BENCHMARK MUTUAL FUND

Transcription

1 BENCHMARK MUTUAL FUND ANNUAL REPORT

2 Trustees Report For the Year ended March 31, 2010 Dear Unit holders, We have pleasure in presenting our ninth report and the audited financial statements of the Schemes of Benchmark Mutual Fund for the year ended March 31, CONSTITUTION Benchmark Mutual Fund ( the Fund ) has been sponsored by Niche Financial Services Pvt. Ltd. ( the Sponsor ) and was set up as a Trust under the Indian Trust Act, 1882 through Trust Deed dated February 14, Th e Fu nd has b een r egist er ed with S ecu rit ies and Ex ch an g e B o ar d o f In d i a ( SEBI ) vid e registration number MF/045/01/6 dated June 12, Benchmark Trustee Company Pvt. Ltd. ( the Trustee ) is sole Trustee of the Fund. In accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, Benchmark Asset Management Company Pvt. Ltd. (BAMC) has been appointed as Asset Management Company ( the Investment Manager or AMC ) to the Fund vide Investment Management Agreement dated February 14, INVESTMENT PHILOSOPHY OF THE FUND The Fund uses indexing and quantitative approach to achieve Schemes investment objective. Unlike other Funds, the Fund does not try to beat the markets they track and does not seek temporary defensive positions when markets decline or appear over valued. The Fund does not make any judgments about the investment merit of a particular stock or a particular industry segment nor does it attempt to apply any economic, financial or market analysis. Indexing eliminates risks associated with active management with regard to over/underperformance vis-à-vis a benchmark. Also, the management fees and other operating expenses charged to the Schemes are one of the lowest in the Mutual Fund Industry in India. AWARD Nifty Benchmark Exchange Traded Scheme - Nifty BeES, a scheme of Benchmark Mutual Fund has been awarded Best Performing Mutual Fund of the Year in the Index Fund Category at the CNBC - TV18 - Crisil Mutual Fund of The Year Award 2009 by CRISIL Fund Services, CRISIL Limited. In total, 13 schemes were eligible for the award universe. Eligibility Criteria & Methodology Schemes present in all four quarterly CRISIL CPRs were considered for the award. The award is based on consistency of the scheme s performance in the four quarterly CRISIL CPR rankings released during the calendar year The individual CRISIL CPR parameter scores averaged for the four quarters were further multiplied by the parameter weights as per the CRISIL CPR methodology to arrive at the final scores. A detailed methodology of the CRISIL CPR is available at Past performance is no guarantee of future results. Rankings and Award Source: CRISIL FundServices, CRISIL Ltd. INVESTMENT OBJECTIVE AND PERFORMANCE REVIEW OF THE SCHEMES 1. Nifty BeES Nifty Benchmark Exchange Traded Scheme (Nifty BeES) is an open ended index scheme in the form of an Exchange Traded Fund (ETF), tracking S&P CNX Nifty Index and is passively managed. Nifty BeES is listed on the Capital Market Segment of the National Stock Exchange of India Ltd. (NSE). The investment objective of the Scheme is to provide investment returns that, before expenses, closely correspond to the total returns of securities as represented by S&P CNX Nifty Index. 1

3 As per the investment pattern of the Scheme, Nifty BeES invests at least 90% of its total assets in the stocks constituting S&P CNX Nifty Index. Nifty BeES may invest upto 10% of their total assets in stocks not included in the corresponding underlying index. The investment decisions are determined as per S&P CNX Nifty Index. In case of any change in the index due to corporate actions or change in the constituents of S&P CNX Nifty Index {as communicated by India Index Services & Products Ltd. (IISL), Index provider}, relevant investment decisions are determined considering the composition of S&P CNX Nifty Index. Performance Record (as on March 31, 2010) Benchmark Returns Particulars Nifty BeES S&P CNX Nifty S&P CNX Nifty Total Return Index Last 1 Year 74.47% 73.76% 75.29% Last 3 Years 11.68% 11.14% 12.27% Last 5 Years 22.12% 20.85% 22.43% Since Inception 23.09% 21.74% 23.74% Returns are compounded annualized. Past performance may or may not be sustained. The returns are calculated after considering the dividend paid. For calculating returns since inception, the allotment price is taken at Rs at which the units were allotted on December 28, 2001 in the New Fund Offer. Annualised Tracking Error since inception till March 31, 2010 is 0.14%. It is calculated with respect to Total Return S&P CNX Nifty Index. Total assets under management in Nifty BeES as on March 31, 2010 were Rs crores held by 12,580 investors. 2. Junior BeES Nifty Junior Benchmark Exchange Traded Scheme (Junior BeES) is an open ended index scheme in the form of an ETF, tracking CNX Nifty Junior Index and is passively managed. Junior BeES is listed on the Capital Market Segment of NSE. The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the returns of securities as represented by CNX Nifty Junior Index. As per the investment pattern, Junior BeES invests at least 90% of its total assets in the stocks constituting CNX Nifty Junior Index. The Scheme may invest upto 10% of its total assets in stocks not included in the corresponding underlying index. The investment decisions are determined as per CNX Nifty Junior Index. In case of any change in the index due to corporate actions or change in the constituents of CNX Nifty Junior Index, by IISL, relevant investment decisions are determined considering the composition of CNX Nifty Junior Index. Performance Record (as on March 31, 2010) Benchmark Returns Particulars Junior BeES CNX Nifty Junior CNX Nifty Junior Total Return Index Last 1 Year % % % Last 3 Years 15.75% 16.10% 17.25% Last 5 Years 20.28% 20.29% 21.69% Since Inception 33.26% 33.25% 35.27% Returns are compounded annualised. Past performance may or may not be sustained. The returns are calculated after considering the dividend paid. For calculating returns since inception, the allotment price is taken at Rs at which the units were allotted on February 21, 2003 in the New 2

