due date
           Natural calamities.                                                        upto the date of sale shall not be treated as an addition to sale
           Declaration of war or occurrence of insurrection, civil                    value but shall be credited to Interest Recoverable Account.
           commotion or any other serious or sustained financial,               c)    In determining the holding cost of investments and the gains
           political or industrial emergency or disturbance.                          or loss on sale of investments, the “average cost” method shall
           SEBI, by order, so directs.                                                be followed.
           On a requisition made by three-fourths of the Unitholders.           d)    Transactions for purchase or sale of investments shall be
      The Fund also reserves the right, to withdraw sale of Units in                  recognised as of the trade date and not as of the settlement

                                                                           43
TATA BALANCED FUND
     date, so that the effect of all investments traded during a                 Scheme. Income Tax benefits to the mutual fund and to the unitholder
     financial year are recorded and reflected in the financial                  is in accordance with the prevailing tax laws as certified by S.B.
     statements for that year. Where investment transactions take                Billimoria & Co., Chartered Accountants, the Auditors of the Scheme.
     place outside the Stock Market, for example, acquisitions
     through private placement or purchases or sales through                     i.   TAX BENEFITS TO THE FUND
     private treaty, the transaction would be recorded, in the event             Tata Mutual Fund is a Mutual Fund registered with the Securities
     of a purchase, as of the date on which the Scheme obtains                   and Exchange Board of India and hence the entire income of the
     any enforceable obligation to pay the price or, in the event of a           Fund will be exempt from income-tax in accordance with the
     sale, when the Scheme obtains an enforceable right to collect               provisions of Section 10(23D) of the Income-tax Act, 1961 (the Act).
     the proceeds of sale or an enforceable obligation to deliver                The Fund will receive all income without any deduction of tax at
     the instruments sold.                                                       source under the provisions of Section 196(iv), of the Act.
e)   Where income receivable on investments has been accrued                     However, under the Finance (No. 2) Act, 2004, ( the Finance Act ) it
     and has not been received for a period of 3 months beyond                   is provided that on income distribution, if any, made by the Fund on
     the due date, provision shall be made by debit to the revenue               or after 1 April, 2004, to Unitholders, being Individuals and Hindu
     account for the income so accrued and no further accrual of                 Undivided Family, income-tax will be payable under Section 115R
     income shall be made in respect of such investment.                         of the Act, at 13.06875 % (inclusive of surcharge and additional
                                                                                 surcharge called Education Cess on income-tax), and to other
f)   When in the case of an open-ended Scheme (like the present
                                                                                 Unitholders at 20.91% (inclusive of surcharge and additional
     Scheme) Units are sold, the difference between the sale price
                                                                                 surcharge on income-tax), except, inter alia, in the case of open-
     and the face value of the Unit, if positive, shall be credited to
                                                                                 ended equity-oriented funds, (i.e. where the investible funds are
     reserves and if negative shall be debited to reserves, the face
                                                                                 invested by way of equity shares in domestic companies to the extent
     value being credited to Capital Account. Similarly, when in
                                                                                 of more than 50% of the total proceeds of the Fund), where no such
     respect of such a Scheme (like the present Scheme), Units
                                                                                 tax will be levied.
     are repurchased, the difference between the purchase price
     and face value of the Units, if positive shall be debited to                ii. TAX BENEFITS TO UNITHOLDERS
     reserves and if negative, shall be credited to reserves, the                Income Tax
     face value being debited to the Capital Account.                            All Unitholders
g)   In the case of an open-ended Scheme (like the present                       Income received in respect of units of a mutual fund, in respect of
     Scheme), when Units are sold an appropriate part of the sale                income distribution made on or after 1 April, 2003, would be exempt
     proceeds shall be credited to an Equalisation Account and                   from income-tax in the hands of the Unitholders under Section 10(35)
     when Units are repurchased an appropriate amount shall be                   of the Act.
     debited to Equalisation Account. The net balance on this
                                                                                 Tax Deduction at Source
     account should be credited or debited to the Revenue Account.
