ANNUAL REPORT

Transcription

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2 BOARD OF TRUSTEES Justice S. Mohan - Independent Trustee Amitabha Ghosh - Associate Trustee S. R. Hegde - Independent Trustee P. V. Rao - Independent Trustee A. K. Thakur - Independent Trustee SAHARA MUTUAL FUND 97-98, ATLANTA Nariman Point Mumbai SPONSOR Sahara India Financial Corporation Limited Sahara India Bhavan Kapoorthala Complex Lucknow ANNUAL REPORT INVESTMENT MANAGER Sahara Asset Management Company Private Limited 97-98, ATLANTA Nariman Point Mumbai REGISTRAR AND TRANSFER AGENT Karvy Computer Share Private Limited 21, Avenue 4, Street No 1 Banjara Hills, Hyderabad CUSTODIAN HDFC BANK LTD Lodha - I Think Techno Campus, Building - Alpha, 8th Floor, Near Railway Station, Kanjur Marg (E), Mumbai STATUTORY AUDITORS Chaturvedi & Co Chartered Accountants 81, Mittal Chambers Nariman Point Mumbai

3 Table of Contents Page No Report of the Trustees 3 Sahara Tax Gain 13 Sahara Growth 23 Sahara Midcap 39 Sahara Wealth Plus 57 Sahara Infrastructure 76 Sahara R.E.A.L 95 Sahara Power & Natural Resources 111 Sahara Banking & Financial Services 127 Sahara Super Sahara Star Value 159 Sahara Gilt 175 Sahara Income 188 Sahara Liquid 203 Sahara Classic 223 Sahara Interval Quarterly Plan Series Sahara Short Term Bond 254 Addendums for the year Note: Auditors Report, BS, Revenue, Schedules,Key Statistics and Notes to Accounts form part of each scheme.

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5 REPORT OF THE TRUSTEES We are pleased to present before you the ANNUAL REPORT of SAHARA MUTUAL FUND for the year ended March 31, Sahara Mutual (formerly known us First India Mutual ) has been constituted as a Trust on 18 th July, 1996 in accordance with the provisions of the Indian Trust Act, 1882 and is duly registered under the Indian Registration Act, The is registered with SEBI under Registration No.MF/030/96/0. The Trustees have entered into an Investment Management Agreement dated 18 th July 1996 with Sahara Asset Management Company Private Limited Ltd (formerly First India Asset Management (P) Ltd) to function as the Investment Manager for the Schemes of Sahara Mutual. The Sponsor to the Mutual is Sahara India Financial Corporation Limited and has contributed an initial amount of Rs.1 lakh as the Trust Corpus. The Board of Trustees is the exclusive owner of the Trust and holds the same in trust for the benefit of the unit holders. The Board of Trustees has been discharging its duties and carrying out the responsibilities as provided in the Regulations and the Trust Deed. The Board of Trustees seeks to ensure that the and the Schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the Stock Exchanges, the Association of Mutual s in India and other regulatory agencies. OVERVIEW OF DEBT MARKETS The financial year was relatively more challenging year for the policy makers across the economies across the globe. The complex tradeoff between growth and inflation and attempt to find the right balance between the two has been the summary of last year. Inflation underwent a sharp spike due to rise in prices of food articles & commodities, structural changes in consumption pattern, and loose monetary condition which impacted asset prices across the board. Food inflation touched a high of 18% last year and the general inflation remained at elevated levels. To tame the spiraling inflation, RBI had to resort to hikes in the policy rates. Repo became the policy rate for reference. The action however, did little to contain overall inflation. The average inflation for the year was 9% and is likely to impact the economic growth. The attempt to control inflation had its toll on IIP last year. IIP moderated to 2.90 % in the month of December 2010 from 12.10% in October While demands could be seen sustaining in consumer durables and non-durables, there was slow growth in capital goods as the year progressed. This may be attributed to rising cost and unstable world economy, where export prospects were dim for the most part of last year. OVERVIEW OF EQUITY MARKETS Equity markets in India and across the globe witnessed muted growth in FY10-11 on the back of good performance in the previous year. Nifty gave returns of 11% and CNX Midcap gave marginal returns of 4.35% during the financial year ending 31 st March The key reasons behind this subdued performance were high inflation, rising interest rate scenario, economic uncertainties, telecom scam and tight liquidity conditions in the market. Though FII remained net buyers of over Rs.1 lakh crores, domestic institutions were net sellers. The year started on a positive note with strong IIP numbers and above average monsoon. Unlike last year, the monsoon in India has been quite normal this year. About 78% of the area received excess/normal rainfall. For a nation that is largely agrarian in nature, a normal monsoon augurs well for the economy, especially in terms of rural consumption and inflation control. However, later during the year, the IIP numbers slipped to as low as 2.9% in the month of December 2010 Vs 10.4% in FY10. The three-month moving-average of the IIP data reveals that there has been a slowdown in IIP since February This could be attributed to the withdrawal of the government s stimulus package and the corresponding weak private consumption and rising interest rates. 3