4 Fund Offer. Annualised Tracking Error since inception till March 31, 2010 is 0.52%. It is calculated with respect to Total Return CNX Nifty Junior Index. Total assets under management as on March 31, 2010 were Rs crores held by 3,251 investors. 3. Liquid BeES Liquid Benchmark Exchange Traded Scheme (Liquid BeES) is an open ended liquid scheme in the form of an ETF listed on the Capital Market Segment of NSE. The investment objective of the Scheme is to enhance returns and minimize price risk by investing in basket of call money, short-term government securities and money market instruments of short and medium maturities while maintaining the safety and liquidity. As per the investment pattern, Liquid BeES invests in Call Money, Short Term Government Securities, T- Bills, Repos, Debt Securities, Commercial Papers, Certificate of Deposits, Short Term Debentures and Floating Rate Notes. The Scheme will retain the flexibility to invest in the entire range of securities as per investment objective of the Scheme and as per the SEBI Regulations. Fitch Credit Rating Agency has assigned Credit Rating of AAAmmf(ind) to Liquid BeES. AAAmmf(ind) indicates the Scheme s strong capacity to achieve its investment objective of preserving principal and providing shareholder liquidity through limiting credit, market and liquidity risk, relative to all other short term investment in India. Performance Record (as on March 31, 2010) Particulars Liquid BeES # Benchmark Returns - CRISIL Liquid Fund Index Last 1 Year 3.20% 3.69% Last 3 Years 5.66% 6.65% Last 5 Years 5.43% 6.24% Since Inception 4.95% 5.69% Returns are annualised. The date of allotment of the units of the Scheme was July 8, Past performance may or may not be sustained. The Scheme declares daily dividend which is compulsorily reinvested in the Scheme. #Returns are based on income distributed including dividend distribution tax. Actual dividend in the hands of each investor will vary based on category and rate of dividend distribution tax applicable thereon. Total assets under management as on March 31, 2010 were Rs crores held by 10,577 investors. 4. Bank BeES Banking Index Benchmark Exchange Traded Scheme (Bank BeES) is an open ended index scheme in the form of an ETF, tracking CNX Bank Index and is passively managed. Bank BeES is listed on the Capital Market Segment of the NSE. The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by CNX Bank Index. As per the investment pattern, Bank BeES invests at least 90% of its total assets in the stocks constituting CNX Bank Index. The Scheme may invest upto 10% of its total assets in stocks not included in the corresponding underlying index. The investment decisions are determined as per CNX Bank Index. In case of any change in the index due to corporate actions or change in the constituents of CNX Bank Index, by IISL, relevant investment decisions are determined considering the composition of CNX Bank Index. 3

5 Performance Record (as on March 31, 2010) Benchmark Returns Particulars Bank BeES CNX Bank CNX Bank Index Total Return Index Last 1 Year % % % Last 3 Years 22.12% 21.19% 22.97% Last 5 Years 22.79% 21.73% 23.68% Since Inception 26.64% 25.31% 27.50% Returns are compounded annualised. Past performance may or may not be sustained. The returns are calculated after considering the dividend paid. For calculating returns since inception, the allotment price is taken at Rs at which the units were allotted on May 27, 2004 in the New Fund Offer. Annualised Tracking Error since inception till March 31, 2010 is 0.24%. It is calculated with respect to Total Return CNX Bank Index. Total assets under management as on March 31, 2010 were Rs crores held by 1,137 investors. 5. Benchmark Derivative Fund (BDF) Benchmark Derivative Fund (BDF) is an open ended equity scheme. The investment objective of the Scheme is to provide absolute returns over and above money market instruments by taking advantage in the underlying cash and derivative markets. Various strategies are used as return enhancers. As per the investment pattern, Benchmark Derivative Fund invests 65% - 100% in Equities and Convertible Debentures, 65% - 100% in Derivatives including Index Futures, Stock Futures, Index Options and Stock Options and 0% - 35% in money market, debt instruments and cash at call. Performance Record (as on March 31, 2010) Benchmark Derivative Fund Benchmark Returns Particulars Dividend Option S&P CNX CRISIL Composite CRISIL Liquid Growth Option # Nifty Index Bond Fund Index Fund Index Last 1 Year 2.87% 2.89% 73.76% 5.41% 3.69% Last 3 Years 5.85% 5.95% 11.14% 6.99% 6.65% Last 5 Years 6.53% % 5.59% 6.24% Since Inception 6.31% 6.62% 19.89% 5.67% 6.15% Returns are compounded annualized. Past performance may or may not be sustained. For Benchmark Derivative Fund - Dividend Plan, the returns are calculated after considering the dividend paid. For calculating returns since inception, the allotment price for Growth Option is taken at Rs. 1,000/- at which the units were allotted on December 18, 2004 in the New Fund Offer and for Dividend Option is taken at Rs. 1,000/- at which the units were allotted on September 30, #Returns are based on income distributed including dividend distribution tax. Actual dividend in the hands of each investor will vary based on category and rate of dividend distribution tax applicable thereon. Total assets under management as on March 31, 2010 were Rs crores held by 424 investors. 6. Gold BeES Gold Benchmark Exchange Traded Scheme (Gold BeES) is an open ended gold scheme inf the form of an ETF and is passively managed. Gold BeES is listed on the Capital Market Segment of the NSE. The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the returns provided by domestic price of gold through physical gold. 4

