EXPERT SPEAK. Dear Friends,

Transcription

1 February 28, 2018

2 EXPERT SPEAK February 28, 2018 Dear Friends, If 2017 was the year of hope, 2018 will be the year of reality. The market valuations have now been trading in the high valuation zone for around a year now. In 2017, market prices ran away as the gdp slowed down to absorb the structural changes happening in that year. But that is behind us. The latest gdp figure shows a growth rate of 7.2% yoy. At that some market forecasters seem to be more upbeat about the future growth outlook. CY 2018 is likely to see good fundamentals despite some strong head winds. India Inc. Is doing a marvellous jobs despite burden of high real interest rates and overvalued currency. They are also doing well to absorb lesser availability of credit especially at lower end of the rating curve. Combination of high real rates, low credit availability and overvalued currency has subdued demand and kept capacity utilisation of India INC at lower levels. India Inc was cautiously optimistic for bulk of last three years as apart from rates, currency and credit they had to tackle disruptive reforms like Demonetisation and GST. Now they are becoming optimistic shedding cautious stance. They are becoming optimistic as demand seems to be picking up and election bound Government is likely to keep spending tap open to benefit further strengthening of Demand. This will help in improvement in capacity utilisation leading to better margin. If rates, currency and credit normalises than the recovery will be more broader and more faster. The investments in CY 2018 are likely to be led by the government and PSUs but can see support from private Sector in CY 2019 post formation of new government. Sectors like Agriculture, Rural and Infrastructure is likely to see higher growth due to focus of the election bound government. For investors CY 2018 is a year where they need to focus on asset allocation rather than market momentum. It will be a year of volatility rather than steady rise. It will be year of Stock picking rather than Sector picking. It will be a year of large caps rather than micro and mini caps. It will be a year of playing contra rather than chasing momentum. In such scenario, for us finance professionals, managing expectations is more challenging then managing assets. Over the last one year, a large segment of retail investors have entered the equities market at relatively high valuations. It is now our collective responsibility that we manage this trust and protect the investor through the likely roller coaster ride that they may witness. Regards, Nilesh Shah Managing Director 1 1

3 Key Events for the Month of February 2018: India s 3Q GDP rebounded to 7.2% as negative supply shocks on account of the demonetization and GST seem to be fading away. Investment growth surged to double digits from 8.9% last quarter to 13% in 3Q in line with what we have been seeing with some high frequency indicators. RBI kept its policy rates unchanged in line with street expectations however inflation forecasts were pushed up and growth forecasts pared down indicating likely difficult policy challenges going forward. Jan trade deficit widened to 16.3bn which is well above the recent average of 13.4bn this was driven by a strong acceleration in imports to 40.7bn (+26%) as well as a slowdown in exports to 24.4bn (+9%) which was particularly pronounced in textiles and gems & jewellery. India s cabinet approved a plan to allow private companies to bid for coal mines for commercial production, a move that would help the country cut imports and boost local production. India replaced Germany to reclaim the third spot on the Hurun Global Rich List 2018 with 131 billionaires. India added 31 new billionaires over the last year while the combined wealth of the Indian billionaires increased by 49% to 454 billion. Indian equities (-4.9%) gave up all the gains from the early part of the year in the month of Feb with the heightened global volatility weighing on sentiment and FIIs turning large net sellers. The introduction of LTCG in the budget and the unraveling of the massive ~2bn scam involving PNB and heightened global volatility were also viewed as a dampener by market participants. The interest rates on provident funds declared by EPFO for FY 2018 was pegged at 8.55%. Inflation: - CPI inflation for January eased to 5.07 %, compared to a 17-month high of 5.21 % in December. - The WPI for the month of Jan was recorded at 2.84%; easing further on lower food prices as compared to 3.58% in the previous month India's manufacturing sector growth eased slightly in February to 52.1 from 52.4 in January indicating a factory output and new business orders rose at a slower pace. The Indian service sector remained in expansion mode in Jan, registering the fastest rise in activity in three months. The seasonally adjusted Nikkei Services Business Activity Index improved to 51.7 in Jan, up from 50.9 in Dec. Market Valuation Indicators Markets Fairly Valued Few Indicators Like PE Indicate Over-valuation, While Other Composite Indicators Like P/B Or Market Cap To GDP Suggest Valuations Still Having Some Room To Expand month forward Sensex P/B (x) Sensex P/B (x) - LHS India s Market Cap to GDP (%) Average of 78% for the period Feb-91 Feb-92 Feb-93 Feb-94 Feb-95 Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E Market Bubble Stretched Fair Value Plus Fair Attractive Cheap Equity Allocaion Exit 5% - 10% Under Invest 15%- 25% Neutral - 35% - 45% Neutral 50% Neutral + 65% - 75% Over Invest 80% - 90% Suggested equity allocation (Assuming 50% equity allocation as neutral) 12-month forward Sensex P/E (x) Stretched 20x 24x Fair Value Plus 17x 20x Fair 13x 17x Attractive 10x 13x Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Source:Internal Calculation Strategy for Investments in the Current Scenario for Equity Investor 2

