TD Mutual Funds Annual Financial Report

TD High Yield Bond Fund TD Mutual Funds Annual Financial Report for the period ended December 31, 2011 Management’s Responsibility for Financial Reporting The accompanying financial statements have been prepared by TD Asset Management Inc. as Manager of the Fund and approved by its Board of Directors.The Manager is responsible for the integrity, objectivity and reliability of the data presented.This responsibility includes selecting appropriate accounting principles and making judgments and estimates consistent with Canadian generally accepted accounting principles.The Manager is also responsible for the development of internal controls over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial information is produced, and the safeguarding of all assets of the Fund. The Board of Directors of TD Asset Management Inc. is responsible for reviewing and approving the financial statements and overseeing manage-ment’s performance of its financial reporting responsibilities. PricewaterhouseCoopers LLP is the external auditor of the Fund.The auditor has audited the financial statements in accordance with Canadian generally accepted auditing standards to enable it to express its opinion on the financial statements.The auditor’s report is included on the following page of this Annual Report. On behalf of TD Asset Management Inc., Manager of the Fund Sandra Cimoroni Director and Officer, TD Mutual Funds March 7, 2012 December 31, 2011 Francesca Shaw Director and Chief Financial Officer March 7, 2012 1 Annual Financial Report Independent Auditor’s Report To the Unitholders and Trustee of: TD Canadian T-Bill Fund TD Canadian Money Market Fund TD Premium Money Market Fund TD U.S. Money Market Fund TD Ultra Short Term Bond Fund TD Short Term Bond Fund TD Mortgage Fund TD Canadian Bond Fund TD Income Advantage Portfolio TD Canadian Core Plus Bond Fund TD Corporate Bond Capital Yield Fund TD Real Return Bond Fund TD Global Bond Fund TD High Yield Bond Fund TD Monthly Income Fund TD U.S. Monthly Income Fund TD Balanced Income Fund TD Diversified Monthly Income Fund TD Balanced Growth Fund TD Dividend Income Fund TD Dividend Growth Fund TD Canadian Blue Chip Equity Fund TD Canadian Equity Fund TD Canadian Value Fund TD Canadian Small-Cap Equity Fund TD North American Dividend Fund TD U.S. Blue Chip Equity Fund (collectively, the “Funds”) TD U.S. Quantitative Equity Fund TD U.S. Large-Cap Value Fund TD U.S. Large-Cap Value Currency Neutral Fund TD U.S. Equity Portfolio TD U.S. Equity Currency Neutral Portfolio TD U.S. Mid-Cap Growth Fund TD U.S. Small-Cap Equity Fund TD Global Low Volatility Fund TD Global Dividend Fund TD Global Value Fund TD Global Growth Fund TD Global Equity Portfolio TD Global Multi-Cap Fund TD Global Sustainability Fund TD International Value Fund TD International Growth Fund TD European Growth Fund TD Japanese Growth Fund TD Asian Growth Fund TD Pacific Rim Fund TD Emerging Markets Fund TD Latin American Growth Fund TD Resource Fund TD Energy Fund TD Precious Metals Fund TD Entertainment & Communications Fund TD Science & Technology Fund TD Health Sciences Fund TD Canadian Bond Index Fund TD Balanced Index Fund TD Canadian Index Fund TD Dow Jones Industrial AverageSM Index Fund TD U.S. Index Fund TD U.S. Index Currency Neutral Fund TD Nasdaq® Index Fund TD International Index Fund TD International Index Currency Neutral Fund TD European Index Fund TD Japanese Index Fund TD Advantage Balanced Income Portfolio TD Advantage Balanced Portfolio TD Advantage Balanced Growth Portfolio TD Advantage Growth Portfolio TD Advantage Aggressive Growth Portfolio TD Comfort Conservative Income Portfolio TD Comfort Balanced Income Portfolio TD Comfort Balanced Portfolio TD Comfort Balanced Growth Portfolio TD Comfort Growth Portfolio TD Comfort Aggressive Growth Portfolio TD Target Return Conservative Fund TD Target Return Balanced Fund We have audited the financial statements of each of the Funds, which comprise the statement of investment portfolio as at December 31, 2011 and the statements of net assets, investment operations and changes in net assets as at and for the periods indicated in note 1, and the related notes and supplementary schedules, which comprise a summary of significant accounting policies and other explanatory information. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of the financial statements of each of the Funds in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on the financial statements of each of the Funds based on each of our audits.We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform an audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in each of our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements of each of the Funds present fairly, in all material respects, the financial position of each of the Funds, the results of each of their investment operations and the changes in each of their net assets as at and for the periods indicated in note 1 in accordance with Canadian generally accepted accounting principles. Chartered Accountants, Licensed Public Accountants Toronto, Ontario March 7, 2012 December 31, 2011 2 Annual Financial Report TD High Yield Bond Fund Statements of Net Assets (in 000s except per unit amounts and number of units) as at December 31, 2011 and 2010 Statements of Investment Operations (in 000s except per unit amounts) for the periods ended December 31, 2011 and 2010 Assets Investments at Fair Value (Note 2) Short-Term Investments Foreign Currencies Cash Interest Receivable Dividends Receivable Subscriptions Receivable Receivable for Investment Sales Unrealized Gain on Open Foreign Exchange Forward Contracts Liabilities Accrued Liabilities Redemptions Payable Unrealized Loss on Open Foreign Exchange Forward Contracts Net Assets (Note 2) 2011 $ 1,368,257 $ 68,964 93 279 26,312 72 3,380 0 20,844 1,488,201 607 712 2,411 3,730 $ 1,484,471 $ 2010 1,254,844 26,233 2,816 154 23,033 120 1,325 3,151 25,912 1,337,588 642 1,610 3,460 5,712 1,331,876 Investment Income Interest Dividends Foreign Exchange Securities Lending Less: Withholding Taxes Expenses (Note 4) Management Fees Administration Fees Independent Review Committee Fees Bank Charges and Interest Less: Waived Expenses Net Investment Income (Loss) Net Realized Gain (Loss) on Sale of Investments Net Change in Unrealized Appreciation/ 2011 $ 101,152 $ 120 (10,111) 1 (199) 90,963 7,147 525 5 6 7,683 (9) 7,674 83,289 (8,557) 2010 94,558 398 40,147 1 (36) 135,068 7,582 477 6 6 8,071 (9) 8,062 127,006 (53,248) Net Assets Representing Unitholders’ Equity (Note 3) Investor Series $ 87,760 $ Institutional Series $ 109,897 $ Depreciation of Investments 99,343 Transaction Costs on Purchases 90,427 and Sales of Investments (45,117) (15) 101,651 (9) Advisor Series F-Series H-Series S-Series $ 198,220 $ $ 54,346 $ $ 1,313 $ $ 415 $ 210,078 50,085 977 6 Net Gain (Loss) on Investments Increase (Decrease) in Net Assets from Investment Operations† ... - tailieumienphi.vn