6 As per the investment pattern, Gold BeES invests 90% - 100% in physical gold and 0% - 10% in money market instruments, securitised debts, bonds including cash at call. Performance Record (as on March 31, 2010) Particulars Gold BeES Benchmark Returns - Physical price of Gold Last One Year 7.46% 8.18% Last Three Years 19.29% 20.36% Since Inception 18.98% 20.00% Returns are compounded annualised. Past performance may or may not be sustained. For calculating returns since inception, the allotment price is taken at Rs at which the units were allotted on March 8, 2007 in the New Fund Offer. Total assets under management as on March 31, 2010 were Rs crores held by 63,579 investors. 7. PSU Bank BeES PSU Bank Benchmark Exchange Traded Scheme (PSU Bank BeES) is an open ended index scheme in the form of an ETF, tracking CNX PSU Bank Index and is passively managed. PSU Bank BeES is listed on the Capital Market Segment of the National Stock Exchange of India Ltd. (NSE). The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by CNX PSU Bank Index. As per the investment pattern, PSU Bank BeES invests at least 90% of its total assets in the stocks constituting CNX PSU Bank Index. The Scheme may invest upto 10% of its total assets in stocks not included in the corresponding underlying index. The investment decisions are determined as per CNX PSU Bank Index. In case of any change in the index due to corporate actions or change in the constituents of CNX PSU Bank Index, by IISL, relevant investment decisions are determined considering the composition of CNX PSU Bank Index. Performance Record (as on March 31, 2010) Benchmark Returns Particulars PSU Bank BeES CNX PSU Bank Index CNX PSU Bank Total Return Index Last 1 Year % % % Since Inception 10.79% 9.97% 12.23% Returns are compounded annualised. Past performance may or may not be sustained. For calculating returns since inception, the allotment price is taken at Rs at which the units were allotted on October 25, 2007 in the New Fund Offer. Annualised Tracking Error since inception till March 31, 2010 is 0.90%. It is calculated with respect to Total Return CNX PSU Bank Index. Total assets under management as on March 31, 2010 were Rs crores held by 953 investors. 8. Benchmark Equity & Derivatives Opportunities Fund Benchmark Equity & Derivatives Opportunities Fund (BEDOF) is an open ended equity scheme. The investment objective of the Scheme is to provide absolute returns by taking advantage of opportunities in the underlying cash and derivative markets and through deployment of surplus cash in fixed income securities. The Scheme is designed for investors seeking long-term capital appreciation primarily through investment in a diversified portfolio of strategies. As per the investment pattern, BEDOF invests at least 65% - 100% of its total assets in Equities & Equity related derivative instruments and 0% - 35% in Money Market, Debt instruments and Cash at call. 5

7 Performance Record (as on March 31, 2010) BEDOF Benchmark Returns Particulars Growth Option Dividend Option CRISIL Balanced Fund Last 1 Year 3.21% 3.21% 47.31% Since Inception 5.80% 5.85% 0.74% Returns are compounded annualised. Past performance may or may not be sustained. For BEDOF - Dividend Plan, the returns are calculated after considering the dividend paid. For calculating returns since inception, the allotment price is taken at Rs. 10/- at which the units were allotted on October 31, 2007 in the New Fund Offer. Total assets under management as on March 31, 2010 were Rs crores held by 354 investors. 9. Benchmark S&P CNX 500 Fund Benchmark S&P CNX 500 Fund is an open ended index scheme and is passively managed. The investment objective of the Scheme is to generate capital appreciation through equity investments by investing in securities which are constituents of S&P CNX 500 Index in the same proportion as in the Index. As per the investment pattern, Benchmark S&P CNX 500 Fund invests at least 90% of its total assets in the stocks constituting S&P CNX 500 Index. The Scheme may invest upto 10% of its total assets in stocks not included in the corresponding underlying index. The investment decisions are determined as per S&P CNX 500 Index. In case of any change in the index due to corporate actions or change in the constituents of S&P CNX 500 Index, by IISL, relevant investment decisions are determined considering the composition of S&P CNX 500 Index. Performance Record (as on March 31, 2010) Benchmark S&P CNX 500 Fund Benchmark Returns Particulars S&P CNX 500 S&P CNX 500 Growth Option Dividend Option Index Total Return Index Last 1 Year 80.37% 80.94% 87.95% 90.02% Since Inception 63.78% 63.97% 59.37% 61.19% Returns are compounded annualised. Past performance may or may not be sustained. For Benchmark S&P CNX 500 Fund Dividend Plan, the returns are calculated after considering the dividend paid. For calculating returns since inception, the allotment price is taken at Rs. 10/- at which the units were allotted on January 6, 2009 in the New Fund Offer. Annualised Tracking Error since inception till March 31, 2010 is 2.07%. It is calculated with respect to Total Return S&P CNX 500 Index. Total assets under management as on March 31, 2010 were Rs crores held by 3,365 investors. 10. Shariah Benchmark Exchange Traded Scheme (Shariah BeES) Shariah Benchmark Exchange Traded Scheme (Shariah BeES) is an open ended index scheme in the form of an ETF, tracking S&P CNX Nifty Shariah Index and is passively managed. Shariah BeES is listed on the Capital Market Segment of the NSE. The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the S&P CNX Nifty Shariah Index by investing in securities which are constituents of S&P CNX Nifty Shariah Index in the same proportion as in the Index. As per the investment pattern, Shariah BeES invests at least 90% of its total assets in the stocks constituting S&P CNX Nifty Shariah Index. The Scheme may invest upto 10% of its total assets in stocks not included in the corresponding underlying index. 6