4 Equity Market Snapshot: Strong Performance by Majority Sectors over the Last 1 Year; Pharma lagging in returns BSE Sectoral Indicates (10) (20) (5.4) (%) (1.6) (6.3) Realty Metals Capital Goods 1.2 (0.4) (1.9) (1.3) (4.3) (5.3) (1.5) (4.2) (3.1) (8.3) (8.6) (8.6) Bankex IT Services FMCG Tech Auto Oil & Gas Power PSU Healthcare 1m return % 1 yr return % *Past performance may or may not be sustained in the future. Source: Bloomberg, Data as on 28th Feb2018 Credit growth has picked up by 8-10% as compared to last year Credit Growth (Weekly Data) Current Credit/ Deposit Ratio is ~74.39% (RHS) Commercial Credit by Banks = Rs lakh Crore (LHS) Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Source: Bloomberg, Data as on 28th Feb2018 Key Variables & Their Impact On Equities Key Variables Short - term Medium - term Remarks Economy Corporate Earnings FII Flow DII Flow GST to impact near-term activity especially informal segment Improving operating leverage, falling interest costs and improvement in working capital can accelerate earnings, but a bit back-ended. Key is improvement in capacity utilisation India stands out among global asset classes with prospects of strong long term growth. Focus on improving financial savings of households Supply of paper er disinvestment target and repair of leveraged balance sheet to create supply in markets. Policy/Reform Initiative Election heavy year can dampen near term outlook for meaningful reform Signifies growth 3

5 Debt Market Snapshot: Items Feb-18 Jan-18 Change Reverse Repo 5.75% 5.75% Nil Repo 6.00% 6.00% Nil CRR 4.00% 4.00% Nil SLR 19.50% 19.50% Nil Mibor Overnight 6.05% 6.00% 5 bps Call(O/N) 5.93% 5.92% 1 bps CBLO 5.84% 5.85% -1 bps 1 yr T Bill 6.62% 6.55% 7 bps 10 G Sec 7.73% 7.43% 30 bps 5 Year AAA 8.02% 7.74% 28 bps USD/INR ` ` `1.49 Source: RBI; Bloomberg. Positive Real Interest Rates to Stimulate Financial Savings 6 Real Interest Rate (%) Feb-18 Nov-17 Aug-17 May-17 Feb-17 Nov-16 Aug-16 May-16 Feb-16 Nov-15 Aug-15 May-15 Feb-15 Nov-14 Aug-14 May-14 Feb-14 Nov-13 Aug-13 May-13 Feb-13 Nov-12 Aug-12 May-12 Feb-12 Source: Bloomberg Earlier, negative real rates fueled inflation in physical assets as people chased assets such as real estate and gold till With real rates in the position territory now, money may move from physical to financial assets. Note: Monthly 10 year Gilt Yield taken as average of their respective month. Feb 2018 CPI is assumed to be same as Jan-18 and Real Interest rate is calculated. Source: Bloomberg Key Variables & their Impact On Interest Rates in 2018 Key Variables Inflation Rupee Credit Demand Government Borrowing RBI Policy Global Event Risk Corporate bond Spread Debt FII flow Liquidity Short - term (3-6 month) Medium term (6month 2 years) Denotes fall in interest rates 4 4

6 KOTAK 50 An Open - Ended Equity Fund Manager: Mr. Harish Krishnan* : Nifty 50 Allotment date: December 29, 1998 Folio Count: 91,500 AAUM: `1, crs AUM: `1, crs To generate capital appreciation from a portfolio of predominantly equity and equity related securities. The portfolio will generally comprise of equity and equity related instruments of around 50 companies which may go up to 59 companies but will not exceed 59 at any point in time. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Additional Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: a) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units: 1%. b) For redemption/switch outs (including SIP/STP) after 1 year from the date of allotment of units: Nil. Regular:2.17%; Direct: 1.00% Investment Style: Style 53.66% % Value Blend Growth Size Large Mid Small Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 8.59 Reliance Industries Ltd. Petroleum Products 6.27 ICICI Bank Ltd. Banks 6.17 IndusInd Bank Ltd. Banks 4.90 ITC Ltd. Consumer Non Durables 4.70 Larsen And Toubro Ltd. Construction Project 3.85 Maruti Suzuki India Limited Auto 3.68 GAIL (India) Ltd. Gas 2.50 Vedanta Ltd. Non - Ferrous Metals 2.40 Infosys Ltd. Software 2.39 Zee Entertainment Enterprises Ltd Media and Entertainment 2.27 Motherson Sumi Systems Ltd. Auto Ancillaries 2.17 Bharat Petroleum Corporation Ltd. Petroleum Products 2.04 Tech Mahindra Ltd. Software 2.01 State Bank Of India Banks 1.99 Shree Cement Ltd. Cement 1.82 Cadila Healthcare Ltd. Pharmaceuticals 1.77 SBI Life Insurance Company Ltd Finance 1.67 ICICI Lombard General Insurance Company Ltd Finance 1.54 Sun TV Limited. Media and Entertainment 1.52 HCL Technologies Ltd. Software 1.49 GlaxoSmithkline Consumer Healthcare Ltd Consumer Non Durables 1.47 Britannia Industries Ltd. Consumer Non Durables 1.46 Mahindra & Mahindra Ltd. Auto 1.38 Axis Bank Ltd Banks 1.35 Persistent Systems