                                                                                 All Unitholders
     The balance on the Equalisation Account debited or credited
     to the Revenue Account should not decrease or increase the                  In view of the exemption of income in the hands of the Unitholders,
     net income of the Fund but is only an adjustment to distributable           no income tax is deductible at source, on income distribution by the
     surplus. It shall therefore be reflected in the Revenue Account             Fund, under the provisions of Sections 194K and 196A of the Act.
     only after the net income of the Fund is determined.                        iii. Capital Gains Tax
h)   The cost of investments acquired or purchased would include                 All Unitholders
     brokerage, stamp charges and any charge customarily included                Under Section 10(38) of the Act, capital gains arising on transfer of
     in the broker’s bought note. In respect of privately placed debt            a long-term capital asset held for a period of more than twelve
     instruments any front-end discount offered should be reduced                months, inter alia, being a unit of an equity oriented fund (as defined
     from the cost of the investment.                                            therein) would be exempt from income-tax, if sale of such unit is
                                                                                 made on or after 1 October, 2004, and such transaction has been
i)   To provide appropriate details of the Schemewise deployment
                                                                                 chargeable to securities transaction tax under Chapter VII of the
     of the assets of the Fund, certain accounting policies and
                                                                                 Finance Act. Currently securities transaction tax is being levied at
     standards in accordance with the appropriate guidance notes
                                                                                 0.15% on sale of units to the mutual fund and at 0.075% for delivery-
     issued by the Institute of Chartered Accountants of India may
                                                                                 based sale through stock exchange.
     be adopted by TAML, and amended from time to time. The
     Trustee Company/ TAML may alter these above stated                          Under Section 54EC of the Act and subject to the conditions
     accounting policies and standards from time to time, and also               specified therein, taxable capital gains arising on transfer of a long-
     to the extent the guidance notes issued by the Institute of                 term capital asset shall not be chargeable to tax to the extent such
     Chartered Accountants of India, and the SEBI (Mutual Funds)                 capital gains are invested in certain notified bonds within six months
     Regulations, 1996 change, so as to permit the Scheme to give                from the date of transfer.
     a true and fair view of its state of affairs. As such the accounting        Under Section 54ED of the Act and subject to the conditions
     policies and standards, and the preparation of the annual report            specified therein, capital gains arising from transfer of long term
     and annual statement of account of the Scheme will be in                    assets, inter alia, being listed units shall not be chargeable to tax to
     accordance with SEBI (Mutual Funds) Regulations, 1996,                      the extent such gains are invested in acquiring equity shares forming
     including Schedule IX and XI thereof.                                       part of an “eligible issue of share capital” within six months from the
                                                                                 date of transfer of the long-term assets. Eligible issue of share capital
XIX. TAX TREATMENT OF INVESTMENTS IN MUTUAL FUNDS
                                                                                 has been defined as an issue of equity shares which satisfies the
Certain tax benefits as described below are available, under present
                                                                                 following conditions:
taxation laws to the Unitholders holding the Units as an investment.
The information set out below is included for general information                •    the issue is made by a public company formed and registered
purposes only and does not constitute legal or tax advice. In view                    in India; and
of the individual nature of the tax consequences, each investor is               •    the shares forming part of the issue are offered for subscrip-
advised to consult his or her own tax consultant with respect to                      tion to the public.
specific tax implications arising out of their participation in the

                                                                            44
                                                                                                         TATA BALANCED FUND
The following amounts would be deductible from the full value of               Tax Deduction at Source
consideration, to arrive at the amount of capital gains :                      Domestic Unitholders
•   cost of acquisition of Units (excluding the Securities                     No income tax is deductible at source from income by way of capital
    Transaction Tax, if any paid on acquisition) as adjusted by                gains under the present provisions of the Act.
    Cost Inflation Index notified by the Central Government,
    and                                                                        Foreign Institutional Investors
•    expenditure incurred wholly and exclusively in connection                 Under Section 196D of the Act, no deduction shall be made from
     with such transfer.                                                       any income by way of capital gains, in respect of transfer of
Under the provisions of Section 94(7) of the Act, loss arising on              securities referred to in Section 115AD of the Act.
sale of Units, which are bought within three months prior to the               Other Non-resident Unitholders
record date (i.e. the date fixed by the Mutual Fund for the purposes           Part II of the First Schedule to the Finance Act, provides for deduction
of entitlement of the Unitholders to receive the income) and sold              of tax at source from taxable capital gains at the rate of 20%, where
within nine months after the record date, shall be ignored for the             they relate to long-term capital gains and at the marginal rates, viz.
