Annual Report

Transcription

1 Annual Report

2 3rd Annual Report BOARD OF DIRECTORS Mirae Asset Trustee Company Private Limited Mr. V. B. Haribhakti Mr. S. T. Gerela Mr. K. Ramasubramanian Mr. M. L. Soneji Mirae Asset Global Investments (India) Private Limited (AMC) Mr. B. N. Chakraborty Mr. N. N. Jambusaria Mr. Cheon Woong Park Mr. Arindam Ghosh Sponsor: Mirae Asset Global Investments Company Limited Registered office: 45-I, Yoido-Dong, Youngdeungpo-Gu, Seoul, Korea Trustee: Mirae Asset Trustee Company Private Limited Registered Office: Unit No.606, Windsor Building, Off. C.S.T Road, Kalina, Santacruz (East), Mumbai Asset Management Company: Mirae Asset Global Investments (India) Private Limited Registered & Corporate Office: Unit No.606, Windsor Building, Off. C.S.T Road, Kalina, Santacruz (East), Mumbai Custodian: Standard Chartered Bank 23-25, Mahatma Gandhi Road, Fort, Mumbai Statutory Auditors: S.R. Batliboi & Co., Chartered Accountants 6 th floor, Express Towers, Nariman Point, Mumbai Registrar & Transfer Agent: Karvy Computershare Private Limited Karvy Plaza; H No , Avenue 4, Street No 1, Banjara Hills, Hyderabad

3 Annual Report of Mirae Asset Mutual Fund for the year ended March 31, 2010 Dear Unit holder, The Trustee Company presents its third report and the audited financial statements of the Schemes of Mirae Asset Mutual Fund (the Fund ), for the year ended March 31, MIRAE ASSET MUTUAL FUND During the year ended March 31, 2010, the Fund launched two products viz. Mirae Asset China Advantage Fund, an open ended fund of funds scheme and Mirae Asset Short Term Bond Fund, an open ended debt scheme. The Average Net Assets Under Management (AUM) were Rs Crores as at 31st March, The New Fund Offer (NFO) of Mirae Asset China Advantage Fund generated Rs crores, whereas of Mirae Asset Short Term Bond Fund generated Rs crores. *- During the year under review, Mirae Asset Interval Fund Quarterly Plan Series I & Mirae Asset Interval Fund Quarterly Plan Series II were wound up in compliance with SEBI Circular dated December 12, The Fund(s) has declared dividends under its various Schemes and a list of such dividends is annexed and forms part of the Annual Report. During the period, the Net Assets under management were Rs crores as at 31st March, Past Performance is no guarantee of future results. Since March 2010, Mirae Asset Mutual Fund launched Mirae Asset Emerging Bluechip Fund, an open ended equity fund. The new fund offer started on 24th May, 2010 and continued till 22nd June DEBT MARKET OVERVIEW The Indian economy is recovering rapidly from growth slowdown, but inflationary pressures which were triggered by supply side factors are now developing into a wider inflationary process. The borrowing program has already started, the amount being INR crores. The weekly borrowing in the first half (63% of total borrowing) was around INR crores. RBI has re-iterated its commitment to conduct the market borrowing program in a non - disruptive manner. The Reserve Bank of India released the monetary policy for under the economic backdrop of real interest rates being negative, inflation having a wider impact, absorption of liquidity and providing credit. The RBI hiked all its key policy rates by 25 bps. The Repo rate now stands at 5.25%, the reverse repo at 3.75% and the CRR (cash reserve ratio) at 6%. By doing this RBI has signaled rate hikes will be done in a calibrated way. Netting it out Inflationary expectations will be anchored, recovery process will be sustained, government borrowing requirements and private credit demand will be met. The growth rate has been projected at 8% under the assumption of normal monsoon, and sustenance of good performance of industrial and service sectors on the back of rising domestic and external demand. Inflation has been projected at 5.5% with three major uncertainties. The prospects of monsoon, crude prices and demand side prices are building up. Other macro projections are Credit growth at 20%, deposit growth at 18%, money supply growth at 17%. The global economy continues to face several challenges such as high levels of unemployment (close to 10%) despite signs of renewed activity in manufacturing and initial improvement in retail sales. DEBT MARKET FUTURE OUTLOOK The bond yields are expected to rise due to huge G-sec supply on a weekly basis. Rising oil prices continue to be a matter of concern for the debt market. Although the Kirit Parikh committee has recommended to free the oil prices, it will be difficult step as this may lead to higher inflation and may in turn hamper growth. Higher interest rates locally will attract more foreign flows, which in turn will strengthen rupee. The 10 year G-sec should trade between 8% to 8.50% with an upward bias as the rates rises. Corporate bonds will follow G-sec market. Rate hikes in a calibrated way can be expected from RBI. Liquidity, credit growth, industrial production, monsoon and inflation numbers will help RBI to decide further rate hikes. EQUITY MARKET OVERVIEW Global financial markets exhibited significant stabilisation during 2009, despite the drag from the global financial crisis. However, volatility increased in the beginning of 2010 due to concerns about unsustainable fiscal positions, as reflected in sovereign risks. Episodes such as the Dubai World debt standstill and the sovereign debt problems in Greece and East European countries pose a major risk to the stability of financial markets going forward. Recovery in the global economy picked up momentum in the fourth quarter of The speed of recovery, however, remains significantly divergent in different parts of the world. The projections for global output for 2010 generally point to consolidating recovery, led by the Emerging Market Economies (EMEs). The risks to the overall global macroeconomic environment have, however, increased because of large public debt in advanced economies, on the back of concerns relating to reduction in potential output, high unemployment rates, impaired financial systems and premature exit from the policy stimulus. Closer home, the improvement in global macroeconomic conditions is reflected in the turnaround in India s exports and the return of capital flows. With stronger recovery in EMEs driven largely by domestic demand, improving exports and return of capital flows, EMEs face the risks of inflation and asset price build up going forward. With market activity returning to the pre-global crisis level, volatility in the domestic financial markets was much lower during than in the year before, when the crisis erupted. Despite considerable stability, markets faced concerns emerging from large government borrowings and the increase in inflation. This affected yields in the government bond market. The transmission of lower policy rates to the credit markets improved, albeit, slowly. Following the optimism on account of measures announced in the Union Budget such as the roadmap for fiscal consolidation and PSU divestment, stock prices recorded further gains. FIIs made net purchases of US$ 23.7 billion in the Indian equity market during (net sales of US$ 10.4 billion in ), while the mutual funds net sales during amounted to Rs.10,512 crore (net purchases of Rs.6,985 crore in of ). In the emerging macroeconomic scenario, monetary 2