Limited Software 1.31 Schaeffler India Ltd Industrial Products 1.31 Inter Globe Aviation Ltd Transportation 1.17 Bharat Electronics Ltd Industrial Capital Goods 1.13 Solar Industries India Limited Chemicals 1.12 HDFC Ltd. Warrants Finance 1.11 Note: Term Deposit as provided above is towards margin for derivatives transactions Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) Nifty 50 (TRI) ( `)# Nifty 50 (TRI) Returns (%) S&P BSE SENSEX (TRI) ( `)^ S&P BSE SENSEX (TRI) Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Indraprastha Gas Ltd. Gas 1.11 Sanofi India Ltd. Pharmaceuticals 1.11 The Ramco Cements Ltd Cement 1.10 Petronet LNG Ltd. Gas 1.08 RBL Bank Ltd Banks 1.07 Bata India Ltd. Consumer Durables 1.06 DR.Lal Pathlabs Ltd Healthcare Services 1.06 HDFC Ltd. Finance 1.06 Hero MotoCorp Ltd. Auto 1.05 Laurus Labs Ltd Pharmaceuticals 1.02 Kajaria Ceramics Ltd. Construction 0.96 Nestle India Ltd. Consumer Non Durables 0.93 Amara Raja Batteries Ltd. Auto Ancillaries 0.84 Industrial Development Bank of India Ltd. Banks 0.82 Colgate Palmolive (India ) Ltd. Consumer Non Durables 0.76 Edelweiss Financial Services Ltd Finance 0.69 Dalmia Bharat Ltd. Cement 0.66 Tata Consultancy Services Ltd. Software 0.66 Bharat Earth Movers Ltd. Industrial Capital Goods 0.63 Supreme Industries Limited Industrial Products 0.59 Punjab National Bank Banks 0.46 Ultratech Cement Ltd. Cement 0.30 Yes Bank Ltd Banks 0.28 Dabur India Ltd Consumer Non Durables 0.27 OCL India Ltd Cement 0.12 Listed/Awaiting Listing on Stock Exchange - Total Futures IndusInd Bank Ltd.-MAR Futures (Market value represents Notional Value) - Total TERM DEPOSITS AXIS Bank Ltd Term Deposits - Total 0.47 Collateral Borrowing & Lending obligation 1.39 Net Current /(Liabilities) 0.48 Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 23,10,000 1,25,796 4,30,114 8,59,177 13,93,536 23,81,695 1,60,78, ,28,532 4,43,007 8,40,670 13,45,528 23,00,575 1,16,23, ,29,976 4,44,070 8,35,622 13,40,881 23,01,637 1,12,02, Inception : - December 29, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). As TRI data is not available since inception of the scheme, benchmark SIP Performance is calculated by taking S&P BSE Sensex PRI values from 29th Dec 1998 to 31st May 2007 and TRI Values from 31st May 2007 to 31st Jan 2018 Kotak 50 NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: Long term capital growth Investment in portfolio of predominantly equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them Financial Services Energy Consumer Goods Automobile Information Technology Construction Pharma Cement & Cement Products Media & Entertainment Industrial Manufacturing * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. For last three dividends, please refer page no For scheme performance, please refer page no

7 KOTAK CLASSIC EQUITY An Open - Ended Equity Growth Fund Manager: Mr. Deepak Gupta* : Nifty 100 Allotment date: July 27, 2005 Folio Count: 17,628 AAUM: ` crs AUM: ` crs To generate capital appreciation from a diversified portfolio of equity and equity related securities. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Additional Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: a) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units: 1%. b) For redemption/switch outs (including SIP/STP) after 1 year from the date of allotment of units: Nil. Regular: 2.60%; Direct: 1.48% Investment Style: Style 83.88% % Value Blend Growth Size Large Mid Small Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Reliance Industries Ltd. Petroleum Products 5.23 Infosys Ltd. Software 4.26 Tata Consultancy Services Ltd. Software 3.87 Hindustan Unilever Ltd. Consumer Non Durables 3.57 Maruti Suzuki India Limited Auto 3.53 Bharti Airtel Ltd. Telecom - Services 2.81 Hindalco Industries Ltd Non - Ferrous Metals 2.66 Larsen And Toubro Ltd. Construction Project 2.62 GAIL (India) Ltd. Gas 2.19 Power Grid Corporation Of India Ltd Power 2.17 Bajaj Finance Limited Finance 2.07 HDFC Bank Ltd. Banks 1.89 Titan Company Ltd. Consumer Durables 1.75 Hero MotoCorp Ltd. Auto 1.74 National Thermal Power Corporation Limited Power 1.71 Jubilant Foodworks Limited Consumer Non Durables 1.70 Britannia Industries Ltd. Consumer Non Durables 1.56 HDFC Ltd. Warrants Finance 1.44 Motherson Sumi Systems Ltd. Auto Ancillaries 1.43 Tata Steel Limited. Ferrous Metals 1.32 Sun TV Limited. Media and Entertainment 1.30 Bharat Petroleum Corporation Ltd. Petroleum Products 1.29 Jindal Steel & Power Ltd. Ferrous Metals 1.23 Galaxy Surfactants Ltd Chemicals 1.20 Tech Mahindra Ltd. Software 1.18 Mahindra & Mahindra Ltd. Auto 1.16 Indraprastha Gas Ltd. Gas 1.15 ITC Ltd. Consumer Non Durables 1.11 Shriram Transport Finance Co Ltd. Finance 1.07 Vedanta Ltd. Non - Ferrous Metals 1.05 Godrej Agrovet Ltd Consumer Non Durables 1.01 AU Small Finance Bank Ltd. Banks 0.97 Amber Enterprises India Ltd Consumer Durables 0.94 Tata Communications Ltd Telecom - Services 0.94 HDFC Ltd. Finance 0.88 Bajaj Finserv Ltd. Finance 0.86 State Bank Of India Banks 0.86 Dr Reddys Laboratories Ltd Pharmaceuticals 0.82 Grasim Industries Ltd. Cement 0.75 RBL Bank Ltd Banks 0.74 Note: #Term Deposit as provided above is towards margin for derivatives transactions Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) Nifty 100 (TRI) ( `)# Nifty 100 (TRI) Returns (%) Nifty 50 (TRI) ( `)^ Nifty 50 (TRI) Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Piramal Enterprises Limited Pharmaceuticals 0.72 Federal Bank Ltd. Banks 0.70 United Spirits Ltd. Consumer Non Durables 0.68 Zee Entertainment Enterprises Ltd Media and Entertainment 0.66 Eris Lifesciences Ltd Pharmaceuticals 0.62 Biocon Ltd. Pharmaceuticals 0.60 Avenue Supermarts Ltd Retailing 0.59 Laurus Labs Ltd Pharmaceuticals 0.59 JSW Steel Ltd. Ferrous Metals 0.57 The Ramco Cements Ltd Cement 0.48 Indian Oil Corporation Ltd Petroleum Products 0.45 Prataap Snacks Ltd Consumer Non Durables 0.41 Aditya Birla Capital Ltd Finance 0.39 Hindustan Petroleum Corporation Ltd Petroleum Products 0.32 Eicher Motors Ltd Auto 0.29 Ultratech Cement Ltd. Cement 0.29 Tata Motors Ltd - DVR Auto 0.17 HCL Technologies Ltd. Software 0.13 L&T Finance Holdings Ltd Finance 0.09 Tata Steel Limited (Partly Paid Shares) Ferrous Metals 0.09 Apollo Micro Systems Ltd Industrial Capital Goods 0.05 IndusInd Bank Ltd. Banks 0.03 Listed/Awaiting Listing on Stock Exchange - Total Preference Shares Listed/Awaiting listing on Stock Exchange 7.5% Vedanta Reedemable Preference Shares Non - Ferrous Metals 0.11 Listed/Awaiting listing on Stock Exchange - Total 0.11 Futures CNX NIFTY-MAR HDFC Bank Ltd.-MAR IndusInd Bank Ltd.-MAR ICICI Bank Ltd.-MAR HCL Technologies Ltd.-MAR RBL Bank Ltd-MAR Futures (Market value represents Notional Value) - Total TERM DEPOSITS AXIS Bank Ltd. # 3.39 Standard Chartered Bank Ltd 0.16 Term Deposits - Total 3.55 Collateral Borrowing & Lending obligation Net Current /(Liabilities) Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 15,20,000 1,29,808 4,56,340 8,88,380 14,54,454 25,24,780 36,58, ,28,467 4,49,150 8,67,790 14,03,850 24,36,965 36,18, ,28,532 4,43,007 8,40,670 13,45,528 23,00,575 34,03, Inception : - July 27,2005. The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). Kotak Classic Equity NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: Long term capital growth Investment in portfolio of predominantly equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. SECTOR ALLOCATION (%) Financial Services Energy Consumer Goods Information Technology Automobile Metals Cash & Cash Equivalent Others Telecom Pharma * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. For last three dividends, please refer page no For scheme performance, please refer page no

8 KOTAK OPPORTUNITIES An Open - Ended Equity Growth Fund Manager: Mr. Harsha Upadhyaya* : Nifty 500 Allotment date: September 9, 2004 Folio Count: 1,35,467 AAUM: `2, crs AUM: `2, crs To generate capital appreciation from a diversified portfolio of equity and equity related securities. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe ## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Additional Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: a) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units: 1% b) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units: NIL Regular: 2.08%; Direct: 0.91% Investment Style Style 37.31% % Value Blend Growth Size Large Mid Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 5.92 Reliance Industries Ltd. Petroleum Products 4.60 Larsen And Toubro Ltd. Construction Project 3.87 HDFC Ltd. Finance 3.79 Gujarat State Petronet Ltd. Gas 3.30 ICICI Bank Ltd. Banks 3.28 Coromandel International Ltd. Fertilisers 2.93 Infosys Ltd. Software 2.70 Bharat Financial Inclusion Limited Finance 2.36 ITC Ltd. Consumer Non Durables 2.33 Hero MotoCorp Ltd. Auto 2.26 Inter Globe Aviation Ltd Transportation 2.24 The Ramco Cements Ltd Cement 2.21 ICICI Lombard General Insurance Company Ltd Finance 2.17 Max Financial Services Ltd. Finance 2.08 Schaeffler India Ltd Industrial Products 2.06 GAIL (India) Ltd. Gas 2.04 State Bank Of India Banks 2.02 Zee Entertainment Enterprises Ltd Media and Entertainment 2.01 Axis Bank Ltd Banks 1.99 Century Textiles & Industries Ltd. Cement 1.92 Shree Cement Ltd. Cement 1.74 Godrej Agrovet Ltd Consumer Non Durables 1.70 Indraprastha Gas Ltd. Gas 1.69 Maruti Suzuki India Limited Auto 1.67 Indian Bank Banks 1.60 Avenue Supermarts Ltd Retailing 1.56 Bata India Ltd. Consumer Durables 1.45 Bharat Earth Movers Ltd. Industrial Capital Goods 1.42 OCL India Ltd Cement 1.33 Petronet LNG Ltd. Gas 1.30 Torrent Pharmaceuticals Ltd. Pharmaceuticals 1.23 Bajaj Finance Limited Finance 1.17 Britannia Industries Ltd. Consumer Non Durables 1.15 Healthcare Global Enterprises Ltd Healthcare Services 1.15 UPL Ltd Pesticides 1.15 Yes Bank Ltd Banks 1.15 SYSTEMATIC INVESTMENT PLAN (SIP) Inception : - September 09, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). Kotak Opportunities NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Note: Term Deposit as provided above is towards margin for derivatives transactions Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) Nifty 500 (TRI) ( `)# Nifty 500 (TRI) Returns (%) Nifty 50 (TRI) ( `)^ Nifty 50 (TRI) Returns (%) Bharat Petroleum Corporation Ltd. Petroleum Products 1.07 Jindal Steel & Power Ltd. Ferrous Metals 1.07 Jubilant Foodworks Limited Consumer Non Durables 1.07 Arvind Ltd Textile Products 1.06 DR.Lal Pathlabs Ltd Healthcare Services 1.05 Thermax Ltd. Industrial Capital Goods 1.04 SRF Ltd. Textile Products 1.03 TI Financial