purpose of computing income chargeable to tax to the extent of                 at 30% in case of non-corporate Unitholders and at 40% in case of
exempt income received or receivable on such Units.                            corporate Unitholders, in case of short-term capital gains. Surcharge
Under the provisions of Section 94(8) of the Act, as inserted by the           on income-tax will be levied at 10%, on such tax, in respect of non-
Finance Act, where on units which are bought, additional units are             corporate Unitholders, where their income exceed Rs.850,000/- and
allotted without any payment within three months prior to the record           at 2.5% thereof in case of all corporate Unitholders. An additional
date, which are sold within nine months after the record date, the             surcharge at 2% is also to be levied under the Finance Act in all
loss arising on sale on such units bought shall be ignored for the             cases on the aggregate of tax and surcharge, so calculated.
purpose of computing income chargeable to tax and such loss shall              Other Benefit
be treated as the cost of acquisition of such additional units.
                                                                               Investments in Units of the Mutual Fund will rank as an eligible form
Subject to above, capital gains tax will be chargeable as under :              of investment under Section 11(5) of the Act read with Rule 17C of
                                                                               the Income Tax Rules, 1962, for Religious and Charitable Trusts.
Foreign Institutional Investors
Long-term capital gains on sale of Units, other than units of an equity        Wealth Tax
oriented fund referred to above, would be taxed at the rate of 10%             Units held under the Schemes of the Fund are not treated as assets
under Section 115AD of the Act. Such gains, would be calculated                as defined under Section 2(ea) of the Wealth Tax Act, 1957 and
without indexation of cost of acquisition.                                     therefore would not be liable to wealth tax.
Short-term capital gains arising after 1 October 2004, would also be           Gift Tax
taxable under Section 111A of the Act, at 10% if the sale of such unit         The Gift-tax Act, 1958, has ceased to apply to gifts made on or after
has been chargeable to securities transaction tax. Other short-term            1 October 1998. Gifts of Units, purchased under the Schemes, would
capital gains would be taxed at 30%.                                           therefore, be exempt from gift-tax.
The above tax rates would be increased by applicable surcharge, in             However, it is now provided by the Finance Act that, subject to certain
case of, non-corporate Unitholders, at 10% thereof, where their                exceptions, cash, gifts in excess of Rs.25,000/- received after 1
income exceed Rs.850,000/- and at 2.5% thereof in case of all                  September, 2004, without any consideration will be taxed as income
corporate Unitholders. In all cases, additional surcharge at 2% called         in the hands of recipients.
Education Cess will be levied on the aggregate of tax and applicable
surcharge, so calculated.                                                      XX. INVESTORS’ RIGHTS & SERVICES

Other Unitholders                                                              i. Rights
Long-term capital gains in respect of Units, other than units of an                 An abridged schemewise annual report shall be mailed to all
equity oriented fund referred to above, held for a period of more than              the unitholders not later than six months from the date of closure
twelve months, will be chargeable under Section 112 of the Act, at                  of the relevant accounting year and the full annual report shall
concessional rate of tax, at 20%, as increased by the applicable                    be available for inspection at the head office of the fund and the
surcharge. An additional surcharge at 2% on the aggregate of tax                    copy shall be made available to the unitholders on request on
and surcharge is to be levied under the Finance Act.                                payment of nominal fees if any.
In case of Individuals and Hindu Undivided Families, where taxable                  Before expiry of one month from the close of each half year, i.e.
income as reduced by long-term capital gains, is below the basic                    on 31/3 and 30/9, the fund will publish its unaudited financial
exemption limit, the long-term capital gains will be reduced to the                 results in the prescribed format as per SEBI Circular MFD/CIR/
extent of the shortfall and only the balance long-term capital gains                1/200/2001 dated April 20, 2001 in one national English daily
will be subjected to the flat rate of income tax.                                   newspaper and in a newspaper in the language of the region
                                                                                    where the HO of the fund is situated.