6 In spite of good monsoon and better crop yields, the average inflation for FY11 was around 9% Vs RBI target of 4.5-5%, putting pressure on the central bank to raise key rates seven times during the year. Given the significant headwinds being played out currently, the central bank has clearly outweighed inflationary expectations over growth. The Government of India de-controlled petrol prices during the year and also raised prices of diesel, kerosene and LPG translating further pressure on inflation. The budget this year clearly focused on fiscal consolidation without letting up on growth. Fiscal position was comfortable this year especially after windfall from 3G spectrum & BWA auctions and disinvestments. The financial year , was also highlighted with irregularities in 2G spectrum allocation and the MFI (Micro Finance Institution) space. Concerns over corporate governance also rose with news of the loan scam declared by CBI, SEBI barring founders and related entities of four firms from trading on stock exchanges. These news jolted investor confidence and created panic in the markets. On the international front, uncertainty prevailed during the year starting with the European crisis, concerns over China s possible real estate bubble, unrest in Middle East and African region and catastrophe in Japan. The economic news flow emanating from the US was also disappointing. The Federal Reserve kept interest rates unchanged at artificially lower levels and stated that the US s economic recovery was more modest than anticipated. The stubbornly-high unemployment levels and a depressed housing and credit markets have prompted US consumers to save more and spend less, leading to weak consumption levels and raising concerns of a double-dip recession also affecting export oriented emerging countries like India and China. With ongoing global uncertainty, Gold prices reached all time high. Unrest in Middle East and African region pushed crude prices above $120/bbl translating in further inflationary pressure. TRUSTEES: The Board of Trustees as on date comprise Justice S Mohan, Independent Trustee, Mr. Amitabha Ghosh, Nominee of the Sponsor, Mr. S. R. Hegde, Independent Trustee, Mr. P.V. Rao, Independent Trustee and Mr A K Thakur, Independent Trustee. PERFORMANCE. (a) EQUITY SCHEMES: 1. Sahara Tax Gain Investment Objective: The scheme objective is to provide immediate tax relief and long term growth of capital to investors by investing upto 85 % in equity and equity related instruments. Returns: Performance as of Since Inception 1 year March 31, 2011 inception date Scheme (%) April 1, 1997 BSE 200 (%) Converted into an open ended fund from November 7, The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 2. Sahara Growth. Investment Objective: The basic objective of Sahara Growth is to achieve capital appreciation by investing in equity and equity related instruments 4

7 Returns: Performance as of Since Inception 1 year March 31, 2011 inception date Scheme (%) Aug 30, CNX Nifty (%) The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 3. Sahara Mid Cap. Investment Objective: The basic objective is to achieve long term capital growth at medium level of risks by investing primarily in Midcap stocks. Returns: Performance as of March 31, year Since inception Inception date Scheme (%) December 31, CNX 500 (%) The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 4. Sahara Wealth plus. Investment Objective: The primary objective of the scheme would be to invest equity and equity related instruments of companies that would be wealth builders in the long term. Returns: Performance as of Since Inception 1 year March 31, 2011 inception date Scheme (%) VPO September 1, FPO CNX 500 (%) VPO Variable Pricing Option FPO Fixed Pricing Option The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 5. Sahara Infrastructure. Investment Objective: The primary objective of the scheme is to provide income distribution and/or medium to long term capital gains by investing predominantly in equity / equity related instruments of companies in the infrastructure sector. Returns: Performance as of Since Inception 1 year March 31, 2011 inception date Scheme (%) VPO (8.63) 9.07 April 3, FPO (9.41) Nifty (%) VPO Variable Pricing Option FPO Fixed Pricing Option The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 6. Sahara R.E.A.L : (Retailing, Entertainment & Media, Auto & Auto Ancillaries and Logistics ). 5

8 Investment Objective: The primary objective of the scheme is to provide long term capital gains by investing predominately in equity/equity related instruments of companies in the Retailing, Entertainment & Media, Auto and Auto Ancillaries and Logistics sector. Returns: Performance as of Since 1 year March 31, 2011 inception Inception date Scheme (%) 0.30 (7.07) November 27, CNX Nifty (%) The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 7. Sahara Power and Natural Resources : Investment Objective: The investment objective is to generate long term capital appreciation through investment in equities and equity related securities of companies engaged in the business of generation, transmission, distribution of Power or in those companies that are engaged directly or indirectly in any activity associated in the power sector or principally engaged in discovery, development, production, processing or distribution of natural resources. Returns: Performance as of March 31, year Since inception Inception date Scheme (%) (1.59) 8.29 June 17, Nifty (%) The price and redemption value of the units, and income from them, can go up down with the fluctuations in the market value of its underlying investments as well as 8. Sahara Banking & Financial Services Investment Objective: The investment objective would be to provide long term capital appreciation through investment in equities and equities related securities of companies whose business comprise of Banking / Financial services, either whole or in part. Returns: Performance as of March 31, year Since inception Inception date Scheme (%) September 16, Bank Nifty (%) The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 9. Sahara Super 20 The investment objective of the scheme would be to provide long term capital appreciation by investing in predominantly equity and equity related securities of around 20 companies selected out of the top 100 largest market capitalization companies, at the point of investment. Returns: Performance as of March 31, year Since inception Inception date Scheme (%) July 31, CNX Nifty (%)