Holding ltd. Finance 1.03 JK Cement Ltd. Cement 0.98 Colgate Palmolive (India ) Ltd. Consumer Non Durables 0.96 Heritage Foods Ltd Consumer Non Durables 0.94 AIA Engineering Limited Industrial Products 0.91 Linde India Ltd. Chemicals 0.91 Techno Electric & Engineering Co Ltd. Construction Project 0.76 Whirlpool of India Ltd. Consumer Durables 0.56 Equitas Holdings Ltd Finance 0.54 National Buildings Construction Corporation Limited Construction 0.51 Multi Commodity Exchange of India Limited Finance 0.48 HDFC Ltd. Warrants Finance 0.46 Container Corporation of India Ltd. Transportation 0.40 Swaraj Engines Ltd Industrial Products 0.24 Edelweiss Financial Services Ltd Finance 0.23 Listed/Awaiting Listing on Stock Exchange - Total Preference Shares Listed/Awaiting listing on Stock Exchange 6% Redm Preference Sh Zee Entertainment Enterprises Ltd Media and Entertainment 0.05 Listed/Awaiting listing on Stock Exchange - Total 0.05 TERM DEPOSITS AXIS Bank Ltd Term Deposits - Total 0.57 Collateral Borrowing & Lending obligation 2.60 Net Current /(Liabilities) Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 16,20,000 1,24,827 4,52,288 9,43,204 15,68,233 27,50,936 51,48, ,28,957 4,58,808 9,04,559 14,62,145 25,08,620 43,13, ,28,532 4,43,007 8,40,670 13,45,528 23,00,524 40,43, Small Financial Services Energy Consumer Goods Cement & Cement Products Industrial Manufacturing Construction Fertilisers & Pesticides Automobile Information Technology Services Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: Long term capital growth Investment in portfolio of predominantly equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks. John Bogle * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. 7 For last three dividends, please refer page no For scheme performance, please refer page no

9 KOTAK SELECT FOCUS FUND An Open - Ended Equity Fund Manager: Mr. Harsha Upadhyaya* : Nifty 200 Allotment date: September 11, 2009 Folio Count: 9,50,976 AAUM: `17, crs AUM: `17, crs The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Additional Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: a) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units:1% b) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units: NIL Regular:1.97%; Direct: 1.00% Investment Style Style 16.67% % Value Blend Growth Size Large Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 7.26 Larsen And Toubro Ltd. Construction Project 5.52 Reliance Industries Ltd. Petroleum Products 5.36 HDFC Ltd. Finance 4.47 ICICI Bank Ltd. Banks 4.40 Hero MotoCorp Ltd. Auto 3.33 State Bank Of India Banks 3.09 Maruti Suzuki India Limited Auto 2.98 ITC Ltd. Consumer Non Durables 2.90 IndusInd Bank Ltd. Banks 2.74 RBL Bank Ltd Banks 2.48 Infosys Ltd. Software 2.47 GAIL (India) Ltd. Gas 2.42 Ultratech Cement Ltd. Cement 2.33 The Ramco Cements Ltd Cement 1.96 Shree Cement Ltd. Cement 1.87 Indraprastha Gas Ltd. Gas 1.85 Axis Bank Ltd Banks 1.78 Petronet LNG Ltd. Gas 1.74 ICICI Lombard General Insurance Company Ltd Finance 1.71 Britannia Industries Ltd. Consumer Non Durables 1.68 Bharat Electronics Ltd Industrial Capital Goods 1.56 Bajaj Finance Limited Finance 1.54 Mahindra & Mahindra Ltd. Auto 1.39 Container Corporation of India Ltd. Transportation 1.25 SBI Life Insurance Company Ltd Finance 1.19 Arvind Ltd Textile Products 1.18 Hindustan Petroleum Corporation Ltd Petroleum Products 1.12 Century Textiles & Industries Ltd. Cement 1.11 HDFC Standard Life Insurance Company Ltd Finance 1.07 MRF Limited Auto Ancillaries 1.07 Inter Globe Aviation Ltd Transportation 1.05 Bharat Petroleum Corporation Ltd. Petroleum Products 1.04 Godrej Consumer Products Ltd. Consumer Non Durables 1.02 Kec International Ltd. Construction Project 1.00 Max Financial Services Ltd. Finance 0.87 Note: Term Deposit as provided above is towards margin for derivatives transactions Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) Nifty 200 (TRI) ( `)# Nifty 200 (TRI) Returns (%) Nifty 50 (TRI) ( `)^ Nifty 50 (TRI) Returns (%) Bajaj Finserv Ltd. Finance 0.83 Cadila Healthcare Ltd. Pharmaceuticals 0.82 Bata India Ltd. Consumer Durables 0.74 Bharat Earth Movers Ltd. Industrial Capital Goods 0.66 Ashok Leyland Ltd. Auto 0.64 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 0.63 Tata Motors Ltd. Auto 0.58 Bayer Cropscience Ltd. Pesticides 0.55 Federal Bank Ltd. Banks 0.53 Equitas Holdings Ltd Finance 0.51 Solar Industries India Limited Chemicals 0.47 Jubilant Foodworks Limited Consumer Non Durables 0.37 Laurus Labs Ltd Pharmaceuticals 0.37 Techno Electric & Engineering Co Ltd. Construction Project 0.37 AIA Engineering Limited Industrial Products 0.31 HDFC Ltd. Warrants Finance 0.25 Avenue Supermarts Ltd Retailing 0.23 Whirlpool of India Ltd. Consumer Durables 0.23 ICICI Prudential Life Insurance Company Ltd Finance 0.19 Max India Limited Healthcare Services 0.12 Kirloskar Oil Engines Ltd. Industrial Products 0.09 Listed/Awaiting Listing on Stock Exchange - Total Preference Shares Listed/Awaiting listing on Stock Exchange 6% Redm Preference Sh Zee Entertainment Enterprises Ltd Media and Entertainment 0.01 Listed/Awaiting listing on Stock Exchange - Total 0.01 Futures CNX NIFTY-MAR Inter Globe Aviation Ltd-MAR HDFC Bank Ltd.-MAR Infosys Ltd.