However, where the tax payable on such long-term capital gains,
computed before indexation, exceeds 10%, as increased by the                        Before expiry of one month from the close of each half year
applicable surcharge and additional surcharge as provided by the                    that is on 31/3 and 30/9, the fund will publish its scheme portfolio
Finance Act, of the amount of capital gains, such excess tax shall                  in the prescribed format as per SEBI Circular MFD/CIR/9/120/
not be payable by the Unitholder.                                                   2000 dated November 24, 2000 in one national English daily
                                                                                    newspaper and in a newspaper in the language of the region
Short-term capital gains in respect of all Units, held for a period of              where the HO of the fund is situated, or send a copy of the
not more than twelve months, will be aggregated with other income                   scheme portfolio to all the unitholders.
and taxed at rates of tax, including surcharge, applicable to normal
income. However, Section 111A inserted in the Act, by the Finance                   Unitholders under the Scheme have a proportionate right in the
Act, provides that such gains, in respect of equity oriented fund, will             beneficial ownership of the assets of TMF under the Scheme.
be taxable only at 10% as increased by the applicable surcharges, if                The Unitholders have a right to ask the Trustee Company about
such gains arise after 1t October, 2004, and the sale of unit has been              any information which may have an adverse bearing on their
chargeable to the securities transaction tax.                                       investments, and the Trustee Company shall be bound to

                                                                          45
TATA BALANCED FUND
      disclose such information to the Unitholders as stated in the           iii.   Information regarding the Scheme
      clauses “NAV Information” & “Information regarding the Scheme”.         TMF shall before the expiry of one month from the close of each
      The Unitholders have a right to receive audited annual report           half year i.e.31st March and 30th September publish, by means of
      setting forth the financials of the Scheme as on 31st March             an advertisement in one English language national daily newspaper
      along with the entire portfolio in detail.                              and in a vernacular language newspaper published in Mumbai, the
                                                                              Scheme’s unaudited financial results and portfolio statements. The
      The appointment of the Asset Management Company can be
                                                                              Board shall also make such periodic disclosures to the Unitholders
      terminated by majority of the trustees or by 75% of the
                                                                              as are required by the SEBI Regulations and are essential to keep
      unitholders of the scheme.
                                                                              them informed about any information which may have an adverse
      The trustees shall ensure that no change in the fundamental             bearing on the Scheme. As such, the disclosure of information, etc.
      attributes of any scheme or the trust or fees and expenses              of the Scheme will be in accordance with SEBI Regulations including
      payable or any other change which would modify the scheme               Schedule XI & XII thereof.
      and affects the interest of unitholders, shall be carried out
      unless:-                                                                An abridged Schemewise annual report shall be mailed to all
      (i) a written communication about the proposed change is                unitholders not later than six months from the date of closure of the
            sent to each unitholder and an advertisement is given in          relevant accounting year and the full annual report shall be available
            one English daily newspaper having nationwide circula-            for inspection at TAML; a copy shall be made available to the
            tion as well as in a newspaper published in the language          unitholders on request, on payment of nominal Fees, if any. The
            of the region where the Head Office of the mutual fund is         Annual Report and abridged summary thereof shall contain details
            situated; and                                                     as specified in the Eleventh Schedule of the SEBI Regulations and
      (ii) the unitholders are given an option to exit at the prevail-        such other details as are necessary for the purpose of providing a
            ing Net Asset Value without any exit load.”                       true and fair view of the operations of the mutual fund; Provided
                                                                              that the abridged schemewise annual report mailed to unitholders
      Unitholders have the right to inspect all the documents listed
                                                                              need not contain full portfolio disclosure, if the full accounts are
      under the clause “Documents Available for Inspection”.
                                                                              published in newspapers, but should contain details of group
      Under normal circumstances, the repurchase proceeds shall               company investments such as the name of the company, the amount
      be despatched within ten Business Days from the date of                 of investment made in each company of the Group by each scheme
      repurchase, while income distribution warrants shall be                 and the aggregate investments made by all schemes in the group
      despatched within 30 days of the declaration of income.                 companies of the sponsor.
ii.   Services                                                                The Annual Report of the Asset Management Company will also
      Register of Unitholders                                                 be displayed on the website of the AMC.