9 The price and redemption value of the units, and income from them, can go up down with the fluctuations in the market value of its underlying investments as well as 10. Sahara Star Value The investment objective of the scheme is to provide long term capital appreciation by investing predominantly in equity / equity related instruments of select companies based on value parameters. Returns: Performance as of March 31, year Since inception Inception date Scheme (%) (1.22) 6.37 Sept 14, BSE 200 (%) The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments (b) DEBT SCHEMES 1. Sahara Income. Investment Objective: The primary objective of the scheme is to generate regular income and growth of capital through investment in debt instruments, money market and related securities while at all times emphasizing the importance of capital preservation. Returns: Performance as of Since Inception 1 year March 31, 2011 inception date Scheme (%) February 21, CRISIL Composite Bond NA* 2002 Index (%) *as Index launched on March 31, 2002 The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 2. Sahara Liquid. Investment Objective: The investment objective is to create a highly liquid portfolio of good quality debt as well as money market instruments with a view to provide high liquidity and reasonable returns to the unit holders, while at all times emphasizing the importance of capital preservation. Returns: Performance as of March 31, year Since inception Inception date Scheme (%) Variable Pricing Option February Fixed Pricing Option , 2002 CRISIL Liquid Index (%) NA* * As Index launched on March 31 st Face Value of Units Rs.1000/- The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. 3. Sahara Gilt. Investment Objective: The investment objective is to generate reasonable returns by investing in sovereign instruments issued by Central / State governments. 7

10 Returns: Performance as of March Since Inception 1 year 31, 2011 inception date Scheme (%) February I Sec Composite Index (%) NA* 21, 2002 * As Index launched on March 31 st, The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments 4. Sahara Classic : Investment Objective: The objective is to generate returns by investing in debt instruments including money market instruments and also to invest in equity and equity related instruments to seek capital appreciation. Returns: Performance as of March 31, Since Inception 1 year 2011 inception date Scheme (%) February I Sec Composite Index (%) , 2008 The price and redemption value of the units, and income from them, can go up down with the fluctuations in the market value of its underlying investments as well as 5. Sahara Interval The investment objective of the scheme is to generate returns with low volatility through a portfolio of debt and money market instruments with a provision to offer liquidity at periodic intervals. Returns: Performance as of March 31, year Since Inception inception date Scheme (%) October CRISIL Short Term Bond Index (%) , 2008 The price and redemption value of the units, and income from them, can go up down with the fluctuations in the market value of its underlying investments as well as 6. Sahara Short Term Bond The investment objective of the scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities. Returns: Performance as of March 31, year Since Inception inception date Scheme (%) April 13, CRISIL Liquid Index (%) The price and redemption value of the units, and income from them, can go up down with the fluctuations in the market value of its underlying investments as well as The Balance Sheet and the Revenue Account together with the notes thereon have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual s) Regulations, 1996 and amendments thereto, as applicable. 8

11 MARKET OUTLOOK DEBT MARKETS The economy is facing challenges of lower IIP growth and continued high inflation. The instability in some of the Middle East and African countries has added to the uncertainties. There is an increasing fear of higher inflation - moderate growth (IIP) paradigm. Recent strong steps taken by RBI through its policy initiatives are focused towards containing inflation. The liquidity in the system is likely to remain tight for the larger part of this year. Despite RBI measures, the inflation and interest rates are likely to remain at elevated levels. The government borrowings are also expected to go beyond the budgeted figures thereby giving very little comfort for sustaining the much needed higher GDP growth. EQUITY MARKETS The inflationary conditions continue to prevail. RBI has been consistently hiking the rates, but the stance has changed recently, with inflation control being given more importance than the growth for the first time since last year. This would impact growth in the short term but would help the government control inflation. As a result the policies are likely to be directed towards curbing expenditures, augmenting supplies, generating revenues through disinvestment, restraining money supply etc. The multi-pronged measures of RBI and the government are likely to bring inflation to an acceptable level of around 5-6% around March This also depends on the monsoon which is expected to be normal this year. However, the long term outlook of the India growth story continues to remain bright. This is because the underlying demand for goods and services has been robust. This is also vindicated by the fact that, whenever market falls to around 5400 levels, it retraces its fall smartly, when we observe good FII and domestic inflows. The global situation too is expected to improve going forward but short term uncertainties still remain there too. Scheme wise unclaimed Dividends & Redemptions as on March 31, 2011 Scheme Name No of Investors Unclaimed Dividend (Rs) No. of Investors Unclaimed Redemption (Rs) Sahara Gilt Sahara Income , Sahara Growth , Sahara Taxgain , Sahara Midcap Sahara Infrastructure Sahara Banking & Financial Services Sahara Wealth plus Sahara R.E.A.L Sahara Power & Natural Resources Sahara Star Value Sahara Interval Sahara Super

12 Disclosure of investor complaints for the year Total Number of Folios under all schemes: Complaint Code Type of Complaint I A Non receipt of Dividend on Units I B Interest on delayed payment of Dividend I C Non receipt of Redemption Proceeds I D Interest on delayed Payment of Redemption II A Non receipt of Statement of Account/Unit Certificate II B Discrepancy in Statement of Account (a) No. of Complaints pending at the beginning of the year (b) No of complaints received during the year Within 30 Days Resolved Days Days Action on (a) and (b) Beyond 180 days Non Actionable 0-3 mths Pending 3-6 mths 6-9 mths II C Non receipt of Annual Report /Abridged Summary III A Wrong switch between Schemes III B Unauthorized switch between Schemes III C Deviation from Scheme attributes III D Wrong or Excess charges/load III E Non updation of changes viz.address, PAN,bank details, nomination, etc IV Others TOTAL Role of Mutual s in Corporate Governance of Public Listed Companies 9-12 mths 10