4 3rd Annual Report policy management in will be dominated by the challenge of moderating inflation and anchoring inflation expectations, while remaining supportive of growth impulses. Indices 31-Mar Apr-2009 % Chg BSE Sensex % Nifty % BSE % Dow Jones % S&P % MAIOF (Rs.) (NAV per unit) % BSE 200 (Benchmark) % MAGCSF (Rs.) (NAV per unit) % MSCI Asia Pacific ex-japan Energy & Material Index (55%) + MSCI India Energy & Material Index - (35%) + MSCI Brazil Energy & Material Index - (10%) (with MSCI s 10/40 Equity Index Methodology) (Benchmark) % FUTURE OUTLOOK OF EQUITY MARKET We believe that other than the earnings growth, two important factors which will an overbearing impact on the market [a] the global situation, and [b] factors related to India s fiscal situation. We believe high oil prices could be the significant risk as it impacts in the following way: (a) India s government borrowing program may get impacted by the large unfunded subsidy on fuels. Even assuming that governmentowned upstream companies bear one-third of the subsidy losses, the Indian government may have to deal with about Rs.600+ bn of under-recoveries. India s unfunded fiscal liability could shoot up 1 ppt (at US$85/bbl crude price) leading to higher interest rates. (b) Current-account deficit will deteriorate. (c) Domestic product prices and inflation will be higher. India may have no option but to tackle this new menace with further a tightening of the monetary policy, leading to a higher-than-expected increase in interest rates in FY 2011E. We already expect policy rates to move up about 100 bps in FY 2011E. A lot more concerning are the factors related to global economy. The situation is fluid given the sensitiveness associated with: [a] The impact on global recovery and job markets as easy liquidity is withdrawn. [b] Impact of tightening on China and commodity businesses. [c] Problems with many nations related to higher deficit particularly in the Euro area. Market Valuation: We continue to believe that the longer term outlook for equities in India remain positive due to its relatively strong fundamentals and faster growth than its developed counterparts. The big India consumption story is sustainable and exciting. India will stand-out as among the few countries to withstand the recession and present a secular growth opportunity. On a forward PER basis, India is currently trading on 16-17x. After two years of flat growth, the index earnings will grow at about 22% in FY 2011 and 20% in FY We continue to believe despite the run-up, that valuations are reasonably attractive given the secular growth trend. FUTURE OUTLOOK OF THE FUND The year for the Indian mutual industry has been characterized by wide ranging changes in regulations which cover aspects from the way mutual funds invest to the way mutual funds are sold. In the light of these changes, AMCs has to figure out a new and effective distribution model. Going forward, we believe the Indian mutual fund industry is expected to grow by catering to the evolving aspirations of retail customers. The industry should seek to target an increased share of the customer wallet through product innovation combined with deeper retail penetration by expanding reach into Tier 2 and Tier 3 towns. We believe that building investors trust and initiatives aimed at promoting investor education will be critical factors towards building greater retail participation. In the year ahead, Mirae Asset intends to pursue growth through offering various product offerings in the equity and fixed income markets. Going forward, Mirae Asset will continue to follow its four point strategy of (1) Strong Brand Positioning (2) Investment Performance (3) Investor Education and (4) Innovative Products. OBJECTIVES, INVESTMENT POLICY, PERFORMANCE & OPERATIONS OF THE SCHEMES: (I) MIRAE ASSET INDIA OPPORTUNITIES FUND (MAIOF), an open ended equity oriented scheme The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities. There is no assurance or guarantee of returns. 3