-MAR Futures (Market value represents Notional Value) - Total 2.09 TERM DEPOSITS AXIS Bank Ltd Term Deposits - Total 0.79 Collateral Borrowing & Lending obligation 8.20 Net Current /(Liabilities) SYSTEMATIC INVESTMENT PLAN (SIP) Systematic Investment Plan (SIP) If you had invested `10,000 every month Inception : - September 11, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). Kotak Select Focus Fund NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) 1 year 3 years 5 years 7 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 10,20,000 1,25,501 4,56,538 9,74,140 16,62,625 21,94, ,28,522 4,52,861 8,83,452 14,27,532 18,36, ,28,532 4,43,007 8,40,670 13,45,528 17,36, Mid Small Financial Services Energy Automobile Cement & Cement Products Consumer Goods Cash & Cash Equivalent Construction Industrial Manufacturing Information Technology Services Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: Long term capital growth Investment in portfolio of predominantly equity & equity related securities generally focussed on a few selected sectors. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Wealth is like sea-water; the more we drink, the thirstier we become; and the same is true of fame. Arthur Schopenhauer * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. 7 For last three dividends, please refer page no For scheme performance, please refer page no

10 KOTAK TAX SAVER An Open - Ended Equity Linked Savings Fund Manager: Mr. Harsha Upadhyaya* : Nifty 500 Allotment date: November 23, 2005 Folio Count: 1,29,624 AAUM: ` crs AUM: ` crs To generate long-term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `500 and in multiple of `500 Additional Investment: `500 & in multiples of `500 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: Exit Load is not applicable for Kotak Tax Saver. (applicable for all plans) Regular: 2.18%; Direct: 1.15% Investment Style Style 39.84% % Value Blend Growth Size Large Mid Small Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 6.31 Reliance Industries Ltd. Petroleum Products 5.51 Larsen And Toubro Ltd. Construction Project 4.50 ICICI Bank Ltd. Banks 3.64 IndusInd Bank Ltd. Banks 3.28 HDFC Ltd. Finance 3.15 Infosys Ltd. Software 2.92 GlaxoSmithkline Consumer Healthcare Ltd Consumer Non Durables 2.80 Shree Cement Ltd. Cement 2.78 Axis Bank Ltd Banks 2.65 Mahanagar Gas Ltd Gas 2.53 SKF India Ltd Industrial Products 2.49 GAIL (India) Ltd. Gas 2.39 Ultratech Cement Ltd. Cement 2.32 OCL India Ltd Cement 2.21 RBL Bank Ltd Banks 2.09 Whirlpool of India Ltd. Consumer Durables 2.00 ITC Ltd. Consumer Non Durables 1.94 Thermax Ltd. Industrial Capital Goods 1.93 State Bank Of India Banks 1.87 Solar Industries India Limited Chemicals 1.61 Techno Electric & Engineering Co Ltd. Construction Project 1.59 The Ramco Cements Ltd Cement 1.57 Bharat Petroleum Corporation Ltd. Petroleum Products 1.50 Bajaj Finance Limited Finance 1.49 APL Apollo Tubes Limited Ferrous Metals 1.43 Cadila Healthcare Ltd. Pharmaceuticals 1.41 Yes Bank Ltd Banks 1.35 Gujarat State Petronet Ltd. Gas 1.30 AU Small Finance Bank Ltd. Banks 1.24 Maruti Suzuki India Limited Auto 1.23 Bata India Ltd. Consumer Durables 1.22 Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) Nifty 500 (TRI) ( `)# Nifty 500 (TRI) Returns (%) Nifty 50 (TRI) ( `)^ Nifty 50 (TRI) Returns (%) UPL Ltd Pesticides 1.22 SRF Ltd. Textile Products 1.19 Arvind Ltd Textile Products 1.17 Amara Raja Batteries Ltd. Auto Ancillaries 1.15 Nestle India Ltd. Consumer Non Durables 1.08 Jindal Steel & Power Ltd. Ferrous Metals 1.06 SpiceJet Ltd. Transportation 1.06 Linde India Ltd. Chemicals 1.04 Vedanta Ltd. Non - Ferrous Metals 1.03 Colgate Palmolive (India ) Ltd. Consumer Non Durables 1.02 AIA Engineering Limited Industrial Products 1.00 Zee Entertainment Enterprises Ltd Media and Entertainment 0.99 JMC Projects (India) Ltd Construction 0.97 Tejas Networks Ltd Telecom - Equipment & Accessories 0.95 Max Financial Services Ltd. Finance 0.93 Container Corporation of India Ltd. Transportation 0.91 Laurus Labs Ltd Pharmaceuticals 0.91 Hindustan Oil Exploration Company Ltd. Oil 0.85 Strides Shasun Ltd. Pharmaceuticals 0.75 Hawkins Cooker Ltd Household Appliances 0.60 Multi Commodity Exchange of India Limited Finance 0.54 Blue Dart Express Ltd. Transportation 0.51 KSB Pump Ltd Industrial Products 0.43 Listed/Awaiting Listing on Stock Exchange - Total Preference Shares Listed/Awaiting listing on Stock Exchange 6% Redm Preference Sh Zee Entertainment Enterprises Ltd Media and Entertainment 0.11 Listed/Awaiting listing on Stock Exchange - Total 0.11 Collateral Borrowing & Lending obligation 2.26 Net Current /(Liabilities) 0.02 SYSTEMATIC INVESTMENT PLAN (SIP) Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 14,80,000 1,22,547 4,36,485 9,10,796 14,69,156 25,07,100 33,47, ,28,957 4,58,808 9,04,559 14,62,145 25,08,818 34,47, ,28,532 4,43,007 8,40,670 13,45,528 23,00,575 31,97, Inception : - November 23, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). Kotak Tax Saver NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: long term capital growth with a 3 year lock in Investment in portfolio of predominantly equity & equity related securities. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Financial Services Energy Consumer Goods Construction Cement & Cement Products Industrial Manufacturing Metals Pharma Services Information Technology I'm only rich because I know when I'm wrong I basically have survived by recognizing my mistakes. George Soros * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. 7 For last three dividends, please refer page no For scheme performance, please refer page no