13 Policy on Attending AGM/EOGM of Investee Companies Introduction Sahara Asset Management Company Private Limited, acts as an Investment Manager ( The AMC ) to the schemes of Sahara Mutual ( ). The general voting policy and procedures being followed by the AMC in exercising the voting rights ( Voting Policy ) is given hereunder. Philosophy and Guidelines of Voting Policy The AMC has a dual responsibility of a prudent fund manager investing investor money as well as of an entity performing the responsibility of protecting the investor interest. As part of the management of funds, irrespective of the scheme, the AMC ensures that investments are made in companies that meet investment norms. It is expected that the investee company adheres to proper corporate governance standards. The voting policy for the investee companies by the AMC is as under: The AMC shall deal with voting on case to case basis. For this purpose, the AMC shall review various notices of AGM/EOGM received from the investee companies from time to time and decide whether there are some issues on which the voting decision (favourable / unfavourable) is to be taken. The AMC would generally agree with the management of the Investee Company on routine matters, but may object by voting against if it believes that the interest of the shareholders are prejudiced in any manner. As regards non-routine items the Manager-Equity with assistance of the Equity Research Department and in consultation with the Chief Investment Officer shall review each of such cases and make specific recommendations to the Chief Executive Officer. In case the AMC is against any non routine item, it may decide to attend the meeting and vote against. In some other such cases, it may decide to abstain based on one or more of the factors like our small holding in the company, location of the meeting place, time/cost involved etc. For these instances, the reasons for non attendance will be recorded. As per the decision taken by the AMC, it may depute an authorized person to vote in AGM/EOGM appropriately keeping in mind the interest of unit holders. AMC would maintain a record on the AGM/EOGM voting related matters. Disclosure of Voting policy and Maintenance of Records This Policy on attending AGM/EOGM and suitable disclosure thereof will be made available on the website The details of voting in the AGMs of the investee companies for the financial year are as follows: HPCL Date Type of Meeting (AGM / EGM) Proposal Management Recommendation Vote (For / Against / Abstain) 16-Sep-10 AGM Adoption of Audited Balance Sheet, For For Director's Report, Auditors Report. Declaration of final dividend of 120%. For For Reappointment of directors Sh. L N Gupta, Sh B Mukharji and Dr. Gitesh Shah. For For UNICHEM LTD Date Type of Meeting (AGM / EGM) Proposal Management Recommendation Vote (For / Against / Abstain) 16-Sep-10 AGM To adopt audited balance sheet along For For 11

14 with reports of directors. Declaration of final dividend. For For To re-appoint directors Mr. Prafull For For Sheth and Mr. Anand Mahajan. To reappoint Auditors M/s B D For For Jokhakar & Co. To resolve subdivision of each equity share of Rs. 5 each into equity share of Rs.2 each. For For CAIRN INDIA LTD Date Type of Meeting (AGM / EGM) Proposal Management Recommendation Vote (For / Against / Abstain) 15-Sep-10 AGM To consider audited balance sheet. For For To re-appoint directors - Mr Indrajit For For Banerjee and Mr. Rahul Dhir. To appoint auditors M/s S R Batliboi & Co. For For STATUTORY INFORMATION a. The Sponsors are not responsible or liable for any loss resulting from the operation of the Schemes of the beyond their initial contribution of Rs.1 lakh for setting up the. b. The price and redemption value of the units, and income from them, can go up as well as down with fluctuations in the market value of its underlying investments. c. Full Annual Report is disclosed on the website ( and shall be available for inspection at the Head Office of the Mutual. Present and prospective unit holders can obtain copy of the trust deed, the full Annual Report of the / AMC free of cost. ACKNOWLEDGEMENTS The Trustees would like to thank all the investors for reposing their faith and trust in Sahara Mutual. The Trustees thank the Securities and Exchange Board of India, the Reserve Bank of India, the Sponsors, the Board of the Sahara Asset Management Company Private Limited, and Association of Mutual s in India for their support, co-operation and guidance during the period. We are also thankful to the Auditors, Registrar and Transfer Agents, Custodian, Banks, AMFI Certified distributors and other service providers for their continuous support. The Trustees also appreciate the efforts made by the employees of Sahara Asset Management Company Private Limited and place on record their contribution in good performance of the schemes. We look forward for your continued support and assure you of our commitment at all times in managing the schemes of Sahara Mutual. On behalf of the Board of Trustees For SAHARA MUTUAL FUND S R Hegde Trustee Place: Mumbai Date: June 1 st,

15 SAHARA TAX GAIN FUND AUDITORS REPORT TO THE TRUSTEES OF SAHARA MUTUAL FUND 1. We have audited the Balance Sheet of Sahara Mutual Sahara Tax Gain (the Scheme ) as at March 31, 2011, and the related Revenue Account for the year ended on that date, annexed thereto. These financial statements are a responsibility of the Trustees of Sahara Mutual and the management of Sahara Asset Management Company Private Limited (the Management ). Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of account of the Scheme. 4. In our opinion and to the best of our information and according to the explanations given to us: The Balance Sheet and the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual s) Regulations, 1996 and amendments thereto, as applicable and give a true and fair view in conformity with the Accounting principles generally accepted in India i). in case of Balance Sheet of the state of affairs of the scheme as at March 31, 2011and ii). in case of the Revenue account, of the surplus for the year ended on that date. 5. The Balance Sheet and the Revenue Account together with the notes thereon, have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual s) Regulations, 1996 and amendments thereto, as applicable. For CHATURVEDI & CO. Chartered Accountants (SN Chaturvedi) Place: Mumbai Partner Date: 01/06/2011 M.No.: Firm Regn. No.: E 13