5 The Scheme aims to maximize the long term capital appreciation by finding investment opportunities resulting from Indian economic growth and its structural shifts through investing in equities, equities related securities with risk mitigating and controlling measures. The scheme has outperformed its benchmark (BSE 200) since its inception. The fund focuses on bottom up approach for stock picking and focused a lot on domestic consumption and outsourcing theme. It helped the fund to generate consistent returns. The net assets of Mirae Asset India Opportunities Fund amounted to Rs Crores as at March 31, As at March 31, 2010, 95.49% of the net assets were invested in equity shares and balance in fixed deposits (margin) and CBLO. Comparison of the performance of Mirae Asset India Opportunities Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on CAGR Benchmark** CAGR Benchmark** 31 st March, Returns returns (%) Returns returns 2010 (Last 1 (CAGR) since (CAGR) (Rs.) year)* (Last 1 inception* (since (%)^ year) (%)^ inception) (%)^ (%)^ Mirae Asset India Opportunities Fund - Regular Plan - Growth Option % 92.87% 20.22% 7.68% Mirae Asset India Opportunities Fund - Regular Plan - Dividend Option % 92.87% 15.62% 7.68% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 4 th April 2008 ** Benchmark:- BSE 200 Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. The returns of last 1 year are higher largely due to sharp market recovery. (II) MIRAE ASSET GLOBAL COMMODITY STOCKS FUND (MAGCSF), an open ended equity fund The investment objective of the scheme is to generate long term capital appreciation through an actively managed portfolio investing in equity and equity related securities of companies that benefit either directly or indirectly from commodity price movements, with at least 65% of the corpus invested overseas in Asia Pacific and Emerging Markets. There is no assurance or guarantee of returns. The commodities may include, for example, energy commodities, metals & materials, food and agricultural commodities and other commodities. The Energy Commodities include Crude Oil, Natural Gas, Gasoline, Coal and Coking Coal etc. The Metal and Materials include aluminium, copper, gold, zinc, silver, lead, platinum, steel, nickel, tin and iron ore, etc. The Food and Agro based Commodities include wheat, corn, cotton, sugar, rubber, soybeans, coffee, rice and meat etc. The scheme has outperformed its benchmark (MSCI Asia Pacific ex-japan Energy & Material Index (55%), MSCI India Energy & Material Index - (35%), MSCI Brazil Energy & Material Index - (10%) (with MSCI s 10/40 Equity Index Methodology) in terms of performance in the last 1 year period. The fund focuses on combination of top down (for sector selection) and bottom up (for stock selection) approach. Global re-stocking of commodity helped the commodity prices and this fund. China is the opportunity and threat for commodity prices and performance of the fund. We expect volatility to continue. The net assets of the Mirae Asset Global Commodity Stocks Fund stood at Rs Crores as at March 31, As at March 31, 2010, 95.25% of the net assets were invested in equity shares and balance in CBLO, fixed deposits (margin) and others. Comparison of the performance of Mirae Asset Global Commodity Stocks Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on CAGR Benchmark** CAGR Benchmark** 31 st March, Returns returns (%) Returns returns 2010 (Last 1 (CAGR) since (CAGR) (Rs.) year)* (Last 1 inception* (Since (%)^ year) (%)^ inception) (%)^ (%)^ Mirae Asset Global Commodity Stocks Fund - Regular Plan - Growth Option % 72.29% 11.88% 13.94% Mirae Asset Global Commodity Stocks Fund - Regular Plan - Dividend Option % 72.29% 11.88% 13.94% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. 4

6 3rd Annual Report CAGR Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 20th August 2008 ** Benchmark:- MSCI Asia Pacific ex-japan Energy & Material Index (55%) + MSCI India Energy & Material Index - (35%) + MSCI Brazil Energy & Material Index - (10%) (with MSCI s 10/40 Equity Index Methodology). Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. (III) (IV) MIRAE ASSET CHINA ADVANTAGE FUND (MACAF), an open ended fund of funds scheme The investment objective of the scheme is to generate long-term capital appreciation by investing predominantly in units of Mirae Asset China Sector Leader Equity Fund and/or units of other mutual fund schemes, units of ETFs investing in equities and equity related securities of companies domiciled in or exercising a large portion of their economic activity in China and Hong Kong. There is no assurance or guarantee of returns. The fund has underperformed in the short term as construction of portfolio results in impact cost and adverse impact of rupee appreciation. Chinese equities is underperforming as authorities are clamping down property market excesses, bank re-capitalization and tightening liquidity. The net assets of the Mirae Asset China Advantage Fund stood at Rs Crores as at March 31, As at March 31, 2010, 96.89% of the net assets were invested in units of Mirae Asset China Sector Leader Equity Fund and balance in CBLO, and others. Comparison of the performance of Mirae Asset China Advantage Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on Absolute Benchmark** 31 st March, Returns (Since returns (%) 2010 inception)* (Since inception) (Rs.) (%)^ (Absolute)%^ Mirae Asset China Advantage Fund - Regular Plan - Growth Option % -3.47% Mirae Asset China Advantage Fund - Regular Plan - Dividend Option % -3.47% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. Absolute returns are provided as the scheme has not completed one year. * Date of Allotment/ Inception date:- 5th November 2009 ** Benchmark:- MSCI China Index (INR) Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. MIRAE ASSET GILT FUND (MAGF), an open ended gilt fund MAGF is an Open ended Gilt Scheme. The scheme has two plans i.e. Investment Plan and Savings Plan. (a) Investment Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of sovereign securities issued and guaranteed by Central and State Government with residual maturity ranging from 1 year to 20 years or higher. There is no assurance or guarantee of returns. The Plan intends to invest predominantly in a portfolio comprising of Government securities with residual maturity ranging from 1 year to 20 years or higher. The average portfolio maturity duration of the plan will exceed 4 years. (b) Savings Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of short to medium term Government securities guaranteed by Central and State Government with an average portfolio maturity duration not exceeding 5 years. There is no assurance or guarantee of returns. The Plan intends to invest predominantly in a portfolio comprising of short to medium term Government securities with an average portfolio maturity duration not exceeding 5 years. The fund will be managed according to its objective and thereby seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of sovereign securities issued and guaranteed by Central and State Govt. The Scheme may also invest in money market instruments which include but is not limited to treasury bills, CBLO, repo/reverse repo and any other like instruments as are and or may be permitted under the Regulations and RBI from time to time. The investment team will take an active view of the interest rate movement by keeping a close watch on various macroeconomic parameters of the Indian economy as well as developments in global markets. Investment views / decisions will be taken on the basis of the various factors like, prevailing interest rate scenario, Government s borrowing programme, level of liquidity in the banking system, inflation levels and overall macro economic growth of the country. The performance of the scheme is benchmarked against I Sec Li-Bex for Investment Plan & I Sec Si-Bex for Savings Plan. The Trustees of Mirae Asset Mutual Fund at its meeting held on 19th March, 2010, had approved the change in the investment strategy 5