      A register of Unitholders shall be maintained at the office of          Annual Report, Half Yearly Results and Half Yearly Portfolio
      the Asset Management Company and also at the office of the              Statement of Mutual Fund will also be displayed on the website of
      Registrar and at such other places as the Trustee Company               AMC and AMFI.
      may decide and such register shall be conclusive evidence of
                                                                              Mutual Funds can send account statements annual report, portfolio
      ownership. The register shall contain the following particulars
                                                                              statements and other correspondence to the unit holders using e-
      :
                                                                              mail as an alternate mode of communication, with the consent of
      The names and addresses of the Unitholders                              their unitholders.
      The number of Units held by each such holder                            iv. Meeting and consent of Unitholders
      The date from which the Unit(s) are held in the name of the             Pursuant to Clause 15 of Regulation 18 of the SEBI (Mutual Funds)
      holder(s)                                                               Regulations, 1996 (the SEBI Regulations), the Trustee Company
                                                                              shall call for a meeting and obtain the consent of the Unitholders of
      The plan opted for making investment
                                                                              the Scheme (entirely at the option of the Trustee Company, either
The register may be closed for such time and for such period as the           at a meeting of the unitholders or through postal ballot or any other
Trustee Company may determine so. However, the register shall                 mode of communication in conformity with the Regulations and/or
not remain closed for more than 45 business/ working days in any              SEBI Regulations) under any of the following circumstances:
one year. In the event of a closure of the register for a period or
                                                                                     whenever required to do so by SEBI in the interest of the
periods, notice shall be given by way of publication in newspaper(s)
                                                                                     Unitholders.
or other media. Requests for fresh/ ongoing sales, repurchase,
switch will not be accepted during the period when the register is                   upon the request of three-fourths of the Unitholders of the
closed. Except when the register is closed, the register shall during                Scheme.
the business hours subject to such reasonable restrictions as the                    if the Trustee Company determines to wind up the Scheme or
Trustee Company may impose, but not less than two hours on each                      prematurely redeem the units.
business day, be kept open for inspection by any Unitholder. Subject
to the provisions herein contained, the Trustee Company and TAML                     The trustees shall ensure that no change in the fundamental
shall neither receive notice in respect of any Unit of any trust                     attributes of any scheme or the trust or fees and expenses
express, implied, or constructive, nor shall they be bound to enter                  payable or any other change which would modify the scheme
any such notice in respect of any Unit in the register except when                   and affects the interest of unitholders, shall be carried out un-
so directed by a Court of Competent jurisdiction.                                    less:-
                                                                                     (i)    a written communication about the proposed change is
Each Unitholder will receive an updated Account Statement, along                            sent to each unitholder and an advertisement is given in
with a A. S. Number (for control purposes) each time fresh / ongoing                        one English daily newspaper having nationwide circula-
sale, partial redemptions / repurchase / switch of Units are made or                        tion as well as in a newspaper published in the language
any other distributions (other than Income Distribution), if any, in                        of the region where the Head Office of the mutual fund is
respect of Units are declared and paid. Fractional Units will be                            situated; and
computed and accounted for upto three decimal places.
                                                                                     (ii)   the unitholders are given an option to exit at the prevail-
                                                                                            ing Net Asset Value without any exit load.”

                                                                         46
                                                                                                          TATA BALANCED FUND
     No amendment to the Trust Deed shall be carried out without                conducted with / by the Scheme / Fund purely on commercial terms/
     the prior approval of SEBI and Unitholders approval would be               on an arm’s length basis as principal to principal.
     obtained where it affects the interests of unitholders.
                                                                                TAML may, utilise the services of the Companies stated in the clause
v.    Benefits to the Unitholders
                                                                                “Associate Transactions” (& to whom selling commission has been
All benefits accruing / earned under the Scheme in respect of income            paid/provided for their marketing efforts in mobilising subscription
( not included in NAV ), capital, reserves and surpluses, if any, at            for the units of the previous schemes of the Fund)and/or the
the time of their declaration or otherwise under the Scheme shall               Sponsors, Associates, other Companies within the TATA group,
be available only to the Unitholders who hold the Units at the time             Employees or their relatives, etc. for the purpose of any securities
of its / their declaration.                                                     transactions and distribution and sale of Units / securities, provided
vi. Documents available for inspection                                          that any deal in securities through any broker associated with the
Following documents will be available for inspection by the                     Sponsors should not be beyond 5% of the quarterly aggregate
prospective investors / Unitholders on all Business Days between                purchase and sale of securities by TMF, as per SEBI Regulations
11.00 am and 1.00 p.m. at the Office of Tata Asset Management                   and the brokerage or commission paid as per prevailing market
Limited.                                                                        practice and/or approved rates is disclosed in the half yearly annual
                                                                                accounts of the Fund . TAML may, invest in Units of the Funds /
     A copy of Memorandum & Articles of Association of TAML.                    Schemes in TMF (the existing Funds / Schemes including the
     A copy of the Custodian Agreement.                                         present Scheme and others as may be announced / launched from
                                                                                time to time), only after full disclosure of its intention to invest has
     Consent from the Auditors to act in the said capacity.