8 The investment decisions are determined as per S&P CNX Nifty Shariah Index. In case of any change in the index due to corporate actions or change in the constituents of S&P CNX Nifty Shariah Index, by IISL, relevant investment decisions are determined considering the composition of S&P CNX Nifty Shariah Index. Performance Record (as on March 31, 2010) Benchmark Returns Particulars Shariah BeES S&P CNX Nifty Shariah S&P CNX Nifty Shariah Index Total Return Index Last 1 Year 69.69% 70.10% 71.74% Since Inception 79.22% 80.25% 82.57% Returns are compounded annualised. Past performance may or may not be sustained. For calculating returns since inception, the allotment price is taken at Rs at which the units were allotted on March 18, 2009 in the New Fund Offer. Annualised Tracking Error since inception till March 31, 2010 is 0.24%. It is calculated with respect to Total Return S&P CNX Nifty Shariah Index. Total assets under management as on March 31, 2010 were Rs crores held by 276 investors. 11. Hang Seng Benchmark Exchange Traded Scheme (Hang Seng BeES) Hang Seng Benchmark Exchange Traded Scheme (Hang Seng BeES) is an open ended index scheme in the form of an ETF, tracking Hang Seng Index and is passively managed. Hang Seng BeES is listed on the Capital Market Segment of the NSE. The investment objective of the Scheme is to provide returns that, returns that, before expenses, closely correspond to the total returns of securities as represented by Hang Seng Index of Hang Seng Data Services Limited., by investing in the securities in the same proportion as in the Index. As per the investment pattern, Hang Seng BeES invests at least 90% of its total assets in the stocks constituting Hang Seng Index. The Scheme may invest upto 10% of its total assets in stocks not included in the corresponding underlying index. The investment decisions are determined as per Hang Seng Index. In case of any change in the index due to corporate actions or change in the constituents of Hang Seng Index, by Hang Seng Data Services Ltd., relevant investment decisions are determined considering the composition of Hang Seng Index. The New Fund Offer of Hang Seng BeES opened for public subscription on February 15, 2010 and closed on February 24, 2010 with Rs crores being amount mobilized in the New Fund Offer. The units of the Scheme were allotted on March 09, 2010 at Rs. 1, The units of Hang Seng BeES were listed on NSE on March 19, Performance Record (as on March 31, 2010) Particulars Hang Seng BeES Hang Seng Index Benchmark Returns Hang Seng Index Total Return Index (INR) Since Inception (0.59%) (1.38%) (1.15%) Returns are absolute as the Scheme has not completed one year. Past performance may or may not be sustained. For calculating returns since inception, the allotment price is taken at Rs. 1, at which the units were allotted on March 9, 2010 in the New Fund Offer. Total assets under management as on March 31, 2010 were Rs crores held by 2,420 investors. 7

9 TOTAL ASSETS UNDER MANAGEMENT As on March 31, 2010 total assets under management were Rs. 1, crores for all the Schemes. Dividend During the financial year , the following dividends were declared : Scheme Rate Record Date Nifty BeES Rs per unit July 9, 2009 Junior BeES Rs per unit July 9, 2009 Bank BeES Rs per unit July 9, 2009 Benchmark Derivative Fund - Dividend Option Rs per unit September 1, 2009 Benchmark Equity & Derivatives Opportunities Fund - Rs per unit September 1, 2009 Dividend Option PSU Bank BeES Rs per unit November 10, 2009 Benchmark Derivative Fund - Dividend Option Rs per unit December 26, 2009 Benchmark Derivative Fund - Dividend Option Rs per unit March 15, 2010 Benchmark Equity & Derivatives Opportunities Fund - Rs per unit March 15, 2010 Dividend Option Benchmark S&P CNX 500 Fund Dividend Option Rs per unit March 15, 2010 Further, dividend, in the form of units, was declared and paid in Liquid BeES on a daily basis as per its Scheme Information Document. FUTURE OUTLOOK The Fund has received approval from Securities & Exchange Board of India for the launch of the following Schemes : 1. Infrastructure Benchmark Exchange Traded Scheme (Infra BeES) is an open ended index scheme in the form of an exchange traded fund whose investment objective is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the CNX Infrastructure Index. 2. Benchmark Short Term Fund is an open ended debt scheme whose investment objective is to enhance returns with minimum risk by investing in a portfolio of money market and debt instruments while maintaining the safety and liquidity. Benchmark Short Term Fund has been launched with its New Fund Offer commencing from June 29, Further, the Fund has also filed the following Scheme Information Documents with SEBI whose details are: 1. Gilt Benchmark Exchange Traded Scheme is an open ended gilt scheme in the form of an ETF whose investment objective is to generate returns through investment in securities issued by the Central Government and/or State Government and/or any other security guaranteed by the Government of India. 2. Benchmark Liquid Exchange Traded Split Scheme (BLESS) is an open ended liquid scheme whose investment objective is to enhance returns and minimize price risk of the combined NAV of pair of units by investing in basket of call money, short-term government securities and money market instruments of short and medium maturities while maintaining the safety and liquidity and divide the portfolio proceeds at the maturity between Bear Unit holders and Bull Unit holders in accordance with the distribution formula based on the movement of S&P CNX Nifty Index. The Scheme would mature at the end of three years. Also there is contingent early maturity provision in case of occurrence of contingent event. The contingent event in this case will be the closing S&P CNX Nifty Index on any day is 50% above or below the initial index level. 8

10 STATUTORY DETAILS The price and redemption value of the units and income from them can go up as well as down with the fluctuation in the market value of its underlying investments. On written request, present and prospective Unitholder/investors can obtain a copy of the Trust Deed, the Annual Report and the text of the Schemes. Unitholders, if they so desire, may request the Annual Report of the AMC. The details of investor complaints received by the Fund in financial year is enclosed as an Annexure. The AMC has not paid any brokerage and commission to associates/related parties/group companies of the Sponsor/AMC. LIABILITY AND RESPONSIBILITY OF TRUSTEE AND SPONSOR The main responsibility of the Trustee is to protect the interest of Unitholders and inter alia ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed, Statement of Additional Information (SAI) and Scheme Information Document (SID) of the Schemes. From the information provided to the Trustee and the reviews the Trustee has undertaken, the Trustee believes the AMC has operated in the interests of Unitholders. The Sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution of Rs. 1 lac made by it towards setting up of Benchmark Mutual Fund. ACKNOWLEDGEMENTS We would like to thank Securities and Exchange Board of India, National Stock Exchange of India Ltd., Service providers, Depositories, the investors, the AMC and its employees for their committed service. For and on behalf of the Board of Directors of Benchmark Trustee Company Pvt. Ltd. (Trustee to Benchmark Mutual Fund) Dr. S. A. Dave Chairman Place: Mumbai Date: June 28,