7 of the Scheme Information Document of Mirae Asset Gilt Fund Investment & Savings Plan. As per the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 any modification in the investment strategy of a scheme amounts to a change in the fundamental attribute of the scheme. Accordingly, as per Regulation 18(15A) of the said regulations, the AMC had provided an exit option to the investors of the said scheme between March 29, 2010 to April 28, 2010 (both days inclusive). During the aforesaid exit option, majority of the investors have opted to stay invested with the Scheme after the change in the fundamental attribute in the scheme(s). The net assets of the Mirae Asset Gilt Fund Investment Plan amounted to Rs Crores as at March 31, 2010 while the net assets of the Mirae Asset Gilt Fund Savings Plan amounted to Rs crore as at March 31, As at March 31, 2010, under Investment Plan, 93.74% of the net assets were invested in CBLO and the balance was in Cash whereas, under Savings Plan, 65.87% of the net assets were invested in CBLO and balance was in Cash. Comparison of the performance of Mirae Asset Gilt Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on CAGR Benchmark** CAGR Benchmark** 31 st March, Returns returns (%) Returns returns 2010 (Last 1 (CAGR) (Since (CAGR) (Rs.) year)* (Last 1 inception* (Since (%)^ year) (%)^ inception) (%)^ (%)^ Mirae Asset Gilt Fund - Investment Plan Mirae Asset Gilt Fund Investment Plan - Regular Plan - Growth Option % 3.09% 3.10% -0.49% Mirae Asset Gilt Fund Investment Plan - Regular Plan - Dividend Option % 3.09% 3.11% -0.49% Mirae Asset Gilt Fund Investment Plan - Institutional Plan - Growth Option % 3.09% 3.10% -0.49% Mirae Asset Gilt Fund Investment Plan - Institutional Plan - Dividend Option % 3.09% 3.11% -0.49% Mirae Asset Gilt Fund Investment Plan - Provident Fund Automatic Capital Appreciation Monthly % 3.09% 3.11% -0.49% Mirae Asset Gilt Fund Investment Plan - Provident Fund Automatic Capital Appreciation Quarterly % 3.09% 3.11% -0.49% Mirae Asset Gilt Fund Investment Plan - Provident Fund Defined Maturity Date % 3.09% 3.11% -0.49% Mirae Asset Gilt Fund Investment Plan - Provident Fund Automatic Annual Reinvestment % 3.09% 3.11% -0.49% Mirae Asset Gilt Fund - Savings Plan Mirae Asset Gilt Fund Savings Plan - Regular Plan - Growth Option % 6.10% 1.80% 4.62% Mirae Asset Gilt Fund Savings Plan - Regular Plan - Dividend Option % 6.10% 1.80% 4.62% Mirae Asset Gilt Fund Savings Plan - Provident Fund Automatic Capital Appreciation Quarterly % 6.10% 1.90% 4.62% Mirae Asset Gilt Fund Savings Plan - Provident Fund Automatic Capital Appreciation Half Yearly % 6.10% 1.90% 4.62% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 6th February 2009 ** Benchmark:- I Sec Li-Bex for Investment Plan & I Sec Si-Bex for Savings Plan. Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. 6

8 3rd Annual Report (V) (VI) MIRAE ASSET CASH MANAGEMENT FUND (MACMF), an open ended liquid scheme. The investment objective of the scheme is to seek to generate returns linked to short end rates like MIBOR and CBLO etc. and provide higher liquidity by investing in a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. This scheme is meant for investors to deploy their funds for a short period of time. The fund will be managed according to the investment objective, thereby seeking to generate returns linked to MIBOR, call and CBLO etc. commensurate with low risk and shall maintain high liquidity for the purpose of meeting the liquidity requirements of the investors. The net assets of the Mirae Asset Cash Management Fund amounted to Rs Crores as at March 31, As at March 31, 2010, 96.11% of the net assets were invested in CBLO and the balance was in Cash. Comparison of the performance of Mirae Asset Cash Management Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on CAGR Benchmark** CAGR Benchmark** 31 st March, Returns returns (%) Returns returns 2010 (Last 1 (CAGR) (Since (CAGR) (Rs.) year)* (Last 1 inception* (Since (%)^ year) (%)^ inception) (%)^ (%)^ Mirae Asset Cash Management Fund - Growth Option % 4.52% 2.45% 4.83% Mirae Asset Cash Management Fund - Daily Dividend Option % 4.52% 2.28% 4.83% Mirae Asset Cash Management Fund - Weekly Dividend Option % 4.52% 2.36% 4.83% Mirae Asset Cash Management Fund - Monthly Dividend Option % 4.52% 2.46% 4.83% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 12th January 2009 ** Benchmark:- CCIL MIBOR. Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. MIRAE ASSET LIQUID FUND (MALF), an open ended liquid scheme. The investment objective of the scheme is to seek to generate reasonable returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. This scheme is meant for investors to deploy their funds for a short period of time. The fund will be managed according to the investment objective, thereby seek to generate reasonable returns commensurate with low risk. The scheme will invest in money market and other debt securities and shall maintain high liquidity for the purpose of meeting the liquidity requirements of the investors. The net assets of the Mirae Asset Liquid Fund amounted to Rs.0.88 Crores as at March 31, As at March 31, 2010, 90.77% of the net assets were invested in CBLO And the balance was in Cash. Comparison of the performance of Mirae Asset Liquid Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on CAGR Benchmark** CAGR Benchmark** 31 st March, Returns returns (%) Returns returns 2010 (Last 1 (CAGR) (Since (CAGR) (Rs.) year)* (Last 1 inception* (Since (%)^ year) (%)^ inception) (%)^ (%)^ Mirae Asset Liquid Fund - Regular Plan - Bonus Option % % Mirae Asset Liquid Fund - Regular Plan - Daily Dividend Option % 3.69% -2.66% 6.32% Mirae Asset Liquid Fund - Regular Plan - Growth Option % 3.69% -0.32% 6.32% Mirae Asset Liquid Fund - Regular Plan - Monthly Dividend Option % 3.69% -2.49% 6.32% Mirae Asset Liquid Fund - Regular Plan - Weekly Dividend Option % 3.69% -2.59% 6.32% ^ Past performance may or may not be sustained in future. 7