11 KOTAK MID-CAP An Open - Ended Equity Growth Fund Manager: Mr. Pankaj Tibrewal* : Nifty Midcap 100 Allotment date: February 24, 2005 Folio Count: 56,243 AAUM: ` crs AUM: ` crs To generate capital appreciation from a diversified portfolio of equity and equity related securities. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Additional Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: a) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units:1% b) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units:nil Regular: 2.31%; Direct: 1.17% Investment Style Style 62.67% % Value Blend Growth Size Large Mid Small Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Dixon Technologies India Ltd Consumer Durables 3.60 Atul Ltd. Chemicals 3.12 Schaeffler India Ltd Industrial Products 2.91 Apollo Pipes Ltd Finance and Investments 2.62 Solar Industries India Limited Chemicals 2.58 RBL Bank Ltd Banks 2.56 JK Cement Ltd. Cement 2.53 IndusInd Bank Ltd. Banks 2.49 V.S.T Tillers Tractors Ltd Auto 2.43 Techno Electric & Engineering Co Ltd. Construction Project 2.42 Finolex Cables Ltd. Industrial Products 2.39 Federal Bank Ltd. Banks 2.19 Prataap Snacks Ltd Consumer Non Durables 2.10 Galaxy Surfactants Ltd Chemicals 2.09 Godrej Agrovet Ltd Consumer Non Durables 2.06 Motherson Sumi Systems Ltd. Auto Ancillaries 2.04 MRF Limited Auto Ancillaries 1.98 Shriram City Union Finance Ltd. Finance 1.98 APL Apollo Tubes Limited Ferrous Metals 1.97 The Ramco Cements Ltd Cement 1.91 Lux Industries Limited Textile Products 1.85 Persistent Systems Limited Software 1.85 JMC Projects (India) Ltd Construction 1.80 Supreme Industries Limited Industrial Products 1.79 Eveready Industries India Ltd. Consumer Non Durables 1.73 Ratnamani Metals & Tubes Ltd. Ferrous Metals 1.72 Hindustan Oil Exploration Company Ltd. Oil 1.71 SKF India Ltd Industrial Products 1.67 Kewal Kiran Clothing Limited. Textile Products 1.64 Thermax Ltd. Industrial Capital Goods 1.64 AU Small Finance Bank Ltd. Banks 1.61 Note: Midcap stocks as a % age of Net : 66.78%. Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) Nifty Midcap 100 (TRI) ( `)# Nifty Midcap 100 (TRI) Returns (%) Nifty 50 (TRI) ( `)^ Nifty 50 (TRI) Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Sun TV Limited. Media and Entertainment 1.59 Bharat Forge Ltd. Industrial Products 1.58 Heritage Foods Ltd Consumer Non Durables 1.52 Laurus Labs Ltd Pharmaceuticals 1.51 Navneet Education Ltd. Media and Entertainment 1.45 Sundaram Finance Ltd. Finance 1.44 Bajaj Finance Limited Finance 1.40 Mahindra & Mahindra Financial Services Ltd. Finance 1.36 Hawkins Cooker Ltd Household Appliances 1.35 Cadila Healthcare Ltd. Pharmaceuticals 1.33 Amber Enterprises India Ltd Consumer Durables 1.32 Hindustan Petroleum Corporation Ltd Petroleum Products 1.32 Tata Global Beverages Limited Consumer Non Durables 1.32 Gujarat State Petronet Ltd. Gas 1.27 Apollo Hospitals Enterprises Ltd. Healthcare Services 1.25 Torrent Pharmaceuticals Ltd. Pharmaceuticals 1.25 Amara Raja Batteries Ltd. Auto Ancillaries 1.18 Bajaj Finserv Ltd. Finance 1.16 Whirlpool of India Ltd. Consumer Durables 1.14 Strides Shasun Ltd. Pharmaceuticals 1.07 Arvind Ltd Textile Products 1.06 Inter Globe Aviation Ltd Transportation 0.95 Punjab National Bank Banks 0.78 Avenue Supermarts Ltd Retailing 0.73 Canara Bank Banks 0.70 Mcleod Russel India Ltd Consumer Non Durables 0.64 JK Tyre & Industries Ltd. Auto Ancillaries 0.52 Sundaram Finance Holdings Limited. Finance 0.12 Listed/Awaiting Listing on Stock Exchange - Total Collateral Borrowing & Lending obligation 0.98 Net Current /(Liabilities) Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 15,70,000 1,28,298 4,76,241 10,88,833 18,60,544 34,68,808 52,63, ,27,797 4,81,657 10,47,932 17,25,608 30,93,700 50,24, ,28,532 4,43,007 8,40,670 13,45,528 23,00,575 37,08, Inception : - February 24,2005. The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). Kotak Mid-cap NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: Long term capital growth Investment in equity & equity related securities predominantly in mid cap stocks. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Financial Services Industrial Manufacturing Consumer Goods Automobile Chemicals Pharma Cement & Cement Products Energy Construction Metals If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. Edmund Burke * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. 7 For last three dividends, please refer page no For scheme performance, please refer page no