                                                                                been made in the Offering Circulars. TAML shall not charge any
     SEBI (Mutual Funds) Regulations, 1996.                                     fees on its investment in Units of the Funds / Schemes in TMF.
     A copy of the Offering Circular.                                           TAML shall not act as a Trustee of any Mutual Fund and shall not
     Copy of the Trust Deed.                                                    undertake any other business activities except activities in the nature
     Copy of Memorandum & Articles of Association of Trustee                    of portfolio management services, management and advisory
     Company.                                                                   services to offshore funds, pension funds, provident funds, venture
                                                                                capital funds, management of insurance funds, financial consultancy
     Copy of Investment Management Agreement.
                                                                                and exchange of research on commercial basis, if any of such
     Copy of Registration Certificate from SEBI.                                activities are not in conflict with the activities of the Fund. Provided
     Copy of Agreement with Registrars                                          that TAML may itself or through its subsidiaries undertake such
     Indian Trusts Act, 1882                                                    activities if it satisfies SEBI that its key personnel, the systems,
                                                                                back office, bank and securities accounts are segregated activity
XXI. INVESTOR GRIEVANCES REDRESSAL MECHANISM                                    wise and there exist systems to prohibit access to inside information
The complaints by investors are usually received at CAMS,                       of various activities. Provided further that TAML shall meet capital
Authorised Investor Service Centres. If the complaints are queries              adequacy requirements, if any, separately for each such activity
like non-receipt of certificate, change of address etc. which are               and obtain separate approval, if necessary under the relevant
only redressable by the Mumbai office they are answered by the                  Regulations. Please refer to the clauses on “The Asset Management
same. Complaints/ queries solvable at the local Authorised Investor             Company” and “Investment Limitations”.
Service Centres are addressed accordingly.
                                                                                XXII. PENALTIES PENDING LITIGATION OR PROCEEDINGS,
A complete record of complaints received and attended is                              FINDINGS OF INSPECTIONS OR INVESTIGATIONS FOR
maintained and a review is carried out periodically by TAML to ensure                 WHICH ACTION MAY HAVE BEEN TAKEN OR IS IN THE
prompt redressal of complaints.                                                       PROCESS OF BEING TAKEN BY ANY REGULATORY
Yearwise breakup of Investor Complaints                                               AUTHORITY
                                                                                1.   Cases of penalties awarded by SEBI Act or any of its
Up to        Opening   Letters          Total     Letters    Letters
                                                                                     regulations against the Sponsor of the Mutual Fund or any
             Balance Received                   Attended     Balance
                                                                                     company associated with the Sponsor in any capacity including
31/03/2002          11        7342  7353            7353         0                   the Asset Management Company, Trustee Company/Board of
31/03/2003           0       15373 15373           15364         9                   Trustees, or any of the Asset Management Company and
31/03/2004           9        6966 6975             6975         0                   Trustee Company. For Sponsor and its associates, other than
28/02/2005           0        1824 1824             1824         0                   the penalties as mentioned above, the penalties for defaults in
                                                                                     respect of shareholders, debentureholders and depositors shall
Conflict of interest
                                                                                     also be disclosed. Additionally, penalties awarded for any
The Trustee Company, the Asset Management Company, the                               economic offence and violation of any securities laws shall be
Custodian, the Registrar, any Associate, any Distributor, Dealer,                    disclosed.
other companies within the Tata group, etc. may from time to time
act (individually and / or jointly) as manager, custodian, registrar,                A fine of Rs. 2 lacs has been paid by Tata Asset Management
administrator, investment adviser, distributor or dealer or agent or                 Limited. to SEBI (on behalf of the AMC and the Mutual Fund)
marketing associate, respectively in relation to, or be otherwise                    for disclosure of portfolio statement to Unitholders not being
involved in, other Schemes / Funds / Activities (in the same or                      in the exact format as prescribed by SEBI.