9 The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 5th March 2008 ** Benchmark:- CRISIL Liquid Fund Index Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. (VII) MIRAE ASSET ULTRA SHORT TERM BOND FUND (MAUSTBF), an open ended debt scheme. MAUSTBF is an open ended debt scheme. This scheme is meant for investors to deploy their funds for a short period of time. The fund is managed according to the investment objective, thereby seeking to generate returns commensurate with low risk. The scheme invests in money market and other debt securities and maintains high liquidity for the purpose of meeting the liquidity requirements of the investors. The investment objective of the scheme is to seek to generate returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. The net assets of the Mirae Asset Ultra Short Term Bond Fund amounted to Rs Crores as at March 31, As at March 31, 2009, 95.68% of the net assets were invested in CBLO & the balance was in Cash. Comparison of the performance of Mirae Asset Ultra Short Term Bond Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on CAGR Benchmark** CAGR Benchmark** 31 st March, Returns returns (%) Returns returns 2010 (Last 1 (CAGR) (Since (CAGR) (Rs.) year)* (Last 1 inception* (Since (%)^ year) (%)^ inception) (%)^ (%)^ Mirae Asset Ultra Short Term Bond Fund - Regular Plan - Daily Dividend Option % 3.69% -0.60% 6.32% Mirae Asset Ultra Short Term Bond Fund - Regular Plan - Weekly Dividend Option % 3.69% -0.48% 6.32% Mirae Asset Ultra Short Term Bond Fund - Regular Plan - Monthly Dividend Option % 3.69% -0.60% 6.32% Mirae Asset Ultra Short Term Bond Fund - Regular Plan - Growth Option % 3.69% 1.74% 6.32% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 5th March 2008 ** Benchmark:- CRISIL Liquid Fund Index Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. (VIII) MIRAE ASSET SHORT TERM BOND FUND (MASTBF), an open ended debt scheme. MASTBF is an open ended debt scheme. The primary investment objective of the scheme is to seek to generate returns through an actively managed diversified portfolio of debt and money market instruments. The Scheme does not guarantee or assure any return. The net assets of the Mirae Asset Short Term Bond Fund amounted to Rs.1.40 Crores as at March 31, As at March 31, 2009, 100% of the net assets were invested in CBLO. Comparison of the performance of Mirae Asset Short Term Bond Fund with benchmark returns as on 31st March, 2010:- Scheme Name/Plan/Option NAV as on Absolute Benchmark** 31 st March, Returns returns (%) 2010 (Since (Since (Rs.) inception)* inception) (%)^ (Absolute)%^ Mirae Asset Short Term Bond Fund - Regular Plan - Growth Option % 3.03% Mirae Asset Short Term Bond Fund - Regular Plan - Dividend Option % 3.03% Mirae Asset Short Term Bond Fund - Regular Plan - Weekly Dividend Reinvestment Option % 3.03% 8