12 KOTAK EMERGING EQUITY An Open - Ended Equity Growth Fund Manager: Mr. Pankaj Tibrewal* : S&P BSE MID SMALL CAP Allotment date: March 30, 2007 Folio Count: 2,32,042 AAUM: `2, crs AUM: `3, crs The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by investing predominantly in mid and small cap companies. However, there is no assurance that the objective of the scheme will be realized. Available Plans/Options A) Regular Plan B) Direct Plan Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover Beta Sharpe## Standard Deviation Source: ICRA MFI Explorer. Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Additional Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. (applicable for all plans) Exit Load: a) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units:1%. b) For redemption/switch outs (including SIP/STP) after 1 year from the date of allotment of units: Nil. Regular: 2.05%; Direct: 1.09% Investment Style Style 33.60% % Value Blend Growth Size Large Mid Small Equity & Equity related (Listed/Awaiting listing on Stock Exchange) IndusInd Bank Ltd. Banks 3.71 Schaeffler India Ltd Industrial Products 3.47 Atul Ltd. Chemicals 3.03 RBL Bank Ltd Banks 2.85 The Ramco Cements Ltd Cement 2.78 Bata India Ltd. Consumer Durables 2.64 Finolex Cables Ltd. Industrial Products 2.49 Supreme Industries Limited Industrial Products 2.48 Solar Industries India Limited Chemicals 2.33 Godrej Agrovet Ltd Consumer Non Durables 2.29 Federal Bank Ltd. Banks 2.17 APL Apollo Tubes Limited Ferrous Metals 2.16 Shriram City Union Finance Ltd. Finance 2.13 SKF India Ltd Industrial Products 2.13 Emami Ltd. Consumer Non Durables 2.07 Motherson Sumi Systems Ltd. Auto Ancillaries 2.05 Coromandel International Ltd. Fertilisers 1.98 Eveready Industries India Ltd. Consumer Non Durables 1.95 Sundaram Finance Ltd. Finance 1.89 Persistent Systems Limited Software 1.82 Thermax Ltd. Industrial Capital Goods 1.82 Kajaria Ceramics Ltd. Construction 1.77 Kewal Kiran Clothing Limited. Textile Products 1.71 Apollo Hospitals Enterprises Ltd. Healthcare Services 1.69 Edelweiss Financial Services Ltd Finance 1.69 Future Retail Ltd. Retailing 1.54 Amara Raja Batteries Ltd. Auto Ancillaries 1.47 Gujarat State Petronet Ltd. Gas 1.47 Whirlpool of India Ltd. Consumer Durables 1.47 Oberoi Realty Ltd Construction 1.43 Kirloskar Oil Engines Ltd. Industrial Products 1.41 Mahindra & Mahindra Financial Services Ltd. Finance 1.41 Inter Globe Aviation Ltd Transportation 1.40 Eris Lifesciences Ltd Pharmaceuticals 1.38 Britannia Industries Ltd. Consumer Non Durables 1.37 Navneet Education Ltd. Media and Entertainment 1.37 Lux Industries Limited Textile Products 1.36 SYSTEMATIC INVESTMENT PLAN (SIP) Bharat Earth Movers Ltd. Industrial Capital Goods 1.32 SRF Ltd. Textile Products 1.32 ICICI Bank Ltd. Banks 1.30 Hawkins Cooker Ltd Household Appliances 1.28 Ramkrishna Forgings Ltd. Industrial Products 1.27 Laurus Labs Ltd Pharmaceuticals 1.22 City Union Bank Ltd. Banks 1.16 Indraprastha Gas Ltd. Gas 1.11 Equitas Holdings Ltd Finance 1.09 Sheela Foam Ltd Consumer Durables 1.08 Torrent Pharmaceuticals Ltd. Pharmaceuticals 1.04 Bajaj Finance Limited Finance 1.00 PNC INFRATECH LIMITED Construction 0.90 V-Guard Industries Ltd. Industrial Capital Goods 0.84 Abbott India Ltd. Pharmaceuticals 0.81 Divi s Laboratories Limited Pharmaceuticals 0.75 TI Financial Holding ltd. Finance 0.73 Zee Entertainment Enterprises Ltd Media and Entertainment 0.71 Carborundum Universal Ltd. Industrial Products 0.70 Bank Of Baroda Banks 0.67 Strides Shasun Ltd. Pharmaceuticals 0.62 WPIL Ltd Industrial Products 0.61 D-Link (India) Ltd Hardware 0.47 Pennar Engineered Building Systems Limited Ferrous Metals 0.19 Sundaram Finance Holdings Limited. Finance 0.18 Listed/Awaiting Listing on Stock Exchange - Total Futures MRF Limited-MAR V-Guard Industries Ltd.-MAR Futures (Market value represents Notional Value) - Total 1.70 TERM DEPOSITS AXIS Bank Ltd Term Deposits - Total 0.50 Collateral Borrowing & Lending obligation 3.43 Net Current /(Liabilities) Notes: Term Deposit as provided above is towards margin for derivatives transactions. Midcap and Small cap stocks as a % age of Net : 86.70%. Monthly SIP of ` Total amount invested ( `) Total Value as on Feb 28, 2018( `) Returns (%) S&P BSE MidSmallCap (TRI) ( `)# S&P BSE MidSmallCap (TRI) Returns (%) Nifty 50 (TRI) ( `)^ Nifty 50 (TRI) Returns (%) Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 1,20,000 3,60,000 6,00,000 8,40,000 12,00,000 13,20,000 1,27,823 4,77,786 11,43,138 19,95,770 36,17,067 40,15, ,32,059 5,03,302 10,92,581 17,95,231 31,38,649 35,38, ,28,532 4,43,007 8,40,670 13,45,528 23,00,575 26,06, Inception : - March 30, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Additional TRI Total Return Index, In terms of SEBI circular dated January 4, 2018, the performance of the scheme is benchmarked to the Total Return variant (TRI) of the Index instead of Price Return Variant (PRI). Kotak Emerging Equity NAV as on February 28, 2018: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Investors understand that their principal will be at moderately high risk This product is suitable for investors who are seeking*: Long term capital growth Investment in equity & equity related securities predominantly in mid & small cap companies * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Financial Services Industrial Manufacturing Consumer Goods Pharma Chemicals Automobile Services Construction Cement & Cement Products Textiles * For Fund Manager experience, please refer page ## Risk free rate assumed to be 6.05% (FBIL Overnight MIBOR rate as on 28th February 2018). **Total Expense Ratio excludes applicable B15 fee and service tax. 7 For last three dividends, please refer page no For scheme performance, please refer page no