16 SAHARA TAX GAIN FUND BALANCE SHEET AS AT MARCH 31, 2011 Schedu le As at March 31, 2011 As at March 31, 2010 ASSETS (Rs) (Rs) Investments 1 101,426,564 91,881,502 Deposits Other Current Assets 3 11,052,455 12,895,928 Total Assets 112,479, ,777,430 LIABILITIES Unit Capital 4 66,090,943 55,902,171 Reserves & Surplus 5 45,631,649 39,525,854 Current Liabilities & Provisions 6 756,427 9,349,405 Total Liabilities 112,479, ,777,430 NET ASSET VALUE Net Asset Value per unit (Rs.) i) Growth Option ii) Dividend Option Significant Accounting Policies and Notes to the accounts 8 Schedules 1 to 6 and 8 form an integral part of the Balance Sheet As per our attached report of even date For Chaturvedi & Co. For Sahara Asset Management Company Pvt Ltd Chartered Accountants For Sahara Mutual Sd/- Sd/- Sd/- Sd/- Sd/- S.N.Chaturvedi C.K.Kamdar O.P.Srivastava S.R.Hegde Amitabha Ghosh Partner Director Director Trustee Trustee Sd/- Sd/- Naresh Kumar Garg A.N.Sridhar Chief Executive Officer Manager Place: Mumbai Place: Mumbai Date: 27 th May 2011 Date: 1 st June

17 REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011 SAHARA TAX GAIN FUND For the year ended March 31, For the year ended March 31, Schedule (Rs) (Rs) INCOME Dividend Income 1,548,993 1,274,282 Interest Income 332, ,741 Profit on Sale / Redemption of Investments(Net) 18,310,633 34,023,070 (Other than Inter Scheme Transfer / Sale) Total Income 20,192,398 35,410,093 EXPENSES & LOSSES Management Fees 1,380, ,417 Registrar & Transfer Agent Charges 298, ,051 Custodian Fees 111,288 82,590 Fees & Expenses of Trustees 77,393 48,766 Statutory Audit Fees 43,514 25,994 Internal Audit Fees 113,843 48,260 Insurance 31,653 12,997 Costs related to Investor Communication 112,130 34,226 Transaction cost 146,298 19,239 Marketing & Selling Exps. 454, ,094 Total Expenses 2,769,819 1,974,633 Net Surplus for the Year (excluding unrealised appreciation) 17,422,579 33,435,460 Provision / Write Back for dimunition in value of Investments 7 (5,883,929) 5,970,527 Net Surplus for the Year (excluding unrealised appreciation) 11,538,650 39,405,987 Transfer from Income Equalisation Reserve 15,364,230 18,627,078 Dividend paid, including dividend tax (13,621,827) (18,288,028) Net Surplus Transferred to Revenue Reserve 13,281,053 39,745,037 Significant Accounting Policies and Notes to the accounts 8 Schedules 7 to 8 form an integral part of the Revenue Account As per our attached report of even date For Chaturvedi & Co. For Sahara Asset Management Company Pvt Ltd Chartered Accountants For Sahara Mutual Sd/- Sd/- Sd/- Sd/- Sd/- S.N.Chaturvedi C.K.Kamdar O.P.Srivastava S.R.Hegde Amitabha Ghosh Partner Director Director Trustee Trustee Sd/- Sd/- Naresh Kumar Garg A.N.Sridhar Chief Executive Officer Manager Place: Mumbai Place: Mumbai Date: 27 th May 2011 Date: 1 st June

18 SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 1 Investments (Refer Note 8.14 of Schedule 8 for detailed Portfolio Statement) As at March 31, 2011 (Rs) SAHARA TAX GAIN FUND As at March 31, 2010 (Rs) Equity Shares 101,426,564 91,881,502 SCHEDULE 2 Deposits 101,426,564 91,881,502 With Scheduled Banks - - SCHEDULE 3 Other Current Assets Balances with Banks in Current accounts 1,568,134 4,750,539 Contracts for sale of Investments 310, Outstanding and Accrued Income 1,920 1,101 Reverse Repo arrangements 8,984,700 8,035,425 Receivable on Issue of Units / Dividend - 108,395 Investment - Liquid MF Units 186,943 - Dividend Receivable ,052,455 12,895,927 SCHEDULE 4 Unit Capital Growth Option units of Rs.10 each 8,831,519 7,699,723 (For units of Rs.10 each Dividend Option units of Rs.10 each 57,259,424 48,202,448 (For units of Rs.10 each) Total 66,090,943 55,902,171 (Refer Note 8.10 of Schedule 8) SCHEDULE 5 Reserves and Surplus Revenue Reserve Balance as at beginning of the year 72,667,748 32,922,711 Transferred from Revenue Account 13,281,053 16

19 39,745,037 Balance as at end of the year 85,948,801 72,667,748 Income Equalisation Reserve Balance as at beginning of the year Additions during the year 15,364,230 18,627,078 Transferred to Revenue Account (15,364,230) (18,627,078) Balance as at end of the year - - Unrealised Appreciation Reserve Balance as at beginning of the year 7,135,694 1,499,090 Additions/(Deletions) during the year 497,398 5,636,603 Balance as at end of the year 7,633,092 7,135,694 Unit Premium Reserve Balance as at beginning of the year (40,277,588) (31,277,925) (Deletions)/Additions during the year (7,672,657) (8,999,662) Balance as at end of the year (47,950,244) (40,277,588) Balance carried to the Balance Sheet 45,631,649 39,525,855 SCHEDULE 6 Current Liabilities and Provisions Sundry Creditors 292, ,660 Management Fees Payable 21,455 21,789 TDS on management fees payable - - Contract for Purchase of Investments - 8,524,307 Unclaimed Distributed Income 148, ,879 Payable on Redemption of Units 293, ,847 Load Charges Payable to AMC - (77) Other Payables ,427 9,349,405 17