10 3rd Annual Report Mirae Asset Short Term Bond Fund - Regular Plan - Fortnightly Dividend Reinvestment Option % 3.03% Mirae Asset Short Term Bond Fund - Regular Plan - Quarterly Dividend Reinvestment Option % 3.03% Mirae Asset Short Term Bond Fund - Institutional Plan - Growth Option % 3.03% ^ Past performance may or may not be sustained in future. The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. Absolute returns are provided as the scheme has not completed one year. * Date of Allotment/ Inception date:- 3rd August, 2009 ** Benchmark:- CRISIL Liquid Fund Index Note: The calculations of returns shall assume reinvestment of all payouts at the then prevailing NAV. Note: Pursuant to Regulation 41(3) of SEBI (Mutual Funds) Regulations, 1996, the Board of Mirae Asset Trustee Company Private Limited vide their resolution dated 14th May, 2009 & 10th June, 2009 approved the winding up of Mirae Asset Interval Fund Quarterly Plan Series I (MAIF-QP-SI) & Mirae Asset Interval Fund Quarterly Plan Series II (MAIF-QP-SII) respectively. The last date of (MAIF-QP-SI) & (MAIF-QP-SII) was 13th May, 2009 & 8th June, 2009 respectively as the scheme(s) had to be terminated on grounds of SEBI guidelines on minimum number of investors pursuant to the provisions of SEBI Circular No. SEBI/IMD/ CIR No.10/2701/03 dated December 12, The Reports of Trustees on winding up of the aforesaid schemes and the Auditor s Reports were filed with Securities and Exchange Board of India on January 11, DIVIDEND DECLARED DURING THE FINANCIAL YEAR : MIRAE ASSET CASH MANAGEMENT FUND Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: Dividend Per Unit (in Rs.) Scheme Description NAV per unit Individual Non March 31, 2010 (Rs.) Individual Mirae Asset Cash Management Fund - Daily Dividend Plan Mirae Asset Cash Management Fund - Weekly Dividend Plan Mirae Asset Cash Management Fund - Monthly Dividend NIL NIL Past performance may or may not be sustained in future. NIL Dividend not declared during the period under review i.e. 1 st April, 2009 to 31 st March, MIRAE ASSET INDIA OPPORTUNITIES FUND Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: Dividend Per Unit (in Rs.) Scheme Description NAV per unit Individual Non March 31, 2010 (Rs.) Individual Mirae Asset India Opportunities Fund - Regular Plan - Dividend Option Past performance may or may not be sustained in future. Note: Post declaration of the dividend, the NAV of the Scheme will fall to the extent of the dividend pay-out and distribution tax, if any. For daily dividends cumulative dividend for a plan is indicated with record date as the month of dividend and the ex dividend NAV as on March 31, During the year under review, no dividend was declared under Mirae Asset Global Commodity Stocks Fund, Mirae Asset China Advantage Fund, Mirae Asset Liquid Fund, Mirae Asset Ultra Short Term Bond Fund, Mirae Asset Short Term Bond Fund and Mirae Asset Gilt Fund Investment Plan & Savings Plan. 9

11 STATUTORY DETAILS Mirae Asset Mutual Fund: The fund has been set up as a trust sponsored by Mirae Asset Global Investments Company Limited, a company incorporated in South Korea. (liability restricted to their contribution of Rs. 1 lakh each to the corpus) with Mirae Asset Trustee Company Private Limited as the Trustee (Trustee under the Indian Trusts Act, 1882) and with Mirae Asset Global Investments (India) Private Limited (MAGIL AMC) as the Investment Manager. Mirae Asset Global Investments Company Limited (MAGICL) is a part of Mirae Asset Financial Group (Mirae Asset). Mirae Asset was established in 1997 and is South Korea s leading independent financial services provider. With Asset Management as its core activity, Mirae Asset is engaged in a broad range of financial services including Investment Banking, Wealth Management and Life Insurance. Other significant activities of the group include Alternate Investment including Private Equity, Venture Capital and Real Estate. Mirae Asset Trustee Company Private Limited: The Trustee is the exclusive owner of the Trust Fund and holds the same in trust for the benefit of the unitholders. The Trustee has been discharging its duties and carrying out the responsibilities as provided in the Regulations and the Trust Deed. The Trustee seeks to ensure that the Fund and the Schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the Stock Exchanges, the Association of Mutual Funds in India and other regulatory agencies. Mirae Asset Global Investments (India) Private Limited (AMC): Mirae Asset Global Investments (India) Private Limited, a company registered under the Companies Act, 1956 and having its registered office at Unit 606, 6th Floor, Windsor, off CST Road, Kalina, Santacruz (E), Mumbai Mirae Asset Global Investments (India) Private Limited has been appointed as the Asset Management Company (AMC) of Mirae Asset Mutual Fund by the Trustee vide. Investment Management Agreement ( IMA ) dated October 11, 2007 entered into between Mirae Asset Trustee Company Private Limited and Mirae Asset Global Investments (India) Private Limited. The Investment Manager was approved by SEBI to act as the AMC for the Fund vide letter no. IMD/HSV/OTW/109716/2007 dated 30th November, Full Annual Report shall be disclosed on the website ( and shall also be available for inspection at the Head Office of the Mutual Fund. On written request present and prospective unit holders / investors can obtain a copy of the Trust Deed, the Annual Report at a price and the text of the relevant Scheme. The Balance Sheet as at 31st March, 2010 and the Revenue Account for the year ended 31st March, 2010 for the various schemes are annexed to this Report. INVESTOR SERVICES Mirae Asset Mutual Fund has been taking several steps towards increasing awareness among investors with regards to financial planning and investments. It has continued its efforts on disseminating information on specific types of asset classes through the media fraternity by organizing knowledge sharing workshops across cities. In addition, the mutual fund has been contributing to articles focusing on investing basics that appear in various media vehicles. In addition, it has been organizing investor forums in specific cities to help investors gain understanding of mutual funds. On the web front, the mutual fund has taken steps to develop modules which can help investors gain knowledge on the category through easy to use financial tools. LIABILITY AND RESPONSIBILITY OF TRUSTEE AND SPONSORS The liabilities and responsibility of the Trustee are in accordance with the SEBI (Mutual Funds) Regulations, 1996, Trust deed and the offer documents of the schemes. The liability of the Sponsor/Settlor is limited to the initial contribution of Rs. 100,000/- towards the setting up of Mirae Asset Mutual Fund. The price and redemption value of the units and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. There can be no assurance that the Fund s objective will be achieved. Past performance is not necessarily indicative of future results and may not necessarily provide a basis for comparison with other investments. INVESTMENT OBJECTIVE OF THE SCHEMES: Mirae Asset India Opportunities Fund: The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities. There is no assurance or guarantee of returns. Mirae Asset Global Commodity Stocks Fund: The investment objective of the scheme is to generate long term capital appreciation through an actively managed portfolio investing in equity and equity related securities of companies that benefit either directly or indirectly from commodity price movements, with at least 65% of the corpus invested overseas in Asia Pacific and Emerging Markets. There is no assurance or guarantee of returns. Mirae Asset China Advantage Fund: The investment objective of the scheme is to generate long-term capital appreciation by investing predominantly in units of Mirae Asset China Sector Leader Equity Fund and/or units of other mutual fund schemes, units of exchange traded schemes that focus on investing in equities and equity related securities of companies domiciled in or having their area of primary activity in China and Hong Kong. The Scheme may also invest a certain portion of its corpus in debt and money market securities and/or units of debt/liquid schemes of Domestic Mutual Funds, in order to meet liquidity requirements from time to time. The Scheme does not guarantee or assure any returns. Mirae Asset Gilt Fund: (a) Investment Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of sovereign securities issued and guaranteed by Central and State Government with residual maturity ranging from 1 year to 20 years or higher. 10