11 Complaint Code Type of Complaint# (a) No. of complaints pending at the beginning of the year Annexure to Trustee Report Details of Investor Complaints (b) No. of complaints received during the year Within 30 days Action on (a) and (b) Resolved Non Actionable* Pending Beyond days days days 0-3 months 3-6 months 6-9 months 9-12 months IA Non Receipt of Dividend on Units IB Interest on delayed payment of Dividend IC Non receipt of Redemption Proceeds ID Interest on delayed payment of Redemption IIA Non Receipt of Stament of Account/Unit Certificate IIB Discrepancy in Statement of Account IIC Non Receipt of Annual Report/Abridged Summary IIIA Wrong switch between Schemes IIIB Unauthorised switch between Schemes IIIC Deviation from Scheme attributes IIID Wrong or excess charges/load IIIE Non updation of changes viz. address, PAN, bank details, nomination, etc IV Others # Including against its authorised persons/distributors/employees, etc *Non actionable means the complaint are incomplete/outside the scope of mutual fund

12 AUDITORS REPORT The Board of Directors, Benchmark Trustee Company Private Limited We have audited the attached Balance Sheet as at March 31, 2010 and the Revenue Account for the year ended on that date annexed thereto, of Nifty Benchmark Exchange Traded Scheme (Nifty BeES), a scheme of Benchmark Mutual Fund. These financial statements are prepared in accordance with SEBI (Mutual Fund) Regulations, 1996 (The Regulations) and are the responsibility of the Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on auditing issued by Institute of Chartered Accountants of India. 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. We report that: 1. We have obtained all information and explanations, which, to the best of our knowledge and belief were necessary for the purpose of our audit. 2. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of accounts of the Scheme. 3. The accounts have been prepared in accordance with the accounting policies adopted by the trustees of the Fund and as specified in the Ninth Schedule to the Regulations.

13 4. In our opinion, valuation methods for Non Traded Securities, if any, adopted by the scheme are fair and reasonable and are in accordance with the guidelines for valuation issued by SEBI and approved by the Trustee. 5. In our opinion and to the best of our information and according to the explanations given to us, the financial statements read with the accounting policies and notes to accounts attached thereto, give the information required as per the Regulations and give a true & fair view in conformity with the generally accepted accounting principles in India: a. In the case of Balance Sheet of Nifty BeES, the Scheme of Benchmark Mutual Fund, of the state of affairs of the Scheme as at March 31, 2010; and b. In the case of Revenue Account of Nifty BeES, the Scheme of Benchmark Mutual Fund, of the surplus of the Scheme for the year ended March 31, For N.M.RAIJI & CO. Chartered Accountants Firm Reg. No:108296W Place: Mumbai J. M. GANDHI Partner Membership No Dated: June 28, 2010

14 BENCHMARK MUTUAL FUND NIFTY BENCHMARK EXCHANGE TRADED SCHEME - NIFTY BeES BALANCE SHEET AS AT MARCH 31, 2010 Serial No. PARTICULARS SCHEDULE AMOUNT (In Rs.) March 31, 2010 March 31, 2009 LIABILITIES 1 Unit Capital (No of units: Current Year - 6,657,477, Previous Year - 4,317,477) 66,574,766 43,174,766 2 Reserves and Surplus A 3,436,596,940 1,275,685,739 UNIT HOLDERS FUNDS 3,503,171,706 1,318,860,505 3 Current Liabilities & Provisions B 14,553,553 28,484,503 TOTAL 3,517,725,259 1,347,345,008 ASSETS 1 Investments C 3,498,388,884 1,314,896,500 2 Other Current Assets D 19,336,375 32,448,508 TOTAL 3,517,725,259 1,347,345,008 Accounting Policies and Notes to Accounts G The Schedules referred to herein form an integral part of the Balance sheet and Revenue Account As per our Report of even date For N M Raiji & Co. Chartered Accountants For and on behalf of Benchmark Trustee Company Pvt Ltd. Dr. S.A.Dave Shriraj Dhruv J M Gandhi Chairman Director (Partner) Membership No For and on behalf of Benchmark Asset Management Company Pvt. Ltd. D.S.Mehta Chairman S.R.Halbe Director Place : Mumbai Vishal Jain Date : June 28, 2010 Fund Manager

15 BENCHMARK MUTUAL FUND NIFTY BENCHMARK EXCHANGE TRADED SCHEME - NIFTY BeES REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Serial No. PARTICULARS SCHEDULE AMOUNT (In Rs.) March 31, 2010 March 31, INCOME AND GAINS 1.1 Dividend 26,276,379 31,205, Profit on sale / redemption of investments 834,872, ,316,637 (other than inter-scheme transfer/sale) 1.3 Profit on Futures 1,143,082 1,248, Net Change in unrealised appreciation/(depreciation) on investments 474,324, ,606,910 TOTAL 1,336,616, ,377,250 2 EXPENSES AND LOSSES 2.1 Management & Operating Expenses E 15,058,665 11,394, Loss on sale/redemption of investments 78,518,350 1,762,761,128 (other than inter-scheme transfer/sale) 2.3 Loss on Futures 2,885,398 4,509,209 TOTAL 96,462,413 1,778,664,862 Surplus / (Deficit) for the year 1,240,154,450 (1,300,287,612) Add/(Less): Income Equalisation 640,589,759 (1,509,412,990) Add: Opening unrealised appreciation reserve Less: Closing unrealised appreciation reserve - 331,006, ,549,737,250 (2,809,700,602) Balance brought forward from Previous year 1,191,954,906 4,025,892,891 Surplus available for distribution 2,741,692,156 1,216,192,289 Appropriation Income Distribution 26,088,644 24,237,383 Balance Carried to the Balance Sheet 2,715,603,512 1,191,954,906 Accounting Policies and Notes to Accounts G The Schedules referred to herein form an integral part of the Balance sheet and Revenue Account As per our Report of even date For N M Raiji & Co. Chartered Accountants For and on behalf of Benchmark Trustee Company Pvt Ltd. Dr. S.A.Dave Shriraj Dhruv J M Gandhi Chairman Director (Partner) Membership No For and on behalf of Benchmark Asset Management Company Pvt. Ltd. D.S.Mehta Chairman S.R.Halbe Director Place : Mumbai Vishal Jain Date : June 28, 2010 Fund Manager