20 SCHEDULES FORMING PART OF REVENUE ACCOUNT For the year ended March 31, 2011 (Rs) For the year ended March 31, 2010 (Rs) SCHEDULE 7 Provision / Write Back for dimunition in value of Investments At the beginning of the year (1,009,113) (6,979,640) At the end of the year (6,893,042) (1,009,113) (5,883,929) 5,970,527 18

21 PERSPECTIVE HISTORICAL PER UNIT STATISTICS SAHARA TAX GAIN FUND As at As at As at Particulars 31-Mar Mar Mar- 09 (A) Gross Income (I) Income other than Profit on sale of Investments (ii) Income from Profit (net of loss) on inter-scheme sales/ transfer of Investments (iii) Income from Profit (net of Loss) on sale other than Inter scheme (iv) Transfer to revenue account from past year's reserve NA NA NA (B) Aggregate of expenses, write off, amortisation and charges (c) Net Income (d) Net unrealised appreciation/(dimunition) in value of Investments (e) Net Asset Value Growth Plan Dividend Plan (f) Repurchase Price during the year** (I) Highest Growth Plan Dividend Plan (ii) Lowest Growth Plan Dividend Plan (g) Resale Price during the year** (I) Highest Growth Plan Dividend Plan (ii) Lowest Growth Plan Dividend Plan (h) Ratio of expenses to average daily net assets by Percentage 2.49% 2.50% 2.50% (i) Ratio of income to average daily net assets by percentage (excluding transfer to revenue account from past year's reserve but including net change in unrealized appreciation / depreciation in value of Investments and adjusted for net loss on sale / redemption of investments) **Based on the maximum load during the year 15.67% 52.58% % 19

22 NOTES TO ACCOUNTS ANNEXURE 1 TO THE ABRIDGED BALANCE SHEET AND REVENUE ACCOUNT FOR THE YEAR / PERIOD ENDED 31 ST MARCH, Investments :- 1.1 Certain investments are registered in the name of the without specific reference to the Scheme. As at March 31, 2011 the aggregate market value of securities under Sahara Tax Gain but held in the name of Sahara Mutual is Rs. 8,986, The marketing and selling expenses amounting to Rs. 4,54, and Registrar and Transfer Agents charges amounting to Rs.298, constitutes 16.42% and 10.79% respectively of the total schemes expenses. 1.3 Open Position of derivatives (outstanding market value & % to Net Assets as of the Year end). Nil 1.4 Investments in Associates and Group Companies: Provide details of issuer, nature of instruments, amount, and aggregate investments by all schemes. Nil 1.5 Open position of Securities Borrowed and / or Lending by the scheme. Nil 1.6 Details of NPA: Aggregate market value and provision thereof. Nil 1.7 Aggregate Unrealised Gain / Loss as at the end of the Financial Year / Period and percentage to net assets. Asset Class Equity Shares Appreciati on (Rs. In lakhs) 31-Mar-11 % to Net Asset s Depreciati on (Rs. In lakhs) % to Net Asset s Appreciati on (Rs. In lakhs) 31-Mar-10 % to Net Asset s Depreciati on (Rs. In lakhs) % to Net Asset s Aggregate Value of Purchase and Sale with Percentage to average assets. Purchases Year Amount in Rs. % of Daily Average ,432, ,606, Sales Year Amount in Rs. % of Daily Average ,811, ,665, Non-Traded securities in the portfolio: Provide Aggregate Value of Equity, Debt & Money Market Instruments and percentage to net assets. Scheme Name Sahara Tax Gain Category 31 st March, st March, 2010 % to Net Market value Assets (Rs.in lakhs) Market value (Rs.in lakhs) % to Net Assets Money Market

23 2. Details of Transaction with Associates under regulation 25(8). Brokerage to SIFCL A/c CMSD (Associate) has been made for sale of units of the MF as on 31 st March 2011: Commission to SIFCL A/c CMSD (Associate) made for sale of units of the MF for the current year ended 31 st March 2011 (Rs.In lakhs) Tax Gain Growth Liquid Mid cap Wealth Plus Infrastructure (Rs. in lakhs) Star Banking & Interval R. E. A. L Super 20 Power and Natural Value Financial Quarterly Resources Services Plan Sr Commission to SIFCL A/c CMSD (Associate) made for sale of units of the MF for the previous year ended 31 st March (Rs.In lakhs) Tax Gain Growth Liquid Mid cap Wealth Plus Infrastructure (Rs. in lakhs) Star Banking & Interval R. E. A. L Super 20 Power and Natural Value Financial Quarterly Resources Services Plan Sr Commission paid to associates / related parties /group companies of Sponsor/AMC Name of associate Nature of Period Business given Commission paid / related parties / association Covered (Rs cr and % of total (Rs & % of total group companies / nature of business received commission paid of Sponsor / AMC relation by the fund) by the fund (1) (2) (3) (4) (5) Sponsor / SIFCL A/c CMSD Mutual April 10- (5.15; (Rs /-; March %) 11.94%) Distributor SIFCL A/c CMSD Sponsor / Mutual Distributor April 09- March 10 ( 3.39; 0.11 % ) ( Rs.1,011,598/-; 24.75% ) In column No 4, the total business received by the fund includes business through ARNs & also direct business. In column No 5, the amount includes the upfront and the trail. Brokerage paid to associates / related parties / group companies of Sponsor/AMC Name of associate Nature of Period Value of Brokerage (Rs Cr & / related parties / association Covered Transaction (in Rs, % of total brokerage group companies / nature of Cr & of Total value paid by the ) of Sponsor / AMC relation of Transaction of the )