12 3rd Annual Report (b) Savings Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of short to medium term Government securities guaranteed by Central and State Government with an average portfolio maturity duration not exceeding 5 years. There is no assurance or guarantee of returns. Mirae Asset Cash Management Fund: The investment objective of the scheme is to seek to generate returns linked to short end rates like MIBOR and CBLO etc. and provide higher liquidity by investing in a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. Mirae Asset Liquid Fund: The investment objective of the scheme is to seek to generate reasonable returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. Mirae Asset Short Term Bond Fund: The investment objective of the scheme is to seek to generate returns through an actively managed diversified portfolio of debt and money market instruments. There is no assurance or guarantee of returns. Mirae Asset Ultra Short Term Bond Fund: The investment objective of the scheme is to seek to generate returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. Mirae Asset Interval Fund - Quarterly Plan - Series I & II: The investment objective of the scheme is to seek to generate returns with low volatility through a portfolio of debt and money market instruments with a provision to offer liquidity at periodic intervals. There is no assurance OR guarantee of returns. BASIS AND POLICY OF INVESTMENTS UNDERLYING THE SCHEME OF MIRAE ASSET MUTUAL FUND Investment policies of the Funds reflect restrictions for mutual fund investments established by SEBI. Avenues for investment in equity are identified on the following criteria: 1. Sound Management 2. Good track record of the Company 3. Potential for future growth 4. Industry scenario 5. Liquidity of the stock 6. Any other in the opinion of AMC Avenues for investment in debt are identified on the following criteria: 1. Economic Scenario 2. Liquidity 3. RBI Stance 4. Credit Risk 5. Any other in the opinion of AMC ACKNOWLEDGEMENTS The Trustees wish to thank the Government of India, the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and the Association of Mutual Funds in India (AMFI) for their support and directions. The Trustees would also like to thank the Fund s Auditors, Custodian, Registrar & Transfer Agent, Bankers, Distributors, Brokers and all other service providers for their valuable support. The Trustees also wish to thank all unit holders for their strong support. For and on behalf of Mirae Asset Trustee Company Private Limited Sd/- Sd/- V. B. Haribhakti S. T. Gerela Chairman Director Place: Mumbai Date: June 29,

13 Auditors Report MIRAE ASSET INDIA OPPORTUNITIES FUND To, The Trustee of MIRAE ASSET MUTUAL FUND 1. We have audited the attached balance sheet of MIRAE ASSET MUTUAL FUND MIRAE ASSET INDIA OPPORTUNITIES FUND ( the Scheme ) as at 31 March 2010 and also the revenue account for the year ended on that date annexed thereto. These financial statements are the responsibility of the management of Mirae Asset Global Investments (India) Private Limited, the Scheme s asset manager. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. ii. The balance sheet and revenue account dealt with by this report are in agreement with the books of account. iii. In our opinion, the balance sheet and revenue account dealt with by this report have been prepared in conformity with the accounting policies and standards specified in the Ninth Schedule to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 ( the SEBI Regulations ). iv. In our opinion, and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the SEBI Regulations as applicable, and give a true and fair view in conformity with the accounting principles generally accepted in India: a) in the case of the balance sheet of the state of affairs of the Scheme as at 31 March 2010; and b) in the case of the revenue account of the surplus for the year ended on that date. For S. R. BATLIBOI & CO. Firm Registration No E Chartered Accountants Per Surekha Gracias Partner Membership No: Mumbai, June 29,

14 3rd Annual Report MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND BALANCE SHEET AS AT 31 MARCH 2010 (All amounts in thousands of Rupees) Schedule SOURCES OF FUNDS Unit capital 2(b) & 3 1,108,920 1,650,765 Reserves and surplus 2(b) & 4 439,798 (573,995) Current liabilities 5 12,623 20,225 1,561,341 1,096,995 APPLICATION OF FUNDS Investments 2(c), 6 & 16 1,479, ,024 Deposits 7 20,000 40,000 Other current assets 8 61, ,971 1,561,341 1,096,995 The accompanying schedules are an integral part of this balance sheet. As per our report of even date. For S.R. Batliboi & Co. Mirae Asset Trustee Mirae Asset Global Investments Firm Registration No E Company Private Limited (India) Private Limited Chartered Accountants Mr. V.B. Haribhakti Mr. Nihar N. Jambusaria per Surekha Gracias Chairman Director Partner Membership No Mr. K. Ramasubramanian Mr. Arindam Ghosh Director Director & CEO Mumbai Date: June 29, 2010 Mr. Gopal Agrawal Head - Equity Mr. Neelesh Surana Sr. Fund Manager - Equity 13