16 BENCHMARK MUTUAL FUND NIFTY BENCHMARK EXCHANGE TRADED SCHEME - NIFTY BeES SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010 AND REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 Schedule No. PARTICULARS AMOUNT (In Rs.) March 31, 2010 March 31, 2009 A RESERVES AND SURPLUS Unit Premium Reserve Opening Balance 83,730, ,969,689 Add/(Less): On account of subscription/redemption of units 306,255,636 (385,238,856) 389,986,469 83,730,833 Unrealised Appreciation Reserve Opening Balance - - Add/(Less): During the year 331,006,959 - Closing Balance 331,006,959 - Surplus Balance transferred from Revenue Account 2,715,603,512 1,191,954,906 2,715,603,512 1,191,954,906 3,436,596,940 1,275,685,739 B CURRENT LIABILITIES & PROVISIONS Current Liabilities Contracts for Purchase of Investments 2,468,058 2,390,402 Management Fees Payable 1,038, ,487 Trusteeship Fees Payable 203,166 29,450 Payable on repurchase of units - 24,215,672 Provision for STT 7,513, ,725 Others 3,329,973 1,413,767 14,553,553 28,484,503 C INVESTMENTS (Marked to Market) (Refer Schedule F for Portfolio Holding Statement) Equity Shares 3,498,388,884 1,314,896,500 3,498,388,884 1,314,896,500 D OTHER CURRENT ASSETS Balances with Scheduled Banks in Current Account 16,119,034 6,754,384 Contracts for sale of investments 2,495,120 24,215,672 Dividend Receivable on Equity 722, ,053 Margin Money on Future Contracts - 1,236,399 19,336,375 32,448,508 E MANAGEMENT & OTHER OPERATING EXPENSES Management Fees 9,033,017 6,833,345 Trusteeship Fees 301, ,059 Selling, Marketing and Distribution Expenses 2,040,029 2,116,163 Audit Fees 138, ,552 Custodial Fees 1,120, ,728 Registrar Expenses 1,517,499 1,101,839 Listing, Licensing and Other Fees 367, ,589 Investor Communication Expenses 492,314 78,250 Other Operating Expenses 47,605-15,058,665 11,394,525

17 BENCHMARK MUTUAL FUND NIFTY BENCHMARK EXCHANGE TRADED SCHEME - (NIFTY BeES) SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010 AND REVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 SCHEDULE F - PORTFOLIO HOLDING STATEMENT AS ON MARCH 31, 2010 SCRIP NAME NO. MARKET VALUE (Amount in Rs.) % TO TOTAL EQUITY & EQUITY RELATED INSTRUMENTS AUTO HERO HONDA MOTORS LTD 20,621 40,095,472 MAHINDRA & MAHINDRA LTD 96,292 52,127,674 MARUTI SUZUKI INDIA LTD 30,332 43,009,259 TATA MOTORS LTD 62,256 47,171,371 BANKS AXIS BANK LTD 56,594 66,115,941 HDFC BANK LTD 79, ,101,884 ICICI BANK LTD 255, ,318,983 PUNJAB NATIONAL BANK 30,508 30,896,977 STATE BANK OF INDIA 59, ,777,978 CEMENT ACC LTD 23,156 22,022,514 AMBUJA CEMENTS LTD 187,145 22,429,328 GRASIM INDUSTRIES LTD 15,660 44,080,551 JAIPRAKASH ASSOCIATES LTD 262,728 39,290,972 CONSTRUCTION DLF LTD 83,095 25,668,046 UNITECH LTD 307,563 22,636,637 CONSTRUCTION PROJECT LARSEN & TOUBRO LTD 137, ,014,898 CONSUMER NON DURABLES ITC LTD. 594, ,507, ,403, ,211, ,823, ,304, ,014, ,507, DIVERSIFIED HINDUSTAN UNILEVER LTD 239,961 57,482,658 57,482, FERROUS METALS JINDAL STEEL & POWER LTD 88,429 62,174,430 STEEL AUTHORITY OF INDIA LTD 134,291 33,915,192 TATA STEEL LTD 140,017 88,497,745 FINANCE HDFC LTD 58, ,635,641 INFRASTRUCTURE DEVELOPMENT FINANCE CO LTD 214,823 34,575,762 RELIANCE CAPITAL LTD 26,195 19,804, ,587, ,016,