24 There are no associate brokers, hence not applicable for the period April Mar 2011 & April Mar Large Holdings in the Scheme (i.e. in excess of 25% of the net assets): Nil 4. Unit Capital movement during the year ended / period ended March 31, 2011 Growth Option Number of Number of Units Amount (Rs) Units Amount (Rs) As on As on As on As on 31-Mar Mar Mar Mar-10 Initial Capital 653, ,535, , ,535,000 Opening Balance ,699, , ,139,594 Units Sold during the year ,106, , ,143,853 Units Repurchased during the year (97, ) (974354) (158, ) (1,583,728) Face Value of Units: Rs.10 per unit Dividend Option Number of Number of Units Amount (Rs) Units Amount (Rs) As on As on As on As on 31-Mar Mar Mar Mar-10 Initial Capital Opening Balance ,202,448 3,723, ,236, Units Sold during the period ,594,908 1,602, ,024,941 Units Repurchased during the period (353,793.22)(3,537,932.00) (505,897.83) (5,058,978.00) Face Value of Units: Rs.10 per unit 5. Expenses other than management fee is inclusive of service tax where applicable. 6. Previous year figures have been reclassified/regrouped, wherever necessary, to conform to the current year s classification. 7. Contingent Liability: Nil As per our attached report of even date For Chaturvedi & Co. For Sahara Asset Management Company Pvt Ltd Chartered Accountants For Sahara Mutual Sd/- Sd/- Sd/- Sd/- Sd/- S.N.Chaturvedi C.K.Kamdar O.P.Srivastava S.R.Hegde Amitabha Ghosh Partner Director Director Trustee Trustee Sd/- Sd/- Naresh Kumar Garg A.N.Sridhar Chief Executive Officer Manager Place: Mumbai Place: Mumbai Date: 27 th May 2011 Date: 1 st June

25 SAHARA GROWTH FUND AUDITORS REPORT TO THE TRUSTEES OF SAHARA MUTUAL FUND 1. We have audited the Balance Sheet of Sahara Mutual Sahara Growth (the Scheme ) as at March 31, 2011, and the related Revenue Account for the year ended on that date, annexed thereto. These financial statements are a responsibility of the Trustees of Sahara Mutual and the management of Sahara Asset Management Company Private Limited (the Management ). Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of account of the Scheme. 4. In our opinion and to the best of our information and according to the explanations given to us: The Balance Sheet and the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual s) Regulations, 1996 and amendments thereto, as applicable and give a true and fair view in conformity with the Accounting principles generally accepted in India i). in case of Balance Sheet of the state of affairs of the scheme as at March 31, 2011 and ii). in case of the Revenue account, of the surplus for the year ended on that date. 5. The Balance Sheet and the Revenue Account together with the notes thereon, have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual s) Regulations, 1996 and amendments thereto, as applicable. For CHATURVEDI & CO Chartered Accountants (SN Chaturvedi) Place: Mumbai Partner Date: 01/06/2011 M.No.: Firm Regn. No.: E 23

26 SAHARA GROWTH FUND BALANCE SHEET AS AT 31st MARCH, 2011 Schedule As at March 31, 2011 As at March 31, 2010 ASSETS (Rs) (Rs) Investments 1 111,944,143 60,421,508 Deposits Other Current Assets 3 11,234,647 5,146,912 Total Assets 123,178,790 65,568,420 LIABILITIES Unit Capital 4 41,238,505 12,865,405 Reserves & Surplus 5 81,460,967 48,169,812 Current Liabilities & Provisions 6 479,318 4,533,203 Total Liabilities 123,178,790 65,568,420 NET ASSET VALUE Net Asset Value per unit (Rs.) Growth Option Dividend Option Significant Accounting Policies and Notes to the accounts 8 Schedules 1 to 6 and 8 form an integral part of the Balance Sheet As per our attached report of even date For Chaturvedi & Co. For Sahara Asset Management Company Pvt Ltd Chartered Accountants For Sahara Mutual Sd/- Sd/- Sd/- Sd/- Sd/- S.N.Chaturvedi C.K.Kamdar O.P.Srivastava S.R.Hegde Amitabha Ghosh Partner Director Director Trustee Trustee Sd/- Sd/- Naresh Kumar Garg A.N.Sridhar Chief Executive Officer Manager Place: Mumbai Place: Mumbai Date: 27 th May 2011 Date: 1 st June