15 MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND REVENUE ACCOUNT FOR THE PERIOD FROM 01 APRIL 2009 TO 31 MARCH 2010 (All amounts in thousands of Rupees) 01 April, March, 2008 Schedule to 31 March, 2009 to 31 March, 2009 INCOME Dividend 2(d) 19,127 14,497 Interest 2(d) & 9 3,193 10,219 Profit on sale/redemption of investments, net 2(d) 814,548 - Load Income 2(f) Other Income Total 837,805 24,730 EXPENSES AND LOSSES Change in provision for net unrealised loss in value of investments 2(c) & 6(ii) (120,626) 120,626 Loss on sale/redemption of investments, net 2(d) - 389,393 Loss on inter-scheme transfer/sale of investments, net 2(d) 92 16,401 Management fee 10 17,969 13,438 Trusteeship fee Custodian service charges Registrar service charges 1,871 2,536 Commission to distributors 8,354 10,319 Publicity expenses Audit fee Interest on borrowings - 2 Other operating expenses 7,298 9,810 (82,583) 564,387 Less: Expenses reimbursed / to be reimbursed by AMC (682) (10,930) Total (83,265) 553,457 Surplus/Deficit for the year 921,070 (528,727) Equalisation credit 2(e) 3,858 10,032 Income distribution on capital account (49,756) - Surplus/Deficit transferred to the balance sheet 4 875,172 (518,695) The accompanying schedules are an integral part of this revenue account. As per our report of even date. For S.R. Batliboi & Co. Mirae Asset Trustee Mirae Asset Global Investments Firm Registration No E Company Private Limited (India) Private Limited Chartered Accountants Mr. V.B. Haribhakti Mr. Nihar N. Jambusaria per Surekha Gracias Chairman Director Partner Membership No Mr. K. Ramasubramanian Mr. Arindam Ghosh Director Director & CEO Mumbai Date: June 29, 2010 Mr. Gopal Agrawal Head - Equity Mr. Neelesh Surana Sr. Fund Manager - Equity 14

16 3rd Annual Report MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND SCHEDULES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2010 (All amounts in thousands of Rupees unless specified otherwise) 1. BACKGROUND Mirae Asset Mutual Fund - Mirae Asset India Opportunities Fund ( the Scheme ) was launched as an open ended equity oriented scheme on 11 February The new fund offer of the Scheme opened on 11 February 2008 and closed on 10 March Mirae Asset Global Investments Company Limited is the sponsor of Mirae Asset Mutual Fund ( The Fund ). In accordance with SEBI (Mutual Funds) Regulations, 1996 ( the SEBI Regulations ), the Board of Directors of Mirae Asset Trustee Company Private Limited ( the Trustee ) has appointed Mirae Asset Global Investment (India) Private Limited ( the AMC ) to manage the Fund s affairs and operate its schemes. The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities and equity related securities. The Scheme offers its investors the following plans: Dividend Plan Growth Plan Institutional Option - Dividend Plan 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements are prepared on the accrual basis of accounting, under the historical cost convention, as modified for investments, which are marked-to-market. The significant accounting policies, which are in accordance with the SEBI Regulations and have been approved by the Boards of Directors of the AMC and the Trustee, are stated below. (a) Determination of net asset value - The net asset value of the units of the scheme is determined separately for the units issued under the plans/options. - For reporting the net asset values within the portfolio, the Scheme s daily income earned, including realised profit or loss and unrealised gain or loss in the value of investments, and expenses incurred, are allocated to the related plans/options in proportion to their respective daily net assets arrived at by multiplying day end outstanding units to previous day s closing net asset value. (b) (c) Unit capital - Unit capital represents the net outstanding units at the balance sheet date, thereby reflecting all transactions relating to the period ended on that date. - Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premium reserve of each plan/option, after an appropriate portion of the issue proceeds and redemption payouts is credited/ debited to the equalisation account, a mandatory requirement for open ended mutual fund schemes. Investments Accounting for investment transactions - Purchase and sale of investments are recorded on the date of the transaction, at cost and sale price respectively, after considering brokerage, commission, CCIL charges and fees payable or receivable, if any. - Right entitlements are recognised as investments on the ex-rights date. - Bonus entitlements are recognised as investments on the ex-bonus date. Valuation of investments - Investments in equity shares which have traded during a period of thirty days (prior to the balance sheet date) are stated at the closing prices on the balance sheet date or the last trading day before the balance sheet date, as may be applicable, on the National Stock Exchange of India Limited (principal stock exchange). When on a particular valuation day, a security has not been traded on the principal stock exchange, the value at which it is traded on the Bombay Stock Exchange Limited is used. - Equity Derivatives (including index derivatives): Futures and options contracts are valued based on the price determined by the stock exchange where they are traded. - Investments in Central Government securities (excluding treasury bills) are stated at the prices on the balance sheet date, as released by an independent agency suggested by the Association of Mutual Funds in India ( AMFI ). - Investments in fixed income securities are valued as follows: - Securities (including money market instruments and floating rate bonds) traded on the balance sheet date (on the stock exchange where a majority (in terms of value) of these securities are principally traded), are stated at the last traded price. 15