18 SCHEDULE F - PORTFOLIO HOLDING STATEMENT AS ON MARCH 31, 2010 GAS GAIL (INDIA) LTD 103,000 42,291,800 INDUSTRIAL CAPITAL GOODS ABB LTD 23,269 19,313,270 BHARAT HEAVY ELECTRICALS LTD 36,228 86,608,468 SIEMENS LTD 34,648 25,644,717 SUZLON ENERGY LTD 167,478 12,033,294 42,291, NON-FERROUS METALS HINDALCO INDUSTRIES LTD 297,979 54,008,694 STERLITE INDUSTRIES (INDIA) LTD 92,449 78,577, ,599, OIL CAIRN INDIA LTD 98,633 30,147,177 OIL & NATURAL GAS CORPORATION LTD 77,336 84,969, ,585, PETROLEUM PRODUCTS BHARAT PETROLEUM CORPORATION LTD 29,626 15,347,749 RELIANCE INDUSTRIES LTD 387, ,545, ,116, PHARMACEUTICALS CIPLA LTD 116,344 39,364,992 RANBAXY LABORATORIES LTD 34,785 16,536,789 SUN PHARMACEUTICAL INDUSTRIES LTD 17,231 30,877, ,893, POWER NTPC LTD 198,516 41,142,441 POWER GRID CORPORATION OF INDIA LTD 131,591 14,099,976 RELIANCE INFRASTRUCTURE LTD 32,154 32,123,454 RELIANCE POWER LTD 83,641 12,500,148 TATA POWER CO LTD 37,510 51,525,612 86,779, SOFTWARE HCL TECHNOLOGIES LTD 48,646 17,434,726 INFOSYS TECHNOLOGIES LTD 110, ,764,257 TATA CONSULTANCY SERVICES LTD 115,215 89,942,590 WIPRO LTD 68,379 48,340, ,391, TELECOM - SERVICES BHARTI AIRTEL LTD 280,008 87,516,500 IDEA CELLULAR LTD 385,430 25,245,665 RELIANCE COMMUNICATIONS LTD 153,774 26,133, ,482, ,896, TOTAL 3,498,388, Note : Cash and Cash Equivalents are not considered for the above purpose.

19 Nifty Benchmark Exchange Traded Scheme Nifty BeES Schedule G Accounting Policies and Notes to Accounts BENCHMARK MUTUAL FUND 1. BACKGROUND Benchmark Mutual Fund ( the Fund ) has been sponsored by Niche Financial Services Pvt. Ltd and has been set up as a Trust under the Indian Trust Act, 1882 through Trust Deed dated February 14, Benchmark Trustee Company Pvt. Ltd. ( the Trustee ) is the sole Trustee of the Fund. In accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, Benchmark Asset Management Company Pvt. Ltd. (BAMC) has been appointed as Asset Management Company ( the AMC ) to the Fund. Nifty Benchmark Exchange Traded Scheme (Nifty BeES) is an open-ended index scheme of Benchmark Mutual Fund tracking S&P CNX Nifty Index in the form of Exchange Traded Fund (ETF) and the units of Nifty BeES are listed on the Capital Market Segment of the National Stock Exchange of India Ltd. (NSE). The investment objective of the Scheme is to generate returns that, before expenses, closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. Subscription and Redemption of units of Nifty BeES are generally through the exchange of underlying securities forming part of the S&P CNX Nifty Index. The rounding off difference is settled in money value. The Fund also allows cash subscription/redemption of Nifty BeES in pre-defined size, whereby the Fund will arrange to buy/sell the underlying index securities on behalf of the investors. 2. SIGNIFICANT ACCOUNTING POLICIES a) The method of accounting is on accrual basis. b) Investments i. Purchase and sale of securities are recognized on trade date. i.e. on the date of transaction and not on the date of settlement. ii. iii. iv. All investments are accounted at acquisition cost. Such cost includes stamp duty, brokerage and any other charges customarily included in broker s note. Cost of right shares, if any, is considered at issue price plus premium paid, if any, to acquire rights renunciation. Bonus entitlements, if any, are recognized on ex-bonus dates. Similarly right entitlements, if any, are recognized only when original shares on which right entitlements accrue are traded on ex-right basis. v. Portfolio Valuation For the purpose of financial statements, the Fund marks all investments to market and carries investments in the Balance Sheet at the market value. Unrealized gain, if any, arising out of appreciation of the investments, is carried to the Balance Sheet. Traded securities are valued at the last quoted closing prices on the NSE. In absence of such a quoted price on the valuation date, the last available quoted price within a period of thirty days prior to the valuation date is used for valuation purpose. Non traded securities, if any, including those not traded within 30 days prior to the valuation date and thinly traded/unlisted securities are valued in accordance with the guidelines issued by SEBI. vi. In determining the holding cost of investments and gain/loss on sale of investments, weighted average method has been followed.

20 c) Income Recognition a. Dividend income is accrued on ex-dividend date. b. Profit or loss on sale of investment is arrived at by applying weighted average cost on trade date. c. Interest on fixed income investments are recognized on accrual basis. d. Unrealized appreciation and changes thereon are recognized as gain/loss in the Revenue Account and thereafter carried to the Balance Sheet as Unrealized Appreciation Reserve. d) Income Equalization An appropriate portion of price of unit at the time of purchase and sale is transferred to Income Equalization Account. In arriving at the portion of the price to be transferred to Income Equalization Account, surplus/deficit (before considering unrealized appreciation) upto the date of transaction is taken into account. The net balance in Income Equalization Account is transferred to Revenue Account. e) Unit Premium Reserve Unit Premium Reserve is debited or credited at the time of purchase or sale of units after taking into account the face value of units and Income Equalization.To comply with SEBI circular, balance in Unit Premium Reserve is not considered for distribution of dividend after 15 th March f) Entry / Exit Load The Fund creates and redeems units only in predefined lot size called creation unit. The Fund does not charge any entry or exit load on subscription or redemption of units in creation unit size. As per the terms of offer document, depository and custody charges are recovered from the respective investor for transfer of shares on subscription and redemption and the same are utilized for payments to depository / custodian and hence do not form a part of revenue account. In case no quotes are available on NSE for five consecutive trading days, the Fund may redeem units in less than creation unit size, and in that event an exit load of 5% will be applicable. However no load has been charged on this account during the year under review. With effect from August 1, 2009, any exit load in excess of 1% will be credited back to the Scheme for the benefit of investors. As per the terms of the Offer Document, Depository and Custody Charges are recovered from the respective investor for transfer of shares on subscription and redemption and the same is utilized for payment of transaction charges to Depository Participant and Custodian on account of transfer of shares and hence do not form part of Revenue Account. 3. NOTES TO ACCOUNTS 1. Net Assets Value (NAV) is calculated after considering market/fair value of investments and after providing for expenses on an estimated basis. 2. There are no underwriting obligations undertaken by the Scheme with respect to issue of securities of associate companies. 3. There is no contingent liability on underwriting commitment, partly paid equity shares or any other uncalled liabilities.