27 REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011 SAHARA GROWTH FUND Schedule For the year ended March 31, 2011 For the year ended March 31, 2010 (Rs) (Rs) INCOME Dividend 876, ,420 Interest Income 463,557 75,891 Profit on Sale / Redemption of Investments(Net) 2,951,288 18,375,359 (Other than Inter Scheme Transfer / Sale) Total Income 4,290,887 19,037,670 EXPENSES & LOSSES Management Fees 1,094, ,528 Registrar & Transfer Agent Charges 165,382 82,948 Custodian Fees 118,890 85,239 Fees & Expenses of Trustees 63,922 49,300 Statutory Audit Fees 42,488 26,278 Internal Audit Fees 135,301 48,788 Insurance 37,983 13,139 Costs related to Investor Communication 116,921 22,493 Transaction cost 131,511 19,979 Marketing & Selling Exps. 302, ,294 Total Expenses 2,209,408 1,383,986 Surplus for the Year (excluding unrealised appreciation) 2,081,479 17,653,685 Provision / Write back for dimunition in value of Investments 7 (4,773,580) 2,860,494 Transfer from Income Equalisation Reserve 94,498,246 2,226,011 Dividend paid, including dividend tax (28,828,349) - Surplus/(Deficit) transferred to Reserves 62,977,797 22,740,190 Significant Accounting Policies and Notes to the accounts 8 Schedules 7 and 8 form an integral part of the Revenue Account As per our attached report of even date For Chaturvedi & Co. For Sahara Asset Management Company Pvt Ltd Chartered Accountants For Sahara Mutual Sd/- Sd/- Sd/- Sd/- Sd/- S.N.Chaturvedi C.K.Kamdar O.P.Srivastava S.R.Hegde Amitabha Ghosh Partner Director Director Trustee Trustee Sd/- Sd/- Naresh Kumar Garg A.N.Sridhar Chief Executive Officer Manager Place: Mumbai Place: Mumbai Date: 27 th May 2011 Date: 1 st June

28 SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 1 As at March 31, 2011 (Rs) As at March 31, 2010 (Rs) Investments (Refer note 8.14 of Schedule 8 for detailed Portfolio statement) Equity Shares 111,944,143 60,421,508 SCHEDULE 2 Deposits 111,944,143 60,421,508 With Scheduled BankS - - SCHEDULE 3 Other Current Assets Balances with Banks in Current accounts 521,670 2,599,508 Contracts for sale of Investments 480,262 - Outstanding and Accrued Income 2,181 17,226 Reverse Repo arrangements 10,203,624 2,376,675 Receivable on issue of Units / Dividend - 153,505 Investment - Liquid MF Units 26,910-11,234,647 5,146,913 SCHEDULE 4 Unit Capital Growth Option: units of Rs.10 each 4,454,392 4,974,822 (For : units of Rs.10 each) Dividend Option: units of Rs.10 each 36,784,113 7,890,582 (For : units of Rs.10 each) Total 41,238,505 12,865,405 (Refer note 8.10 of Schedule 8) 26

29 SCHEDULE 5 Reserves and Surplus Revenue Reserve Balance as at beginning of the year 65,329,034 42,588,844 Transfer from Revenue Account 62,977,797 22,740,190 Balance as at end of the year 128,306,831 65,329,034 Income Equalisation Reserve Balance as at beginning of the year - - Additions During the year 94,498,246 2,226,011 Transfer to Revenue Account (94,498,246) (2,226,011) Balance as at end of the year - - Unrealised Appreciation Reserve Balance as at beginning of the year 4,259, ,404 Additions During the year (531,155) 3,453,269 Balance as at end of the year 3,728,518 4,259,673 Unit Premium Reserve Balance as at beginning of the year (21,418,895) (21,313,775) Additions During the year (29,155,487) (105,120) Balance as at end of the year (50,574,382) (21,418,895) SCHEDULE 6 Current Liabilities and Provisions 81,460,967 48,169,812 Sundry Creditors 325, ,063 Management Fees Payable 23,690 13,998 TDS Payable on Management Fees - - Contracts for Purchase of Investments - 3,982,863 Payable on redemption of units 119, ,739 27

30 Unclaimed Distributed Income 5,510 5,510 Load Charges payable to AMC 5, ,318 4,533,203 SCHEDULES FORMING PART OF REVENUE ACCOUNT SCHEDULE 7 Provision / Write Back for dimunition in value of Investments For the period ended March 31, 2011 (Rs) For the period ended March 31, 2010 (Rs) At the beginning of the year (847,501) (3,707,995) At the end of the year (5,621,081) (847,501) (4,773,580) 2,860,494 28

31 PERSPECTIVE HISTORICAL PER UNIT STATISTICS Year Year Year SAHARA GROWTH FUND Ended Ended Ended Particulars As at As at As at 31-Mar Mar Mar- 09 (a) Gross Income (I) Income other than Profit on sale of Investments (ii) Income from Profit (net of loss) on inter-scheme sales/ transfer of Investments (iii) Income from Profit (net of Loss) on sale other than Inter scheme (iv) Transfer to revenue account from past year's reserve NA NA NA (b) Aggregate of expenses, write off, amortisation and charges (c) Net Income (d) Net unrealised appreciation/(diminution) in value of Investments (e) Net Asset Value Growth Plan Dividend Plan (f) Repurchase Price during the year** (i) Highest Growth Plan Dividend Plan (ii) Lowest Growth Plan Dividend Plan (g) Resale Price during the year** (i) Highest Growth Plan Dividend Plan (ii) Lowest Growth Plan Dividend Plan (h) Ratio of expenses to average daily net assets by Percentage 2.48% 2.49% 2.48% (i) Ratio of income to average daily net assets by Percentage 2.33% 40.22% % (excluding transfer to revenue account from past year's reserve but including net change in unrealized appreciation /depreciation in value of Investments and adjusted for net loss on sale / redemption of investments) ** based on the maximum load during the year 29