different capacity) (to the extent permitted under various relevant
Regulations), which may have similar investment objectives to those             2.   Pending material litigation proceedings incidental to the
of the Scheme/ Fund. The Asset Management Company, may for                           business of the Mutual Fund to which the Sponsor of the Mutual
example, make investments for other permitted business activities                    Fund or any company associated with the Sponsor in any
or on its own behalf without making the same available to the                        capacity including the AMC, Board of Trustee/Trustee Company
Scheme / Fund. The Asset Management Company/Trustee                                  or any of the directors or key personnel is a party. Any pending
Company will, at all times, have regard in such event to its obligations             criminal cases against the Sponsor or any company associated
to act in the best interests of the Scheme / Fund so far as is                       with the Sponsor in any capacity including the AMC, Board of
practicable, having regard to its obligations to other permitted                     Trustee/Trustee Company or any of the directors or key
business activities and will ensure that such transactions are                       personnel should be also be disclosed separately.

                                                                           47
TATA BALANCED FUND
     “SEBI has filed a writ petition before the Bombay High Court            MISCELLANEOUS
     seeking direction to the Additional Metropolitan Magistrate (the        Statements in this Offering Circular are, except where otherwise
     Magistrate) to expedite the case in a criminal complaint (for           stated, based on the law and practice currently in force in India and
     alleged insider trading) initiated by them earlier against              are subject to changes therein. The information contained in this
     Hindustan Lever Ltd. (HLL) and its five Executive Directors             Offering Circular regarding taxation is for general information
     who held such office in March 1996. Thereafter, the Magistrate          purposes only and is in conformity with the relevant provisions of
     has taken congnizance of SEBI’s complaint and has directed              the Income Tax Act, 1961, Wealth Tax Act, 1957, and Gift Tax Act,
     the issue of summons to HLL and the five Executive Directors            1958, respectively and has been included relying upon advice
     Mr. S.M. Datta, a director of the Tata Trustee Company Pvt.             provided to the Fund by S.B.Billimoria & Co. Chartered Accountants,
     Ltd., was one of the five Executive Directors of HLL who are            auditors of TMF, based on the relevant prevailing provisions. Further
     being proceeded against.”                                               investments by NRI will also be in accordance with the provisions
3.   Deficiency in the systems and operations of the Sponsor of              of Foreign Exchange Management Act, 1999 and RBI directions
     the Mutual Fund or any company associated with the sponsor              and permissions for offer of units to NRIs/ FIIs. All necessary and
     in any capacity including the AMC or the Trustee Company                required permissions have been / are being taken and resolutions
     which SEBI has specifically advised to be disclosed in the              have been / are being passed. This Offering Circular is approved by
     offer document, or which has been notified by any other                 the Trustee Company on 8th May, 1995.
     regulatory agency, shall be disclosed. – NIL.                           The contents of the Offering Circular including figures, data, yields,
4.   Enquiry/adjudication proceedings under the SEBI Act and the             etc. have been checked and are factually correct.
     Regulations made thereunder, that are in progress against the           All points mentioned in the SEBI (Mutual Fund) Circular MFD/
     Sponsor of the Mutual Fund or any company associated with               CIR/06/275/2001 dated July 9, 2001 and revised as on December
     the Sponsor in any capacity including the AMC, Board of                 26, 2003 have been included in this Offer Document.
     Trustee/Trustee Company or any of the Directors of key
     personnel of the Asset Management Company shall be                      Notwithstanding anything contained in the Offering Circular the
     disclosed. – NIL.                                                       provisions of the SEBI (Mutual Funds) Regulations, 1996 and the
                                                                             guidelines thereunder shall be applicable.
                                                                                                                                    By order
                                                                                                                           Board of Directors
                                                                                                             Tata Asset Management Limited.


                                                                             Place: Mumbai                                       H. A. Bulsara
                                                                                    st
                                                                             Date: 1 April, 2005.                        Chief Operating Officer




                                                                        48

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:4
posted:8/27/2011
language:English
pages:49