21 4. All investments are marked to market and accordingly reflected in the Balance Sheet. The cost and market value of investments are shown in Note no The AMC has not dealt in any securities through brokers associated with the Sponsor. 6. Purchase of investments yet to be settled: Rs. 2,468,058/- (Previous Year 2,390,402/-). The above purchases were made on NSE and were accordingly settled on T + 2 basis. 7. Sale of investments yet to be settled: Rs. 2,495,120/- (Previous Year 24,215,672 /-). The above sales were made on NSE and were accordingly settled on T + 2 basis. 8. Income and Expenses Average Daily Net Assets (Rs.) Year ended March 31, 2010 Year ended March 31, ,012,827, ,280,589, Aggregate Value (Rs.) % of Average Net Assets Aggregate Value (Rs.) % of Average Net Assets Total income (including net profit/(loss) on sale / redemption of investments, profit on interscheme transfers and net change in unrealised appreciation / (depreciation) in value of investments) 1,255,213, % (1,288,893,087) (56.52%) Total expenditure (Annual recurring expenses) 15,058, % 11,394, % 9. Aggregate Value of Purchase and Sale of Investments during the year (Rs. in Lakhs) (Rs. in Lakhs) Daily Average Net Assets 30, , Purchases 90, , % to Daily Average Net Assets % % Sales 80, , % to Daily Average Net Assets % % 10. Net Asset Value (Per Unit in Rs.) As at March 31, 2010 As at March 31, 2009 Face Value Net Assets Value Allotment NAV The scheme declared a Dividend of Rs.4.50/- per unit on July 09, 2009 out of the surplus available for distribution at that point of time.

22 11. Cost and Market Value of Investments Amount (Rs. in Lakhs) Cost 31, , Market Value 34, , Unrealised Appreciation in the Value of investments 3, (1,433.18) 12. Movement in Unit Capital Particulars Units Rs. in Lakhs Units Rs. in Lakhs Initial Units (on the date of Allotment) 2,011, ,011, Units at the beginning of the year 4,317, ,917, Units Issued 17,870,000 1, ,820,000 2, Units Redeemed 15,530,000 1, ,420,000 2, Units at the end of the year 6,657, ,317, Details of Large Holding (more than 25% of the Net Assets of the Scheme) As on March 31, 2010 there is no investor in the Scheme who holds more than 25% of the net assets of the Scheme. 14. Income Tax No provision for Income Tax is made as the Scheme qualifies as a recognized Mutual Fund under section 10 (23D) of the Income Tax Act, Investment Management Fees Investment Management Fees is calculated on the daily average net assets of the Scheme. The details of management fees levied on an annualized basis are as follows: Amount (in Rs.) Daily Average Net Assets 3,012,827,977 2,280,589,934 Management Fees (in %) 0.30% 0.30% Management Fees 9,033,017 6,833, Trustee Fees In accordance with the terms of Offer Document, the Trustee fees has been 0.01% of the daily average net assets of the Scheme. 17. Custodial Fees and Expenses Citibank N.A. provides custodial services to the Scheme for which it receives custody fees including safekeeping. In addition, Citibank N.A. is reimbursed for custody and transaction charges by depositories (i.e. NSDL / CDSL). 18. Registrar and Transfer Agent Fees and Expenses Karvy Computershare Private Limited provides Registrar and Transfer Agency Services to the Scheme, for which it receives the fees based on daily average net assets of the Scheme. 19. There are no investments made by Benchmark Trustee Company Pvt. Ltd. in the Scheme. Benchmark Asset Management Company Pvt. Ltd. holds 897 units in the Scheme as at March 31, 2010.

23 20. The Scheme has not made any investments in Group/Associate Companies. 21. The Scheme has not made any investment in the issues lead managed by Associate Companies. 22. No brokerage, custodial fees or any other payment for services have been paid or is payable to any entity in which the AMC or its major shareholders have a substantial interest. 23. Disclosure under Regulation 25 (11) - Benchmark Mutual Fund had invested in the following company, which has invested more than 5% of the net assets of any scheme of Benchmark Mutual Fund. Company which has invested ICICI BANK LTD CORPORATION BANK Scheme in which invested more than 5% of net assets NIFTY BeES, JUNIOR BeES, BANK BeES & PSU BANK BeES PSU BANK BeES Scheme which has invested Aggregate investment during the period under regulation 25(11) at cost (Rs. in Lakhs) Outstanding as on March 31, 2010 at Market value (Rs. in Lakhs) NIFTY BeES 5, , BANK BeES 6, , LIQUID BeES 5, BEDOF BDF BENCHMARK S&P CNX 500 FUND JUNIOR BeES PSU BANK BeES BENCHMARK S&P CNX 500 FUND TATA INVESTMENT CORPORATION LTD LARSEN & TOUBRO LTD JUNIOR BeES BENCHMARK S&P CNX 500 FUND BENCHMARK S&P CNX 500 FUND NIFTY BeES 5, , SHARIAH BeES BEDOF BDF BENCHMARK S&P CNX 500 FUND The investments in above companies were made as they are a constituent of the respective indices tracked by Nifty BeES, Junior BeES, Bank BeES, PSU Bank BeES, Shariah BeES and Benchmark S&P CNX500 fund. In case of Liquid BeES the investment was made in money market instruments in accordance with investment objective of the scheme. In case of Benchmark Derivative Fund and Benchmark Equity and Derivatives Opportunities Fund, the investment in above companies was made on account of arbitrage opportunities available in the derivatives market during the year. 24. The Financial Statements of the Scheme have been prepared in accordance with SEBI Mutual Funds Regulations, 1996 wherein disclosure of Cash Flow Statement and Segment Reporting have not been prescribed. Hence the same has not been provided for the Scheme.